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EXHIBIT 10.9
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ASSET PURCHASE AGREEMENT
AMONG
RENTX INDUSTRIES, INC.,
U-RENT, INC.
AND THE
SHAREHOLDERS
OF
U-RENT, INC.
AS OF OCTOBER 31, 1996
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. Basic Transaction . . . . . . . . . . . . . . . . . . . . . 1
2.2. Assumption of Certain Liabilities . . . . . . . . . . . . . 1
2.3. Purchase Price; Payment . . . . . . . . . . . . . . . . . . 1
2.4. Sales Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . 2
2.5. Closing; Closing Date . . . . . . . . . . . . . . . . . . . 2
2.6. Deliveries at the Closing . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties. . . . . . . . . . . . . . . . . . . 3
3.1. Representations and Warranties of the Seller and the
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Representations and Warranties of the Buyer . . . . . . . . 10
3.3. Survival of Representations . . . . . . . . . . . . . . . . 11
3.4. Representations as to Knowledge . . . . . . . . . . . . . . 11
4. Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . 11
4.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Operation and Preservation of Business . . . . . . . . . . . 11
4.3. Full Access . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4. Notice of Developments . . . . . . . . . . . . . . . . . . . 12
4.5. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6. Conveyance of Shareholder Property . . . . . . . . . . . . . 12
4.7. Announcements . . . . . . . . . . . . . . . . . . . . . . . 12
4.8. Bulk Sales Laws . . . . . . . . . . . . . . . . . . . . . . 12
5. Post-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . 12
5.1. Further Assurances . . . . . . . . . . . . . . . . . . . . . 12
5.2. Transition . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . 13
5.5. Post-Closing Announcements . . . . . . . . . . . . . . . . . 13
5.6. Financial Statements . . . . . . . . . . . . . . . . . . . . 13
5.7. Satisfaction of Liabilities . . . . . . . . . . . . . . . . 13
5.8. [Reserved.] . . . . . . . . . . . . . . . . . . . . . . . . 14
5.9. Repurchase of Unpaid Receivables . . . . . . . . . . . . . . 14
6. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . 14
6.1. Conditions to Obligation of the Buyer . . . . . . . . . . . 14
6.2. Conditions to Obligation of the Seller and
the Shareholders . . . . . . . . . . . . . . . . . . . . . . 15
7. Remedies for Breaches of This Agreement . . . . . . . . . . . . . . 16
7.1. Indemnification Provisions for Benefit of the Buyer . . . . 16
7.2. Indemnification Provisions for Benefit of the
Seller and the Shareholders . . . . . . . . . . . . . . . . 17
(i)
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7.3. Matters Involving Third Parties . . . . . . . . . . . . . . 17
7.4. Right of Offset. . . . . . . . . . . . . . . . . . . . . . . 18
7.5. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 18
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1. Termination of Agreement . . . . . . . . . . . . . . . . . . 19
8.2. Effect of Termination . . . . . . . . . . . . . . . . . . . 19
8.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . 19
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1. No Third-Party Beneficiaries . . . . . . . . . . . . . . . . 19
9.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 19
9.3. Succession and Assignment . . . . . . . . . . . . . . . . . 19
9.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 20
9.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 20
9.8. Amendments and Waivers . . . . . . . . . . . . . . . . . . . 20
9.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . 21
9.10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.11. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . 21
9.12. Construction . . . . . . . . . . . . . . . . . . . . . . . . 21
9.13. Incorporation of Exhibits . . . . . . . . . . . . . . . . . 22
9.14. Seller's and Shareholders' Agent. . . . . . . . . . . . . . 22
Exhibits:
Exhibit 1.1(a) Exhibit 3.1(g)(i)(A)
Exhibit 1.1(b) Exhibit 3.1(g)(i)(B)
Exhibit 1.1(c) Exhibit 3.1(g)(ii)
Exhibit 1.1(d) Exhibit 3.1(h)(i)
Exhibit 1.1(e) Exhibit 3.1(h)(ii)
Exhibit 1.1(f) Exhibit 3.1(k)
Exhibit 1.1(g) Exhibit 3.1(l)
Exhibit 1.1(h) Exhibit 3.1(m)
Exhibit 1.1(i) Exhibit 3.1(n)
Exhibit 3.1(c) Exhibit 3.1(p)(i)
Exhibit 3.1(d)(i) Exhibit 3.1(p)(ii)
Exhibit 3.1(d)(ii) Exhibit 3.1(s)(ii)
Exhibit 3.1(e) Exhibit 3.1(s)(iii)
Exhibit 3.1(f) Exhibit 6.1(j)
Exhibit 6.2(e)
(ii)
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This Asset Purchase Agreement is entered into as of October 31,
1996 among RentX Industries, Inc., a Delaware corporation (the "Buyer"), U-
Rent, Inc., an Oklahoma corporation (the "Seller"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (individually, a "Shareholder" and collectively, the
"Shareholders").
Recitals
The Shareholders own all of the issued and outstanding capital
stock of the Seller. The Seller desires to sell, and the Buyer desires to
purchase, substantially all of the Seller's assets as provided in this
Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises, the mutual
representations, warranties and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
1. Definitions. The terms defined in Exhibit 1.1(a) shall have the meanings
designated therein.
2. Purchase and Sale.
2.1. Basic Transaction. Subject to the terms and conditions set forth
in this Agreement, the Buyer agrees to purchase from the Seller, and the Seller
agrees to sell to the Buyer, all the Acquired Assets free and clear of any
Encumbrance or Tax, for the consideration specified in Section 2.3. The Buyer
will have no obligation under this Agreement to purchase less than all of the
Acquired Assets.
2.2. Assumption of Certain Liabilities. Subject to the terms and
conditions set forth in this Agreement, the Buyer agrees to assume and become
responsible at the Closing for all of the Assumed Liabilities. The Buyer will
not assume or have any responsibility with respect to any other Liability not
expressly included within the definition of Assumed Liabilities.
2.3. Purchase Price; Payment.
(a) The cash purchase price for the Acquired Assets is
$2,404,400. At the Closing, the Buyer will, by wire transfer or other delivery
of immediately available funds, (i) (A) pay to the Seller (subject to Section
2.3(b)) $2,154,400, less $7,724 representing the estimated Pre-Closing Personal
Property Tax Amount, and (B) deposit $250,000 into the Escrow Account and (ii)
assume the Assumed Liabilities (and the amounts paid and deposited to and in
respect of the Seller and the Assumed Liabilities will constitute the full
purchase price for the Acquired Assets). The amount deposited in the Escrow
Account will belong to the Seller, subject to the Seller's indemnification
obligations set forth in this Agreement, and will be held, invested,
administered and disbursed according to Section 7.1(b) hereof and the Escrow
Agreement.
(b) At the Closing, the Buyer will deposit into a demand
deposit account in the name of the Buyer and the Shareholders' Agent, from the
amount otherwise payable to the Seller pursuant to Section 2.3(a)(i)(A), an
amount equal to the Reserve Amount, and such funds shall initially constitute
the Liabilities Reserve. The funds on deposit in the Liabilities Reserve will
belong to the Seller, subject to the provisions of this Section 2.3(b).
Following the Closing, the Liabilities Reserve will be applied to the payment
of Reserved Seller Liabilities, by disbursements from that account by
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the Buyer or the Shareholders' Agent, as the Reserved Seller Liabilities become
due and payable. To the extent that the Buyer receives a ▇▇▇▇ or invoice
representing, or is otherwise aware of, any Reserved Seller Liabilities, the
Buyer may cause funds to be disbursed from the Reserve Amount to satisfy such
Reserved Seller Liabilities. Reserved Seller Liabilities representing accrued
vacation and other accrued employee benefits will be satisfied by payment of
the amount thereof to the Buyer as the Buyer provides such benefits or makes
cash payments in lieu thereof to employees. The Shareholders' Agent will take
all actions necessary to cause the Liabilities Reserve to be applied to satisfy
Reserved Seller Liabilities and, if the Liabilities Reserve has been exhausted,
the Seller and the Shareholders will provide additional funds as required to
satisfy Reserved Seller Liabilities. Nothing in this Agreement will be deemed
to limit the joint and several obligations of the Seller and the Shareholders
to pay the Reserved Seller Liabilities in full. After all Reserved Seller
Liabilities have been satisfied, any excess Liabilities Reserve on deposit in
the account created pursuant to this Section 2.3(b) will be paid to the Seller.
Any disputes concerning the Liabilities Reserve will be settled by arbitration
as provided in this Agreement.
(c) As soon as practicable after the Closing, but effective as
of the Closing, the parties will prepare and initial a "Price Allocation
Schedule", allocating for Tax reporting purposes the total consideration for
the Acquired Assets among the various categories of Acquired Assets in the
following order and amounts: (i) to cash and cash equivalents, the $1,600
amount on the Closing Balance Sheet; (ii) to Closing Accounts Receivable, the
amount on the Closing Balance Sheet; (iii) to Closing Inventory, the amount on
the Closing Balance Sheet; (iv) to equipment and leasehold improvements, the
greater of the appraised fair market value (if the Buyer in its sole discretion
obtains an appraisal before or after the Closing) or the current book value
thereof as reflected on the Closing Balance Sheet; (v) to prepaid expenses, the
unamortized balance on the Closing Balance Sheet; (vi) to any other assets,
other than goodwill, the amount on the Closing Balance Sheet; and (vii) the
entire remaining balance of the consideration shall be allocated to the
goodwill of the Seller's business or, at the Buyer's sole discretion, to the
other intangible assets which are included in the Acquired Assets. The parties
acknowledge that such allocations for Tax reporting purposes were determined
pursuant to arm's length bargaining regarding the fair market values of the
Acquired Assets in accordance with the provisions of Code Section 1060. The
parties agree to be bound by the allocations set forth in the Price Allocation
Schedule for all federal, state and local Tax reporting purposes, including for
purposes of determining any income, gain, loss, depreciation or other
deductions in respect of such assets. The parties further agree to prepare and
file all Tax Returns (including Form 8594 under the Code) in a manner
consistent with such allocations.
2.4. Sales Taxes, Etc. The Seller will pay all sales, use, transfer
and other Taxes, fees and charges payable in respect of the sale and transfer
of the Acquired Assets to the Buyer pursuant to this Agreement.
2.5. Closing; Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") is anticipated to take place on
November 1, 1996 (but in any event on or before November 4, 1996), commencing
at 8:00 a.m. local time in Denver, Colorado, at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.C., and all transactions contemplated by this Agreement will be effective
at 11:59 p.m. local time in Chickasha, Oklahoma the day immediately preceding
the Closing (such effective time being the "Closing Date").
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2.6. Deliveries at the Closing. At the Closing, (a) the Seller and the
Shareholders will deliver, or cause to be delivered, to the Buyer the
certificates, instruments and documents referred to in Section 6.1, (b) the
Buyer will deliver to the Seller and the Shareholders the certificates,
instruments and documents referred to in Section 6.2, (c) the Seller will
deliver to the Buyer instruments transferring to the Buyer title to the
Acquired Assets free and clear of any Encumbrances or Taxes and (d) the Buyer
will pay and deposit the purchase price in accordance with Section 2.3.
3. Representations and Warranties.
3.1. Representations and Warranties of the Seller and the Shareholders.
The Seller and the Shareholders jointly and severally represent and warrant to
the Buyer that the statements contained in this Section 3.1 are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
then substituted for the date of this Agreement throughout this Section 3.1).
(a) Organization, Good Standing, Authority, Etc. The Seller
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Oklahoma, which is the only jurisdiction in which the
nature of the business conducted by it or the properties owned, leased or
operated by it make such qualification necessary. The Seller has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. This Agreement and the Other
Seller Agreements and the consummation of the transactions contemplated hereby
and thereby have been duly and unanimously approved by the board of directors
and shareholders of the Seller, and this Agreement has been duly executed and
delivered by the Seller. The Seller has full corporate power and authority to
execute, deliver and perform this Agreement and the Other Seller Agreements to
which the Seller is a party, each Shareholder and each relative or affiliate of
the Seller or a Shareholder who is party to any Other Seller Agreement has full
and absolute right, power, authority and legal capacity to execute, deliver and
perform this Agreement and all Other Seller Agreements to which such
Shareholder, relative or affiliate is a party, and this Agreement constitutes,
and the Other Seller Agreements will when executed and delivered constitute,
the legal, valid and binding obligations of, and shall be enforceable in
accordance with their respective terms against, the Seller and each such
Shareholder, relative or affiliate who is a party thereto.
(b) Ownership. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ own,
beneficially and of record, free and clear of any Encumbrance or Tax, 45,000
and 5,000 shares, respectively, of the common stock, $1.00 par value, of the
Seller, which constitute all outstanding shares of the capital stock of the
Seller. No other Person has any right to acquire any equity interest in the
Seller.
(c) No Violation. The execution, delivery and performance of
this Agreement and the Other Seller Agreements and the consummation of the
transactions contemplated hereby and thereby will not (i) violate any Legal
Requirement to which the Seller, any Shareholder, or any relative or affiliate
of the Seller or any Shareholder who is a party to any Other Seller Agreement
is subject or any provision of the articles of incorporation or bylaws of the
Seller or any such affiliate, or (ii) violate, with or without the giving of
notice or the lapse of time or both, or conflict with or result in the breach
or termination of any provision of, or constitute a default under, or give any
Person the right to accelerate any obligation under, or result in the creation
of any Encumbrance upon any properties, assets or business of the Seller, any
Shareholder, or any such relative or affiliate pursuant to, any indenture,
mortgage, deed of trust, lien, lease, license, Permit, agreement, instrument or
other
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arrangement to which the Seller, any Shareholder or any such relative or
affiliate is a party or by which the Seller, any Shareholder, or any such
relative or affiliate or any of their respective assets and properties is bound
or subject. Except for notices that will be given and consents that will be
obtained by the Seller and the Shareholders prior to the Closing (which are set
forth in Exhibit 3.1(c)), neither the Seller, any Shareholder, nor any such
relative or affiliate need give any notice to, make any filing with or obtain
any authorization, consent or approval of any Governmental Authority or other
Person in order for the parties to consummate the transactions contemplated by
this Agreement and the Other Seller Agreements.
(d) Financial Statements. The balance sheets of the Seller as
of June 30, 1995 and June 30, 1996, the related statements of income,
shareholders' equity and cash flows for the fiscal years then ended, the
unaudited balance sheet of the Seller as of August 31, 1996 (the latter being
referred to as the "Latest Balance Sheet"), and the related statement of income
for the two-month period then ended, have been prepared in accordance with good
accounting practices and on a basis consistent with those of prior years, are
in accordance with the books and records of the Seller (which books and records
are complete and correct), are accurate and fairly present the financial
position and results of operations of the Seller as of such dates and for each
of the periods indicated, do not list book values for the assets that are in
excess of their fair market values, and, except as set forth on Exhibit
3.1(d)(i), make adequate provision for all Liabilities to which the Seller is
subject. Exhibit 3.1(d)(i) describes, to the best knowledge of the Seller and
the Shareholders, how such financial statements vary from GAAP as GAAP relates
to method of accounting, method of depreciation and policy of accruing
vacation. Copies of the financial statements described in the first sentence
in this Section are attached as Exhibit 3.1(d)(ii).
(e) Absence of Certain Leases, Changes or Events. The Seller
is not, except as set forth on Exhibit 3.1(e), a party to or otherwise bound by
any contract or agreement that has a term of three or more months pursuant to
which the Seller is obligated to furnish any equipment, products or services,
and no such contract or agreement has been prepaid with respect to any period
after the Closing Date. Since April 1, 1996, the Seller has not (i) incurred
any debt, indebtedness or other Liability, except current Liabilities incurred
in the ordinary course of business; (ii) delayed or postponed the payment of
accounts payable or other Liabilities or accelerated the collection of any
receivable beyond stated, normal terms; (iii) sold or otherwise transferred any
of its equipment or other assets or properties; (iv) cancelled, compromised,
settled, released, waived, written-off or expensed any account or note
receivable, right, debt or claim involving more than $5,000 in the aggregate;
(v) changed in any significant manner the way in which it conducts its
business; (vi) made or granted any individual wage or salary increase in excess
of 10% or $1.00 per hour, any general wage or salary increase, or any
additional benefits of any kind or nature; (vii) except as otherwise expressly
permitted by this Section 3.1(e), (A) entered into any contracts or agreements,
or made any commitments, involving more than $5,000 individually or in the
aggregate or (B) accelerated, terminated, delayed, modified or cancelled any
agreement, contract, lease or license (or series of related agreements,
contracts, leases and licenses) involving more than $5,000 individually or in
the aggregate; (viii) suffered any adverse fact or change, including, without
limitation, to or in its business, assets, financial condition, prospects or
customer or supplier relationships; (ix) made any payment or transfer to or for
the benefit of any shareholder, officer or director or any relative or
affiliate thereof or permitted any Person, including, without limitation, any
shareholder, officer, director or employee or any relative or affiliate
thereof, to withdraw assets from the Seller (other than cash as set forth on
Exhibit 3.1(e)), and other than the payment to the Shareholders of the
proportionate monthly amount
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of their respective normal annualized salaries due and payable during such
period; (x) failed to make purchases of new or used equipment necessary to
maintain its rental/lease inventory at the level which is reasonably necessary
to maintain the revenue base experienced by the Seller during the 12 months
preceding such date; (xi) increased or decreased its lease rate with respect to
any equipment by 10% or more from the applicable lease rate in effect on April
1, 1996 or rented or leased any equipment or sold or otherwise transferred any
inventory, equipment or services at below-normal rental or lease rates or
margins; (xii) suffered any other significant occurrence, event, incident,
action, failure to act or transaction outside the ordinary course of business;
or (xiii) agreed to incur, take, enter into, make or permit any of the matters
described in clauses (i) through (xii).
(f) Tax Matters. Neither the Seller nor any of its
Shareholders has ever filed (i) an election pursuant to Section 1362 of the
Code that the Seller be taxed as an "S" corporation, except as set forth on
Exhibit 3.1(f), or (ii) a consent pursuant to Section 341(f) of the Code
relating to collapsible corporations. The Seller and the Shareholders will pay
all Taxes attributable to the Seller's business and activities, including all
Taxes attributable to the transactions contemplated by this Agreement, on or
before the due date. There are no Encumbrances on any of the assets of the
Seller that arose in connection with any failure (or alleged failure) to pay
any Tax. Exhibit 3.1(f) lists all federal, state and local income Tax Returns
filed with respect to the Seller for taxable periods ended on or after January
1, 1990, indicates those Tax Returns that have been audited and indicates those
Tax Returns that currently are the subject of audit. The Seller has delivered
to the Buyer correct and complete copies of all federal, state and local income
Tax Returns and examination reports of, and statements of deficiencies assessed
against or agreed to by, the Seller since January 1, 1990.
(g) Assets and Properties.
(i) As of the date of this Agreement, the Seller owns
all of the Acquired Assets (other than certain items of Shareholder Property),
free and clear of all Encumbrances (except for those Encumbrances which the
Seller shall cause to be terminated as of the Closing). As of the Closing, all
of the Acquired Assets (including all of the Shareholder Property) will be
owned by the Seller, free and clear of all Encumbrances, and the Seller will
have good and marketable title to (or, in the case of Acquired Assets that are
leased, valid leasehold interests in) all the Acquired Assets. The Acquired
Assets consist of (A) the tangible and intangible assets of the Seller
(exclusive of the Excluded Assets) in existence as of December 31, 1995 (except
as set forth on Exhibit 3.1(e) with respect to cash of the Seller which was
distributed to its shareholders and except for such changes in inventory and in
accounts receivable in the ordinary course of business as are not in violation
of Section 3.1(e)) and (B) all tangible and intangible assets, including,
without limitation, all improvements, fixtures and fittings, owned by any
Shareholder or relative or affiliate thereof or of the Seller which have been
used in its business at any time on or after December 31, 1995 (the
"Shareholder Property"), including, without limitation, the tangible and
intangible assets set forth on Exhibit 3.1(g)(i)(A) owned by any Shareholder or
relative or affiliate thereof. The Premises constitute all of the real
property, buildings and improvements used by the Seller in its business. The
Acquired Assets are all of the tangible and intangible assets (other than the
Excluded Assets) used by the Seller in, or necessary for the conduct of, its
Business. The Acquired Assets and the equipment leased or consigned by the
Seller from third parties who are not relatives or affiliates of the Seller or
any Shareholder for lease by the Seller to its customers (the "Third-Party
Equipment") encompass all equipment used by the Seller to generate the income
reflected in the financial statements attached as Exhibit 3.1(d)(ii), and the
total cost to the Seller to lease or have consignment of such Third-Party
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Equipment during the fiscal year ending June 30, 1996 and the two-month period
ending August 31, 1996 did not exceed $150,000 and $42,000, respectively.
Exhibit 3.1(g)(i)(B) lists all Third-Party Equipment. The Seller does not
lease any equipment from any Shareholder or any relative or affiliate of the
Seller or any Shareholder. Except for items rented or leased to customers, all
of the tangible Acquired Assets are located on the Premises.
(ii) Except as set forth on Exhibit 3.1(g)(ii), the
Premises are free from defects, have been maintained in accordance with normal
industry practice, are in good operating condition and repair and are suitable
for the purposes for which they presently are used. The Seller has not
received notice of violation of any Legal Requirement or Permit relating to its
operations or its owned or leased properties.
(iii) No party to any lease has repudiated any
provision thereof, and there are no disputes, oral agreements or forbearance
programs in effect as to any such lease. To the best knowledge of the Seller
and the Shareholders, the Premises have received all approvals of Governmental
Authorities (including Permits) required in connection with the occupation and
operation thereof and have been occupied, operated and maintained in accordance
with applicable Legal Requirements. The Premises are supplied with utilities
and other services necessary for the operation of said Premises.
(h) Lists of Properties, Contracts and Other Data. Attached
as Exhibit 3.1(h)(ii) is a correct and complete list setting forth the items
identified on Exhibit 3.1(h)(i). True and complete copies of the items
referred to in Exhibit 3.1(h)(ii) have been delivered to the Buyer. All such
rights, licenses, leases, registrations, Permits, Intellectual Property,
applications, contracts, agreements and commitments and other items referred to
in Exhibit 3.1(h)(ii) are valid, in full force and effect, enforceable in
accordance with their respective terms for the period stated therein, and no
party has repudiated any provision thereof and no action or claim is pending or
threatened to revoke, modify, terminate or render invalid any of such items.
Neither the Seller nor any other party thereto is in breach or default in
performance of any of its respective obligations under, and no event exists
which, with the giving of notice or lapse of time or both, would constitute a
breach, default or event of default on the part of a party to, any of the
foregoing that is continuing unremedied.
(i) Litigation, Etc. There is no outstanding Order against,
nor is there any litigation, proceeding, arbitration or investigation by any
Governmental Authority or other Person pending or threatened against, the
Seller, its properties or its business or relating to the transactions
contemplated by this Agreement, nor is there any basis for any such action.
(j) Notes and Accounts Receivable. The notes receivable, if
any, and accounts receivable of the Seller reflected on its Latest Balance
Sheet, and all notes and accounts receivable arising prior to the Closing Date
in existence as of the Closing Date), arose and will arise from bona fide
transactions by the Seller in the ordinary course of business, are valid
receivables with trade customers subject to no setoffs or counterclaims, and
are current and collectible.
(k) Product Quality, Warranty and Liability. All products and
services sold, rented, leased, provided or delivered by the Seller to customers
on or prior to the Closing Date conform to applicable contractual commitments,
express and implied warranties, product and service specifications and quality
standards, and the Seller has no Liability and there is no basis for any
Liability for
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replacement or repair thereof or other damages in connection therewith. No
product or service sold, rented, leased, provided or delivered by the Seller to
customers on or prior to the Closing Date is subject to any guaranty, warranty
or other indemnity beyond the applicable standard terms and conditions of sale,
rent or lease. The Seller has no Liability and there is no basis for any
Liability arising out of any injury to a Person or property as a result of the
ownership, possession, provision or use of any product or service sold, rented,
leased, provided or delivered by the Seller on or prior to the Closing Date.
All product or service liability claims that have been asserted against the
Seller since January 1, 1991, whether covered by insurance or not and whether
litigation has resulted or not, are listed and summarized on Exhibit 3.1(k).
(l) Insurance. The Seller has policies of insurance (i)
covering risk of loss on its Acquired Assets, (ii) covering products and
services liability and liability for fire, property damage, personal injury and
workers' compensation coverage and (iii) for business interruption, all, to the
best knowledge of the Seller and the Shareholders, with responsible and
financially sound insurance carriers in adequate amounts and in compliance with
governmental requirements and in accordance with good industry practice. All
such insurance policies are valid, in full force and effect and enforceable in
accordance with their respective terms and no party has repudiated any
provision thereof. All such policies will remain in full force and effect
until midnight on the Closing Date. Neither the Seller nor any other party to
any such policy is in breach or default (including with respect to the payment
of premiums or the giving of notices) in the performance of any of their
respective obligations thereunder, and no event exists which, with the giving
of notice or the lapse of time or both, would constitute a breach, default or
event of default, or permit termination, modification or acceleration under any
such policy. There are no claims, actions, proceedings or suits arising out of
or based upon any of such policies nor, to the best knowledge of the Seller and
the Shareholders, does any basis for any such claim, action, suit or proceeding
exist. All premiums have been paid on such policies as of the date of this
Agreement and will be paid on such policies through the Closing Date. The
Seller has been covered during the five years prior to the date of this
Agreement by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. All
claims made during such five-year period with respect to any insurance coverage
of the Seller, other than those described on Exhibit 3.1(k), are set forth on
Exhibit 3.1(l).
(m) Compliance with Applicable Laws and Rights. To the best
knowledge of the Seller and the Shareholders, except as set forth on Exhibit
3.1(m), neither the Seller nor the Seller's assets (including its Premises,
facilities, machinery and equipment) are in violation of any applicable Legal
Requirement or Right. The Seller has not received notice from any Governmental
Authority or other Person of any violation or alleged violation of any Legal
Requirement or Right, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been filed or commenced or is
pending or threatened against the Seller alleging any such violation.
(n) Pension and Employee Benefit Matters. The Buyer will not
suffer any Liability or Adverse Consequence from any Seller's administration or
termination of any of its Employee Benefit Plans or from any failure of any
post-Closing distribution of benefits to employees of the Seller to be made by
the Seller in compliance with all applicable Legal Requirements. The Buyer
will have no obligation to employ any employee of the Seller or to continue any
Employee Benefit Plan, and will have no Liability under any plan or arrangement
maintained by the Seller for the benefit of any employee. The Seller will
remain liable for all costs of employee compensation, including benefits and
Taxes relating to employment and employees attributable to periods through the
Closing Date, whether
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reported by the Closing Date or thereafter, and all group health plan
continuation coverage to which any employee, former employee or dependent is
entitled because of a qualifying event (as defined in Section 4980B(f)(3) of
the Code) occurring through the Closing Date or as a result of termination of
employment with the Seller because of the transactions contemplated by this
Agreement and any benefit or excise tax liability or penalty or other costs
arising from any failure by the Seller to provide group health plan
continuation coverage. Except as set forth on Exhibit 3.1(n), neither the
Seller nor any Affiliated Group which includes the Seller (if any) maintains,
administers or contributes to, has maintained, administered or contributed to,
or has any Liability to contribute to, any Employee Benefit Plan. Exhibit
3.1(n) lists each Employee Benefit Plan that is, or at any time during the past
six years was, maintained, administered, contributed to or required to be
contributed to by the Seller or any Affiliated Group (if any) which includes or
has included the Seller, and the date of termination of each such Employee
Benefit Plan (if any) which has been terminated. The Seller has no Liability
(and there is no basis for the assertion of any Liability) as a result of the
Seller's or any such Affiliated Group's maintenance, administration or
termination of, or contribution to, any Employee Benefit Plan. Neither the
Seller nor any member of any Affiliated Group (if any) which includes or has
included the Seller has ever been required to contribute to any Multiemployer
Plan (as defined in ERISA Section 3(37)) nor has incurred any Liability under
Title IV of ERISA.
(o) Employees and Labor. The Seller has not received any
notice, nor, to the best knowledge of the Seller and the Shareholders, is there
any reason to believe that any executive or key employee of the Seller or any
group of employees of the Seller has any plans to terminate his, her or its
employment with the Seller. No executive or key employee is subject to any
agreement, obligation, Order or other legal hindrance that impedes or might
impede such executive or key employee from devoting his or her full business
time to the affairs of the Seller prior to the Closing Date and, if such person
becomes an employee of the Buyer, to the affairs of the Buyer after the Closing
Date. The Seller will not be required to give any notice under the Worker
Adjustment and Retraining Notification Act, as amended, or any similar Legal
Requirement as a result of this Agreement, the Other Seller Agreements or the
transactions contemplated hereby or thereby. The Seller does not have any
labor relations problems or disputes, nor has the Seller experienced any
strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. The Seller is not a party to or bound by any collective
bargaining agreement, there is no union or collective bargaining unit at the
Seller's facilities, and no union organization effort has been threatened,
initiated or is in progress with respect to any employees of the Seller.
(p) Customer and Supplier Relationships. Exhibit 3.1(p)(i)
lists, for each of the Seller's four stores, each customer that, to the best
knowledge of the Seller and the Shareholders, individually or with its
affiliates was, based upon the Seller's sales, rental or lease revenues during
the fiscal years ending June 30, 1995 and June 30, 1996 and the two-month
period ending August 31, 1996, one of the Seller's five largest customers at
such store during any such fiscal year or such two-month period (the "Principal
Customers"). Exhibit 3.1(p)(ii) lists, for each of the Seller's four stores,
each supplier that, to the best knowledge of the Seller and the Shareholders,
individually or with its affiliates was, based upon the Seller's purchases of
inventory or supplies during the fiscal years ending June 30, 1995 and June 30,
1996 and the two- month period ending August 31, 1996, one of the Seller's five
largest suppliers at such store during any such fiscal year or such two-month
period (the "Principal Suppliers"). The Seller has good commercial working
relationships with its Principal Customers and Principal Suppliers and since
July 1, 1994, no Principal Customer or Principal Supplier has cancelled or
otherwise terminated its relationship with the Seller, materially decreased or
limited
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12
its purchases, rentals or leases from, or inventory or supplies supplied to,
the Seller, or threatened to take any such action. The Seller and the
Shareholders have no basis to anticipate any problems with the Seller's
customer, supplier or business relationships. No Principal Customer or
Principal Supplier has any plans to reduce its purchases, rentals or leases
from, or inventory or supplies supplied to, the Seller below levels prevailing
since July 1, 1994, and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not adversely affect
the relationship of the Seller with any Principal Customer or Principal
Supplier prior to the Closing Date or of the Buyer with any Principal Customer
or Principal Supplier after the Closing Date.
(q) Resale Inventory. The resale inventory of the Seller
consists of goods which, in the aggregate, are merchantable, are fit for the
purposes for which they were procured and are held by the Seller, are usable in
the ordinary course of the Seller's business and are not obsolete.
(r) Condition, Adequacy and Type of Equipment. The
rental/lease inventory of the Seller consists of machinery, equipment and other
tangible personal property which are merchantable, are fit and suitable for the
purpose for which they were procured and are held by the Seller, useable in the
ordinary course of the Seller's business and are not obsolete. All of the
machinery, equipment and other tangible personal property included in the
Acquired Assets (including that held for rental, lease or sale) has been well
maintained and is in good repair and good operating condition (subject to the
last sentence of this Section 3.1(r)). None of the machinery, equipment or
other tangible personal property included in the Acquired Assets (including
that held for rental, lease or sale) is damaged or defective (subject to the
last sentence of this Section 3.1(r)), the Seller has not experienced material
problems or deficiencies with respect to its machinery, equipment and other
tangible personal property (subject to the last sentence of this Section
3.1(r)), and, to the best knowledge of the Seller and the Shareholders, there
is no basis to anticipate any such problems or deficiencies (subject to the
last sentence of this Section 3.1(r)). In the normal course of business
certain items which are held for rental or lease suffer damage in the course of
use by the Seller's customers, and such items have been repaired, or are
reparable and are in the process of being repaired, by the Seller for use in
the Seller's rental and leasing business; provided, however, that the Seller
shall continue through the Closing Date to repair such items on a basis
consistent with past practice and the aggregate cost to the Buyer after the
Closing Date to repair all such items which are in need of repair or are in the
process of being repaired as of the Closing Date will not exceed that which,
consistent with past practice of the Seller, is normally experienced by the
Seller at any given time.
(s) Environmental Matters.
(i) The Seller is conducting and at all times has
conducted its business and operations, and has occupied, used and operated the
Premises and all other real property and facilities previously owned, occupied,
used or operated by the Seller, in compliance with all Environmental
Obligations and so as not to give rise to Liability under any Environmental
Obligations or to any impact on the Seller's business or activities. The
Seller and the Shareholders do not have any knowledge of pending or proposed
changes to any Environmental Obligations which would require any changes in any
of the Seller's Premises, facilities, equipment, operations or procedures or
affect the Seller's business or its cost of conducting its business as now
conducted.
(ii) No conditions, circumstances or activities have
existed or currently exist, and neither the Seller nor any Shareholder has
engaged in any acts or omissions, with respect to the
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Premises or any other real properties, facilities or business previously owned,
occupied, used or operated by the Seller or any predecessor (including, without
limitation, off-site disposal or treatment of Hazardous Materials) which could
give rise to any Liability pursuant to any Environmental Obligation. Exhibit
3.1(s)(ii) identifies all real properties and facilities, including the
addresses thereof, which have been owned, occupied, used or operated by the
Seller or its predecessors at any time on or prior to the date of this
Agreement. There are no outstanding, pending or threatened Orders against the
Seller or any Shareholder, nor are there any current, pending or threatened
investigations of any kind against the Seller or any Shareholder, concerning
any Environmental Obligations. There are no actions, suits or administrative,
arbitral or other proceedings alleged, claimed, threatened, pending against or
affecting the Seller or any Shareholder at law or in equity with respect to any
Environmental Obligations, and neither the Seller nor any Shareholder has
knowledge of any existing grounds on which any such action, suit or proceedings
might be commenced.
(iii) Any chemicals and chemical compounds and mixtures
which are included among the assets of the Seller are integral to and required
for the conduct of the Seller's business, have not been and are not intended to
be discarded or abandoned, and are not waste or waste materials. Except as set
forth in the environmental studies attached as Exhibit 3.1(s)(iii)
(collectively, the "Environmental Study"), the Seller has not generated,
handled, used, transported or disposed of Hazardous Materials. All waste
materials which are generated as part of the business of the Seller are
handled, stored, treated and disposed of in accordance with applicable Legal
Requirements and Environmental Obligations.
(iv) Except as set forth in the Environmental Study,
no underground or above ground storage tanks are or have been located on the
Premises or any other real properties or any facilities previously owned,
occupied, used or operated by the Seller or any predecessor. Neither any of
the Premises nor any other real properties or facilities previously owned,
occupied, used or operated by the Seller or any predecessor has been used at
any time as a gasoline service station or any facility for storing, pumping,
dispensing or producing gasoline or any other petroleum products or Hazardous
Materials. No building or other structure on any of the Premises contains
asbestos-containing materials. There are not nor have there been any
incinerators, septic tanks (except as set forth in the Environmental Study),
▇▇▇▇▇ fields, cesspools or ▇▇▇▇▇ (including without limitation dry, drinking,
industrial, agricultural and monitoring ▇▇▇▇▇) on any of the Premises.
(t) Intellectual Property. The Seller owns or has the legal
right to use and to transfer to the Buyer each item of Intellectual Property
required to be identified on Exhibit 3.1(h)(ii). The continued operation of
the business of the Seller as currently conducted will not interfere with,
infringe upon, misappropriate or conflict with any Intellectual Property rights
of another Person. To the best knowledge of the Seller and the Shareholders,
no other Person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of the
Seller or any Intellectual Property included in the Shareholder Property.
Neither the Seller nor any owner of any Intellectual Property included in the
Shareholder Property has granted any license, sublicense or permission with
respect to any Intellectual Property owned or used in the Seller's business.
(u) Disclosure. None of the documents or information provided
to the Buyer by the Seller, any Shareholder or any agent or employee thereof in
the course of the Buyer's due diligence investigation and the negotiation of
this Agreement and Section 3.1 of this Agreement and the disclosure Exhibits
referred to therein, including the financial statements referred to above in
Section
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3.1, contain any untrue statement of any material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact which materially adversely affects
the business, prospects, condition, affairs or operations of the Seller or any
of its properties or assets which has not been set forth in this Agreement or
such Exhibits, including such financial statements.
Nothing in the disclosure Exhibits referred to in Section 3.1
shall be deemed adequate to disclose an exception to a representation or
warranty made herein unless the applicable disclosure Exhibit identifies the
exception with particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate
to disclose an exception to a representation or warranty made herein (unless
the representation or warranty has to do with the existence of the document or
other item itself). The Seller and the Shareholders acknowledge and agree that
the fact that they have made disclosures pursuant to Section 3.1 or otherwise
of matters, or did not have knowledge of matters, which result in Adverse
Consequences to the Buyer shall not relieve the Seller and the Shareholders of
their obligation pursuant to Article 7 to indemnify and hold the Buyer harmless
from all Adverse Consequences.
3.2. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller and the Shareholders that the statements contained
in this Section 3.2 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this Agreement
throughout this Section 3.2).
(a) Organization, Good Standing, Power, Etc. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. This Agreement and the Other Buyer Agreements
and the transactions contemplated hereby and thereby have been duly approved by
all requisite corporate action. The Buyer has full corporate power and
authority to execute, deliver and perform this Agreement and the Other Buyer
Agreements, and this Agreement constitutes, and the Other Buyer Agreements will
when executed and delivered constitute, the legal, valid and binding
obligations of the Buyer, and shall be enforceable in accordance with their
respective terms against the Buyer.
(b) No Violation of Agreements, Etc. The execution, delivery
and performance of this Agreement and the Other Buyer Agreements, and the
consummation of the transactions contemplated hereby and thereby will not (i)
violate any Legal Requirement to which the Buyer is subject or any provision of
the certificate of incorporation or bylaws of the Buyer or (ii) violate, with
or without the giving of notice or the lapse of time or both, or conflict with
or result in the breach or termination of any provision of, or constitute a
default under, or give any Person the right to accelerate any obligation under,
or result in the creation of any Encumbrance upon any properties, assets or
business of the Buyer pursuant to, any indenture, mortgage, deed of trust,
lien, lease, license, agreement, instrument or other arrangement to which the
Buyer is a party or which the Buyer or any of its assets and properties is
bound or subject. Except for notices and consents that will be given or
obtained by the Buyer prior to the Closing, the Buyer does not need to give any
notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental Authority or other Person in order for the parties
to consummate the transactions contemplated by this Agreement.
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3.3. Survival of Representations. The representations and warranties
contained in Sections 3.1 and 3.2 and the Liabilities of the parties with
respect thereto shall survive any investigation thereof by the parties and
shall survive the Closing for four years, except that (a) the Liabilities of
the Seller and the Shareholders with respect to (i) the representations and
warranties set forth in Sections 3.1(f), 3.1(i), 3.1(k), 3.1(m) and 3.1(n)
shall survive until expiration of all applicable statutes of limitation and
(ii) the representations and warranties set forth in Sections 3.1(a), 3.1(b),
3.1(c), 3.1(g), 3.1(s), 3.1(t) and 3.1(u) shall survive without termination,
and (b) the Liabilities of the Buyer with respect to the representations and
warranties set forth in Sections 3.2(a) and 3.2(b) shall survive without
termination.
3.4. Representations as to Knowledge. The representations and
warranties contained in Article 3 hereof will in each and every case where an
exercise of discretion or a statement to the "best knowledge," "best of
knowledge" or "knowledge" is required on behalf of any party to this Agreement
be deemed to require that such exercise of discretion or statement be in good
faith after reasonable investigation, with due diligence, to the best efforts
of such party and be exercised always in a reasonable manner and within
reasonable times.
4. Pre-Closing Covenants. The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
4.1. General. Each of the parties will use its best efforts to take
all actions necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including the
satisfaction, but not the waiver, of the closing conditions set forth in
Section 6) and the other agreements contemplated hereby. Without limiting the
foregoing, the Shareholders will, and will cause the Seller to, give any
notices, make any filings and obtain any consents, authorizations or approvals
needed to consummate the transactions contemplated by this Agreement.
4.2. Operation and Preservation of Business. The Seller will not, and
Shareholders will not cause or permit the Seller to, engage in any practice,
take any action or enter into any transaction outside its ordinary course of
business; provided, however, that in no event will any action be taken or any
transaction be entered into which would result in a breach of any
representation, warranty or covenant of the Seller or any Shareholder. The
Seller will, and the Shareholders will cause the Seller to, keep its business
and properties, including its current operations, physical facilities, working
conditions, and relationships with customers, suppliers, lessors, licensors and
employees, intact and, in connection therewith, to continue to purchase new or
used equipment necessary to maintain its rental/lease inventory at the level
specified in Section 3.1(e)(x).
4.3. Full Access. The Seller will permit the Buyer and its agents to
have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Seller, to all premises,
properties, personnel, books, records (including Tax records), contracts and
documents of or pertaining to the Seller.
4.4. Notice of Developments. The Seller will give prompt written
notice to the Buyer of any material development which occurs after the date of
this Agreement and affects the business, assets, Liabilities, financial
condition, operations, results of operations, future prospects,
representations, warranties, covenants or disclosure Exhibits of the Seller.
No such written notice, however, will be
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deemed to amend or supplement any disclosure Exhibit or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.
4.5. Exclusivity. Neither the Seller nor any Shareholder will, and no
Shareholder will cause or permit the Seller to, (a) solicit, initiate or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any portion
of the assets of, the Seller (including any acquisition structured as a merger,
consolidation or share exchange) or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. No Shareholder will vote shares of
the Seller's stock in favor of any such transaction. The Seller and
Shareholders will notify the Buyer immediately if the Person makes any
proposal, offer, inquiry or contact with respect to any of the foregoing.
4.6. Conveyance of Shareholder Property. Prior to the Closing Date,
the Shareholders shall convey to the Seller, free and clear of any Encumbrance
or Tax, all of each Shareholder's right, title and interest to the Shareholder
Property.
4.7. Announcements. Prior to the Closing, no party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other parties.
4.8. Bulk Sales Laws. In reliance upon its indemnification rights set
forth in Section 7, the Buyer waives compliance by the Seller with the bulk
transfer law and any other similar law of any applicable jurisdiction in
respect to the transactions contemplated by this Agreement.
5. Post-Closing Covenants. The parties agree as follows with respect to the
period following the Closing.
5.1. Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the
requesting party (unless the requesting party is entitled to indemnification
therefor under Section 7).
5.2. Transition. Each of the Shareholders will assist with the
transition of the Seller's business to the Buyer during the first 12 months
following the Closing at no cost to the Buyer. Neither the Seller nor any
Shareholder will take any action at any time that is designed or intended to
have the effect of discouraging any customer, supplier, lessor, licensor or
other business associate of the Seller from establishing or continuing a
business relationship with the Buyer after the Closing.
5.3. Cooperation. In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (a) any
transaction contemplated by this Agreement or (b) 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 any of the Acquired Assets or the Seller's business, each of the
other parties will cooperate with such party and its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their
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books and records as shall be reasonably necessary in connection with the
contest or defense, all at the sole cost and expense of the contesting or
defending party (unless the contesting or defending party is entitled to
indemnification therefor under Section 7).
5.4. Confidentiality. The Seller and the Shareholders will treat and
hold as confidential all Confidential Information concerning the Buyer, the
Seller's business or the Acquired Assets, refrain from using any such
Confidential Information and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all of such Confidential Information in its or
their possession.
5.5. Post-Closing Announcements. Following the Closing, neither the
Seller nor any Shareholder will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the Buyer.
5.6. Financial Statements. The Seller and the Shareholders will, upon
request of the Buyer, cooperate with the Buyer to produce such historical and
on-going financial statements and audits as the Buyer may request, all at the
sole cost and expense of the Buyer.
5.7. Satisfaction of Liabilities. The Seller and the Shareholders will
pay and perform, as and when due, all Liabilities relating to the Seller, the
business of the Seller and the Acquired Assets, other than the Assumed
Liabilities. In addition, the Seller and the Shareholders will pay to the
Buyer an amount equal to the portion of the personal property taxes on the
Acquired Assets of the Seller attributable to the period from January 1, 1996
to and including the date on which the Closing occurs (the "Pre-Closing
Personal Property Tax Amount"). The Pre-Closing Personal Property Tax Amount
payable by the Shareholders and the Seller will be determined by prorating
personal property taxes on the Acquired Assets of the Seller for 1996 in
proportion to the number of days in the year prior to and including the date on
which the Closing occurs compared to the number of days in the year remaining
after the date on which the Closing occurs. If the actual Pre-Closing Property
Tax Amount exceeds the estimated Pre-Closing Property Tax Amount used for
purposes of Section 2.3(a), the Shareholders and the Sellers shall pay such
excess amount to the Buyer within five days after their receipt of notice from
the Buyer stating the amount payable by them and a copy of the invoices from
Governmental Authorities relating thereto. If the estimated Pre-Closing
Property Tax Amount used for purposes of Section 2.3(a) exceeds the actual Pre-
Closing Property Tax Amount, the Buyer shall pay such excess amount to the
Seller within five days of receipt of the invoices from Governmental
Authorities relating thereto. The Buyer will pay and perform, as and when due
(except to the extent the validity thereof or the liability therefor is being
contested by the Buyer), the Assumed Liabilities. Further, the Seller and the
Shareholders, at their expense, promptly will take or cause to be taken any
action necessary to remedy any failure of the Premises or the acquired business
to comply at the Closing Date with any Legal Requirement, upon receipt of
notice from the Buyer at any time.
5.8. [Reserved.]
5.9. Repurchase of Unpaid Receivables. The Seller and the Shareholders
jointly and severally guarantee that the Closing Accounts Receivable will be
fully paid to the Buyer in accordance with their terms at 95% of their recorded
amounts not later than 120 days from the Closing Date. Upon demand by the
Buyer at any time after 120 days from the Closing Date, the Seller and the
Shareholder shall jointly and severally pay to the Buyer 95% of the amount of
any unpaid Closing Accounts Receivables which are the subject of such demand.
Upon such payment to the Buyer, the Closing Accounts
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Receivable which are so paid for by the Seller and the Shareholder shall,
without further action of any party, become the property of the Seller.
6. Conditions to Closing.
6.1. Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the purchase of the Acquired Assets and the consummation of
the other transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:
(a) the Seller's and each Shareholder's representations and
warranties shall be correct and complete at and as of the Closing Date and the
Closing and any written notices delivered to the Buyer pursuant to Section 4.5
and the subject matter thereof shall be satisfactory to the Buyer;
(b) the Seller and the Shareholders shall have performed and
complied with all of their covenants hereunder through the Closing;
(c) the Seller and Shareholders shall have given all notices
and procured all of the third-party consents, authorizations and approvals
required to consummate the transactions contemplated by this Agreement, all in
form and substance reasonably satisfactory to the Buyer;
(d) no action, suit or proceeding shall be pending or
threatened before any Governmental Authority or any other Person wherein an
unfavorable Order would (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation or (iii) affect
adversely the right of the Buyer to own the Acquired Assets or to conduct the
acquired business, and no such Order shall be in effect;
(e) there shall have been no adverse change in the Acquired
Assets or the Seller's business between the date of execution of this Agreement
and the Closing;
(f) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in Sections 6.1(a)
through (e) is satisfied in all respects and as to the adoption of resolutions
by the board of directors and shareholders of the Seller authorizing the
execution, delivery and performance of this Agreement and the Other Seller
Agreements and the consummation of the transactions contemplated hereby and
thereby;
(g) the Buyer shall have completed its due diligence with
respect to the Seller, the Seller's business and the Acquired Assets with
results satisfactory to the Buyer.
(h) the Other Seller Agreements and documentation necessary to
accomplish the conveyance of the specific ownership tax and fee payments made
by the Seller prior to the Closing in respect of vehicles and mobile equipment
included in the Acquired Assets shall have been executed and delivered by the
Seller and the Shareholders, as applicable;
(i) the Premises Leases shall have been executed and delivered
by the parties thereto and the owners of the real property underlying the
Premises Leases, and each Person having an
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19
Encumbrance on such Property, shall have executed and delivered nondisturbance
and landlord waiver agreements relating thereto satisfactory to the Buyer;
(j) the Buyer shall have received from counsel to the Seller
and the Shareholders an opinion in form and substance as set forth in Exhibit
6.1(j) addressed to the Buyer and its debt and equity financing sources and
dated as of the Closing;
(k) financing necessary for the consummation of the
transactions contemplated hereby and the operation of the acquired business
shall be available to the Buyer on terms and conditions satisfactory to the
Buyer;
(l) a "Phase I" environmental study of the Premises, and such
additional environmental testing as the Buyer shall request, shall have been
completed at the Seller's expense and supplied to the Buyer, and the contents
and results thereof shall be satisfactory to the Buyer;
(m) the Seller shall have delivered to the Buyer possession
and control of the Acquired Assets;
(n) the Seller and the Shareholders shall have executed and
delivered to the Buyer (i) appropriate documentation to transfer to the Buyer
record ownership of the trade names "U-Rent" and "U-RENT Equipment Rental &
Sales" and all other registered Intellectual Property and applications therefor
and (ii) an amendment to the Seller's articles of incorporation for the purpose
of changing its name to a name that does not include the term "U-Rent" or any
derivation thereof; and
(o) the Seller and the Shareholders shall have delivered, or
caused the Seller to deliver, to the Buyer such other instruments, certificates
and documents as are reasonably requested by the Buyer in order to consummate
the transactions contemplated by this Agreement, all in form and substance
reasonably satisfactory to the Buyer.
The Buyer may waive any condition specified in this Section 6.1 at or prior to
the Closing.
6.2. Conditions to Obligation of the Seller and the Shareholders. The
obligation of the Seller and the Shareholders to consummate the sale of the
Acquired Assets is subject to satisfaction of the following conditions:
(a) the Buyer's representations and warranties shall be
correct and complete at and as of the Closing Date and the Closing;
(b) the Buyer shall have performed and complied with all of
its covenants hereunder through the Closing Date;
(c) the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified above in Sections 6.2(a)
and (b) is satisfied in all respects;
(d) the Other Buyer Agreements shall have been executed and
delivered by the Buyer;
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20
(e) the Seller and Shareholders shall have received from
counsel to the Buyer an opinion in form and substance as set forth in Exhibit
6.2(e), addressed to the Seller and Shareholders and dated as of the Closing;
and
(f) the Buyer shall have paid and deposited the purchase price
for the Acquired Assets pursuant to Section 2.3.
The Shareholders' Agent may waive any condition specified in this Section 6.2
at or prior to the Closing.
7. Remedies for Breaches of This Agreement.
7.1. Indemnification Provisions for Benefit of the Buyer.
(a) (i) If the Seller or any Shareholder breaches (or if any
Person other than the Buyer alleges facts that, if true, would mean the Seller
or any Shareholder has breached) any of the representations or warranties of
the Seller or any Shareholder contained herein and the Buyer gives notice
thereof to the Shareholders' Agent within the Survival Period, or if the Seller
or any Shareholder breaches (or if any Person other than the Buyer alleges
facts that, if true, would mean the Seller or any Shareholder has breached) any
covenants of the Seller or any Shareholder contained herein or any
representations, warranties or covenants of the Seller or any Shareholder
contained in any Other Seller Agreement and the Buyer gives notice thereof to
the Shareholders' Agent, then the Seller and the Shareholders agree to jointly
and severally indemnify and hold harmless the Buyer from and against any
Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to or caused by any of the foregoing regardless of whether the Adverse
Consequences are suffered during or after the Survival Period. In determining
whether there has been a breach of any representation or warranty contained in
Section 3.1 and in determining the amount of Adverse Consequences suffered by
the Buyer for purposes of Section 7.1(a)(i) and (ii), such representations and
warranties shall not be qualified (other than by (A) the reference to knowledge
set forth in the second sentence of Section 3.1(d) as it relates to Exhibit
3.1(d)(i) and (B) the references to "material" set forth in Section 3.1(u)) by
"material," "materiality," "in all material respects," "best knowledge," "best
of knowledge" or "knowledge" or words of similar import, or by any phrase using
any such terms or words.
(ii) The Seller and the Shareholders also agree to
jointly and severally indemnify and hold harmless the Buyer from and against
any Adverse Consequences the Buyer may suffer which result from, arise out of,
relate to or are caused by the consummation of the transactions contemplated by
this Agreement, whether or not such matter was known or disclosed to the Buyer,
was disclosed on any Exhibit hereto or is a matter with respect to which the
Seller or Shareholder did or did not have knowledge, including, without
limitation, any act or omission of the Seller, any Shareholder or any
predecessor with respect to, or any event or circumstance related to, the
Seller's, any Shareholder's or any predecessor's ownership, occupation, use or
operation of any of the Acquired Assets, the Excluded Assets or any other
assets or properties or the conduct of its or their business, regardless of
whether such act, omission, event or circumstance occurred or existed prior to,
at or after the Closing Date or whether a claim with respect to such matter was
asserted before or is asserted after the Closing Date, any Liability of the
Seller or any Shareholder not included in the Assumed Liabilities (including,
without limitation, those concerning Hazardous Materials or the failure of the
Seller, any Shareholder or any predecessor to comply with any Environmental
Obligation or other Legal
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21
Requirement), and any Liability resulting from any failure of the parties to
comply with any applicable bulk sales or transfer Legal Requirement in
connection with the transactions contemplated by this Agreement.
(iii) If any dispute arises concerning whether any
indemnification is owing which cannot be resolved by negotiation among the
parties within a reasonable time, the dispute will be resolved by arbitration
pursuant to this Agreement.
(b) Amounts needed to cover any indemnification claims
resolved in favor of the Buyer against the Seller or any Shareholder during the
Escrow Period will be paid to the Buyer first out of the funds escrowed
pursuant to the Escrow Agreement, along with interest from the Closing Date at
the rate applicable to the escrowed funds. The Seller and the Shareholders
will have joint and several Liability for any additional amounts needed to
cover such claims, which amounts will be paid directly to the Buyer. At the
end of the Escrow Period amounts that may be needed to cover pending
indemnification claims made by the Buyer (such amounts to be determined by the
Buyer based upon the reasonable exercise of its business judgment) will be
retained in the Escrow Account until such claims are resolved, and any excess
on deposit therein, including any accrued interest, will be paid to the Seller.
Nothing in this Section 7.1(b) will be construed to limit the Buyer's right to
indemnification to amounts on deposit in the Escrow Account. The Buyer and the
Shareholders' Agent shall jointly give instructions to the Escrow Agent to
carry out the intent of this Section 7.1(b). Any disputes concerning the
escrowed funds will be settled by arbitration as provided in this Agreement.
7.2. Indemnification Provisions for Benefit of the Seller and the
Shareholders. If the Buyer breaches (or if any Person other than the Seller or
a Shareholder alleges facts that, if true, would mean the Buyer has breached)
any of its representations or warranties contained herein and the Shareholders'
Agent gives notice of a claim for indemnification against the Buyer within the
Survival Period, or if the Buyer breaches (or if any Person other than the
Seller or a Shareholder alleges facts that, if true, would mean the Buyer has
breached) any of its covenants contained herein or any of its representations,
warranties or covenants contained in any Other Buyer Agreement and the
Shareholders' Agent gives notice thereof to the Buyer, then the Buyer agrees to
indemnify and hold harmless the Seller and the Shareholders from and against
any Adverse Consequences the Seller and the Shareholders may suffer which
result from, arise out of, relate to, or are caused by the breach or alleged
breach, regardless of whether the Adverse Consequences are suffered during or
after the Survival Period. In determining whether there has been a breach of
any representation or warranty contained in Section 3.2 and in determining the
amount of Adverse Consequences suffered by the Buyer for purposes of this
Section, such representations and warranties shall not be qualified by
"material," "materiality," "in all material respects," "best knowledge," "best
of knowledge" or "knowledge" or words of similar import, or by any phrase using
any such terms or words. If any dispute arises concerning whether any
indemnification is owing which cannot be resolved by negotiation among the
parties within a reasonable time, the dispute will be resolved by arbitration
pursuant to this Agreement.
7.3. Matters Involving Third Parties.
(a) If any third party (including, without limitation, any
Governmental Authority) notifies any party (the "Indemnified Party") with
respect to any matter (a "Third Party Claim") which may give rise to a claim
for indemnification against any other party (the "Indemnifying Party"), then
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the Indemnified Party will notify each Indemnifying Party thereof in writing
within 15 days after receiving such notice. No delay on the part of the
Indemnified Party in notifying any Indemnifying Party will relieve the
Indemnifying Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right, at its sole
cost and expense, to defend the Indemnified Party against the Third Party Claim
with counsel of its choice satisfactory to the Indemnified Party so long as (i)
the Indemnifying Party notifies the Indemnified Party in writing within 10 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to or caused by the Third Party Claim, (ii) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently. If the Indemnifying Party does not elect to assume control of or
otherwise participate in the defense or settlement of any Third Party Claim, it
will be bound by the results obtained by the Indemnified Party with respect to
the Third Party Claim.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7.3(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (iii)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 7.3(b) above
is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (iii) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
7.4. Right of Offset. The Buyer will have the right to offset any
Adverse Consequences it may suffer against any amounts payable pursuant to this
Agreement or any Other Seller Agreement to the Seller, any Shareholder or any
relative or affiliate of the Seller or any Shareholder at or after the Closing.
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23
7.5. Other Remedies. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy any party may have.
8. Termination.
8.1. Termination of Agreement. The parties may terminate this
Agreement as provided below:
(a) the Buyer and the Shareholders' Agent may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written
notice to the Shareholders' Agent at any time prior to the Closing (i) in the
event any Seller or Shareholder has breached any representation, warranty or
covenant contained in this Agreement in any material way, the Buyer has
notified the Shareholders' Agent of the breach, and the breach has not been
cured within 10 days after the notice of breach or (ii) if the Closing has not
occurred on or before November 4, 1996 because of the failure of any condition
precedent to the Buyer's obligations to consummate the Closing (unless the
failure results primarily from the Buyer breaching any representation, warranty
or covenant contained in this Agreement in any material way); or
(c) the Shareholders' Agent may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (i) if the
Buyer has breached any representation, warranty or covenant contained in this
Agreement in any material way, the Shareholders' Agent has notified the Buyer
of the breach, and the breach has not been cured within 10 days after the
notice of breach or (ii) if the Closing has not occurred on or before November
4, 1996 because of the failure of any condition precedent to the Seller's and
the Shareholders' obligations to consummate the Closing (unless the failure
results primarily from the Seller or any Shareholder breaching any
representation, warranty or covenant contained in this Agreement in any
material way).
8.2. Effect of Termination. The termination of this Agreement by a
party pursuant to Section 8.1 will in no way limit any obligation or liability
of any other party based on or arising from a breach or default by such other
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement, and the terminating party will be
entitled to seek all relief to which it is entitled under applicable law.
8.3. Confidentiality. If this Agreement is terminated, each party will
treat and hold as confidential all Confidential Information concerning the
other parties which it acquired from such other parties in connection with this
Agreement and the transactions contemplated hereby.
9. Miscellaneous.
9.1. No Third-Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.
9.2. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements
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or representations by or among the parties, written or oral, to the extent they
relate in any way to the subject matter hereof.
9.3. Succession and Assignment. This Agreement will be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Neither the Seller nor any Shareholder may assign this
Agreement or any of their rights, interests or obligations hereunder without
the prior written approval of the Buyer. The Buyer may assign its rights and
obligations hereunder as permitted by law, including, without limitation, to
any debt or equity financing source.
9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument. The execution of a
counterpart of the signature page to this Agreement will be deemed the
execution of a counterpart of this Agreement.
9.5. Headings. The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
9.6. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is
sent by registered or certified mail, return receipt requested, postage
prepaid, or by courier, telecopy or facsimile, and addressed to the intended
recipient as set forth below:
If to the Seller or
the Shareholders: Copy to:
Addressed to the ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Shareholders' Agent at: Attorney at Law
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer: Copy to:
RentX Industries, Inc. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Attn: B. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices will be deemed given three days after mailing if sent by certified
mail, when delivered if sent by courier, and upon receipt of confirmation by
person or machine if sent by telecopy or facsimile transmission. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
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9.7. Governing Law. This Agreement will be governed by and construed
in accordance with the domestic laws of the State of Colorado without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Colorado or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Colorado.
9.8. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same is in writing and signed by the Buyer
and the Shareholders' Agent. No waiver by any party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence, and no waiver will be effective unless set forth in writing and
signed by the party against whom such waiver is asserted.
9.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.10. Expenses. Except as otherwise provided in Section 8.2, (a) the
Buyer shall bear its own costs and expenses (including, without limitation,
legal fees and expenses) incurred either before or after the date of this
Agreement in connection with this Agreement or the transactions contemplated
hereby and (b) the Seller and the Shareholders will bear all costs and expenses
(including, without limitation, all legal, accounting and tax related fees and
expenses, all fees, commissions, expenses and other amounts payable to any
broker, finder or agent and the costs of any environmental study and additional
environmental testing contemplated by Section 6.1) incurred by the Seller or
any Shareholder either before or after the date of this Agreement in connection
with this Agreement or the transactions contemplated hereby.
9.11. Arbitration. Any disputes arising under or in connection with
this Agreement, including, without limitation, those involving claims for
specific performance or other equitable relief, will be submitted to binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association under the authority of federal and state arbitration statutes, and
shall not be the subject of litigation in any forum. EACH PARTY, BY SIGNING
THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS SUCH
PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS, INCLUDING
THE RIGHT TO JURY TRIAL. The arbitration will be conducted only in Denver,
Colorado, before a single arbitrator selected by the parties or, if they are
unable to agree on an arbitrator, before a panel of three arbitrators, one
selected by the Buyer, one selected by the Shareholders' Agent and the third
selected by the other two arbitrators. The arbitrators shall have full
authority to order specific performance and award damages and other relief
available under this Agreement or applicable law, but shall have no authority
to add to, detract from, change or amend the terms of this Agreement or
existing law. All arbitration proceedings, including settlements and awards,
shall be confidential. The decision of the arbitrators will be final and
binding, and judgment on the award by the arbitrators may be entered in any
court of competent jurisdiction. THIS SUBMISSION AND AGREEMENT TO ARBITRATE
WILL BE SPECIFICALLY ENFORCEABLE. The prevailing party or parties in any such
arbitration or in any action to enforce this Agreement will be entitled to all
reasonable costs and expenses, including fees and expenses of the arbitrators
and attorneys, incurred in connection therewith.
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9.12. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The word "including" will mean including
without limitation. The parties intend that each representation, warranty and
covenant contained herein will have independent significance. If any party
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
9.13. Incorporation of Exhibits. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
9.14. Seller's and Shareholders' Agent. The Seller and each Shareholder
hereby authorizes and appoints the Shareholders' Agent to act as its, his or
her exclusive agent and attorney-in-fact to act on behalf of each of them with
respect to all matters which are the subject of this Agreement, including,
without limitation, (a) receiving or giving all notices, instructions, other
communications, consents or agreements that may be necessary, required or given
hereunder and (b) asserting, settling, compromising, or defending, or
determining not to assert, settle, compromise or defend, (i) any claims which
the Seller or any Shareholder may assert, or have the right to assert, against
the Buyer, or (ii) any claims which the Buyer may assert, or have the right to
assert, against the Seller or any Shareholder. The Shareholder's Agent hereby
accepts such authorization and appointment. Upon the receipt of written
evidence satisfactory to the Buyer to the effect that the Shareholder's Agent
has been substituted as agent of the Seller and the Shareholders by reason of
his death, disability or resignation, the Buyer shall be entitled to rely on
such substituted agent to the same extent as they were theretofore entitled to
rely upon the Shareholder's Agent with respect to the matters covered by this
Section 9.14. Neither the Seller nor any Shareholder shall act with respect to
any of the matters which are the subject of this Agreement except through the
Shareholder's Agent. The Seller and the Shareholders acknowledge and agree
that the Buyer may deal exclusively with the Shareholders' Agent in respect of
such matters, that the enforceability of this Section 9.14 is material to the
Buyer, and that the Buyer has relied upon the enforceability of this Section
9.14 in entering into this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BUYER:
RENTX INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
SELLER:
U-RENT, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
SHAREHOLDERS:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT.]
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