Document:

exv10w1

 

Exhibit 10.1

Execution Copy

ASSET PURCHASE AGREEMENT

between

GATX TECHNOLOGY SERVICES CORPORATION,

GATX TECHNOLOGY FINANCE INC.,

GATX FINANCIAL CORPORATION,

CIT TECHNOLOGIES CORPORATION

and

CIT FINANCIAL LTD.

April 14, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1.
	 	     DEFINITIONS; INTERPRETATION	 	 	1	 
	1.1
	 	Definitions	 	 	1	 
	1.2
	 	Interpretation	 	 	14	 
	ARTICLE 2.
	 	     PURCHASE AND SALE	 	 	14	 
	2.1
	 	Purchase and Sale of Transferred Assets	 	 	14	 
	2.2
	 	Excluded Assets	 	 	16	 
	2.3
	 	Assumed Obligations	 	 	18	 
	2.4
	 	Excluded Obligations	 	 	19	 
	2.5
	 	Consideration	 	 	19	 
	2.6
	 	Determination of Purchase Price Adjustment	 	 	22	 
	2.7
	 	Escrow; Subsequent Transfers	 	 	24	 
	2.8
	 	Closing	 	 	25	 
	2.9
	 	Deliveries of Sellers	 	 	25	 
	2.10
	 	Deliveries of Purchasers	 	 	26	 
	ARTICLE 3.
	 	     REPRESENTATIONS AND WARRANTIES OF SELLERS and GFC	 	 	26	 
	3.1
	 	Authority of Sellers and GFC	 	 	26	 
	3.2
	 	Title to Assets	 	 	27	 
	3.3
	 	Changes in Credit Ratings	 	 	27	 
	3.4
	 	Consents and Approvals	 	 	27	 
	3.5
	 	Balance Sheets	 	 	27	 
	3.6
	 	No Material Adverse Change	 	 	28	 
	3.7
	 	Tax Matters	 	 	28	 
	3.8
	 	Litigation	 	 	28	 
	3.9
	 	Sales Commission Plans	 	 	28	 
	3.10
	 	Other Contracts	 	 	29	 
	3.11
	 	Brokers, Etc	 	 	29	 
	3.12
	 	Intentionally Left Blank	 	 	29	 
	3.13
	 	Equipment Leases	 	 	29	 
	3.14
	 	Financing Agreements	 	 	32	 
	3.15
	 	Compliance with Laws	 	 	33	 
	3.16
	 	Canadian Transferred Assets	 	 	34	 
	3.17
	 	Privacy Laws	 	 	34	 
	ARTICLE 4.
	 	     REPRESENTATIONS AND WARRANTIES OF PURCHASERS	 	 	34	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	4.1
	 	Authority of Purchasers	 	 	34	 
	4.2
	 	Brokers, Etc	 	 	35	 
	4.3
	 	Financing	 	 	35	 
	4.4
	 	Independent Investigation	 	 	35	 
	ARTICLE 5.
	 	     COVENANTS	 	 	35	 
	5.1
	 	Commercially Reasonable Efforts;
Regulatory Approvals; Third Party Consents	 	 	35	 
	5.2
	 	Pre-Closing Access to Information	 	 	39	 
	5.3
	 	Operation of Business Prior to Closing	 	 	40	 
	5.4
	 	Confidentiality	 	 	40	 
	5.5
	 	Employee Matters	 	 	41	 
	5.6
	 	Compliance with WARN	 	 	42	 
	5.7
	 	Use of GATX Name	 	 	42	 
	5.8
	 	Records; Post-Closing Access to Information	 	 	43	 
	5.9
	 	March 31st Balance Sheet	 	 	44	 
	5.10
	 	Post-Closing Collections; Right of Subrogation	 	 	44	 
	5.11
	 	Parent Guarantees	 	 	44	 
	5.12
	 	Insurance	 	 	44	 
	5.13
	 	Intentionally Left Blank	 	 	45	 
	5.14
	 	Payments and Equipment Received by Sellers	 	 	45	 
	5.15
	 	Salespersons	 	 	45	 
	5.16
	 	Sales Commission Plans	 	 	45	 
	ARTICLE 6.
	 	     CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS	 	 	46	 
	6.1
	 	Warranties True As of Both Present Date and Closing Date	 	 	46	 
	6.2
	 	Compliance with Agreements and Covenants	 	 	46	 
	6.3
	 	Competition Law	 	 	46	 
	6.4
	 	Injunctions	 	 	46	 
	6.5
	 	Laws	 	 	46	 
	6.6
	 	Consents	 	 	46	 
	6.7
	 	Certificate	 	 	47	 
	6.8
	 	Deliveries by Sellers and GFC	 	 	47	 

ii

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	ARTICLE 7.
	 	     CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS and GFC	 	 	47	 
	7.1
	 	Warranties True as of Both Present Date and Closing Date	 	 	47	 
	7.2
	 	Compliance with Agreements and Covenants	 	 	47	 
	7.3
	 	Competition Law	 	 	47	 
	7.4
	 	Injunctions	 	 	47	 
	7.5
	 	Laws	 	 	47	 
	7.6
	 	Certificate	 	 	47	 
	7.7
	 	GFC Credit Agreements	 	 	48	 
	7.8
	 	Deliveries by Purchasers	 	 	48	 
	ARTICLE 8.
	 	     TERMINATION	 	 	48	 
	8.1
	 	Termination	 	 	48	 
	8.2
	 	Effect of Termination	 	 	48	 
	ARTICLE 9.
	 	     SURVIVAL AND INDEMNIFICATION	 	 	49	 
	9.1
	 	Survival	 	 	49	 
	9.2
	 	Indemnification by Sellers and GFC	 	 	49	 
	9.3
	 	Indemnification by Purchasers	 	 	50	 
	9.4
	 	Limitations on Liability	 	 	52	 
	9.5
	 	Claims	 	 	53	 
	9.6
	 	Notice of Third Party Claims; Assumption of Defense	 	 	53	 
	9.7
	 	Settlement or Compromise	 	 	54	 
	9.8
	 	Intentionally Left Blank	 	 	55	 
	9.9
	 	Knowledge	 	 	55	 
	9.10
	 	Net Losses; Subrogation; Mitigation	 	 	55	 
	9.11
	 	Purchase Price Adjustments	 	 	55	 
	9.12
	 	Special Rule for Fraud	 	 	56	 
	9.13
	 	Bulk Sales Act	 	 	56	 
	9.14
	 	GST Gross-up	 	 	56	 
	ARTICLE 10.
	 	     TAX MATTERS	 	 	56	 
	10.1
	 	Cooperation on Tax Matters	 	 	56	 
	10.2
	 	Allocation of Purchase Price	 	 	57	 
	10.3
	 	Apportioned Obligations	 	 	58	 
	10.4
	 	Transfer Taxes	 	 	58	 

iii

 

TABLE OF CONTENTS

(continued)

 

	 	 	 	 	 	 	 
	10.5
	 	Assignment	 	 	58	 
	ARTICLE 11.
	 	     MISCELLANEOUS	 	 	58	 
	11.1
	 	Expenses	 	 	58	 
	11.2
	 	Amendment	 	 	59	 
	11.3
	 	Notices	 	 	59	 
	11.4
	 	Waivers	 	 	60	 
	11.5
	 	Counterparts	 	 	61	 
	11.6
	 	Headings	 	 	61	 
	11.7
	 	Applicable Law	 	 	61	 
	11.8
	 	Assignment	 	 	61	 
	11.9
	 	No Third Party Beneficiaries	 	 	61	 
	11.10
	 	Forum; Waiver of Jury Trial	 	 	61	 
	11.11
	 	Schedules	 	 	61	 
	11.12
	 	Incorporation	 	 	62	 
	11.13
	 	Complete Agreement	 	 	62	 
	11.14
	 	Disclaimer	 	 	62	 
	11.15
	 	Public Announcements	 	 	62	 
	11.16
	 	Currency	 	 	63	 
	11.17
	 	Further Assurances	 	 	63	 
	ARTICLE 12.
	 	     Guaranty	 	 	63	 

iv

 

Exhibits

	 	 	 
	Exhibit A

	 	Assignment and Assumption Agreement
	Exhibit B

	 	Bill of Sale
	Exhibit C

	 	Confidentiality Agreement
	Exhibit D

	 	Transition Services Agreement
	Exhibit E

	 	Equipment Lease Subservicing Agreement

Schedules

	 	 	 
	Schedule 1.1(a)

	 	Carneros Financing Documents
	Schedule 1.1(b)

	 	Credit Enhancements
	Schedule 1.1(c)

	 	GTS Accounting Principles
	Schedule 1.1(d)

	 	Parent Guarantees
	Schedule 1.1(e)

	 	Purchasers’ Knowledge
	Schedule 1.1(f)

	 	Sales Commission Plans
	Schedule 1.1(g)

	 	Salespersons
	Schedule 1.1(h)

	 	Sellers’ Knowledge
	Schedule 2.1(a)

	 	Commitments
	Schedule 2.1(f)

	 	Assumed Servicing Agreements
	Schedule 2.5(b)(xxi)

	 	Additional Commissions
	Schedule 2.5(c)

	 	Allocation of Purchase Price Among Sellers
	Schedule 3.2

	 	Liens on Transferred Assets
	Schedule 3.3

	 	Changes in Credit Ratings
	Schedule 3.4

	 	Consents
	Schedule 3.5

	 	Pro Forma Balance Sheet
	Schedule 3.6

	 	No Material Adverse Change
	Schedule 3.8

	 	Litigation
	Schedule 3.10

	 	Other Contracts
	Schedule 3.13(b)

	 	Equipment Lease Enforceability
	Schedule 3.13(e)

	 	Equipment Lease Consents
	Schedule 3.13(f)(i)

	 	Electronic Data Tape (CD format)
	Schedule 3.13(f)(ii)

	 	Electronic Data Tape Supplementary Materials
	Schedule 3.13(g)

	 	Title to Equipment
	Schedule 3.13(h)

	 	Obligor Assignment of Equipment
	Schedule 3.13(j)

	 	Remarketing, Residual or Collateral Sharing or Recourse Agreements
	Schedule 3.13(k)

	 	Credit Enhancements
	Schedule 3.13(l)

	 	Proceedings relating to Equipment Leases or Equipment Lease Transactions
	Schedule 3.13(m)

	 	Equipment Lease Compliance with Laws
	Schedule 3.13(n)

	 	Tax Exempt Transactions with Governmental Authorities
	Schedule 3.13(p)

	 	Bankruptcy
	Schedule 3.13(q)

	 	Equipment Lease Payments
	Schedule 3.13(r)

	 	Equipment Lease Delinquencies
	Schedule 3.13(s)

	 	Future Funding or Financing Obligations
	Schedule 3.13(u)

	 	Equipment Location
	Schedule 3.13(v)

	 	Non-Obligor Lease Payments

v

 

	 	 	 
	Schedule 3.13(w)

	 	Adverse Changes
	Schedule 3.14

	 	Financing Agreements
	Schedule 3.15

	 	Compliance with Laws
	Schedule 5.1(d)(iii)

	 	Event of Default Debt
	Schedule 5.3

	 	Operation of Business Prior to Closing

vi

 

ASSET PURCHASE AGREEMENT

     This
ASSET PURCHASE AGREEMENT is entered into on the 14th day of April,
2004 between GATX TECHNOLOGY SERVICES CORPORATION, a Delaware corporation
(“GTS”), GATX TECHNOLOGY FINANCE INC., a corporation organized under the laws
of Canada (“GTF” and, together with GTS, “Sellers”), GATX FINANCIAL
CORPORATION, a Delaware corporation (“GFC”), CIT TECHNOLOGIES CORPORATION, a
Michigan corporation (“CIT USA”), and CIT FINANCIAL LTD., an Ontario
corporation (“CIT Canada” and, together with CIT USA, “Purchasers”).

     WHEREAS, subject to the terms and conditions set forth herein, GTS and GTF
desire to sell to Purchasers, and Purchasers desire to purchase from GTS and
GTF, all of the Transferred Assets (as hereinafter defined), and GTS and GTF
desire to assign to Purchasers, and Purchasers desire to assume from GTS and
GTF, all of the Assumed Obligations (as hereinafter defined); and

     WHEREAS, subject to the terms and conditions contained herein, GFC is
willing to guarantee the payment and timely performance by each Seller of its
agreements, obligations and liabilities arising under this Agreement (as
hereinafter defined).

     NOW, THEREFORE, in consideration of the premises and the mutual promises
herein contained, Purchasers, Sellers and GFC agree as follows:

ARTICLE 1.

DEFINITIONS; INTERPRETATION

     1.1 Definitions. The following terms shall have the following meanings
for the purposes of this Agreement:

     “Accounts Receivable” means all accounts receivable of each Seller as set
forth in the “Accounts Receivable” line item on the Pro Forma Balance Sheet,
the March 31st Balance Sheet or the Closing Balance Sheet, as applicable,
calculated in a manner consistent with the calculation of Accounts Receivable
set forth on the Pro Forma Balance Sheet.

     “Additional Books and Records” means (a) the credit files maintained by
Sellers with respect to Obligors under the Equipment Leases, (b) any Tax
Returns filed by a Seller on behalf of any such Obligors, and (c) all data and
information concerning the Equipment Leases and other Transferred Assets
contained in any data base maintained by or on behalf of any Seller, including
the MAPS and DMS systems, that (i) is reasonably requested by Purchasers in
connection with the transactions contemplated hereby and (ii) can be provided
by Sellers without violating any contractual obligation of confidentiality (it
being agreed that if a contractual obligation of confidentiality prevents
Sellers from providing Purchasers with any such data or information, the
parties shall work together in good faith in an effort to put Purchasers in the
same position as if Sellers had been able to provide Purchasers with such data
or information).

     “Additional Commission Amount” shall have the meaning set forth in Section
2.5(b)(xxi).

 

 

     “Advance Payment” means, in respect of any Equipment Lease, any Security
Deposit or other payment that was received by a Seller as collateral or
security, or any advance rent or unapplied cash received by a Seller prior to
the scheduled due date therefore, in each case to the extent existing on, or
arising after, the Closing Date in respect of such Equipment Lease and payable
to such Seller under applicable Law and such Equipment Lease.

     “Advance Ruling Certificate” means an advance ruling certificate issued by
the Commissioner of Competition pursuant to section 102 of the Competition Act
with respect to the transactions relating to GTF contemplated by this
Agreement.

     “Affiliate” means any Person controlling, controlled by or under common
control with another “Person”; for purposes of this definition only, “control”
shall mean the ownership, directly or indirectly, of 50% or more of the
outstanding common stock of a Person.

     “Agreement” means this Asset Purchase Agreement, including all Appendices,
Schedules and Exhibits hereto, as it may be amended from time to time in
accordance with its terms.

     “Allocation Schedule” shall have the meaning set forth in Section 10.2.

     “Apportioned Obligations” shall have the meaning set forth in Section
10.3.

     “Arbitrating Accounting Firm” shall have the meaning set forth in Section
2.6(b).

     “Assignment and Assumption Agreement” means the Assignment and Assumption
Agreement between GTS, GTF and Purchasers with respect to the transfer of the
Transferred Agreements and the Assumed Obligations from GTS and GTF to
Purchasers substantially in the form of Exhibit A.

     “Assumed Obligations” shall have the meaning set forth in Section 2.3.

     “Assumed Servicing Agreements” shall have the meaning set forth in Section
2.1(f).

     “Article 9 Transaction Documents” means the Transaction Documents other
than the Transition Services Agreement and the Equipment Lease Subservicing
Agreement.

     “Average Residual Interest” means (a) the aggregate value of the Original
Booked Residual Interests for all New Equipment Leases (other than (i) those
New Equipment Leases for which the Residual Interest has not yet been booked
and (ii) those New Equipment Leases that contain $1.00 purchase options),
divided by (b) the aggregate Original Equipment Cost of the Equipment subject
to such New Equipment Leases.

     “Bankrupt” shall have the meaning set forth in Section 2.5(b)(xx).

     “Bankruptcy Amount” shall have the meaning set forth in Section 2.5(b)(v).

     “Bankruptcy Code” shall have the meaning set forth in Section 2.5(b)(xx).

2

 

     “Bankruptcy Lease Loan Loss Allowance Amount” shall have the meaning set
forth in Section 2.5(b)(vii).

     “Bankruptcy Leases” shall have the meaning set forth in Section
2.5(b)(vi).

     “Bill of Sale” means the Bill of Sale with respect to the sale and
purchase of the Transferred Assets of GTS and GTF substantially in the form of
Exhibit B.

     “Business Day” means any day of the year, other than (a) any Saturday or
Sunday or (b) any other day on which banks located in Chicago, Illinois
generally are closed for business.

     “Canadian Assumed Obligations” shall have the meaning set forth in Section
2.3.

     “Canadian Hired Employees” shall have the meaning set forth in Section
5.5(b).

     “Canadian Transferred Assets” shall have the meaning set forth in Section
2.1.

     “Carneros Master Lease Agreements” means (a) the Master Lease Agreement,
dated as of October 4, 2000, between Carneros Trust I, as owner, and GTS, as
lessee, and (b) the Master Lease Agreement, dated as of December 29, 2000,
between Carneros II, as owner, and GTS, as lessee, in each case including all
related schedules, supplements, riders and addenda.

     “Carneros Notes” means (a) the non-recourse promissory notes of GTS in the
initial aggregate amount of $20,608,541.63 payable to Mellon US Leasing and
issued pursuant to the Master Security Agreement, dated as of October 31, 2000,
between GTS and Mellon US Leasing, a division of Mellon Leasing Corporation and
(b) the non-recourse promissory notes of GTS in the initial aggregate amount of
$17,205,219.91 and $1,620,955.62 payable to Hitachi Credit America Corp. and
issued pursuant to the Master Security Agreement, dated as of December 29,
2000, between GTS and Hitachi Credit Corp.

     “Carneros Sublease Amount” shall have the meaning set forth in Section
2.5(b)(xiv).

     “Carneros Sublease Loan Loss Allowance Amount” shall have the meaning set
forth in Section 2.5(b)(xvi).

     “Carneros Subleases” shall have the meaning set forth in Section
2.5(b)(xv).

     “Carneros Transactions” means the transactions contemplated by the
Carneros Trust I and Carneros Trust II Financing Documents.

     “Carneros Trust I and Carneros Trust II Financing Documents” means the
Carneros Master Lease Agreements and the master security agreements, promissory
notes, guarantees, intercreditor agreements and other agreements (a) executed
in connection with or relating to the Carneros Transactions executed by and
between GTS, as owner-lessees thereunder, and Mellon US Leasing, a division of
Mellon Leasing Corporation, and Hitachi Credit America Corp., as nonrecourse
lenders, and the other parties thereto and (b) set forth on Schedule 1.1(a).

     “CIT Canada” shall have the meaning set forth in the preamble hereof.

3

 

     “CIT USA” shall have the meaning set forth in the preamble hereof.

     “Closing” means the closing of the transactions contemplated hereby.

     “Closing Balance Sheet” means the unaudited, consolidated balance sheet of
GTS and GTF as of the Closing Date, prepared in accordance with Section 2.6(a).

     “Closing Date” shall have the meaning set forth in Section 2.8.

     “Closing Payment” shall have the meaning set forth in Section 2.5(c).

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

     “Collections” means, in respect of any Equipment Lease, all lease and loan
payments and other amounts due or to become due under such Equipment Lease
after the Closing Date, including all Advance Payments, tax payments,
prepayments, fees, penalties and any interest payments, penalties or charges,
late payment charges, insurance proceeds, casualty payments, excess wear and
tear charges, and the cash and non-cash proceeds of enforcement or sale of any
Equipment Lease and/or the related Equipment.

     “Commissioner of Competition” means the Commissioner of Competition
appointed pursuant to the Competition Act.

     “Commitments” shall have the meaning set forth in Section 2.1(a).

     “Competition Act” means the Competition Act (Canada).

     “Competition Act Compliance” means:

          (a) the issuance of an Advance Ruling Certificate; or

          (b) Purchasers and GTF have given the notice required under section 114 of
the Competition Act with respect to the transactions contemplated by this
Agreement and the applicable waiting period under section 123 of the
Competition Act has expired or been waived in accordance with the Competition
Act; or

          (c) the obligation to give the requisite notice has been waived pursuant
to subsection 113(c) of the Competition Act

     and, in the case of clause (b) or (c) above, Purchasers have been advised
in writing by the Commissioner of Competition or a person authorized by the
Commissioner of Competition that such person is of the view, at that time,
that, in effect, grounds do not exist to initiate proceedings before the
Competition Tribunal under the merger provisions of the Competition Act with
respect to the transactions contemplated by this Agreement, and the form of and
any terms and conditions attached to any such advice are acceptable to
Purchasers and GTF, acting reasonably, and such advice has not been rescinded
or amended.

4

 

     “Confidentiality Agreement” means that certain Letter Agreement, dated
December 20, 2003, between GATX Corporation and Purchasers, a copy of which is
set forth as Exhibit C attached hereto, as amended pursuant to the terms of
this Agreement.

     “Contracts” means any contract, agreement, lease or permit, including
Equipment Leases, Equipment Lease Transactions and Financing Agreements, to
which a Seller is a party.

     “Credit Enhancement” means any (a) Advance Payment, (b) investment
certificate, certificate of deposit, authorization to hold funds,
hypothecation, pledge or charge of account or like instrument, (c) letter of
credit, repurchase agreement, agreement of indemnity, guarantee, lease
guarantee bond or postponement agreement, (d) recourse agreement, (e) security
agreement, (f) certificate representing shares or the right to purchase capital
of or interests in, any Person, (g) agreement, contract or arrangement designed
to enhance the creditworthiness of an Obligor, or (h) bond or debenture, in
each case including those listed on Schedule 1.1(b) and to the extent pledged,
assigned, mortgaged, charged, hypothecated, made, delivered or transferred as
security for the performance of any obligation under or with respect to any
Equipment Lease.

     “El Camino” shall have the meaning set forth in Section 5.8(e).

     “Electronic Data Tape” shall have the meaning set forth in Section
3.13(f).

     “Equipment” means the equipment, including personal computers, servers,
mainframes, telecommunications equipment, software, Intellectual Property
rights, if any, or other property covered by an Equipment Lease, together with
any and all attachments, accessories, accessions, additions, improvements,
replacements and substitutions incorporated or installed on or in any item
thereof and any and all Residual Interests in the Equipment.

     “Equipment Lease” means an equipment lease, master equipment lease
agreement, loan and security agreement and all related schedules, supplements,
riders and addenda, or any other financing agreement arising out of the lease,
rental or financing of equipment, which evidences the payment obligation of an
Obligor and is entered into with respect to an Equipment Lease Transaction;
provided, that in relation to the Carneros Transactions, “Equipment Lease”
means the Carneros Subleases and the leasehold interests and other rights
arising under the Carneros Master Lease Agreements (collectively, all Equipment
Leases are referred to as the “Equipment Leases”).

     “Equipment Lease File” means, whether in physical, hard copy form or
scanned into Sellers’ electronic file system, the original of the master
equipment lease agreement, the original or a copy of all equipment schedules
and all related schedules, supplements, riders, addenda and exhibits thereto,
and all other documents held by GTS or GTF evidencing or otherwise executed or
delivered in connection with such Equipment Lease or otherwise held by GTS or
GTF in connection with an Equipment Lease Transaction, including all
guarantees, security agreements, recourse agreements, letters of credit, lessee
certificates of insurance, UCC financing statements, equipment invoices,
subordination agreements and related correspondence.

     “Equipment Lease Services” shall have the meaning set forth in Section
5.1(d)(ii).

5

 

     “Equipment Lease Subservicing Agreement” shall have the meaning set forth
in Section 5.1(d)(ii).

     “Equipment Lease Transaction” means an equipment lease or financing
arrangement provided by GTS or GTF with respect to personal computers, servers,
mainframes, communications or other equipment, including any software or
software packages relating thereto, under which GTS or GTF is the lessor,
seller, lender or provider, or an assignee thereof.

     “Escrow Agent” means the escrow agent pursuant to the terms of the Escrow
Agreement.

     “Escrow Agreement” shall have the meaning set forth in Section 2.7(a).

     “Escrow Amount” means (a) (i) the aggregate net book value of the Escrow
Leases as of March 31, 2004, less (ii) the absolute value of the loan loss
allowance amount associated with such Escrow Leases (determined in accordance
with the GTS Accounting Principles, consistently applied) as of March 31, 2004,
times (b) 0.0884.

     “Escrow Leases” means the Equipment Leases (other than Excluded Leases)
that are subject to Nonrecourse Debt (other than Event of Default Debt) for
which the Required Consent has not been received from the applicable
Nonrecourse Lender as of 5:00 p.m. Central Time on the second Business Day
prior to Closing.

     “Escrow Lease Schedule” shall have the meaning set forth in Section
2.7(b).

     “Estimated Purchase Price” shall have the meaning set forth in Section
2.5(c).

     “Event of Default Debt” means the Nonrecourse Debt listed on Schedule
5.1(d)(iii) for which a failure to obtain a Required Consent is an Event of
Default.

     “Event of Default Lease Amount” shall have the meaning set forth in
Section 2.5(b)(viii).

     “Event of Default Lease Loan Loss Allowance Amount” shall have the meaning
set forth in Section 2.5(b)(x).

     “Event of Default Leases” shall have the meaning set forth in Section
2.5(b)(ix).

     “Excess Residual Amount” shall have the meaning set forth in Section
2.5(b)(xvii).

     “Excess Residual Multiplier” shall have the meaning set forth in Section
2.5(b)(xviii).

     “Excluded Assets” shall have the meaning set forth in Section 2.2.

     “Excluded Leases” means, collectively, (a) the Bankruptcy Leases, (b) the
Event of Default Leases, if any, (c) the Recourse Debt Leases, if any, (d) the
Carneros Subleases if the Required Consent of the Head Lessor under the
Carneros Master Lease Agreements is not obtained prior to Closing, and (e) the
Sales Agency Leases relating to the Sales Agency Agreement, if Purchasers do
not elect that such agreement shall become the Transferred Sales Agency
Agreement pursuant to Section 2.1(k).

6

 

     “Excluded Obligations” shall have the meaning set forth in Section 2.4.

     “Financing Agreements” means the Nonrecourse Debt and the Carneros Trust I
and Carneros Trust II Financing Documents (including the Carneros Notes).

     “GAAP” means United States generally accepted accounting principles in
effect from time to time.

     “GFC” shall have the meaning set forth in the preamble hereof.

     “GFC Credit Agreements” means, collectively, the following credit
agreements between GFC and the various lenders thereto: (a) Term Loan Agreement
dated as of April 9, 2001, (b) Credit Agreement dated as of June 22, 2001, (c)
Credit Agreement dated as of July 2, 2003 and (d) Credit Agreement dated as of
June 16, 2003.

     “Governmental Authority” means any U.S. or Canadian federal, state,
provincial or municipal entity, any foreign government and any political
subdivision or other executive, legislative, administrative, judicial,
quasi-judicial or other governmental department, commission, court, board,
bureau, agency or instrumentality, domestic or foreign.

     “Governmental Required Consents” means, with respect to a Person, (a)
compliance by such Person with, and filings by such Person under, the HSR Act,
if applicable, and (b) Competition Act Compliance.

     “GTF” shall have the meaning set forth in the preamble hereof.

     “GTS” shall have the meaning set forth in the preamble hereof.

     “GTS Accounting Principles” means GAAP (or, as applicable, deviations from
GAAP identified on Schedule 1.1(c)), as applied by GTS in the preparation of
the Pro Forma Balance Sheet, including those applications of GAAP that are set
forth on Schedule 1.1(c).

     “GTS Customer Credit Rating” means the credit rating assigned by GTS to
each of its customers pursuant to the ten-point credit rating system used by
GTS and described on Schedule 1.1(c) under the heading “Reserves.”

     “GTS Hired Employees” shall have the meaning set forth in Section
5.5(a)(i).

     “Guaranty” shall have the meaning set forth in Article 12.

     “Head Lessor” shall have the meaning set forth in Section 5.1(d)(iv).

     “Hired Employees” means, collectively, the GTS Hired Employees and the
Canadian Hired Employees.

     “Hired Salespersons” shall have the meaning set forth in Section 5.16.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

7

 

     “Indemnified Person” means the Person or Persons entitled to, or claiming
a right to, indemnification under Article 9.

     “Indemnifying Person” means the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article 9.

     “Initial Notice” shall have the meaning set forth in Section 9.6.

     “Insurance Policy” means, with respect to each Equipment Lease, any
insurance policy benefiting the owner of the Equipment Lease providing loss,
physical damage, theft, credit, disability, breakdown, liability and/or similar
coverage with respect to the related Equipment.

     “Intellectual Property” means domestic and foreign: (a) registered and
unregistered trade names, trademarks, service marks, applications for
trademarks and applications for service marks; (b) patent registrations and
patent applications; (c) trade secrets; and (d) copyrights, claims for
copyrights, copyright registrations and copyright applications that, in each
case, are owned by or licensed to a Seller.

     “Inventory” means all equipment and other property owned by a Seller that
is held for sale or lease and is not subject to an Equipment Lease.

     “Investment Canada Act” means the Investment Canada Act (Canada).

     “Judicial Action” shall have the meaning set forth in Section 11.10.

     “Law” means any law, statute, regulation, ordinance, rule, order, decree,
judgment, consent decree or governmental requirement enacted, promulgated,
entered into, agreed to or imposed by any Governmental Authority.

     “Lease Amount” shall have the meaning set forth in Section 2.5(b)(i).

     “Lease and Financing Warranty” means a representation or warranty in
Section 3.13 or Section 3.14.

     “LIBOR Rate” shall have the meaning set forth in Section 2.6(a).

     “Lien” means any title defect, conflicting or adverse claim of ownership,
mortgage, deed of trust, hypothecation, security interest, lien, pledge, claim,
right of first refusal, option, charge, restrictive covenant, lease, order,
decree, judgment, stipulation, settlement, attachment, objection or other
encumbrance of any nature whatsoever, whether or not perfected, including any
liens under the escheat laws of any Governmental Authority.

     “Loan Receivables” means the loan receivables of each Seller as set forth
on the Pro Forma Balance Sheet, the March 31st Balance Sheet or the Closing
Balance Sheet, as applicable, calculated in a manner consistent with the
calculation of Loan Receivables set forth on the Pro Forma Balance Sheet.

     “Loan Receivables Amount” shall have the meaning set forth in Section
2.5(b)(iii).

8

 

     “Loss” or “Losses” means any and all damages, losses, actions,
proceedings, causes of action, obligations, liabilities, claims, Liens,
penalties, fines, demands, assessments, awards, judgments, settlements, costs
and expenses, including (a) court costs and similar costs of litigation, (b)
reasonable attorneys’ and consultants’ fees, including those incurred in
connection with (i) investigating or attempting to avoid the matter giving rise
to the Losses or (ii) successfully establishing a valid right to
indemnification for Losses and (c) interest awarded as part of a judgment or
settlement, if any, but in any event shall exclude consequential, punitive,
special or incidental damages or lost profits (except to the extent such
profits are represented by the Premium Amount paid in connection with this
transaction) claimed, incurred or suffered by any Indemnified Person (which
exclusion does not include any consequential, punitive, special or incidental
damages or lost profits for which such Indemnified Person is liable to a third
party).

     “March 31st Balance Sheet” shall have the meaning set forth in Section
5.9.

     “Material Adverse Effect” means any condition, circumstance, change or
effect, that individually or when taken together with all other conditions,
circumstances, changes or effects is materially adverse to the Transferred
Assets; provided, that, for purposes of this Agreement, a Material Adverse
Effect shall not include any condition, circumstance, change or effect to the
Transferred Assets resulting from (a) changes to the industry or markets in
which the Transferred Assets are operated that are not unique to the
Transferred Assets, (b) the announcement or disclosure of the transactions
contemplated herein, (c) general economic, regulatory or political conditions
or changes in the countries in which the Transferred Assets are operated, (d)
military action or any act of terrorism, (e) changes in Law, or (f) compliance
with the terms of this Agreement; and provided, further, that in the case of
each of clauses (a), (c), (d), (e) and (f), the Transferred Assets are not
materially disproportionately affected by such condition, circumstance, change
or effect compared to other Persons engaged in the conduct of similar
businesses as Sellers.

     “Net Book Value of Equipment Leases” shall have the meaning set forth in
Section 2.5(b)(ii).

     “Net Loan Loss Allowance Amount” shall have the meaning set forth in
Section 2.5(b)(iv).

     “New Equipment Leases” means those Equipment Leases entered into after
December 31, 2003 and up to and including the Closing Date.

     “Non-Hired GTS Employees” shall have the meaning set forth in Section
5.5(a)(i).

     “Non-Hired Canadian Employees” shall have the meaning set forth in Section
5.5(b)(i).

     “Nonrecourse Debt” means the loan and security agreements and other
financing agreements listed on Schedule 3.14, which were incurred by GTS or GTF
in connection with the Equipment Lease Transactions and are reflected as
“Nonrecourse debt” on the Pro Forma Balance Sheet, including the Carneros
Notes.

     “Nonrecourse Debt Amount” shall have the meaning set forth in Section
2.5(b)(xix).

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     “Nonrecourse Lenders” means those Persons who are lenders related to the
Nonrecourse Debt, including those Persons listed on Schedule 3.14, and each of
their successors and assigns.

     “Obligations” shall have the meaning set forth in Article 12.

     “Obligor” means the Person named in an Equipment Lease as lessee,
purchaser, user or borrower, together with any guarantors or other parties
obligated in respect of such Equipment Lease.

     “Original Booked Residual Interest” means the amount of the Residual
Interest as originally booked by a Seller at the inception of the Equipment
Lease.

     “Original Equipment Cost” means the original cost of Equipment calculated
in the ordinary course of business in accordance with past practices.

     “Parent Guarantee” means any guarantee, indemnity, performance bond,
letter of credit, support agreement, letter of comfort, deposit or other
security or contingent obligation entered into or granted by either Seller or
any of its Affiliates in relation to or arising out of any obligations or
liabilities of either Seller, including those guarantees set forth on Schedule
1.1(d).

     “Permitted Liens” means: (a) Liens arising by operation of Law for Taxes
not yet due and payable; (b) the rights of customers under the Equipment Leases
in the ordinary course of business under general principles of commercial law;
(c) Liens arising under Financing Agreements; and (d) Liens that would not
reasonably be expected to have a Material Adverse Effect or to adversely affect
or impair the value of the Transferred Assets or the use of the Transferred
Assets in the ordinary course of business.

     “Person” means any individual, corporation, partnership, association,
limited liability company, trust, governmental or quasi-governmental authority
or body or other entity or organization in any jurisdiction.

     “Post-Closing Taxes” means Taxes imposed on the activities of Purchasers
after the Closing Date with respect to the Purchasers’ ownership or operation
of the Transferred Assets.

     “Post-Closing Tax Period” shall have the meaning set forth in Section
10.3.

     “PPSA” means the Personal Property Security Act (Ontario).

     “Pre-Closing Tax Period” shall have the meaning set forth in Section 10.3.

     “Premium Amount” means the (a) (i) the aggregate net book value of the
Equipment Leases (other than the Excluded Leases) and the Loan Receivables
Amount as set forth on the Closing Balance Sheet, less (ii) the absolute value
of the Net Loan Loss Allowance Amount as set forth on the Closing Balance
Sheet, times (b) 0.0884.

     “Pro Forma Balance Sheet” means the unaudited, consolidated balance sheet
of GTS and GTF as of December 31, 2003.

10

 

     “Purchase Price” shall have the meaning set forth in Section 2.5(a).

     “Purchase Price Adjustment” means the difference (either positive or
negative) between the Estimated Purchase Price and the Purchase Price as
determined based on the Closing Balance Sheet.

     “Purchaser Indemnified Parties” shall have the meaning set forth in
Section 9.2.

     “Purchasers” shall have the meaning set forth in the preamble hereof.

     “Purchasers’ knowledge,” or variations thereof, means the actual knowledge
of the executive officers and directors of Purchasers set forth on Schedule
1.1(e).

     “Purchasers Unidentified Amounts” shall have the meaning set forth in
Section 5.10.

     “Records” shall have the meaning set forth in Section 5.8(a).

     “Recourse Debt” means the Loan and Security Agreement, dated as of
December 30, 2002, between GTS, as Borrower, and General Electric Capital
Corporation, as Lender.

     “Recourse Debt Lease Amount” shall have the meaning set forth in Section
2.5(b)(xi).

     “Recourse Debt Lease Loan Loss Allowance Amount” shall have the meaning
set forth in Section 2.5(b)(xiii).

     “Recourse Debt Leases” shall have the meaning set forth in Section
2.5(b)(xii).

     “Required Consents” shall have the meaning set forth in Section 5.1(d)(i).

     “Residual Interest” means the interest of GTS or GTF as lessor in and to
the equity or residual interest in the Equipment at the end of the lease term
of the relevant Equipment Lease, whether such Equipment Lease is terminated at
the scheduled lease end date thereof or earlier or later than such scheduled
lease end date.

     “Sales Agency Agreement” means the written sales agency agreement attached
to Schedule 1.1(f).

     “Sales Agency Lease Amount” shall have the meaning set forth in Section
2.5(b)(xxiii).

     “Sales Agency Lease Loan Loss Allowance Amount” shall have the meaning set
forth in Section 2.5(b)(xxiv).

     “Sales Agency Leases” shall have the meaning set forth in Section
2.5(b)(xxii).

     “Sales Commission Plans” mean the GATX Technology Commission Plans (1998,
1999, 2000, 2001, 2003, 2004), copies of which are attached hereto as Schedule
1.1(f).

     “Salespersons” means those individuals listed on Schedule 1.1(g) who are
still employed as salespersons by a Seller immediately prior to the Closing.

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     “Security Deposit” means, with respect to any Equipment Lease, the
refundable security deposit (if any), specified in such Equipment Lease or
advance rental paid by the Obligor under its respective Equipment Lease.

     “Seller Indemnified Parties” shall have the meaning set forth in Section
9.3.

     “Seller Tax Period” means the Tax Period (including all prior Taxable
Periods) ending on and including the Closing Date.

     “Sellers” shall have the meaning set forth in the preamble hereof.

     “Sellers’ knowledge,” or variations thereof, means the actual knowledge of
the executive officers and directors of Sellers set forth on Schedule 1.1(h).

     “Sellers Unidentified Amounts” shall have the meaning set forth in Section
5.14.

     “Subservicing Fee” shall have the meaning set forth in Section 5.1(d)(ii).

     “Tax” or “Taxes” mean all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, capital stock, net proceeds, ad
valorem, turnover, real, personal and other property (tangible and intangible),
goods and services, sales, use, franchise, excise, value added, stamp, leasing,
lease, user, transfer, fuel, excess profits, occupational, interest
equalization, windfall profits, unitary, severance and employees’ income
withholding, unemployment and Social Security taxes, duties, assessments and
charges (including the recapture of any tax items such as investment tax
credits), which are imposed by the United States, Canada or any Governmental
Authority, including any interest, penalties or additions to tax related
thereto imposed by any Governmental Authority (including any interest or
penalties with respect to such Taxes).

     “Tax Benefit” means (a) the present value of any refund, credit or
reduction in otherwise required Tax payments including any interest payable
thereon, less (b) the present value of any required Tax payments, which present
value shall be computed as of the Closing Date or the first date on which the
right to the refund, credit or other Tax reduction, or such Tax payment, arises
or is reasonably estimated to be actually utilized or paid, whichever is later,
(i) using the effective Tax rate of the Indemnified Person (which, in the case
of an Indemnified Person that is a reporting company under the Securities
Exchange Act of 1934, as amended, shall be as reported in its Form 10-K filed
with the Securities and Exchange Commission) for the Tax Period with respect to
such Tax under applicable Tax laws on such date and (ii) using the interest
rate on such date imposed on corporate deficiencies paid within 30 days of a
notice of proposed deficiency under the Code or other applicable Tax laws. Any
Tax Benefit shall be computed net of any directly related Tax detriment,
including the present value of a reduction in depreciation or amortization
deductions as a result of an adjustment to the Purchase Price. The amount of
any Tax detriment shall be computed in the same manner in which Tax Benefits
are otherwise computed pursuant to this definition.

     “Tax Period” or “Taxable Period” means any period prescribed by any
Governmental Authority for which a Tax Return is required to be filed or a Tax
is required to be paid.

12

 

     “Tax Return” means all returns and reports of or with respect to Taxes
required to be filed with any Governmental Authority or depository.

     “Tax Statute of Limitations Date” with respect to a particular Tax means
the opening of business on the day after the expiration of the applicable
statute of limitations with respect to such Tax, including any extensions
thereof made with the consent of the applicable Seller (or if such date is not
a Business Day, the next Business Day).

     “Tax Warranty” means a representation or warranty in Section 3.7.

     “Title and Authorization Warranty” means a representation or warranty in
Section 3.1, 3.2, 3.13(g) or 4.1 of this Agreement.

     “Transaction Documents” means this Agreement, each Assignment and
Assumption Agreement, each Bill of Sale, the Transition Services Agreement, the
Equipment Lease Subservicing Agreement, the Escrow Agreement and each other
agreement, document and certificate executed and delivered in connection with
this Agreement.

     “Transferred Agreements” means, collectively, the Equipment Leases, the
Nonrecourse Debt, the Transferred Real Estate Leases and the Assumed Servicing
Agreements, other than any of such agreements that are Unassigned Contracts.

     “Transferred Assets” shall mean the assets set forth in Section 2.1.

     “Transferred Real Estate Leases” shall have the meaning set forth in
Section 2.1(h).

     “Transferred Sales Agency Agreement” shall have the meaning set forth in
Section 2.1(k).

     “Transferred Sales Agency Arrangements” shall have the meaning set forth
in Section 2.1(l).

     “Transfer Taxes” shall have the meaning set forth in Section 10.4.

     “Transition Services Agreement” means the Transition Services Agreement
substantially in the form of Exhibit D.

     “UCC” shall mean the Uniform Commercial Code, as amended from time to
time, in the applicable jurisdiction.

     “Unassigned Contracts” shall have the meaning set forth in Section
5.1(d)(i).

     “U.S. Assumed Obligations” shall have the meaning set forth in Section
2.3.

     “U.S. Transferred Assets” shall have the meaning set forth in Section 2.1.

     “WARN” means the Worker Adjustment and Retraining Notification Act of
1988, as amended.

13

 

     1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of
the masculine, feminine or neuter gender or the singular or plural form of
words herein shall not limit any provision of this Agreement. The use of the
terms “including” or “include” shall in all cases herein mean “including,
without limitation” or “include, without limitation,” respectively. Reference
to any Person includes such Person’s successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement.
Reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Underscored references to
Articles, Sections, paragraphs, clauses, Exhibits or Schedules shall refer to
those portions of this Agreement. The use of the terms “hereunder,” “hereby,”
“hereof,” “hereto” and words of similar import shall refer to this Agreement as
a whole and not to any particular Article, Section, paragraph or clause of, or
Exhibit or Schedule to, this Agreement.

ARTICLE 2.

PURCHASE AND SALE

     2.1 Purchase and Sale of Transferred Assets. Upon the terms and subject
to the conditions of this Agreement, at the Closing, GTS or GTF, as applicable,
shall sell, transfer, convey, assign and deliver, and, as applicable, shall
cause their Affiliates to sell, transfer, convey, assign, and deliver, to CIT
USA or CIT Canada, as applicable, and, in accordance with the Allocation
Schedule, CIT USA or CIT Canada, as applicable, shall purchase, acquire and
accept from GTS, GTF or their Affiliates, as applicable, all of GTS’, GTF’s and
each of their Affiliates, as applicable, right, title and interest in and to
the following assets of GTS or GTF on the Closing Date (the “Transferred
Assets”), in each case free and clear of all Liens, other than Permitted Liens:

          (a) Equipment Leases. Other than (i) the Excluded Leases (except to the
extent transferred after the Closing pursuant to Section 2.7(d)) and (ii) the
Accounts Receivable, and subject to Section 5.1(d), the Equipment Leases, and
all the rights, benefits and obligations arising from or in connection with
such Equipment Leases, including (A) GTS’ or GTF’s right, title and interest
to, and ownership of, the related Equipment, including all Residual Interests
in such Equipment, (B) GTS’ or GTF’s right, title and interest in and to all
Collections, and all rights to payment of a monetary obligation (whether or not
earned by performance) and all other amounts due or received in each case in
connection with the Equipment Leases on or after the Closing Date, (C) all
rights of recourse of GTS or GTF against any Obligor or under any guaranty with
respect to such Equipment Leases, (D) all Equipment Lease Files with respect to
Equipment Leases and all documents and records contained in such related
Equipment Lease Files, (E) all rights of GTS, GTF or their Affiliates to or
under any Credit Enhancements or any other funds, property or collateral
relating to such Equipment Leases, including rights, if any, in any such funds,
property or collateral held by Nonrecourse Lenders, (F) all rights of GTS, GTF
or their Affiliates under any related Insurance Policies, (G) all commitments
made by GTS or

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GTF to enter into new Equipment Leases, extend, renew or remarket existing
Equipment Leases or sell Equipment related thereto, including any such
commitments made by GTS or GTF on or after the date hereof that are made in the
ordinary course of their business consistent with past practices and the
obligations of GTS and GTF under Section 5.3, including such Commitments
entered into as of one Business Day prior to the date hereof and set forth on
Schedule 2.1(a) (which Schedule 2.1(a) shall be updated by Sellers and
delivered to Purchasers as of the close of business on the Business Day prior
to the Closing) (the “Commitments”), and (H) all proceeds (as defined in the
UCC) of the foregoing;

          (b) Loan Receivables. The Loan Receivables;

          (c) Intentionally Left Blank;

          (d) Intentionally Left Blank;

          (e) Financing Agreements. The Financing Agreements (including the
Nonrecourse Debt);

          (f) Assumed Servicing Agreements. The Contracts listed on Schedule 2.1(f)
that are servicing agreements and arrangements relating to the Equipment to
which either GTS or GTF is a party (the “Assumed Servicing Agreements”);

          (g) Additional Books and Records. The Additional Books and Records;

          (h) Real Estate Leases. The real estate leases set forth on a schedule to
be delivered by Purchasers to Sellers no less than two Business Days prior to
Closing (the “Transferred Real Estate Leases”);

          (i) Satellite FF&E. The owned and leased furniture, fixtures and
equipment located at the premises that are the subject of the Transferred Real
Estate Leases;

          (j) Computers. The computers and related equipment used immediately prior
to the Closing by any Salespersons who are Hired Employees; provided, that,
immediately upon the Closing, Purchasers shall either remove all licensed
software that is on such computer or obtain necessary licenses with respect to
such software;

          (k) Sales Agency Agreement. The Sales Agency Agreement if Purchasers so
elect in a written notice delivered to Sellers no less than two Business Days
prior to Closing (the “Transferred Sales Agency Agreement”);

          (l) Sales Agency Arrangements. One or more of the sales agency
arrangements described on Schedule 1.1(f) (other than the Sales Agency
Agreement) if Purchasers so elect in a written notice delivered by Purchasers
to Sellers no less than two Business Days prior to Closing (the “Transferred
Sales Agency Arrangements”); and

          (m) Transferred Rights. To the extent transferable, all rights and claims
relating to the Transferred Assets, including rights and claims under or with
respect to all warranties, representations, indemnities and guarantees made by,
and Intellectual Property of,

15

 

suppliers, manufacturers, contractors and other third parties in
connection with the Transferred Assets.

Anything in this Agreement to the contrary notwithstanding, this Agreement
shall not constitute an assignment or transfer any Contract or any claim or
right or any benefit or obligation thereunder or resulting therefrom if an
assignment or transfer thereof, without the consent of a third party thereto,
would constitute a breach or violation thereof or impose any obligation or
liability on a Seller and if such a consent is not obtained at or prior to the
Closing, which Contract, claim, right or benefit shall be governed by Section
5.1(d).

GTS shall sell, transfer, convey, assign and deliver to CIT USA, and CIT USA
shall purchase, acquire and accept from GTS, all of GTS’s right, title and
interest in and to the Transferred Assets (the “U.S. Transferred Assets”), and
GTF shall sell, transfer, convey, assign and deliver to CIT Canada, and CIT
Canada shall purchase, acquire and accept from GTF, all of GTF’s right, title
and interest in and to the Transferred Assets (the “Canadian Transferred
Assets”).

     2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1, GTS
and GTF shall not sell, assign, convey, transfer or deliver to Purchasers, and
Purchasers shall not purchase, acquire or take assignment or delivery of, any
assets or rights of GTS, GTF or any of their Affiliates other than the
Transferred Assets (the “Excluded Assets”). The Excluded Assets include the
following assets and rights:

          (a) Cash. Except as provided in Section 2.1, all cash, certificates of
deposit, bank deposits, negotiable instruments, marketable securities and other
cash equivalents, together with all accrued but unpaid interest thereon;

          (b) GATX Name. Any internet domain names, logos, trade names, trade
marks, service names or service marks containing the name “GATX,” “GATX
Technology Services Corporation” or “GATX Technology Finance Inc.” or any
variations or derivations thereof, and the goodwill associated therewith;

          (c) Tax Refunds; Tax Returns. All claims for and rights to receive Tax
refunds and any accrued interest thereon for the Seller Tax Period (or any
portion thereof ending on the Closing Date), all Tax Returns, and all notes,
worksheets, files or documents relating thereto;

          (d) Claims. All claims, causes of action, rights of recovery, defenses,
counterclaims and rights of set-off of any kind (including rights under and
pursuant to all warranties, representations and guarantees made by suppliers of
products, materials or equipment or components thereof) relating to any
Excluded Obligations;

          (e) Employee Records. All personnel, employee compensation and benefits
and labor relations records relating to employees of GTS and GTF; provided,
that GTS and GTF shall deliver to Purchasers, as requested by Purchasers,
copies of all such records that relate to the Hired Employees to the extent
permitted by applicable Law;

          (f) Excluded Books and Records. (i) Except as otherwise expressly
provided herein, the books and records of GTS and GTF, (ii) the minute books
from the meetings (or

16

 

consents in lieu thereof) of the board of directors and stockholders of
GTS and GTF and the stock ownership records of GTS and GTF and (iii) the books
and records prepared in connection with the sale of GTS and GTF and/or their
businesses and assets, including offers received from prospective purchasers
and any information relating to such offers;

          (g) Contracts. All rights of GTS or GTF under any Contracts other than
the Transferred Agreements;

          (h) This Agreement. All rights of GTS or GTF under this Agreement;

          (i) Insurance. All rights of GTS and GTF under insurance policies not
relating to the Equipment or the Equipment Leases; provided, that Purchasers
shall be entitled to the proceeds under insurance policies to the extent that
such proceeds relate to Losses sustained by Purchasers that arise with respect
to Transferred Assets or Assumed Obligations, due to events occurring before
the Closing Date;

          (j) Indemnification Payments. Any indemnification payments made by
lessees under the Equipment Leases after the Closing in respect of losses
actually incurred by Sellers, GFC or any of their Affiliates prior to the
Closing;

          (k) Excluded Servicing Agreements. The servicing agreements and
arrangements relating to the Equipment to which either GTS or GTF is a party
and which are not Assumed Servicing Agreements;

          (l) Inventory. The Inventory;

          (m) Furniture, Fixtures and Equipment. Except as provided in Section 2.1,
the furniture, fixtures and equipment of Sellers;

          (n) Real Estate Leases. Except for the Transferred Real Estates Leases,
all real property leases of Sellers or any of their Affiliates;

          (o) Real Property. Except for the leased property that is the subject of
the Transferred Real Estate Leases, all real property owned, leased or
otherwise held for use by Sellers or any of their Affiliates, including all
buildings and other improvements thereon;

          (p) Intellectual Property. Except as provided in Section 2.1, all rights,
title, and interests of Sellers in, to and under any Intellectual Property;

          (q) Accounts Receivable. The Accounts Receivable;

          (r) Excluded Leases. The Excluded Leases;

          (s) Other Investments. The transactions represented by the “Other
Investments” line item on the March 31st Balance Sheet or the Closing Balance
Sheet, as applicable, calculated in a manner consistent with the calculation of
Other Investments set forth on the Pro Forma Balance Sheet; and

17

 

          (t) Other Excluded Assets. All other assets (real or personal, tangible
or intangible) and Contracts of GTS and GTF not included in the Transferred
Assets.

None of the Excluded Assets shall be included in the term “Transferred Assets”
or any other term defined in Section 2.1.

     2.3 Assumed Obligations. Except as provided in Section 2.4, at the
Closing Purchasers shall assume, and shall agree to pay, perform, fulfill and
discharge when due only the following liabilities and obligations relating to
the time period after the Closing (collectively, excluding the Excluded
Obligations, the “Assumed Obligations”):

          (a) Financing Agreements. The liabilities and obligations of GTS, GTF
and, to the extent Affiliates are jointly liable for liabilities and
obligations of GTS and GTF in amounts in the aggregate no greater than such
liabilities and obligations of GTS and GTF, their Affiliates (other than the
Parent Guarantees to the extent set forth in Section 5.11), relating to the
Nonrecourse Debt and the Carneros Notes, other than those relating to Excluded
Leases;

          (b) Equipment Leases. The liabilities and obligations of GTS, GTF and, to
the extent any of their Affiliates are jointly liable for such liabilities and
obligations of GTS and GTF in amounts in the aggregate no greater than such
liabilities and obligations of GTS and GTF, their Affiliates (other than the
Parent Guarantees to the extent set forth in Section 5.11) (including all
obligations for Taxes other than Taxes in the nature of income or capital
Taxes) relating to or arising out of the Equipment and the related Equipment
Leases, the Equipment Lease Transactions and the Commitments, other than the
Excluded Leases;

          (c) Servicing Agreements. The liabilities and obligations of GTS, GTF
and, to the extent any of their Affiliates are jointly liable for such
liabilities and obligations of GTS and GTF in amounts in the aggregate no
greater than such liabilities and obligations of GTS and GTF, their Affiliates
relating to or arising out of the Assumed Servicing Agreements;

          (d) Sales Agency Agreement. The liabilities and obligations of GTS, GTF
and, to the extent any of their Affiliates are jointly liable for such
liabilities and obligations of GTS and GTF in amounts in the aggregate no
greater than such liabilities and obligations of GTS and GTF, their Affiliates
relating to or arising out of the Transferred Sales Agency Agreement;

          (e) Sales Agency Arrangements. The liabilities and obligations of GTS,
GTF and, to the extent any of their Affiliates are jointly liable for such
liabilities and obligations of GTS and GTF in amounts in the aggregate no
greater than such liabilities and obligations of GTS and GTF, their Affiliates
relating to or arising out of the Transferred Sales Agency Arrangements;

          (f) Transferred Real Estate Leases. The liabilities and obligations of
GTS, GTF and their Affiliates relating to or arising out of the Transferred
Real Estate Leases;

          (g) Taxes. All Post-Closing Taxes and Transfer Taxes allocated to
Purchasers under Section 10.4; and

18

 

          (h) Transferred Assets. All other liabilities and obligations of any kind
relating to the Transferred Assets.

CIT USA shall assume, and shall agree to pay, perform, fulfill and discharge
when due, only the Assumed Obligations of GTS (the “U.S. Assumed Obligations”),
and CIT Canada shall assume, and shall agree to pay, perform, fulfill and
discharge when due, only the Assumed Obligations of GTF (the “Canadian Assumed
Obligations”).

     2.4 Excluded Obligations. Notwithstanding anything in this Agreement to
the contrary, Purchasers shall not assume or otherwise pay, perform, discharge
or be liable in respect of any liability, duty or obligation of GTS, GTF, GFC
or their Affiliates, including any Taxes imposed on GTS, GTF, GFC or their
Affiliates attributable to any of their activities before the Closing, other
than the Assumed Obligations (collectively, the “Excluded Obligations”) and
Sellers shall be solely and exclusively liable with respect to and shall fully
pay, perform and discharge all the Excluded Obligations.

     2.5 Consideration.

          (a) Purchase Price. Upon the terms and subject to the conditions of this
Agreement, in payment for the aforesaid sale, conveyance, assignment, transfer
and delivery of the Transferred Assets and the assignment and assumption of the
Assumed Obligations, CIT USA and CIT Canada shall pay to GTS and GTF an amount
in cash equal to (i) the Lease Amount, less (ii) the aggregate of (1) the
Bankruptcy Amount, (2) the Nonrecourse Debt Amount, and (3) the Additional
Commission Amount (as adjusted pursuant to Section 2.6 and Section 2.7, the
“Purchase Price”).

          (b) Calculation of Purchase Price. For purposes of this Agreement:

               (i) “Lease Amount” means the product of: (1) (A) the Net Book Value of
Equipment Leases, plus (B) the Loan Receivables Amount, less (C) the aggregate
of (u) the absolute value of the Net Loan Loss Allowance Amount, (v) the Event
of Default Lease Amount, if any, (w) the Recourse Debt Lease Amount, if any,
(x) the Excess Residual Amount, if any, (y) the Carneros Sublease Amount, if
any, and (z) the Sales Agency Lease Amount, if any, times (2) 1.0884.

               (ii) “Net Book Value of Equipment Leases” means the aggregate net book
value of the Equipment Leases as set forth on the
March 31st Balance Sheet or
the Closing Balance Sheet, as applicable.

               (iii) “Loan Receivables Amount” means the aggregate net book value of the
Loan Receivables as set forth on the March 31st Balance Sheet or the Closing
Balance Sheet, as applicable.

               (iv) “Net Loan Loss Allowance Amount” means (1) the aggregate amount of
the loan loss allowance for the Equipment Leases and the Loan Receivables
(determined in accordance with the GTS Accounting Principles, consistently
applied) as of March 31, 2004 or the Closing Date, as applicable, less (2) the
Bankruptcy Lease Loan Loss Allowance Amount, less (3) the Event of Default
Lease Loan Loss Allowance Amount, less (4)

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the Recourse Debt Lease Loan Loss Allowance Amount, less (5) the Carneros
Sublease Loan Loss Allowance Amount, less (6) the Sales Agency Lease Loan Loss
Allowance Amount, each of the foregoing clauses (2) — (6) as set forth on the
March 31st Balance Sheet or the Closing Balance Sheet, as applicable.

               (v) “Bankruptcy Amount” means the aggregate net book value of the
Bankruptcy Leases as set forth on the March 31st Balance Sheet or the Closing
Balance Sheet, as applicable.

               (vi) “Bankruptcy Leases” means the Equipment Leases for which an Obligor
(a) is Bankrupt on March 31, 2004 or the Closing Date, as applicable, and (b)
with respect to Equipment Leases in effect as of December 31, 2003, such
Obligor was not Bankrupt as of December 31, 2003.

               (vii) “Bankruptcy Lease Loan Loss Allowance Amount” means the absolute
value of the loan loss allowance associated with the Bankruptcy Leases
(determined in accordance with the GTS Accounting Principles, consistently
applied) as set forth on the March 31st Balance Sheet or the Closing Date
Balance Sheet, as applicable.

               (viii) “Event of Default Lease Amount” means the amount, if any, equal to
the aggregate net book value of the Event of Default Leases as set forth on the
March 31st Balance Sheet or the Closing Balance Sheet, as applicable.

               (ix) “Event of Default Leases” means those Equipment Leases that are
subject to Event of Default Debt for which a Required Consent is not received
from the applicable Nonrecourse Lender prior to the Closing.

               (x) “Event of Default Lease Loan Loss Allowance Amount” means the absolute
value of the loan loss allowance associated with the Event of Default Leases
(determined in accordance with the GTS Accounting Principles, consistently
applied) as set forth on the March 31st Balance Sheet or the Closing Date
Balance Sheet, as applicable.

               (xi) “Recourse Debt Lease Amount” means the amount, if any, equal to the
aggregate net book value of the Recourse Debt Leases as set forth on the March
31st Balance Sheet or the Closing Balance Sheet, as applicable.

               (xii) “Recourse Debt Leases” means those Equipment Leases that are subject
to Recourse Debt that is not paid off in full prior to Closing.

               (xiii) “Recourse Debt Lease Loan Loss Allowance Amount” means the absolute
value of the loan loss allowance associated with the Recourse Debt Leases
(determined in accordance with the GTS Accounting Principles, consistently
applied) as set forth on the March 31st Balance Sheet or the Closing Date
Balance Sheet, as applicable.

               (xiv) “Carneros Sublease Amount” means (1) if the Required Consent of the
Head Lessor under the Carneros Master Lease Agreements is not obtained prior to
Closing, the aggregate net book value of the Carneros Subleases as set forth on
the March 31st Balance

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Sheet or the Closing Balance Sheet, as applicable, and (2) if the Required
Consent of the Head Lessor under the Master Lease Agreement is obtained prior
to Closing, $0.

               (xv) “Carneros Subleases” means those Equipment Leases that are defined as
“User Leases” under the Carneros Master Lease Agreements.

               (xvi) “Carneros Sublease Loan Loss Allowance Amount” means the absolute
value of the loan loss allowance associated with the Carneros Subleases
(determined in accordance with the GTS Accounting Principles, consistently
applied) as set forth on the March 31st Balance Sheet or the Closing Date
Balance Sheet, as applicable.

               (xvii) “Excess Residual Amount” means (1) the aggregate Original Equipment
Cost of the New Equipment Leases (other than (a) those New Equipment Leases for
which the Residual Amount has not yet been booked and (b) those New Equipment
Leases that contain $1.00 purchase options) as calculated for March 31, 2004 or
the Closing Date, as applicable, times (2) the Excess Residual Multiplier.

               (xviii) “Excess Residual Multiplier” means the amount, if any, by which
the Average Residual Interest exceeds 0.175.

               (xix) “Nonrecourse Debt Amount” means the aggregate amount of the
Nonrecourse Debt as set forth on the March 31st Balance Sheet or the Closing
Balance Sheet, as applicable, excluding any Nonrecourse Debt associated with
any Excluded Leases.

               (xx) “Bankrupt” when used with respect to a Person, means (1) that such
Person commences a voluntary case concerning it under Title 11 of the United
States Code as now or hereafter in effect, or any successor thereto (the
“Bankruptcy Code”) or any similar foreign law; (2) an involuntary case is
commenced against the Person under the Bankruptcy Code or any similar foreign
law, and if the petition is controverted, it is not dismissed within 90 days
after the commencement of the case; (3) such Person declares a moratorium or
suspension of payments with respect to all or a substantial part of its debts
or ceases to conduct its business or enters into any composition or other
arrangement with its creditors generally (or any class of them); (4) a
custodian (as defined in the Bankruptcy Code or any similar foreign law) is
appointed for, or takes charge of, all or a substantial part of the property of
the Person; (5) the Person commences any other proceeding under any
reorganization, arrangement, readjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar Law of any jurisdiction
whether now or hereafter in effect relating to such Person or there is
commenced against the Person any such proceeding which remains undismissed for
a period of 90 days or the Person is adjudicated insolvent or bankrupt; (6) the
Person fails to controvert in a timely manner any petition or action filed
against it under the Bankruptcy Code or any similar foreign law or any such
proceeding or any order of relief or other order approving any such case or
proceeding or the appointment of any custodian or the like of or for it or any
substantial part of its property or suffers any such appointment to continue
undischarged or unstayed for a period of 90 days; or (7) the Person makes a
general assignment for the benefit of creditors.

               (xxi) “Additional Commission Amount” means the aggregate of the amounts
set forth on Exhibit A to Schedule 2.5(b)(xxi) opposite each individual
identified on

21

 

Exhibit A to Schedule 2.5(b)(xxi) who either (1) becomes a Hired Employee
or (2) becomes a sales agent of a Purchaser in connection with the assumption
by a Purchaser of the Sales Agency Agreement or any other sales agency
agreement or arrangement described on Schedule 1.1(f); provided, that in no
event shall the Additional Commission Amount exceed $5,000,000.

               (xxii) “Sales Agency Leases” means those Equipment Leases with respect to
which commissions are payable under the Sales Agency Agreement as set forth on
the March 31st Balance Sheet or the Closing Balance Sheet, as applicable, if
Purchasers do not elect that such agreement becomes the Transferred Sales
Agency Agreement pursuant to Section 2.1(k).

               (xxiii) “Sales Agency Lease Amount” means the aggregate net book value of
the Sales Agency Leases as set forth on the March 31st Balance Sheet or the
Closing Balance Sheet, as applicable.

               (xxiv) “Sales Agency Lease Loan Loss Allowance Amount” means the absolute
value of the loan loss allowance associated with the Sales Agency Leases
(determined in accordance with the GTS Accounting Principles, consistently
applied) as set forth on the March 31st Balance Sheet or the Closing Date
Balance Sheet, as applicable.

          (c) Estimated Purchase Price. At the Closing, Purchasers shall pay to
Sellers an amount in cash determined based on the March 31st Balance Sheet
equal to (i) (1) the Lease Amount, less (2) the aggregate of (A) the Bankruptcy
Amount, (B) the Nonrecourse Debt Amount, and (C) the Additional Commission
Amount (the “Estimated Purchase Price”) less (ii) the Escrow Amount (the
“Closing Payment”). The Closing Payment shall be payable by wire transfer of
immediately available funds in accordance with the allocation set forth on
Schedule 2.5(c) to: (i) GTS to such account as GTS may direct in advance of the
Closing; and (ii) GTF to such account as GTF may direct in advance of the
Closing.

          (d) No Double Counting. Each Equipment Lease and each other component of
the Estimated Purchase Price or Purchase Price shall only be counted once in
calculating the Estimated Purchase Price or the Purchase Price (it being
understood that if a particular Equipment Lease is both a Bankruptcy Lease and
another type of Equipment Lease hereunder, such Equipment Lease shall be
treated only as a Bankruptcy Lease for purposes of calculating the Estimated
Purchase Price or the Purchase Price).

     2.6 Determination of Purchase Price Adjustment.

          (a) Closing Balance Sheet. In order to determine the Purchase Price
Adjustment, GTS shall prepare and deliver to Purchasers, within 60 days
following the Closing Date, the Closing Balance Sheet. The Closing Balance
Sheet shall be prepared by GTS at its own expense with the assistance, if
applicable, of personnel of Sellers who become employees of Purchasers as of or
following the Closing as may be reasonably requested by GTS. The Closing
Balance Sheet (i) shall be prepared in accordance with the GTS Accounting
Principles, (ii) shall have the same line items as set forth in the March 31st
Balance Sheet and (iii) shall not take into consideration any events occurring
after the Closing. GTS shall permit, and shall use its commercially reasonable
efforts to cause its accountants to permit, Purchasers’ accountants

22

 

reasonable access to all work papers and other pertinent information used
in connection with the preparation of the Closing Balance Sheet. If the
Purchase Price as determined based on the Closing Balance Sheet as the same
becomes final and binding on the parties pursuant to Section 2.6(b) is less
than the Estimated Purchase Price, then GTS and GTF (in accordance with the
allocation set forth on Schedule 2.5(c)) shall remit to Purchasers the Purchase
Price Adjustment, together with interest thereon at the 60 day London InterBank
Offered Rate (LIBOR), as reported by Bloomberg on the Closing Date calculated
on an annual basis but prorated for the actual number of days for which
interest is to be paid (i.e., the number of days from but excluding the Closing
Date to and including the date of payment) (the “LIBOR Rate”), by wire transfer
of immediately available funds, not later than the third Business Day after the
Closing Balance Sheet becomes final and binding upon the parties pursuant to
Section 2.6(b), to an account that Purchasers shall designate to GTS. If the
Purchase Price as determined based on the Closing Balance Sheet, as the same
becomes final and binding upon the parties pursuant to Section 2.6(b), is
greater than the Estimated Purchase Price, then, Purchasers shall, in
accordance with the allocation set forth on Schedule 2.5(c), remit to GTS and
GTF the Purchase Price Adjustment, together with interest thereon at the LIBOR
Rate from the Closing Date to the date of payment, by wire transfer of
immediately available funds, not later than the third Business Day after the
Closing Balance Sheet becomes final and binding upon the parties pursuant to
Section 2.6(b), to accounts that GTS and GTF shall designate to Purchasers.
The Purchase Price shall be deemed adjusted downwards or upwards, as the case
may be (in accordance with the allocation set forth on Schedule 2.5(c), if
applicable), by the amount remitted by GTS or GTF, on the one hand, or
Purchasers, on the other hand, under this Section 2.6 subject to adjustment
pursuant to Section 2.6(b).

          (b) Disputes. If (i) Purchasers notify GTS in writing within 30 days
after receipt of the Closing Balance Sheet that Purchasers disagree with the
determination of the Purchase Price based on the Closing Balance Sheet as being
inconsistent with the GTS Accounting Principles (which shall include any errors
or mistakes in the preparation of the Closing Balance Sheet), (ii) such notice
shows that the dispute would result in an adjustment to the Purchase Price of
at least Fifty Thousand Dollars ($50,000) if resolved in favor of Purchasers
and (iii) such notice states with reasonable specificity the basis for the
disputed inconsistency with the GTS Accounting Principles, GTS and Purchasers
shall attempt in good faith to resolve such dispute as soon as possible. If
the parties are unable to resolve such dispute within 30 days after GTS’
receipt of such notice, GTS and Purchasers shall as soon as reasonably
practicable thereafter jointly submit such dispute for arbitration to an
independent certified public accounting firm mutually acceptable to GTS and
Purchasers (or, if the parties cannot agree within one week on such an
arbitrating accounting firm, to the Chicago office of KPMG LLP (the
“Arbitrating Accounting Firm”) for the purpose of resolving the dispute set
forth in such notice. The review performed by the Arbitrating Accounting Firm
shall be limited to the issues identified in the notice, which issues shall
only relate to whether in its preparation of the Closing Balance Sheet, GTS
misapplied the GTS Accounting Principles in the manner specified by Purchasers.
The Arbitrating Accounting Firm shall review and decide the issue or issues
that are the subject of such dispute as specified in such notice within 30 days
after such submission. The decision of the Arbitrating Accounting Firm shall
be set forth in writing and delivered to GTS and Purchasers. The decision of
the Arbitrating Accounting Firm shall be final and binding on GTS and
Purchasers (absent fraud of the Arbitrating Accounting Firm or any of the
parties hereto) and the Purchase Price as determined based on the Closing
Balance Sheet, as adjusted to

23

 

reflect the determination of the Arbitrating Accounting Firm, shall
constitute the final and binding “Purchase Price” for purposes of this Section
2.6; provided, that the Purchase Price shall not be adjusted unless the
decision of the Arbitrating Accounting Firm would result in an adjustment to
the Purchase Price on the Closing Balance Sheet submitted by GTS of at least
Fifty Thousand Dollars ($50,000) (such that, if the Purchase Price, as
determined by the Arbitrating Accounting Firm, is not at least Fifty Thousand
Dollars ($50,000) different from the Purchase Price shown on the Closing
Balance Sheet submitted by GTS, then the Purchase Price as determined based on
the Closing Balance Sheet submitted by GTS shall be the final and binding
“Purchase Price” for purposes of this Section 2.6. Notwithstanding the
foregoing, if Purchasers deliver a written notice that Purchasers intend to
dispute the Closing Balance Sheet delivered by Sellers, any amount not in
dispute shall be paid as contemplated by Section 2.6(a). If Purchasers deliver
written notice that Purchasers do not intend to dispute the Closing Balance
Sheet delivered by Sellers, then such Closing Balance Sheet shall be final and
binding upon the parties upon delivery of such notice, and if Purchasers do not
notify Sellers of a dispute prior to the termination of the 30 day period
specified above in Section 2.6(b), then the Closing Balance Sheet as delivered
by Sellers shall be final and binding upon the parties upon the close of such
30th day. The fees and costs of the Arbitrating Accounting Firm shall be borne
equally by Purchasers and Sellers.

     2.7 Escrow; Subsequent Transfers.

          (a) At the Closing, Purchasers shall, on behalf of Sellers, deliver to the
Escrow Agent, by wire transfer of immediately available funds, an amount in
cash equal the Escrow Amount. Subsequent to the Closing, the Escrow Amount
shall be held in escrow by the Escrow Agent pursuant to the terms of this
Section 2.7 and the terms of an escrow agreement that is mutually agreeable to
each of Purchasers, Sellers and the Escrow Agent (the “Escrow Agreement”) and
that shall be entered into by the parties and the Escrow Agent at or before the
Closing.

          (b) As soon as reasonably practicable after the Closing, Sellers and
Purchasers shall deliver to the Escrow Agent a schedule setting forth that
portion of the Escrow Amount that is attributable to each Escrow Lease (the
“Escrow Lease Schedule”). Subsequent to the Closing, Sellers shall, as soon as
reasonably practicable after receipt thereof, deliver to Purchasers and the
Escrow Agent any executed Required Consents received by Sellers with respect to
Escrow Leases, together with an Assignment and Assumption Agreement duly
executed by the applicable Seller with respect to such Escrow Leases. On the
third Business Day of each calendar month for which the Escrow Amount is held
in escrow, unless, prior to such date, Purchasers provide the Escrow Agent with
a written notice that Purchasers are disputing the release of the funds in
accordance with the Escrow Agreement, the Escrow Agent shall release to Sellers
the aggregate amount set forth on the Escrow Lease Schedule (plus the accrued
interest thereon) for each Escrow Lease that is the subject of Nonrecourse Debt
for which a Required Consent is received from the applicable Nonrecourse Lender
during the immediately preceding calendar month.

          (c) On the 90th day subsequent to the Closing (or the next Business Day
thereafter), unless, prior to such date, Purchasers provide the Escrow Agent
with a written notice that Purchasers are disputing the release of the funds in
accordance with the Escrow Agreement,

24

 

the Escrow Agent shall release the remaining amounts being held in escrow
as follows: (i) the aggregate amount set forth on the Escrow Lease Schedule
(plus the accrued interest thereon) for each Escrow Lease that is the subject
of Nonrecourse Debt for which the applicable Nonrecourse Lender has given
written notice of a “Termination Event” under such Nonrecourse Debt and has
exercised its right to terminate Sellers’ authority to bill and collect for
lease payment or to otherwise assume such billing and collecting, shall be paid
to Purchasers and (ii) all remaining amounts being held in escrow (plus the
accrued interest thereon) shall be released to Sellers. For purposes of this
Agreement, the final Purchase Price shall be deemed reduced by any amounts paid
to Purchasers pursuant to clause (i) of the previous sentence (other than the
amount of the interest).

          (d) If at any time within the first 90 days after the Closing Date, the
applicable Required Consent for any Excluded Leases (other than Bankruptcy
Leases and the Sales Agency Leases) is obtained, then promptly thereafter the
applicable Seller and the applicable Purchaser shall arrange for the purchase,
sale and assignment of such Equipment Leases and the related Equipment Lease
File upon the terms and conditions of this Agreement; provided, that (i) the
aggregate net book value of such Equipment Lease shall be determined as of the
date of such purchase, sale and assignment and (ii) all other terms, conditions
and provisions of this Agreement, including Article 3, shall apply to such
Equipment Lease, the related Equipment Lease Files and any other related
Transferred Assets, all as if such Equipment Lease were not an Excluded Lease.

     2.8 Closing. The Closing shall take place at the offices of Mayer, Brown,
Rowe & Maw LLP, 190 South LaSalle Street, Chicago, Illinois 60603, at 10:00
a.m.. central time on the second Business Day after the date on which all
conditions precedent set forth in Articles 6 and 7 have been satisfied or
waived by the parties, or such other place, date and time as is mutually
agreeable to Sellers and Purchasers (the “Closing Date”).

     2.9 Deliveries of Sellers. At the Closing, the applicable Seller or GFC,
as applicable, shall deliver to Purchasers:

          (a) the Transition Services Agreement, duly executed by Sellers;

          (b) an Assignment and Assumption Agreement, duly executed by each of GTS
and GTF;

          (c) a Bill of Sale, duly executed by each of GTS and GTF;

          (d) the Transferred Assets (other than the Equipment), by making such
Transferred Assets available to Purchasers at their present location;

          (e) the Equipment Lease Subservicing Agreement, duly executed by Sellers;

          (f) the Escrow Agreement, duly executed by Sellers;

          (g) all other conveyance documents reasonably requested by a Purchaser to
transfer to such Purchaser the Transferred Assets; and

25

 

          (h) any other items to be delivered by any Seller or GFC as required under
the terms and provisions of this Agreement.

     2.10 Deliveries of Purchasers. At the Closing, Purchasers shall deliver
to Sellers or GFC, as applicable:

          (a) the Transition Services Agreement, duly executed by Purchasers;

          (b) an Assignment and Assumption Agreement, duly executed by each
Purchaser;

          (c) a Bill of Sale, duly executed by each Purchaser;

          (d) the Equipment Lease Subservicing Agreement, duly executed by
Purchasers;

          (e) the Escrow Agreement, duly executed by Purchasers;

          (f) confirmations of the wire transfers of immediately available funds as
required by Section 2.5; and

          (g) any other items to be delivered by Purchasers under the terms and
provisions of this Agreement.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF SELLERS AND GFC

     Sellers and GFC, severally and not jointly, represent and warrant to
Purchasers as follows (it being understood and agreed that, notwithstanding
anything to the contrary contained herein, the representations and warranties
set forth in this Article 3 shall not apply to (a) the Accounts Receivable, (b)
the Excluded Leases or (c) any Nonrecourse Debt that is paid off in full on or
prior to the Closing or is not an Assumed Obligation):

     3.1 Authority of Sellers and GFC. Each of GTS and GFC is a corporation
validly existing and in good standing under the laws of the State of Delaware,
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Each of
GTS and GFC has all requisite corporate power and authority to enter into this
Agreement and the other Transaction Documents to which it is a party and to
carry out the transactions contemplated in this Agreement and the other
Transaction Documents to which it is a party. GTF is a corporation validly
existing under the laws of Canada and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. GTF has all requisite corporate power and authority to
enter into this Agreement and the other Transaction Documents to which it is a
party and to carry out the transactions contemplated in this Agreement and the
other Transaction Documents to which it is a party. The execution, delivery,
and performance of this Agreement and the other Transaction Documents to which
it is a party by each Seller and by GFC has been duly authorized by all
necessary corporate action. This Agreement has been, and each other

26

 

Transaction Document to which it is a party will be at Closing, duly and
validly executed and delivered by each Seller and by GFC and this Agreement
constitutes, and each of the other Transaction Documents will constitute, the
legal, valid, and binding obligation of each Seller and GFC that is a party
thereto, enforceable against each Seller and GFC in accordance with its terms,
except as may be limited by (a) applicable bankruptcy, insolvency, moratorium,
reorganization or similar Laws from time to time in effect which affect
creditors’ rights generally or (b) equitable limitations on the availability of
specific remedies.

     3.2 Title to Assets. Except as otherwise set forth herein and except as
disclosed in Schedule 3.2, GTS or GTF, as applicable, has good and marketable
title to, and is the sole and lawful owner of, all of the Equipment Leases,
Collections and Loan Receivables, free and clear of any Lien other than
Permitted Liens. Except as set forth in Schedule 3.2 and subject to obtaining
and making all applicable consents, (a) GTS or GTF, as applicable, has the full
right to sell, convey, transfer, assign and deliver the Equipment Leases,
Collections and Loan Receivables to Purchasers and (b) at the Closing GTS or
GTF, as applicable, shall convey to Purchasers good and marketable title to all
of the Equipment Leases, Collections and Loan Receivables, free and clear of
any Lien (other than Permitted Liens).

     3.3 Changes in Credit Ratings. Except as set forth on Schedule 3.3, the
GTS Customer Credit Rating as of the date hereof of each customer is the same
as it was for purposes of the Pro Forma Balance Sheet.

     3.4 Consents and Approvals. The execution and delivery of this Agreement
and each other Transaction Document to which it is a party by each Seller and
GFC does not, and the consummation of the transactions contemplated hereby and
thereby and performance by each Seller and GFC of its respective obligations
hereunder, assuming the receipt of the Governmental Required Consents and the
consents, approvals and waivers listed on Schedule 3.4, will not: (a) violate
or conflict with any term, condition or provision of (i) the charter, by-laws
or analogous organizational document of any Seller or GFC, (ii) any Contract to
which any Seller or GFC is a party or by which any of their respective
properties are bound and which violation or conflict would reasonably be
expected to have a Material Adverse Effect or (iii) any Law applicable to
Sellers and GFC, in the case of clauses (ii) and (iii), which violation would
reasonably be expected to have a Material Adverse Effect; or (b) result in the
creation of any Lien upon any of Sellers’ or GFC’s respective properties or
give to others any interest or right in any of their respective properties,
including, a right to purchase any of such properties, except where the Lien,
right or interest is not reasonably expected to have a Material Adverse Effect.
Except as set forth on Schedule 3.4, the failure of any Person not a party
hereto to authorize or approve this Agreement or any other Transaction Document
or the transactions contemplated hereby or thereby will not give any Person the
right to enjoin, rescind or otherwise prevent or impede the sale of the
Transferred Assets to Purchasers in accordance with the terms of this Agreement
or any other Transaction Document or to reach in any fashion the Transferred
Assets in the hands of Purchasers following the Closing or to obtain damages
from, or any other judicial relief against, Purchasers as a result of the
transactions carried out in accordance with the provisions of this Agreement.

     3.5 Balance Sheets. The Pro Forma Balance Sheet, as set forth in Schedule
3.5, presents fairly, in all material respects, the consolidated financial
condition of GTS and GTF as

27

 

of the referenced date and (a) was derived from the books and records of
GTS and (b) is unaudited. The individual line items that are included in the
Pro Forma Balance Sheet were calculated, in all material respects, in
accordance with the GTS Accounting Principles, consistently applied. The March
31st Balance Sheet, when delivered pursuant to the terms hereof, will be
derived from the books and records of GTS. The individual line items that will
be included in the March 31st Balance Sheet will be calculated, in all material
respects, in accordance with the GTS Accounting Principles, consistently
applied.

     3.6 No Material Adverse Change. Except as set forth on Schedule 3.6,
since December 31, 2003 there has not occurred any change that had, or could
reasonably be expected to have, a Material Adverse Effect.

     3.7 Tax Matters.

          (a) All Tax Returns with respect to the Transferred Assets that are
required to be filed by GTS or GTF before the Closing Date, have been or will
be filed. The information provided on such Tax Returns is or will be complete
and accurate in all material respects, and all Taxes shown to be due on such
Tax Returns have been or will be paid in full (except to the extent that a
failure to file such Tax Returns or pay such Taxes, or an inaccuracy in such
Tax Returns would not result in Purchasers being liable for such Taxes nor give
rise to a Lien on the Transferred Assets). GTF is registered under Part IX of
the Excise Tax Act under business number 862980331RT0001. GTF’s Quebec Sales
Tax registration number is 1024341344.

          (b) Substantially all of the Equipment Leases that are Transferred Assets
have been treated by Sellers as “true leases” for federal income tax purposes.
Notwithstanding anything to the contrary in this Agreement, Sellers make no
representation or warranty that the Equipment Leases are “true leases” for Tax
purposes.

          (c) Sellers have paid or caused to be paid, or will pay or cause to be
paid, and have collected and remitted, or have collected and will remit, any
and all Taxes due and payable on or before the Closing Date with respect to all
Equipment Leases, including payments thereunder, all Equipment Lease
Transactions that are Transferred Assets and the Equipment subject thereto to
the applicable Governmental Authority where required, arising out of, pursuant
to or in connection with the Equipment Leases, including payments thereunder,
and all Equipment Lease Transactions that are Transferred Assets.

     3.8 Litigation. Except as set forth on Schedule 3.8, there is no demand,
claim, suit, action, arbitration or legal, administrative or other proceeding
pending or, to Sellers’ knowledge, threatened against a Seller or any of their
officers, directors, employees, assets, properties or businesses and relating
to the Transferred Assets or Assumed Obligations that would reasonably be
expected to have a Material Adverse Effect.

     3.9 Sales Commission Plans. The documents and descriptions attached
hereto on Schedule 1.1(f) constitute all of the documents and materials that
comprise the Sales Commission Plans, the Sales Agency Agreement and the other
sales agency arrangements and constitute the entire agreement of Sellers under
and with respect to the Sales Commission Plans, the Sales Agency Agreement and
the other sales agency arrangements. The amounts listed on

28

 

Exhibit B to Schedule 2.5(b)(xxi) (which Exhibit B to Schedule 2.5(b)(xxi)
shall be updated by Sellers and delivered to Purchasers as of the close of
business on the Business Day prior to Closing) under the headings “Grown Equity
(Basis-EOT)” and “Upfront 1% Commission” and the salesperson identification
codes listed thereon are true and correct and computed in accordance with the
Sales Commission Plans.

     3.10 Other Contracts. The terms and conditions set forth in this Section
3.10 shall apply to all Transferred Agreements, except for Equipment Leases,
which are covered by Section 3.13 and Financing Agreements, which are covered
by Section 3.14. Except as set forth on Schedule 3.10, to Sellers’ knowledge,
no Seller is in receipt of any written claim of breach of any such Transferred
Agreement that would reasonably be expected to constitute a default by the
applicable Seller thereunder and that would reasonably be expected to have a
Material Adverse Effect. To Sellers’ knowledge, all such Transferred
Agreements are in full force and effect and are enforceable by the applicable
Seller in accordance with their terms, except (a) for such failures to be in
full force and effect that would not reasonably be expected to have a Material
Adverse Effect and (b) as may be limited by (i) applicable bankruptcy,
insolvency, moratorium, reorganization or similar Laws from time to time in
effect which affect creditors’ rights generally or (ii) equitable limitations
on the availability of specific remedies.

     3.11 Brokers, Etc. Except for J.P. Morgan Securities, Inc., the fees and
expenses of which shall be the responsibility of Sellers, no broker or
investment banker acting on behalf of any Seller or GFC or under the authority
of any of them is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee directly or indirectly from any Seller or GFC
in connection with any of the transactions contemplated herein.

     3.12 Intentionally Left Blank.

     3.13 Equipment Leases.

          (a) The Equipment Leases arise from the bona fide lease, sale or financing
of the Equipment relating to such Equipment Leases and have been originated or
purchased by GTS or GTF in the ordinary course of business.

          (b) Except as set forth on Schedule 3.13(b), each Equipment Lease and
related Credit Enhancement, if any, is a legal, valid and binding obligation of
the parties thereto, enforceable against the parties thereto in accordance with
its terms, except as may be limited by (i) applicable bankruptcy, insolvency,
moratorium, reorganization or similar Laws from time to time in effect which
affect creditors’ rights generally or (ii) equitable limitations on the
availability of specific remedies.

          (c) Each Equipment Lease involves a bona fide business transaction and was
not entered into for personal, family or household purposes, and no Equipment
Lease is a consumer lease as defined in Article 2A of the UCC or a lease of
consumer goods as defined in section 1(1) of the PPSA.

          (d) Each Equipment Lease and the other documents in the Equipment Lease
File accurately reflects the entire agreement of the parties to such Equipment
Lease with respect to the Equipment Lease and related Equipment Lease
Transaction.

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          (e) Except as set forth on Schedule 3.13(e), no Equipment Lease requires
the prior written consent of the Obligor thereto or contains any other
restriction relating to the transfer or assignment of such Equipment Lease by
Sellers.

          (f)   (i) Subject to the assumptions, field descriptions and adjustments
described therein, the Equipment Leases reflected on the electronic data tape
dated as of December 31, 2003 that has been delivered in a read-only CD format,
the title of which is 04-12-04 GATX Portfolio as of 12-31-03, Lease Level &
Asset Level, Schedule 3.13(f)(i) GATX Technology & CIT Technologies APA, and
attached to Schedule 3.13(f)(i) (such data tape referred to as the “Electronic
Data Tape”) previously delivered to Purchasers represents all the Equipment
Leases that were outstanding as of December 31, 2003. Subject to the
assumptions, field descriptions and adjustments described therein, the
information set forth on the Electronic Data Tape is true and correct in all
material respects as of December 31, 2003. Subject to the assumptions, field
descriptions and adjustments described therein, the cash flow tab of the
Electronic Data Tape relating to the cash flows on the Equipment Leases sets
forth in all material respects a true and accurate description of the rental
payment obligations (including the description of either U.S. or Canadian
currency) under the related Equipment Lease Transaction. Subject to the
assumptions, field descriptions and adjustments described therein, the debt
flow tab of the Electronic Data Tape relating to debt flows on the Financing
Agreements is true and accurate in all material respects. Purchasers shall
deduct from any claim for a breach of the representations and warranties
contained in the immediately preceding three sentences the amount of any
inaccuracies in the Electronic Data Tape that, to the actual knowledge
(determined at the time such claim is made without any duty of inquiry) of the
senior employee of the applicable Purchaser (or, as applicable, such
Purchaser’s Affiliate) who is responsible for generating such claim, have a
positive value to Purchasers.

               (ii) The additional materials relating to the Equipment Leases listed on
Schedule 3.13(f)(ii) and attached thereto are true and correct in all material
respects.

          (g) Except as set forth on Schedule 3.13(g), GTS or GTF has either good
and marketable title to, leasehold interest in or a first priority perfected
security interest in, the Equipment relating to each Equipment Lease, free and
clear of all Liens, except the interests of the Obligor thereunder and
Permitted Liens.

          (h) None of the terms of the Equipment Leases permit the sale, assignment
or transfer of the Obligor’s interest therein to another Person, or the sale,
assignment or transfer of the Equipment relating to such Equipment Leases,
without the prior consent of the lessor, seller, lender, or provider
thereunder, other than (i) the Equipment Leases that (A) permit assignment to a
subsidiary, parent or other affiliate of the Obligor, or (B) permit assignment
to a third party where the Obligor remains liable under the Equipment Lease
(provided that, to Sellers’ knowledge, Sellers’ right to the Residual Interest
in the related Equipment at the end of the original term of the related
Equipment Lease is not adversely affected by any such assignment), or (ii) the
Equipment Leases listed on Schedule 3.13(h), which are the only Equipment
Leases that permit assignment or sublease of the Equipment to a third party,
subject to certain conditions contained in such Equipment Leases.

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          (i) The terms of each Equipment Lease provide that the Obligor is
responsible (1) for the maintenance and repair of the Equipment (provided that,
in certain instances, maintenance contract costs may be financed by or billed,
collected and remitted by GTS or GTF), (2) to self insure for, or maintain
casualty and liability with respect to, the Equipment and to pay the applicable
premiums for such insurance and (3) the payment of Taxes (including personal
property, sales and use Taxes) relating to such Equipment (provided that GTS or
GTF may bill, collect and remit for personal property, sales and use Taxes and
other similar Taxes).

          (j) Except as set forth on Schedule 3.13(j), no Equipment Lease is subject
to any remarketing, residual or collateral sharing agreement or recourse
agreement with third parties.

          (k) Except as set forth on Schedule 3.13(k), there are no Credit
Enhancements (other than guarantees) in place with respect to any Equipment
Lease.

          (l) (i) No Equipment Lease or any related Credit Enhancement is subject to
any defense, offset, claim, right of rescission or counterclaim of any kind by
the Obligor or Credit Enhancement provider thereunder, and except as set forth
on Schedule 3.13(l), no suit or other legal or administrative proceeding has
been brought or, to Seller’s knowledge, threatened to be brought by or against
Sellers, GTS or GTF with respect to any Equipment Lease or Equipment Lease
Transaction, (ii) no Equipment Lease is terminable at the option of the Obligor
thereunder except to the extent that such Obligor is required to pay to Seller
a termination fee in an amount at least equal to the discounted present value
of the remaining payments, and (iii) Sellers have in their possession and will
deliver to Purchaser at Closing, information contained in the Equipment Lease
Files and in the Deal Management System of GTS and GTF, which taken as a whole
is reasonably sufficient to establish the Original Equipment Cost of the
Equipment.

          (m) Except as set forth on Schedule 3.13(m), each Equipment Lease and
related Equipment Lease Transaction including each Equipment Lease for which
the Obligor is a Governmental Authority, complies in all material respects with
all Laws applicable to such Equipment Lease and related Equipment Lease
Transaction, and Sellers have not received any written notice of violation of
any Law relating to any Equipment Lease and related Equipment Lease
Transaction.

          (n) Except as set forth on Schedule 3.13(n), no Equipment Lease involving
a Governmental Authority, as Obligor, was originated as a tax exempt
transaction.

          (o) Sellers have administered and serviced the Equipment Leases that are
Transferred Assets in the ordinary course of business consistent with past
practices, except as authorized pursuant to delegated authorities of Sellers in
effect from time to time. Sellers have not (i) renewed, extended, refinanced,
amended or waived any provisions of any Equipment Lease, (ii) released any
Obligor or (iii) released or taken possession of any Equipment other than in
the ordinary course of business consistent with past practices, except as
authorized pursuant to approvals effected pursuant to delegated authorities of
Sellers in effect from time to time.

31

 

          (p) Except as set forth on Schedule 3.13(p), as of December 31, 2003, no
Obligor under any Equipment Lease is Bankrupt, none of the Equipment is subject
to a plan in any proceeding within the definition of “Bankrupt” nor, to
Sellers’ knowledge, has any Obligor threatened nor has any announcement been
made that any Obligor is, or intends to become Bankrupt.

          (q) Except as set forth on Schedule 3.13(q), all amounts due under each
Equipment Lease are payable in U.S. or Canadian dollars in regularly scheduled
installments.

          (r) Except as set forth on Schedule 3.13(r), as of March 31, 2004 none of
the Equipment Leases are two calendar months or more delinquent, and, to
Sellers’ knowledge, no Obligor is in default under the terms of any Credit
Enhancement. To Sellers’ knowledge, no non-payment default or non-payment
event of default by an Obligor has occurred and is continuing under the terms
of any Equipment Lease or Credit Enhancement, and no Obligor has been notified
by Sellers that a default or event of default has occurred based on such a
non-payment default or event of default.

          (s) As of the date hereof and as of the Closing Date, Schedule 3.13(s)
sets forth all future funding or financing obligations with respect to any
Equipment Lease other than the Commitments.

          (t) To Sellers’ knowledge, all signatures, names and addresses of Obligors
contained on the Equipment Leases were true and correct as of the date of
execution thereof.

          (u) The Equipment has been delivered to the U.S. or Canadian location
specified in the Equipment Lease and has been accepted by the Obligor under the
related Equipment Lease as satisfactory. To Sellers’ knowledge, except as set
forth on Schedule 3.13(u), (i) the Equipment is currently at such location or
the U.S. or Canadian location reflected in the MAPs lease management system and
(ii) all of the Equipment is in the condition required by the terms of the
Equipment Lease.

          (v) To Sellers’ knowledge, except as set forth on Schedule 3.13(v), no
payments made on the Equipment Leases are being made by any guarantor
thereunder or Person other than the Obligor.

          (w) Schedule 3.13(w) contains a complete list of all Equipment Leases that
as of December 31, 2003 (i) (A) had a net book value of more than $100,000 and
(B) had been placed on non-accrual status by the applicable Seller, or (ii) had
Equipment that was, to Sellers’ knowledge, abandoned, lost or otherwise
materially damaged or (iii) had Equipment that was the subject of an active
proceeding for reclamation, replevin, attachment or similar proceeding.

          (x) In the case of the Equipment Leases being sold by GTF, each lessee is
not a non-resident of Canada within the meaning of the Income Tax Act (Canada).

     3.14 Financing Agreements. Schedule 3.14 sets forth a true and complete
list of all Financing Agreements, including the Carneros Trust I and Carneros
Trust II Financing Documents, and a complete list of all lenders under the
Financing Agreements. GTS has

32

 

previously made available to Purchaser complete and accurate copies of the
Financing Agreements listed on Schedule 3.14. Except as set forth on Schedule
3.14:

          (a) Neither GTS, GTF nor any of their Affiliates made any
misrepresentation under or in connection with any of the Financing Agreements;

          (b) Neither GTS, GTF nor any of their Affiliates is in breach of any
warranty provided under or in connection with any of the Financing Agreements;

          (c) Each of GTS, GTF and each of their Affiliates has performed all of its
obligations required to be performed by such entity under or in connection with
the Financing Agreements;

          (d) No Nonrecourse Lender has asserted or made any claim or, to Sellers’
knowledge, threatened to assert or make any claim, for or with respect to any
actual or alleged misrepresentation or breach of any warranty under or in
connection with any of the Financing Agreements;

          (e) No Nonrecourse Lender has sought or, to Sellers’ knowledge, threatened
to seek any indemnification or to exercise or to enforce any right to
accelerate the payment of the Nonrecourse Debt;

          (f) As of the date hereof, no basis exists or, with the mere passage of
time or the giving of notice or both notice and time will exist, that would
give rise to any right for any Nonrecourse Lender to make or assert any claim
for misrepresentation or breach of warranty by GTS, GTF or their Affiliates or,
to Sellers’ knowledge, any other Person, under or in connection with any
Nonrecourse Debt or that would give rise to any right of indemnification for
any Nonrecourse Lender under any Nonrecourse Debt, any right for any
Nonrecourse Lender to require the substitution, replacement or repurchase of
the Equipment securing any Nonrecourse Debt or any right for any Nonrecourse
Lender to accelerate the payment of the Nonrecourse Debt.

          (g) The Financing Agreements constitute the legal, valid and binding
obligation of the parties thereto, enforceable in accordance with their terms,
except as may be limited by: (i) applicable bankruptcy, insolvency,
moratorium, reorganization or similar Laws from time to time in effect that
affect creditor’s rights generally; or (ii) equitable limitations on the
availability of specific remedies; and

          (h) As of the date hereof and as of the Closing Date, there are no payment
obligations due from GTS or GTF but unpaid under the Financing Agreements.

     3.15 Compliance with Laws. Except as set forth on Schedule 3.15, Sellers
are, in all material respects, in compliance with all applicable Laws
applicable to the business of Sellers, and Sellers are not in default with
respect to any judgment, order, injunction, settlement agreement or decree of
any Governmental Authority (it being understood that the representation
contained in this Section 3.15 shall not apply to (a) Tax matters (as the sole
and exclusive representations and warranties with respect to Tax matters are
set forth in Section 3.7) or (b)

33

 

Equipment Leases (as the sole and exclusive representations and warranties
with respect to Equipment Leases are set forth in Section 3.13)).

     3.16 Canadian Transferred Assets. To Sellers’ knowledge, none of the
Equipment or the Obligors under any Equipment Leases forming part of the
Canadian Transferred Assets are located outside of Canada. The Allocation
Schedule accurately sets out the location of the Canadian Transferred Assets.

     3.17 Privacy Laws. Sellers have not and do not in the ordinary course of
their business relating to the Equipment Leases collect, disclose or distribute
personal information (as defined in the Personal Information Protection and
Electronic Documents Act (Canada)).

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Purchasers, severally and not jointly, represent and warrant to Sellers as follows:

     4.1 Authority of Purchasers.

          (a) CIT USA is a corporation duly organized, validly existing and in good
standing under the laws of Michigan, with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. CIT USA has all requisite corporate power to enter
into this Agreement and to carry out its obligations under this Agreement and
the other Transaction Documents to which it is a party. The execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party by CIT USA has been duly authorized by all necessary
corporate action. This Agreement and the other Transaction Documents to which
it is a party have been duly and validly executed and delivered by CIT USA and
constitutes the legal, valid and binding obligation of CIT USA enforceable
against CIT USA in accordance with their terms, except as may be limited by (i)
applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws
from time to time in effect that affect creditors’ rights generally or (ii)
equitable limitations on the availability of specific remedies.

          (b) CIT Canada is a corporation duly organized, validly existing under the
laws of Ontario, with all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
CIT Canada has all requisite corporate power to enter into this Agreement and
the other Transaction Documents to which it is a party and to carry out its
obligations under this Agreement and the other Transaction Documents to which
it is a party. The execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party by CIT Canada has been
duly authorized by all necessary corporate action. This Agreement and the
other Transaction Documents to which it is a party has been duly and validly
executed and delivered by CIT Canada and constitutes the legal, valid and
binding obligation of CIT Canada enforceable against CIT Canada in accordance
with their terms, except as may be limited by (i) applicable bankruptcy,
insolvency, moratorium, reorganization or similar Laws from time to time in
effect

34

 

that affect creditors’ rights generally or (ii) legal or equitable
limitations on the availability of specific remedies.

          (c) Consents and Approvals. Except for the Governmental Required
Consents, the execution and delivery of this Agreement by Purchasers does not,
and the consummation of the transactions contemplated hereby and performance by
Purchasers of its obligations hereunder will not, violate or conflict with any
provision of: (i) the Certificate and Articles of Incorporation (or
Amalgamation, as the case may be) or by-laws of Purchasers; (ii) any material
agreement, lease, instrument, mortgage, license or franchise to which
Purchasers is a party or by which any of its properties is bound; or (iii) any
Law applicable to Purchasers and which violation or conflict would reasonably
be expected to have a material adverse effect on the financial condition of
Purchasers. The failure of any Person not a party hereto to authorize or
approve this Agreement or the transactions contemplated hereby will not give
any Person a right to enjoin, rescind or otherwise prevent or impede the
purchase or assumption, as applicable, of the Transferred Assets or the Assumed
Obligations by Purchasers in accordance with the terms of this Agreement or to
obtain damages from, or any other judicial relief against, any Seller or
Purchasers as a result of any transactions carried out in accordance with the
provisions of this Agreement.

     4.2 Brokers, Etc. No broker or investment banker acting on behalf of
Purchasers is or will be entitled to any broker’s or finder’s fee or any other
commission or similar fee directly or indirectly in connection with any of the
transactions contemplated hereby.

     4.3 Financing. Purchasers have all necessary financial resources
available to consummate the transactions contemplated hereby.

     4.4 Independent Investigation. In making the decision to enter into this
Agreement and to consummate the transactions contemplated hereby, other than
reliance on the representations, warranties, covenants and obligations of
Sellers set forth in this Agreement, Purchasers has relied solely on its own
independent investigation, analysis and evaluation of the Transferred Assets,
the Assumed Obligations and Unassigned Contracts (including Purchasers’ own
estimate and appraisal of the value of the Transferred Assets, the Assumed
Obligations and Unassigned Contracts). Purchasers confirms to Sellers that
Purchasers is sophisticated and knowledgeable in the business of equipment
leasing and is capable of evaluating the matters set forth above.

ARTICLE 5.

COVENANTS

     5.1 Commercially Reasonable Efforts; Regulatory Approvals; Third Party
Consents.

          (a) On the terms and subject to the conditions of this Agreement, each
party shall use its commercially reasonable efforts to cause the Closing to
occur, including taking all commercially reasonable actions necessary (i) to
comply promptly with all legal requirements that may be imposed on it or any of
its Affiliates with respect to the Closing and (ii) to obtain each Governmental
Required Consent and each other consent of, and filing with, a

35

 

Governmental Authority, which if not obtained or made is reasonably likely
to have a material adverse effect on the ability of the parties to consummate
the transactions contemplated by this Agreement.

          (b) In furtherance and not limitation of the provisions of Section 5.1(a),
Sellers and Purchasers shall cooperate with each other with respect to
obtaining the Governmental Required Consents. Purchasers and Sellers shall (i)
furnish to the other such necessary information and reasonable assistance as
the other may require in connection with its preparation of any notification,
filing, submission or further documentation or evidence that is necessary in
obtaining Governmental Required Consents and (ii) promptly disclose to the
other all correspondence received from or sent to any relevant Governmental
Authority in connection herewith and shall keep the other fully informed of any
other related communication in whatever form with any of the relevant
Governmental Authorities. Purchasers and Sellers shall comply promptly with
any inquiry or request for additional information from any relevant
Governmental Authority in connection herewith and shall promptly provide any
supplemental information requested in connection with the notifications,
filings and/or submissions made hereunder for the purposes of obtaining the
Governmental Required Consents.

          (c) In furtherance of and not in limitation of the provisions of Section
5.1(a) and (b):

               (i) Each of GTS and Purchasers shall, as promptly as practicable, but in
no event later than five Business Days following the execution and delivery of
this Agreement, file, if applicable, with the United States Federal Trade
Commission and the United States Department of Justice the notification and
report form, if any, required for the transactions contemplated hereby and any
supplemental information requested in connection therewith pursuant to the HSR
Act. Any such notification and report form and supplemental information shall
be in substantial compliance with the requirements of the HSR Act

               (ii) Purchasers and GTF shall, as promptly as practicable, but in no event
later than seven Business Days following the execution and delivery of this
Agreement prepare and provide submissions to the Commissioner of Competition,
including an application for an Advance Ruling Certificate and promptly furnish
any additional information requested under the Competition Act. In addition,
if requested by Purchasers, GTF or the Commissioner of Competition, Purchasers
and GTF will file a short-form or long-form pre-merger notification pursuant to
the Competition Act.

               (iii) Purchasers shall, if applicable, as promptly as practicable after
the Closing Date, but in no event later than ten days following the Closing
Date, prepare and provide notice to Industry Canada, in prescribed form, of the
completion of the transactions contemplated by this Agreement. GTF shall
provide such reasonable assistance as may be required in preparation of such
notice.

          (d) Contract Consents. (i) General. Immediately after execution of this
Agreement and prior to and after the Closing, each Seller shall, and shall
cause its Affiliates to, use its commercially reasonable efforts (at its own
cost and expense, except as specifically provided in this Section 5.1(d)) to
obtain, and Purchasers shall consult and cooperate with Sellers

36

 

in Sellers’ obtaining, all consents and waivers from third parties to the
extent such consents or waivers are required in respect of any Contracts with
Sellers, including in respect of any Equipment Leases and Financing Agreements,
in connection with entering into this Agreement or the consummation of the
transactions contemplated hereby (the “Required Consents”); provided, that,
except as specifically provided in this Section 5.1(d), neither party hereto
shall be required to pay or commit to pay any amount to (or incur any
obligation in favor of) any Person from whom any such Required Consent may be
required. Purchasers acknowledge that Required Consents may be required from
parties to Contracts listed on Schedule 3.4, including parties to Equipment
Leases and Financing Agreements, and that all such Required Consents have not
been obtained and may not be obtained. Other than in connection with a breach
of this Section 5.1(d) or as provided in the Equipment Lease Subservicing
Agreement, neither Sellers nor GFC shall have any liability whatsoever to
Purchasers arising out of or relating to the failure to obtain any Required
Consents in respect of such Contracts. Other than in connection with a breach
of this Section 5.1(d), Purchasers acknowledge that no representation, warranty
or covenant of a Seller or GFC contained herein shall be breached or deemed
breached, and, except as specifically provided in Section 6.6, no condition
shall be deemed not satisfied, as a result of (A) the failure to obtain any
such Required Consents under the Contracts listed on Schedule 3.4, or (B) any
lawsuit, action, proceeding or investigation commenced or threatened by or on
behalf of any Person arising out of or relating to the failure to obtain any
such Required Consents under the Contracts listed on Schedule 3.4. If a
Required Consent is required under a Contract listed on Schedule 3.4 but is not
obtained prior to the Closing or if an attempted assignment of a Contract is
ineffective for any other reason (any such Contract being an “Unassigned
Contract”), then after the Closing, except for the Recourse Debt as is provided
in clause (v) below, the applicable Seller shall continue to use its
commercially reasonable efforts to obtain, and Purchasers shall continue to
consult with and cooperate with Sellers in obtaining, such Required Consent or
otherwise procure an effective assignment of such Unassigned Contract. With
respect to Unassigned Contracts (other than the Equipment Leases, the Financing
Agreements and the Recourse Debt), pending the obtaining of such Required
Consent or the procurement of such assignment, the applicable Seller shall
implement an arrangement reasonably satisfactory to the applicable Purchaser to
provide such Purchaser with the rights and benefits of such Unassigned Contract
(including an arrangement to provide the applicable Purchaser with the amounts
collected under such Unassigned Contract) so long as such Purchaser, at its
sole cost and expense, accepts the burdens and performs the obligations under
such Unassigned Contract as a subcontractor of the applicable Seller. If, with
respect to any such Unassigned Contract, including the Equipment Leases (and
the interests in Equipment related thereto) and the Financing Agreements, the
applicable Required Consent is obtained or an effective assignment reasonably
satisfactory to the applicable Purchaser can otherwise be made following the
Closing, the applicable Seller shall as soon as reasonably practicable assign
to the applicable Purchaser all of its right, title and interest in and to such
Unassigned Contract, and the applicable Purchaser shall assume and perform all
liabilities and the obligations arising thereunder after the date of such
Required Consent, at which time such Unassigned Contract (and the interests in
Equipment related thereto) shall be deemed a Transferred Asset, without the
payment of further consideration (except for the amounts set forth in Sections
2.5 and 2.7, if applicable) and the obligations so assumed thereunder shall be
deemed Assumed Obligations.

               (ii) Equipment Leases. Immediately after execution of this Agreement and
prior to and after the Closing, each Seller shall, and shall cause its
Affiliates to, use its

37

 

commercially reasonable efforts (at its own cost and expense) to obtain,
and Purchasers shall consult and cooperate with Sellers in Sellers obtaining,
all Required Consents with respect to the Equipment Leases listed on Schedule
3.4. If any such Equipment Leases are Unassigned Contracts as of the Closing
Date, Sellers and Purchasers shall, in addition to the actions described in
clause (i) above, enter into an Equipment Lease Subservicing Agreement in
substantially the form attached hereto as Exhibit E (the “Equipment Lease
Subservicing Agreement”), pursuant to which: (A) the applicable Purchaser
shall, as a subservicer for the applicable Seller, bill and post collections on
Equipment Leases that are Unassigned Contracts, administer any and all
extensions, terminations, renewals or rewrites of, or any other amendments or
modifications with respect to, such Equipment Leases, administer and monitor
the delivery, maintenance and return of the related Equipment and all tax
payments and insurance with respect to such Equipment, engage or cause its
agent to engage in the sale, lease or other disposal of any such Equipment that
is repossessed or returned, including inspections thereof, and service and
administer all other matters arising under the related Equipment Lease
Transactions (collectively, the “Equipment Lease Services”); and (B) the
applicable Seller shall compensate the applicable Purchaser for its services in
the Equipment Lease Subservicing Agreement (the “Subservicing Fee”) as set
forth in the Equipment Lease Subservicing Agreement.

               (iii) Nonrecourse Debt. With respect to the Nonrecourse Debt (other than
the Carneros Trust I and Carneros Trust II Financing Documents and other than
with respect to the Excluded Leases) listed on Schedule 3.4 for which a
Required Consent is required, immediately after execution of this Agreement and
prior to and after the Closing each Seller shall, and shall cause its
Affiliates to, use its commercially reasonable efforts (at its own cost and
expense, except as set forth in clause (A) below) to take, and Purchasers shall
consult and cooperate with Sellers in Sellers taking, the following actions:
(A) requesting that all amounts owing by the applicable Seller under such
Nonrecourse Debt be prepaid, provided that any prepayment amount of principal
plus accrued interest (and any premium or charge associated with such
prepayment amount if agreed to in writing by the applicable Purchaser in its
sole and absolute discretion) shall be paid by the applicable Purchaser on or
after the Closing Date; and (B) if such Nonrecourse Debt is not prepaid,
obtaining all Required Consents with respect to such Nonrecourse Debt. If any
such Nonrecourse Debt (other than Event of Default Debt) is not prepaid on the
Closing Date and becomes an Unassigned Contract, the applicable Seller shall,
pursuant to the term and conditions of this Agreement, assign to the applicable
Purchaser the Equipment Leases subject to the Lien of such Nonrecourse Lender
as provided in Section 2.1(a) and Sellers and Purchasers shall, in addition to
the actions described in clause (i) above, provide in the Equipment Lease
Subservicing Agreement with respect to the Equipment Leases and Equipment Lease
Transactions relating to such Nonrecourse Debt, that (y) the applicable
Purchaser shall provide the applicable Equipment Lease Services to and for the
benefit of the applicable Nonrecourse Lender with respect to the Equipment
Leases securing such Nonrecourse Debt, and (z) the applicable Purchaser shall
pass through to or on behalf of the applicable Seller all payments received
from Obligors under the applicable Equipment Leases that are payable to the
Nonrecourse Lenders under such Nonrecourse Debt on or before the date specified
for such payments in the applicable Nonrecourse Debt, and shall provide such
other administrative services to the Nonrecourse Lender on behalf of the
applicable Seller with respect to such Nonrecourse Debt as shall be set forth
in such Equipment Lease Subservicing Agreement. If any Event of Default Debt
is not prepaid and becomes an Unassigned Contract, Sellers shall retain

38

 

and shall not assign such Event of Default Debt or the Equipment Leases
related thereto unless, within 90 days after the Closing Date, such Event of
Default Debt is prepaid or the Required Consent is obtained, in which case such
Event of Default Debt and the Equipment Leases related thereto shall be
assigned to Purchasers pursuant to Section 2.7(d).

               (iv) Carneros Trust I and Carneros Trust II Financing Documents. With
respect to the Carneros Trust I and Carneros Trust II Financing Documents,
prior to the Closing GTS shall, and shall cause its Affiliates to, use its
commercially reasonable efforts (at its own cost and expense, except as set
forth in clauses (A) and (B) below) to take, and Purchasers shall consult and
cooperate with GTS in GTS taking the following actions: (A) with respect to
the Required Consents by the owner-lessor (the “Head Lessor”) under the
Carneros Master Lease Agreements, requesting that the Head Lessor’s interest in
the Carneros Master Lease Agreements be prepaid for an amount equal to the
present value of the early buyout option prices under Section 29 thereof plus
the present value of the rental payments under the Carneros Master Lease
Agreements to the early buy-out dates, provided that such prepayment amount
(including any premium or charge associated with such prepayment amount, if
agreed to in writing by the applicable Purchaser in its sole and absolute
discretion) shall be paid by the applicable Purchaser; and (B) with respect to
the Required Consents by the lenders under the Nonrecourse Debt represented by
the Master Security Agreements that are a part of the Carneros Trust I and
Carneros Trust II Financing Documents and assuming that the Head Lessor
consents to prepayment as described in clause (A) above, prepaying such
Nonrecourse Debt pursuant to Section 7(a) thereof, provided that the applicable
Purchaser shall pay the remaining amounts due plus any prepayment fee set
forth therein. If the Head Lessor does not consent to prepayment as described
in clause (A) above, Sellers shall retain and shall not assign the Carneros
Subleases unless, within 90 days after the Closing Date, the Head Lessor does
consent to such prepayment, in which case the Carneros Sublease shall be
assigned to the applicable Purchaser pursuant to Section 2.7(d).

               (v) Recourse Debt. With respect to the Recourse Debt, (A) GTS shall use
its commercially reasonable efforts to prepay the Recourse Debt in accordance
with Section 4.02 thereof, provided that GTS shall not be required to pay a
prepayment premium or charge thereunder, and (B) if GTS cannot prepay the
Recourse Debt as described in clause (A) on or prior to the Closing Date,
Sellers shall retain and shall not assign such Recourse Debt or the Equipment
Leases related thereto unless, within 90 days after the Closing Date, such
Recourse Debt is prepaid, in which case the Equipment Leases related to such
Recourse Debt shall be assigned to Purchasers pursuant to Section 2.7(d).

     5.2 Pre-Closing Access to Information. Commencing forthwith after the
execution and delivery of this Agreement and continuing up to and including the
Closing, subject to any applicable legal restrictions, Sellers shall afford
Purchasers and its counsel, accountants and other authorized representatives,
upon reasonable prior notice, reasonable access during normal business hours
(when accompanied by an authorized representative of Sellers) to the premises,
properties, personnel, books and records of Sellers, to the extent related to
the Transferred Assets, the Assumed Obligations or in connection with
Purchasers’ interviewing and making offers of employment to employees of
Sellers under this Agreement and as appropriate to prepare for the Transition
Services Agreement, so long as such access does not unreasonably

39

 

disrupt the normal operations of Sellers and, during such period, shall
furnish reasonably promptly to Purchasers such information as Purchasers may
reasonably request.

     5.3 Operation of Business Prior to Closing. Prior to the Closing Date,
except as set forth on Schedule 5.3 or as otherwise contemplated by this
Agreement and except for changes that, notwithstanding Sellers’ commercially
reasonable efforts to mitigate the effect of such changes, result from the
announcement of this Agreement, GTS and GTF shall operate in the ordinary
course of business consistent with past practices in all material respects,
and shall not, without the prior written consent of Purchasers (which shall not
be unreasonably withheld or delayed), (a) other than pursuant to actions taken
that affect employees of Sellers and their Affiliates generally and are not
specifically directed at employees of Sellers, (i) increase the compensation of
any Hired Employee other than in the ordinary course of business or as required
by any agreement or by-law in effect on the date of this Agreement, (ii) adopt
any new employee benefit plan or materially amend any existing employee benefit
plan relating to a Hired Employee other than to reflect changes in Law and plan
administration or other than in the ordinary course of business and consistent
with past practices or (iii) enter into any new employment or consulting
agreement relating to a Hired Employee for which the aggregate consideration to
be paid is greater than $200,000 and (b) operate their businesses in a manner
that is inconsistent with Schedule 5.3.

     5.4 Confidentiality.

          (a) Purchasers acknowledges that the information being provided to it in
connection with the transactions contemplated hereby is subject to the terms of
the Confidentiality Agreement. Within two Business Days of the date of this
Agreement, Purchasers agree to deliver to Sellers a duly executed amendment to
the Confidentiality Agreement providing that the term of the confidentiality
obligations under the Confidentiality Agreement is three years. Effective upon
the Closing, the Confidentiality Agreement shall terminate with respect to
information relating solely to the Transferred Assets and the Assumed
Obligations; provided, that Purchasers acknowledge that any and all other
information provided to it by any Seller or any of their Affiliates or
representatives concerning any Seller or any of their Affiliates shall remain
subject to the terms and conditions of the Confidentiality Agreement after the
Closing Date.

          (b) At all times from and after the Closing Date, Sellers shall keep
secret and maintain in confidence, and shall not use for their benefit or for
the benefit of others, any confidential or proprietary information relating to
the Transferred Assets or the Assumed Obligations, other than any of such
information that is in the public domain (unless any of such information is in
the public domain in whole or in part due to action or inaction of Sellers).
The foregoing shall not prohibit (i) use of such information (1) as is required
by Law, (2) as is necessary to prepare Tax Returns (including Tax Returns of
Sellers or of any of their Affiliates) or other filings with Governmental
Authorities or to defend or object to any reassessment of Taxes, (3) as is
necessary for Sellers (or their representatives) to prepare and disclose, as
may be required, accounting statements or (4) to assert or protect any rights
of any Seller hereunder or under any applicable Law or (ii) disclosing to any
and all Persons, without limitation of any kind, the U.S. or Canadian federal,
provincial and state tax treatment and tax structure (tax structure shall mean
any fact that may be relevant to understanding the U.S. or Canadian federal,

40

 

provincial or state tax treatment of the transaction) contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to Sellers relating to such tax treatment and tax structure.

     5.5 Employee Matters.

          (a) U.S. Employees.

               (i) At least seven Business Days prior to the Closing, CIT USA shall offer
employment, to be effective as of the Closing Date, to such employees of GTS
(whether or not active) as CIT USA shall identify in writing to GTS at least
fifteen (15) Business Days prior to the Closing Date. All such employees who
accept employment with CIT USA as of the Closing Date shall be referred to as
“GTS Hired Employees” and all employees of GTS who are not GTS Hired Employees
as of the Closing Date shall be referred to as “Non-Hired GTS Employees.”
Except as provided in Sections 5.15 and 5.16, the terms and conditions of such
employment by CIT USA, including the wages, salary, vacation, holiday, paid
leaves, location of employment and the level of required travel, shall be on
such terms and conditions as CIT USA may determine. Purchasers shall provide
appropriate information to affected employees concerning such terms and
conditions of such employment at the time Purchasers extend such employment
offers, and Purchasers and Sellers shall cooperate in providing Purchasers the
opportunity to communicate such offers to affected employees.

               (ii) Effective from and after the Closing, the GTS Hired Employees shall
be given credit for all purposes under the employee benefit plans, programs,
policies and arrangements maintained from time to time by Purchasers or its
Affiliates concerning GTS Hired Employees, for such employees’ service with GTS
and its Affiliates and predecessors for purposes of eligibility and vesting
under such plans (but not for purposes of Benefit Service or Early Retirement
as defined in the CIT Group, Inc. Retirement Plan, or for purposes of
determining years of Continuous CIT Service under the retiree medical and life
insurance plans) to the extent that such service was taken into account under a
corresponding GTS benefit plan as of the Closing Date. If applicable,
Purchasers shall (A) cause any preexisting condition, restrictions or waiting
period under the Purchasers’ plans to be waived (to the extent satisfied or
waived under Sellers’ applicable plans) and (B) honor any deductible and
out-of-pocket expenses incurred by GTS Hired Employees and their dependents
under Sellers’ plan during the portion of the calendar year preceding the
Closing Date.

          (b) Canadian Employees.

               (i) At least seven Business Days prior to the Closing, CIT Canada shall
offer employment, to be effective as of the Closing Date, to such employees of
GTF (whether or not active) as CIT Canada shall identify in writing to GTF at
least 15 Business Days prior to the Closing Date. All such employees who
accept employment with CIT Canada as of the Closing Date shall be referred to
as “Canadian Hired Employees” and all employees of GTF who are not Canadian
Hired Employees as of the Closing Date shall be referred to as “Non-Hired
Canadian Employees.” The terms and conditions of such employment by CIT
Canada, including the wages, salary, vacation, holiday, paid leaves, location
of employment and the level of required travel, shall be on such terms and
conditions as CIT Canada may determine. Purchasers

41

 

shall provide appropriate information to affected employees concerning
such terms and conditions of such employment at the time Purchasers extends
such employment offers, and Purchasers and Sellers shall cooperate in providing
Purchasers the opportunity to communicate such offers to affected employees.

               (ii) Effective from and after the Closing, the Canadian Hired Employees
shall be given credit for all purposes under applicable employee benefit plans,
programs, policies and arrangements maintained from time to time by Purchasers
or its Affiliates, for such employees’ service with GTF and its Affiliates and
predecessors to the same extent and for the same purposes that such service was
taken into account under a corresponding GTF benefit plan as of the Closing
Date.

               (iii) GTS shall be responsible for all liabilities or obligations arising
under applicable law to Canadian employees who are not offered employment by
CIT Canada, whether such obligations arise pursuant to statute, contract or
otherwise.

     5.6 Compliance with WARN. At least 15 Business Days prior to the Closing
Date, GTS shall issue notices as required by WARN to all employees who have not
been identified by CIT USA as receiving an offer of employment. GTS shall be
liable to all Non-Hired GTS Employees and Purchaser shall be liable to all GTS
Hired Employees for termination by Purchaser subsequent to the Closing with
regard to WARN or similar statutes or regulations of any jurisdiction relating
to any plant closing or mass layoff.

     5.7 Use of GATX Name.

          (a) Immediately subsequent to the Closing, Purchasers shall use their
commercially reasonable efforts to cause the Hired Employees and any of its
other employees to cease using the GATX name or any derivative thereof in any
way. Without limiting the foregoing, as promptly as practicable subsequent to
the Closing, Purchasers shall use their commercially reasonable efforts to
remove the GATX name, any derivative thereof and any logo related thereto from
any Transferred Assets or Assumed Obligations or other objects on which such
name appears. Notwithstanding the foregoing, within three months of the
Closing, Purchasers shall not use the GATX name or any derivative thereof in
any way.

          (b) Notwithstanding Section 5.7(a), from and after the Closing Date,
Purchasers shall only use forms of master leases, schedules, supplements,
riders and addenda, whether related to Equipment Leases entered into before or
after the Closing, that do not contain the GATX name, any derivative thereof or
any logo related thereto, and which do not impose any liability on or otherwise
obligate GTS or GTF. Notwithstanding Section 5.7(a), if at any time after the
Closing Purchasers renew, amend, supplement or otherwise modify in any way any
master equipment lease agreement entered into prior to the Closing Purchasers
shall, in connection with such renewal, amendment, supplement or modification,
ensure that the master equipment lease agreement reflects the names of
Purchasers and ceases to refer to “GATX” in any way.

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     5.8 Records; Post-Closing Access to Information.

          (a) Notwithstanding anything to the contrary contained in this Agreement,
Sellers may retain all (i) original agreements, documents, books, records and
files (collectively, “Records”) prepared in connection with the transactions
contemplated hereby, including bids received from other parties and analyses
relating to Sellers, the Transferred Assets or the Assumed Obligations and (ii)
Tax Returns.

          (b) Subject to Section 10.1, Purchasers shall preserve and retain, and
shall cause their Affiliates in accordance with the document retention policy
of Purchasers, as amended from time to time, to preserve and retain, all
Records (including any documents relating to any governmental or
non-governmental actions, suits, proceedings or investigations) relating to the
Transferred Assets or the Assumed Obligations prior to the Closing Date.

          (c) Subject to Section 10.1, from and after the Closing Date, Purchasers
shall, and shall cause its Affiliates to, afford Sellers and their respective
counsel, accountants and other authorized representatives, with five Business
Days’ prior notice, reasonable access during normal business hours to the
respective premises, properties, personnel, books and records related to the
Transferred Assets, Assumed Obligations and Hired Employees and any other
assets or information that Sellers reasonably deem necessary, including in
connection with the preparation of the Closing Balance Sheet and any report or
Tax Return required to be filed by Sellers under applicable Law (but so as not
to unduly disrupt the normal course of operations of Purchasers), including
preparing or defending any Tax Return and any interim or annual report or other
accounting statements.

          (d) If and for so long as any party hereto is contesting or defending
against any third-party charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand in connection with (i) any transaction
contemplated under this Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction on or prior to the Closing Date
involving the Transferred Assets, each other party hereto shall (x) fully
cooperate with it and its counsel in, and assist it and its counsel with, the
contest or defense, (y) make available its personnel (including for purposes of
fact finding, consultation, interviews, depositions and, if required, as
witnesses), and (z) provide such information, testimony and access to its books
and records, in each case as shall be reasonably requested in connection with
the contest or defense, all at the sole cost and expense (not including
employee compensation and benefits costs) of the contesting or defending party
(unless the contesting or defending party is entitled to indemnification
therefor under Article 9). For the avoidance of doubt, this Section 5.8(d)
shall not apply with respect to disputes between the parties hereto.

          (e) If requested by Sellers, Purchaser shall, upon reasonable advance
notice, make available to (a) El Camino Resources Ltd., a California
corporation (“El Camino”) and (b) the accounting firm, if any, engaged to
resolve any dispute between GTS and El Camino, commercially reasonable access,
but so as not to unduly disrupt the normal course of operations of Purchasers,
to (i) Hired Employees to provide information and (ii) the accounts and records
contained in the Equipment Lease Files, in each case related to that certain
securitization deferred contingent payment that may be owed by GTS to El Camino
pursuant to that certain

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Asset Purchase Agreement, dated January 12, 2001, by and between El
Camino, certain Affiliates of El Camino and GTS.

     5.9 March 31st Balance Sheet. As soon as reasonably practicable after the
date hereof (and in any event at least five Business Days prior to Closing),
Sellers shall deliver to Purchasers an unaudited, consolidated balance sheet of
GTS and GTF as of March 31, 2004 (the “March 31st Balance Sheet”). The March
31st Balance Sheet (a) shall be prepared in accordance with the GTS Accounting
Principles and (b) shall have the same line items as set forth in the Pro Forma
Balance Sheet, except that, without duplication, it shall not include the loan
loss allowance line item but shall include the following line items:
Bankruptcy Amount, Event of Default Lease Amount, Recourse Debt Lease Amount,
Carneros Sublease Amount, Sales Agency Lease Amount, Net Loan Loss Allowance
Amount, Bankruptcy Lease Loan Loss Allowance Amount, Event of Default Lease
Loan Loss Allowance Amount, Recourse Debt Lease Loan Loss Allowance Amount,
Carneros Sublease Loan Loss Allowance Amount and Sales Agency Lease Loan Loss
Allowance Amount (it being understood that if a particular Equipment Lease is
both a Bankruptcy Lease and another type of Equipment Lease hereunder, such
Equipment Lease shall be treated only as a Bankruptcy Lease for purposes of the
March 31st Balance Sheet).

     5.10 Post-Closing Collections; Right of Subrogation. If, subsequent to
the Closing, Purchasers or any of their Affiliates receive any amounts due with
respect to the Accounts Receivable, the Excluded Leases or any other Excluded
Asset, Purchasers shall, or shall cause their Affiliates to, as soon as
reasonably practicable, remit to Sellers any such amounts so received;
provided, that, if Purchasers or any of their Affiliates receive any amounts
from a Person who is an obligor to both Purchasers and Sellers that are not
clearly identified as being for the account of Purchasers or Sellers and
Purchasers remain unable after their ordinary course accounts receivable and
reconciliation procedures, to determine the account against which such amount
was paid (the “Purchasers Unidentified Amounts”), then Purchasers shall remit
to Sellers an amount equal to the Purchasers Unidentified Amounts so received,
times the product of (a) the aggregate amount owed to Sellers from such
obligor, divided by (b) the aggregate amount owed to Purchasers (or any of
their Affiliates) and Sellers from such obligor. At the Closing, Sellers shall
become subrogated to all of Purchasers’ rights under the Equipment Leases that
are necessary for Sellers to pursue collection, at Sellers’ sole cost and
expense, of the Accounts Receivable.

     5.11 Parent Guarantees. Purchasers shall cooperate with Sellers and use
their commercially reasonable efforts to obtain a full and unconditional
release of the Parent Guarantees listed on the Nonrecourse Debt portion of
Schedule 1.1(d); provided, that, notwithstanding the foregoing, if required by
a Nonrecourse Lender in connection with the assumption of the related
Nonrecourse Debt by a Purchaser, such Purchaser (or one of its Affiliates)
shall agree to enter into a replacement guaranty for any Parent Guaranty that
relates to such Nonrecourse Debt so long as the terms of such replacement
guaranty being requested by the Nonrecourse Lender are not materially and
adversely different from the current terms of the corresponding Parent
Guarantee listed on the Nonrecourse Debt portion of Schedule 1.1(d).

     5.12 Insurance. Purchasers acknowledge that (a) the coverage of Sellers,
as related to the Transferred Assets, Assumed Obligations or Hired Employees,
for the period after the

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Closing under all of the insurance policies maintained by Sellers or any
of their Affiliates prior to such Closing shall be terminated effective as of
the Closing Date with respect to the Transferred Assets, Assumed Obligations or
Hired Employees and (b) upon such termination, the Transferred Assets, Assumed
Obligations or Hired Employees shall cease to be covered under such policies
with respect to the period after Closing and shall have to obtain replacement
coverage for such period.

     5.13 Intentionally Left Blank.

     5.14 Payments and Equipment Received by Sellers. In addition to their
obligations under the Transition Services Agreement and excluding any amounts
received in connection with Excluded Assets, if Sellers or any of their
Affiliates receive after the Closing any rental, lease or any other payments or
fees or other amounts due with respect to any Equipment Lease or if any
Equipment with respect to any Equipment Lease is delivered after the Closing to
Sellers or any of their Affiliates or any such entity otherwise obtains control
thereof after the Closing, Sellers shall or shall cause their Affiliates to
hold the same in trust for the benefit of Purchasers and shall forthwith pay
and deliver the same, in the form received, to Purchasers; provided, that, if
Sellers or any of their Affiliates receive any amounts from a Person who is an
obligor of both Purchasers and Sellers that are not clearly identified as being
for the account of Sellers or Purchasers and Sellers remain unable after their
ordinary course accounts receivable and reconciliation procedures, to determine
the account against which such amount was paid (the “Sellers Unidentified
Amounts”), then Sellers shall remit to Purchasers an amount equal to the
Sellers Unidentified Amounts so received, times the product of (a) the
aggregate amount owed to Purchasers from such obligor, divided by (b) the
aggregate amount owed to Sellers (or any of their Affiliates) and Purchasers
from such obligor. At the Closing, Purchasers shall become subrogated to all
of Sellers’ rights under the Equipment Leases that are necessary for Purchasers
to pursue collection, at Purchasers’ sole cost and expense, of the accounts
receivable relating to any such Sellers Unidentified Amounts.

     5.15 Salespersons. It is the intention of Purchasers to interview all
Salespersons and to make offers of employment as deemed appropriate by
Purchasers, which Purchasers anticipate will be made to approximately 15 to 20
Salespersons. All such offers made by Purchasers shall provide that, with
respect to each Salesperson’s book of business that exists as of the Closing,
such Salesperson shall receive commissions on his or her existing book of
business as set forth in Section 5.16. For purposes of this Agreement,
“existing book of business” means the Equipment Leases that exists as of the
Closing and are acquired by Purchaser pursuant to Section 2.1(a) or Section
2.7(d).

     5.16 Sales Commission Plans. Each Salesperson who becomes a Hired
Employee pursuant to Section 5.15 (the “Hired Salespersons”) shall be provided
a commission plan by Purchasers with respect to such Salesperson’s existing
book of business that provides such Hired Salesperson essentially the same
economics as would have been received by such Hired Salesperson under the Sales
Commission Plans, determined by such Hired Salesperson’s (a) basis in the
applicable Equipment Leases as reflected under the heading “Grown Equity
(Basis-EOT)“on Exhibit B to Schedule 2.5(b)(xxi), (b) commission rates as set
forth in the Sales Commission Plans and (c) payments at substantially the same
time as under the Sales Commission Plans (it being understood that monthly or
quarterly payments shall be deemed to

45

 

be substantially the same) and Purchasers shall modify or amend, and at
all relevant times keep in effect, its existing sales commissions plans to
affect the terms and conditions of such offer as described herein.

ARTICLE 6.

CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASERS

     The obligation of Purchasers to consummate the transactions contemplated
hereby is, at the option of Purchasers, subject to satisfaction of each of the
following conditions precedent on or before the Closing Date:

     6.1 Warranties True As of Both Present Date and Closing Date. The
representations and warranties of Sellers and GFC contained herein shall have
been accurate, true and correct in all material respects on and as of the date
hereof, and, except to the extent that any such representation or warranty is
made solely as of the date hereof or as of another date earlier than the
Closing Date, shall also be accurate, true and correct in all material respects
on and as of the Closing Date with the same force and effect as though made by
Sellers and GFC on and as of the Closing Date.

     6.2 Compliance with Agreements and Covenants. Each Seller and GFC shall
have in all material respects performed and complied with all of its covenants
and obligations contained in this Agreement to be performed and complied with
by it on or prior to the Closing Date.

     6.3 Competition Law. (a) The waiting period, if applicable, under the HSR
Act shall have expired or been terminated and (b) Competition Act Compliance
shall have been obtained.

     6.4 Injunctions. No court or other Governmental Authority shall have
issued an order, decree or ruling which shall then be in effect enjoining,
restraining or prohibiting the completion of the transactions contemplated
hereby and no suit, action or proceeding shall have been instituted by a
Governmental Authority with at least a reasonable possibility of success
seeking to enjoin, restrain, prohibit, or otherwise challenge the transactions
contemplated by this Agreement, or that would be reasonably likely to prevent
or make illegal the consummation of the transactions contemplated by this
Agreement, and no Government Authority shall have notified Purchasers or
Sellers in writing that this Agreement or the consummation of the transactions
contemplated by this Agreement, this Agreement would in any manner constitute a
violation of any law, rule, or regulation and that it intends to commence any
suit, action, or proceeding to restrain, enjoin or prohibit the transaction
contemplated by this Agreement.

     6.5 Laws. There shall not be any statute, rule or regulation,
restraining, enjoining, or prohibiting the consummation of the transaction
contemplated by this Agreement.

     6.6 Consents. Sellers shall have received Required Consents from
Nonrecourse Lenders holding at least 69.09% of the aggregate amount of
Nonrecourse Debt outstanding as of the Closing, other than Nonrecourse Debt
associated with Excluded Leases.

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     6.7 Certificate. Purchasers shall have received a certificate from each
Seller and GFC signed on behalf of such Seller or GFC, as applicable, by an
authorized officer of such Seller or GFC, as applicable, with respect to itself
to the effect set forth in Sections 6.1 and 6.2.

     6.8 Deliveries by Sellers and GFC. Sellers and GFC shall have effected
the deliveries required pursuant to Section 2.9.

ARTICLE 7.

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS AND GFC

     The obligation of Sellers and GFC to consummate the transactions
contemplated hereby is at the option of Sellers and GFC, subject to the
satisfaction of each of the following conditions precedent on or before the
Closing Date:

     7.1 Warranties True as of Both Present Date and Closing Date. The
representations and warranties of Purchasers contained herein shall have been
accurate, true and correct in all material respects on and as of the date
hereof, and shall also be accurate, true and correct in all material respects
on and as of the Closing Date with the same force and effect as though made by
Purchasers on and as of the Closing Date.

     7.2 Compliance with Agreements and Covenants. Purchasers shall in all
material respects have performed and complied with all of its covenants and
obligations contained in this Agreement to be performed and complied with by it
on or prior to the Closing Date.

     7.3 Competition Law. (a) The waiting period, if applicable, under the HSR
Act shall have expired or been terminated and (b) Competition Act Compliance
shall have been obtained.

     7.4 Injunctions. No court or other Governmental Authority shall have
issued an order, decree or ruling which shall then be in effect enjoining,
restraining or prohibiting the completion of the transactions contemplated
hereby and no suit, action or proceeding shall have been instituted by a
Governmental Authority with at least a reasonable possibility of success
seeking to enjoin, restrain, prohibit or otherwise challenge the transactions
contemplated by this Agreement, or that would be reasonably likely to prevent
or make illegal the consummation of the transactions contemplated by this
Agreement, and no Government Authority shall have notified Purchasers or
Sellers in writing that this Agreement or the consummation of the transactions
contemplated by this Agreement would in any manner constitute a violation of
any law, rule or regulation and that it intends to commence any suit, action,
or proceeding to restrain, enjoin or prohibit the transactions contemplated by
this Agreement.

     7.5 Laws. There shall not be any statute, rule, or regulation,
restraining, enjoining, or prohibiting the consummation of the transaction
contemplated by this Agreement.

     7.6 Certificate. Sellers shall have received a certificate from each
Purchaser signed on behalf of such Purchaser by an authorized officer of such
Purchaser with respect to itself to the effect set forth in Sections 7.1 and
7.2.

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     7.7 GFC Credit Agreements. GFC shall have received all consents required
under the terms of the GFC Credit Agreements in order to consummate the
transactions contemplated hereby.

     7.8 Deliveries by Purchasers. Purchasers shall have effected the
deliveries required pursuant to Section 2.10.

ARTICLE 8.

TERMINATION

     8.1 Termination. This Agreement shall terminate:

          (a) upon the mutual written agreement of Sellers and Purchasers;

          (b) upon written notice from Purchasers to Sellers if (i) any of the
conditions precedent set forth in Article 6 shall have become incapable of
fulfillment (and shall not have been waived by Purchasers) or (ii) each of the
conditions precedent set forth in Article 6 shall not have been satisfied on or
before July 31, 2004, so long as, in the case of clauses (i) and (ii),
Purchasers is not then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement; or

          (c) upon written notice from Sellers to Purchasers if (i) any of the
conditions precedent set forth in Article 7 shall have become incapable of
fulfillment (and shall not have been waived by Sellers) or (ii) each of the
conditions precedent set forth in Article 7 has not been satisfied on or before
July 31, 2004 so long as, in the case of clauses (i) and (ii), neither any
Seller nor GFC is then in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement.

     8.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 8.1, the transactions contemplated hereby shall be abandoned without
any further action by the parties hereto, all applications, filings and other
submissions shall, if possible, be promptly withdrawn and all further
obligations of the parties under this Agreement shall become null and void and
of no further force or effect, except that (i) Section 11.1, 11.7, 11.10 and
11.15 shall survive and (ii) if this Agreement is terminated by a party because
one or more of the conditions to the terminating party’s obligations under this
Agreement is not satisfied as a result of another party’s material failure to
comply with its representations, warranties, covenants, agreements or
obligations under this Agreement, the terminating party’s right to pursue all
legal and equitable remedies (including, if applicable, specific performance)
shall survive such termination unimpaired and the party that is in material
breach of any of its representations, warranties, covenants, agreements or
obligations shall reimburse the terminating party for its reasonable fees of
attorneys, accountants and other third-party agents and representatives,
incurred in connection with this Agreement and the transactions contemplated
hereby. The obligations of the parties under the Confidentiality Agreement
shall survive, and continue in full force and effect, after this Agreement in
accordance with the terms and conditions of the Confidentiality Agreement.

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ARTICLE 9.

SURVIVAL AND INDEMNIFICATION

     9.1 Survival. The representations and warranties of the parties hereto
contained herein shall survive the Closing for a period of 18 months, except
that (a) Lease and Financing Warranties shall survive for three years, (b) Tax
Warranties in respect of a particular Tax shall survive until the Tax Statute
of Limitations Date for such Tax and (c) Title and Authorization Warranties
shall survive forever. Neither any Purchaser, any Seller nor GFC shall have
any liability with respect to claims first asserted in connection with any
representation or warranty after the survival period specified therefor in this
Section 9.1.

     9.2 Indemnification by Sellers and GFC. Subject to the following sentence
and Section 9.4, each Seller and GFC agrees to indemnify Purchasers, their
Affiliates and their respective officers, directors, employees, successors and
permitted assigns (the “Purchaser Indemnified Parties”) after the Closing
against and in respect of, and agree to hold the Purchaser Indemnified Parties
harmless from, any and all Losses asserted against, imposed on, incurred by or
suffered by any Purchaser Indemnified Party arising out of or resulting from
any of the following:

          (a) any breach of or any inaccuracy in any representation or warranty made
by such Seller or GFC in this Agreement or any Article 9 Transaction Document
delivered by such Seller or GFC at the Closing or pursuant to Section 2.7(d);
provided that neither any Seller nor GFC shall have any liability under this
Section 9.2(a) for any breach of or inaccuracy in any representation or
warranty unless (i) in the case of all representations and warranties, except
for Lease and Financing Warranties, Tax Warranties and Title and Authorization
Warranties, a notice of the Purchaser Indemnified Party’s claim is given to
such Seller or GFC, as applicable, not later than 5:30 p.m. Chicago time on the
18-month anniversary of the Closing Date, (ii) in the case of Lease and
Financing Warranties, a notice of the Purchaser Indemnified Party’s claim is
given to such Seller not later than 5:30 p.m. Chicago time on the third
anniversary of the Closing Date, (iii) in the case of Tax Warranties, a notice
of the Purchaser Indemnified Party’s claim is given to such Seller not later
than 5:30 p.m. Chicago time on the Tax Statute of Limitations Date for the
particular Tax in question and (iv) in the case of Title and Authorization
Warranties, a notice of the Purchaser Indemnified Party’s claim is given to
such Seller at any time in the future;

          (b) any breach of or failure by (excluding any breach or inaccuracy
covered by Section 9.2(a) above) such Seller or GFC to perform any agreement,
covenant, obligation or undertaking of such Seller or GFC set out in this
Agreement or any Article 9 Transaction Document delivered at the Closing or
pursuant to Section 2.7(d) by such Seller or GFC; provided, that neither any
Seller nor GFC shall have any liability under this Section 9.2(b) for any
breach or failure occurring on or prior to the Closing Date unless a notice of
the Purchaser Indemnified Party’s claim is given to such Seller or GFC, as
applicable, not later than 5:30 p.m. Chicago time on the third anniversary of
the Closing Date;

          (c) the Excluded Obligations (whether known or unknown at the time of the
Closing and whether existing or hereafter arising);

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          (d) the Excluded Assets;

          (e) except to the extent of any related Assumed Obligations, any failure
to comply with Section 9.13 or any bulk sales or bulk transfer or similar Laws
that may be applicable to the sale of the Transferred Assets;

          (f) any claim, action, demand, complaint, investigation, petition, suit or
other proceeding, whether civil, criminal or administrative, in law or in
equity, or before any Governmental Authority (including any counterclaim or
crossclaims), relating to any Equipment Leases, Equipment Lease Transactions or
other Transferred Assets, in each case to the extent arising out of or based
upon or with respect to any action or event occurring prior to the Closing,
whether or not pending or threatened on the date hereof or at the Closing, and
whether brought, made or instigated by any Governmental Authority or any other
Person;

          (g) the failure of GTS to be licensed pursuant to the California Finance
Lenders Law prior to the Closing, including any Losses arising out of or
resulting from, in whole or in part, any Equipment Lease due to a failure to be
so licensed; or

          (h) any Liens imposed upon the Transferred Assets as a result of any
Seller’s failure to pay its Taxes (other than Transfer Taxes allocated to
Purchasers pursuant to Section 10.4).

     Notwithstanding the previous sentence, (i) GTS shall be obligated to
indemnify the Purchaser Indemnified Parties pursuant to this Section 9.2 only
for matters giving rise to such obligation of indemnification relating to GTS,
or to the assets or obligations of GTS, (ii) GTF shall be obligated to
indemnify the Purchaser Indemnified Parties pursuant to this Section 9.2 only
for matters giving rise to such obligation of indemnification relating to GTF,
or to the assets or obligations of GTF, and (iii) GFC shall be obligated to
indemnify the Purchaser Indemnified Parties pursuant to this Section 9.2 for
all matters giving rise to such obligation of indemnification.

     9.3 Indemnification by Purchasers. Subject to the following sentence and
Section 9.4, each Purchaser agrees to indemnify Sellers, their Affiliates and
their respective officers, directors, employees, successors and permitted
assigns (the “Seller Indemnified Parties”) after the Closing against and in
respect of, and agree to hold the Seller Indemnified Parties harmless from, any
and all Losses asserted against, imposed on, incurred by or suffered by any
Seller Indemnified Party arising out of or resulting from any of the following:

          (a) any breach of or any inaccuracy in any representation or warranty made
by such Purchaser in this Agreement or any Article 9 Transaction Document
delivered by such Purchaser at the Closing or pursuant to Section 2.7(d);
provided, that neither Purchaser shall have any liability under this Section
9.3(a) for any breach of or inaccuracy in any representation or warranty
unless, (i) in the case of all representations and warranties, except for Title
and Authorization Warranties, a notice of the Seller Indemnified Party’s claim
is given to such Purchaser, as applicable, not later than 5:30 p.m. Chicago
time on the 18-month anniversary of the Closing Date and (ii) in the case of
Title and Authorization Warranties, a notice of the Seller Indemnified Party’s
claim is given to such Purchaser at any time in the future;

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          (b) any breach of or failure by (excluding any breach or inaccuracy
covered by Section 9.3(a) above) such Purchaser to perform any agreement,
covenant, obligation or undertaking of such Purchaser set out in this Agreement
or any Article 9 Transaction Document delivered by such Purchaser at the
Closing or pursuant to Section 2.7(d); provided, that neither Purchaser shall
have any liability under this Section 9.3(b) for any breach or failure
occurring on or prior to the Closing, unless a notice of the Seller Indemnified
Party’s claim is given to such Purchaser, as applicable, not later than 5:30
p.m. Chicago time on the third anniversary of the Closing Date;

          (c) any event or condition occurring after the Closing Date with respect
to the Transferred Assets and the Assumed Obligations (other than any event or
condition with respect to any Unassigned Contracts because indemnification, if
any, with respect to Unassigned Contracts is provided for in the Equipment
Lease Subservicing Agreement);

          (d) the termination by such Purchaser of the employment of any Hired
Employee after the Closing based on any action by such Purchaser after the
Closing, excluding any claim that any of the transactions contemplated hereby
or such termination gives rise to any severance or other benefits from Seller
or under any benefit plan, program, arrangement or other obligation or duty of
any Seller or any Affiliate of Sellers; provided, that such Losses do not arise
out of, and are not based upon, do not result from, and do not relate to any
breach of or non-compliance with WARN (as Purchasers’ indemnification with
respect to compliance with WARN is addressed exclusively in Section 9.3(g));

          (e) the Assumed Obligations (whether existing or hereafter arising);

          (f) the status of any Seller as a direct or indirect owner, former owner,
obligor or former obligor, as applicable, of the Transferred Assets or the
Assumed Obligations after the Closing Date to the extent such Losses do not
arise out of, are not based upon and are not with respect to any action or
event occurring prior to the Closing, whether or not pending or threatened on
the date hereof or at the Closing, and whether brought, made or instigated by
any Governmental Authority or any other Person; provided, that such Losses do
not arise out of, and are not based upon, do not result from and do not relate
to any breach or inaccuracy of any representation, warranty, covenant or
obligation of any Seller or GFC hereunder or under any other Transaction
Document;

          (g) any suit or claim of violation brought against Sellers or their
Affiliates under WARN or any comparable state Law for any actions taken by such
Purchaser on or after the Closing Date with respect to any facility, operating
unit or GTS Hired Employee, including any failure to timely give the notice
required by WARN, or other similar statutes or regulations with respect to any
facility closing or mass layoff (or similar triggering event) caused by such
Purchaser;

          (h) the enforcement against a Seller or any Seller Indemnified Party of
any Parent Guarantee for any matter arising after the Closing, except to the
extent such matter would give rise to a valid claim under Section 3.14; or

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          (i) any claim, action, demand, complaint, investigation, petition, suit or
other proceeding, whether civil, criminal or administrative, in law or in
equity, or before any Governmental Authority (including any counterclaim or
crossclaims), relating to any Equipment Leases, Equipment Lease Transactions or
other Transferred Assets, in each case to the extent arising out of or based
upon or with respect to any action or event occurring after the Closing,
whether brought, made or instigated by any Governmental Authority or any other
Person; provided, that such Losses do not arise out of, and are not based upon,
do not result from and do not relate to any breach or inaccuracy of any
representation, warranty, covenant or obligation of any Seller or GFC hereunder
or under any other Transaction Document.

Notwithstanding the previous sentence, (i) CIT USA shall be obligated to
indemnify the Seller Indemnified Parties pursuant to this Section 9.3 only for
matters giving rise to such obligation of indemnification relating to CIT USA,
or to the US Transferred Assets and US Assumed Obligations, and (ii) CIT Canada
shall be obligated to indemnify the Seller Indemnified Parties pursuant to this
Section 9.3 only for matters giving rise to such obligation of indemnification
relating to CIT Canada, or to the Canadian Transferred Assets and Canadian
Assumed Obligations.

     9.4 Limitations on Liability. Notwithstanding any other provision of this
Agreement (other than Section 9.12):

          (a) Other than for liability under Section 3.7, Section 9.2(g), Section
9.2(h), Section 9.12 or Article 10, the Transition Services Agreement and the
Equipment Lease Subservicing Agreement for which, in each case, this Section
9.4(a) shall not be applicable (with the effect that indemnification for any
such Losses for any such breach shall not be subject to this Section 9.4(a)),
the Seller Indemnified Parties shall not have any obligation to indemnify the
Purchaser Indemnified Parties unless the aggregate amount of Losses subject to
indemnification pursuant to Section 9.2 (other than pursuant to Section 3.7,
Section 9.2(g) or Section 9.2(h)) shall exceed $1,000,000, and once such amount
is exceeded, the Seller Indemnified Parties shall indemnify the Purchaser
Indemnified Parties for, and shall be liable for, all Losses subject to
indemnification pursuant to Section 9.2 exceeding such amount (subject to the
other limitations on indemnification expressly set forth in this Agreement).

          (b) Other than for liability under Section 9.2(b) (solely relating to
breaches occurring after the Closing), Section 9.2(c), Section 9.2(d), Section
9.2(e), Section 9.2(g), Section 9.2(h), Section 9.12, Article 10, the
Transition Services Agreement and the Equipment Lease Subservicing Agreement
for which, in each case, this Section 9.4(b) shall not be applicable (with the
effect that indemnification for any such Losses shall not be counted toward the
aggregate amount set forth in this Section 9.4(b)), Sellers and GFC, taken
together, shall have no liability under or in connection with this Agreement or
the transactions contemplated hereby in excess of the Premium Amount in the
aggregate.

          (c) The sole and exclusive liability and responsibility of Sellers and GFC
to the Purchaser Indemnified Parties under or in connection with this Agreement
or the transactions contemplated hereby, other than the Transition Services
Agreement and the Equipment Lease Subservicing Agreement (including for any
breach of or inaccuracy in any representation or warranty or for any breach of
any covenant or obligation), and the sole and exclusive remedy of

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the Purchaser Indemnified Parties with respect to any of the foregoing,
shall be as set forth in Article 8, Article 9 and Article 10. To the extent
that the Purchaser Indemnified Parties have any Losses for which they may
assert any other right to indemnification, contribution or recovery from
Sellers or GFC (whether under this Agreement or under any common law or any
statute, including any Environmental Law, or otherwise), Purchasers hereby
waive, release and agree not to assert such other right, and Purchasers agree
to cause each of the Purchaser Indemnified Parties to waive, release and agree
not to assert such right.

          (d) The sole and exclusive liability and responsibility of Purchasers to
the Seller Indemnified Parties under or in connection with this Agreement or
the transactions contemplated hereby, other than the Transition Services
Agreement and the Equipment Lease Subservicing Agreement (including for any
breach of or inaccuracy in any representation or warranty or for any breach of
any covenant or obligation), and the sole and exclusive remedy of the Seller
Indemnified Parties with respect to any of the foregoing, shall be as set forth
in Article 8, Article 9 and Article 10. To the extent that the Seller
Indemnified Parties have any Losses for which they may assert any other right
to indemnification, contribution or recovery from Purchasers (whether under
this Agreement or under any common law or any statute, including any
Environmental Law, or otherwise), Sellers and GFC hereby waive, release and
agree not to assert such other right, and Sellers and GFC agree to cause each
of the Seller Indemnified Parties to waive, release and agree not to assert
such right.

          (e) In no event shall any Seller or GFC be required to indemnify any
Purchaser Indemnified Party, and neither any Seller nor GFC shall have any
liability for any Loss accrued, provided or reserved for, or otherwise taken
into account in, the Net Loan Loss Allowance Amount.

     9.5 Claims. As promptly as is reasonably practicable after knowledge of a
claim for indemnification under this Agreement that does not involve a third
party claim, or the commencement of any suit, action or proceeding of the type
described in Section 9.6, becomes within Purchasers’ knowledge or Sellers’
knowledge, as the case may be, the Indemnified Person shall give written notice
to the Indemnifying Person of such claim, which notice shall specify in
reasonable detail the nature of such claim and the estimated amount (if then
susceptible to estimation) that the Indemnified Person at the time plans to
seek hereunder from the Indemnifying Person, together with such reasonably
available information (if not already available to the Indemnifying Person) as
may be necessary for the Indemnifying Person to determine that the limitations
in Section 9.4 have been satisfied or do not apply; provided, that failure of
the Indemnified Person to give such notice of any such claim shall not release,
waive or otherwise affect the obligations under this Article 9 of the
Indemnifying Person with respect thereto except to the extent that it is
materially prejudiced by the failure or delay in giving such notice.

     9.6 Notice of Third Party Claims; Assumption of Defense. The Indemnified
Person shall give written notice (the “Initial Notice”) as promptly as is
reasonably practicable, but in any event no later than ten Business Days after
receiving notice thereof, to the Indemnifying Person of the written assertion
of any claim, or the commencement of any suit, action or proceeding, by any
Person not a party hereto in respect of which indemnity is to be sought under
this Agreement (which notice shall specify in reasonable detail the nature of
such claim and the estimated

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amount (if then susceptible to estimation) that the Indemnified Person at
that time plans to seek hereunder from the Indemnifying Person, together with
such reasonably available information (if not already available to the
Indemnifying Person) as may be necessary for the Indemnifying Person to
determine that the limitations in Section 9.4 have been satisfied or do not
apply); provided, that failure of the Indemnified Person to give such notice of
any such claim or commencement shall not release, waive or otherwise affect the
obligations under this Article 9 of the Indemnifying Person with respect
thereto except to the extent that it is materially prejudiced by the failure or
delay in giving such notice. The Indemnifying Person may, at its own expense,
(a) participate in the defense of any such claim, suit, action or proceeding
and (b) upon notice to the Indemnified Person within ten Business Days after
the receipt of the Initial Notice from the Indemnified Person of the claim,
suit, action or proceeding, assume the defense thereof with counsel of its own
choice reasonably acceptable to the Indemnified Person, and in the event of
such assumption, shall have the exclusive right, subject to compliance by the
Indemnifying Person with clauses (i) and (iii) of Section 9.7, to settle or
compromise such claim, suit, action or proceeding. If the Indemnifying Persons
do not so elect to assume such defense in accordance with the terms of this
Section 9.6, the Indemnified Person may defend such claim, suit, action or
proceeding in such manner as the Indemnified Person may deem appropriate,
including settling such claim or action or proceeding (after giving notice of
the same to each of the Indemnifying Persons) on such terms as the Indemnified
Person may deem appropriate, and the Indemnifying Persons shall assist and
cooperate fully with such defense as reasonably requested by the Indemnified
Person and shall promptly indemnify the Indemnified Person in accordance with
the provisions of Section 9.2 or 9.3, as applicable. If the Indemnifying
Person so assumes such defense, the Indemnified Person shall have the right
(but not the duty) to participate in the defense thereof and to employ counsel
separate from the counsel employed by the Indemnifying Person; provided, that
the expense of separate counsel so employed shall be borne by the Indemnified
Person unless there exists actual or potential conflicting interests between
the Indemnifying Persons and the Indemnified Person. Whether or not the
Indemnifying Person chooses to defend or prosecute any such claim, suit, action
or proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.

     9.7 Settlement or Compromise. Any settlement or compromise made or caused
to be made by the Indemnified Person (unless the Indemnifying Person has the
exclusive right to settle or compromise under Section 9.6) or the Indemnifying
Person, as the case may be, of any such claim, suit, action or proceeding of
the kind referred to in Section 9.6 shall also be binding upon the Indemnifying
Person or the Indemnified Person, as the case may be, in the same manner as if
a final judgment or decree had been entered by a court of competent
jurisdiction in the amount of such settlement or compromise; provided that (i)
no obligation, restriction or Loss shall be imposed on the Indemnified Person
as a result of any settlement or compromise without its prior written consent,
which consent shall not be unreasonably withheld or delayed, (ii) if the
Indemnifying Person has assumed the defense of a claim, suit, action or
proceeding pursuant to Section 9.6, the Indemnified Person shall not
compromise or settle such claim, suit, action or proceeding without the prior
written consent of the Indemnifying Person, which consent shall not be
unreasonably withheld or delayed, and (iii) such settlement shall not contain
any finding or admission of any violation of Law or any fault on the part of
the Indemnified Person, and shall not have any effect on any other claims that
may be made by the Indemnified Person against the third party bringing the
claim, suit, action or proceeding.

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     9.8 Intentionally Left Blank.

     9.9 Knowledge. Notwithstanding anything contained herein to the contrary
other than Section 9.12, no party shall have (a) any liability for a breach of
or inaccuracy in any representation or warranty by such party, if the party
seeking indemnification actually knew (within the definition of Purchasers’
knowledge or Sellers’ knowledge, as applicable) at or before the Closing of
such and the extent of such breach or inaccuracy or (b) any liability after the
Closing for any breach of or failure to perform any covenant or obligation of
such party if the party seeking indemnification knew (within the definition of
Purchasers’ knowledge or Sellers’ knowledge, as applicable) at or before the
Closing of such breach or failure.

     9.10 Net Losses; Subrogation; Mitigation.

          (a) Notwithstanding anything contained herein to the contrary, the amount
of any Losses incurred or suffered by an Indemnified Person shall be calculated
after giving effect to (i) any insurance proceeds received by the Indemnified
Person (or any of its Affiliates) with respect to such Losses, but only if the
insurance premium relating to such proceeds has not been paid for by the
Indemnified Person, (ii) any Tax Benefit realized by the Indemnified Person (or
any of its Affiliates) arising from the facts or circumstances giving rise to
such Losses and from the payment of any amounts to the Indemnified Person (or
any of its Affiliates) on account of any Losses and (iii) any other recoveries
directly relating to such Loss obtained by the Indemnified Person (or any of
its Affiliates) from any other third party, less all Losses related to the
pursuing and receipt of such recoveries and any related recoveries. Each
Indemnified Person shall exercise commercially reasonable efforts to obtain
such proceeds, benefits and recoveries; provided, that no party shall be
required to use such efforts if they would be detrimental in any material
respect to such party. If any such net proceeds, benefits or recoveries are
received by an Indemnified Person (or any of its Affiliates) with respect to
any Losses after an Indemnifying Person has made a payment to the Indemnified
Person with respect thereto, the Indemnified Person (or such Affiliate) shall
pay to the Indemnifying Person the amount of such net proceeds, benefits or
recoveries (up to the amount of the Indemnifying Person’s payment).

          (b) Upon making any payment to an Indemnified Person in respect of any
Losses, the Indemnifying Person shall, to the extent of such payment, be
subrogated to all rights of the Indemnified Person (and its Affiliates) against
any insurance company or any other third party from which the Indemnified
Person (and its Affiliates) has contractual indemnity rights, in respect of the
Losses to which such payment relates. Such Indemnified Person (and its
Affiliates) and Indemnifying Person shall execute upon request all instruments
reasonably necessary to evidence or further perfect such subrogation rights.

          (c) Purchasers, Sellers and GFC shall use commercially reasonable efforts
to mitigate any Losses, whether by asserting claims against a third party or by
otherwise qualifying for a benefit that would reduce or eliminate an
indemnified matter; provided, that no party shall be required to use such
efforts if they would be detrimental in any material respect to such party.

     9.11 Purchase Price Adjustments. Any amounts payable under Section 9.2 or
Section 9.3 shall be treated by Purchasers and Sellers as an adjustment to the
Purchase Price.

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     9.12 Special Rule for Fraud. Notwithstanding anything in this Article 9
or elsewhere in this Agreement to the contrary, in the event of a breach of a
representation or warranty by any party to this Agreement that constitutes
fraud or intentional deception, the representation or warranty that has been
breached will survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (regardless of any
investigation made by any party to this Agreement or on its behalf) and will
continue in full force and effect for perpetuity, and any Losses from any such
breach will not be subject to the indemnification basket, cap or other
limitations contained in this Article 9.

     9.13 Bulk Sales Act. CIT Canada shall not require GTF to comply with the
requirements of the Bulk Sales Act (Ontario). GTF and GFC warrant and agree to
pay and discharge when due all claims of creditors asserted against CIT Canada
by reason of such non-compliance to the extent that such liabilities are not
specifically assumed by CIT Canada as part of the Canadian Assumed Obligations.
GTF and GFC hereby jointly and severally agree to indemnify and hold CIT
Canada harmless from, against and in respect of any loss, liability, cost or
expense, including reasonable attorneys’ fees, suffered or incurred by CIT
Canada by reason of the failure of GTF to pay or discharge any such claim.

     9.14 GST Gross-up. The Indemnifying Person agrees that any
indemnification payments under this Article 9 shall be increased by the amount
of any applicable goods and services or Québec sales tax, if any, deemed to be
included in such payment; it being understood that this provision is not
intended to allow the Indemnified Person to recover more than once for any such
tax.

ARTICLE 10.

TAX MATTERS

     10.1 Cooperation on Tax Matters.

          (a) After Closing, upon reasonable written notice, Purchasers and Sellers
shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such party) relating to the Transferred Assets (including access to and
copies of books and records and, in the case of ad valorem Taxes, supporting
information regarding the appraisal methods used by Sellers to report the value
of the Equipment for personal property tax purposes) as is reasonably requested
for: the filing of all Tax Returns; the making of any election related to
Taxes; the preparation for any Tax audit by any Governmental Authority; and the
prosecution or defense of any claim, suit or proceeding related to any Tax
Return. Sellers and Purchasers shall cooperate with each other in the conduct
of any audit or other proceeding relating to (i) Taxes involving the
Transferred Assets or (ii) the allocation of the Purchase Price. Sellers shall
be liable for and shall hold Purchasers harmless from all Taxes levied, imposed
or assessed with respect to any audit or other proceeding of or related to
Taxes by any Governmental Authority with respect to the Transferred Assets and
attributable to a Tax period ending on or before the Closing Date. Purchasers
and Sellers shall (i) retain all books and records with respect to Tax matters
pertinent to the Transferred Assets relating to any Taxable Period beginning
before the Closing Date until the expiration of the applicable statute of
limitations (and, to the extent notified by Purchasers or Sellers, any

56

 

extensions thereof) of the respective Taxable Periods, and to abide by all
record retention agreements entered into with any Government Authority and (ii)
give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party so
requests, Sellers, as the case may be, shall allow the other party to take
possession of such books and records.

          (b) Purchasers and Sellers, upon reasonable request by the other party,
shall use all commercially reasonable efforts to obtain any certificate or
other document from any Governmental Authority or any other Person, and shall
use good faith efforts to mitigate, reduce or eliminate any Tax that could be
imposed (including with respect to the transactions contemplated hereby).

          (c) Sellers shall provide Purchasers with copies of any tax abatement,
tax deferral, tax credit or other similar tax incentive agreement or document
between Sellers and any Governmental Authority with respect to ad valorem Taxes
on the Transferred Assets and Sellers shall cooperate with Purchasers and the
Governmental Authority to insure that, where possible, a Purchaser is
substituted for a Seller as the recipient and the beneficiary of any such tax
abatement, tax deferral, tax credit or similar tax incentive.

          (d) Each Seller will provide to Purchasers at or prior to the Closing: (i)
copies of all bona fide re-sale certificates; (ii) copies of all documentation
to support all bona fide re-sale certificates; (iii) copies of any applicable
sales/use tax documentation specifically required in California, Illinois, New
Jersey and Ohio in connection with the transfer of tangible personal property;
with respect to all Equipment Leases and the corresponding Equipment Lease
Transactions.

     10.2 Allocation of Purchase Price. Within 60 days after the Closing Date,
Purchasers shall deliver to Sellers a schedule allocating the Purchase Price
and Assumed Obligations among the Transferred Assets in accordance with section
1060 of the Code and the regulations thereunder (the “Allocation Schedule”).
The Allocation Schedule shall include a breakdown by Governmental Authority and
shall in all other material respects contain sufficient detail to enable
Purchasers and Sellers to determine Taxes applicable to the transactions
contemplated by this Agreement. Sellers have 30 days from the date of receipt
of the Allocation Schedule to notify Purchasers in writing that Sellers dispute
one or more items reflected on the Allocation Schedule as having no reasonable
basis for the allocation set forth in the Allocation Schedule, which notice
shall include a detailed explanation of the basis for the dispute. If Sellers
do not provide such notice to the Purchasers, Sellers shall be deemed to have
accepted the Allocation Schedule as submitted by Purchasers. If Sellers do
provide such notice, Sellers and Purchasers shall negotiate in good faith to
resolve such dispute. If Sellers and Purchasers fail to resolve any such
dispute within 30 days of Purchasers’ receipt of Sellers’ notice, the
Arbitrating Accounting Firm shall be engaged for resolution of the dispute with
respect to the allocation of the Purchase Price and Assumed Obligations to the
extent such allocation is in dispute. The determination of the Arbitrating
Accounting Firm shall be final and binding on all parties. The parties agree
not to take any position inconsistent with the Allocation Schedule for Tax
reporting purposes. The fees and expenses of the Arbitrating Accounting Firm
in connection with the resolution of any dispute shall be paid equally by
Purchasers and Sellers.

57

 

     10.3 Apportioned Obligations. Liability for personal property taxes and
similar ad valorem obligations levied with respect to the Transferred Assets
for a taxable period which includes (but does not end on) the Closing Date
(collectively, the “Apportioned Obligations”) shall be apportioned between
Purchasers and Sellers based on the number of days of such taxable period
included in the period ending on the Closing Date (the “Pre-Closing Tax
Period”) and the number of days of such taxable period included in the period
after the Pre-Closing Tax Period (the “Post-Closing Tax Period”). Sellers
shall be liable for the proportionate amount of such Apportioned Obligations
that is attributable to the Pre-Closing Tax Period. Purchasers shall be liable
for the proportionate amount of such Apportioned Obligations that is
attributable to the Post-Closing Tax Period.

     10.4 Transfer Taxes. All excise, goods and services, sales (including
bulk sales), use, value added, registration, recording, documentary,
conveyancing, property, and transfer taxes incurred in connection with the
transactions contemplated by this Agreement, at the Closing, (collectively, the
“Transfer Taxes”) shall be borne equally (50/50) by Purchasers and Sellers.
Notwithstanding the immediate prior sentence, Purchasers shall, at the Closing,
pay to GTF all goods and services tax, harmonized sales tax, and Quebec sales
tax imposed on CIT Canada and required to be collected by GTF under applicable
Canadian federal or provincial law in connection with the transactions
contemplated by this Agreement. For greater certainty, Seller shall pay and
Purchasers shall have no responsibility for Taxes on the net income of Seller
or franchise taxes, or capital gains or other gains or profits realized by
Sellers in connection with the transactions contemplated by this Agreement.
Purchasers and Sellers shall cooperate in providing each other with any
appropriate resale exemption certifications and other similar documentations.
Notwithstanding the foregoing, Sellers shall be allocated 100% of all
California Transfer Taxes (including any audit adjustments of such Taxes) that
may arise from the transfer of (1) Transferred Assets that constitute
California sale leasebacks and (2) leases with elections to pay California
sales or use Tax measured by the purchase price rather than taxed on the lease
stream. Also, for purposes of this provision, Transfer Taxes shall be
allocated after taking into account any benefit to a party associated with
Illinois sales or use Tax credits that may arise as a result of this
Transaction.

     10.5 Assignment. Sellers shall assign to Purchasers any rights Sellers
may have to claim an offset or a credit for sales, use or similar Taxes with
respect to the continuation of the Equipment Leases that may be used under
applicable Law by Purchasers, but only to the extent that Sellers would not
otherwise be entitled to claim such offsets or credits, except where the
Obligor under the Equipment Lease is entitled to receive the credit or offset.

ARTICLE 11.

MISCELLANEOUS

     11.1 Expenses. Each party hereto shall bear its own expenses with respect
to this transaction. Purchasers and Sellers shall pay equally (50/50) any HSR
Act, Competition Act, Investment Canada Act or similar filing or reporting fee
called for by such acts to be paid for in connection with its filing.

58

 

     11.2 Amendment. This Agreement may be amended, modified or supplemented
only in writing signed by each of the parties hereto.

     11.3 Notices. Any written notice to be given hereunder shall be deemed
given: (a) when received if given in person or by nationally recognized
courier; (b) on the date of transmission if sent by telecopy, e-mail or other
wire transmission (receipt confirmed); (c) three Business Days after being
deposited in the US mail, certified or registered mail, postage prepaid; and
(d) if sent by an internationally recognized overnight delivery service, the
second Business Day following the date given to such overnight delivery service
(specified for overnight delivery and receipt confirmed). All notices shall be
addressed as follows:

     If to any Seller or GFC, addressed as follows:

	 	 	GATX Technology Services Corporation

GATX Technology Finance Inc.

GATX Financial Corporation

c/o GATX Corporation

500 West Monroe Street

Chicago, Illinois 60661

Attention: Ronald J. Ciancio, Esq.

Telephone: (312) 621-6591

Facsimile: (312) 621-6647

	 
	 	 	with a copy to:
	 
	 	 	Mayer, Brown, Rowe & Maw LLP

190 South LaSalle Street

Chicago, Illinois 60603

Attention: Elizabeth A. Raymond, Esq.

Telephone: (312) 782-0600

Facsimile: (312) 701-7711

     If to Purchasers, addressed as follows:

	 	 	CIT Technologies Corporation

c/o CIT Systems Leasing

2285 Franklin Road,

2nd Floor

Bloomfield Hills, Michigan 48303

Attention: Ken Bruchanski, Chief Financial Officer

Telephone: 248-339-1516

Facsimile: 248-339-1491

59

 

	 	 	CIT Financial Ltd.

c/o CIT Systems Leasing

2285 Franklin Road

2nd Floor

Bloomfield Hills, Michigan 48303

Attention: Ken Bruchanski, Chief Financial Officer

Telephone: 248-339-1516

Facsimile: 248-339-1491
	 
	 	 	with copies to:
	 
	 	 	CIT Group Inc.

1 CIT Drive

Livingston, NJ 07039

Attention: Executive Vice President, Chief Credit Officer and Global Servicing

Director — Specialty Finance

Telephone: 973-740-5160

Facsimile: 973-740-5611
	 
	 	 	CIT Group Inc.

1 CIT Drive

Livingston, NJ 07039

Attention: Senior Vice President and Chief Counsel — Specialty Finance

Telephone: 973-740-5377

Facsimile:
	 
	 	 	Pitney Hardin LLP

(mail):

P.O. Box 1945

Morristown, New Jersey 07962-1945

(deliveries):

200 Campus Drive

Forham Park, New Jersey 07932

Attention: Michael J. Dunne, Esq.

Telephone: (973) 966-8138

Facsimile: (973) 966-1550

     11.4 Waivers. The failure of a party to require performance of any
provision hereof shall not affect its right at a later time to enforce the
same. No waiver by a party of any term, covenant, representation or warranty
contained herein shall be effective unless in writing. No such waiver in any
one instance shall be deemed a further or continuing waiver of any such term,
covenant, representation or warranty in any other instance.

60

 

     11.5 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

     11.6 Headings. The headings preceding the text of Articles and Sections
of this Agreement and the Schedules and Exhibits thereto are for convenience
only and shall not be deemed part of this Agreement.

     11.7 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws (both substantive and
procedural), and not the conflict of laws principles of the State of Illinois.

     11.8 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns;
provided, that no assignment of either party’s rights or obligations may be
made without the written consent of the other party, which consent shall not be
unreasonably withheld or delayed.

     11.9 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, solely with respect to Article 9 and Article
10, any Indemnified Person hereunder, and, except as aforesaid, no provision of
this Agreement shall be deemed to confer any remedy, claim or right upon any
third party, including any Hired Employee or former employee of Sellers or any
participant or beneficiary in any benefit plan, program or arrangement.

     11.10 Forum; Waiver of Jury Trial. Each party agrees that any suit,
action or proceeding brought by such party against the other in connection with
or arising from this Agreement (“Judicial Action”) shall be brought solely in
the United States District Court for the Northern District of Illinois, and
each party consents to the jurisdiction and venue of each such court. Each
party hereby waives its rights to a jury trial in connection with any Judicial
Action.

     11.11 Schedules. 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 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 and GFC may, from
time to time prior to or at the Closing, by notice in accordance with the terms
of this Agreement, supplement or amend any Schedule, including one or more
supplements or amendments to

61

 

correct any matter which would constitute a breach of any representation,
warranty, covenant or obligation contained herein. No such supplemental or
amended Schedule shall be deemed to cure any breach for purposes of Section
6.1. If, however, the Closing occurs, any such supplement and amendment will
be effective to cure and correct for all other purposes any breach of any
representation, warranty, covenant or obligation which would have existed if
Sellers or GFC had not made such supplement or amendment, and all references to
any Schedule hereto which is supplemented or amended as provided in this
Section 11.11 shall for all purposes at and after the Closing be deemed to be a
reference to such Schedule as so supplemented or amended.

     11.12 Incorporation. The respective Schedules, Exhibits and Appendices
attached hereto and referred to herein are incorporated into and form a part of
this Agreement.

     11.13 Complete Agreement. This Agreement and the Confidentiality
Agreement constitute the complete agreement of the parties with respect to the
subject matter hereof and supersede all prior discussions, negotiations and
understandings.

     11.14 Disclaimer. Sellers and GFC disclaim any representations or
warranties except as specifically set forth in this Agreement (or any agreement
or document referred to in this Agreement or delivered in connection with the
transactions contemplated by this Agreement). In particular, except as
specifically set forth in this Agreement, Sellers and GFC disclaim any
representation or warranty, and Purchasers agree that neither any Seller nor
GFC shall have any liability, with respect to any information concerning the
Transferred Assets, the Assumed Obligations or the Hired Employees not
represented and warranted to in this Agreement, including, (a) the information
set forth in the Descriptive Memorandum dated December 2003 distributed by J.P.
Morgan Securities, Inc. with respect to the GTS Companies, (b) any information
regarding the Transferred Assets, the Assumed Obligations or the Hired
Employees provided at any management presentation related to the transactions
contemplated by this Agreement, (c) any information communicated by or made
available through the data room process or (d) any financial projection or
forecast relating to any of the Transferred Assets or the Assumed Obligations.
With respect to any such projection or forecast delivered by or on behalf of
Sellers to Purchasers, Purchasers acknowledge that (i) there are significant
uncertainties inherent in such projections and forecasts and (ii) Purchasers
are familiar with such uncertainties and takes full responsibility for making
its own evaluation of the adequacy and accuracy of all such projections and
forecasts; provided, that Sellers and GFC in no way limit the representations,
warranties, covenants or other agreements made by Sellers or GFC in this
Agreement.

     11.15 Public Announcements. Sellers, GFC and Purchasers each agree that
they and their Affiliates shall not issue any press release or otherwise make
any public statement or respond to any media inquiry with respect to this
Agreement or the transactions contemplated hereby without the prior approval of
the other parties, which shall not be unreasonably withheld or delayed, except
(a) as may be required by Law or by any stock exchanges having jurisdiction
over Sellers, GFC, Purchasers or their Affiliates and (b) (i) in connection
with any earnings call with shareholders and analysts that may be held by GATX
Corporation or CIT Group Inc. to discuss such company’s financial results for
the first quarter of 2004 or (ii) in response to any unsolicited inquiries from
any media source or analyst (it being understood that any statements

62

 

pursuant to this clause (b) shall be consistent with the document entitled
“Post-Press Release Media and/or Investment Community Responses” that has been
previously delivered by Sellers to Purchasers).

     11.16 Currency. Except as otherwise expressly set forth herein, all
references to “dollars” or “$” in this Agreement shall mean United States
Dollars. For purposes of currency conversion, Canadian Dollars shall be
converted into U.S. Dollars based upon the exchange rate in the Key Currency
Cross Rates table published in the Wall Street Journal on the Business Day
immediately prior to March 31, 2004 for purposes of the March 31st Balance
Sheet and the Business Day immediately prior to the Closing Date for purposes
of the Closing Balance Sheet.

     11.17 Further Assurances. At any time and from time to time after the
Closing, at Purchasers’ reasonable request and without further consideration,
each Seller shall execute and deliver, and cause its Affiliates, as
appropriate, to execute and deliver, such other instruments of sale, transfer,
conveyance, assignment, and confirmation and take such further action as
Purchasers may reasonably deem necessary or desirable in order to more
effectively transfer, convey and assign to Purchasers (or any successor or
permitted assign of Purchasers), and to confirm Purchasers’ (and any such
successor’s and assign’s) title to the Transferred Assets, to put Purchasers
(and any such successors and assigns) in actual possession and operating
control thereof and to assist Purchasers (and any such successors and assigns)
in exercising all rights, title and interests with respect thereto.

ARTICLE 12.

GUARANTY

     GFC hereby unconditionally, absolutely, continuingly and irrevocably
guarantees, as a primary obligor and not merely as a surety, to Purchasers and
the Purchaser Indemnified Parties the full and timely payment, if any, and
performance by each Seller of all of their covenants, agreements, obligations
and liabilities arising under or pursuant to this Agreement and the other
Transaction Documents, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, including all indemnification
obligations (collectively, the “Obligations”). If any of the Obligations shall
not be paid or performed according to their terms, GFC shall immediately pay,
perform, or cause the performance of the same, this Guaranty being a guaranty
of full payment and performance and not of collectibility. This Guaranty is an
absolute, unconditional, and continuing guaranty and is in no way conditioned
upon any requirement that Purchasers first attempt to collect payment or seek
performances of any of the Obligations from either or both Sellers or any other
obligor or guarantor, or resort to any other security or other means of
obtaining payment or performance of any of the Obligations or upon any other
condition or contingency whatsoever. GFC’s obligations under this Article 12
shall in no way be impaired, affected, reduced or released by reason of the
voluntary or involuntary liquidation, dissolution, sale, or other disposition
of all or substantially all the assets of either or both Sellers or the
marshalling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other similar proceedings or
any other inability to pay or perform affecting, either or both Sellers or any
of their respective assets.

63

 

     Purchasers shall have the right, without giving notice to or obtaining the
consent of GFC and without relieving GFC of any liability hereunder, to deal
with either or both Sellers, in such manner as Purchasers, in their sole and
absolute discretion, deems fit and proper, and to this end GFC hereby gives to
Purchasers the full authority in its discretion to do any and all of the
following things, without notice to, or obtaining the consent of, GFC: (a)
grant waivers, extensions, renewals or other indulgences under any Transaction
Document or any other document relating to the Obligations; (b) waive the
payment or performance of any of the Obligations; (c) modify or amend any of
the terms or provisions contained in any Transaction Document or any other
document relating to the Obligations; (d) vary, exchange, release or discharge,
wholly or partially, or delay in or abstain from perfecting or enforcing any
security for or guaranty of the Obligations by any other person; (e) accept
partial payment or performance of any of the Obligations; or (f) compromise or
make any settlement or other arrangement with either or both Sellers or any
other guarantor of the Obligations.

     GFC hereby consents to all of the terms and provisions of each Transaction
Document, as the same may be from time to time amended or modified in
accordance with their terms. GFC hereby irrevocably waives: (a) notice of
acceptance of this Guaranty; (b) notice of any amendment or any change in the
terms of the Transaction Documents or any other documents relating to the
Obligations; (c) notice of any breach, violation or default under or in
connection with any Transaction Document or any other documents relating to the
Obligations or any other present or future agreement relating directly or
indirectly thereto; (d) demand for performance or observance of and enforcement
of any provisions of, or any pursuit or exhaustion of, any rights or remedies
against the either of both Sellers or any other guarantor or obligor who
becomes liable in any manner for any of the Obligations, and any requirements
of diligence or promptness on the part of Purchasers in connection therewith;
(e) diligence, presentment, protest, notice of dishonor and notice of default
in the payment of any amount at any time payable by the either of both Sellers
under or in connection with the Transaction Documents or any other documents
relating to the Obligations; and (f) all defenses based on suretyship or
impairment of collateral and any defenses that either or both Sellers may
assert on the Obligations, including failure of consideration, breach of
warranty, fraud, statute of frauds, bankruptcy, lack of legal capacity, statute
of limitations, creditor liability and accord and satisfaction.

     GFC further agrees, as the principal obligor and not as guarantor only, to
pay forthwith upon demand, all reasonable costs and expenses (including
reasonable attorneys’ fees and disbursements) incurred or expended in
connection with the enforcement of this guaranty, together with interest on
amounts recoverable under this guaranty if such interest is awarded by a court
of competent jurisdiction.

     GFC’s successors and assigns shall be bound by the terms and conditions of
this Guaranty. For a period of five years from the Closing, GFC shall not
consolidate with, merge with or into, or sell all or substantially all of its
properties or assets to any Person; provided, that nothing contained in this
paragraph shall be deemed to prevent GFC from consolidating with, merging with
or into, or selling all or substantially all of its properties or assets to any
Person so long as (a) such Person assumes the obligations of GFC under this
Agreement by operation of law in connection with such transaction or (b) if
such Person does not assume the obligations of GFC under this Agreement by
operation of law in connection with such transaction, such Person

64

 

expressly assumes the obligations of GFC under this Agreement and
expressly agrees to be bound by all other provisions applicable to GFC under
this Agreement.

65

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on April 14, 2004.

	 	 	 	 	 
	 	GATX TECHNOLOGY SERVICES CORPORATION

 	 
	 	By:  	/s/ Brian Kenny
 	 
	 	Name:  	Brian Kenney 	 
	 	Title:  	Senior Vice President 	 
	 
	 	GATX TECHNOLOGY FINANCE INC.

 	 
	 	By:  	/s/ Brian Kenny
 	 
	 	Name:  	Brian Kenney 	 
	 	Title:  	Senior Vice President and Chief
Financial Officer 	 
	 
	 	GATX FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Brian Kenny
 	 
	 	Name:  	Brian Kenney 	 
	 	Title:  	Senior Vice President - Finance and
Chief Financial Officer 	 
	 
	 	CIT TECHNOLOGIES CORPORATION

 	 
	 	By:  	/s/ Christine L. Reilly
 	 
	 	Name:  	Christine L. Reilly 	 
	 	Title:  	Executive Vice President -
Corporate Development 	 
	 
	 	CIT FINANCIAL LTD.

 	 
	 	By:  	/s/ Christine L. Reilly
 	 
	 	Name:  	Christine L. Reilly 	 
	 	Title:  	Executive Vice President -
Corporate Developmentexv10w1

 

EXHIBIT 10.1

The Lilly Deferred Compensation Plan

(As Amended and Restated as of April 19, 2004)

Section 1. Establishment of the Plan.

There is hereby established for the benefit of Participants an unfunded plan of
voluntarily deferred compensation known as “The Lilly Deferred Compensation
Plan.”

Section 2. Definitions.

When used in the Plan, the following terms shall have the definitions set forth
in this Section 2:

2.1. Base Salary. The term “Base Salary” means the base salary to which a
management employee is entitled for services rendered to the Company as a
management employee.

2.2. Base Salary Year. The term “Base Salary Year” means each calendar year in
which Base Salary deferred under the Plan is earned by a Participant.

2.3. Beneficiary. The term “Beneficiary” means the beneficiary or
beneficiaries (including any contingent beneficiary or beneficiaries)
designated pursuant to subsection 6.2 hereof.

2.4. Board of Directors. The term “Board of Directors” means the Board of
Directors of Eli Lilly and Company.

2.5. Bonus. The term “Bonus” means the payment to which an Eligible Employee
is entitled pursuant to the Contingent Compensation Plan,the Senior Executive
Bonus Plan or the Lilly Executive Bonus Plan (the EVA Bonus Plan) of the
Company or any other similar compensation plan as may from time to time be
designated by the Committee.

 

 

2.6. Bonus Year. The term “Bonus Year” means each calendar year in which a
Bonus deferred under the Plan is earned by a Participant.

2.7. Committee. The term “Committee” means the committee designated in
subsection 9.1 hereof to administer the Plan.

2.8. Company. The term “Company” means Eli Lilly and Company and its
affiliates and subsidiaries.

2.9. Company Credit. The term “Company Credit” means an amount computed and
credited each calendar year or part thereof to Participants’ accounts as
described in Section 5 at a rate that is equal to one hundred twenty percent
(120%) of the applicable federal long-term rate, with compounding (as
prescribed under Section 1274(d) of the Internal Revenue Code) that was in
effect for the month of December immediately preceding the calendar year.

2.10. Disability. The term “Disability” means a condition that the Committee
determines (i) is attributable to sickness, injury, or disease and (ii) renders
a Participant incapable of engaging in any activity for remuneration or profit
commensurate with the Participant’s education, experience, and training.

2.11. Eligible Employee. The term “Eligible Employee” means a management
employee of the Company who is designated by the Committee as eligible to defer
a Bonus earned in the following year.

2.12. Lilly. The term “Lilly” means Eli Lilly and Company.

2.13. Participant. The term “Participant” means an Eligible Employee who has
elected to defer all or part of a Bonus pursuant to the Plan in accordance with
Section 3.1 hereof or an SEC Executive Officer who has elected to defer all or
part of Base Salary pursuant to the Plan in accordance with Section 3.2 hereof.

-2-

 

2.14. Plan. The term “Plan” means “The Lilly Deferred Compensation Plan” as
set forth herein and as it may be amended from time to time.

2.15. Retirement. The term “Retirement” means the first day of the month next
following the Participant’s last day of work for the Company, but only if such
first day of the month occurs on or after the first to occur of (i) the day on
which the Participant attains age 65 or (ii) the day on which the Participant
is eligible to commence receiving a monthly retirement benefit under a
retirement plan or program maintained by the Company and covering the
Participant.

2.16. SEC Executive Officers. The term “SEC Executive Officers” shall mean
those officers and employees from time to time designated as Executive Officers
for purposes of the proxy statement and Form 10-K.

Section 3. Participation.

3.1. Bonuses. Prior to the beginning of each Bonus Year, the Committee shall
select those Eligible Employees who may elect to defer Bonuses pursuant to the
Plan. Upon selection by the Committee and before the beginning of the
applicable Bonus Year, an Eligible Employee may defer the receipt of a Bonus
pursuant to the Plan by filing a written election with the Committee, in a form
satisfactory to the Committee, that

	(i)	 	defers payment of a designated amount (of One Thousand Dollars
($1,000) or more) or percentage of the Bonus, if any, to be earned in
the Bonus Year, and
	 
	(ii)	 	specifies the payment option selected by the Participant pursuant to
subsection 6.1 hereof.

The amount deferred may not exceed the amount of the Bonus. Except as provided
in subsections 6.1 and 6.3 hereof, any election made pursuant to this Section 3
(including any

-3-

 

election made pursuant to paragraphs (i) and (ii), above) with respect to a
Bonus Year shall be irrevocable when made.

Selection of an Eligible Employee for deferral of a Bonus during one year does
not confer upon the Eligible Employee a right to defer Bonuses for subsequent
years. The Eligible Employees who shall be permitted to defer Bonuses pursuant
to the Plan shall be selected annually by the Committee. If an Eligible
Employee is also an SEC Executive Officer as of the beginning of the Bonus
Year, the Eligible Employee may also defer the receipt of Base Salary as
provided in Section 3.2.

3.2. Base Salary. Subject to the right of the Committee to limit deferrals
described below, prior to the beginning of each Compensation Year, an SEC
Executive Officer may defer the receipt of up to one hundred percent (100%) of
Base Salary pursuant to the Plan by filing a written election with the
Committee, in a form satisfactory to the Committee, that

	(i)	 	defers payment of a designated amount of One Thousand
Dollars ($1,000) or more or a percentage of Base Salary, and
	 
	(ii)	 	specifies the payment option selected by the Participation
pursuant to subsection 6.1 hereof.

The amount deferred may not exceed the amount of Base Salary. Except as
provided in subsections 6.1 and 6.3 hereof, any election made pursuant to this
Section 3 (including any election made pursuant to paragraphs (i) and (ii),
above) with respect to a Bonus Year shall be irrevocable when made and shall
not be affected by the Participant’s ceasing to be an SEC Executive Officer
after the beginning of the Bonus Year.

The Committee reserves the right to limit the amount of Deferrals of Base
Salary to assure that the Company has sufficient funds to cover taxes, benefit
payments, and other necessary and appropriate deductions.

-4-

 

Section 4. Individual Account.

The Treasurer of Lilly shall maintain an account in the name of each
Participant. In the year following the Bonus Year or Base Salary Year, each
Participant’s account shall be credited, as of the first day of the month in
which Bonuses or Base Salary are paid, with the amount that the Participant has
elected to defer hereunder. Each Participant shall be given an annual
statement,
as of December 31 of each year, showing for each year (i) the amount of
Bonuses or Base Salary deferred and (ii) the amount of the Company Credit
to the Participant’s account.

Section 5. Accrual of Company Credit.

The Treasurer of Lilly shall determine the applicable annual rate of Company
Credit on or before December 31 of each calendar year. This rate shall be
effective for the following calendar year. The Company Credit shall accrue
monthly, at one-twelfth of the applicable annual rate, on all amounts credited
to the Participant’s account, including the Company Credits for prior years.
The Company Credit shall not accrue on any amount distributed to the
Participant (or to the Participant’s Beneficiary) during the month for which
the accrual is determined, except where an amount is distributed to a
Beneficiary in the month of the Participant’s death. The Company Credit for
each year shall be credited to each Participant’s account as of December 31 of
that year and shall be compounded annually.

Section 6. Payment.

6.1. Payment Options. The Participant shall select a payment election from the
payment options described below. A Participant may elect that his final payment
election control over all prior payment elections. The payment option selected
by a Participant shall provide for payment to the Participant of the amount
credited to the Participant’s
account in

-5-

 

	(i)	 	a lump sum in January of the second calendar year following
the calendar year in which the Participant’s employment terminates
by reason of Retirement or Disability; or
	 
	(ii)	 	annual installments over a period of two to ten years
commencing in January of the second calendar year following the
calendar year in which the Participant’s employment terminates by
reason of Retirement or Disability;

provided, that in no event shall a lump sum be paid or installment payments
begin under any payment option before the first January that begins after any
Bonus that has been deferred under the payment option has been determined. The
Company shall pay the aggregate amounts deferred, together with a proportionate
part of the aggregate Company Credit accrued to the date (or dates) of payment,
in the manner and on the date(s) specified by the Participant. If a payment
option described in paragraph (i), above, has been elected, the amount of the
lump sum shall be equal to the amount credited to the Participant’s account as
of the December 31 next preceding the date of the payment. If the payment
option described in paragraph (ii), above, has been elected, the amount of each
installment shall be equal to the amount credited to the Participant’s account
as of the December 31 next preceding the date of the installment payment
divided by the number of installment payments that have not yet been made. If
the Participant fails to elect a payment option, the amount credited to the
Participant’s account shall be distributed in a lump sum in accordance with the
payment option described in paragraph (i), above. If the amount
credited to the Participant’s account is less than $25,000 at any time
following the year in which the Participant’s employment terminates by reason
of Retirement of Disability, the Committee, in its sole discretion, may pay out
the amount credited to the Participant’s account in a lump sum.

6.2. Payment upon Death. Within a reasonable period of time following the death
of a Participant, the balance in the Participant’s account shall be paid in a
lump sum to the
Participant’s Beneficiary. For purposes of this subsection 6.2, the balance in
the Participant’s account shall be determined as of the date of payment. A
Participant may designate the Beneficiary, in writing, in a form acceptable to
the Committee, and filed with the Committee

-6-

 

before the Participant’s death. A Participant may, before the Participant’s
death, revoke a prior designation of Beneficiary and may also designate a new
Beneficiary without the consent of the previously designated Beneficiary,
provided that such revocation and new designation (if any) are in writing, in a
form acceptable to the Committee, and filed with the Committee before the
Participant’s death. If the Participant does not designate a Beneficiary, or
if no designated Beneficiary survives the Participant, any amount not
distributed to the Participant during the Participant’s life shall be paid to
the Participant’s estate in a lump sum in accordance with this subsection 6.2.

6.3. Resignation or Dismissal. Within a reasonable time following termination
of a Participant’s employment by resignation or dismissal, the balance in the
Participant’s account shall be paid in a lump sum to the Participant. For
purposes of this subsection 6.3, the balance in the Participant’s account shall
be determined as of a date determined by the Cormittee in its sole discretion.

6.4. Payment on Unforeseeable Emergency. The Administrator may, in its sole
discretion, direct payment to a Participant of all or of any portion of the
Participant’s Account balance, notwithstanding an election under Section 6.1.
above, at any time that it determines that such Participant has an
unforeseeable emergency and then only to the extent reasonably necessary to
meet the emergency. For purposes of this rule, “unforeseeable emergency” means
severe financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or of a dependent of the
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. The circumstances that will
constitute an unforeseeable emergency will depend upon the facts of each case,
but, in any case, payment may not be made to the extent that such hardship is
or may be relieved —

	(i)	 	Through reimbursement or compensation by insurance or
otherwise,

-7-

 

	(ii)	 	By liquidation of the Participant’s assets, to the extent the
liquidation of such assets would not itself cause severe financial
hardship, or
	 
	(iii)	 	By cessation of deferrals under the Plan.

Examples of what are not considered to be unforeseeable emergencies include the
need to send a Participant’s child to college or the desire to purchase a home.

6.5. Cash Payments.All payments under the Plan shall be made in cash.

Section 7. Prohibition Against Transfer.

The right of a Participant to receive payments under the Plan may not be
transferred except by will or applicable laws of descent and distribution. A
Participant may not assign, sell, pledge, or
otherwise transfer any amount to which he is entitled hereunder prior to
transfer or payment thereof to the Participant.

Section 8. Participant’s Rights Unsecured.

The Plan is unfunded. The right of any Participant to receive payments under
the Plan shall be an unsecured claim against the general assets of the Company.

Section 9. Administration.

9.1. Committee. The Plan shall be administered by the Compensation and
Management Development Committee of the Board of Directors,the members of which
shall be selected by the Board of Directors from among its members. No member
of the Committee may be a salaried employee of the Company.

-8-

 

9.2. Powers of the Committee. The Committee’s powers shall include, but not be
limited to, the power

	(i)	 	to select Eligible Employees for participation in the Plan,
	 
	(ii)	 	to interpret the terms and provisions of the Plan and to
determine any and all questions arising under the Plan, including,
without limitation, the right to remedy possible ambiguities,
inconsistencies, or omissions by a general rule or particular
decision,
	 
	(iii)	 	to adopt rules consistent with the Plan, and
	 
	(iv)	 	to limit the deferrals of SEC Executive Officers to assure
that the Company has sufficient funds to cover taxes, benefit
payments, and other necessary or appropriate deductions.

9.3. Finality of Committee Determinations. Determinations by the Committee and
any interpretation, rule, or decision adopted by the Committee under the Plan
or in carrying out or administering the Plan shall be final and binding for all
purposes and upon all interested persons, their heirs, and personal
representatives.

9.4. Claims Procedures. Any person making a claim for benefits hereunder shall
submit the claim in writing to the Committee. If the Committee denies the claim
in whole or in part, it shall issue to the claimant a written notice explaining
the reason for the denial and identifying any additional information or
documentation that might enable the claimant to perfect the claim. The
claimant may, within 60 days of receiving a written notice of denial, submit a
written request for reconsideration to the Committee, together with a written
explanation of the basis of the request. The Committee shall consider any such
request and shall provide the claimant with a written decision together with a
written explanation thereof. All interpretations, determinations, and
decisions of the committee in respect of any claim shall be final and
conclusive.

-9-

 

9.5. Withholding. The Company shall have the right to deduct from all payments
hereunder any taxes required by law to be withheld from such payments. The
recipients of such payments shall bear all taxes on amounts paid under the Plan
to the extent that no taxes are withheld thereon, irrespective of whether
withholding is required.

9.6. Incapacity. If the Committee determines that any person entitled to
benefits under the Plan is unable to care for his or her affairs because of
illness or accident, any payment due (unless a duly qualified guardian or other
legal representative has been appointed) may be paid for the benefit of such
person to such person’s spouse, parent, brother, sister,or other party deemed
by the Committee to have incurred expenses for such person.

9.7. Inability to Locate. If the Committee is unable to locate a person to
whom a payment is due under the Plan for a period of twelve (12) months,
commencing with the first day of the month as of which the payment becomes
payable, the total amount payable to such person shall be forfeited.

9.8. Legal Holidays. If any day on (or on or before) which action under the
Plan must be taken falls on a Saturday, Sunday,or legal holiday, such action
may be taken on (or on
or before) the next succeeding day that is not a Saturday, Sunday,or legal
holiday; provided, that this subsection 9.8 shall not permit any action that
must be taken in one calendar year to be taken in any subsequent calendar year.

Section 10. No Employment Rights.

No provision of the Plan or any action taken hereunder by the Company, the
Board of Directors, or the Committee shall give any person any right to be
retained in the employ of the Company, and the right and power of the Company
to dismiss or discharge any Participant is specifically reserved.

-10-

 

Section 11. Amendment, Suspension, and Termination.

The Board of Directors shall have the right to amend, suspend, or terminate the
Plan at any time. The Committee shall also have the right to amend the Plan,
except for subsection 9.1 hereof and this Section 11.

Section 12. Applicable Law.

The Plan shall be governed by, and construed in accordance with, the laws of
the State of Indiana, except to the extent that such laws are preempted by
Federal law.

Section 13. Effective Date.

This amendment and restatement of the Plan is effective as of January 1, 2004.
Nothing herein shall invalidate or adversely affect any previous election,
designation, deferral, or accrual in accordance with the terms of the Plan that
were then in effect.

-11-

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