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EXHIBIT 10.19
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of
May 7, 1998 by and among NATIONSRENT, INC., a Delaware corporation ("Nations");
▇▇▇▇▇▇▇ EQUIPMENT CO., a Kentucky corporation ("Company");▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a
resident of the state of Florida; ▇▇▇▇▇ ▇▇▇▇▇▇▇, a resident of the state of
Indiana; ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇; and, ▇▇▇▇▇ ▇▇▇▇▇▇▇, residents of the Commonwealth of
Kentucky; and, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, each a resident of the state of
Indiana who collectively constitute all of the shareholders of the Company (the
"Shareholders"). Certain other capitalized terms used herein are defined in
Article XI and throughout this Agreement.
RECITALS
The Shareholders own the capital stock of and operate a construction
equipment rental business in the states of Kentucky, Indiana and Ohio (the
"Business"). The parties have determined that it is in their respective best
interests for Nations to acquire all of the issued and outstanding shares (the
"Shares") of common stock, without par value, of the Company (the "Company
Common Stock") which are held by the Shareholders upon the terms and subject to
the conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 THE ACQUISITION. Upon the terms and subject to the conditions
of this Agreement, at the Closing (as defined below), the Shareholders will
sell, assign, transfer, convey and deliver to Nations and Nations shall
purchase, acquire and accept from the Shareholders, the Shares, free and clear
of any liens (the "Acquisition").
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1.2 CONSIDERATION. As consideration for the Shares, Nations shall,
upon the terms and subject to the conditions of this Agreement, remit to
Shareholders (the "Purchase Price") at the Closing (as hereinafter defined): (I)
Twenty Three Million Ninety One Thousand One Hundred and Eighty Dollars
(23,091,180.00) (the "Closing Payment") in immediately available funds; (ii) a
series of promissory notes from Nations in the original principal amount of
Eleven Million Three Hundred and Nine Thousand, Nine Hundred and Sixty Five
Dollars ($11,309,965) the form of which is provided as Exhibit A attached hereto
(the "Promissory Notes"); and (iii) the Management Promissory Notes (as
hereinafter defined) in the original amount of (I) One Million Four Hundred and
Eight Thousand Eight Hundred and Twenty One dollars (1,408,821) which is not
convertible to Nations Common Stock (Exhibit BI); and (ii) Six Hundred and
Ninety Thousand and Thirty Four Dollars ($690,034), which is convertible to
Nations Common Stock (Exhibit BII). Nations shall also assume the indebtedness,
(as defined in Section 3.10) of the Company. The Promissory Notes and the
Management Promissory Notes shall be subject to the set off rights, and upon
conversion, hold back rights described in Section 8.3. The parties acknowledge
that Nations has bargained for ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Company
Management") to continue with the Company after the Closing Date for two years.
Should Company Management voluntarily terminate or be terminated for Compelling
Cause (as defined in the Employment Agreement) other than death or disability
then a portion of the Purchase Price to be received by Company Management shall
be reduced as contemplated by the promissory notes issued to Company Management
("Management Promissory Notes") the form of which is attached hereto as Exhibit
B.
1.3 THE CLOSING. Subject to the terms and conditions of this
Agreement, the consummation of the Acquisition (the "Closing") shall take place
no later than May 31, 1998, or as promptly as practicable (and in any event
within five (5) business days) after satisfaction or waiver of the conditions
set forth in Articles VI and VII, at the offices of Shareholders' counsel,
Seiller & ▇▇▇▇▇▇▇▇▇, LLP, Louisville, Kentucky, or such other time and place as
the parties may otherwise agree (the "Closing Date").
1.4 PROCEDURE AT THE CLOSING. At the Closing, the Shareholders
shall deliver to Nations certificates representing the Shares duly endorsed for
transfer, and Nations shall pay the Purchase Price to Shareholders in accordance
with Section 1.2. In addition, at the Closing the Company and the Shareholders
shall deliver to Nations the documents, certificates, opinions, consents and
letters required by Article VI, and Nations shall deliver to the Company and the
Shareholders the documents and certificates required by Article VII.
1.5 ACCOUNTING TREATMENT. The parties hereto acknowledge and agree
that the transactions contemplated hereby are intended to be treated as a
purchase by Nations for accounting purposes.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF NATIONS
As a material inducement to the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, Nations makes
the following representations and warranties:
2.1 CORPORATE STATUS. Nations is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
2.2 CORPORATE POWER AND AUTHORITY. Nations has the corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. Nations has
taken all action necessary to authorize the execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby.
2.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by Nations and constitutes a legal, valid and binding obligation of
Nations, enforceable against Nations in accordance with its terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
2.4 NO COMMISSIONS. Nations has not incurred any obligation for
any finder's or broker's or agent's fees or commissions or similar compensation
in connection with the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
As a material inducement to Nations to enter into this Agreement and to
consummate the transactions contemplated hereby, the Shareholders, jointly and
severally, make the following representations and warranties to Nations:
3.1 CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Kentucky
and has the requisite power and authority to own or lease its properties and to
carry on its business as now being conducted. The Company is legally qualified
to do business as a foreign corporation in each state where the nature of its
properties and the conduct of its business requires such qualification.
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3.2 POWER AND AUTHORITY. The Company has the power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The Company has taken all
action necessary to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby. The Shareholders have the requisite
competence, power and authority to execute and deliver this Agreement, to
perform their obligations hereunder and to consummate the transactions
contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and
delivered by each of the Company and the Shareholders, and constitutes the
legal, valid and binding obligation of each of them, enforceable against each of
them in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
3.4 CAPITALIZATION.
(a) Schedule 3.4(a) sets forth, with respect to the Company,
(I) the number of authorized shares of each class of its capital stock, and (ii)
the number of issued and outstanding shares of each class of its capital stock.
There are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require the Company to issue or
sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation (except for the Company Profit
Sharing Plan) or other similar rights with respect to the Company. Except as set
forth on Schedule 3.4(a), there are no proxies, voting rights or other
agreements or understandings with respect to the voting or transfer of the
capital stock of the Company. Except as set forth on Schedule 3.4(a), the
Company is not obligated to redeem or otherwise acquire any of its outstanding
shares of capital stock.
(b) Schedule 3.4(b) sets forth, with respect to the Company,
the name, address and federal taxpayer identification number of, and the number
of outstanding shares of each class of its capital stock owned of record and/or
beneficially by, each shareholder of the Company as of the close of business on
the date of this Agreement. As of the date hereof, the Shareholders are the
holders of all issued and outstanding shares of capital stock of the Company,
and the Shareholders own such shares free and clear of all Liens, restrictions
and claims of any kind.
3.5 NO VIOLATION. Except as set forth on Schedule 3.5, the
execution and delivery of this Agreement by the Company and the Shareholders,
the performance by the Company and the Shareholders of their respective
obligations hereunder and the consummation by the Company and the Shareholders
of the transactions contemplated by this Agreement will not (I) contravene any
provision of the articles of incorporation or bylaws of the Company, (ii)
violate or conflict with any law, statute, ordinance, rule, regulation, decree,
writ, injunction, judgment or order of any
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Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against the Company or the Shareholders, (iii)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Contract which is applicable to, binding upon
or enforceable against the Company or the Shareholders, (iv) result in or
require the creation or imposition of any Lien upon or with respect to any of
the Company Assets (as defined in Section 3.14), or (v) require the consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, any court or tribunal or any other Person, except as may
be required under the HSR Act.
3.6 SUBSIDIARIES. Except as provided at Section 5.9(d) hereof, the
Company does not own, directly or indirectly, any outstanding voting securities
of or other interests in, or control, any other corporation, partnership, joint
venture or other business entity.
3.7 NO COMMISSIONS. Neither the Company nor the Shareholders have
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
3.8 FINANCIAL STATEMENTS. The Company has delivered to Nations (I)
the financial statements of the Company for the year ending June 30, 1997,
including the notes thereto, audited by Deming, Malone, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
("Auditor"), and (ii) the financial statements of the Company for the eight
month period ended February 28, 1998, and the nine-month period ended March 31,
1998 (collectively, the "Financial Statements"), copies of which are attached to
Schedule 3.8 hereto. The balance sheet dated as of February 28, 1998, including
the notes thereto, of the Company included in the Financial Statements is
referred to herein as the "Current Balance Sheet." The Financial Statements
fairly present the financial position of the Company as of the balance sheet
dates and the results of operations for the periods covered thereby, and have
been prepared in accordance with GAAP consistently applied throughout the
periods indicated. The books and records of the Company fully and fairly reflect
all transactions, properties, assets and liabilities of the Company. There are
no extraordinary or material non-recurring items of income or expense during the
periods covered by the Financial Statements and the balance sheets included in
the Financial Statements do not reflect any writeup or revaluation increasing
the book value of any assets, except as specifically disclosed in the notes
thereto. The Financial Statements reflect all adjustments necessary for a fair
presentation of the financial information contained therein.
3.9 CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Except as
provided on Schedule 3.9 attached hereto, since the date of the Current Balance
Sheet, the Company has operated in the ordinary course of business and has not
(I) issued any capital stock or other securities; (ii) made any distribution of
or with respect to its capital stock or other securities or purchased or
redeemed any of its securities; (iii) paid any bonus to or increased the rate of
compensation of any of its officers or salaried employees or amended any other
terms of employment of such persons; (iv) sold, leased or transferred any of its
properties or assets other than in the ordinary course of business consistent
with past practice except as disclosed in the Letter of Agreement dated as of
April 22, 1998 between
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Nations, the Company and the Stockholders; (v) made or obligated itself to make
capital expenditures out of the ordinary course of business consistent with past
practice; (vi) made any payment in respect of its liabilities other than in the
ordinary course of business consistent with past practice; (vii) incurred any
obligations or liabilities (including any indebtedness) or entered into any
transaction or series of transactions involving in excess of $10,000 in the
aggregate out of the ordinary course of business, except for this Agreement and
the transactions contemplated hereby; (viii) suffered any theft, damage,
destruction or casualty loss, not covered by insurance and for which a timely
claim was filed, in excess of $10,000 in the aggregate; (ix) suffered any
extraordinary losses (whether or not covered by insurance); (x) waived,
canceled, compromised or released any rights having a value in excess of $10,000
in the aggregate; (xi) made or adopted any change in its accounting practice or
policies; (xii) made any adjustment to its books and records other than in
respect of the conduct of its business activities in the ordinary course
consistent with past practice; (xiii) entered into any transaction with any
Affiliate; (xiv) entered into any employment agreement; (xv) terminated, amended
or modified any agreement involving an amount in excess of $10,000; (xvi)
imposed any security interest or other Lien on any of its assets other than in
the ordinary course of business consistent with past practice; (xvii) delayed
paying any accounts payable which is due and payable except to the extent being
contested in good faith; (xviii) made or pledged any charitable contribution in
excess of $1,000; (xix) entered into any other transaction or been subject to
any event which has or may have a Material Adverse Effect on the Company or
agreed to do or authorized any of the foregoing.
3.10 LIABILITIES OF THE COMPANY. The Company has no liabilities or
obligations, whether accrued, absolute, contingent or otherwise, except (a) to
the extent reflected or taken into account in the Current Balance Sheet and not
heretofore paid or discharged, (b) liabilities incurred in the ordinary course
of business consistent with past practice since the date of the Current Balance
Sheet (none of which relate to breach of contract, breach of warranty, tort,
infringement or violation of law, or which arose out of any action, suit, claim,
governmental investigation or arbitration proceeding), and (c) normal accruals,
reclassifications, and audit adjustments which would be reflected on an audited
financial statement and which could not be material in the aggregate.
Notwithstanding the generality of the foregoing, however, the costs of defense
of the action described in Schedule 3.11 at item A2 shall be deemed to be in the
ordinary course of business. Schedule 3.10 sets forth any liability or
indebtedness for borrowed money by the Company or secured by the Assets, as
defined in Section 3.14(a), (the "Indebtedness) which shall not on the closing
date exceed $23,500,000.00 plus amounts borrowed after March 31, 1998 to fund
incremental equipment purchases.
3.11 LITIGATION. Except as set forth on Schedule 3.11 attached
hereto, there is no action, suit, or other legal or administrative proceeding or
governmental investigation pending, threatened, anticipated or to the knowledge
of the Company and Shareholders contemplated against, by or affecting the
Company or the Shareholders, or which question the validity or enforceability of
this Agreement or the transactions contemplated hereby. During the three-year
period prior to the date hereof, there has been no action, suit or other legal
or administrative proceeding or governmental investigation against, by or
affecting the Company or the Shareholders in which the amount in question
exceeded $10,000. There are no outstanding orders, decrees, stipulations or
agreements
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issued by any Governmental Authority in any proceeding or agreed to by the
Company or the Shareholders to which the Company or the Shareholders are or were
a party which have not been complied with in full or which continue to impose
any obligations on the Company or the Shareholders or which may have a Material
Adverse Effect on the Company or the Shareholders.
3.12 ENVIRONMENTAL MATTERS.
(a) The Company is and has at all times been in full
compliance with all Environmental Laws (as defined in clause (g) below)
governing its business, operations, properties and assets, including, without
limitation: (I) all requirements relating to the Discharge (as defined in clause
(g) below) and Handling (as defined in clause (g below) of Hazardous Substances
(as defined in clause (g) below); (ii) all requirements relating to notice,
record keeping and reporting; (iii) all requirements relating to obtaining and
maintaining Licenses (as defined in clause (h) below) for the ownership of its
properties and assets and the operation of its business as presently conducted,
and (iv) all applicable writs, orders, judgements, injunctions, governmental
communications, decrees, informational requests or demands issued pursuant to,
or arising under, any Environmental Laws.
(b) There are no (and there is no basis for any)
non-compliance orders, warning letters, notices of violation (collectively,
"Notices"), claims, suits, actions, judgments, penalties, fines, or
administrative or judicial investigations or proceedings (collectively,
"Proceedings") pending or threatened against or involving the Company or its
business, operations, properties, or assets, issued by any Governmental
Authority or third party with respect to any Environmental Laws or Licenses
issued to the Company thereunder in connection with, related to or arising out
of the ownership by the Company of its properties or assets or the operation of
the Business, which have not been resolved or which would impose any obligation,
burden or continuing liability on Nations in the event that the transactions
contemplated by this Agreement are consummated, or which could have a Material
Adverse Effect on the Company.
(c) The Company has not Handled or Discharged, nor has it at
any time allowed or arranged for any third party to Handle or Discharge,
Hazardous Substances to, at or upon: (I) any location other than a site lawfully
permitted to receive such Hazardous Substances; (ii) any real property currently
or previously owned or operated by the Company; or (iii) any site which,
pursuant to any Environmental Laws, (x) has been placed on the National
Priorities List or its state equivalent; or (y) the United States Environmental
Protection Agency or the relevant state agency or other Governmental Authority
has notified the Company that such Governmental Authority has proposed or is
proposing to place on the National Priorities List or its state equivalent.
There has not occurred, nor is there presently occurring, a Discharge, or
threatened Discharge, of any Hazardous Substance on, into or beneath the surface
of, or adjacent to, any real property currently
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or previously owned or operated by the Company in an amount requiring a notice
or report to be made to a Governmental Authority or in violation of any
applicable Environmental Laws.
(d) Schedule 3.12 identifies the operations and activities,
and locations thereof, which have been conducted or are being conducted by the
Company on any real property currently or previously owned or operated by the
Company which have involved the Handling or Discharge of Hazardous Substances.
(e) Except as set forth on Schedule 3.12, the Company does not
use, nor has it used, any Aboveground Storage Tanks (as defined in clause (g)
below) or Underground Storage Tanks (as defined in clause (g) below), and there
are not now nor to the knowledge of the Company and the Shareholders have there
ever been any Underground Storage Tanks beneath any real property currently or
previously owned or operated by the Company that are required to be registered
under applicable Environmental Laws.
(f) Schedule 3.12 identifies (I) all environmental audits,
assessments or occupational health studies undertaken by the Company or its
agents for the period of time during which the Company owned or possessed any
real property or any Governmental Authority or third party, relating to or
affecting the Company or any real property currently or previously owned or
operated by the Company; (ii) the results of any ground, water, soil, air or
asbestos monitoring undertaken by the Company or its agents or any Governmental
Authority or third party, relating to or affecting the Company or any real
property currently or previously owned or operated by the Company which indicate
the presence of Hazardous Substances at levels requiring a notice or report to
be made to a Governmental Authority or in violation of any applicable
Environmental Laws; (iii) all material written communications between the
Company and any Governmental Authority arising under or related to Environmental
Laws; and (iv) all outstanding citations issued under OSHA, or similar state or
local statutes, laws, ordinances, codes, rules, regulations, orders, rulings, or
decrees, relating to or affecting the Company or any real property currently or
previously owned or operated by the Company.
(g) For purposes of this Section 3.12, the following terms
shall have the meanings ascribed to them below:
"Aboveground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Aboveground Storage
Tanks.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further be
defined in any Environmental Law, into or through any medium including,
without limitation, ground water, surface water, land, soil or air.
"Environmental Laws" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, orders, plans,
injunctions, decrees, rulings, and changes or ordinances or judicial or
administrative interpretations thereof, or similar laws of foreign
jurisdictions where the Company conducts business, whether currently in
existence or hereafter enacted or promulgated, any of which govern (or
purport to
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govern) or relate to pollution, protection of the environment, public
health and safety, air emissions, water discharges, hazardous or toxic
substances, solid or hazardous waste or occupational health and safety,
as any of these terms are or may be defined in such statutes, laws,
rules, regulations, codes, orders, plans, injunctions, decrees, rulings
and changes or ordinances, or judicial or administrative
interpretations thereof, including, without limitation: the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendment and Reauthorization Act of
1986, 42 U.S.C. 9601, et ,. (collectively "CERCLA"); the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act
of 1976 and subsequent Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. 6901 et seq. (collectively "RCRA"); the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. 1801, et seq. (the "Hazardous
Materials Transportation Act"); the Clean Water Act, as amended, 33
U.S.C. 1311, et seq. (the "Clean Water Act"); the Clean Air Act, as
amended (42 U.S.C. 7401-7642) (the "Clean Air Act"); the Toxic
Substances Control Act, as amended, 15 U.S.C. 2601 et seq. (the "Toxic
Substances Control Act"); the Federal Insecticide, Fungicide, and
Rodenticide Act as amended, 7 U.S.C. 136- 136y, ("FIFRA"); the
Emergency Planning and Community Right-to-Know Act of 1986 as amended,
42 U.S.C. 11001, et seq. (Title III of ▇▇▇▇) ("EPCRA"); and the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. 651,
et seq. ("OSHA").
"Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, of any Hazardous Substances or Waste.
"Hazardous Substances" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, and any other
contaminant, pollutant or constituent thereof, whether liquid, solid,
semi-solid, sludge and/or gaseous, including without limitation,
chemicals, compounds, by-products, pesticides, asbestos containing
materials, petroleum or petroleum products, and polychlorinated
biphenyls, the presence of which requires investigation or remediation
under any Environmental Laws or which are or become regulated, listed
or controlled by, under or pursuant to any Environmental Laws,
including, without limitation, RCRA, CERCLA, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, FIFRA, EPCRA and OSHA, or any similar state
statute, or any future amendments to, or regulations implementing such
statutes, laws, ordinances, codes, rules, regulations, orders, rulings,
or decrees, or which has been or shall be determined or interpreted at
any time by any Governmental Authority to be a hazardous or toxic
substance regulated under any other statute, law, regulation, order,
code, rule, order, or decree.
"Licenses" means all licenses, certificates, permits,
approvals and registrations.
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"Underground Storage Tank" shall have the meaning ascribed to
such term in Section 6901 et seq., as amended, of RCRA, or any
applicable state or local statute, law, ordinance, code, rule,
regulation, order ruling, or decree governing Underground Storage
Tanks.
3.13 REAL ESTATE. The Company at Closing will not own any parcels
of real property. Schedule 3.13 sets forth (a) a list of all leases, licenses or
similar agreements ("Real Property Leases") copies of which have previously been
furnished to Nations), (b) the lessor and lessee thereof and the date and term
of each of such leases, (c) the legal description, if known, including street
address, of each property covered thereby (the "Leased Premises"), and (d) a
brief description (including size and function) of the principal improvements
and buildings thereon. The Real Property Leases are in full force and effect and
have not been amended, and no party thereto is in default or breach under any
such Lease. No event has occurred which, with the passage of time or the giving
of notice or both, would cause a breach of or default by the Company under any
of such leases and there is no breach or anticipated breach by any other party
to such leases. With respect to each of the Leased Premises: (I) the Company has
valid leasehold interests or other rights of use and occupancy in the Leased
Premises, free and clear of any Liens on such leasehold interests or other
rights of use and occupancy, or any covenants, easements or title defects known
to or created by the Company, except as do not affect the occupancy or uses of
such properties; (ii) the portions of the buildings located on the Leased
Premises that are used in the business of the Company are within the property
setback and building lines of the respective property, are in good repair and
condition, normal wear and tear excepted, and are in the aggregate sufficient to
satisfy the Company respective normal business activities as conducted thereat;
(iii) each of the Leased Premises (a) has direct access to public roads or
access to public roads by means of a perpetual access easement, such access
being sufficient to satisfy the current and reasonably anticipated normal
transportation requirements of the Company respective business as presently
conducted at such parcel; and (b) is served by all utilities in such quantity
and quality as are sufficient to satisfy the current normal business activities
as conducted at such parcel; and (iv) the Company has not received notice of (a)
any condemnation proceeding with respect to any portion of the Leased Premises
or any access thereto and no such proceeding is contemplated to the knowledge of
the Company by any Governmental Authority; or (b) any special assessment which
may affect any of the Leased Premises and to the knowledge of the Company and
the Shareholders no such special assessment is contemplated by any Governmental
Authority.
3.14 GOOD TITLE, ADEQUACY AND CONDITION OF ASSETS. Except as set
forth on Schedule 3.10, the Company has, and at the Closing will have, good and
marketable title to its Assets, as hereinafter defined, with full power to sell,
transfer and assign the same free and clear of any Lien. The Assets and the
Leased Premises constitute, in the aggregate, all of the assets and properties
necessary for the conduct of the Business in the manner in which and to the
extent to which such Business is currently being conducted. Assets means all of
the properties and assets of the Company, including the Leased Premises, whether
personal or mixed, tangible or intangible, wherever located. The Assets are in
good operating condition, normal wear and tear excepted, and have been
maintained in accordance with all applicable specifications and warranties. All
inventory of rental equipment of the Company set forth on Schedule 3.14(a)
hereto and all inventory of merchandise set
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forth in Schedule 3.14(b) hereto, consists of a quality and quantity usable,
rentable, or salable in the ordinary course of business of the Company, except
for obsolete items and items of below standard quality, all of which have been
written off, written down or adequately reserved against to their net realizable
value in the Current Balance Sheet. All such inventory not written off has been
recorded at the lower of cost or net realizable value, and depreciated
consistent with the economic life of such inventory. The quantities of each item
of such inventory are reasonable in the present circumstances of the Company.
All such inventory is in good operating condition and repair, subject to normal
wear and tear, and has been maintained in accordance with normal industry
practice.
3.15 COMPLIANCE WITH LAWS. The Company is and has been in
compliance with all laws, regulations and orders applicable to it, its business
and operations (as conducted by it now and in the past), the Assets and any
other properties and assets (in each case owned or used by it now or in the
past). The Company has not been cited, fined or otherwise notified of any
asserted past or present failure to comply with any laws, regulations or orders
and no proceeding with respect to any such violation is pending or threatened.
Neither the Company, nor any of its respective employees or to the knowledge of
the Company or the Shareholders, agents, has made any payment of funds which is
prohibited by law, and no funds have been set aside to be used for any payment
prohibited by law. The Company is not subject to any Contract, decree or
injunction which restricts the continued operation of the Business or the
expansion thereof to other geographical areas, customers or suppliers, or to
other lines of business.
3.16 LABOR AND EMPLOYMENT MATTERS. Schedule 3.16 sets forth the
name and current rate of compensation of each employee of the Company. The
Company is not a party to or bound by any collective bargaining agreement or any
other agreement with a labor union, and there has been no effort by any labor
union during the twenty-four (24) months prior to the date hereof to organize
any employees of the Company into one or more collective bargaining units. There
is no pending or threatened labor dispute, strike or work stoppage which affects
or which may affect the Business. Neither the Company, nor any agent,
representative or employee thereof has within the last ten (10) years committed
any unfair labor practice as defined in the National Labor Relations Act, as
amended, and there is no pending or threatened charge or complaint against the
Company or any of the Companies by or with the National Labor Relations Board or
any representative thereof The Company is not aware that any key employee or
group of employees have any plans to terminate his or their employment with the
Company. The Company is not a party or subject to any employment agreements,
noncompetition agreements, or consulting agreements. The Company has complied
with all applicable laws, rules and regulations relating to employment, civil
rights and equal employment opportunities, including but not limited to, the
Civil Rights Act of 1964, the Fair Labor Standards Act, and Americans with
Disabilities Act, each as amended.
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3.17 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.17 sets forth each employee Benefit Plan of the
Company. With respect to each Employee Benefit Plan (as defined in clause (d)
below) of the Company, (I) each has been administered in compliance with its
terms and with all applicable laws including, without limitation, ERISA and the
Code; (ii) no actions, suits, claims or disputes are pending or to the knowledge
of the Company and the Shareholders threatened; (iii) no audits, proceedings,
claims or demands are pending with any Governmental Authority; (iv) all reports,
returns and similar documents required to be filed with any Governmental
Authority or distributed to any plan participant have been duly or timely filed
or distributed; (v) no "prohibited transaction" has occurred within the meaning
of ERISA or the Code; (vi) no such plan provides medical or dental benefits for
any current or former employees of the Company or its predecessors after
termination of employment; (vii) no such plan obligates the Company to pay
separation, severance, termination or similar benefits as a result of any
transaction contemplated by this Agreement or solely as a result of a "change of
control" (as defined in Section 280G of the Code); (viii) all required or
discretionary (in accordance with historical practices) payments, premiums,
contributions, reimbursements or accruals for all periods ending prior to or as
of the Closing shall have been made or properly accrued on the Current Balance
Sheet or will be properly accrued on the books and records of the Company as of
the Closing; (ix) no such plan has any unfunded liabilities which are not
reflected on the Current Balance Sheet or the books and records of the Company;
(x) the Company has complied with the notice and continuation of coverage
requirements of Section 4980B of the Code and the regulations thereunder with
respect to any group health plan within the meaning of Code Section 5000(b)(1);
and (xi) the Company does not participate in, nor has it ever participated in,
or have any withdrawal liability under ERISA with respect to, a "multiemployer
plan" (as defined in Section 3(37) of ERISA). True and accurate copies of each
Employee Benefit Plan of the Company, together with the most recent annual
reports on Form 5500, all IRS favorable determination letters and summary plan
descriptions for such plans have been furnished to Nations.
(b) With respect to each Employee Benefit Plan of the Company
intended to qualify under Code Section 401(a) or 403(a), (I) the Internal
Revenue Service has issued a favorable determination letter, which has not been
revoked, that any such plan is tax-qualified and exempt from federal income tax;
(ii) no reportable event (within the meaning of Section 4043 of ERISA) has
occurred; and (iii) the present value of all liabilities under any such plan
will not exceed the current fair market value of the assets of such plan
(determined using the actuarial assumption used for the most recent actuarial
valuation for such plan).
(c) Nations will not suffer any loss, cost or liability as a
result of any claim that the Company has not complied with the provisions of
paragraphs (a) and (b) above with respect to each Employee Benefit Plan
maintained by any such entity.
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(d) For purposes hereof, "Employee Benefit Plan" means any:
(I) employee pension benefit plan as defined in Section 3(2) of ERISA; (ii)
multiemployer plan as defined in Section 3(37) of ERISA; (iii) employee welfare
benefit plan as defined in Section 3(1) of ERISA; and (iv) any stock option,
bonus, stock purchase, or insurance plan and any severance or termination pay
plan or policy in which employees, spouses or dependents participate.
3.18 TAX MATTERS. All Tax Returns required to be filed prior to the
date hereof with respect to the Company or its respective income, properties,
franchises or operations have been timely filed, each such Tax Return has been
prepared in compliance with all applicable laws and regulations, and all such
Tax Returns are true and accurate in all respects. All Taxes due and payable by
or with respect to the Company and the Business have been paid or are accrued on
the Current Balance Sheet. The Company has withheld and paid all Taxes to the
appropriate Governmental Authority required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party. With respect to each taxable period
of the Company: (I) except as set forth on Schedule 3.18 attached hereto, no
deficiency or proposed adjustment which has not been settled or otherwise
resolved for any amount of Taxes has been asserted or assessed by any taxing
authority against the Company; (ii) the Company has not consented to extend the
time in which any Taxes may be assessed or collected by any taxing authority;
(iii) the Company has not requested or been granted an extension of the time for
filing any Tax Return to a date later than the Closing; (iv) there is no action,
suit, taxing authority proceeding, or audit or claim for refund now in progress,
pending or threatened against or with respect to the Company regarding Taxes;
(v) there are no Liens for Taxes (other than for current Taxes not yet due and
payable) upon the Assets of the Company and (vi) the Company has duly and
validly filed an election for "S" corporation status under the Code, and such
"S" election has not been revoked or terminated and neither the Company nor the
Shareholders have taken any action which would cause a termination of such "S"
election. No sales or use tax (other than sales tax on motor vehicles),
non-recurring intangible tax, documentary stamp tax or other excise tax (or
comparable tax imposed by any governmental entity) will be payable by the
Company or Nations by virtue of the transactions contemplated in this Agreement.
3.19 INSURANCE. Schedule 3.19 provides a list of all insurance
policies of the company currently in force and provides the insurer, type of
coverage, and policy period for each policy. The Company is covered by valid,
outstanding and enforceable policies of insurance issued to it covering its
properties, assets and business against risks of the nature normally insured
against by corporations in the same or similar lines of business and in coverage
amounts typically and reasonably carried by such corporations (the "Insurance
Policies"). Such Insurance Policies are in full force and effect, and all
premiums due thereon have been paid. The Company has complied with the
provisions of such Insurance Policies. During the three year period to the date
hereof, the Company has not made any claims under any of the Insurance Policies,
and has suffered no losses that would give rise to any such claims, for an
amount in excess of $ 10,000. The Company has not failed to give, in a timely
manner, any notice required under any of the Insurance Policies to preserve its
rights thereunder. Through the Closing Date, each of the Insurance Policies will
be in full force and effect.
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3.20 RECEIVABLES. All of the receivables of the Company are valid
and legally binding, represent bona fide transactions and arose in the ordinary
course of business of the Company. All of such receivables are good and
collectible receivables, and will be collected in full in accordance with the
terms of such receivables and in any event within three (3) months following the
Closing, except for those receivables set forth on Schedule 3.20 attached hereto
which shall be collected within six months of the Closing, without set off or
counterclaims. If the receivables listed on Schedule 3.20 are not collected
within six months of the Closing, Shareholders shall have ten (10) days to
purchase any one or more of such receivables at the legal balance.
3.21 LICENSES AND PERMITS. The Company possesses all licenses and
required governmental or official approvals, permits or authorizations
(collectively, the "Permits") for the Business and operations, and Schedule 3.21
sets forth a true, complete and accurate list of all such Permits. All such
Permits are valid and in full force and effect, the Company is in full
compliance with the respective requirements thereof, and no proceeding is
pending or threatened to revoke or amend any of them. None of such Permits is or
will be impaired or in any way affected by the execution and delivery of this
Agreement or the transactions contemplated hereby.
3.22 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS; AFFILIATED
TRANSACTIONS. No current customer of the Company has threatened to terminate its
business relationship with the Company for any reason. The Company has no direct
or indirect interest in any customer, supplier or competitor of the Company, or
in any person from whom or to whom the Company leases real or personal property,
except as provided in Section 5.9 hereof. No officer, director, or shareholder
of the Company, nor any person related by blood or marriage to any such person,
nor any entity in which any such person owns any beneficial interest, is a party
to any Contract or transaction with the Company has any interest in any property
used by the Company.
3.23 CONTRACTS. Schedule 3.23 sets forth a list of each Contract to
which the Company is a party or by which it or its properties and assets are
bound and which is material to its business, assets, properties or prospects
(the "Material Contracts"), true, correct and complete copies of which have been
provided to Nations. The copy of each Material Contract furnished to Nations is
a true and complete copy of the document it purports to represent and reflects
all amendments thereto made through the date of this Agreement. The Company has
not violated any of the terms or conditions of any Material Contract or any term
or condition which would permit termination or modification of any Material
Contract, and all of the covenants to be performed by any other party thereto
have been fully performed, and there are no claims for breach or indemnification
or notice of default or termination under any Material Contract. No event has
occurred which constitutes, or after notice or the passage of time, or both,
would constitute, a default by the Company under any Material Contract, and no
such event has occurred which constitutes or would constitute a default by any
other party. The Company is not subject to any liability or payment resulting
from renegotiation of amounts paid under any Material Contract. As used in this
Section 3.23, Material Contracts shall include, without limitation, formal or
informal, written or oral, in each case which is material to the business,
assets, properties or prospects of the Company, (a) loan agreements, indentures,
mortgages, pledges, hypothecations, deeds of trust, conditional sale or title
retention agreements, security agreements,
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equipment financing obligations or guaranties, or other sources of contingent
liability in respect of any indebtedness or obligations to any other Person(s),
or letters of intent or commitment letters with respect to same; (b) contracts
obligating the Company to provide products or services for a period of one year
or more, excluding standard collection contracts entered into in the ordinary
course of its business without material modification from the preprinted forms
used by the Company in the ordinary course of business, copies of which have
been supplied to Nations; (c) leases of real property and leases of personal
property not cancelable without penalty on notice of sixty (60) days or less or
calling for payment of an annual gross rental exceeding $10,000; (d)
distribution, sales agency or franchise or similar agreements, or agreements
providing for an independent contractor's services, or letters of intent with
respect to same; (e) employment agreements, management service agreements,
consulting agreements, confidentiality agreements, non-competition agreements,
employee handbooks, policy statements and any other agreements relating to any
employee, officer or director of the Company; (f) licenses, assignments or
transfers of trademarks, trade names, service marks, patents, copyrights, trade
secrets or know how, or other agreements regarding proprietary rights or
intellectual property; (g) any Contract relating to pending capital expenditures
by the Company; (h) any non-competition agreements restricting the Company in
any manner; and (I) other material Contracts or understandings, irrespective of
subject matter and whether or not in writing, not entered into in the ordinary
course of business by the Company and not otherwise disclosed on the Schedules.
3.24 ACCURACY OF INFORMATION FURNISHED. No statement or information
made or furnished by the Company or the Shareholders to Nations or any of
Nations' representatives, including those contained in this Agreement and the
various schedules attached hereto and the other information and statements
referred to herein and previously furnished by the Company and the Shareholders,
contains or shall contain any untrue statement of a fact or omits or shall omit
any fact necessary to make the information contained therein not misleading. The
Company and the Shareholders have provided Nations with true, accurate and
complete copies of all documents listed or described in the various Schedules
attached hereto.
3.25 CUSTOMERS. All of the customers listed on the customer lists
attached hereto as Schedule 3.25 are subject to valid and enforceable customer
contracts. True, correct and complete copies of such contracts have been
furnished by the Company to Nations. The Company has not violated any of the
terms or conditions of any of the customer contracts, and all of the covenants
to be performed by any other party thereto have been fully performed and there
are no claims for breach or indemnification or notice of default or termination
thereunder. Schedule 3.25 notes the top 25 customers of the Company as measured
by annual revenue for the last twelve months.
3.26 INTELLECTUAL PROPERTY. The Company has full legal right, title
and interest to the Intellectual Property and has not granted any rights in or
to the same to any third party. The Business as presently conducted, and the
unrestricted conduct and the unrestricted use and exploitation of the
Intellectual Property, does not infringe or misappropriate any rights held or
asserted by any Person, and no Person is infringing on the Intellectual
Property. No payments are required for the continued use of the Intellectual
Property. None of the Intellectual Property has ever been declared invalid or
unenforceable, or is the subject of any pending or threatened action for
opposition, cancellation,
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declaration, infringement, or invalidity, unenforceability or misappropriation
or like claim, action or proceeding.
3.27 BANK ACCOUNTS. Schedule 3.27 lists each account of each of the
Company with any bank, broker or other depository institution, and the names of
all persons authorized to withdraw funds from each such account, and the
locations of all safe deposit boxes of the Company and the names of all persons
authorized to have access to such safe deposit boxes.
3.28 NAMES: PRIOR ACQUISITIONS. All names under which the Company
does business as of the date hereof are specified on Schedule 3.28. Except as
otherwise disclosed in Schedule 3.28, the Company has not changed its name or
used any assumed or fictitious name or been the surviving entity in a merger,
acquired any business or changed its principal place of business or chief
executive office, within the past three years.
3.29 DISTRIBUTIONS. From July 1, 1997, to the Closing Date, the
Company has not made and will not make any distributions to Shareholders beyond
those already made and listed on Schedule 3.9 other than: (I) salaries and
reimbursements of customary business expenses incurred in the ordinary course of
business consistent with past practices paid to Shareholders who are also
employees of the Company; (ii) as provided on Schedule 3.9; and (iii) as
contemplated by Section 5.9.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE CLOSING
4.1 CONDUCT OF BUSINESS PENDING THE CLOSING. The Company covenants
and agrees that, between the date of this Agreement and the Closing Date, the
Business shall be conducted only in, and shall not take any action except in,
the ordinary course of business consistent with past practice. The Company shall
use its reasonable best efforts to preserve intact its business organization, to
keep available the services of its current officers, employees and consultants,
and to preserve its present relationships with customers, suppliers and other
persons with which it has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement, the
Company shall not between the date of this Agreement and the Closing Date,
directly or indirectly, do or propose or agree to do any of the following
without the prior written consent of Nations: (a) amend or otherwise change its
articles of incorporation or bylaws or equivalent organizational
documents; (b) issue or authorize the issuance of, any shares of its capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock or other ownership
interest; (c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock other than as contemplated by Section 3.29; (d) reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock; (e) acquire (including, without
limitation, for cash, or shares of stock, property or services, by merger,
consolidation or acquisition of stock or assets) any interest in any
corporation, partnership or other business
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organization or division thereof; (f) incur any additional indebtedness or
prepay any Indebtedness other than to fund additional equipment purchases; (g)
make any loans or advances to any person or entity or guarantee the indebtedness
of any person or entity, except in the ordinary course of business consistent
with past practice; (h) sell, dispose of or encumber any of its assets outside
the ordinary course of business ; (I) enter into, modify or terminate, any
Contract, other than in the ordinary course of business consistent with past
practice; (j) pay any bonus to or increase the compensation or benefits payable
or to become payable to its employees, independent contractors or consultants
except as described in Section 5.14 below; (k) pay, discharge or satisfy any
existing claims, liabilities or obligations other than in the ordinary course of
business consistent with past practice; (l) increase or decrease prices charged
to its customers, except for previously announced price changes, or take any
other action which might reasonably result in any increase in the loss of
customers; (m) make (or commit to make) any capital expenditures in excess of
$10,000 except in the ordinary course of business; or (n) agree, in writing or
otherwise, to take or authorize any of the foregoing actions or any other action
which would make any representation or warranty in Article III untrue or
incorrect.
ARTICLE V
CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES
5.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby and to
satisfy the conditions set forth in Article VI and Article VII. The Shareholders
shall cause the Company to comply with all of the covenants of the Company under
this Agreement.
5.2 HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall
(I) make promptly (and in no event later than eight (8) business days following
the date hereof) their respective filings, if any, and thereafter make any other
required submissions, under the HSR Act, with respect to the transactions
contemplated hereby, and (ii) use their reasonable best efforts to take, or
cause to be taken, all appropriate actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated herein, including,
without limitation, using their best efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of any
Governmental Authority and parties to Contracts with the Company as are
necessary for the consummation of the transactions contemplated hereby. Each of
the parties agrees to cooperate with the others in the preparation and filing of
all forms, notifications, reports and information, if any, required or
reasonably deemed advisable pursuant to any law, rule or regulation in
connection with the transactions contemplated by this Agreement, and to use
their respective best efforts to agree jointly on a method to overcome any
objections by any Governmental Authority to any such transactions. The parties
also agree to use best efforts to defend all lawsuits or other legal proceedings
challenging this Agreement or the consummation of the transactions contemplated
hereby and to lift or rescind any injunction or
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restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby.
5.3 NOTIFICATION OF CERTAIN MATTERS. The Company and the
Shareholders shall give prompt notice to Nations of the occurrence or
non-occurrence of any event which would likely cause any representation or
warranty contained herein to be untrue or inaccurate, or any covenant,
condition, or agreement contained herein not to be complied with or satisfied.
5.4 CONFIDENTIALITY: PUBLICITY. Except as may be required by law
or as otherwise permitted or expressly contemplated herein, no party hereto or
their respective Affiliates, employees, agents and representatives shall
disclose to any third party this Agreement or the subject matter or terms hereof
without the prior consent of the other parties hereto. No press release or other
public announcement related to this Agreement or the transactions contemplated
hereby shall be issued by any party hereto without the prior approval of the
other parties.
5.5 NO OTHER DISCUSSIONS. The Company and the Shareholders agree
that the Company and the Shareholders and their respective Affiliates,
employees, agents and representatives will not (I) initiate, encourage the
initiation by others of discussions or negotiations with third parties or
respond to solicitations by third persons relating to any merger, sale or other
disposition of any substantial part of the assets, business or properties of the
Company (whether by merger, consolidation, sale of stock or otherwise), or (ii)
enter into any agreement or commitment (whether or not binding) with respect to
any of the foregoing transactions. The Company and the Shareholders will
immediately notify Nations if any third party attempts to initiate any
solicitation, discussion or negotiation with respect to any of the foregoing
transactions.
5.6 DUE DILIGENCE REVIEW AND ENVIRONMENTAL ASSESSMENT. Nations
shall be entitled to conduct prior to the Closing a due diligence review of the
assets, properties, books and records of the Company and an environmental
assessment of the Leased Premises (hereinafter referred to as "Environmental
Assessment"). The Company shall cause their respective directors, officers,
employees, auditors, counsel and agents to afford Nations and its officers,
employees, auditors, counsel and agents reasonable access at all reasonable
times to the properties, offices, and other facilities of the Company, to its
respective officers and employees and to all books and records, and shall
furnish such persons with all financial, operating and other data and
information as may be requested. The Environmental Assessment may include a
physical examination of the Leased Premises and any structures, facilities, or
equipment located thereon, soil samples, ground and surface water samples,
storage tank testing and review of pertinent records, documents, and licenses of
the Company. If the Environmental Assessment identifies environmental
contamination which requires remediation or further evaluation or if the results
of the Environmental Assessment or due diligence review are otherwise not
satisfactory to Nations in its sole discretion, then Nations may elect not to
close the transactions contemplated by this Agreement and to terminate this
Agreement. Nations' failure or decision not to conduct any such due diligence
review or Environmental Assessment, and any information provided to or obtained
by Nations, shall not affect any representation or warranty of the Company or
the Shareholders under this Agreement. Assuming the Company makes available
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the materials for review by Nations, its due diligence review shall be completed
by May 14, 1998, and the Environmental Assessment which shall be completed by
May 31, 1998.
5.7 RESTRICTIVE COVENANTS. In order to assure that Nations will
realize the benefits of the transactions contemplated hereby, the Company and
each of, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ agree that he, will
not:
(a) for a period of three (3) years following the termination
of his employment with the Company, directly or indirectly, alone or as a
partner, joint venturer, officer, director, employee, consultant, agent,
independent contractor, or security holder, of any company or business, engage
in, or finance, or provide financial assistance with respect to, any business
activity in the business of renting, selling, leasing, distributing, servicing
or repairing new or used equipment, spare parts and related supplies to
industrial, manufacturing, or construction customers (the "Equipment Business")
in any county in any state in the United States in which NationsRent, Inc. or
any of its subsidiaries, successors, or assigns (collectively, the "Nations
Companies") conducts such business at the time such person commences to engage
in such activity; provided, however, that the beneficial ownership of less than
five percent (5%) of any class of securities of any entity having a class of
equity securities actively traded on a national securities exchange or
over-the-counter market shall not be deemed, in and of itself, to violate the
prohibitions of this Section;
(b) for a period of three (3) years following the termination
of his employment with the Company, directly or indirectly, (I) induce any
customer acquired hereunder or any other customer of the Nations Companies to
patronize any business which is directly or indirectly in competition with the
Equipment Business conducted by any of the Nations Companies; (ii) canvass,
solicit or accept from any Person which is a customer of the Equipment Business
conducted by any of the Nations Companies, any such competitive business; or
(iii) request or advise any customer of the Equipment Business conducted by any
of the Nations Companies to withdraw, curtail or cancel any such customer's
business with the Nations Companies or their successors;
(c) for a period of three (3) years following the termination
of his employment with the Company, directly or indirectly, employ any person
who was employed by the Nations Companies, within six (6) months prior to the
date being employed by such Shareholder, or in any manner seek to induce any
employee of the Nations Companies to leave his or her employment; and
(d) at any time following the Closing Date, directly or
indirectly, in any way utilize, disclose, copy, reproduce or retain in his
possession any of the Companies' proprietary rights or records acquired
hereunder, including, but not limited to, any customer lists.
(e) Notwithstanding the foregoing, the restrictions described
above in (a), (b), and (c) shall run, in the case of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, for a term
of five (5) years from Closing.
The Company and the Shareholders agree and acknowledge that the
restrictions contained in this Section are reasonable in scope and duration, and
are necessary to protect the Nations
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Companies. The Company and the Shareholders agree and acknowledge that any
breach of this Section will cause irreparable injury to the Nations Companies
and upon any breach or threatened breach of any provision of this Section, the
Nations Companies shall be entitled to injunctive relief, specific performance
or other equitable relief, without the necessity of posting bond; provided,
however, that this shall in no way limit any other remedies which the Nations
Companies may have as a result of such breach, including the right to seek
monetary damages. The parties hereto agree that Nations may assign, without
limitation, the foregoing restrictive covenants to any successor to Nations'
Equipment Business.
5.8 EMPLOYMENT AGREEMENTS. (a) The Company and Shareholders shall
cause ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ to enter into two (2) year employment
agreements, the form of which is provided at Exhibit C.
(b) The Company and the Shareholders shall cooperate with and
assist Nations to cause ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ to enter into employment
agreements substantially similar to the form of employment agreement attached as
Exhibit C.
5.9 TRANSFER OF REAL PROPERTY, LEASES.
(a) Prior to Closing the Company shall cause to be transferred
to Shareholders or their designee the real property located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇; ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇; and ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
(b) On the Closing Date the Company shall enter into leases
(the form of which is attached as Exhibit D) providing for the lease of the
Leased Premises.
(c) The Company shall prior to the Closing distribute its
rights to certain life insurance policies listed on Schedule 5.9(c) prior to
Closing.
(d) Prior to the Closing Date the Company shall distribute to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or his assignee the following securities: Community Bank of
Naples; Harmony Oaks Limited Partnership; and First National Bank of PA.
5.10 CONTRACTS: CONSENTS. Prior to the Closing, (I) the Company
shall not terminate or otherwise modify or amend any of its Contracts, and (ii)
the Company shall receive consents to the transactions contemplated hereby and
waivers of rights to terminate or modify any rights or obligations of the
Company from any Person(s) from whom such consent or waiver is required under
any Contract to which the Company or the Assets are bound as of a date not more
than ten (10) days prior to the Closing Date, or who, as a result of the
transactions contemplated hereby, would have such rights to terminate or modify
such contracts, either by the terms thereof or as a matter of law.
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5.11 PAYOFF AND ESTOPPEL LETTERS. Prior to the Closing, the Company
shall request and deliver to Nations payoff and estoppel letters from all
holders of any Indebtedness of the Company which letters shall contain payoff
amounts, per diem interest, wire transfer instructions and an agreement to
deliver to Nations, upon full payment of any such Indebtedness, UCC-3
termination statements, satisfactions of mortgage or other appropriate releases
and any original promissory notes or other evidences of indebtedness marked
canceled.
5.12 SHAREHOLDERS VOTE. The Shareholders, in executing this
Agreement, consent as shareholders of the Company to the transactions
contemplated hereby, and waive notice of any meeting in connection therewith.
5.13 YEAR END BONUSES. On or before June 30, 1998, Nations shall
cause Company to pay to Employees year-end bonuses for the fiscal year ending
June 30, 1998, calculated in accordance with past practices, and as set forth on
Schedule 3.16.
5.14 COOPERATION OF SHAREHOLDERS. The Shareholders shall cooperate
with Nations in the conduct of an audit of the Company, including but not
limited to the execution of required representation letters, in connection with
the preparation of a registration for a securities offering.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF NATIONS
The obligations of Nations to effect the transactions contemplated
hereby shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions, any or all of which may be waived in whole or in part
in writing by Nations:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Company and the
Shareholders contained in this Agreement shall be true and correct at and as of
the Closing Date with the same force and effect as though made at and as of that
time except (I) for matters specifically permitted by or disclosed on any
Schedule to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and correct
as of such date. Each of the Company and Shareholders shall have performed and
complied with all of their respective obligations required by this Agreement to
be performed or complied with at or prior to the Closing Date. Each of the
Company and Shareholders shall have delivered to Nations a certificate, dated as
of the Closing Date, duly signed (in the case of the Company by its President),
certifying that such representations and warranties are true and correct and
that all such obligations have been complied with and performed.
6.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between
the date hereof and the Closing Date, (I) there shall have been no Material
Adverse Change in the Assets or the Business except as contemplated by the terms
of this Agreement, (ii) there shall have been no adverse federal, state or local
legislative or regulatory change affecting in any respect the Assets or the
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Business, and (iii) none of the Assets shall have been damaged by fire, flood,
casualty, act of God or the public enemy or other cause (regardless of insurance
coverage for such damage), and there shall have been delivered to Nations a
certificate to that effect, dated the Closing Date and signed by or on behalf of
the Company and the Shareholders.
6.3 CORPORATE CERTIFICATE. The Company shall have delivered to
Nations (I) copies of its articles of incorporation and bylaws as in effect
immediately prior to the Closing Date, (ii) copies of resolutions adopted by its
Board of Directors and Shareholders authorizing the transactions contemplated by
this Agreement, and (iii) a certificate of existence issued by the Commonwealth
of Kentucky as of a date not more than ten (10) days prior to the Closing Date,
certified in the case of subsections (I) and (ii) of this Section as of the
Closing Date by the Secretary of the Company as being true, correct and
complete.
6.4 DELIVERY OF THE SHARES. At the Closing, Shareholders shall
duly endorse for transfer and deliver to Nations (or its assignee) the Shares
and such other instruments of transfer of title as are necessary to transfer to
Nations (or its assignee) good and marketable title to the Shares free and clear
of any Liens.
6.5 OPINION OF COUNSEL. Nations shall have received an opinion
dated as of the Closing Date from counsel for the Company and the Shareholders,
in form and substance acceptable to Nations, to the effect that:
(I) the Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Kentucky and is authorized to carry on the business now conducted by it
and to own or lease the properties now owned or leased by it;
(ii) the Company has obtained all necessary authorizations
and consents of its Boards of Directors and Shareholders to consummate
the Acquisition and the other transactions contemplated hereby;
(iii) Such counsel does not know or have reason to believe
that there is any litigation, proceeding or investigation pending or
threatened which might result in any Material Adverse Effect on the
Company, or which questions the validity of this Agreement;
(iv) The execution and delivery of this Agreement by the
Company and the Shareholders, the performance by the Company and the
Shareholders of their respective obligations hereunder and the
consummation by the Company and the Shareholders of the transactions
contemplated by this Agreement will not (a) contravene any provision of
the articles of incorporation or bylaws of the Company, (b) violate or
conflict with any law, statute, ordinance, rule, regulation, decree,
writ, injunction, judgment or order of any Governmental Authority or of
any arbitration
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award which is either applicable to, binding upon or enforceable
against the Company, or the Shareholders, (c) conflict with, result in
any breach of, or constitute a default (or an event which would, with
the passage of time or the giving of notice or both, constitute a
default) under, or give rise to a right to terminate, amend, modify,
abandon or accelerate, any Contract which is applicable to, binding
upon or enforceable against the Company or the Shareholders except for
loan agreements, (d) result in or require the creation or imposition of
any Lien upon or with respect to any of the Assets, or (e) require the
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or
any other Person, except for certain lenders and as required and as
have been made under the HSR Act; and
(v) This Agreement is a valid and binding obligation of the
Company and the Shareholders, and enforceable against each of them in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally or general
equitable principles.
6.6 NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other governmental
body which shall seek to restrain, prohibit, invalidate or collect damages
arising out of the transactions contemplated hereby, and which, in the judgment
of Nations, makes it inadvisable to proceed with the transactions contemplated
hereby.
6.7 DUE DILIGENCE REVIEW. Nations shall have completed its due
diligence review of the Company, the Assets and the Business pursuant to Section
5.6, and shall be satisfied with the results of such review and assessment.
6.8 BOARD APPROVAL. The Board of Directors of Nations shall have
authorized and approved this Agreement and the transactions contemplated hereby.
6.9 EMPLOYMENT AGREEMENTS; LEASES; TERMINATION OF BUY SELL
AGREEMENT. The Company shall have delivered the executed employment agreements
contemplated by Section 5.8 and the leases contemplated by Section 5.9 hereof.
The Shareholders shall deliver at Closing a
termination agreement, in form and substance reasonably acceptable to Nations,
terminating the Buy Sell Agreement listed on Schedule 3.4(a).
6.10 CONSENTS. The Company shall have received the consents to the
transactions contemplated hereby in accordance with Section 5.10 hereof.
6.11 HSR ACT. Any applicable HSR Act waiting period shall have
expired or been terminated.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
AND THE SHAREHOLDERS
The obligations of the Company and the Shareholders to effect the
transactions contemplated hereby shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, any or all of which may be
waived in whole or in part in writing by the Company and the Shareholders:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Nations contained in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time except (I) for changes
specifically permitted by or disclosed pursuant to this Agreement, and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date. Nations shall
have performed and complied with all of its obligations required by this
Agreement to be performed or complied with at or prior to the Closing Date.
Nations shall have delivered to the Company, the Companies and the Shareholders
a certificate, dated as of the Closing Date, and signed by an officer thereof,
certifying that such representations and warranties are true and correct, and
that all such obligations have been performed and complied with, in all material
respects.
7.2 PURCHASE PRICE. At the Closing, Nations shall (I) pay to the
Shareholders the Closing Payment; and (ii) deliver to Shareholders the
Promissory Notes.
7.3 NO ORDER OR INJUNCTION. There shall not be pending by or
before any court or other governmental body an order or injunction restraining
or prohibiting the transactions contemplated hereby.
7.4 HSR ACT. Any applicable HSR Act waiting period shall have
expired or been terminated.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENT TO INDEMNIFY. Shareholders agree to protect, defend,
indemnify and hold Nations harmless from and against the aggregate of all
expenses, losses, costs, deficiencies, liabilities and damages (including,
without limitation, related counsel and paralegal fees and expenses) incurred or
suffered by Nations resulting from or arising out of (I) any breach of a
representation or warranty made by the Company or Shareholders in or pursuant to
this Agreement, (ii) any breach of the covenants or agreements made by the
Company or the Shareholders in this Agreement, or (iii) any
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inaccuracy in any certificate delivered by the Company or the Shareholders
pursuant to this Agreement or (iv) any liability for any judgment, award, or
settlement under the litigation against the Company listed on Schedule 3.11 as
item A.2. (collectively, "Indemnifiable Damages"). Without limiting the
generality of the foregoing with respect to the measurement of Indemnifiable
Damages, Nations shall have the right to be put in the same pre-tax consolidated
financial position as it would have been in had each of the representations and
warranties of the Company and the Shareholders hereunder been true and correct
and had the agreements and covenants of the Company and the Shareholders been
performed in full. Notwithstanding anything to the contrary contained herein,
Nations shall not be entitled to any Indemnifiable Damages unless the aggregate
of all such Indemnifiable Damages exceeds $200,000.00 ("Indemnification
Threshold"), in which case, Nations shall be entitled to the full amount of
Indemnifiable Damages including the amount of the Indemnification Threshold. Any
receivables of the Company charged-off or written down prior to the date hereof
that the Company receives a recovery on after the Closing Date (net of any
expenses of such recovery), shall be applied to reduce the aggregate amount of
Indemnifiable Damages.
8.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Shareholders in this Agreement at
Sections 3.1, 3.12, 3.17 and 3.18 shall survive the Closing of the transactions
contemplated hereby. All other representations and warranties made by the
Shareholders shall survive for a period of three (3) years after the Closing
Date. Notwithstanding any knowledge of facts determined or determinable by any
party by investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
contained in this Agreement or in any other documents or papers delivered in
connection herewith. Each representation, warranty, covenant and agreement of
the parties contained in this Agreement is independent of each other
representation, warranty, covenant and agreement.
8.3 SET OFF AND SECURITY FOR INDEMNIFICATION OBLIGATIONS.
Shareholders agree that Nations may set off against and recoup from the
Promissory Notes and/or the Management Promissory Notes any Indemnifiable
Damages for which the Shareholders may be responsible pursuant to this
Agreement. Should the Promissory Notes be (in accordance with their terms)
converted to common stock of Nations, $.01 par value per share (the "Nations
Common Stock"), the Shareholders hereby grant a first priority security interest
in, and pledge and instruct Nations to set aside and hold back Nations Common
Stock equal to $6,000,000.00 (at the initial price of the Nations Common Stock
of its initial underwriters public offering registered under the Securities Act
of 1933, as amended) (the "Held Back Shares"). Nations may set off against the
Held Back Shares any Indemnifiable Damages for which the Shareholders are
responsible in accordance with this Agreement. The set off and hold back rights
are subject, however, to the following terms and conditions:
(a) Nations shall give written notice to the Company of any
claim for Indemnifiable Damages or any other damages hereunder, which
notice shall set forth (I) the amount of Indemnifiable Damages or other
loss, damage, cost or expense
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which Nations claims to have sustained by reason thereof, and (ii) the
basis of the claim therefor.
(b) Such set off and recoupment shall be effected on the later
to occur of the expiration of thirty (30) days from the date of such
notice (the "Notice of Contest Period") or, if such claim is contested,
the date the dispute is resolved.
(c) If, prior to the expiration of the Notice of Contest
Period, the Shareholders shall notify Nations in writing of an
intention to dispute the claim and if such dispute is not resolved
within thirty (30) days after expiration of such period (the
"Resolution Period"), then Nations may elect that such dispute shall be
resolved by a committee of three (3) arbitrators (one appointed by the
Company, one appointed by Nations and one appointed by the two
arbitrators so appointed), which shall be appointed within sixty (60)
days after the expiration of the Resolution Period. The arbitrators
shall abide by the rules of the American Arbitration Association and
their decision shall be made within forty-five (45) days of being
appointed and shall be final and binding on all parties.
(d) The Held Back Amount shall constitute a deferred payment
obligation of Nations to the Shareholders which shall be paid to the
Shareholders eighteen months after the Closing Date subject to any
setoffs and recoupments by Nations hereunder. All setoffs, recoupments
and payments of Indemnifiable Damages pursuant to this Section shall be
treated as adjustments to the Purchase Price.
8.4 VOTING OF AND DIVIDENDS ON THE HELD BACK SHARES. Except with
respect to shares transferred pursuant to the foregoing right of set off (and in
the case of such shares, until the same are transferred), all Held Back Shares
shall be deemed to be owned by the Shareholders and the shareholders shall be
entitled to vote the same; provided, however, that, there shall also be
deposited with Nations subject to the terms of this Article, all shares of
Nations Common Stock issued to the Shareholders as a result of any stock
dividend or stock split and all cash issuable to the Shareholders as a result of
any cash dividend, with respect to the Held Back Shares. All stock and cash
issued or paid upon Held Back Shares shall be distributed to the Shareholders
together with such Held Back Shares.
8.5 SUBSTITUTION FOR HELD BACK SHARES. At any time that Nations is
holding Held Back Shares under the provision of sections 8.3 and 8.4 above, the
Shareholders or any of them shall be entitled to receive delivery of such
shares, unencumbered, upon the delivery to Nations of substitute collateral, in
such form as shall be acceptable to Nations, approval of which shall not be
unreasonably withheld, to be held for the same time, the same manner, and under
the same provisions as the Held Back Shares, with provisions for further
substitution in the same manner.
8.6 DELIVERY OF HELD BACK SHARES. Nations agrees to deliver to the
Shareholders no later than eighteen months after the Closing Date any Held Back
Shares then held by it (or proceeds from
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the Held Back Shares) unless there then remains unresolved any claim for
Indemnifiable Damages or other damages hereunder as to which notice has been
given, in which event any Held Back Shares remaining on deposit (or proceeds
from the sale of Held Back Shares) after such claim shall have been satisfied
shall be returned to the Shareholders promptly after the time of satisfaction.
8.7 NO BAR: WAIVER. If the Held Back Shares are insufficient to
set off any claim for Indemnifiable Damages made hereunder (or have been
delivered to the Shareholders prior to the making or resolution of such claim),
then Nations may take any action or exercise any remedy available to it by
appropriate legal proceedings to collect the Indemnifiable Damages. The
Shareholders hereby waive any rights to contribution or any similar rights they
may have against the Company as a result of their agreement to indemnify Nations
under this Article VIII or otherwise.
ARTICLE IX
DEFINITIONS
9.1 DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, as in effect on the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and the treasury regulations promulgated thereunder.
"Contract" means any agreement, contract, lease, note,
mortgage, indenture, loan agreement, franchise agreement, covenant,
employment agreement, license, instrument, purchase and sales order,
undertaking, commitment, obligation whether written or oral, express or
implied.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and any
entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
▇▇
▇▇
"▇▇▇ ▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"Indebtedness" of any entity means all obligations of such
entity (I) which in accordance with GAAP should be classified upon a
balance sheet as indebtedness; (ii) for borrowed money or purchase
money financing which has been incurred in connection with the
acquisition of property, assets or services; (iii) secured by any Lien
or other charge upon property or assets owned by such entity, even
though such entity has not assumed or become liable for the payment of
such obligations; (iv) created or arising under any conditional sale or
other title retention agreement with respect to property acquired by
such entity, whether or not the rights and remedies of the lender or
lessor under such agreement in the event of default are limited to
repossession or sale of the property; and (v) for remaining payments
under any capitalized leases (as defined under GAAP), non-competition
agreements, severance agreements, or any other agreements made outside
the ordinary course of business.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not limited to,
any conditional sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable law
or any jurisdiction in connection with such mortgage, pledge, security
interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or
effect), in the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or prospects
which change (or effect) individually or in the aggregate, is
materially adverse to such condition, properties, assets, liabilities,
rights, obligations, operations, business or prospects.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, limited liability company, estate,
trust, unincorporated association, joint venture, Governmental
Authority or other entity, of whatever nature.
"Tax Return" means any tax return, filing or information
statement required to be filed in connection with or with respect to
any Taxes; and
"Taxes" means all taxes, fees or other assessments, including,
but not limited to, income, excise, property, sales, franchise,
intangible, withholding, social security and unemployment taxes imposed
by any federal, state, local or foreign governmental agency, and any
interest or penalties related thereto.
9.2 OTHER DEFINITIONAL PROVISIONS. All terms defined in this Agreement
shall have the defined meanings when used in any certificates, reports or other
documents made or delivered
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pursuant hereto or thereto, unless the context otherwise requires. Terms defined
in the singular shall have a comparable meaning when used in the plural, and
vice versa. All matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods, where
applicable. As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing Date: (a) by mutual written consent of all of the parties
hereto at any time prior to the Closing; or (b) by Nations in the event of a
material breach by the Company or the Shareholders of any provision of this
Agreement or in accordance with Section 5.6; (c) by the Company in the event of
a material breach by Nations of any provision of this Agreement; or (d) by
Nations or the Company if the Closing shall not have occurred by July 31, 1998
provided that the party seeking to terminate this Agreement has acted in good
faith to close the transactions contemplated hereby.
10.2 EFFECT OF TERMINATION. Except for the provisions of Article
VIII hereof, which shall survive any termination of this Agreement, in the event
of termination of this Agreement pursuant to Section 1 0.1, this Agreement shall
forthwith become void and of no further force and effect, and the parties hereto
shall be released from any and all obligations hereunder; provided, however,
that nothing herein shall relieve any party from liability for the willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
(a) IF TO NATIONS:
NationsRent, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Ft. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
Akerman, Senterfitt & ▇▇▇▇▇▇, P.A.
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) IF TO THE COMPANY OR THE SHAREHOLDERS:
▇▇▇▇▇▇▇ Equipment Co.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
L. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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WITH A COPY TO:
Seiller & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notice shall be deemed given on the date sent if sent by facsimile
transmission and on the date delivered (or the date of refusal of delivery) if
sent by overnight delivery or certified or registered mail.
11.2 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement
(including the Exhibits and Schedules attached hereto) and other documents
delivered at the Closing pursuant hereto, contains the entire understanding of
the parties in respect of its subject matter and supersedes all prior agreements
and understandings (oral or written) between or among the parties with respect
to such subject matter. The Exhibits and Schedules constitute a part hereof as
though set forth in full above. Except for the Nations Companies which are
intended to be third party beneficiaries of this Agreement, this Agreement is
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.
11.3 EXPENSES. Except as otherwise provided herein, the
Shareholders and Nations shall pay their own fees and expenses, except for the
filing fee and Washington counsel fee due in connection with the HSR filing
which shall be paid by Nations, including their own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby. The
Shareholders hereby agrees to pay any and all sales, transfer and use and/or
similar taxes or fees which may become due and owing as a result of the
completion of the transactions contemplated by Section 5.9.
11.4 AMENDMENT; WAIVER. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written instrument
executed by all parties. No failure to exercise, and no delay in exercising, any
right, power or privilege under this Agreement shall operate as a waiver, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor shall any waiver be
implied from any course of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for performance of any
other obligations or any other acts. The rights and remedies of the parties
under this Agreement are in addition to all other rights and remedies, at law or
equity, that they may have against each other.
11.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder.
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Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by the Companies or the Shareholders without the
prior written consent of Nations.
11.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument. A telecopy signature of any party shall
be considered to have the same binding legal effect as an original signature.
11.7 INTERPRETATION. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
11.8 CONSTRUCTION. The parties agree and acknowledge that they have
jointly participated in the negotiation and drafting of this Agreement. In the
event of an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement. The parties agree that
prior drafts of this Agreement shall not be deemed to provide any evidence as to
the meaning of any provision hereof or the intent of the parties with respect
thereto. Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. If any party has breached 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 shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant. 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 relates solely to the existence of the
document or other items itself).
11.9 GOVERNING LAW: SEVERABILITY. This Agreement shall be construed
in accordance with and governed for all purposes by the laws of the State of
Florida applicable to contracts executed and to be wholly performed within such
State. If any word, phrase, sentence, clause, section, subsection or provision
of this Agreement as applied to an party or to any circumstance is adjudged by a
court to be invalid or unenforceable, the same will in no way affect any other
circumstance or the validity or enforceability of any other word, phrase,
sentence, clause, section, subsection or provision of this Agreement. If any
provision of this Agreement, or any part thereof, is held to be unenforceable
because of the duration of such provision or the area covered thereby, the
parties agree that the court making such determination shall have the power to
reduce the duration and/or area of such provision, and/or to delete specific
words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced.
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11.10 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to all other parties hereto that (a) before executing
this Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party has
had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
NATIONSRENT, INC., a Delaware corporation
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ EQUIPMENT CO., a
Kentucky corporation
By:/s/ L. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
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L. ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, President
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