Merrill Lynch & Co., Inc. & Subsidiaries - Page 37




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          the discounted value of residual payments in excess of                      
          $29,500,000.  The nonbinding letter of intent specifically stated           
          that the parties were bound by the terms of their March 23, 1987,           
          confidentiality agreement.  The nonbinding letter of intent also            
          stated:                                                                     
                    The consummation of the acquisition contemplated                  
               herein is subject to (i) negotiation and execution of                  
               definitive agreements acceptable in form and substance                 
               to * * * [GATX/BCE] and * * * [petitioner], (ii) no                    
               change having occurred in the federal income tax laws                  
               or the regulations of the U.S. Treasury promulgated                    
               thereunder that would materially adversely alter the                   
               economic effect of the transactions contemplated                       
               herein, (iii) approval of the transactions contemplated                
               herein by * * * [petitioner’s] Executive Committee and                 
               by the appropriate corporate authorities for * * *                     
               [GATX/BCE], (iv) consummation of satisfactory secured                  
               financing by * * * [GATX/BCE] and (v) other customary                  
               and appropriate closing conditions.                                    
               F.  GATX Finance Committee Approval                                    
               On or about May 29, 1987, the GATX Finance Committee met to            
          consider the proposed acquisition of ML Capital Resources.  A               
          written proposal presented at that meeting stated that GATX was             
          “awarded the transaction” based on its initial and modified bid             
          proposals and was “invited to perform a due diligence                       
          investigation.”  The written proposal also stated that, upon                
          completion of the due diligence process, GATX/BCE reserved the              
          right to adjust the purchase price based on its due diligence               
          findings in the event that any information in the 3-volume                  
          offering memorandum was incorrect.  The written proposal also               
          recommended that the base purchase price be reduced to $63.3                





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