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EXHIBIT 10.13
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ASSET PURCHASE AGREEMENT
AMONG
RENTX INDUSTRIES, INC.,
CVR, INC.
AND THE
SHAREHOLDERS
OF
CVR, INC.
AS OF MARCH 14, 1997
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. Basic Transaction . . . . . . . . . . . . . . . . . . . . . . 1
2.2. Assumption of Certain Liabilities . . . . . . . . . . . . . . 1
2.3. Purchase Price; Payment . . . . . . . . . . . . . . . . . . . 1
2.4. Sales Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . 2
2.5. Closing; Closing Date . . . . . . . . . . . . . . . . . . . . 2
2.6. Deliveries at the Closing . . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties. . . . . . . . . . . . . . . . . . . . 3
3.1. Representations and Warranties of the Seller and the
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Representations and Warranties of the Buyer . . . . . . . . . 10
3.3. Survival of Representations . . . . . . . . . . . . . . . . . 11
3.4. Representations as to Knowledge . . . . . . . . . . . . . . . 11
4. Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Operation and Preservation of Business . . . . . . . . . . . . 12
4.3. Acquisitions and Dispositions of Rental Equipment . . . . . . 12
4.4. Full Access . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5. Notice of Developments . . . . . . . . . . . . . . . . . . . . 12
4.6. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7. Conveyance of Shareholder Property . . . . . . . . . . . . . . 13
4.8. Announcements . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9. Bulk Sales Laws . . . . . . . . . . . . . . . . . . . . . . . 13
5. Post-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . 13
5.1. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 13
5.2. Transition . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 13
5.5. Post-Closing Announcements . . . . . . . . . . . . . . . . . . 14
5.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . 14
5.7. Satisfaction of Liabilities . . . . . . . . . . . . . . . . . 14
5.8. Certain Environmental Matters . . . . . . . . . . . . . . . . 14
5.9. Repurchase of Unpaid Receivables . . . . . . . . . . . . . . . 14
5.10. Use of Certain Assets and Services . . . . . . . . . . . . . . 15
5.11. Location 7 . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1. Conditions to Obligation of the Buyer . . . . . . . . . . . . 16
6.2. Conditions to Obligation of the Seller and the Shareholders . 17
(i)
3
7. Remedies for Breaches of This Agreement . . . . . . . . . . . . . . . 18
7.1. Indemnification Provisions for Benefit of the Buyer . . . . . 18
7.2. Indemnification Provisions for Benefit of the Seller and the
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.3. Matters Involving Third Parties . . . . . . . . . . . . . . . 19
7.4. Right of Offset. . . . . . . . . . . . . . . . . . . . . . . . 20
7.5. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . 20
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1. Termination of Agreement . . . . . . . . . . . . . . . . . . . 20
8.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . 21
8.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 21
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.1. No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . 21
9.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 21
9.3. Succession and Assignment . . . . . . . . . . . . . . . . . . 21
9.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 22
9.8. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 22
9.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.11. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.12. Construction . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.13. Incorporation of Exhibits . . . . . . . . . . . . . . . . . . 23
9.14. Seller's and Shareholders' Agent. . . . . . . . . . . . . . . 24
(ii)
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Exhibits:
Exhibit 1.1(a)
Exhibit 1.1(b)
Exhibit 1.1(c)
Exhibit 1.1(d)
Exhibit 1.1(e)
Exhibit 1.1(f)
Exhibit 1.1(g)
Exhibit 1.1(h)
Exhibit 1.1(i)
Exhibit 1.1(j)
Exhibit 1.1(k)
Exhibit 1.1(l)
Exhibit 1.1(m)
Exhibit 1.1(n)
Exhibit 3.1(c)
Exhibit 3.1(d)(i)
Exhibit 3.1(d)(ii)
Exhibit 3.1(e)(i)
Exhibit 3.1(e)(ii)
Exhibit 3.1(f)
Exhibit 3.1(g)(i)(A)
Exhibit 3.1(g)(i)(B)
Exhibit 3.1(g)(ii)
Exhibit 3.1(h)(i)
Exhibit 3.1(h)(ii)
Exhibit 3.1(i)(A)
Exhibit 3.1(i)(B)
Exhibit 3.1(k)
Exhibit 3.1(l)
Exhibit 3.1(m)
Exhibit 3.1(o)(i)
Exhibit 3.1(o)(ii)
Exhibit 3.1(r)(ii)
Exhibit 3.1(r)(iii)
Exhibit 4.3
Exhibit 6.1(j)
Exhibit 6.2(e)
(iii)
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This Asset Purchase Agreement is entered into as of March 14,
1997 among RentX Industries, Inc., a Delaware corporation (the "Buyer"), CVR,
Inc., a Virginia corporation (the "Seller"), and Xxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxx (individually, a "Shareholder"
and collectively, the "Shareholders").
Recitals
The Shareholders own all of the issued and outstanding capital
stock of the Seller. The Seller desires to sell, and the Buyer desires to
purchase, substantially all of the Seller's assets as provided in this
Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises, the mutual
representations, warranties and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
1. Definitions. The terms defined in Exhibit 1.1(a) shall have the
meanings designated therein.
2. Purchase and Sale.
2.1. Basic Transaction. Subject to the terms and conditions set forth
in this Agreement, the Buyer agrees to purchase from the Seller, and the Seller
agrees to sell to the Buyer, all the Acquired Assets free and clear of any
Encumbrance or Tax, for the consideration specified in Section 2.3. The Buyer
will have no obligation under this Agreement to purchase less than all of the
Acquired Assets.
2.2. Assumption of Certain Liabilities. Subject to the terms and
conditions set forth in this Agreement, the Buyer agrees to assume and become
responsible at the Closing for all of the Assumed Liabilities. The Buyer will
not assume or have any responsibility with respect to any other Liability not
expressly included within the definition of Assumed Liabilities.
2.3. Purchase Price; Payment.
(a) The cash purchase price for the Acquired Assets is
$4,502,400. At the Closing, the Buyer will, by wire transfer or other
delivery of immediately available funds, (i) (A) pay to the Seller (subject to
Section 2.3(b)), subject to increase or decrease as applicable for the Net
Rental Equipment Adjustment, $4,052,400, and (B) deposit $450,000 into the
Escrow Account and (ii) assume the Assumed Liabilities (and the amounts paid
and deposited to and in respect of the Seller and the Assumed Liabilities will
constitute the full purchase price for the Acquired Assets). The amount
deposited in the Escrow Account will belong to the Seller, subject to the
Seller's indemnification obligations set forth in this Agreement, and will be
held, invested, administered and disbursed according to Section 7.1(b) hereof
and the Escrow Agreement.
(b) At the Closing, the Buyer will deposit into a demand
deposit account in the name of the Buyer and the Shareholders' Agent, from the
amount otherwise payable to the Seller pursuant to Section 2.3(a)(i)(A), an
amount equal to the Reserve Amount, and such funds shall initially constitute
the Liabilities Reserve. The funds on deposit in the Liabilities Reserve will
belong to the Seller, subject to the provisions of this Section 2.3(b).
Following the Closing, the Liabilities Reserve will be applied to the payment
of Reserved Seller Liabilities, by disbursements from that account by
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the Buyer or the Shareholders' Agent, as the Reserved Seller Liabilities become
due and payable. To the extent that the Buyer receives a xxxx or invoice
representing, or is otherwise aware of, any Reserved Seller Liabilities, the
Buyer may cause funds to be disbursed from the Reserve Amount to satisfy such
Reserved Seller Liabilities. Reserved Seller Liabilities representing accrued
vacation and other accrued employee benefits with respect to those persons who
are employees of the Seller as of the Closing Date and who become employees of
the Buyer effective as of the Closing will be satisfied by payment of the
amount thereof to the Buyer as the Buyer provides such benefits or makes cash
payments in lieu thereof to employees. The Shareholders' Agent will take all
actions necessary to cause the Liabilities Reserve to be applied to satisfy
Reserved Seller Liabilities and, if the Liabilities Reserve has been exhausted,
the Seller and the Shareholders will provide additional funds as required to
satisfy Reserved Seller Liabilities. Nothing in this Agreement will be deemed
to limit the joint and several obligations of the Seller and the Shareholders
to pay the Reserved Seller Liabilities in full. After all Reserved Seller
Liabilities have been satisfied, any excess Liabilities Reserve on deposit in
the account created pursuant to this Section 2.3(b) will be paid to the Seller.
Any disputes concerning the Liabilities Reserve will be settled by arbitration
as provided in this Agreement.
(c) As soon as practicable after the Closing, but effective as
of the Closing, the parties will prepare and initial a "Price Allocation
Schedule", allocating for Tax reporting purposes the total consideration for
the Acquired Assets among the various categories of Acquired Assets in the
following order and amounts: (i) to cash and cash equivalents, the $2,400
amount on the Closing Balance Sheet; (ii) to Closing Accounts Receivable, the
amount on the Closing Balance Sheet; (iii) to Closing Inventory, the amount on
the Closing Balance Sheet; (iv) to equipment and leasehold improvements, the
greater of the appraised fair market value (if the Buyer in its sole discretion
obtains an appraisal before or after the Closing) or the current book value
thereof as reflected on the Closing Balance Sheet; (v) to prepaid expenses, the
unamortized balance on the Closing Balance Sheet; (vi) to any other assets,
other than goodwill, the amount on the Closing Balance Sheet; and (vii) the
entire remaining balance of the consideration shall be allocated to the
goodwill of the Seller's business or, at the Buyer's sole discretion, to the
other intangible assets which are included in the Acquired Assets. The parties
acknowledge that such allocations for Tax reporting purposes were determined
pursuant to arm's length bargaining regarding the fair market values of the
Acquired Assets in accordance with the provisions of Code Section 1060. The
parties agree to be bound by the allocations set forth in the Price Allocation
Schedule for all federal, state and local Tax reporting purposes, including for
purposes of determining any income, gain, loss, depreciation or other
deductions in respect of such assets. The parties further agree to prepare and
file all Tax Returns (including Form 8594 under the Code) in a manner
consistent with such allocations.
2.4. Sales Taxes, Etc. The Seller will pay all sales, use, transfer
and other Taxes, fees and charges payable in respect of the sale and transfer
of the Acquired Assets to the Buyer pursuant to this Agreement.
2.5. Closing; Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") is anticipated to take place on
March 14, 1997 (but in any event on or before April 1, 1997), commencing at
8:00 a.m. local time in Denver, Colorado, at the offices of Xxxxxxx & Xxxxxx
L.L.C., and all transactions contemplated by this Agreement will be effective
at 12:00 a.m. local time in Waynesboro, Virginia, on the day of the Closing
(such effective time being the "Closing Date").
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2.6. Deliveries at the Closing. At the Closing, (a) the Seller and
the Shareholders will deliver, or cause to be delivered, to the Buyer the
certificates, instruments and documents referred to in Section 6.1, (b) the
Buyer will deliver to the Seller and the Shareholders the certificates,
instruments and documents referred to in Section 6.2, (c) the Seller will
deliver to the Buyer instruments transferring to the Buyer title to the
Acquired Assets free and clear of any Encumbrances or Taxes and (d) the Buyer
will pay and deposit the purchase price in accordance with Section 2.3.
3. Representations and Warranties.
3.1. Representations and Warranties of the Seller and the
Shareholders. The Seller and the Shareholders jointly and severally represent
and warrant to the Buyer that the statements contained in this Section 3.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were then substituted for the date of this Agreement throughout this
Section 3.1).
(a) Organization, Good Standing, Authority, Etc. The Seller
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Virginia and is not required to be qualified to do
business as a foreign corporation in any other jurisdiction. The Seller has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. This Agreement
and the Other Seller Agreements and the consummation of the transactions
contemplated hereby and thereby have been duly and unanimously approved by the
board of directors and shareholders of the Seller, and this Agreement has been
duly executed and delivered by the Seller. The Seller has full corporate power
and authority to execute, deliver and perform this Agreement and the Other
Seller Agreements to which the Seller is a party, each Shareholder and each
relative or affiliate of the Seller or of a Shareholder who is party to any
Other Seller Agreement has full and absolute right, power, authority and legal
capacity to execute, deliver and perform this Agreement and all Other Seller
Agreements to which such Shareholder, relative or affiliate is a party, and
this Agreement constitutes, and the Other Seller Agreements will when executed
and delivered constitute, the legal, valid and binding obligations of, and
shall be enforceable in accordance with their respective terms against, the
Seller and each such Shareholder, relative or affiliate who is a party thereto.
(b) Ownership. Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxxxx and Xxxxx X. Xxxxx own, beneficially and of record, free and clear of
any Encumbrance or Tax, 755 shares, 349 shares, 79 shares, and 17 shares,
respectively, of the common stock, $563.96 par value, of the Seller, which
constitute all outstanding shares of the capital stock of the Seller. No other
Person has any right to acquire any equity interest in the Seller.
(c) No Violation. The execution, delivery and performance of
this Agreement and the Other Seller Agreements and the consummation of the
transactions contemplated hereby and thereby will not (i) violate any Legal
Requirement to which the Seller, any Shareholder, or any relative or affiliate
of the Seller or of any Shareholder who is a party to any Other Seller
Agreement is subject or any provision of the articles of incorporation or
bylaws of the Seller or of any such affiliate, or (ii) violate, with or without
the giving of notice or the lapse of time or both, or conflict with or result
in the breach or termination of any provision of, or constitute a default
under, or give any Person the right to accelerate any obligation under, or
result in the creation of any Encumbrance upon any properties, assets or
business of the Seller, of any Shareholder, or of any such relative or
affiliate pursuant to, any
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indenture, mortgage, deed of trust, lien, lease, license, Permit, agreement,
instrument or other arrangement to which the Seller, any Shareholder or any
such relative or affiliate is a party or by which the Seller, any Shareholder,
or any such relative or affiliate or any of their respective assets and
properties is bound or subject. Except for notices that will be given and
consents that will be obtained by the Seller and the Shareholders prior to the
Closing (which are set forth in Exhibit 3.1(c)), neither the Seller, any
Shareholder, nor any such relative or affiliate need give any notice to, make
any filing with or obtain any authorization, consent or approval of any
Governmental Authority or other Person in order for the parties to consummate
the transactions contemplated by this Agreement and the Other Seller
Agreements.
(d) Financial Statements. The unaudited balance sheets of the
Seller as of December 31, 1991, December 31, 1992, December 31, 1993, December
31, 1994, and December 31, 1995, and the related statements of income, for the
fiscal years then ended, the unaudited balance sheet of the Seller as of
December 31, 1996 (the latter being referred to as the "Latest Balance Sheet"),
and the related statement of income, for the fiscal year then ended, have been
prepared in accordance with good accounting practices and on a basis consistent
with those of prior years, are in accordance with the books and records of the
Seller (which books and records are complete and correct), are accurate and
fairly present the financial position and results of operations of the Seller
as of such dates and for each of the periods indicated, do not list book values
for the assets that are in excess of their fair market values, and, except as
set forth on Exhibit 3.1(d)(i), make adequate provision for all Liabilities to
which the Seller is subject. Copies of the financial statements described in
the first sentence in this Section are attached as Exhibit 3.1(d)(ii).
(e) Absence of Certain Leases, Changes or Events. The Seller
is not, except as set forth on Exhibit 3.1(e)(i), a party to or otherwise bound
by any contract or agreement that has a term of three or more months pursuant
to which the Seller is obligated to furnish any equipment, products or
services, and no such contract or agreement has been prepaid with respect to
any period after the Closing Date. Since November 30, 1996, the Seller has
not, except as set forth on Exhibit 3.1(e)(ii), (i) incurred any debt,
indebtedness or other Liability, except current Liabilities incurred in the
ordinary course of business; (ii) delayed or postponed the payment of accounts
payable or other Liabilities or accelerated the collection of any receivable
beyond stated, normal terms; (iii) sold (except as set forth on Exhibit 4.3
with respect to the period between November 30, 1996, and the date of this
Agreement and as permitted by Section 4.3 with respect to the period after the
date of this Agreement and before the Closing Date) or otherwise transferred
any of its equipment or other assets or properties; (iv) cancelled,
compromised, settled, released, waived, written-off or expensed any account or
note receivable, right, debt or claim involving more than $10,000 in the
aggregate; (v) changed in any significant manner the way in which it conducts
its business; (vi) made or granted any individual wage or salary increase in
excess of 10% or $1.00 per hour, any general wage or salary increase, or any
additional benefits of any kind or nature; (vii) except as otherwise expressly
permitted by this Section 3.1(e), (A) entered into any contracts or agreements,
or made any commitments, involving more than $15,000 individually or in the
aggregate or (B) accelerated, terminated, delayed, modified or cancelled any
agreement, contract, lease or license (or series of related agreements,
contracts, leases and licenses) involving more than $15,000 individually or in
the aggregate; (viii) suffered any adverse fact or change, including, without
limitation, to or in its business, assets, financial condition, prospects or
customer or supplier relationships; (ix) made any payment or transfer to or for
the benefit of any shareholder, officer or director or any relative or
affiliate thereof or permitted any Person, including, without limitation, any
shareholder, officer, director or employee or any relative or affiliate
thereof,
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to withdraw assets from the Seller (other than cash of the Seller distributed
to its shareholders as set forth on Exhibit 3.1(e)(ii) and other than the
payment to the Shareholders of the proportionate monthly amount of their
respective normal annualized salaries due and payable during such period); (x)
failed to make purchases of new or used equipment necessary to maintain its
rental/lease inventory at the level which is reasonably necessary to maintain
the revenue base experienced by the Seller during the 12 months preceding such
date; (xi) decreased its lease rate with respect to any equipment by 10% or
more from the applicable lease rate in effect on November 30, 1996, or rented
or leased any equipment or sold or otherwise transferred any inventory,
equipment or services at below-normal rental or lease rates or margins; (xii)
suffered any other significant occurrence, event, incident, action, failure to
act or transaction outside the ordinary course of business; or (xiii) agreed to
incur, take, enter into, make or permit any of the matters described in clauses
(i) through (xii).
(f) Tax Matters. Neither the Seller nor any of its
shareholders has ever filed (i) an election pursuant to Section 1362 of the
Code that the Seller be taxed as an "S" corporation, except as set forth on
Exhibit 3.1(f), or (ii) a consent pursuant to Section 341(f) of the Code
relating to collapsible corporations. The Seller and the Shareholders will pay
all Taxes attributable to the Seller's business and activities, including all
Taxes attributable to the transactions contemplated by this Agreement, on or
before the due date. There are no Encumbrances on any of the assets of the
Seller that arose in connection with any failure (or alleged failure) to pay
any Tax. Exhibit 3.1(f) lists all federal, state and local income Tax Returns
filed with respect to the Seller for taxable periods ended on or after January
1, 1991, indicates those Tax Returns that have been audited and indicates those
Tax Returns that currently are the subject of audit. The Seller has delivered
to the Buyer correct and complete copies of all federal, state and local income
Tax Returns and examination reports of, and statements of deficiencies assessed
against or agreed to by, the Seller since January 1, 1991.
(g) Assets and Properties.
(i) As of the date of this Agreement, the Seller owns
all of the Acquired Assets (other than certain items of Shareholder Property),
free and clear of all Encumbrances (except for those Encumbrances which the
Seller shall cause to be terminated as of the Closing). As of the Closing, all
of the Acquired Assets (including all of the Shareholder Property) will be
owned by the Seller, free and clear of all Encumbrances, and the Seller will
have good and marketable title to (or, in the case of Acquired Assets that are
leased, valid leasehold interests in) all the Acquired Assets. The Acquired
Assets consist of (A) the tangible and intangible assets of the Seller
(exclusive of the Excluded Assets) in existence as of November 30, 1996 (except
as set forth on Exhibit 3.1(e) with respect to cash of the Seller which was
distributed to its shareholders and except for such changes in inventory and in
accounts receivable in the ordinary course of business as are not in violation
of Section 3.1(e)) or Section 4.3, increased by New Rental Equipment acquired
from and after the date of this Agreement in compliance with Section 4.3,
decreased by Current Rental Equipment disposed of from and after the date of
this Agreement in compliance with Section 4.3, and decreased by Current Rental
Equipment sold or otherwise transferred on or after November 30, 1996 but
before the date of this Agreement as set forth on Exhibit 4.3 and (B) all
tangible and intangible assets, including, without limitation, all
improvements, fixtures and fittings, owned by any Shareholder or relative or
affiliate thereof or of the Seller which have been used in its business at any
time on or after November 30, 1996 (the "Shareholder Property"), including,
without limitation, the tangible and intangible assets set forth on Exhibit
3.1(g)(i)(A) owned by any Shareholder or relative or affiliate thereof.
Between November 30, 1996 and the day before the date of this Agreement, the
Seller has purchased the New
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Rental Equipment and has sold, for cash or a Current Rental Equipment
Receivable only, the Current Rental Equipment described in Exhibit 4.3, but has
not otherwise sold, traded, transferred or otherwise disposed of any Current
Rental Equipment. The Acquired Assets are all of the tangible and intangible
assets (other than the Excluded Assets) used by the Seller in, or necessary for
the conduct of, its business. The Acquired Assets and the equipment leased by
the Seller from third parties who are not relatives or affiliates of the Seller
or any Shareholder for lease by the Seller to its customers (the "Third-Party
Equipment") encompass all equipment used by the Seller to generate the income
reflected in the financial statements attached as Exhibit 3.1(d)(ii), and the
total cost to the Seller to lease such Third-Party Equipment during the fiscal
years ending December 31, 1995 and December 31, 1996 did not exceed $400,000
and $274,000, respectively. Exhibit 3.1(g)(i)(B) lists all Third Party
Equipment leased by the Seller as of the date hereof. The Seller does not
lease any equipment from any Shareholder or any relative or affiliate of the
Seller or any Shareholder. Except for items rented or leased to customers, all
of the tangible Acquired Assets are located on the Premises.
(ii) The Premises constitute all of the real property,
buildings and improvements used by the Seller in its business and are supplied
with utilities and other services necessary for the operation thereof. Except
as set forth on Exhibit 3.1(g)(ii), the Premises are free from defects, have
been maintained in accordance with normal industry practice, are in good
operating condition and repair and are suitable for the purposes for which they
presently are used. To the best knowledge of the Seller and the Shareholders,
the Premises have received all approvals of Governmental Authorities (including
Permits) required in connection with the occupation and operation thereof and
have been occupied, operated and maintained in accordance with applicable Legal
Requirements. The Seller has not received notice of violation of any Legal
Requirement or Permit relating to its owned or leased properties.
(iii) No party to any lease has repudiated any provision
thereof, and there are no disputes, oral agreements or forbearance programs in
effect as to any such lease.
(h) Lists of Properties, Contracts and Other Data. Attached
as Exhibit 3.1(h)(ii) is a correct and complete list setting forth the items
identified on Exhibit 3.1(h)(i). True and complete copies of the items
referred to in Exhibit 3.1(h)(ii) have been delivered to the Buyer. All items
referred to in Exhibit 3.1(h)(ii) are valid, in full force and effect,
enforceable in accordance with their respective terms for the period stated
therein, and no party has repudiated any provision thereof and no action or
claim is pending or threatened to revoke, modify, terminate or render invalid
any of such items. Neither the Seller nor any other party thereto is in breach
or default in performance of any of its respective obligations under, and no
event exists which, with the giving of notice or lapse of time or both, would
constitute a breach, default or event of default on the part of a party to, any
of the foregoing that is continuing unremedied.
(i) Litigation; Compliance with Applicable Laws and Rights.
There is no outstanding Order against, nor, except as set forth on Exhibit
3.1(i)(A) is there any litigation, proceeding, arbitration or investigation by
any Governmental Authority or other Person pending or threatened against, the
Seller, its properties or its business or relating to the transactions
contemplated by this Agreement, nor is there any basis for any such action. To
the best knowledge of the Seller and the Shareholders, except as set forth on
Exhibit 3.1(i)(B), neither the Seller nor the Seller's assets (including its
Premises, facilities, machinery and equipment) are in violation of any
applicable Legal Requirement or Right. The Seller has not received notice from
any Governmental Authority or other
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11
Person of any violation or alleged violation of any Legal Requirement or Right,
and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand or notice has been filed or commenced or is pending or threatened
against the Seller alleging any such violation.
(j) Notes and Accounts Receivable. The accounts receivable of
the Seller reflected on its Latest Balance Sheet, and all accounts receivable
arising prior to the Closing Date (including, without limitation, any Current
Rental Equipment Receivables in existence as of the Closing Date), arose and
will arise from bona fide transactions by the Seller in the ordinary course of
business, are valid receivables with trade customers subject to no setoffs or
counterclaims, and are current and collectible.
(k) Product Quality, Warranty and Liability. All products and
services sold, rented, leased, provided or delivered by the Seller to customers
on or prior to the Closing Date conform to applicable contractual commitments,
express and implied warranties, product and service specifications and quality
standards, and the Seller has no Liability and there is no basis for any
Liability for replacement or repair thereof or other damages in connection
therewith. No product or service sold, rented, leased, provided or delivered
by the Seller to customers on or prior to the Closing Date is subject to any
guaranty, warranty or other indemnity beyond the applicable standard terms and
conditions of sale, rent or lease. The Seller has no Liability and there is no
basis for any Liability arising out of any injury to a Person or property as a
result of the ownership, possession, provision or use of any product or service
sold, rented, leased, provided or delivered by the Seller on or prior to the
Closing Date. All product or service liability claims that have been asserted
against the Seller since January 1, 1992, other than those set forth on Exhibit
3.1(i)(A), whether covered by insurance or not and whether litigation has
resulted or not, are listed and summarized on Exhibit 3.1(k).
(l) Insurance. The Seller has policies of insurance (i)
covering risk of loss on its Acquired Assets, (ii) covering products and
services liability and liability for fire, property damage, personal injury and
workers' compensation coverage and (iii) for business interruption, all, to the
best knowledge of the Seller and the Shareholders, with responsible and
financially sound insurance carriers in adequate amounts and in compliance with
governmental requirements and in accordance with good industry practice. All
such insurance policies are valid, in full force and effect and enforceable in
accordance with their respective terms and no party has repudiated any
provision thereof. All such policies will remain in full force and effect
until midnight on the Closing Date. Neither the Seller nor any other party to
any such policy is in breach or default (including with respect to the payment
of premiums or the giving of notices) in the performance of any of their
respective obligations thereunder, and no event exists which, with the giving
of notice or the lapse of time or both, would constitute a breach, default or
event of default, or permit termination, modification or acceleration under any
such policy. There are no claims, actions, proceedings or suits arising out of
or based upon any of such policies nor, to the best knowledge of the Seller and
the Shareholders, does any basis for any such claim, action, suit or proceeding
exist. All premiums have been paid on such policies as of the date of this
Agreement and will be paid on such policies through the Closing Date. The
Seller has been covered during the five years prior to the date of this
Agreement by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. All
claims made during such five-year period with respect to any insurance coverage
of the Seller, other than those described on Exhibit 3.1(k), are set forth on
Exhibit 3.1(l).
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12
(m) Pension and Employee Benefit Matters. The Buyer will not
suffer any Liability or Adverse Consequence from any Seller's administration or
termination of any of its Employee Benefit Plans or from any failure of any
pre-Closing or post-Closing distribution of benefits to employees of the Seller
to be made by the Seller in compliance with all applicable Legal Requirements.
The Buyer will have no obligation to employ any employee of the Seller or to
continue any Employee Benefit Plan, and will have no Liability under any plan
or arrangement maintained by the Seller for the benefit of any employee. The
Seller will remain liable for all costs of employee compensation, including
benefits and Taxes relating to employment and employees attributable to periods
through the Closing Date, whether reported by the Closing Date or thereafter,
and all group health plan continuation coverage to which any employee, former
employee or dependent is entitled because of a qualifying event (as defined in
Section 4980B(f)(3) of the Code) occurring through the Closing Date or as a
result of termination of employment with the Seller because of the transactions
contemplated by this Agreement and any benefit or excise tax liability or
penalty or other costs arising from any failure by the Seller to provide group
health plan continuation coverage. Except as set forth on Exhibit 3.1(m),
neither the Seller nor any Affiliated Group which includes the Seller (if any)
maintains, administers or contributes to, has maintained, administered or
contributed to, or has any Liability to contribute to, any Employee Benefit
Plan. Exhibit 3.1(m) lists each Employee Benefit Plan that is, or at any time
during the past six years was, maintained, administered, contributed to or
required to be contributed to by the Seller or any Affiliated Group (if any)
which includes or has included the Seller, and the date of termination of each
such Employee Benefit Plan (if any) which has been terminated. The Seller has
no Liability (and there is no basis for the assertion of any Liability) as a
result of the Seller's or any such Affiliated Group's maintenance,
administration or termination of, or contribution to, any Employee Benefit
Plan. Neither the Seller nor any member of any Affiliated Group (if any) which
includes or has included the Seller has ever been required to contribute to any
Multiemployer Plan (as defined in ERISA Section 3(37)) nor has incurred any
Liability under Title IV of ERISA.
(n) Employees and Labor. The Seller has not received any
notice, nor, to the best knowledge of the Seller and the Shareholders, is there
any reason to believe that any executive or key employee of the Seller or any
group of employees of the Seller has any plans to terminate his, her or its
employment with the Seller. No executive or key employee is subject to any
agreement, obligation, Order or other legal hindrance that impedes or might
impede such executive or key employee from devoting his or her full business
time to the affairs of the Seller prior to the Closing Date and, if such person
becomes an employee of the Buyer, to the affairs of the Buyer after the Closing
Date. The Seller will not be required to give any notice under the Worker
Adjustment and Retraining Notification Act, as amended, or any similar Legal
Requirement as a result of this Agreement, the Other Seller Agreements or the
transactions contemplated hereby or thereby. The Seller does not have any
labor relations problems or disputes, nor has the Seller experienced any
strikes, grievances, claims of unfair labor practices or other collective
bargaining disputes. The Seller is not a party to or bound by any collective
bargaining agreement, there is no union or collective bargaining unit at the
Seller's facilities, and no union organization effort has been threatened,
initiated or is in progress with respect to any employees of the Seller.
(o) Customer and Supplier Relationships. Exhibit 3.1(o)(i)
lists each customer that individually or with its affiliates accounted for 2%
or more of the Seller's sales, rental or lease revenues during either of the
fiscal years ending December 31, 1995 or December 31, 1996 (the "Principal
Customers"). Exhibit 3.1(o)(ii) lists each supplier that individually or with
its affiliates accounted for 2% or more of the Seller's purchases of inventory
or supplies during the fiscal year
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ending December 31, 1995 or December 31, 1996 (the "Principal Suppliers"). The
Seller has good commercial working relationships with its Principal Customers
and Principal Suppliers and since January 1, 1996, no Principal Customer or
Principal Supplier has cancelled or otherwise terminated its relationship with
the Seller, materially decreased or limited its purchases, rentals or leases
from, or inventory or supplies supplied to the Seller, or threatened to take
any such action. The Seller and the Shareholders have no basis to anticipate
any problems with the Seller's customer, supplier or business relationships.
To the best knowledge of the Seller and the Shareholders, no Principal Customer
or Principal Supplier has any plans to reduce its purchases, rentals or leases
from, or inventory or supplies supplied to, the Seller below levels prevailing
since January 1, 1996, and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not adversely affect
the relationship of the Seller with any Principal Customer or Principal
Supplier prior to the Closing Date or of the Buyer with any Principal Customer
or Principal Supplier after the Closing Date.
(p) Resale Inventory. The resale inventory of the Seller
consists of goods which, in the aggregate, are merchantable, are fit for the
purposes for which they were procured and are held by the Seller, are usable in
the ordinary course of the Seller's business and are not obsolete.
(q) Condition, Adequacy and Type of Equipment. The
rental/lease inventory of the Seller consists of machinery, equipment and other
tangible personal property which are merchantable, are fit and suitable for the
purpose for which they were procured and are held by the Seller, useable in the
ordinary course of the Seller's business and are not obsolete. All of the
machinery, equipment and other tangible personal property included in the
Acquired Assets (including that held for rental, lease or sale) has been
maintained in accordance with good industry practice and is in good repair and
good operating condition. None of the machinery, equipment or other tangible
personal property included in the Acquired Assets (including that held for
rental, lease or sale) is damaged or defective, the Seller has not experienced
material problems or deficiencies with respect to its machinery, equipment and
other tangible personal property, and, to the best knowledge of the Seller and
the Shareholders, there is no basis to anticipate any such problems or
deficiencies. In the normal course of business certain items which are held
for rental or lease suffer damage in the course of use by the Seller's
customers, and such items are reparable and are in the process of being
repaired by the Seller for use in the Seller's rental and leasing business, and
the Seller has repaired and shall continue through the Closing Date to repair
such items on a basis consistent with good industry practice and the aggregate
cost to the Buyer after the Closing Date to repair all such items which are in
need of repair or are in the process of being repaired as of the Closing Date
will not exceed $20,000.
(r) Environmental Matters.
(i) The Seller is conducting and at all times has
conducted its business and operations, and has occupied, used and operated the
Premises and all other real property and facilities previously owned, occupied,
used or operated by the Seller, in compliance with all Environmental
Obligations and so as not to give rise to Liability under any Environmental
Obligations or to any impact on the Seller's business or activities. The
Seller and the Shareholders do not have any knowledge of pending or proposed
changes to any Environmental Obligations which would require any changes in any
of the Seller's Premises, facilities, equipment, operations or procedures or
affect the Seller's business or its cost of conducting its business as now
conducted.
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14
(ii) No conditions, circumstances or activities have
existed or currently exist, and neither the Seller nor any Shareholder has
engaged in any acts or omissions, with respect to the Premises or any other
real properties, facilities or business previously owned, occupied, used or
operated by the Seller or any predecessor (including, without limitation, off-
site disposal or treatment of Hazardous Materials) which could give rise to any
Liability pursuant to any Environmental Obligation. Exhibit 3.1(r)(ii)
identifies all real properties and facilities, including the addresses thereof,
which have been owned, occupied, used or operated by the Seller or its
predecessors at any time on or prior to the date of this Agreement. There are
no outstanding, pending or threatened Orders against the Seller or any
Shareholder, nor are there any current, pending or threatened investigations of
any kind against the Seller or any Shareholder, concerning any Environmental
Obligations. There are no actions, suits or administrative, arbitral or other
proceedings alleged, claimed, threatened, pending against or affecting the
Seller or any Shareholder at law or in equity with respect to any Environmental
Obligations, and neither the Seller nor any Shareholder has knowledge of any
existing grounds on which any such action, suit or proceedings might be
commenced.
(iii) Any chemicals and chemical compounds and mixtures
which are included among the assets of the Seller are integral to and required
for the conduct of the Seller's business, have not been and are not intended to
be discarded or abandoned, and are not waste or waste materials. Except as set
forth in the environmental studies attached as Exhibit 3.1(r)(iii)
(collectively, the "Environmental Study"), the Seller has not generated,
handled, used, transported or disposed of Hazardous Materials. All waste
materials which are generated as part of the business of the Seller are
handled, stored, treated and disposed of in accordance with applicable Legal
Requirements and Environmental Obligations.
(iv) Except as set forth in the Environmental Study, no
underground or above ground storage tanks are or have been located on the
Premises or any other real properties or any facilities presently or previously
owned, occupied, used or operated by the Seller or any predecessor. Except as
set forth in the Environmental Study, neither any of the Premises nor any other
real properties or facilities presently or previously owned, occupied, used or
operated by the Seller or any predecessor has been used at any time as a
gasoline service station or any facility for storing, pumping, dispensing or
producing gasoline or any other petroleum products (other than such storage,
pumping and dispensing of fuels and lubricants as is incidental to the Seller's
equipment rental/leasing business) or Hazardous Materials. No building or
other structure on any of the Premises contains asbestos-containing materials.
There are not nor have there been any incinerators, septic tanks, xxxxx fields,
cesspools or xxxxx (including without limitation dry, drinking, industrial,
agricultural and monitoring xxxxx) on any of the Premises.
(s) Intellectual Property. The Seller owns or has the legal
right to use and to transfer to the Buyer each item of Intellectual Property
required to be identified on Exhibit 3.1(h)(ii). The continued operation of
the business of the Seller as currently conducted will not interfere with,
infringe upon, misappropriate or conflict with any Intellectual Property rights
of another Person. To the best knowledge of the Seller and the Shareholders,
no other Person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of the
Seller or any Intellectual Property included in the Shareholder Property.
Neither the Seller nor any owner of any Intellectual Property included in the
Shareholder Property has granted any license, sublicense or permission with
respect to any Intellectual Property owned or used in the Seller's business.
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(t) Disclosure. None of the documents or information provided
to the Buyer by the Seller, any Shareholder or any agent or employee thereof in
the course of the Buyer's due diligence investigation and the negotiation of
this Agreement and Section 3.1 of this Agreement and the disclosure Exhibits
referred to therein, including the financial statements referred to above in
Section 3.1, contain any untrue statement of any material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact which materially adversely affects
the business, prospects, condition, affairs or operations of the Seller or any
of its properties or assets which has not been set forth in this Agreement or
such Exhibits, including such financial statements.
Nothing in the disclosure Exhibits referred to in Section 3.1
shall be deemed adequate to disclose an exception to a representation or
warranty made herein unless the applicable disclosure Exhibit identifies the
exception with particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate
to disclose an exception to a representation or warranty made herein (unless
the representation or warranty has to do with the existence of the document or
other item itself). The Seller and the Shareholders acknowledge and agree that
the fact that they have made disclosures pursuant to Section 3.1 or otherwise
of matters, or did not have knowledge of matters, which result in Adverse
Consequences to the Buyer shall not relieve the Seller and the Shareholders of
their obligation pursuant to Article 7 to indemnify and hold the Buyer harmless
from all Adverse Consequences.
3.2. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller and the Shareholders that the statements
contained in this Section 3.2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3.2).
(a) Organization, Good Standing, Power, Etc. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. This Agreement and the Other Buyer Agreements
and the transactions contemplated hereby and thereby have been duly approved by
all requisite corporate action. The Buyer has full corporate power and
authority to execute, deliver and perform this Agreement and the Other Buyer
Agreements, and this Agreement constitutes, and the Other Buyer Agreements will
when executed and delivered constitute, the legal, valid and binding
obligations of the Buyer, and shall be enforceable in accordance with their
respective terms against the Buyer.
(b) No Violation of Agreements, Etc. The execution, delivery
and performance of this Agreement and the Other Buyer Agreements, and the
consummation of the transactions contemplated hereby and thereby will not (i)
violate any Legal Requirement to which the Buyer is subject or any provision of
the certificate of incorporation or bylaws of the Buyer or (ii) violate, with
or without the giving of notice or the lapse of time or both, or conflict with
or result in the breach or termination of any provision of, or constitute a
default under, or give any Person the right to accelerate any obligation under,
or result in the creation of any Encumbrance upon any properties, assets or
business of the Buyer pursuant to, any indenture, mortgage, deed of trust,
lien, lease, license, agreement, instrument or other arrangement to which the
Buyer is a party or which the Buyer or any of its assets and properties is
bound or subject. Except for notices and consents that will be given or
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obtained by the Buyer prior to the Closing, the Buyer does not need to give any
notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental Authority or other Person in order for the parties
to consummate the transactions contemplated by this Agreement.
3.3. Survival of Representations. The representations and warranties
contained in Sections 3.1 and 3.2 and the Liabilities of the parties with
respect thereto shall survive any investigation thereof by the parties and
shall survive the Closing for the lesser of four years or the applicable
statute of limitations, except that the Liabilities of the Seller and the
Shareholders with respect to the representations and warranties set forth in
Sections 3.1(a), 3.1(b), 3.1(c), 3.1(f), 3.1(g), 3.1(m), 3.1(r), 3.1(s) and
3.1(t), and the Liabilities of the Buyer with respect to the representations
and warranties set forth in Sections 3.2(a) and 3.2(b), shall survive without
termination.
3.4. Representations as to Knowledge. The representations and
warranties contained in Article 3 hereof will in each and every case where an
exercise of discretion or a statement to the "best knowledge," "best of
knowledge" or "knowledge" is required on behalf of any party to this Agreement
be deemed to require that such exercise of discretion or statement be in good
faith after reasonable investigation, with due diligence, to the best efforts
of such party and be exercised always in a reasonable manner and within
reasonable times.
4. Pre-Closing Covenants. The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
4.1. General. Each of the parties will use its best efforts to take
all actions necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including the
satisfaction, but not the waiver, of the closing conditions set forth in
Section 6) and the other agreements contemplated hereby. Without limiting the
foregoing, the Shareholders will, and will cause the Seller to, give any
notices, make any filings and obtain any consents, authorizations or approvals
needed to consummate the transactions contemplated by this Agreement.
4.2. Operation and Preservation of Business. The Seller will not, and
Shareholders will not cause or permit the Seller to, engage in any practice,
take any action or enter into any transaction outside its ordinary course of
business; provided, however, that in no event will any action be taken or fail
to be taken or any transaction be entered into which would result in a breach
of any representation, warranty or covenant of the Seller or any Shareholder.
The Seller will, and the Shareholders will cause the Seller to, keep its
business and properties, including its current operations, physical facilities,
working conditions, and relationships with customers, suppliers, lessors,
licensors and employees, intact and, in connection therewith, to continue to
purchase new or used equipment necessary to maintain its rental/lease inventory
at the level specified in Section 3.1(e)(x).
4.3. Acquisitions and Dispositions of Rental Equipment. From the date
of this Agreement through the Closing Date, the Seller may purchase new or used
rental or lease equipment for use in the growth and expansion of its business
("New Rental Equipment;" provided, however, that the term New Rental Equipment
shall not include any new or used rental or lease equipment acquired to
maintain the Seller's business) or may sell (but only for cash or a Current
Rental Equipment Receivable) rental or lease equipment owned by the Seller on
or after October 31, 1996 ("Current Rental Equipment"), but may not otherwise
sell, trade, transfer or dispose of any Current Rental
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Equipment; provided, however, that between the date of this Agreement and the
Closing Date, no New Rental Equipment shall be purchased and no Current Rental
Equipment shall be sold without the express prior written approval of an
officer of the Buyer and without the Shareholders' Agent and an officer of the
Buyer expressly agreeing on the amount by which the purchase price payable
pursuant to Section 2.3(a) shall be increased in respect of such New Rental
Equipment purchases ("New Rental Equipment Increases") and the amount by which
the purchase price payable pursuant to Section 2.3(a) shall be decreased in
respect of such Current Rental Equipment sales ("Current Rental Equipment
Decreases"). Exhibit 4.3 sets forth (a) New Rental Equipment Increases with
respect to New Rental Equipment purchased between October 31, 1996 and the date
of this Agreement and (b) Current Rental Equipment Decreases with respect to
Current Rental Equipment sold or otherwise transferred between October 31, 1996
and the date of this Agreement, as agreed by the Shareholders' Agent and an
officer of the Buyer. If any New Rental Equipment purchases or Current Rental
Equipment sales or other transfers occur after the date hereof and before the
Closing Date, Exhibit 4.3 shall be amended to reflect any agreed upon New
Rental Equipment Increases and Current Rental Equipment Decreases relating
thereto.
4.4. Full Access. The Seller will permit the Buyer and its agents to
have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Seller, to all premises,
properties, personnel, books, records (including Tax records), contracts and
documents of or pertaining to the Seller.
4.5. Notice of Developments. The Seller will give prompt written
notice to the Buyer of any material development which occurs after the date of
this Agreement and affects the business, assets, Liabilities, financial
condition, operations, results of operations, future prospects,
representations, warranties, covenants or disclosure Exhibits of the Seller.
No such written notice, however, will be deemed to amend or supplement any
disclosure Exhibit or to prevent or cure any misrepresentation, breach of
warranty or breach of covenant.
4.6. Exclusivity. Neither the Seller nor any Shareholder will, and no
Shareholder will cause or permit the Seller to, (a) solicit, initiate or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any capital stock or other voting securities, or any portion
of the assets of, the Seller (including any acquisition structured as a merger,
consolidation or share exchange) or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. No Shareholder will vote shares of
the Seller's stock in favor of any such transaction. The Seller and
Shareholders will notify the Buyer immediately if the Person makes any
proposal, offer, inquiry or contact with respect to any of the foregoing.
4.7. Conveyance of Shareholder Property. Prior to the Closing Date,
the Shareholders shall convey, and shall cause each relative or affiliate of
the Seller or of any Shareholder to convey, to the Seller, free and clear of
any Encumbrance or Tax, all of each Shareholder's and each such relative's or
affiliate's right, title and interest to the Shareholder Property.
4.8. Announcements. Prior to the Closing, no party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other parties.
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4.9. Bulk Sales Laws. In reliance upon its indemnification rights set
forth in Section 7, the Buyer waives compliance by the Seller with the bulk
transfer law and any other similar law of any applicable jurisdiction in
respect to the transactions contemplated by this Agreement.
5. Post-Closing Covenants. The parties agree as follows with respect to
the period following the Closing.
5.1. Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the
requesting party (unless the requesting party is entitled to indemnification
therefor under Section 7).
5.2. Transition. Neither the Seller nor any Shareholder will take any
action at any time that is designed or intended to have the effect of
discouraging any customer, supplier, lessor, licensor or other business
associate of the Seller from establishing or continuing a business relationship
with the Buyer after the Closing.
5.3. Cooperation. In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (a) any
transaction contemplated by this Agreement or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving any of the Acquired Assets or the Seller's business, each of the
other parties will cooperate with such party and its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting or
defending party (unless the contesting or defending party is entitled to
indemnification therefor under Section 7).
5.4. Confidentiality. The Seller and the Shareholders will treat and
hold as confidential all Confidential Information concerning the Buyer, the
Seller's business or the Acquired Assets, refrain from using any such
Confidential Information and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all of such Confidential Information in its or
their possession.
5.5. Post-Closing Announcements. Following the Closing, neither the
Seller nor any Shareholder will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the Buyer.
5.6. Financial Statements. The Seller and the Shareholders will, upon
request of the Buyer, cooperate with the Buyer to produce such historical and
on-going financial statements and audits as the Buyer may request, all at the
sole cost and expense of the Buyer.
5.7. Satisfaction of Liabilities. The Seller and the Shareholders
will pay and perform, as and when due, all Liabilities (other than the Assumed
Liabilities) relating to the Seller, the business of the Seller and the
Acquired Assets, including without limitation, all Taxes attributable to the
transactions contemplated by this Agreement and all accrued vacation and other
accrued employee benefits; provided, however, that accrued vacation and other
accrued employee benefits with respect to those
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persons who are employees of the Seller as of the Closing Date and who become
employees of the Buyer effective as of the Closing will be satisfied as set
forth in Section 2.3(b). In addition, the Seller and the Shareholders will pay
to the Buyer, promptly after their receipt of notice from the Buyer stating the
amount payable by them and a copy of the invoices from Governmental Authorities
relating thereto, an amount equal to the portion of the personal property taxes
on the Acquired Assets of the Seller attributable to the period from January 1,
1997 to and including the date on which the Closing occurs (the "Pre-Closing
Personal Property Tax Amount"). The Pre-Closing Personal Property Tax Amount
payable by the Shareholders and the Seller will be determined by prorating
personal property taxes on the Acquired Assets of the Seller for 1997 in
proportion to the number of days in the year prior to and including the date on
which the Closing occurs compared to the number of days in the year remaining
after the date on which the Closing occurs. If the actual Pre-Closing Personal
Property Tax Amount exceeds the estimated Pre-Closing Personal Property Tax
Amount used for purposes of Section 2.3(a), the Seller and the Shareholders
shall pay such excess amount to the Buyer within five days after their receipt
of notice from the Buyer stating the amount payable by them and a copy of the
invoices from Governmental Authorities relating thereto. If the estimated Pre-
Closing Personal Property Tax Amount used for purposes of Section 2.3(a)
exceeds the actual Pre-Closing Personal Property Tax Amount, the Buyer shall
pay such excess amount to the Seller within five days of receipt of the
invoices from Governmental Authorities relating thereto. The Buyer will pay
and perform, as and when due (except to the extent the validity thereof or the
liability therefor is being contested by the Buyer), the Assumed Liabilities.
Further, the Seller and the Shareholders, at their expense, promptly will take
or cause to be taken any action necessary to remedy any failure of the Premises
or the acquired business to comply at the Closing Date with any Legal
Requirement, upon receipt of notice from the Buyer at any time.
5.8. Certain Environmental Matters. The Seller and the Shareholders
shall, within 45 days of the Closing, take or cause to be taken the following
actions: (a) at the Seller's Harrisonburg facility, construct for the Seller's
above-ground storage tanks a concrete containment area of sufficient volume to
meet all applicable Legal Requirements; and (b) modify the wash water
collection systems at the Seller's Waynesboro and Culpeper facilities by
installing dry xxxxx in compliance with all applicable Legal Requirements. The
Seller and the Shareholders shall take such actions at their expense. Nothing
in this Section 5.8 shall relieve the Seller or any Shareholder from any
obligation or Liability under Section 7 of this Agreement, obligate the Buyer
to take any action or impose any Liability on the Buyer.
5.9. Repurchase of Unpaid Receivables. The Seller and the
Shareholders jointly and severally guarantee that the aggregate amount of the
Closing Accounts Receivable, less $25,000, will be fully paid to the Buyer in
accordance with their terms at their recorded amounts not later than 120 days
from the Closing Date. Upon demand by the Buyer at any time after 120 days
from the Closing Date, the Seller and the Shareholders shall jointly and
severally pay to the Buyer the full amount of any unpaid Closing Accounts
Receivables which are the subject of such demand. Upon such payment to the
Buyer, the Closing Accounts Receivable which are so paid for by the Seller and
the Shareholders shall, without further action of any party, become the
property of the Seller.
5.10. Use of Certain Assets and Services.
(a) The Seller shall, during the period from Closing until the
third anniversary of the Closing, provide vehicle repair service at Location 7
to the Buyer at no charge to the Buyer, except that the Buyer shall reimburse
the Seller for the Seller's actual cost of all vehicle parts used in so
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repairing the Buyer's vehicles and the labor services so provided by the Seller
shall not exceed the equivalent of one full-time mechanic per day.
(b) During the period from the Closing until the second
anniversary of the Closing, the Buyer shall be entitled to occupy, at no charge
to the Buyer, the administrative space presently occupied by the Seller for its
headquarters operation at Location 7.
5.11. Location 7.
(a) At the expiration of 18 months from the Closing, the Buyer
and the Seller shall meet to determine their relative interests in a
transaction involving the purchase by the Buyer of the Location 7 Assets.
(b) If the Seller receives an offer, letter of intent or term
sheet (the "Offer") for all or substantially all of the Location 7 Assets at
any time prior to the expiration of the period ending 36 months after the
Closing, and the Seller desires to accept such Offer, the Seller shall give
written notice (the "Notice") to the Buyer within ten days after receipt of
such Offer. The Notice shall include a copy of the Offer signed by the Seller
and the proposed purchaser and shall describe in reasonable detail the proposed
sale, including without limitation, (i) the Seller's bona fide intention to
sell such assets, (ii) the basic terms and conditions of the sale, which shall
include all of the Seller's right, title and interest in and to such assets,
(iii) the price, which shall be a cash price only, for which the Seller
proposes to sell such assets, (iv) the proposed closing date of the sale, and
(v) the name and address of the proposed purchaser. The Buyer may elect to
purchase such assets at the cash price specified in the Notice and upon such
terms and conditions, including such representations and warranties, covenants,
and closing conditions as are customary in a transaction of this nature, by
giving written notice to the Seller within 10 business days of receipt of the
Notice. If the Buyer exercises such right of first refusal, it must conclude
the purchase of the assets upon the later of (i) the closing date set forth in
the Notice, or (ii) the date all necessary consents for such purchase have been
obtained and all other closing conditions included in the definitive purchase
and sale agreement have been satisfied or waived. If the Buyer does not
exercise its right of first refusal pursuant to this Section 5.11(b), then the
Seller may sell such assets to the purchaser named in the Notice at the price
and on substantially the terms specified in the Notice, provided that such sale
is consummated within 120 days of the date of the Notice. If the sale of such
assets is not consummated within such 120-day period, any further sale of such
assets shall again be subject to the provisions of the right of first refusal
set forth in this Section 5.11(b). Any proposed transfer of such assets on
terms and conditions substantially different from those set forth in the Notice
shall again be subject to the Buyer's rights under this Section 5.11(b) and
shall require compliance with the procedures described in this Section 5.11(b).
6. Conditions to Closing.
6.1. Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the purchase of the Acquired Assets and the consummation of
the other transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:
(a) the Seller's and each Shareholder's representations and
warranties shall be correct and complete at and as of the Closing Date and the
Closing and any written notices delivered to the Buyer pursuant to Section 4.5
and the subject matter thereof shall be satisfactory to the Buyer;
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21
(b) the Seller and the Shareholders shall have performed and
complied with all of their covenants hereunder through the Closing;
(c) the Seller and the Shareholders shall have given all
notices and procured all of the third-party consents, authorizations and
approvals required to consummate the transactions contemplated by this
Agreement, all in form and substance reasonably satisfactory to the Buyer;
(d) no action, suit or proceeding shall be pending or
threatened before any Governmental Authority or any other Person wherein an
unfavorable Order would (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation or (iii) affect
adversely the right of the Buyer to own the Acquired Assets or to conduct the
acquired business, and no such Order shall be in effect;
(e) there shall have been no adverse change in the Acquired
Assets or the Seller's business between the date of execution of this Agreement
and the Closing;
(f) the Seller shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in Sections 6.1(a)
through (e) is satisfied in all respects and as to the adoption of resolutions
by the board of directors and shareholders of the Seller authorizing the
execution, delivery and performance of this Agreement and the Other Seller
Agreements and the consummation of the transactions contemplated hereby and
thereby;
(g) the Buyer shall have completed its due diligence with
respect to the Seller, the Seller's business and the Acquired Assets with
results satisfactory to the Buyer.
(h) the Other Seller Agreements and documentation necessary to
accomplish the conveyance of the specific ownership tax and fee payments made
by the Seller prior to the Closing in respect of vehicles and mobile equipment
included in the Acquired Assets shall have been executed and delivered by the
Seller and the Shareholders, as applicable;
(i) the Shareholder Leases shall have been executed and
delivered by the parties thereto and the owners of the real property underlying
the Shareholder Leases, and each Person having an Encumbrance on any such
property, shall have executed and delivered estoppel, nondisturbance and
landlord waiver agreements relating thereto satisfactory to the Buyer;
(j) the Buyer shall have received from counsel to the Seller
and the Shareholders an opinion in form and substance as set forth in Exhibit
6.1(j) addressed to the Buyer and its debt and equity financing sources and
dated as of the Closing;
(k) financing necessary for the consummation of the
transactions contemplated hereby and the operation of the acquired business
shall be available to the Buyer on terms and conditions satisfactory to the
Buyer;
(l) a "Phase I" environmental study of the Premises, and such
additional environmental testing as the Buyer shall request, shall have been
completed at the Seller's expense and supplied to the Buyer, and the contents
and results thereof shall be satisfactory to the Buyer;
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(m) the Seller shall have delivered to the Buyer possession
and control of the Acquired Assets;
(n) the Seller and the Shareholders shall have executed and
delivered to the Buyer (i) appropriate documentation to transfer to the Buyer
record ownership of the trade name "Central Virginia Rental" and all other
registered Intellectual Property and applications therefor and (ii) an
amendment to the Seller's articles of incorporation for the purpose of changing
its name to a name that does not include the term "Central Virginia Rental" or
any derivation thereof; and
(o) the Seller and the Shareholders shall have delivered, or
caused the Seller to deliver, to the Buyer such other instruments, certificates
and documents as are reasonably requested by the Buyer in order to consummate
the transactions contemplated by this Agreement, all in form and substance
reasonably satisfactory to the Buyer.
The Buyer may waive any condition specified in this Section 6.1 at or prior to
the Closing.
6.2. Conditions to Obligation of the Seller and the Shareholders. The
obligation of the Seller and the Shareholders to consummate the sale of the
Acquired Assets is subject to satisfaction of the following conditions:
(a) the Buyer's representations and warranties shall be
correct and complete at and as of the Closing Date and the Closing;
(b) the Buyer shall have performed and complied with all of
its covenants hereunder through the Closing Date;
(c) the Buyer shall have delivered to the Seller a certificate
to the effect that each of the conditions specified above in Sections 6.2(a)
and (b) is satisfied in all respects;
(d) the Other Buyer Agreements shall have been executed and
delivered by the Buyer;
(e) the Seller and the Shareholders shall have received from
counsel to the Buyer an opinion in form and substance as set forth in Exhibit
6.2(e), addressed to the Seller and the Shareholders and dated as of the
Closing; and
(f) the Buyer shall have paid and deposited the purchase price
for the Acquired Assets pursuant to Section 2.3.
The Shareholders' Agent may waive any condition specified in this Section 6.2
at or prior to the Closing.
7. Remedies for Breaches of This Agreement.
7.1. Indemnification Provisions for Benefit of the Buyer.
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(a) If the Seller or any Shareholder breaches (or if any
Person other than the Buyer alleges facts that, if true, would mean the Seller
or any Shareholder has breached) any of the representations or warranties of
the Seller or any Shareholder contained herein and the Buyer gives notice
thereof to the Shareholders' Agent within the Survival Period, or if the Seller
or any Shareholder breaches (or if any Person other than the Buyer alleges
facts that, if true, would mean the Seller or any Shareholder has breached) any
covenants of the Seller or any Shareholder contained herein or any
representations, warranties or covenants of the Seller or any Shareholder
contained in any Other Seller Agreement and the Buyer gives notice thereof to
the Shareholders' Agent, then the Seller and the Shareholders agree to jointly
and severally indemnify and hold harmless the Buyer from and against any
Adverse Consequences the Buyer may suffer resulting from, arising out of,
relating to or caused by any of the foregoing regardless of whether the Adverse
Consequences are suffered during or after the Survival Period. In determining
whether there has been a breach of any representation or warranty contained in
Section 3.1 and in determining for purposes of the preceding sentence the
amount of Adverse Consequences suffered by the Buyer, such representations and
warranties shall not be qualified (other than by (A) the reference to
"knowledge" set forth in the last sentence of Section 3.1(o) and (B) the
references to "material" set forth in Section 3.1(t)) by "material,"
"materiality," "in all material respects," "best knowledge," "best of
knowledge" or "knowledge" or words of similar import, or by any phrase using
any such terms or words. The Seller and the Shareholders also agree to jointly
and severally indemnify and hold harmless the Buyer from and against any
Adverse Consequences the Buyer may suffer which result from, arise out of,
relate to or are caused by (i) any Liability of the Seller or any Shareholder
not included in the Assumed Liabilities (including, without limitation, those
concerning Hazardous Materials or the failure of the Seller, any Shareholder or
any predecessor to comply with any Environmental Obligation or other Legal
Requirement), (ii) any act or omission of the Seller, any Shareholder or any
predecessor with respect to, or any event or circumstance related to, the
Seller's, any Shareholder's or any predecessor's ownership, occupation, use or
operation of any of the Acquired Assets, the Excluded Assets or any other
assets or properties or the conduct of its or their business, regardless, in
the case of clause (i) or (ii), of whether or not such Liability, act,
omission, event or circumstance occurred or existed prior to or at the Closing
Date, of whether a claim with respect to such matter was asserted before or is
asserted after the Closing Date and of whether or not such Liability, act,
omission or matter was known or disclosed to the Buyer, was disclosed on any
Exhibit hereto or is a matter with respect to which the Seller or any
Shareholder did or did not have knowledge, and (iii) any Liability resulting
from any failure of the parties to comply with any applicable bulk sales or
transfer Legal Requirement in connection with the transactions contemplated by
this Agreement. If any dispute arises concerning whether any indemnification
is owing which cannot be resolved by negotiation among the parties within 30
days of notice of claim for indemnification from the party claiming
indemnification to the party against whom such claim is asserted, the dispute
will be resolved by arbitration pursuant to this Agreement.
(b) Amounts needed to cover any indemnification claims
resolved in favor of the Buyer against the Seller or any Shareholder during the
Escrow Period will be paid to the Buyer first out of the funds escrowed
pursuant to the Escrow Agreement, along with interest from the date of the
Closing at the rate applicable to the escrowed funds. The Seller and the
Shareholders will have joint and several Liability for any additional amounts
needed to cover such claims, which amounts will be paid directly to the Buyer.
At the end of the Escrow Period amounts that may be needed to cover pending
indemnification claims made by the Buyer (such amounts to be determined by the
Buyer based upon the reasonable exercise of its business judgment) will be
retained in the Escrow Account until such claims are resolved, and any excess
on deposit therein, including any accrued interest, will be paid
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to the Seller. Nothing in this Section 7.1(b) will be construed to limit the
Buyer's right to indemnification to amounts on deposit in the Escrow Account.
The Buyer and the Shareholders' Agent shall jointly give instructions to the
Escrow Agent to carry out the intent of this Section 7.1(b). Any disputes
concerning the escrowed funds will be settled by arbitration as provided in
this Agreement. The Buyer, on the one hand, and the Seller and the
Shareholders jointly and severally, on the other hand, shall each be
responsible for one-half of the fees, charges and expenses payable to the
Escrow Agent pursuant to paragraph a. of Article 2 of the Escrow Agreement and,
except as otherwise determined pursuant to Section 9.11 of this Agreement, one-
half of any amounts payable pursuant to paragraph b. of such Article 2.
7.2. Indemnification Provisions for Benefit of the Seller and the
Shareholders. If the Buyer breaches (or if any Person other than the Seller or
a Shareholder alleges facts that, if true, would mean the Buyer has breached)
any of its representations or warranties contained herein and the Shareholders'
Agent gives notice of a claim for indemnification against the Buyer within the
Survival Period, or if the Buyer breaches (or if any Person other than the
Seller or a Shareholder alleges facts that, if true, would mean the Buyer has
breached) any of its covenants contained herein or any of its representations,
warranties or covenants contained in any Other Buyer Agreement and the
Shareholders' Agent gives notice thereof to the Buyer, then the Buyer agrees to
indemnify and hold harmless the Seller and the Shareholders from and against
any Adverse Consequences the Seller and the Shareholders may suffer which
result from, arise out of, relate to, or are caused by the breach or alleged
breach, regardless of whether the Adverse Consequences are suffered during or
after the Survival Period. In determining whether there has been a breach of
any representation or warranty contained in Section 3.2 and in determining the
amount of Adverse Consequences suffered by the Buyer for purposes of this
Section, such representations and warranties shall not be qualified by
"material," "materiality," "in all material respects," "best knowledge," "best
of knowledge" or "knowledge" or words of similar import, or by any phrase using
any such terms or words. If any dispute arises concerning whether any
indemnification is owing which cannot be resolved by negotiation among the
parties within 30 days of notice of claim for indemnification from the party
claiming indemnification to the party against whom such claim is asserted, the
dispute will be resolved by arbitration pursuant to this Agreement.
7.3. Matters Involving Third Parties.
(a) If any Person not a party to this Agreement (including,
without limitation, any Governmental Authority) notifies any party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other party (the
"Indemnifying Party"), then the Indemnified Party will notify each Indemnifying
Party thereof in writing within 15 days after receiving such notice. No delay
on the part of the Indemnified Party in notifying any Indemnifying Party will
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right, at its sole
cost and expense, to defend the Indemnified Party against the Third Party Claim
with counsel of its choice satisfactory to the Indemnified Party so long as (i)
the Indemnifying Party notifies the Indemnified Party in writing within 10 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to or caused by the Third Party
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Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party that the Indemnifying Party will
have the financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable
relief, (iv) settlement of, or an adverse judgment with respect to, the Third
Party Claim is not, in the good faith judgment of the Indemnified Party, likely
to establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently. If the Indemnifying Party does not assume control of the defense
or settlement of any Third Party Claim in the manner described above, it will
be bound by the results obtained by the Indemnified Party with respect to the
Third Party Claim.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7.3(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (iii)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 7.3(b) above
is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (iii) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
7.4. Right of Offset. The Buyer will have the right to offset any
Adverse Consequences it may suffer against any amounts payable pursuant to this
Agreement or any Other Seller Agreement to the Seller, any Shareholder or any
relative or affiliate of the Seller or any Shareholder at or after the Closing.
7.5. Other Remedies. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy any party may have.
8. Termination.
8.1. Termination of Agreement. The parties may terminate this
Agreement as provided below:
(a) the Buyer and the Shareholders' Agent may terminate this
Agreement by mutual written consent at any time prior to the Closing;
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26
(b) the Buyer may terminate this Agreement by giving written
notice to the Shareholders' Agent at any time prior to the Closing (i) in the
event the Seller or any Shareholder has breached any representation, warranty
or covenant contained in this Agreement in any material way, the Buyer has
notified the Shareholders' Agent of the breach, and the breach has not been
cured within 10 days after the notice of breach or (ii) if the Closing has not
occurred on or before April 1, 1997 because of the failure of any condition
precedent to the Buyer's obligations to consummate the Closing (unless the
failure results primarily from the Buyer breaching any representation, warranty
or covenant contained in this Agreement in any material way); or
(c) the Shareholders' Agent may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (i) if the
Buyer has breached any representation, warranty or covenant contained in this
Agreement in any material way, the Shareholders' Agent has notified the Buyer
of the breach, and the breach has not been cured within 10 days after the
notice of breach or (ii) if the Closing has not occurred on or before April 1,
1997 because of the failure of any condition precedent to the Seller's and the
Shareholders' obligations to consummate the Closing (unless the failure results
primarily from the Seller or any Shareholder breaching any representation,
warranty or covenant contained in this Agreement in any material way).
8.2. Effect of Termination. The termination of this Agreement by a
party pursuant to Section 8.1 will in no way limit any obligation or liability
of any other party based on or arising from a breach or default by such other
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement, and the terminating party will be
entitled to seek all relief to which it is entitled under applicable law.
8.3. Confidentiality. If this Agreement is terminated, each party
will treat and hold as confidential all Confidential Information concerning the
other parties which it acquired from such other parties in connection with this
Agreement and the transactions contemplated hereby.
9. Miscellaneous.
9.1. No Third-Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.
9.2. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
9.3. Succession and Assignment. This Agreement will be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Neither the Seller nor any Shareholder may assign this
Agreement or any of their rights, interests or obligations hereunder without
the prior written approval of the Buyer. The Buyer may assign its rights and
obligations hereunder as permitted by law, including, without limitation, to
any debt or equity financing source.
9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same
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instrument. The execution of a counterpart of the signature page to this
Agreement will be deemed the execution of a counterpart of this Agreement.
9.5. Headings. The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
9.6. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is
sent by registered or certified mail, return receipt requested, postage
prepaid, or by courier, telecopy or facsimile, and addressed to the intended
recipient as set forth below:
If to the Seller or
the Shareholders: Copy to:
Addressed to the Franklin, Franklin, Xxxxxx & Xxxx
Shareholders' Agent at: 000 X. Xxxxx Xxxxxx
Xxxxxx X. Xxxxx X.X. Xxx Xxxxxx 0000
0000 Xxxx Xxxx Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000 Attn: Xxxxx X. Xxxxxxxx, Xx., Esq.
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
If to the Buyer: Copy to:
RentX Industries, Inc. Xxxxxxx & Xxxxxx L.L.C.
0000 Xxxxx Xxxxxx 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000 Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx Attn: B. Xxxxx Xxxxxxx
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Notices will be deemed given three days after mailing if sent by certified
mail, when delivered if sent by courier, and upon receipt of confirmation by
person or machine if sent by telecopy or facsimile transmission. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
9.7. Governing Law. This Agreement will be governed by and construed
in accordance with the domestic laws of the State of Colorado without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Colorado or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Colorado.
9.8. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same is in writing and signed by the Buyer
and the Shareholders' Agent. No waiver by any party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence, and no waiver will be effective unless set forth in writing and
signed by the party against whom such waiver is asserted.
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9.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.10. Expenses. Except as otherwise provided in Section 8.2, (a) the
Buyer shall bear its own costs and expenses (including, without limitation,
legal fees and expenses) incurred either before or after the date of this
Agreement in connection with this Agreement or the transactions contemplated
hereby and (b) the Seller and the Shareholders will bear all costs and expenses
(including, without limitation, all legal, accounting and tax related fees and
expenses, all fees, commissions, expenses and other amounts payable to any
broker, finder or agent and the costs of any environmental study and additional
environmental testing contemplated by Section 6.1) incurred by the Seller or
any Shareholder either before or after the date of this Agreement in connection
with this Agreement or the transactions contemplated hereby.
9.11. Arbitration. Any disputes arising under or in connection with
this Agreement, including, without limitation, those involving claims for
specific performance or other equitable relief, will be submitted to binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association under the authority of federal and state arbitration statutes, and
shall not be the subject of litigation in any forum. EACH PARTY, BY SIGNING
THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS SUCH
PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS, INCLUDING
THE RIGHT TO JURY TRIAL. The arbitration will be conducted only in Denver,
Colorado, before a single arbitrator selected by the parties or, if they are
unable to agree on an arbitrator, before a panel of three arbitrators, one
selected by the Buyer, one selected by the Shareholders' Agent and the third
selected by the other two arbitrators. The arbitrators shall have full
authority to order specific performance and award damages and other relief
available under this Agreement or applicable law, but shall have no authority
to add to, detract from, change or amend the terms of this Agreement or
existing law. All arbitration proceedings, including settlements and awards,
shall be confidential. The decision of the arbitrators will be final and
binding, and judgment on the award by the arbitrators may be entered in any
court of competent jurisdiction. THIS SUBMISSION AND AGREEMENT TO ARBITRATE
WILL BE SPECIFICALLY ENFORCEABLE. The prevailing party or parties in any such
arbitration or in any action to enforce this Agreement will be entitled to all
reasonable costs and expenses, including fees and expenses of the arbitrators
and attorneys, incurred in connection therewith.
9.12. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The word "including" will mean including
without limitation. The parties intend that each representation, warranty and
covenant contained herein will have independent significance. If any party
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
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29
9.13. Incorporation of Exhibits. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
9.14. Seller's and Shareholders' Agent. The Seller and each
Shareholder hereby authorizes and appoints the Shareholders' Agent to act as
its, his or her exclusive agent and attorney-in-fact to act on behalf of each
of them with respect to all matters which are the subject of this Agreement,
including, without limitation, (a) receiving or giving all notices,
instructions, other communications, consents or agreements that may be
necessary, required or given hereunder and (b) asserting, settling,
compromising, or defending, or determining not to assert, settle, compromise or
defend, (i) any claims which the Seller or any Shareholder may assert, or have
the right to assert, against the Buyer, or (ii) any claims which the Buyer may
assert, or have the right to assert, against the Seller or any Shareholder.
The Shareholders' Agent hereby accepts such authorization and appointment.
Upon the receipt of written evidence satisfactory to the Buyer to the effect
that the Shareholders' Agent has been substituted as agent of the Seller and
the Shareholders by reason of his death, disability or resignation, the Buyer
shall be entitled to rely on such substituted agent to the same extent as they
were theretofore entitled to rely upon the Shareholders' Agent with respect to
the matters covered by this Section 9.14. Neither the Seller nor any
Shareholder shall act with respect to any of the matters which are the subject
of this Agreement except through the Shareholders' Agent. The Seller and the
Shareholders acknowledge and agree that the Buyer may deal exclusively with the
Shareholders' Agent in respect of such matters, that the enforceability of this
Section 9.14 is material to the Buyer, and that the Buyer has relied upon the
enforceability of this Section 9.14 in entering into this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BUYER:
RENTX INDUSTRIES, INC.
By:/s/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President
-------------------------------
SELLER:
CVR, INC.
By:/s/ XXXXXX X. XXXXX
----------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: President
-------------------------------
SHAREHOLDERS:
/s/ XXXXXX X. XXXXX
-------------------------------------
Xxxxxx X. Xxxxx
/s/ XXXXXXX X. XXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXXX X. XXXXXXXXX
-------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ XXXXX X. XXXXX
-------------------------------------
Xxxxx X. Xxxxx
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT.]
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