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EXHIBIT 10.26
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of June
7, 1998 by and among NATIONSRENT, INC., a Delaware corporation ("Nations");
ASSOCIATED RENTAL EQUIPMENT MANAGEMENT COMPANY, INC., a Texas corporation (the
"Company"), and Xxxxxx X. Xxxxx, Xx., who constitutes the sole shareholder of
the Company (the "Shareholder"). Certain other capitalized terms used herein are
defined in Article XI and throughout this Agreement.
RECITALS
The Company owns and operates construction equipment rental businesses in
the states of Texas, Louisiana and Mississippi (the "Business"). Nations desires
to purchase and the Company desires to sell, all of the assets, properties and
business of the Company (the "Acquisition") on the terms and subject to the
conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1. PURCHASED ASSETS. Upon the terms and subject to the conditions of this
Agreement, at the Closing (as defined in Section 3.1), the Company will sell,
convey, transfer, assign and deliver to Nations (or one or more of its
assignees) all of its right, title and interest in and to its assets, properties
and business of every kind and description, whether real, personal or mixed,
tangible or intangible, wherever located (except those assets of the Company
which are specifically excluded as provided in Section 1.2 hereof) as shall
exist on the Closing Date (as defined in Section 3.1), whether or not appearing
on the Current Balance Sheet (as defined in Section 5.8) (collectively, the
"Purchased Assets"), free and clear of any Lien (as defined in Section 11.1)
other than as permitted herein. Without limiting the generality of the
foregoing, the Purchased Assets shall include, but not be limited to, the
following:
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(a) Inventory of Rental Equipment. All inventory of rental equipment
owned, leased or held under rental purchase options by the Company, as more
particularly described on Schedule 1.1(a) attached hereto;
(b) Inventory of Merchandise. All inventory of merchandise held for
sale and owned by the Company, as more particularly described on Schedule
1.1(b) attached hereto.
(c) Other Tangible Personal Property. All machinery, equipment, tools,
supplies, leasehold improvements, construction in progress, furniture and
fixtures, trucks, automobiles, vehicles, computer equipment, computer
software and any other fixed assets owned or leased by the Company, as more
particularly described on Schedule 1.1(c) attached hereto not related to
the Excluded Assets;
(d) Customer Accounts. All of the customer accounts and customer
account contracts (the "Customer Contracts") of the Company, as more
particularly described on Schedule 1.1(d) attached hereto;
(e) Assumed Contracts. All of the interest, rights and benefits
accruing to the Company under any dealer, franchise, sales or service
agreements or any other Contracts (as defined in Section 11.1) to which the
Company is a party and which are set forth on Schedule 1.1(e) attached
hereto (the "Assumed Contracts");
(f) Cash and Cash Equivalents. All cash and cash equivalents and
investments, whether short-term or long-term, of the Company, including
without limitation, bank accounts, certificates of deposit, treasury bills
and securities;
(g) Prepayments. All prepaid and deferred items of the Company,
including without limitation, prepaid rentals, insurance, taxes and
unbilled charges and deposits relating to the operations of the Company;
(h) Receivables. All receivables of the Company, including without
limitation all trade accounts receivables, notes receivable, receivables
arising as a result of contracts in transit and receivables from
manufacturers, insurance companies, service contract providers and any
other vendors or suppliers of the Company not related to the Excluded
Assets;
(i) Equipment Leases. All of the interest of and the rights and
benefits accruing to the Company as lessee under leases of machinery,
vehicles, equipment, tools, furniture and fixtures and other fixed assets
("Equipment Leases"), as more particularly described on Schedule 1.1(i)
attached hereto;
(j) Intangible Property. All of the proprietary rights of the Company,
including without limitation all trademarks, trade names, patents, patent
applications, licenses thereof,
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trade secrets, computer software, slogans, copyrights, processes, operating
rights, other licenses and permits and other similar intangible property
and rights relating to the Business, and all goodwill developed through the
use of such property and rights (collectively, "Intellectual Property"), as
more particularly described on Schedule 1.1(j) attached hereto;
(k) Licenses and Permits. To the extent assignable, all permits,
licenses, certificates of authority, franchises, accreditations,
registrations and other authorizations issued or used in connection with
the Business;
(l) Books, Records and Other Assets. All operating data and records of
the Company, including without limitation, customer lists and records,
financial, accounting and credit records, correspondence, budgets and other
similar documents and records, and all of the Company telephone and
telecopier numbers, and post office boxes; and
(m) Real Property. All of the interests, rights and benefits accruing
to the Company as lessee under the leases (the "Real Property Leases")
covering the parcels of real property leased by the Company and set forth
on Schedule 1.1(m) attached hereto (the "Leased Premises").
1.2. EXCLUDED ASSETS. Notwithstanding anything to the contrary set forth in
Section 1.1, the Purchased Assets shall exclude the following assets of the
Company: (i) the Purchase Price (as defined in Section 2.1) and other rights of
the Company under this Agreement; (ii) the corporate minute books and stock
records of the Company; (iii) all Owned Property (the "Real Property") and
fixtures; (iv) the life insurance policy insuring the life of the Shareholder or
other family members; (v) marketable securities of the Company held in an
account at Xxxxxxx Xxxxx, San Antonio, Texas, as of May 13, 1998, including any
reinvested dividends, interest and capital gains paid from May 13, 1998 through
the Closing Date; (vi) a receivable of the Company from Xxx and Xxx Xxxxxx in an
amount not to exceed $75,000; and (vii) the assets listed on Schedule 1.2
hereto, and (viii) any proceeds or receivables related to the foregoing.
1.3. ASSIGNMENT OF CONTRACTS. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not constitute an assignment of any claim,
contract, license, franchise, lease, commitment, sales order, sales contract,
supply contract, service agreement, purchase order or purchase commitment if an
attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any way adversely affect the rights of
Nations thereunder. If such consent is not obtained, or if any attempt at an
assignment thereof would be ineffective or would affect the rights of the
Company thereunder so that Nations would not in fact receive all such rights,
the Company shall reasonably cooperate with Nations to the extent necessary to
provide for Nations the benefits under such claim, contract, license, franchise,
lease, commitment, sales order, sales contract, supply contract, service
agreement, purchase order or purchase commitment, including subcontracting all
rights and obligations thereunder to Nations and enforcement for the benefit of
Nations of any and all rights of the Company against a third party
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thereto arising out of the breach or cancellation by such third party or
otherwise to the fullest extent permitted by law or agreement.
ARTICLE II
PURCHASE PRICE; ASSUMED LIABILITIES
2.1. PURCHASE PRICE. As consideration for the Purchased Assets, Nations
agrees, on the terms and subject to the conditions and limitations set forth
herein, to pay to the Company an aggregate amount of $39,250,000 (the "Purchase
Price"), payable at the Closing as follows: (i) $29,250,000 in immediately
available funds; and (ii) the issuance of a promissory note from Nations in the
original principal amount of $10,000,000, the form of such note is provided as
Exhibit A attached hereto (the "Promissory Note"). In addition, in the event
that the Closing shall not have occurred prior to August 31,1998, the Purchase
Price to be paid in immediately available funds shall be increased by an amount
equal to $8,064.51 multiplied by the number of days beginning with and including
August 1, 1998, until the Closing Date; provided, however, that no such
adjustment shall be required if and to the extent that the Closing is delayed
solely to the nonfulfillment of the condition set forth in Section 8.12 or the
failure of the Company and the Shareholder to use reasonable best efforts to
seek to obtain the consents required by Section 8.8.
2.2. ASSUMED LIABILITIES. As of the Closing, Nations shall assume and
agree to pay, discharge and perform when lawfully due without setoff under this
Agreement or any other agreement (provided that Nations reserves all rights to
seek indemnification pursuant to Section 10.1(b) hereof), all of the
obligations, duties and liabilities of the Companies (the "Assumed Liabilities")
with respect to the following: 2.3. all of the obligations, duties and
liabilities of the Company accruing as of the Closing Date with respect to the
Customer Contracts (including any warranty obligations), the Assumed Contracts,
the Indebtedness, as defined in Section 5.10 below; (b) increases in
indebtedness resulting from incremental purchases of new equipment subsequent to
May 11, 1998; (c) the outstanding balance at Closing under the Compass Bank
working capital line of credit not to exceed $2,000,000 (or if such line cannot
be assumed by Nations, the payment of such balance not to exceed $2,000,000 at
the Closing); (d) current liabilities of the Company as reflected on the Current
Balance Sheet (including certain Tax accruals limited to the amount of such
accrual) and as accrued since the date of the Current Balance Sheet until the
Closing Date, which have been incurred in the ordinary course of business
(excluding notes payable not constituting Indebtedness hereunder; and (e) the
tax obligations of Nations set forth in Section 13.3 hereof, notwithstanding the
foregoing, Nations will not assume any Excluded Liabilities as defined below.
2.3. EXCLUDED LIABILITIES. Except for the Assumed Liabilities, the parties
expressly agree that Nations shall not assume or otherwise become liable for any
other obligations or liabilities of any of the Company or any of the following
liabilities; (a) any liability or obligation relating to Taxes (as defined in
Section 11.1) of the Company except for the tax obligations of Nations set forth
in Section 13.3 hereof and except up to the amount of the Tax accruals set forth
in Section 2.2(d); (b)
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any liability or obligation relating to any default under any of the Assumed
Liabilities to the extent such default existed prior to the Closing (subject to
the Threshold as defined in Section 10.2); (c) any liability or obligation
(which is not an assumed liability), whether in tort, contract or for violation
of any law, statute, rule or regulation by the Company or the Shareholder or any
officer, director, employee or agent of the Company, that arises out of or
results from any act, omission, occurrence or state of facts prior to the
Closing; (d) any liability or obligation of the Company with respect to or
arising out of any employee benefit plan or any other plans or arrangements for
the benefit of any employees of the Company; (e) any liability or obligation of
the Company and the Shareholder with respect to that certain line of credit from
Xxxxxxx Xxxxx to the Company, loan number 59207349; (f) any liability or
obligation of the Company and the Shareholder with respect to the Excluded
Assets; (g) any liability or obligation (which is not an assumed liability) of
the Company, the Shareholder or any of their Affiliates, whether by contract,
pursuant to law, or otherwise; and (h) any liability or obligation of A-MOP,
Inc. ("A-MOP") not constituting Indebtedness hereunder. The liabilities not
assumed by Nations hereunder, including the liabilities enumerated above, as
referenced to herein as the "Excluded Liabilities".
2.4. NO EXPANSION OF THIRD PARTY RIGHTS. Except as set forth by applicable
laws or in the agreements underlying such Assumed Liabilities, the assumption by
Nations of the Assumed Liabilities, and the transfer thereof by the Company,
shall in no way expand the rights or remedies of any third party against Nations
or the Company as compared to the rights and remedies which such third party
would have had against the Company had Nations not assumed such liabilities.
Without limiting the generality of the preceding sentence, the assumption by
Nations of the Assumed Liabilities shall not create any third party beneficiary
rights.
2.5. TAX TREATMENT; ALLOCATION OF PURCHASE PRICE. The parties hereto intend
that the transactions contemplated by this Agreement shall be treated for tax
purposes as a taxable purchase under the Code. The parties agree that the fair
market value of the Company's fixed assets is the tax basis thereof, and the
allocation of the purchase price of the Company's fixed assets as reflected on
the Company balance sheet dated March 31, 1998 for tax purposes will not be
greater than the existing tax basis of the assets, but in no event less than $10
million, which allocation shall be set forth in Schedule 2.5 to be attached at
Closing. The parties agree to allocate the Purchase Price among such Purchased
Assets in a manner consistent with the requirements set forth in the Code,
including Code Section 1060, and the Treasury regulations promulgated
thereunder. In addition, it is agreed that such allocation will be binding on
both parties for federal income tax purposes in connection with this purchase
and sale of the Purchased Assets, and will be consistently reflected by each
party on their respective federal income tax returns. The parties agree to
prepare and timely file all applicable Internal Revenue Service forms, including
Form 8594 (Asset Acquisition Statement) and other governmental forms, to
cooperate with each other in the preparation of such forms, and to furnish each
other with a copy of such forms prepared in draft, within a reasonable period
prior to the filing due date thereof.
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ARTICLE III
CLOSING
3.1. TIME AND PLACE. Subject to and after fulfillment or waiver of the
conditions set forth in Article VIII and Article IX of this Agreement, the
Closing of the purchase and sale of the Purchased Assets (the "Closing") shall
take place within five (5) business days after satisfaction or waiver of the
conditions (the "Closing Date"), at the offices of Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., San Antonio.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF NATIONS
As a material inducement to the Company and the Shareholder to enter into
this Agreement and to consummate the transactions contemplated hereby, Nations
makes the following representations and warranties:
4.1. CORPORATE STATUS. Nations is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Nations
shall be at the time of Closing, if required by applicable law, legally
qualified to transact its business as a foreign corporation in the States of
Texas, Louisiana and Mississippi.
4.2. CORPORATE POWER AND AUTHORITY. Nations has the corporate power and
authority to execute and deliver this Agreement, the Employment Agreement, the
Promissory Note, the Registration Rights Agreement, the Leases, and the
Assignment and Assumption Agreement (collectively the "Transaction Documents")
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Nations has taken all action
necessary to authorize the execution and delivery of the Transaction Documents,
the performance of its obligations hereunder and thereunder and the consummation
of the transactions contemplated hereby and thereby.
4.3. ENFORCEABILITY. This Agreement has been and at Closing each of the
remaining Transaction Documents will be duly executed and delivered by Nations
and each constitute legal, valid and binding obligation of Nations, enforceable
against Nations in accordance with its terms, except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
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4.4. NO COMMISSIONS. Nations has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby.
4.5. AUTHORIZED SHARES. The capitalization of Nations is as set forth on
Schedule 4.5.
4.6. NO VIOLATION. The execution and delivery of the Transaction Documents
by Nations, the performance by Nations of its obligations hereunder and
thereunder and the consummation by Nations of the transactions contemplated
hereby and thereby will not (i) contravene any provision of the Certificate of
Incorporation or bylaws of the Company, (ii) violate or conflict with any law,
statute, ordinance, rule, regulation, decree, writ, injunction, judgment or
order of any Governmental Authority or of any arbitration award which is either
applicable to, binding upon or enforceable against Nations, (iii) except for
Nations senior indebtedness, conflict with, result in any breach of, or
constitute a default (or an event which would, with the passage of time or the
giving of notice or both, constitute a default) under, or give rise to a right
to terminate, amend, modify, abandon or accelerate, any Contract which is
applicable to, binding upon or enforceable against Nations, or (iv) except for
Nations senior indebtedness, require the consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Authority, any
court or tribunal or any other Person, except as may be required under the HSR
4.7. FUNDS. On the Closing, Nations shall have the necessary funds to remit
the Purchase Price.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE SHAREHOLDER
As a material inducement to Nations to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company and the
Shareholder, jointly and severally, make the following representations and
warranties to Nations:
5.1. CORPORATE STATUS. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has the
requisite power and authority to own or lease its properties and to carry on its
business as now being conducted. The Company is legally qualified to do business
and in good standing as a foreign corporation in the states of Mississippi and
Louisiana. The nature of the Company's properties and the conduct of its
business does not require it to be legally qualified in any other state.
5.2. POWER AND AUTHORITY. The Company has the power and authority to
execute and deliver each of the Transaction Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The Company has taken all action
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necessary to authorize the execution and delivery of each of the Transaction
Documents, the performance of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby. The
Shareholder has the requisite competence, power and authority to execute and
deliver each of the Transaction Documents, to perform his obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
5.3. ENFORCEABILITY. This Agreement has been and each of the remaining
Transaction Documents shall be at Closing duly executed and delivered by the
Company and the Shareholder, and each constitute the legal, valid and binding
obligation of each of them, enforceable against each of them in accordance with
its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
5.4. CAPITALIZATION.
(a) Schedule 5.4(a) sets forth, with respect to the Company, (i) the
number of authorized shares of each class of its capital stock, and (ii) the
number of issued and outstanding shares of each class of its capital stock.
There are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require the Company to issue or
sell any shares of its capital stock (or securities convertible into or
exchangeable for shares of its capital stock). There are no outstanding stock
appreciation, phantom stock, profit participation or other similar rights with
respect to the Company. Other than as set forth herein, there are no proxies,
voting rights or other agreements or understandings with respect to the voting
or transfer of the capital stock of the Company. The Company is not obligated to
redeem or otherwise acquire any of its outstanding shares of capital stock. The
Shareholder is the record and beneficial owner of all of such shares and the
Shareholder owns such shares free and clear of all Liens, restrictions and
claims of any kind.
5.5. NO VIOLATION. Except as set forth on Schedule 5.5, the execution and
delivery of the Transaction Documents by the Company and the Shareholder, the
performance by the Company and the Shareholder of their respective obligations
hereunder and thereunder and the consummation by the Company and the Shareholder
of the transactions contemplated hereunder and thereunder will not (i)
contravene any provision of the articles of incorporation or bylaws of the
Company, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against, the Company, the Shareholder or the Purchased
Assets, (iii) conflict with, result in any breach of, or constitute a default
(or an event which would, with the passage of time or the giving of notice or
both, constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Contract which is applicable to, binding upon
or enforceable against, the Company, the Shareholder or the Purchased Assets,
(iv) result in or require the creation or imposition of any Lien upon or with
respect to any of the Purchased Assets, or (v) require the consent, approval,
authorization or permit of, or filing with or
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notification to, any Governmental Authority, any court or tribunal or any other
Person, except as may be required under the HSR Act.
5.6. SUBSIDIARIES. The Company does not own, directly or indirectly, any
outstanding voting securities of or other interests in, or controls, any other
corporation, partnership, joint venture or other business entity.
5.7. NO COMMISSIONS. Neither the Company nor the Shareholder have incurred
any obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby.
5.8. FINANCIAL STATEMENTS. The Company has delivered to Nations (i) the
unaudited financial statements of the Company for the years ending December 31,
1996 and 1997, including the notes thereto (if applicable), reviewed by
Tschirhart, Oroian, Little & Rawi, P.C. (the "Annual Statements'), and (ii) the
unaudited compiled financial statements of the Company for the 3 month period
ended March 31, 1998, including the notes thereto, (if applicable) and unaudited
internally generated financial statements of the Company for the four month
period ended April 30, 1998, (collectively with the Annual Statements, the
"Financial Statements"), copies of which are attached to Schedule 5.8 hereto.
The balance sheet dated as of March 31, 1998 of Company included in the
Financial Statements is referred to herein as the "Current Balance Sheet."
Subject to the limitations and qualifications set forth in Schedule 5.8, the
Financial Statements fairly present the financial position of the Company at
each of the balance sheet dates and the results of operations for the periods
covered thereby, in accordance with GAAP on a basis consistent with the
Company's prior practices except that such Financial Statements may not be
accompanied by notes or other textual disclosure required by GAAP, and in the
case of the interim statements are also subject to year end adjustments. The
books and records of the Company fully and fairly in all material respects
reflect all transactions, properties, assets and liabilities of the Company.
Except as set forth in Schedule 5.8 there are no extraordinary or material
non-recurring items of income or expense during the periods covered by the
Financial Statements and the balance sheets included in the Financial Statements
do not reflect any writeup or revaluation increasing the book value of any
assets, except in the case of the Annual Statements as specifically disclosed in
the notes thereto. The Annual Financial Statements reflect all adjustments
necessary for a fair presentation of the financial information contained
therein. Nations agrees that the accounting assumptions and practices of the
Company, so long as in accordance with GAAP or set forth on Schedule 5.8, will
not be a breach of this representation.
5.9. CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Since the date of the
Current Balance Sheet, except as set forth on Schedule 5.9, the Company has
operated in the ordinary course of business and has not (i) issued any capital
stock or other securities; (ii) made any distribution of or with respect to its
capital stock or other securities or purchased or redeemed any of its
securities; (iii) paid any bonus to or increased the rate of compensation of any
of its officers or salaried employees or amended any other terms of employment
of such persons; (iv) sold, leased or transferred any of its properties or
assets other than in the ordinary course of business consistent with
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past practice; (v) made or obligated itself to make capital expenditures out of
the ordinary course of business consistent with past practice; (vi) made any
payment in respect of its liabilities other than in the ordinary course of
business consistent with past practice; (vii) incurred any obligations or
liabilities (including any indebtedness) or entered into any transaction or
series of transactions involving in excess of $10,000 in the aggregate out of
the ordinary course of business, except for this Agreement and the transactions
contemplated hereby; (viii) suffered any theft, damage, destruction or casualty
loss, not covered by insurance and for which a timely claim was filed, in excess
of $10,000 in the aggregate; (ix) suffered any extraordinary losses (whether or
not covered by insurance); (x) waived, canceled, compromised or released any
rights having a value in excess of $10,000 in the aggregate; (xi) made or
adopted any change in its accounting practice or policies; (xii) made any
adjustment to its books and records other than in respect of the conduct of its
business activities in the ordinary course consistent with past practice; (xiii)
entered into any transaction with any Affiliate other than in the ordinary
course of business consistent with past practice; (xiv) entered into any
employment agreement; (xv) terminated, amended or modified any agreement
involving an amount in excess of $10,000 other than in the ordinary course of
business consistent with past practice; (xvi) imposed any security interest or
other Lien on any of its assets other than in the ordinary course of business
consistent with past practice; (xvii) delayed paying any accounts payable which
are due and payable except to the extent being contested in good faith; (xviii)
made or pledged any charitable contribution in excess of $1,000; (xix) entered
into any other transaction or been subject to any event which has or may have a
Material Adverse Effect on the Company; or agreed to do or authorized any of the
foregoing.
5.10. LIABILITIES OF THE COMPANY. Except as set forth on Schedule 5.10, the
Company has no liabilities or obligations, whether accrued, absolute, contingent
or otherwise, except (a) to the extent reflected or taken into account in the
Current Balance Sheet and not heretofore paid or discharged, (b) liabilities
incurred in the ordinary course of business consistent with past practice since
the date of the Current Balance Sheet (none of which relates to breach of
contract, breach of warranty, tort, infringement or violation of law, or which
arose out of any action, suit, claim, governmental investigation or arbitration
proceeding), and (c) normal accruals, reclassifications, and audit adjustments
which would be reflected on an audited financial statement and which could not
be material in the aggregate. Schedule 5.10 sets forth Indebtedness which shall
not at Closing exceed $75,000,000. "Indebtedness" shall mean the aggregate
amount of all indebtedness and other obligations of the Company (including
accrued and unpaid interest) for borrowed money, guaranties, letters of credit,
and deferred purchase price of any property, whether owed to a bank or any other
person, and all payoff amounts on all equipment leases and equipment rental
purchase options (plus prepayment penalties less early payment discounts) but
shall not include debt related to Real Property, debt related to Excluded
Assets, or debt relating to obligations not to be assumed by Nations hereunder.
5.11. LITIGATION. Except as set forth on Schedule 5.11, there is no action,
suit, or other legal or administrative proceeding or governmental investigation
pending, threatened, anticipated or to the knowledge of the Company or the
Shareholder contemplated against, by or affecting, the Company, the Shareholder
or the Purchased Assets, or which question the validity or enforceability
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of this Agreement or the transactions contemplated hereby, and there is no basis
for any of the foregoing. Except as set forth on Schedule 5.11, during the
three-year period prior to the date hereof, there has been no action, suit or
other legal or administrative proceeding or governmental investigation against,
by or affecting the Company, the Shareholder or the Purchased Assets, in which
the amount in question exceeded $50,000. There are no outstanding orders,
decrees, stipulations or agreements issued by any Governmental Authority in any
proceeding or agreed to by the Company or the Shareholder to which the Company
or the Shareholder are or were a party which have not been complied with in full
which may have a Material Adverse Effect on the Purchased Assets.
5.12. ENVIRONMENTAL MATTERS.
(a) Except as set forth on Schedule 5.12, the Company is and has at
all times been in full compliance with all Environmental Laws (as defined in
clause (g) below) governing its business, operations, properties and assets,
including, without limitation: (i) all requirements relating to the Discharge
(as defined in clause (g) below) and Handling (as defined in clause (g) below)
of Hazardous Substances (as defined in clause (g) below); (ii) all requirements
relating to notice, record keeping and reporting; (iii) all requirements
relating to obtaining and maintaining Licenses (as defined in clause (g) below)
for the ownership of its properties and assets and the operation of its business
as presently conducted, and (iv) all applicable writs, orders, judgements,
injunctions, governmental communications, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws.
(b) Except as set forth on Schedule 5.12, there are no (and to the
knowledge of the Company there is no basis for any) non-compliance orders,
warning letters, notices of violation (collectively, "Notices"), claims, suits,
actions, judgments, penalties, fines, or administrative or judicial
investigations or proceedings (collectively, "Proceedings") pending or
threatened against or involving the Company, or its business, operations,
properties, or assets, issued by any Governmental Authority or third party with
respect to any Environmental Laws or Licenses issued to the Company thereunder
in connection with, related to or arising out of the ownership by the Company of
its properties or assets or the operation of its business, which have not been
resolved or which would impose any obligation, burden or continuing liability on
Nations in the event that the transactions contemplated by this Agreement are
consummated, or which could have a Material Adverse Effect on the Company.
(c) Except as set forth on Schedule 5.12, the Company has not Handled
or Discharged, nor has it at any time allowed or arranged for any third party to
Handle or Discharge, Hazardous Substances to, at or upon: (i) any location other
than a site lawfully permitted to receive such Hazardous Substances; (ii) any
real property currently or previously owned or operated by the Company; or (iii)
any site which, pursuant to any Environmental Laws, (x) has been placed on the
National Priorities List or its state equivalent; or (y) the United States
Environmental Protection Agency or the relevant state agency or other
Governmental Authority has not notified the Company that such Governmental
Authority has proposed or is proposing to place on the National Priorities
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List or its state equivalent. There has not occurred, nor is there presently
occurring, a Discharge, or threatened Discharge, of any Hazardous Substance on,
into or beneath the surface of, or adjacent to, any real property currently or
previously owned or operated by the Company in an amount requiring a notice or
report to be made to a Governmental Authority or in violation of any applicable
Environmental Laws.
(d) Schedule 5.12 identifies the operations and activities, and
locations thereof, which have been conducted or are being conducted by the
Company on any real property currently or previously owned or operated by the
Company which have involved the Handling or Discharge of Hazardous Substances.
(e) Except as set forth on Schedule 5.12, the Company does not use,
nor has it used, any Aboveground Storage Tanks (as defined in clause (g) below)
or Underground Storage Tanks (as defined in clause (g) below), and there are not
now nor have there ever been any Underground Storage Tanks beneath any real
property currently or previously owned or operated by the Company that are
required to be registered under applicable Environmental Laws.
(f) Schedule 5.12 identifies (i) all environmental audits, assessments
or occupational health studies undertaken by the Company or their agents or any
Governmental Authority or third party, relating to or affecting the Company or
any real property currently or previously owned or operated by or any of the
Company; (ii) the results of any ground, water, soil, air or asbestos monitoring
undertaken by the Company or their agents or any Governmental Authority or third
party, relating to or affecting the Company or any real property currently or
previously owned or operated by the Company which indicate the presence of
Hazardous Substances at levels requiring a notice or report to be made to a
Governmental Authority or in violation of any applicable Environmental Laws;
(iii) all material written communications between the Company and any
Governmental Authority arising under or related to Environmental Laws; and (iv)
all outstanding citations issued under OSHA, or similar state or local statutes,
laws, ordinances, codes, rules, regulations, orders, rulings, or decrees,
relating to or affecting the Company or any real property currently or
previously owned or operated by the Company.
(g) For purposes of this Section 5.12, the following terms shall have
the meanings ascribed to them below:
"Aboveground Storage Tank" shall have the meaning ascribed to such
term in Section 6901 et seq., as amended, of RCRA, or any applicable state
or local statute, law, ordinance, code, rule, regulation, order ruling, or
decree governing Aboveground Storage Tanks.
"Discharge" means any manner of spilling, leaking, dumping,
discharging, releasing or emitting, as any of such terms may further be
defined in any Environmental Law, into or through any medium including,
without limitation, ground water, surface water, land, soil or air.
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"Environmental Laws" means all federal, state, regional or local
statutes, laws, rules, regulations, codes, orders, plans, injunctions,
decrees, rulings, and changes or ordinances or judicial or administrative
interpretations thereof, or similar laws of foreign jurisdictions where the
Company conducts business, whether currently in existence or hereafter
enacted or promulgated, any of which govern (or purport to govern) or
relate to pollution, protection of the environment, public health and
safety, air emissions, water discharges, hazardous or toxic substances,
solid or hazardous waste or occupational health and safety, as any of these
terms are or may be defined in such statutes, laws, rules, regulations,
codes, orders, plans, injunctions, decrees, rulings and changes or
ordinances, or judicial or administrative interpretations thereof,
including, without limitation: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendment and Reauthorization Act of 1986, 42 U.S.C. ss.9601, et seq.
(collectively "CERCLA"); the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and subsequent Hazardous and
Solid Waste Amendments of 1984, 42 U.S.C. ss.6901 et seq. (collectively
"RCRA"); the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
ss.1801, et seq. (the "Hazardous Materials Transportation Act"); the Clean
Water Act, as amended, 33 U.S.C. ss.1311, et seq. (the "Clean Water Act");
the Clean Air Act, as amended (42 U.S.C. ss.7401-7642) (the "Clean Air
Act"); the Toxic Substances Control Act, as amended, 15 U.S.C. ss.2601 et
seq. (the "Toxic Substances Control Act"); the Federal Insecticide,
Fungicide, and Rodenticide Act as amended, 7 U.S.C. ss.136-136y ("FIFRA");
the Emergency Planning and Community Right-to-Know Act of 1986 as amended,
42 U.S.C. ss.11001, et seq. (Title III of XXXX) ("EPCRA"); and the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. ss.651,
et seq. ("OSHA").
"Handle" means any manner of generating, accumulating, storing,
treating, disposing of, transporting, transferring, labeling, handling,
manufacturing or using, as any of such terms may further be defined in any
Environmental Law, of any Hazardous Substances or Waste.
"Hazardous Substances" shall be construed broadly to include any toxic
or hazardous substance, material, or waste, and any other contaminant,
pollutant or constituent thereof, whether liquid, solid, semi-solid, sludge
and/or gaseous, including without limitation, chemicals, compounds,
by-products, pesticides, asbestos containing materials, petroleum or
petroleum products, and polychlorinated biphenyls, the presence of which
requires investigation or remediation under any Environmental Laws or which
are or become regulated, listed or controlled by, under or pursuant to any
Environmental Laws, including, without limitation, RCRA, CERCLA, the
Hazardous Materials Transportation Act, the Toxic Substances Control Act,
the Clean Air Act, the Clean Water Act, FIFRA, EPCRA and OSHA, or any
similar state statute, or any future amendments to, or regulations
implementing
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such statutes, laws, ordinances, codes, rules, regulations, orders,
rulings, or decrees, or which has been or shall be determined or
interpreted at any time by any Governmental Authority to be a hazardous or
toxic substance regulated under any other statute, law, regulation, order,
code, rule, order, or decree.
"Licenses" means all licenses, certificates, permits, approvals and
registrations.
"Underground Storage Tank" shall have the meaning ascribed to such
term in Section 6901 et seq., as amended, of RCRA, or any applicable state
or local statute, law, ordinance, code, rule, regulation, order ruling, or
decree governing Underground Storage Tanks.
5.13. REAL ESTATE.
(a) The Company and Shareholder are making the following
representations and warranties on behalf of the parties identified on Schedule
5.13 that to the knowledge of the Company own certain of the facilities as of
the date hereof and on the Closing Date shall be owned by TJW, Sr./ SKW
Properties, Ltd. at which the Company operates the Business, as set forth on
Schedule 5.13 (the "Owned Property"), which Schedule sets forth the location and
principal improvements and buildings on ("Improvements") the Owned Property,
together with a list of all title insurance policies relating to such
properties, all of which policies have previously been delivered or made
available to Nations.
(i) The owner of each parcel of property identified on Schedule
5.13 holds marketable fee simple title to the Owned Property and existing
Improvements, and valid enforceable easements over the easement areas identified
on Schedule 5.13, if any, all are free and clear of all mortgages, deeds of
trust, ground rents, leases, tenancies, easements, licenses, contracts of sale
or deed, options or rights of first refusal and security interests and any liens
or encumbrances that materially affect the operation of the Business, except the
deeds of trust identified in Schedule 5.13.
(ii) No Improvements upon the Owned Property encroaches upon any
adjacent property boundary line, or any building setback line, side yard line,
local comprehensive plan provisions, zoning laws and ordinances, building code
requirements, permits, licenses or other forms of approval by any Governmental
Authority or any recorded easement (or other easement of which they are aware or
have reason to believe may exist) in a manner that materially interferes with
the operation of the Business on such Owned Property; and the Owned Property is
not located within any flood plain (such that a mortgage would require a
mortgagor to obtain flood insurance).
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(iii) The Owned Property is taxed separately without regard to
any other property and has been subdivided from all other property in compliance
with applicable laws.
(iv) There is no pending condemnation proceedings, suits which
would affect the Owned Property or any portion thereof, nor have the Company or
the Shareholder been provided notice of any potential condemnation actions or
proceedings.
(v) The Company and the Shareholder have received no notice of
any plan, study or effort of any Governmental Authority which in any way would
materially interfere with the operation of the Business thereon or any intended
public improvements which will result in any charge or lien being levied or
assessed upon the Owned Property. The Company and the Shareholder have received
no notice of any existing, proposed or contemplated plan to widen, modify or
realign any street or highway contiguous to the Owned Property.
(vi) All facilities located on the parcels of Owned Property are
supplied with utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer and
storm sewer, all of which services are adequate for the Owned Property and to
the best of the shareholder's and the Company's knowledge are provided via
public roads or via permanent, irrevocable, appurtenant easements.
(vii) The Premises are free from defects that materially affect
the operation of the Business, have been maintained in accordance with normal
industry practice and are in good operating condition and repair and are
suitable for the purposes for which they are presently used.
(b) Schedule 1.1(m) sets forth with respect to each of the Real
Property Leases (copies of which have previously been furnished to Nations) (A)
the lessor and lessee thereof and the date and term of each of such leases, (B)
the legal description, if known, including street address, of each property
covered thereby, and (C) a brief description of the principal improvements and
buildings thereon. The Real Property Leases are in full force and effect and
have not been amended, and the Company is not and to the knowledge of the
Company or the Shareholder no other party thereto is in default or breach under
any such Lease. No event has occurred which, with the passage of time or the
giving of notice or both, would cause a breach of or default by the Company
under any of such leases and there is no breach or anticipated breach by any
other party to such leases. Except as set forth on Schedule 5.12, with respect
to each of the Leased Premises: (a) The Company has valid leasehold interests or
other rights of use and occupancy in the Leased Premises, free and clear of any
Liens on such leasehold interests or other rights of use and occupancy, or any
covenants, easements or title defects known to or created by the Company, except
as do not materially interfere with the operation of the Business thereon; (b)
No portions of the
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buildings located on the Leased Premises that are used in the business of the
Company encroach upon the property setback and building lines of the respective
property in a manner which materially interferes with the operation of the
Business thereon; (c) Each of the Leased Premises (i) has direct access to
public roads or access to public roads by means of a perpetual access easement,
such access being reasonably sufficient to satisfy the needs of the Business;
and (ii) is served by all utilities in such quantity and quality as are
sufficient to satisfy the current normal business activities as conducted at
such parcel; and (iii) the Company has not received notice of (x) any
condemnation proceeding with respect to any portion of the Leased Premises or
any access thereto and neither the Shareholder nor the Company have any
knowledge that such proceeding is contemplated by any Governmental Authority; or
(y) any special assessment which may affect any of the Leased Premises and (d)
the Leased Premises are free from defects that materially affect the operation
of the Business, have been maintained in accordance with normal industry
practice and are in good operating condition and repair and are suitable for the
purposes for which they are presently used.
5.14. GOOD TITLE, ADEQUACY AND CONDITION. Other than the Liens provide on
Schedule 5.14 or Permitted Liens, the Company has, and at the Closing will have,
good and marketable title to the Purchased Assets with full power to sell,
transfer and assign the same free and clear of any Lien, restrictions or claim
of any kind. The Purchased Assets constitute, in the aggregate, all of the
assets and properties necessary for the conduct of the Business in the manner in
which and to the extent to which such Business is currently being conducted. The
Purchased Assets are in good operating condition and repair, normal wear and
tear excepted, and have been maintained in accordance with all applicable
material specifications and warranties and normal industry practice. All
inventory of rental equipment set forth on Schedule 1.1(a) hereto and all
inventory of merchandise set forth on Schedule 1.1(b) hereto consist of a
quality and quantity usable, rentable, or saleable in the ordinary course of
business of the Company, except for obsolete items and items of below-standard
quality, all of which have been written off, written down or adequately reserved
against to their net realizable value in the Current Balance Sheet. All such
inventory not written off has been recorded at the lower of cost or net
realizable value, and depreciated consistent with the economic life of such
inventory. The quantities of each item of such inventory are reasonable in the
present circumstances of the Company.
5.15. COMPLIANCE WITH LAWS. The Company is and during the five (5) years
prior to the date hereof has been in compliance with all laws, regulations and
orders applicable to it, its business and operations (as conducted by it now and
in the past), the Purchased Assets and any other properties and assets (in each
case owned or used by it now or in the past). Except as set forth on Schedule
5.15 during the five (5) years prior to the date hereof, the Company has not
been cited, fined or otherwise notified of any asserted past or present failure
to comply with any laws, regulations or orders and no proceeding with respect to
any such violation is pending or to the knowledge of the Company and the
Shareholder threatened. Neither the Company nor any of its employees or agents,
has made any payment of funds which is prohibited by law, and no funds have been
set aside to be used for any payment prohibited by law. The Company is not
subject to any
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Contract, decree or injunction which restricts the continued operation of the
Business or the expansion thereof to other geographical areas, customers or
suppliers, or to other lines of business.
5.16. LABOR AND EMPLOYMENT MATTERS. Schedule 5.16 sets forth the name and
current rate of compensation of each employee of the Company. The Company is not
a party to or bound by any collective bargaining agreement or any other
agreement with a labor union, and to the knowledge of the Company and the
Shareholder, there has been no effort by any labor union during the twenty-four
(24) months prior to the date hereof to organize any employees of the Company
into one or more collective bargaining units. There is no pending or to the
knowledge of the Company and the Shareholder, threatened labor dispute, strike
or work stoppage which affects or which may reasonably affect the Business. None
of the Company nor any agent, representative or employee thereof has since the
date of incorporation of the Company committed any unfair labor practice as
defined in the National Labor Relations Act, as amended, and there is no pending
or threatened charge or complaint against the Company by or with the National
Labor Relations Board or any representative thereof. The Company is not aware
that any key employee or group of employees has any plans to terminate his or
their employment with the Company. Except as set forth on Schedule 5.16, the
Company is not a party or subject to any employment agreements, noncompetition
agreements, or consulting agreements and the Company has complied with all
applicable laws, rules and regulations relating to employment, civil rights and
equal employment opportunities, including but not limited to, the Civil Rights
Act of 1964, the Fair Labor Standards Act, and Americans with Disabilities Act,
each as amended.
5.17. EMPLOYEE BENEFIT PLANS.
(a) Schedule 5.17 sets forth all Employee Benefit Plans of the
Company. With respect to each Employee Benefit Plan (as defined in clause (d)
below) of the Company, (i) each has been administered in compliance with its
terms and with all applicable laws including, without limitation, ERISA and the
Code; (ii) no actions, suits, claims or disputes are pending or threatened;
(iii) no audits, proceedings, claims or demands are pending with any
Governmental Authority; (iv) all reports, returns and similar documents required
to be filed with any Governmental Authority or distributed to any plan
participant have been duly or timely filed or distributed; (v) no "prohibited
transaction" has occurred within the meaning of ERISA or the Code; (vi) no such
plan provides medical or dental benefits for any current or former employees of
the Company or their predecessors after termination of employment; (vii) no such
plan obligates of the Company to pay separation, severance, termination or
similar benefits as a result of any transaction contemplated by this Agreement
or solely as a result of a "change of control" (as defined in Section 280G of
the Code); (viii) all required or discretionary (in accordance with historical
practices) payments, premiums, contributions, reimbursements or accruals for all
periods ending prior to or as of the Closing shall have been made or properly
accrued on the Current Balance Sheet or will be properly accrued on the books
and records of the Company as of the Closing; (ix) no such plan has any unfunded
liabilities which are not reflected on the Current Balance Sheet or the books
and records of the Company; (x) the Company has complied with the notice and
continuation of coverage requirements of Section 4980B of the Code and the
regulations thereunder with respect to any group health plan within the
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meaning of Code Section 5000(b)(1); and (xi) the Company participate in, or have
ever participated in, or have any withdrawal liability under ERISA with respect
to, a "multiemployer plan" (as defined in Section 3(37) of ERISA). True and
accurate copies of each Employee Benefit Plan of the Company, together with the
most recent annual reports on Form 5500, all IRS favorable determination letters
and summary plan descriptions for such plans have been furnished to Nations.
(b) With respect to each Employee Benefit Plan of the Company
intended to qualify under Code Section 401(a) or 403(a), (i) the Internal
Revenue Service has issued a favorable determination letter, which has not been
revoked, that any such plan is tax-qualified and exempt from federal income tax;
(ii) no reportable event (within the meaning of Section 4043 of ERISA) has
occurred; and (iii) the present value of all liabilities under any such plan
will not exceed the current fair market value of the assets of such plan
(determined using the actuarial assumption used for the most recent actuarial
valuation for such plan).
(c) Neither Nations nor the Company will suffer any loss, cost or
liability as a result of any claim that the Company, or any entity that would be
aggregated with the Company under Code Section 414(b), (c), (m) or (o), has not
complied with the provisions of paragraphs (a) and (b) above with respect to
each Employee Benefit Plan maintained by any such entity.
(d) For purposes hereof, "Employee Benefit Plan" means any: (i)
employee pension benefit plan as defined in Section 3(2) of ERISA; (ii)
multiemployer plan as defined in Section 3(37) of ERISA; (iii) employee welfare
benefit plan as defined in Section 3(1) of ERISA; and (iv) any stock option,
bonus, stock purchase, or insurance plan and any severance or termination pay
plan or policy in which employees, spouses or dependents participate.
5.18. TAX MATTERS. Except as set forth on Schedule 5.18 or otherwise
disclosed in writing to Nations prior to the date hereof, all Tax Returns
required to be filed prior to the date hereof with respect to the Company and
its income, properties, franchises or operations have been timely filed, each
such Tax Return has been prepared in compliance with all applicable laws and
regulations, and all such Tax Returns are true and accurate in all respects.
Except as set forth on Schedule 5.18, all Taxes due and payable, or which have
been incurred but are not yet due and payable by or with respect to the Company
and the Business have been paid or are accrued on the Current Balance Sheet. The
Company has withheld and paid all Taxes to the appropriate Governmental
Authority required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party. With respect to taxable period of the Company: (i) no
deficiency or proposed adjustment which has not been settled or otherwise
resolved for any amount of Taxes has been asserted or assessed by any taxing
authority against the Company; (ii) the Company has not consented to extend the
time in which any Taxes may be assessed or collected by any taxing authority;
(iii) the Company has not requested or been granted an extension of the time for
filing any Tax Return to a date later than the Closing; (iv) there is no action,
suit, taxing authority proceeding, or audit or claim for refund now in progress,
pending or threatened against or with respect to the Company or regarding Taxes;
and (v) there are no Liens
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for Taxes (other than for current Taxes not yet due and payable) upon the assets
of the Company (other than Liens related to taxes to be assumed by Nations in
accordance with Section 13.3).
5.19. INSURANCE. Schedule 5.19 provides a list of all insurance policies of
the Company currently in force and provides the insurer, type of coverage and
policy period for each policy (the "Insurance Policies"). Such Insurance
Policies are in full force and effect, and all premiums due thereon have been
paid. The Company has complied with the provisions of such Insurance Policies.
During the three year period to the date hereof, the Company has not made any
claims under any of the Insurance Policies, and has suffered no losses that
would give rise to any such claims, for an amount in excess of $10,000 except as
set forth on Schedule 5.19. The Company has not failed to give, in a timely
manner, any notice required under any of the Insurance Policies to preserve its
rights thereunder. Through the Closing Date, each of the Insurance Policies will
be in full force and effect.
5.20. RECEIVABLES. All of the receivables of the Company being transferred
to Nations hereunder are valid and legally binding, represent bona fide
transactions and arose in the ordinary course of business of the Company. All of
such receivables are good and collectible receivables, and will be collected in
full in accordance with the terms of such receivables (and in any event within
one hundred and thirty five (135) days following the Closing), without set off
or counterclaims, subject to the allowance for doubtful accounts, if any, set
forth on the Current Balance Sheet, as reasonably adjusted since the date of the
Current Balance Sheet in the ordinary course of business consistent with past
practice.
5.21. LICENSES AND PERMITS. The Company possesses all licenses and required
governmental or official approvals, permits or authorizations (collectively, the
"Permits") for its business and operations, and Schedule 5.21 sets forth a true,
complete and accurate list of all such Permits. All such Permits are valid and
in full force and effect, the Company is in full compliance with the respective
requirements thereof, and no proceeding is pending or threatened to revoke or
amend any of them. None of such Permits is or will be impaired or in any way
affected by the execution and delivery of this Agreement or the transactions
contemplated hereby.
5.22. RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS; AFFILIATED TRANSACTIONS.
No current customer of the Company has given the Company written notice of its
intent to terminate its business relationship with the Company for any reason.
Except as set forth on Schedule 5.22, the Company has no direct or indirect
interest in any customer, supplier or competitor of the Company, or in any
person from whom or to whom the Company leases real or personal property. No
officer, director, or shareholder of the Company, nor any person related by
blood or marriage to any such person, nor any entity in which any such person
owns any beneficial interest, is a party to any Contract or transaction with the
Company or has any interest in any property used by the Company.
5.23. CONTRACTS. Schedule 5.23 sets forth a list of each Contract to which
the Company is a party or by which it or its properties and assets are bound and
which is material to its business, assets, properties or prospects (the
"Material Contracts"), true, correct and complete copies of which have been
provided to Nations. The copy of each Material Contract furnished to Nations is
a true
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and complete copy of the document it purports to represent and reflects all
amendments thereto made through the date of this Agreement. The Company has not
violated any of the terms or conditions of any Material Contract or any term or
condition which would permit termination or modification of any Material
Contract, and to the knowledge of the Company and the Shareholder all of the
covenants to be performed by any other party thereto have been fully performed,
and there are no claims for breach or indemnification or notice of default or
termination under any Material Contract. No event has occurred which
constitutes, or after notice or the passage of time, or both, would constitute,
a default by the Company under any Material Contract, and no such event has
occurred which constitutes or would constitute a default by any other party. The
Company is not subject to any liability or payment resulting from renegotiation
of amounts paid under any Material Contract other than such action taken in the
ordinary course of business consistent with past practice. As used in this
Section 5.24, Material Contracts shall include, without limitation, formal or
informal, written or oral, in each case which is material to the business,
assets, properties or prospects of the Company, (a) loan agreements, indentures,
mortgages, pledges, hypothecations, deeds of trust, conditional sale or title
retention agreements, security agreements, equipment financing obligations or
guaranties, or other sources of contingent liability in respect of any
indebtedness or obligations to any other Person(s), or letters of intent or
commitment letters with respect to same; (b) contracts obligating of the Company
to provide or purchase products or services for a period of one year or more,
excluding standard collection contracts entered into in the ordinary course of
its business without material modification from the preprinted forms used by the
Company in the ordinary course of business, copies of which have been supplied
to Nations; (c) leases of personal property, not a Capital Lease and not
cancelable without penalty on notice of sixty (60) days or less or calling for
payment of an annual gross rental exceeding $10,000; (d) distribution, sales
agency or franchise or similar agreements, or agreements providing for an
independent contractor's services, or letters of intent with respect to same;
(e) employment agreements, management service agreements, consulting agreements,
confidentiality agreements, non-competition agreements, employee handbooks,
policy statements and any other agreements relating to any employee, officer or
director of the Company; (f) licenses, assignments or transfers of trademarks,
trade names, service marks, patents, copyrights, trade secrets or know how, or
other agreements regarding proprietary rights or intellectual property; (g) any
Contract relating to pending capital expenditures by the Company; (h) any
non-competition agreements restricting the Company in any manner; and (i) other
material Contracts or understandings, irrespective of subject matter and whether
or not in writing, not entered into in the ordinary course of business by the
Company and not otherwise disclosed on the Schedules.
5.24. ACCURACY OF INFORMATION FURNISHED. No statement or information made
or furnished by the Company or the Shareholder to Nations or any of Nations'
representatives in this Agreement and the various schedules attached hereto,
contains or shall contain any untrue statement of a fact or omits or shall omit
any fact necessary to make the information contained therein not misleading. The
Company and the Shareholder have provided Nations with true, accurate and
complete copies of all documents listed or described in the various Schedules
attached hereto.
5.25. CUSTOMERS. All of the customers listed on the customer lists attached
hereto as Schedule 1.1(b) are to the knowledge of the Company and the
Shareholder subject to valid and
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enforceable Customer Contracts except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles
regardless of whether such enforceability is considered in a proceeding at law
or in equity. True, correct and complete copies of such contracts have been
furnished by the Company to Nations or made available to Nations. The Company
has not violated any of the terms or conditions of any of the Customer
Contracts, and to the knowledge of the Company and the Shareholder all of the
covenants to be performed by any other party thereto have been fully performed
and there are no claims for breach or indemnification or notice of default or
termination thereunder. Schedule 5.25 lists the top 25 customers of the Company
as measured by annual revenue for the last twelve months.
5.26. INTELLECTUAL PROPERTY. The Company has full legal right, title and
interest to the Intellectual Property and has not granted any rights in or to
the same or any third party. The Business as presently conducted, and the
unrestricted conduct and the unrestricted use and exploitation of the
Intellectual Property, does not infringe or misappropriate any rights held or
asserted by any Person, and no Person is infringing on the Intellectual
Property. Other than payments under the Assumed Liabilities, no payments are
required for the continued use of the Intellectual Property. None of the
Intellectual Property has ever been declared invalid or unenforceable, or is the
subject of any pending or threatened action for opposition, cancellation,
declaration, infringement, or invalidity, unenforceability or misappropriation
or like claim, action or proceeding. The Company will not acquire an interest in
any trade name or trademark similar to the trade names or trademarks transferred
hereunder. The Company has the right to use the computer software.
5.27. BANK ACCOUNTS. Schedule 5.27 lists each account of the Company with
any bank, broker or other depository institution, and the names of all persons
authorized to withdraw funds from each such account, and the locations of all
safe deposit boxes of the Company and the names of all persons authorized to
have access to such safe deposit boxes.
5.28. NAMES; PRIOR ACQUISITIONS. All names under which the Company does
business as of the date hereof are specified on Schedule 5.28. Except as
otherwise disclosed in Schedule 5.28, the Company has not changed its name or
used any assumed or fictitious name or been the surviving entity in a merger,
acquired any business or changed its principal place of business or chief
executive office, within the past three years.
5.29. A-MOP, INC. The Shareholder is the sole record and beneficial owner
of all the outstanding shares of capital stock of A-MOP, free and clear of any
Liens of any kind. A-MOP (i) has no equipment other than as included in Schedule
1.1(a), (ii) no customers other than the Company, (iii) no employees, (iv) has
good title to all of its assets, other than for Liens relating to Indebtedness.
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1. CONDUCT OF BUSINESS PENDING THE CLOSING. The Company covenants and
agrees that, between the date of this Agreement and the Closing Date, the
Business shall be conducted only in, and the Company shall not take any action
except in, the ordinary course of business consistent with past practice. The
Company shall use its reasonable best efforts to preserve intact its business
organization, to keep available the services of its current officers, employees
and consultants, and to preserve its present relationships with customers,
suppliers and other persons with which it has significant business relations. By
way of amplification and not limitation, except as contemplated by this
Agreement, the Company shall not between the date of this Agreement and the
Closing Date, directly or indirectly, do or propose or agree to do any of the
following without the prior written consent of Nations: (i) incur any additional
Indebtedness other than amounts borrowed after May 11, 1998 to fund incremental
equipment purchases and borrowings under the Compass Bank line of Credit not to
exceed $2 million (the Company will not be restricted from borrowing under the
Xxxxxxx Xxxxx line of credit), (ii) create liens on any currently existing
assets, (iii) sell any assets outside the ordinary course of business, (iv)
enter into any contracts, leases or other agreements except in the ordinary
course of business consistent with past practice, (v) amend or terminate any
contracts, leases or other agreements except in the ordinary course of business,
(vi) declare, make or pay any dividend or distribution with respect to (or
redeem any of) the outstanding common stock of the Company; (vii) make (or
commit to) any capital expenditures in excess of $10,000 except in the ordinary
course of business (viii) increase (or authorize an increase) in compensation or
benefits payable to any employee, independent contractors or consultants except
in the ordinary course of business, (ix) issue, or authorize or propose the
issuance of, additional outstanding common stock of any class, or securities
convertible into or exchangeable for any outstanding common stock or other
securities of the Company or any of its subsidiaries, (x) issue, or authorize or
propose the issuance of, any other securities in respect of, in lieu of, or in
substitution for its now outstanding common stock, (xi) transfer any of the
outstanding shares of the Company's capital stock or (xii) purchase additional
marketable securities in the Xxxxxxx Xxxxx account that constitutes an Excluded
Asset; provided, however, that the Company may distribute cash or receivables to
the Shareholder relating to any of the Purchased Assets owned by A-MOP on the
date hereof. The Company agrees to give notice in writing to Nations promptly
following the occurrence of any event which has had (or which is likely to have)
an adverse effect upon its assets, business, operations, prospects, properties
or condition (financial or otherwise).
ARTICLE VII
CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES
7.1. FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby and to
satisfy the conditions set forth in Article VIII and Article
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IX. The Shareholder and the Company shall, and shall use reasonable efforts to
cause the Company's accountants (at the expense of Nations) to, cooperate (such
cooperation to include execution and delivery by the Shareholder and the Company
of customary audit representation letters) with Nations accountants from time to
time in connection with any audit of the assets, property and business of the
Company acquired hereunder, including in connection with Nations initial public
offering. The Shareholder shall cause the Company to comply with all of the
covenants of the Company under this Agreement. Each of the parties agrees to
reasonably cooperate with the others in the preparation and filing of all forms,
notifications, reports and information, if any, required or reasonably deemed
advisable pursuant to any law, rule or regulation in connection with the
transactions contemplated by this Agreement, and to use their respective
reasonably best efforts to agree jointly on a method to overcome any objections
by any Governmental Authority to any such transactions. The parties also agree
to use best efforts to defend all lawsuits or other legal proceedings
challenging this Agreement or the consummation of the transactions contemplated
hereby and to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated hereby.
7.2. HSR ACT AND OTHER ACTIONS. Each of the parties hereto shall (i) make
promptly (and in no event later than ten (10) business days following the date
hereof) their respective filings, if any, and thereafter make any other required
submissions, under the HSR Act, with respect to the transactions contemplated
hereby, and (ii) use their reasonable best efforts to take, or cause to be
taken, all appropriate actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated herein, including,
without limitation, using their best efforts to obtain all licenses, permits,
consents, approvals, authorizations, qualifications and orders of any
Governmental Authority and parties to Contracts with the Company as are
necessary for the consummation of the transactions contemplated hereby. Each of
the parties agrees to cooperate with the others in the preparation and filing of
all forms, notifications, reports and information, if any, required or
reasonably deemed advisable pursuant to any law, rule or regulation in
connection with the transactions contemplated by this Agreement, and to use
their respective best efforts to agree jointly on a method to overcome any
objections by any Governmental Authority to any such transactions. The parties
also agree to use reasonable best efforts to defend all lawsuits or other legal
proceedings challenging this Agreement or the consummation of the transactions
contemplated hereby and to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated hereby.
7.3. NOTIFICATION OF CERTAIN MATTERS. The Company and the Shareholder shall
give prompt notice to Nations of the occurrence or non-occurrence of any event
which would likely cause any representation or warranty contained herein to be
untrue or inaccurate, or any covenant, condition, or agreement contained herein
not to be complied with or satisfied.
7.4. CONFIDENTIALITY; PUBLICITY. Except as may be required by law or as
otherwise permitted or expressly contemplated herein, no party hereto or their
respective Affiliates, employees, agents and representatives shall disclose to
any third party this Agreement or the subject matter or
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terms hereof without the prior consent of the other parties hereto. No press
release or other public announcement related to this Agreement or the
transactions contemplated hereby shall be issued by any party hereto without the
prior approval of the other parties.
7.5. NO OTHER DISCUSSIONS. The Company and the Shareholder agree that until
the termination of this Agreement, the Company, the Shareholder and their
respective Affiliates, employees, agents and representatives will not (i)
initiate, encourage the initiation by others of discussions or negotiations with
third parties or respond to solicitations by third persons relating to any
merger, sale or other disposition of any substantial part of the assets,
business or properties of the Company (whether by merger, consolidation, sale of
stock or otherwise), or (ii) enter into any agreement or commitment (whether or
not binding) with respect to any of the foregoing transactions. The Company and
the Shareholder will immediately notify Nations if any third party attempts to
initiate any solicitation, discussion or negotiation with respect to any of the
foregoing transactions.
7.6. DUE DILIGENCE REVIEW AND ENVIRONMENTAL ASSESSMENT. Nations shall be
entitled to conduct prior to the Closing a due diligence review of the assets,
properties, books and records of the Company and an environmental assessment of
the Leased Premises (hereinafter referred to as "Environmental Assessment"). The
Company shall (and shall cause their respective directors, officers, employees,
auditors, counsel and agents to) afford Nations and its officers, employees,
auditors, counsel and agents reasonable access at all reasonable times to the
properties, offices, and other facilities of the Company, to their respective
officers and employees and to all books and records, subject to applicable law,
and shall furnish such persons with all financial, operating and other data and
information as may be requested. The Environmental Assessment may include a
physical examination of the Leased Premises and any structures, facilities, or
equipment located thereon, soil samples, ground and surface water samples,
storage tank testing and review of pertinent records, documents, and licenses of
the Company. If the Environmental Assessment identifies environmental
contamination which requires remediation or further evaluation or if the results
of the Environmental Assessment or due diligence review are otherwise not
satisfactory to Nations in its sole discretion, then Nations may elect not to
close the transactions contemplated by this Agreement and to terminate this
Agreement. Nations' failure or decision not to conduct any such due diligence
review or Environmental Assessment, and any information provided to or obtained
by Nations, shall not affect any representation or warranty of the Company or
the Shareholder under this Agreement.
7.7. RESTRICTIVE COVENANTS. In order to assure that Nations will realize
the benefits of the transactions contemplated hereby, the Company and the
Shareholder agrees that he, and it will not:
(a) for a period of five (5) years following the Closing Date (the
"Noncompete Period"), directly or indirectly, alone or as a partner, joint
venturer, officer, director, employee, consultant, agent, independent
contractor, or security holder, of any company or business, engage in, or
finance, or provide financial assistance with respect to, any business activity
in the business of renting, selling, leasing, distributing, servicing or
repairing new or used equipment, spare parts and related supplies to industrial,
manufacturing, or construction customers (the "Equipment
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Business") in the states of Texas, Louisiana and Mississippi (the "Territory);
provided, however, that the beneficial ownership of less than five percent (5%)
of any class of securities of any entity having a class of equity securities
actively traded on a national securities exchange or over-the-counter market
shall not be deemed, in and of itself, to violate the prohibitions of this
Section;
(b) during the Noncompetition Period, directly or indirectly, (i)
induce any customer acquired hereunder or any other customer of Nations in the
Territory, any of its subsidiaries, successors and assigns (collectively the
"Nations Companies") to patronize any business which is directly or indirectly
in competition with the Equipment Business conducted by any of the Nations
Companies in the Territory; (ii) canvass, solicit or accept from any Person
which is a customer of the Equipment Business conducted by any of the Nations
Companies in the Territory, any such competitive business; or (iii) request or
advise any customer of the Equipment Business conducted by any of the Nations
Companies in the Territory to withdraw, curtail or cancel any such customer's
business with the Nations Companies or their successors;
(c) during the Noncompetition Period, directly or indirectly, solicit
the employment of any person employed by the Nations Companies in the Territory,
or in any manner seek to induce any employee of the Nations Companies to leave
his or her employment, but may hire former employees of the Nations Companies;
and
(d) at any time following the Closing Date, directly or indirectly, in
any way utilize, disclose, copy, reproduce or retain in his possession any of
the Company's proprietary rights or records acquired hereunder, including, but
not limited to, any customer lists.
The Company and the Shareholder agree and acknowledge that the restrictions
contained in this Section are reasonable in scope and duration, and are
necessary to protect the Nations Companies. The Company and the Shareholder
agree and acknowledge that any breach of this Section will cause irreparable
injury to the Nations Companies and upon any breach or threatened breach of any
provision of this Section, the Nations Companies shall be entitled to injunctive
relief, specific performance or other equitable relief; provided, however, that
this shall in no way limit any other remedies which the Nations Companies may
have as a result of such breach, including the right to seek monetary damages.
The parties hereto agree that Nations may assign, without limitation, the
foregoing restrictive covenants to any successor to Nations's Equipment
Business.
7.8. CONTRACTS; CONSENTS. Without the consent of Nations, prior to the
Closing, (i) the Company shall not terminate or otherwise modify or amend any of
its Contracts, and (ii) the Company shall use its reasonable best efforts to
obtain and receive consents to the transactions contemplated hereby and waivers
of rights to terminate or modify any rights or obligations of the Company from
any Person(s) from whom such consent or waiver is required under any Contract to
which the Company or the Purchased Assets are bound (including the Customer
Contracts, the Assumed Contracts, the Equipment Leases and the Real Property
Leases) as of a date not more than ten (10) days prior to the Closing Date, or
who, as a result of the transactions contemplated hereby,
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would have such rights to terminate or modify such contracts, either by the
terms thereof or as a matter of law.
7.9. RECEIVABLES. At or prior to the Closing Date, the Company shall
deliver to Nations a true, complete and correct list of all receivables to be
transferred to Nations pursuant to Section 1.1(h). From and after the Closing,
the Company shall cooperate with Nations upon Nations' request to notify each
payor of any receivables of such transfer to Nations. The Company and the
Shareholder hereby agrees and acknowledges that any and all payments in respect
of such receivables that are received by the Company or the Shareholder after
the Closing shall be held in trust for the benefit of Nations and delivered to
Nations as soon as practicable.
7.10. PAYOFF AND ESTOPPEL LETTERS. Prior to the Closing, the Company shall
request and deliver to Nations payoff and estoppel letters reasonably requested
by Nations from all holders of any Indebtedness of the Company to be paid off on
or prior to the Closing, which letters shall contain payoff amounts, per diem
interest, wire transfer instructions and an agreement to deliver to Nations,
upon full payment of any such Assumed Indebtedness, UCC-3 termination
statements, satisfactions of mortgage or other appropriate releases and any
original promissory notes or other evidences of indebtedness marked canceled.
7.11. TRANSACTION DOCUMENTS. The Shareholder shall enter into a three (3)
year employment agreement, the form of which is attached as Exhibit B, the
Promissory Note, the Xxxx of Sale, Assignment and Assumption Agreement, the form
of which is attached as Exhibit E, and such other closing documents requested by
Nations and the Shareholder.
7.12. LEASES. (a) Nations, the Company and the Shareholder (as applicable)
shall at Closing enter into leases, the form of which is attached as Exhibit C,
for each of the facilities of the Company. Nations (or its designee) shall enter
into the leases for an initial term of ten (10) years at the Houston, Port
Xxxxxx, Lake Xxxxxxx, Slidel, Conroe and Longview facilities, and for an initial
term of five (5) years at Texas City, Baton Rouge and Lake Xxxxxxx (corporate
office) facilities at the aggregate rental price of Six Hundred Thousand
($600,000) per year, with three, five year renewal options with an increase in
rent prior to the beginning of the sixth year, based on the cumulative change in
the Consumer Price Index ("CPI") from the inception date. Thereafter, rent shall
increase annually based upon the change in the CPI from the previous year. The
leases will be triple net leases and contain cross default provisions. Nations
will be responsible for repairs other than structural repairs to roof, sidewalls
and foundation. The leases will also provide for a purchase option by Nations at
the fair market value. If during the term or any renewal term of the leases the
Company or affiliate shall have received a bona fide arm's length offer to
purchase the property which is acceptable to landlord from any third party the
Company or affiliate shall send a notice to Nations. Nations shall have ten (10)
business days to accept the offer in writing on the exact terms made by such
third party and forty-five (45) days to close the transaction. Any decision not
to exercise such right shall not affect its right to purchase stated above.
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(b) On or prior to the Closing Date, the Shareholder shall either
obtain a nondisturbance agreement in favor of Nations (acceptable to Nations) or
prepay the obligation of the Company to purchase prior to the Closing Date the
Houston property and shall extinguish any existing mortgage, deed of trust,
liens or encumbrances affecting the Owned Properties or obtain a nondisturbance
agreement in favor of Nations (acceptable to Nations).
7.13. REGISTRATION RIGHTS. In connection with the issuance of the
Promissory Note and the conversion of the principal balance of such Promissory
Note to Nation's common stock, the Stockholder shall receive certain
registration rights in accordance with a registration rights agreement, the form
of which is attached as Exhibit D.
7.14. AWARD OF OPTIONS. Nations shall grant to qualified management of the
Company options to purchase an amount of Nations common stock $.01 par value
(the "Common Stock") equal to Five Hundred Thousand Dollars ($500,000) in the
aggregate at a price per share equal to the underwritten initial public offering
("IPO") price of Nations Common Stock. The options shall be issued in accordance
with the terms of the Nations Stock Option Plan in effect at the time. The
recipients of such options shall be determined by the Shareholder. The options
shall vest during a four (4) year period after issuance, at a rate of
twenty-five (25%) percent per year on each anniversary of the date of issuance.
7.15. POST-CLOSING ACTIONS OF THE COMPANY. Within ten (10) days following
the Closing, the Company shall change its names to a name that does not include
the words "associate", "rental" or "equipment" or any derivation thereof.
7.16. EXECUTION OF FURTHER DOCUMENTS. From and after the Closing, upon the
reasonable request of Nations, the Company shall execute, acknowledge and
deliver all such further deeds, bills of sale, assignments, transfers,
conveyances, powers of attorney and assurance as may be required or appropriate
to convey and transfer to and vest in Nations and protect its right, title and
interest in all of the Purchased Assets and to carry out the transactions
contemplated by this Agreement.
7.17. SHAREHOLDER VOTE. The Shareholder, in executing this Agreement,
consents as Shareholder of the Company to the transactions contemplated hereby,
and waives notice of any meeting in connection therewith.
7.18. ACCESS TO INFORMATION. Nations agrees to provide to Company and the
Shareholder access to financial and accounting records of the Company for tax
purposes. Any expense incurred by Nations including but not limited to research
and copying costs shall be paid by Company or the Shareholder.
7.19. EMPLOYEES. Nations agrees to on the Closing Date to: (a) offer
employment to all of the Company's employees at the same wages with
substantially similar benefits provided, however, that no third party
beneficiary rights are meant to be created by the parties hereby which shall
obligate Nations to employ, to pay a certain wage or to provide a specific
benefit to any
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employee of the Company; (b) not to close a facility of the Company for 60 days
after the Closing Date; and (c) employees shall receive full credit for prior
service with the Company for purposes of vesting only and not benefit accrual
for all benefit plans, medical plans and severance plans.
7.20. LEASE TERMINATION, PURCHASE OF CERTAIN ASSETS. On the Closing Date,
the Company shall terminate all existing leases (except for the facility located
at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx) relating to the Owned Property. The
Company shall purchase prior to the Closing all of A-MOP's right, title and
interest in all of its equipment, whether owned, leased or pursuant to rental
purchase options and shall assume the Indebtedness relating thereto. The
purchase price for such assets shall be equal to the difference of the book
value of such assets, less the Indebtedness related thereto.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF NATIONS
The obligations of Nations to effect the transactions contemplated hereby
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions, any or all of which may be waived in whole or in part in
writing by Nations:
8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Company and the
Shareholder contained in this Agreement shall be true and correct at and as of
the Closing Date in all material respects (materiality to be defined for such
purpose as $10,000 per Disclosure Schedule) with the same force and effect as
though made at and as of that time except (i) for matters specifically permitted
by or disclosed on any Schedule to this Agreement, (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date, and (iii) for the
representations and warranties made in Sections 5.8, 5.9, 5.10, 5.11, 5.12,
5.13, 5.14, 5.18 and 5.22, which may be amended by the Company and the
Shareholder as of the Closing Date to reflect changes from the date hereof, so
long as such amendment does not materially affect the prior disclosures on such
schedule, provided that in the event of (iii) above, any action permitted by
Nations pursuant to Section 6.1 shall be deemed to have supplemented any
applicable schedules for all purposes under this Agreement. The Company and
Shareholder shall have performed and complied with all of their respective
obligations required by this Agreement to be performed or complied with at or
prior to the Closing Date. The Company and Shareholder shall have delivered to
Nations a certificate, dated as of the Closing Date, duly signed (in the case of
the Company, by its President), certifying that such representations and
warranties are true and correct in all material respects and that all such
obligations have been complied with and performed.
8.2. NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between the
date hereof and the Closing Date, (i) there shall have been no Material Adverse
Change in the Purchased Assets or the Business, (ii) there shall have been no
adverse federal, state or local legislative or regulatory
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change affecting in any material respect the Purchased Assets or the Business,
and (iii) none of the Purchased Assets in excess of $100,000 shall have been
damaged by fire, flood, casualty, act of God or the public enemy or other cause
(regardless of insurance coverage for such damage), and there shall have been
delivered to Nations a certificate to that effect, dated the Closing Date and
signed by or on behalf of the Company and the Shareholder.
8.3. CORPORATE CERTIFICATE. The Company shall have delivered to Nations (i)
copies of its articles of incorporation and bylaws as in effect immediately
prior to the Closing Date, (ii) copies of resolutions adopted by its Board of
Directors and Shareholder authorizing the transactions contemplated by this
Agreement, and (iii) a certificate of good standing issued by the Secretary of
State of Texas as of a date not more than ten (10) days prior to the Closing
Date, certified in the case of subsections (i) and (ii) of this Section as of
the Closing Date by the Secretary of the Company as being true, correct and
complete.
8.4. DELIVERY OF PURCHASED ASSETS. At the Closing, and the Company shall
duly execute and deliver to Nations (or its assignee) a Xxxx of Sale, Assignment
and Assumption in the form attached hereto as Exhibit E, and such other
instruments of transfer of title as are necessary to transfer to Nations (or its
assignee) good and marketable title to the Purchased Assets free and clear of
any Liens other than the Assumed Liabilities and Permitted Liens, and shall
deliver to Nations (or its assignee) immediate possession of the Purchased
Assets.
8.5. OPINION OF COUNSEL. Nations shall have received an opinion dated as of
the Closing Date from counsel for the Company and the Shareholder, in form and
substance acceptable to Nations, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Texas and is
authorized to carry on the business now conducted by them and to own or
lease the properties now owned or leased by them;
(ii) The Company has obtained all necessary corporate
authorizations to consummate the Acquisition and the other transactions
contemplated hereby;
(iii) The execution and delivery of the Transaction Documents by,
the Company and the Shareholder, the performance by the Company and the
Shareholder of their respective obligations hereunder and thereunder and
the consummation by the Company and the Shareholder of the transactions
contemplated by this Agreement will not (a) contravene any provision of the
articles of incorporation or bylaws of the Company, or (b) violate or
conflict with any law, statute, ordinance, rule, regulation, decree, writ,
injunction, judgment or order of any Governmental Authority or of any
arbitration award which is either applicable to,
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binding upon or enforceable against the Company, the Shareholder or the
Purchased Assets; and
(iv) Each of the Transaction Documents is a valid and binding
obligation of the Company and the Shareholder, and enforceable against each
of them in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally or general
equitable principles.
8.6. NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the transactions contemplated hereby, and which, in the reasonable judgment of
Nations, makes it inadvisable to proceed with the transactions contemplated
hereby.
8.7. DUE DILIGENCE REVIEW. Nations shall have completed its due diligence
review of the Company, the Purchased Assets and the Business, the audit of the
Company prepared on behalf of Nations by Xxxxxx Xxxxxxxx & Co., and its
Environmental Assessment of the Company, and in each such case shall be
satisfied with the results of such review, audit and assessment.
8.8. APPROVALS. Nations or the Company shall have received all necessary
and material permits, licenses, franchises, consents and approvals of all
governmental authorities, lenders, lessors and other third parties, including
under the HSR Act. Any applicable HSR Act waiting period shall have expired or
been terminated.
8.9. CLOSING DOCUMENTS. The Company and Shareholder and the other parties
named therein shall have executed and delivered the Transaction Documents and
such other closing documents necessary to consummate the Acquisition.
8.10 MOVEMENT OF OWNED PROPERTY. The Shareholder shall cause the Owned
Property prior to the Closing Date to be owned by TJW, Sr./ SKW Properties, Ltd.
8.11 REMOVAL OF CERTAIN STORAGE TANKS. The Company shall have removed or
commenced the removal and cleanup or remediation action of the four Underground
Storage Tanks at the Houston property at the Shareholder and landlords expense.
8.12 NONDISTURBANCE AGREEMENTS. The Company and the Shareholder shall have
obtained the nondisturbance agreements or taken the actions contemplated by
Section 7.12(b).
8.13 MOVEMENT OF ASSETS. The Company and the Shareholder shall have caused
A-MOP to have transferred all equipment constituting Purchased Assets to the
Company and the Company shall have assumed all Indebtedness related to such
assets.
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ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF
THE COMPANY AND THE SHAREHOLDER
The obligations of the Company and the Shareholder to effect the
transactions contemplated hereby shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, any or all of which may be
waived in whole or in part in writing by the Company and the Shareholder:
9.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. Subject to Section 8.1, the representations and warranties of
Nations contained in this Agreement shall be true and correct in all material
respects (materiality to be defined as $10,000 per Disclosure Schedule) at and
as of the Closing Date with the same force and effect as though made at and as
of that time except (i) for changes specifically permitted by or disclosed
pursuant to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and correct
as of such date. Nations shall have performed and complied with all of its
obligations required by this Agreement to be performed or complied with at or
prior to the Closing Date. Nations shall have delivered to the Company and the
Shareholder a certificate, dated as of the Closing Date, and signed by an
officer thereof, certifying that such representations and warranties are true
and correct in all material respects, and that all such obligations have been
performed and complied with, in all material respects.
9.2. PURCHASE PRICE. At the Closing, Nations shall pay to the Company the
Purchase Price and assume the Assumed Liabilities.
9.3. NO ORDER OR INJUNCTION. There shall not be pending by or before any
court or other governmental body an order or injunction restraining or
prohibiting the transactions contemplated hereby.
9.4. APPROVALS. Nations or the Company shall have received all necessary
and material permits, licenses, franchises, consents and approvals of all
governmental authorities, lenders, lessors and other third parties, including
under the HSR Act. Any applicable HSR Act waiting period shall have expired or
been terminated.
9.5. OPINION OF COUNSEL. The Company shall have received an opinion dated
as of the Closing Date from counsel for Nations, in form and substance
acceptable to the Company and the Shareholders, to the effect that:
(i) Nations is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
is authorized to carry on the business now conducted by them and to own or
lease the properties now owned or leased by them;
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(ii) Nations has obtained all necessary corporate authorizations
to consummate the Acquisition and the other transactions contemplated
hereby;
(iii) The execution and delivery of the Transaction Documents by,
Nations, the performance by Nations obligations thereunder and the
consummation by Nations of the transactions contemplated by this Agreement
will not (a) contravene any provision of the certificate of incorporation
or bylaws of Nations, or (b) violate or conflict with any law, statute,
ordinance, rule, regulation, decree, writ, injunction, judgment or order of
any Governmental Authority or of any arbitration award which is either
applicable to, binding upon or enforceable against Nations; and
(iv) Each of the Transaction Documents is a valid and binding
obligation of Nations, and enforceable against Nations in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally or general equitable principles.
9.6. CLOSING DOCUMENTS. Nations shall have executed and delivered the
Transaction Documents and such other closing documents necessary to consummate
the Acquisition.
9.7. RELEASE OF GUARANTIES. All guaranties or contingent obligations of the
Shareholder relating to the Assumed Liabilities shall have been terminated and
are of no further force and effect.
ARTICLE X
INDEMNIFICATION
10.1. AGREEMENT TO INDEMNIFY.
(a) From and after the Closing, the Company and the Shareholder,
jointly and severally, agree to protect, defend, indemnify and hold Nations
harmless from and will pay to Nations the aggregate of any loss, liability,
claim, action, damage, expense (including costs of investigation and
defense and reasonable attorneys fees), penalty, or fine, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly
or indirectly, from or in connection with:
(i) any breach of any representation or warranty made by the
Company, and the Shareholder in this Agreement (but giving effect to
the Company's Disclosure Schedules) or any other certificate or
document delivered by or on behalf of the Company or the Shareholder
pursuant to this Agreement;
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(ii) any breach by the Company or the Shareholder of any
covenant or obligation of the Company or Shareholder in this
Agreement;
(iii) any claims (regardless of whether made before or after
Closing) that arise from any facts or circumstances, acts or
omissions occurring prior to the Closing Date or relate to the
Excluded Assets and the Excluded Liabilities; and
(iv) any claims related to any obligation, liability, operations
or the business of A-MOP.
(b) Nations, agrees to protect, defend, indemnify and hold the
Company and the Shareholder harmless from and will pay to the Company and
Shareholder the aggregate of any Damages arising, directly or indirectly,
from or in connection with:
(i) any breach of any representation or warranty made by
Nations in this Asset Purchase Agreement or any other certificate or
document delivered by or on behalf of Nations pursuant to this
Agreement;
(ii) any breach by Nations of any covenant or obligation of
Nations in this Agreement; or
(iii) the Assumed Liabilities, except for any liability or
obligation relating to any default under any of the Assumed
Liabilities to the extent such default existed prior to the Closing
(subject to the Threshold provided at Section 10.2).
10.2. LIMITATIONS ON AMOUNT. Neither the Company nor the Shareholder will
have liability for indemnification or Damages until the total of all Damages
with respect to such matters exceeds $500,000, and then only for the amount by
which such Damages exceed $500,000 (the "Threshold"). The maximum liability for
which the Company and the Shareholders shall be liable for under this Agreement
shall be $10,000,000. However, this limitation will not apply to any fraud by
the Company or the Shareholders.
10.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by any party in this Agreement shall survive the Closing for a
period of one year from the Closing Date, provided that the representations and
warranties concerning environmental matters shall survive for three years from
the Closing Date, and the representations and warranty concerning Taxes set
forth in Section 5.18 shall survive until expiration of the applicable statute
of limitations. If a party receives notice of a claim for indemnification before
the expiration of the applicable representation or warranty, the party shall
remain responsible for any damages relating thereto notwithstanding the
subsequent expiration of such representation or warranty. Notwithstanding any
knowledge of facts
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determined or determinable by any party by investigation, each party shall have
the right to fully rely on the representations, warranties, covenants and
agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
10.4. INDEMNIFICATION PROCEDURE. The indemnification obligations under this
Letter Agreement or the Asset Purchase Agreement shall be subject to the
following procedures:
(a) Third Party Claims. Promptly after receipt by an indemnified
party (an "Indemnitee") under Section 10.1 of notice of the commencement of
any action against it, such Indemnitee will, if a claim is to be made
against an indemnifying party (an "Indemnitor") under such Section, give
notice to the Indemnitor of the commencement of such action, but the
failure to notify the Indemnitor will not relieve the Indemnitor of any
liability that it may have to any Indemnitee, except to the extent that the
Indemnitor demonstrate that the defense of such action is prejudiced by the
Indemnitee's failure to give such notice. With respect to any such action,
the Indemnitor will be entitled to participate in such action and, to the
extent that it wishes (unless (i) the Indemnitor is also a party to such
action and the Indemnitee determines in good faith that joint
representation would be inappropriate, or (ii) the Indemnitor fails to
provide reasonable assurance to the Indemnitee of its financial capacity to
defend such action and provide indemnification with respect to such
action), to assume the defense of such action with counsel satisfactory to
the Indemnitee and, after notice from the Indemnitor to the Indemnitee of
its election to assume the defense of such action, the Indemnitor will not,
as long as it diligently conducts such defense, be liable to the Indemnitee
for any fees of other counsel or any other expenses with respect to the
defense of such action, in each case subsequently incurred by the
Indemnitee in connection with the defense of such action, other than
reasonable costs of investigation. If the Indemnitor assumes the defense of
an action, (i) no compromise or settlement of such claims may be effected
by the Indemnitor without the Indemnitee's consent unless (A) there is no
finding or admission of any violation of law or any violation of the rights
of any Person and no effect on any other claims that may be made against
the Indemnitor, and (B) the sole relief provided is monetary damages that
are paid in full by the Indemnitor; and (ii)the Indemnitee will have no
liability with respect to any compromise or settlement of such claims
effected without its consent (which may not be unreasonably withheld). If
notice is given to an Indemnitor of the commencement of any action and the
Indemnitor does not, within ten days after the Indemnitee's notice is
given, give notice to the Indemnitee of its election to assume the defense
of such action, the Indemnitor will be bound by any determination made in
such action or any reasonable compromise or settlement effected by the
Indemnitee.
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Notwithstanding the foregoing, if an Indemnitee determines in good faith
that there is a reasonable probability that an action may adversely affect
it or its affiliates other than as a result of monetary damages for which
it would be entitled to indemnification under this Agreement, the
Indemnitee may, by notice to the Indemnitor, assume the exclusive right to
defend, compromise, or settle such action, but the Indemnitor will not be
bound by any determination of an action so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
(b) Other Claims. A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice to the party from
whom indemnification is sought.
(c) Cost of Environmental Clean-up. The Company and the Shareholders
will be entitled to control any clean-up and any related proceeding
relating to indemnification claims arising from a breach by the Company and
the Shareholders of representations relating to environmental matters.
10.5. SOLE AND EXCLUSIVE REMEDY. The parties agree that except as otherwise
provided in this Agreement, to the extent permitted by applicable law, the
indemnification provided in this Article shall be the sole and exclusive relief
and remedy available to the parties hereto with respect to a breach of a
representation, warranty, covenant or agreement contained in this Agreement
after the Closing occurs, and Nations shall not be entitled to rescission of
this Agreement. In no event shall the Company or the Shareholder be liable to
Nations for Nations' consequential, incidental, exemplary or punitive damages.
Moreover, no damage, claim, loss, liability, cost or expense shall be deemed to
have been sustained by Nations to the extent covered by insurance policies with
respect thereto. Notwithstanding the foregoing, no provision in this Agreement
shall in any manner limit the right of a party to seek judicial or other relief
for fraud. Prior to one year from the Closing Date, Nations shall have the right
to set off against the Promissory Note for its Damages, with such set off
limited to $2 million prior to December 31, 1998, and such right of setoff being
reduced to $700,000 thereafter (the "Set Off Amount"). Nations may not set off
against the Promissory Note for claims for Damages after June 30, 1999.
10.6. SET OFF FOR INDEMNIFICATION OBLIGATION s. A set off against the
Promissory Note of any Damages for which the Company or the Shareholder may be
responsible pursuant to this Agreement is, subject, to the following terms and
conditions:
(a) Nations shall give written notice to Shareholder of any claim for
Damages or any other damages hereunder, which notice shall set forth (i)
the amount of Damages or other loss, damage, cost or expense which Nations
claims to have sustained by reason thereof, and (ii) the basis of the claim
therefor.
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(b) Such set off and recoupment shall be effected on the later to
occur of the expiration of ten (10) days from the date of such notice (the
"Notice of Contest Period") or, if such claim is contested, the date the
dispute is resolved.
(c) If, prior to the expiration of the Notice of Contest Period, the
Shareholder shall notify Nations in writing of an intention to dispute the
claim and if such dispute is not resolved within thirty (30) days after
expiration of such period (the "Resolution Period"), then Nations may elect
that such dispute shall be resolved by a committee of three (3) arbitrators
(one appointed by the Shareholder, one appointed by Nations and one
appointed by the two arbitrators so appointed), which shall be appointed
within sixty (60) days after the expiration of the Resolution Period. The
arbitrators shall abide by the rules of the American Arbitration
Association and their decision shall be made within forty-five (45) days of
being appointed and shall be final and binding on all parties.
10.7. NO BAR. Subject to Section 10.2, if the Set Off Amount is
insufficient to set off any claim for Damages hereunder (or has been paid by
Nations prior to the making of resolution of such claim), then Nations may take
any action or exercise any remedy available to it by appropriate legal
proceedings to collect the Damages.
ARTICLE XI
DEFINITIONS
11.1. DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, as in effect on the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the
treasury regulations promulgated thereunder.
"Contract" means any agreement, contract, lease, note, mortgage,
indenture, loan agreement, franchise agreement, covenant, employment
agreement, license, instrument, purchase and sales order, undertaking,
commitment, obligation whether written or oral, express or implied.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
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"GAAP" means generally accepted accounting principles in effect in
the United States of America as of April 30, 1998.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" shall have the meaning set forth in Section 5.10.
"Knowledge" or "knowledge" with respect to the Company and the
Shareholder, means the actual knowledge of Xxxxxx X. Xxxxx, Xx., Xxxxx
Xxxxxxxx, Xxxxxx Xxxxxx, and Xxx Xxxxxx.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, but not limited to, any conditional
sale or other title retention agreement, any lease in the nature thereof,
and the filing of or agreement to give any financing statement under the
Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or
charge).
"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, liabilities,
rights, obligations, operations, business or prospects which change (or
effect) individually or in the aggregate, is materially adverse to such
condition, properties, assets, liabilities, rights, obligations,
operations, business or prospects.
"Permitted Liens" means (i) those consisting of zoning or planning
restrictions, easements, permits and other restrictions or limitations on
the use of such property, (ii) Liens for current taxes, assessments or
governmental charges or levies on property not yet due and delinquent, and
(iii) warehousemen's, mechanics', carriers', landlords', repairmen's or
other similar Liens relating to the Purchased Assets or Assumed Liabilities
arising in the ordinary course of business and securing obligations of the
Company.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association,
joint venture, Governmental Authority or other entity, of whatever nature.
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"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Taxes; and
"Taxes" means all taxes, fees or other assessments, including, but
not limited to, income, excise, property, sales, franchise, intangible,
withholding, social security, employment and unemployment taxes imposed by
any federal, state, local or foreign governmental agency, and any interest
or penalties related thereto.
11.2. OTHER DEFINITIONAL PROVISIONS. All terms defined in this Agreement
shall have the defined meanings when used in any certificates, reports or other
documents made or delivered pursuant hereto or thereto, unless the context
otherwise requires. Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa. All matters of an accounting
nature in connection with this Agreement and the transactions contemplated
hereby shall be determined in accordance with GAAP applied on a basis consistent
with prior periods, where applicable. As used herein, the neuter gender shall
also denote the masculine and feminine, and the masculine gender shall also
denote the neuter and feminine, where the context so permits.
ARTICLE XII
TERMINATION
12.1. TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date: 14. by mutual written consent of all of the parties hereto; or
15. by Nations in the event of a material breach by the Company or the
Shareholder of any provision of this Agreement; 16. by the Company or the
Shareholder in the event of a material breach by Nations of any provision of
this Agreement; 17. by Nations, the Company or the Shareholder if the Closing
shall not have occurred by August 31, 1998 or (e) by Nations pursuant to Section
8.7 if it is not satisfied with its investigation, audit or assessment. If
Nations does not close by August 31, 1998 for any reason other than a material
breach of this Agreement by the Company, or a material adverse change to the
Company since March 31, 1998, Nations shall reimburse the Company for all of its
documented expenses up to $200,000 (including supportable time value of the
Company's employees and the value of the Company's materials).
12.2. EFFECT OF TERMINATION. In the event of termination of this Agreement
pursuant to Section 12.1, this Agreement shall forthwith become void and of no
further force and effect, and the parties hereto shall be released from any and
all obligations hereunder; provided, however, that nothing herein shall relieve
any party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
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ARTICLE XIII
GENERAL PROVISIONS
13.1. NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage pre-paid), guaranteed overnight
delivery, or facsimile transmission if such transmission is confirmed by
delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall designate
in writing to the other party):
(a) IF TO NATIONS:
NationsRent, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telecopy: (000) 000-0000
WITH A COPY TO:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxx X.X. Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxx
Telecopy: (000) 000-0000
(b) IF TO THE COMPANY OR THE SHAREHOLDER:
Xxxxxx X. Xxxxx, Xx.
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy: 000-000-0000
WITH A COPY TO:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P
000 Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Mount
Telecopy:000-000-0000
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Notice shall be deemed given on the date sent if sent by facsimile
transmission and on the date delivered (or the date of refusal of delivery) if
sent by overnight delivery or certified or registered mail.
13.2. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Exhibits and Schedules attached hereto) and other documents
delivered at the Closing pursuant hereto, contains the entire understanding of
the parties in respect of its subject matter and supersedes all prior agreements
and understandings (oral or written) between or among the parties with respect
to such subject matter including the Letter Agreement dated May 15, 1998, which
shall be superceded by this Agreement and the other agreements referenced
herein. The Exhibits and Schedules constitute a part hereof as though set forth
in full above. Except for the Nations Companies which are intended to be third
party beneficiaries of this Agreement, this Agreement is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.
13.3. EXPENSES. Except as otherwise provided herein, the parties shall pay
their own fees and expenses, including their own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby. Nation
hereby agrees to pay any and all sales, transfer and use taxes or fees which may
become due and owing as a result of the completion of the transactions
contemplated hereby.
13.4. AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
the exercise of any other right, power or privilege. No waiver of any breach of
any provision shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision, nor shall any waiver be implied from
any course of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other agreement shall be
deemed to be an extension of the time for performance of any other obligations
or any other acts. The rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
13.5. BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be (i) assigned by the Company or the Shareholder without the
prior written consent of Nations or (ii) assigned by Nations without the prior
written consent of the Company and the Shareholder, which consent shall not be
unreasonably withheld, provided that Nations shall have the right to assign its
rights and obligation under this Agreement to a wholly-owned subsidiary of
Nations without the prior consent of the Company or the Shareholder.
Notwithstanding the above, in the event of any assignment by any party hereto,
the assigning party shall remain obligated for all obligations of such assigning
party under this Agreement.
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13.6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument. A telecopy signature of any party shall
be considered to have the same binding legal effect as an original signature.
13.7. INTERPRETATION. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
13.8. CONSTRUCTION. The parties agree and acknowledge that they have
jointly participated in the negotiation and drafting of this Agreement. In the
event of an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement. The parties agree that
prior drafts of this Agreement shall not be deemed to provide any evidence as to
the meaning of any provision hereof or the intent of the parties with respect
thereto. Any reference to any federal, state, local, or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
there exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
13.9. DISPUTE RESOLUTION; GOVERNING LAW; SEVERABILITY. Any controversy or
claim arising out of or relating to this Agreement, or the breach thereof, shall
be settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in Houston, Texas and judgment
upon the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof, and shall not be appealable. Judicial proceedings may be
commenced only to enforce this arbitration agreement or to enforce the results
of arbitration; provided that such prohibition shall not apply in the event that
a court ordered injunction is an appropriate remedy for a breach of this
Agreement or if a cause of action is being asserted for fraud. This Agreement
shall be construed in accordance with and governed for all purposes by the laws
of the State of Texas applicable to contracts executed and to be wholly
performed within such State. If any word, phrase, sentence, clause, section,
subsection or provision of this Agreement as applied to an party or to any
circumstance is adjudged by a court to be invalid or unenforceable, the same
will in no way affect any other circumstance or the validity or enforceability
of any other word, phrase, sentence, clause, section, subsection or provision of
this Agreement. If any provision of this Agreement, or any part thereof, is held
to be unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision,
and/or to delete specific words or phrases, and in its reduced form, such
provision shall then be enforceable and shall be enforced.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
NATIONSRENT, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
------------------------------------
Title: Vice President
-----------------------------------
ASSOCIATED RENTAL EQUIPMENT MANAGEMENT
COMPANY, INC., a Texas corporation
By: /s/ Xxxxxx X. Xxxxx, Xx.
------------------------------------------
Xxxxxx X. Xxxxx, Xx., President
/s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------------------
Xxxxxx X. Xxxxx, Xx., Individually
SPOUSAL JOINDER
The undersigned hereby executes this Agreement solely to transfer her community
property interest in the assets being purchased by Nations hereunder.
/s/ Xxxxx X. Xxxxx
---------------------------------------------
Xxxxx X. Xxxxx
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JOINDER OF A-MOP, INC.
The undersigned duly authorized officer of A-MOP, Inc. hereby executes this
Agreement solely to acknowledge the obligation hereunder to transfer all of the
equipment of A-MOP, Inc. and to assign all of its liabilities constituting
Assumed Liabilities hereunder to the Company prior to the Closing.
A-MOP INC.
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
Xxxxxx X. Xxxxx, Xx.
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