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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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