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EXHIBIT 10.10
AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered into as of the
20th day of December, 1997, by and among NationsRent of West Virginia, Inc., a
Delaware corporation ("Buyer"), Xxxxxxx X. Xxxxx, III and Xxxx X. Xxxxxx (the
"Principal Sellers") and Xxxxx X. Xxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx,
Xx., Xxxxxx Xxxxxx, Xxxxxx Orders, and Xxxxxx Xxxxxx (the "Other Sellers", and
together with the Principal Sellers, the "Sellers") and Titan Rentals, Inc., a
West Virginia corporation ("Company"). The Buyer and the Sellers are referred to
collectively herein as the "Parties."
RECITALS
The Sellers in the aggregate own all of the outstanding capital stock
of the Company. The Sellers desire to sell, and the Buyer desires to purchase,
all of the issued and outstanding shares (the "Shares") of capital stock of the
Company, for the consideration and on the terms set forth in this Agreement.
STATEMENT OF AGREEMENT
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows.
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Article I:
"Accounts Receivable" has the meaning set forth in ss.3.8(a) below.
"Agreement" has the meaning set forth in the first paragraph of this
Agreement.
"Affiliate" shall mean a person that directly, or indirectly through
one or more intermediaries, or is controlled by, or is under common control with
the Person specified.
"Applicable Contract" shall mean any Contract (a) under which the
Company has or may acquire any rights, (b) under which the Company has or may
become subject to any obligation or liability, or (c) by which the Company or
any of the assets owned or used by it is or may become bound.
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"Company VEBA" means a VEBA whose members include employees of the
Company or any ERISA Affiliate of the Company.
"Consent" shall mean any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization).
"Contemplated Transactions" shall mean all of the transactions
contemplated by this Agreement, including:
(a) the sale of the Shares by Sellers to Buyer;
(b) the execution, delivery, and performance of the Promissory
Notes, the Employment Agreements, the Lease Agreements, and the
Sellers' Releases;
(c) the performance by Buyer and Sellers of their respective
covenants and obligations under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and
exercise of control over the Company.
"Contract" shall mean any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Contract Terminations" has the meaning set forth in ss.3.2(b)(vii)
below.
"Damages" has the meaning set forth in ss.10.2 below.
"Employment Agreements" has the meaning set forth in ss.2.4(a)(iii)
below.
"Encumbrance" shall mean any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
"Environment" shall mean soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and any
other environmental medium or natural resource.
"Environmental, Health, and Safety Liabilities" shall mean any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under Environmental Law or Occupational Safety and Health Law and consisting of
or relating to:
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(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and
health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses
arising under Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective
action, including any investigation, cleanup, removal, containment, or
other remediation or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety and Health Law
(whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource
damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law or Occupational
Safety and Health Law.
The terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., as amended
("CERCLA").
"Environmental Law" shall mean any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous
substances or materials, violations of discharge limits, or other
prohibitions and of the commencements of activities, such as resource
extraction or construction, that could have significant impact on the
Environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health
or the Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
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(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other
potentially harmful substances;
(g) the Cleanup of pollutants that have been released,
preventing the threat of release, or paying the costs of such Cleanup
or prevention; or
(h) making responsible parties pay private parties, or groups
of them, for damages done to their health or the Environment, or
permitting self-appointed representatives of the public interest to
recover for injuries done to public assets.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, or any successor law, and regulations and rules issued pursuant to
that Act or any successor law.
"ERISA Affiliate" means, with respect to the Company, any trade or
business (whether or not incorporated) that is part of the same controlled
group, or under common control with, or part of an affiliated service group that
includes the Company, within the meaning of IRC ss.414 and/or ORC
ss.4001(a)(14).
"Facilities" shall mean any real property, leaseholds, or other
interests currently or formerly owned or operated by the Company and any
buildings, plants, structures, or equipment (including motor vehicles) currently
or formerly owned or operated by the Company.
"Financial Statements" has the meaning set forth in ss.3.4 below.
"GAAP" shall mean generally accepted United States generally accepted
accounting principles, as in effect from time to time, applied on a consistent
basis.
"Governmental Authorization" shall mean any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body" shall mean any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
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(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature.
"Hazardous Activity" shall mean the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Company.
"Hazardous Materials" shall mean any waste or other substance that is
listed, defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or solution thereof,
and specifically including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos containing materials.
"Indebtedness" shall mean as applied to any Person, means: (i) all
obligations of that Person to repay or pay money borrowed from another Person or
the deferred portion of the purchase price of services or property; (ii) all
obligations of that Person under bankers acceptances; (iii) all obligations of
that Person under letters of credit; (iv) obligations of others which that
Person has directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the Ordinary Course of Business), discounted or sold
with recourse or agreed (contingently or otherwise) to purchase or repurchase or
otherwise acquire, or in respect of which that Person has agreed to supply or
advance funds (whether by way of loan, stock purchase, capital contribution or
otherwise) or otherwise to become directly or indirectly liable; (v) all
obligations evidenced or secured by any mortgage, pledge, lien or conditional
sale or other title retention agreement to which any property or asset owned or
held by that Person is subject, whether or not the obligation evidenced or
secured thereby shall have been assumed; and (vi) all other items (except items
of capital stock, capital surplus, general contingency reserves, deferred income
taxes, retained earnings and amounts attributable to minority interest, if any)
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of that Person as of the date
Indebtedness is to be determined, including obligations of that Person properly
treated as capital lease obligations or their equivalent under GAAP.
"Indemnified Persons" has the meaning set forth in ss.10.2 below.
"Intellectual Property Assets" has the meaning set forth in ss.3.23
below.
"IRC" shall mean the Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
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"IRS" shall mean the United States Internal Revenue Service or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
"Knowledge" shall mean with respect to a particular fact or matter:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonable inquiry concerning the existence of such fact
or other matter.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving, or who
has at any time served, as a director, officer, partner, executor, or trustee of
such Person (or in any similar capacity), or as an employee having
responsibility for such facts or matters, has, or at any time had, Knowledge of
such fact or other matter.
"Lease Agreements" has the meaning set forth in ss.2.4(a)(iv) below.
"Lease Property" means each of the properties to be leased by Buyer
located near St. Albans and Fairmont, West Virginia, respectively.
"Legal Requirement" shall mean any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
"Maximum Indebtedness" has the meaning set forth in ss.3.30 below.
"Most Recent Balance Sheet" has the meaning set forth in ss.3.4(a)
below.
"Most Recent Financial Statements" has the meaning set forth in
ss.3.4(a) below.
"Most Recent Fiscal Month End" has the meaning set forth in ss.3.4(a)
below.
"Most Recent Fiscal Year End" has the meaning set forth in ss.3.4(a)
below.
"Multiemployer Plan" has the meaning given in ERISA ss.3(37)(A) and
4001.
"Occupational Safety and Health Law" shall mean any Legal Requirement
designed to provide safe and healthful working conditions and to reduce
occupational safety and health hazards, and any program, whether governmental or
private (including those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful working conditions.
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"Order" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" shall mean an action taken by a Person
that is:
(a) consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of
such Person;
(b) not required to be authorized by the board of directors of
such Person (or by any Person or group of Persons exercising similar
authority) and is not required to be specifically authorized by the
parent company (if any) of such Person; and
(c) similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any
Person or group of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
"Organizational Documents" shall mean (a) the articles or certificate
of incorporation and the bylaws or regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) any charter or similar document adopted or filed
in connection with the creation, formation, or organization of a Person; and (e)
any amendment to any of the foregoing.
"Other Benefit Obligations" means all obligations, arrangements, or
customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, officers, employees, or agents, other than obligations, arrangements,
and practices that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon the amount of
service rendered, sabbatical policies, severance payment policies, and fringe
benefits within the meaning of IRC ss.132.
"Other Sellers" has the meaning set forth in the first paragraph of
this Agreement.
"Parent Subsidiary" means any corporation with respect to which the
Parent owns a majority of the common stock or has the power to vote or direct
the voting of sufficient securities to elect a majority of the directors.
"Parties" has the meaning set forth in the first paragraph of this
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
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"Pension Plan" has the meaning given in ERISA ss.3(2)(A).
"Person" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
"Plan" has the meaning given in ERISA ss.3(3).
"Plan Sponsor" has the meaning given in ERISA ss.3(16)(B).
"Principal Sellers" has the meaning set forth in the first paragraph of
this Agreement.
"Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Promissory Notes" shall mean the promissory notes described in
ss.2.4(b)(ii) below.
"Qualified Plan" means any Plan that meets or purports to meet the
requirements of IRC ss.401(a).
"Related Person" shall mean with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material
Interest; and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer,
partner, executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly
under common control with such specified Person;
(b) any Person that holds a Material Interest in such
specified Person;
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(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar
capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity);
and
(f) any Related Person of any individual described in clause
(b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 5% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity securities or
equity interests in a Person.
"Release" shall mean any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional.
"Rental Equipment" shall mean all machinery, equipment, tools,
supplies, and other similar tangible personal property used or held for use by
the Company or its customers.
"Representative" shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"Restrictions" shall mean any restriction of transfer (other than
Restrictions under the Securities Act and state securities laws), Taxes,
security interests, options, warrants, pre-emptive rights, purchase rights,
contracts, commitments, equities, claims, demands or other restrictions in the
right to vote, sell, pledge, transfer or otherwise dispose of the Shares.
"Securities Act" shall mean the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"Seller Notes" mean (a) the Promissory Notes and (b) any other notes
whether outstanding on the date of the Promissory Notes or thereafter created,
incurred or assumed, issued by the Parent or any Parent Subsidiary in connection
with the acquisition by Parent or any Parent Subsidiary of any other business,
properties, stock or assets of the sellers of such businesses, properties, stock
or assets.
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"Sellers" has the meaning set forth in the first paragraph of this
Agreement.
"Sellers' Disclosure Schedule" shall mean the disclosure schedule to be
delivered by Sellers to Buyer prior to Buyer's execution of this Agreement.
"Sellers' Releases" has the meaning set forth in ss.2.4(a)(ii) below.
"Senior Indebtedness" shall mean the principal of (and premium, if any)
and interest on (a) all bank financing and other similar indebtedness of the
ultimate parent of Buyer, NationsRent, Inc., a Delaware corporation ("Parent"),
other than the Seller Notes, whether outstanding on the date of the Promissory
Notes or thereafter created, incurred or assumed, which is (i) reasonably
determined by Parent to be necessary or appropriate (A) in connection with the
acquisition by Parent or any Parent Subsidiary of any businesses, properties, or
assets, or (B) to finance the working capital needs of Parent or any Parent
Subsidiary, and (ii) for money borrowed; (b) obligations of Parent or any Parent
Subsidiary, whether outstanding on the date of the Promissory Notes or
thereafter created, incurred or assumed, as lessee under (I) leases of
properties or assets, which leases are required to be capitalized on the balance
sheet of Parent or any Parent Subsidiary under GAAP, and (II) leases of
properties or assets made as part of any sale and lease-back transaction to
which Parent or any Parent Subsidiary is a party; and (c) amendments, renewals,
extensions, modifications and refundings of any such indebtedness or obligation,
unless in any case in the instrument creating or evidencing any such
indebtedness or obligation or pursuant to which the same is outstanding it is
provided that such indebtedness or obligation is not superior in right of
payment to the Promissory Notes.
"Shares" has the meaning set forth in the Recitals of this Agreement.
"Subsidiary" shall mean with respect to any Person (the "Owner"), any
corporation or other Person of which securities or other interests having the
power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred), are held by the Owner or one or more of its
Subsidiaries.
"Tax" shall mean any tax (including, but not limited to, any income
tax, capital gains tax, value-added tax, sales or use tax, employment tax,
excise tax, gross receipts tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other fee,
and any related charge or amount (including any fine, penalty, interest, or
addition to tax), imposed, assessed, or collected by or under the authority of
any Governmental Body or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
"Tax Return" shall mean any return (including any information return),
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required
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to be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with
any Legal Requirement relating to any Tax.
"Threat of Release" shall mean a substantial likelihood of a Release
that may require action in order to prevent or mitigate damage to the
Environment that may result from such Release.
"Threatened" shall mean a claim, Proceeding, dispute, action, or other
matter pursuant to which if any demand or statement has been made (orally or in
writing) or any notice has been given (orally or in writing), or if any other
event has occurred or any other circumstances exist, that would lead a prudent
Person to conclude that such a claim, Proceeding, dispute, action, or other
matter is likely to be asserted, commenced, taken, or otherwise pursued in the
future.
"Title IV Plans" means all Pension Plans that are subject to Title IV
of ERISA 29 U.S.C. ss.1301 et seq., other than Multiemployer Plans.
"VEBA" means a voluntary employees' beneficiary association under IRC
ss.501(c)(9).
"Welfare Plan" has the meaning given in ERISA ss.3(1).
ARTICLE II
SALE AND TRANSFER OF SHARES; CLOSING
SS.2.1 BASIC TRANSACTION. On and subject to the terms and conditions of
this Agreement, at the Closing, the Buyer agrees to purchase from the Sellers
and the Sellers agree to sell to the Buyer, all of the Shares free and clear of
all Restrictions.
SS.2.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for
the Shares will be Six Million Dollars ($6,000,000), representing the sum of the
Cash Payment as specified in ss.2.4(b)(i) plus the principal amounts of the
Promissory Notes to be delivered by Buyer to Sellers pursuant to ss.2.4(b)(ii)
at the Closing.
SS.2.3 CLOSING. The closing of the Contemplated Transactions (the
"Closing") shall take place at the Columbus offices of Buyer's counsel, Squire,
Xxxxxxx & Xxxxxxx L.L.P., at 10:00 a.m. (local time) on the later of (i)
December 23, 1997 or (ii) the date that is five business days following the
satisfaction or waiver of all conditions to the obligations of the parties to
consummate the Contemplated Transactions (other than conditions with respect to
actions the respective Parties will take at the Closing itself), or at such
other time and place as the parties may agree. Subject to the provisions of
Article IX, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to this
ss.2.3 will not result in the termination of this Agreement and will not relieve
any party of any obligation under this Agreement.
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SS.2.4 CLOSING OBLIGATIONS. At the Closing,
(a) The Sellers and the Company will deliver to the
Buyer:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers), and
notarized, for transfer to Buyer;
(ii) releases in the form of Exhibit 2.4(a)(ii)
executed by Sellers (collectively, "Sellers' Releases");
(iii) an employment agreement in the form of Exhibit
2.4(a)(iii)(A), executed by Xxxxxxx X. Xxxxx, III, and an
employment agreement in the form of Exhibit 2.4(a)(iii)(B),
executed by Xxxx X. Xxxxxx (collectively, the "Employment
Agreements");
(iv) separate lease agreements, each in the form of
Exhibit 2.4(a)(iv), executed by Titan Partners with respect to
each Lease Property (collectively, the "Lease Agreements") and
(v) the various opinions, certificates,
instruments and other documents referred to in Article VII of
this Agreement;
(vi) certified copies of the articles of
incorporation and by-laws of the Company;
(vii) complete stock books, stock ledgers, minute
books and corporate seals of the Company; and
(viii) resignations of such officers and directors
(form their offices as such) of the Company as the Buyer may
request.
(b) Buyer will deliver to Sellers:
(i) $4,500,000 (the "Cash Payment"), in
immediately available funds by wire transfer to account of the
Sellers, with a bank in Charleston, West Virginia designated
by the Sellers, by notice to the Buyer, not later than two (2)
business days prior to the Closing Date;
(ii) the following convertible promissory notes (in
the form of Exhibit 2.4(b)(ii)) (each a "Promissory Note" and
together, the "Promissory Notes") of NationsRent, Inc., a
Delaware corporation and the parent corporation of the Buyer,
which Promissory Notes will bear interest at the rate of 6.5%
per annum (subject
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to a certain conversion period adjustment) and be subordinate
to the Senior Indebtedness:
(A) $387,096 Promissory Note payable to
Xxxxxxx X. Xxxxx, III,
(B) $241,935 Promissory Note payable to
Xxxxx X. Xxxxx,
(C) $193,549 Promissory Note payable to Xxxx
X. Xxxxxxxx,
(D) $193,549 Promissory Note payable to
Xxxxxx X. Xxxxxxxx, Xx.,
(E) $193,549 Promissory Note payable to Xxxx
X. Xxxxxx,
(F) $96,774 Promissory Note payable to
Xxxxxx Xxxxxx,
(G) $96,774 Promissory Note payable to
Xxxxxx Orders, and
(H) $96,774 Promissory Note payable to
Xxxxxx Xxxxxx;
(iii) the Employment Agreements, executed by Buyer;
(iv) the Lease Agreements, executed by Buyer; and
(v) the various opinions, certificates, instruments
and other documents referred to in Article VIII of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND THE COMPANY
The Sellers and the Company represent and warrant to Buyer that the
statements contained in this Article III are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Article III). Such representations and warranties
are made and given subject to the disclosures in the Sellers' Disclosure
Schedule accompanying this Agreement executed, delivered and satisfied by the
Sellers and the Company.
SS.3.1 ORGANIZATION AND GOOD STANDING.
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct its
business as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its
obligations under Applicable Contracts. The Company is duly qualified
to do business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.
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(b) The Sellers and the Company have delivered to Buyer copies
of the Organizational Documents of the Company, as currently in effect.
(c) Attachment ss.3.1(c) contains a complete and accurate list
for the Company of its name, its jurisdiction of incorporation, other
jurisdictions in which it is authorized to do business, and its
capitalization (including the identity of each shareholder and the
number of shares held by each).
SS.3.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers and the Company enforceable against them in
accordance with its terms. Upon the execution and delivery by Sellers
of the Sellers' Releases, the Employment Agreements and the Lease
Agreements (collectively, the "Sellers' Closing Documents"), the
Sellers' Closing Documents will constitute the legal, valid, and
binding obligations of Sellers, enforceable against them in accordance
with their respective terms. Sellers have the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this
Agreement and the Sellers' Closing Documents and to perform their
obligations under this Agreement and the Sellers' Closing Documents.
(b) Except as set forth in ss.3.2(b) of the Sellers'
Disclosure Schedule, neither the execution and delivery of this
Agreement nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or without
notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents
of the Company, or (B) any resolution adopted by the board of
directors or the shareholders of the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person
the right to challenge any of the Contemplated Transactions or
to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which Sellers, or the Company, or
any of the assets owned or used by the Company, may be
subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by the
Company;
15
(iv) to the Knowledge of Sellers, cause any of the
assets owned by the Company to be reassessed or revalued by
any taxing authority or other Governmental Body;
(v) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person
the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract;
(vi) violate any applicable law, rule, regulation,
judgment, injunction, order or decree or alter or violate or
impair any license, franchise, permit or other similar
authorization held by the Company;
(vii) require any consent or other action by any
Person under, conflict with, result in a breach of, constitute
a default under, or give rise to any right of termination,
cancellation or acceleration of any right or obligation of the
Sellers or the Company to a loss of any benefit to which the
Company is entitled under, any agreement, contract, lease,
license, instrument or other arrangement binding upon the
Company or its properties or assets (any such event being a
"Contract Termination"); or
(viii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or
used by the Company.
(c) Except as set forth in ss.3.2(c) of the Sellers'
Disclosure Schedule, neither the Sellers nor the Company is or will be
required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
(d) The Sellers are acquiring the Promissory Notes for their
own account and not with a view to distribution within the meaning of
Section 2(11) of the Securities Act.
SS.3.3 CAPITALIZATION.
(a) The authorized equity securities of the Company consist of
155 shares of common stock, no par value, all of which are issued and
outstanding and constitute the Shares. Sellers are and will be on the
Closing Date the record and beneficial owners and holders of the
Shares, free and clear of all Encumbrances.
(b) No legend or other reference to any purported Encumbrance
appears upon any certificate representing equity securities of the
Company. All of the issued and outstanding equity securities of the
Company have been duly authorized and validly issued, fully paid and
nonassessable and are held of record by the Sellers, free and clear of
all
16
Encumbrances. Except as set forth in ss.3.3(b) of the Sellers'
Disclosure Schedule, there are no outstanding (i) shares of capital
stock or voting securities of the Company other than the Shares, (ii)
securities of the Company convertible into or exchangeable for shares
of capital stock or voting securities or ownership interests in the
Company or (iii) options or other rights to securities or ownership
interests in or securities convertible into or exchangeable for capital
stock or voting securities or ownership interests in the Company (the
items in clauses (i), (ii), and (iii) being referred to collectively as
"Company Securities"). There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any Company
Securities. The Company has no outstanding any bonds, debentures, notes
or other obligations the holders of which have the right to vote (or
are convertible into or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter.
(c) None of the outstanding equity securities or other
securities of the Company were issued in violation of the Securities
Act or any other Legal Requirement.
(d) Except as set forth in ss.3.3(d) of the Sellers'
Disclosure Schedule, the Company does not own or have any Contract to
acquire any equity securities or other securities of any Person or any
direct or indirect equity or ownership interest in any other business.
SS.3.4 FINANCIAL STATEMENTS.
(a) The Sellers and the Company have delivered to the Buyer
the following financial statements (collectively, the "Financial
Statements") that have been compiled by Xxxxxxxx X. Xxxxx, certified
public accountant: (i) unaudited balance sheet ("Balance Sheet") and
statements of income, changes in shareholders' equity, and cash flow as
of and for the fiscal year ended December 31, 1996 (the "Most Recent
Fiscal Year End"), and (ii) unaudited balance sheet (the "Most Recent
Balance Sheet") and statements of income, changes in shareholders'
equity, and cash flow (the "Most Recent Financial Statements") as of
and for the nine months ended September 30, 1997 (the "Most Recent
Fiscal Month End").
(b) The Financial Statements are (i) complete and correct and
consistent with the books and records of the Company (which books and
records are complete and correct); (ii) are prepared in accordance with
the income tax basis of accounting and standards established by the
American Institute of Certified Public Accountants applied on a
consistent basis throughout the periods covered thereby; and (iii)
present fairly the financial condition and the results of operations,
changes in shareholders' equity, and cash flow of the Company as at the
respective dates of and for the periods referred to in such financial
statements, subject to the absence of notes (that, if presented, would
not materially alter the information presented in said Financial
Statements. No financial
17
statements of any other Person are required by GAAP to be included in
consolidated financial statements with the Company.
SS.3.5 BOOKS AND RECORDS. The books of account, stock record books,
and other records of the Company (specifically excluding the minute books), all
of which have been made available to the Buyer, are complete and correct and
have been maintained in accordance with sound business practices, including the
maintenance of an adequate system of internal controls, and accurately reflect
all material transactions. The minute books of the Company are not materially
incomplete or incorrect and the Company will not be adversely affected by the
manner in which such minute books have been maintained or by the actions taken
by the shareholders, the boards of directors, and the committees of the boards
of directors of the Company which are not fully reflected in such minute books.
At the Closing, all of the foregoing books and records will be in the possession
of the Company.
SS.3.6 TITLE TO PROPERTIES; ENCUMBRANCES.
(a) ss.3.6(a) of the Sellers' Disclosure Schedule contains a
complete and accurate list of all real property, leaseholds, or other
interests therein owned by the Company. Sellers and the Company have
delivered or made available to Buyer copies of the deeds and other
instruments (as recorded) by which the Company acquired such real
property and interests, and copies of all title insurance policies,
opinions, abstracts, and surveys in the possession of Sellers or the
Company and relating to such property or interests.
(b) The Company owns (with good and marketable title in the
case of real property, subject only to the matters permitted by the
following sentence) all the properties and assets (whether real,
personal, or mixed and whether tangible or intangible) that they
purport to own located in the facilities owned or operated by the
Company or reflected as owned in the books and records of the Company,
including all of the properties and assets reflected in the Financial
Statements (except for inventory and Rental Equipment sold since the
Most Recent Fiscal Month End, in the Ordinary Course of Business), and
all of the properties and assets purchased or otherwise acquired by the
Company since the Most Recent Fiscal Month End (except for inventory
and Rental Equipment subsequently sold in the Ordinary Course of
Business), which subsequently purchased or acquired properties and
assets (other than inventory, Rental Equipment, and short-term
investments) are listed in ss.3.6(b) of the Sellers' Disclosure
Schedule.
(c) All material properties and assets reflected in the Most
Recent Balance Sheet are free and clear of all Encumbrances and are
not, in the case of real property, subject to any rights of way,
building use restrictions, exceptions, variances, reservations, or
limitations of any nature except, with respect to all such properties
and assets, (i) mortgages or security interests shown on the Most
Recent Balance Sheet as securing specified liabilities or obligations,
with respect to which no default (or event that, with notice or lapse
of time or both, would constitute a default) exists, (ii) mortgages or
security
18
interests incurred in the Ordinary Course of Business in connection
with the purchase of property or assets after the Most Recent Fiscal
Month End (such mortgages and security interests being limited to the
property or assets so acquired), with respect to which no default (or
event that, with notice or lapse of time or both, would constitute a
default) exists, (iii) liens for current taxes not yet due, and (iv)
with respect to real property, (A) minor imperfections of title, if
any, none of which is substantial in amount, materially detracts from
the value or impairs the use of the property subject thereto, or
impairs the operations of the Company and (B) zoning laws and other
land use restrictions that do not impair the present or anticipated use
of the property subject thereto. All buildings, plants, and structures
owned by the Company lie wholly within the boundaries of the real
property owned by the Company and do not encroach upon the property of,
or otherwise conflict with the property rights of, any other Person.
SS.3.7 CONDITION AND SUFFICIENCY OF ASSETS. The buildings, plants,
structures, and equipment of the Company are structurally sound, are in good
operating condition and repair (subject to normal wear and tear), and are
adequate for the uses to which they are being put, and none of such buildings,
plants, structures, or equipment is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost. The building, plants, structures, and equipment of the Company are
sufficient for the continued conduct of the Company's business after the Closing
in substantially the same manner as conducted prior to the Closing.
SS.3.8 ACCOUNTS RECEIVABLE.
(a) All accounts receivable of the Company that are reflected
on the Most Recent Balance Sheet or on the accounting records of the
Company as of the Closing Date (collectively, the "Accounts
Receivable") represent or will represent valid obligations arising from
sales actually made or services actually performed in the Ordinary
Course of Business. Unless paid prior to the Closing Date, the Accounts
Receivable are, or will be as of the Closing Date, current and
collectible.
(b) ss.3.8(b) of the Sellers' Disclosure Schedule contains a
complete and accurate list and description of Proceedings pending as of
the date hereof to pursue collection of the Accounts Receivable (the
"Collection Actions A/R"). There is no contest, claim, or right of
set-off, other than adjustments in the Ordinary Course of Business,
under any Contract with any obligor of an Accounts Receivable relating
to the amount or validity of such Accounts Receivable.
(c) ss.3.8(c) of the Sellers' Disclosure Schedule contains a
complete and accurate list of all Accounts Receivable as of the Most
Recent Fiscal Month End, which list sets forth the aging of such
Accounts Receivable.
19
SS.3.9 INVENTORY. All inventory of the Company, whether or not
reflected in the Most Recent Balance Sheet, consists of a quality and quantity
usable and salable in the Ordinary Course of Business, except for obsolete items
and items of below-standard quality, all of which have been written off or
written down to net realizable value in the Most Recent Balance Sheet. All such
inventories not written off have been priced at the lower of cost or net
realizable value on a first in, first out basis. To the Knowledge of Sellers,
the quantities of each item of inventory of the Company are not excessive, but
are reasonable and consistent with normal industry practices.
SS.3.10 RENTAL EQUIPMENT. All Rental Equipment of the Company,
whether or not reflected in the Most Recent Balance Sheet, consists of a quality
and quantity usable, rentable, or salable in the Ordinary Course of Business,
except for obsolete items and items of below-standard quality, all of which have
been written off or written down to net realizable value in the Most Recent
Balance Sheet. All such Rental Equipment not written off has been recorded at
net realizable value and has been depreciated consistent with the economic life
of such Rental Equipment. To the Knowledge of Sellers, the quantities of each
item of such Rental Equipment are not excessive, but are reasonable and
consistent with normal industry practices. All such Rental Equipment is in good
operating condition and repair, subject to normal wear and tear, and has been
maintained in accordance with normal industry practice.
SS.3.11 NO UNDISCLOSED LIABILITIES. Except as set forth in ss.3.11 of
the Sellers' Disclosure Schedule, the Company does not have any liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Most Recent Balance Sheet and trade
payables and accrued expenses incurred in the Ordinary Course of Business since
the date thereof.
SS.3.12 TAXES.
(a) The Company has filed or caused to be filed on a timely
basis all Tax Returns that are or were required to be filed by it,
either separately or as a member of a group of corporations, pursuant
to applicable Legal Requirements. The Sellers and the Company have
delivered or made available to Buyer copies of, and ss.3.12(a) of the
Sellers' Disclosure Schedule contains a complete and accurate list of,
all such Tax Returns (except sales Tax Returns) filed on or since
January 1, 1993. The Company has paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to
those Tax Returns or otherwise, or pursuant to any assessment received
by the Sellers or the Company, except such Taxes, if any, as are listed
in ss.3.12(a) of the Sellers' Disclosure Schedule and are being
contested in good faith and as to which adequate reserves (determined
in accordance with the basis of accounting used in the Financial
Statements) have been provided in the Most Recent Balance Sheet.
(b) The United States federal and state income Tax Returns of
the Company have been audited by the IRS or relevant state tax
authorities or are closed by the applicable statute of limitations for
all taxable years through December 31, 1993. ss.3.12(b)
20
of the Sellers' Disclosure Schedule contains a complete and accurate
list of all audits of all such Tax Returns, including a reasonably
detailed description of the nature and outcome of each audit. All
deficiencies proposed as a result of such audits have been paid,
reserved against, settled, or, as described in ss.3.12(a) of the
Sellers' Disclosure Schedule, are being contested in good faith by
appropriate proceedings. ss.3.12(a) of the Sellers' Disclosure Schedule
describes all adjustments to the United States federal income Tax
Returns filed by the Company or any group of corporations including the
Company for all taxable years since December 31, 1990, and the
resulting deficiencies proposed by the IRS.
(c) Except as described in ss.3.12(c) of the Sellers'
Disclosure Schedule, neither the Seller nor the Company has given or
been requested to give waivers or extensions (or is or would be subject
to a waiver or extension given by any other Person) of any statute of
limitations relating to the payment of Taxes of the Company or for
which the Company may be liable.
(d) The charges, accruals, and reserves with respect to Taxes
on the books of the Company are adequate (determined in accordance with
the basis of accounting used in the Financial Statements) and are at
least equal to the liability for Taxes of the Company. There exists no
proposed tax assessment against the Company except as disclosed in the
Most Recent Balance Sheet or in ss.3.12(d) of the Sellers' Disclosure
Schedule. No consent to the application of Section 341(f)(2) of the IRC
has been filed with respect to any property or assets held, acquired,
or to be acquired by the Company. All Taxes that the Company is or was
required by Legal Requirements to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to
the proper Governmental Body or other Person. There is no action, suit,
proceeding, investigation, audit, or claim now pending or Threatened by
any taxing authority related to the Company. No claim has ever been
made by any taxing authority in a jurisdiction where the Company does
not file Tax Returns that the Company is subject to taxation in such
jurisdiction. The Company has properly completed and filed all sales
tax exemption certificates for sales where tax was not charged.
(e) All Tax Returns filed by (or that include on a
consolidated basis) the Company are true, correct, and complete. There
is no tax sharing agreement (or equivalent agreement) that will require
any payment by the Company after the date of this Agreement. The
Company is not, or within the five-year period preceding the Closing
Date has not been, an "S" corporation. During the consistency period
(as defined in Section 338(h)(4) of the IRC with respect to the sale of
the Shares to Buyer), neither the Company nor any target affiliate (as
defined in Section 338(h)(6) of the IRC with respect to the sale of the
Shares to Buyer) has sold or will sell any property or assets to Buyer
or to any member of the affiliated group (as defined in Section
338(h)(5) of the IRC) that includes Buyer. ss.3.12(e) of the Sellers'
Disclosure Schedule lists all such target affiliates.
21
(f) The Company is not a party to any safe harbor lease within
the meaning of Section 168(f)(8) of the IRC, as in effect prior to
amendment by the Tax Equity and Fiscal Responsibility Act of 1982. The
Company is not, and never has been, a United States real property
holding corporation within the meaning of Section 897(c)(2) of the IRC.
No Seller is a "foreign person" as such term is defined in Section 1445
of the IRC. The Company is not a "consenting corporation" under Section
341(f) of the IRC. The Company has not entered into any compensatory
agreements with respect to the performance of services which payment
thereunder would result in a nondeductible expense to the Company
pursuant to Section 280G of the IRC. The Company has not participated
in an international boycott as defined in Section 999 of the IRC. The
Company has not agreed to make or is required to make any adjustment
under Section 481(a) of the IRC by reason of a change in accounting
method or otherwise.
SS.3.13 NO MATERIAL ADVERSE CHANGE. Except as set forth in ss.3.13
of the Sellers' Disclosure Schedule, since the Most Recent Fiscal Month End,
there has not been any material adverse change in the business, operations,
properties, prospects, assets, or condition of the Company, and no event has
occurred or circumstance exists that may result in such a material adverse
change.
SS.3.14 EMPLOYEE BENEFITS.
(a) ss.3.14(a) of the Sellers' Disclosure Schedule
contains or sets forth the following:
(i) a complete and accurate list of all Company
Plans, Company Other Benefit Obligations, and Company VEBAs,
and identifies as such all Company Plans that are (A) defined
benefit Pension Plans, (B) Qualified Plans, (C) Title IV
Plans, or (D) Multiemployer Plans.
(ii) a complete and accurate list of (A) all ERISA
Affiliates of the Company, and (B) all Plans of which any such
ERISA Affiliate is or was a Plan Sponsor, in which any such
ERISA Affiliate participates or has participated, or to which
any such ERISA Affiliate contributes or has contributed.
(iii) for each Multiemployer Plan, as of its last
valuation date, the amount of potential withdrawal liability
of the Company and the Company's other ERISA Affiliates,
calculated according to information made available pursuant to
ERISA ss. 4221(e).
(iv) a calculation of the liability of the Company
for post-retirement benefits other than pensions, made in
accordance with Financial Accounting Statement 106 of the
Financial Accounting Standards Board, regardless of whether
the Company is required by this Statement to disclose such
information.
22
(v) the financial cost of all obligations owed under
any Company Plan or Company Other Benefit Obligation that is
not subject to the disclosure and reporting requirements of
ERISA.
(b) The Sellers and the Company have delivered to Buyer:
(i) all documents that set forth the terms of each
Company Plan, Company Other Benefit Obligation, or Company
VEBA and of any related trust, including (A) all plan
descriptions and summary plan descriptions of Company Plans
for which Sellers or the Company or any ERISA Affiliate of the
Company are required to prepare, file, and distribute, and (B)
all summaries and descriptions furnished to participants and
beneficiaries regarding Company Plans, Company Other Benefit
Obligations, and Company VEBAs for which a plan description or
summary plan description is not required;
(ii) all personnel, payroll, and employment manuals
and policies;
(iii) all collective bargaining agreements pursuant
to which contributions have been made or obligations incurred
(including both pension and welfare benefits) by the Company
and the ERISA Affiliates of the Company, and all collective
bargaining agreements pursuant to which contributions are
being made or obligations are owed by such entities;
(iv) a written description of any Company Plan or
Company Other Benefit Obligation that is not otherwise in
writing;
(v) all registration statements filed with respect
to any Company Plan and Company Other Benefit Obligation;
(vi) all insurance policies purchased by or to
provide benefits under any Company Plan and Company Other
Benefit Obligation;
(vii) all contracts with third party administrators,
actuaries, investment managers, consultants, and other
independent contractors that relate to any Company Plan,
Company Other Benefit Obligation, or Company VEBA;
(viii) all reports submitted within the four years
preceding the date of this Agreement by third party
administrators, actuaries, investment managers, consultants,
or other independent contractors with respect to any Company
Plan, Company Other Benefit Obligation, or Company VEBA;
(ix) all notifications to employees of their rights
under ERISA ss.601 et seq. and IRC ss. 4980B;
23
(x) the Form 5500 filed in each of the most recent
three plan years with respect to each Company Plan and Company
Other Benefit Obligation, including all schedules thereto and
the opinions of independent accountants;
(xi) all notices that were given by the Company or
any ERISA Affiliate of the Company or any Company Plan to the
IRS, the U.S. Department of Labor, the PBGC, or any
participant or beneficiary, pursuant to statute, regulation,
or otherwise, within the four years preceding the date of this
Agreement, including notices that are expressly mentioned
elsewhere in this ss.3.14;
(xii) all notices that were given by the IRS, the
PBGC, or the Department of Labor to the Company, any ERISA
Affiliate of the Company, or any Company Plan within the four
years preceding the date of this Agreement;
(xiii) with respect to Qualified Plan and VEBAs, the
most recent determination letter for each Company Plan that is
a Qualified Plan, and exemption in response to the filing of
IRS Form 1024 for each Company VEBA; and
(xiv) with respect to Title IV Plans, the Form
PBGC-I filed for each of the three most recent plan years.
(c) Except as set forth in ss.3.14(c) of the Sellers'
Disclosure Schedule:
(i) The Company and the Company's ERISA Affiliates
have performed all of respective obligations under all Company
Plan, Company Other Benefit Obligations, and Company VEBAs.
The Company has made appropriate entries in its financial
records and statements for all obligations and liabilities
under such Company Plan, Company VEBAs, and Company Other
Benefit Obligation that have accrued but are not due.
(ii) No statement, either written or oral, has been
made by the Company to any Person with regard to any Plan or
Other Benefit Obligation that was not in accordance with the
Plan or Other Benefit Obligation and that could have an
adverse economic consequence to the Company or to Buyer.
(iii) The Company, with respect to all Company Plan,
Company Other Benefits Obligations, and Company VEBAs, are,
and each Company Plan, Company Other Benefit Obligation, and
Company VEBA is, in full compliance with ERISA, the IRC, and
other applicable Laws including the provisions of such Laws
expressly mentioned in this ss.3.14, and with any applicable
collective bargaining agreement.
24
(A) No transactions prohibited by ERISA
ss.406 and no "prohibited transaction" under IRC
ss.4975(c) have occurred with respect to any Company
Plan.
(B) No Seller or the Company or any ERISA
Affiliate of the Company has any liability to the IRS
with respect to any Plan, including any liability
imposed by Chapter 43 of the IRC.
(C) No Seller or the Company or any ERISA
Affiliate of the Company has any liability to the
PBGC with respect to any Plan or has any liability
under ERISA ss.502 or ss.4071.
(D) All filings required by ERISA and the
IRC as to each Company Plan, Company VEBA, and
Company Other Benefit Obligation, have been timely
filed, and all notices and disclosures to
participants required by either ERISA or the IRC have
been timely provided.
(E) All contributions and payments made or
accrued with respect to all Company Plans, Company
Other Benefit Obligations, and Company VEBAs are
deductible under IRC ss.162 or ss.404. No amount, or
any asset of any Company Plan or Company VEBA, is
subject to tax as unrelated business taxable income.
(iv) Each Company Plan and Company Other Benefit
Obligation can be terminated within thirty days, without
payment of any additional contribution or amount and without
the vesting or acceleration of any benefits promised by such
Plan.
(v) Since December 31, 1993, there has been no
establishment or amendment of any Company Plan, Company VEBA,
or Company Other Benefit Obligation.
(vi) No event has occurred or circumstance exists
that could result in a material increase in premium costs of
Company Plans and Company Other Benefit Obligations that are
insured, or a material increase in benefit costs of such
Company Plan and Company Other Benefit Obligation that are
self-insured.
(vii) Other than claims for benefits submitted by
participants or beneficiaries, no claim against, or legal
proceeding involving, any Company Plan, Company Other Benefit
Obligation, or Company VEBA is pending or, to the Knowledge of
Sellers', is pending or Threatened.
25
(viii) Each Company Plan that is a Qualified Plan is
qualified in form and operation under IRC ss.401(a); each
trust for each such Plan is exempt from federal income tax
under IRC ss.501(a). Each Company VEBA is exempt from federal
income tax and qualifies under IRC ss.501(c)(9). No event has
occurred or circumstance exists that will or could give rise
to disqualification or loss of tax-exempt status of any such
Qualified Plan or trust or Company VEBA.
(ix) With respect to each Company Plan, the Company
and each ERISA Affiliate of the Company has met the minimum
funding standard, and has made all contributions required,
under ERISA ss.302 and IRC ss.412.
(x) No Company Plan is subject to Title IV of
ERISA.
(xi) The Company has paid all amounts due to the
PBGC pursuant to ERISA ss.4007.
(xii) Neither the Company nor any ERISA Affiliate of
the Company has ceased operations at any facility or has
withdrawn from any Title IV Plan or has engaged in a
transaction in a manner that would subject the Company or any
ERISA Affiliate of the Company, or any other entity or Sellers
to liability under ERISA ss.4062(e), ss.4063, ss.4064 or
ss.4069.
(xiii) Neither the Company nor any ERISA Affiliate of
the Company has filed a notice of intent to terminate any Plan
or has adopted any amendment to treat a Plan as terminated.
The PBGC has not instituted proceedings to terminate any
Company Plan. No event has occurred or circumstance exists
that may constitute grounds under ERISA ss.4042 for the
termination of, or the appointment of a trustee to administer,
any Company Plan.
(xiv) No amendment has been made, or is reasonably
expected to be made, to any Plan that has required or could
require the provision of security under ERISA ss.307 or IRC
ss.401(a)(29).
(xv) No accumulated funding deficiency, whether or
not waived, exists with respect to any Company Plan; no event
has occurred or circumstance exists that may result in an
accumulated funding deficiency as of the last day of the
current plan year of any such Company Plan.
(xvi) The actuarial report for each Company Plan
that is a Title IV Plan fairly presents the financial
condition and the results of operations of each such Title IV
Plan in accordance with GAAP.
26
(xvii) Since the last valuation date for each
Company Plan that is a Title IV Plan, no event has occurred or
circumstance exists that would increase the amount of benefits
under any such Title IV Plan or that would cause the excess of
such Title IV Plan assets over benefit liabilities (as defined
in ERISA ss.4001) to decrease, or the amount by which benefit
liabilities exceed assets to increase; and
(xviii) The market value of assets equal or exceeded
(and will, as of the Closing Date, equal or exceed) the
present value of "benefit liabilities" (within the meaning of
ERISA ss.4001(a)(16)) thereunder determined in accordance with
both (A) such Title IVB Plan's actuarial valuation assumptions
in effect for the most recent prior plan year, and (B) the
provisions of Title IV of ERISA on a Title IV Plan termination
basis (assuming such Title IV Plan termination on each of such
dates).
(xix) No reportable event (as defined in ERISA
ss.4043 and in regulations issued thereunder) has occurred.
(xx) No Seller has Knowledge of any facts or
circumstances that may give rise to any liability of any
Seller, the Company, any ERISA Affiliate of the Company, or
Buyer to the PBGC under Title IV of ERISA.
(xxi) Neither the Company nor any ERISA Affiliate
of the Company has ever established, maintained, or
contributed to or otherwise participated in, or had an
obligation to maintain, contribute to, or otherwise
participate in any Multiemployer Plan.
(xxii) Neither the Company nor any ERISA Affiliate
of the Company has withdrawn from any Multiemployer Plan with
respect to which there is any outstanding liability as of the
date of this Agreement. No event has occurred or circumstance
exists that presents a risk of the occurrence of any
withdrawal from, or the participation, termination,
reorganization, or insolvency of, any Multiemployer Plan that
could result in any liability of either the Company or Buyer
to a Multiemployer Plan.
(xxiii) Neither the Company nor any ERISA Affiliate
of the Company has received notice from any Multiemployer Plan
that it is in reorganization or is insolvent, that increased
contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, or that such
Multiemployer Plan intends to terminate or has terminated.
(xxiv) No Multiemployer Plan to which the Company or
any ERISA Affiliate of the Company contributes or has
contributed is a party to any pending
27
merger or asset or liability transfer or is subject to any
proceeding brought by the PBGC.
(xxv) Except to the extent required under ERISA
ss.601 et seq. and IRC ss.4980B, the Company does not provide
health or welfare benefits for any retired or former employee,
officer, or director, or any other person, and is not
obligated to provide health or welfare benefits to any active
employee, officer, director, or any other person following
retirement or other termination of service.
(xxvi) The Company has the right to modify and
terminate benefits to retirees (other than pensions) with
respect to both retired and active employees.
(xxvii) Sellers and the Company have complied with
the provisions of ERISA ss.601 et seq. and IRC ss.4980B.
(xxviii) No payment that is owed or may become due to
any director, officer, employee, or agent of the Company will
be non-deductible to the Company or subject to tax under IRC
ss.280G or ss.4999; nor will the Company be required to "gross
up" or otherwise compensate any such person because of the
imposition of any excise tax on a payment to such person.
(xxiv) The consummation of the Contemplated
Transactions will not result in the payment, vesting, or
acceleration of any benefit under any Company Plan or Company
Other Benefit Obligation.
SS.3.15 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS.
(a) Except as set forth in ss.3.15(a) of the Sellers'
Disclosure Schedule,
(i) the Company is, and at all times since
December 31, 1994 has been, in full compliance with each Legal
Requirement that is or was applicable to it or to the conduct
or operation of its business or the ownership or use of any of
its assets;
(ii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) (A) may
constitute or result in a violation by the Company of, or a
failure on the part of the Company to comply with, any Legal
Requirement, or (B) may give rise to any obligation on the
part of the Company to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature; and
(iii) the Company has not received, at any time,
any notice or other communication (whether oral or written)
from any Governmental Body or any
28
other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of the Company to undertake,
or to bear all or any portion of the cost of, any remedial
action of any nature.
(b) ss.3.15(b) of the Sellers' Disclosure Schedule
contains a complete and accurate list of each Governmental
Authorization (excluding vehicle licenses, a complete and accurate list
of which will be provided by Sellers and the Company at least five
business days prior to the Closing) that is held by the Company or that
otherwise relates to the business of, or to any of the assets owned or
used by the Company. Each Governmental Authorization listed in
ss.3.15(b) of the Sellers' Disclosure Schedule is valid and in full
force and effect. The Governmental Authorizations listed in ss.3.15(b)
of the Sellers' Disclosure Schedule collectively constitute all of the
Governmental Authorizations necessary to permit the Company to lawfully
conduct and operate their businesses in the manner they currently
conduct and operate such businesses and to permit the Company to own
and use its assets in the manner in which it currently owns and uses
such assets.
(c) Except as set forth in ss.3.15(c) of the Sellers'
Disclosure Schedule:
(i) the Company is, and at all times since December
31, 1993 has been, in full compliance with all of the terms
and requirements of each Governmental Authorization identified
or required to be identified in ss.3.15(b) of the Sellers'
Disclosure Schedule;
(ii) no event has occurred or circumstance exists
that may (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of
or a failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in
ss.3.15(b) of the Sellers' Disclosure Schedule, or (B) result
directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or
required to be listed in ss.3.15(b) of the Sellers' Disclosure
Schedule;
(iii) the Company has not received any notice or
other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual, proposed,
possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any
Governmental Authorization; and
(iv) all applications required to have been filed
for the renewal of the Governmental Authorizations listed or
required to be listed in ss.3.15(b) of the
29
Sellers' Disclosure Schedule have been duly filed on a timely
basis with the appropriate Governmental Bodies, and all other
filings required to have been made with respect to such
Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
SS.3.16 LEGAL PROCEEDINGS; ORDERS.
(a) ss.3.16(a) of the Sellers' Disclosure Schedule
contains a complete and correct list of each Proceeding by or against
the Company that is currently pending, has been pending at any time
since December 31, 1992, or is Threatened, and that:
(i) relates to or may affect the business of, or any
of the assets owned or used by the Company; or
(ii) challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering
with, any of the Contemplated Transactions.
In addition, (1) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such
Proceeding and (2) no Proceeding has been settled since December 31,
1992, for an amount greater than $5,000.00. Sellers have delivered to
Buyer copies of all pleadings, correspondence, and other documents
relating to each Proceeding (if any) listed in ss.3.16(a) of the
Sellers' Disclosure Schedule. The Proceedings listed in ss.3.16(a) of
the Sellers' Disclosure Schedule will not have a material adverse
effect on the business, operations, assets, condition, or prospects of
the Company.
(b) Except as set forth in ss.3.16(b) of the Sellers'
Disclosure Schedule,
(i) there is no Order to which the Company or any
of the assets owned or used by either the Company, is subject;
(ii) no Seller is subject to any Order that relates
to the business of, or any of the assets owned or used by, the
Company;
(iii) no officer or director of the Company is
subject to any Order that prohibits such officer or director
from engaging in or continuing any conduct, activity, or
practice relating to the business of the Company; and
(iv) to the Knowledge of Sellers, no agent or
employee of the Company is subject to any Order that prohibits
such agent or employee from engaging in or continuing any
conduct, activity, or practice relating to the business of the
Company.
(c) Except as set forth in ss.3.16(c) of the Sellers'
Disclosure Schedule,
30
(i) the Company is, and at all times since December
31, 1993 has been, in full compliance with all of the terms
and requirements of each Order to which it, or any of the
assets owned or used by it, is or has been subject;
(ii) no event has occurred or circumstance exists
that may constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any
term or requirement of any Order to which the Company, or any
of the assets owned or used by the Company, is subject; and
(iii) the Company has not received, at any time, any
notice or other communication (whether oral or written) from
any Governmental Body or any other Person regarding any
actual, alleged, possible, or potential violation of, or
failure to comply with, any term or requirement of any Order
to which the Company, or any of the assets owned or used by
the Company, is or has been subject.
SS.3.17 ABSENCE OF CERTAIN CHANGES AND EVENTS.
(a) Except as set forth in ss.3.17(a) of the Sellers'
Disclosure Schedule, since the Most Recent Fiscal Month End, the
Company has conducted its business only in the Ordinary Course of
Business and there has not been any:
(i) any event, occurrence, development or state of
circumstances or facts which has had or is reasonably expected
to have a material adverse effect, other than those resulting
from changes in general conditions (including laws and
regulations) applicable to the industry, or general economic
conditions;
(ii) any change in the authorized or issued capital
stock of the Company, any merger or consolidation with any
other Person, any declaration, setting aside or payment of any
dividend (whether in cash, securities or other property) or
other distribution with respect to any shares of capital stock
of the Company, or any repurchase, redemption or other
acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other material
ownership interests in, the Company, or the issuance or sale
by the Company of any capital stock or the issuance or sale by
the Company of any capital stock or the issuance or grant by
the Company of any option, warrant, call, commitment,
subscription, right to purchase or contract of any character
relating to its authorized or issued capital stock or any
securities convertible into, relating to or based on its
capital stock or any arrangement or contract with respect to
the purchase or voting of any shares of its or their
respective shares of capital stock, or to adjust, split,
combine or reclassify any of their respective securities or
make any other changes in their respective capital structure;
31
(iii) amendment to the Organizational Documents of
the Company;
(iv) payment or increase by the Company of any
bonuses, salaries, or other compensation to any stockholder,
director, officer, or (except in the Ordinary Course of
Business) employee or entry into any employment, severance, or
similar Contract with any director, officer, or employee, or
debt issued or advances made to any shareholder, director,
officer, or employee;
(v) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement, or
other employee benefit plan for or with any employees of the
Company;
(vi) damage to or destruction or loss of any asset
or property of the Company, whether or not covered by
insurance, which damage, destruction or loss has materially
and adversely affected the properties, assets, business,
financial condition, or prospects of the Company, taken as a
whole;
(vii) entry into, amendment or termination of, or
receipt of notice of termination of (A) any license,
distributorship, dealer, sales representative, joint venture,
credit, or similar agreement, or (B) any Contract or
transaction involving a total remaining commitment by or to
the Company of at least $10,000.00;
(viii) sale (other than sales of inventory in the
Ordinary Course of Business), lease, or other disposition of
any asset or property of the Company or mortgage, pledge, or
imposition of any lien or other encumbrance on any material
asset or property of the Company, including the sale, lease,
or other disposition of any of the Intellectual Property
Assets;
(ix) purchase of any asset or property other than
in the Ordinary Course of Business;
(x) cancellation or waiver of any claims or rights
other than in the Ordinary Course of Business;
(xi) repayment of any debt other than debt
disclosed in the Most Recent Balance Sheet or incurred in the
Ordinary Course of Business since the Most Recent Fiscal Month
End;
(xii) material change in the accounting methods used
by the Company; or
32
(xiii) any occurrence, assumption or guarantee by the
Company or of any Indebtedness in excess of $10,000;
(xiv) any transaction or commitment made to acquire
or dispose of any real property;
(xv) any labor dispute, other than routine
individual grievances, or, to the Knowledge of Sellers, any
activity or proceeding by a labor union or representative
thereof to organize any employees of the Company, or any
lockouts, strikes, slowdowns, work stoppages or, to the
Knowledge of Sellers any threats thereof by or with respect to
any employees of the Company;
(xvi) agreement, whether oral or written, by the
Company to do any of the foregoing.
(b) Prior to the Closing, the Sellers will not (i) sell
or otherwise transfer or dispose of the Shares, (ii) pledge or
otherwise encumber the Shares, (iii) enter into any shareholders
agreement or voting trust agreement, or (iv) grant any proxy with
respect to the Shares.
SS.3.18 CONTRACTS; NO DEFAULTS.
(a) ss.3.18(a) of the Sellers' Disclosure Schedule
contains a complete and accurate list, if any, and the Sellers have
delivered to the Buyer true and complete copies, if any, of:
(i) each Applicable Contract that involves
performance of services or delivery of goods or materials by
the Company of an amount or value in excess of $10,000.00
(excluding the rental of Rental Equipment in the Ordinary
Course of Business);
(ii) each Applicable Contract that involves
performance of services or delivery of goods or materials to
the Company of an amount or value in excess of $5,000.00;
(iii) each Applicable Contract that was not entered
into in the Ordinary Course of Business and that involves
expenditures or receipts of the Company in excess of
$5,000.00;
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Applicable Contract affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any
real or personal property (except personal property leases and
installment and conditional
33
sales agreements having a value per item or aggregate payments
of less than $5,000.00 and with terms of less than one year);
(v) each licensing agreement or other Applicable
Contract with respect to patents, trademarks, copyrights, or
other intellectual property, including agreements with current
or former employees, consultants, or contractors regarding the
appropriation or the nondisclosure of any of the Intellectual
Property Assets;
(vi) each collective bargaining agreement and other
Applicable Contract to or with any labor union or other
employee representative of a group of employees;
(vii) each joint venture, partnership, and other
Applicable Contract (however named) involving a sharing of
profits, losses, costs, or liabilities by the Company with any
other Person;
(viii) each Applicable Contract containing covenants
that in any way purport to restrict the business activity of
the Company or any Affiliate of the Company or limit the
freedom of the Company or any Affiliate of the Company to
engage in any line of business or to compete with any Person;
(ix) each Applicable Contract providing for
payments to or by any Person based on sales, purchases, or
profits, other than direct payments for goods;
(x) each power of attorney, if any, that is
currently effective and outstanding;
(xi) each Applicable Contract, if any, entered into
other than in the Ordinary Course of Business that contains or
provides for an express undertaking by the Company to be
responsible for consequential damages;
(xii) each Applicable Contract for capital
expenditures in excess of $5,000.00;
(xiii) each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance
extended by the Company other than in the Ordinary Course of
Business; and
(xiv) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
ss.3.18(a) of the Sellers' Disclosure Schedule sets forth reasonably
complete details concerning such Contracts, including the parties to
the Contracts, the amount of the
34
remaining commitment of the Company under the Contracts, and the
Company's office where details relating to the Contracts are located.
(b) Except as set forth in ss.3.18(b) of the Sellers'
Disclosure Schedules,
(i) no Seller (and no Related Person of any Seller)
has or may acquire any rights under, and no Seller has or may
become subject to any obligation or liability under, any
Contract that relates to the business of, or any of the assets
owned or used by, the Company; and
(ii) to the Knowledge of Sellers, no officer,
director, agent, employee, consultant, or contractor of the
Company is bound by any Contract that purports to limit the
ability of such officer, director, agent, employee,
consultant, or contractor to (A) engage in or continue any
conduct, activity, or practice relating to the business of the
Company, or (B) assign to the Company or to any other Person
any rights to any invention, improvement, or discovery.
(c) Except as set forth in ss.3.18(c) of the Sellers'
Disclosure Schedule, each Contract identified or required to be
identified in ss.3.18(a) of the Sellers' Disclosure Schedule is in full
force and effect and is valid and enforceable in accordance with its
terms.
(d) Except as set forth in ss.3.19(d) of the Sellers'
Disclosure Schedules,
(i) the Company is, and at all times since December
31, 1994 has been, in substantial compliance with all
applicable terms and requirements of each Contract under which
the Company has or had any obligation or liability or by which
the Company or any of the assets owned or used by the Company
is or was bound;
(ii) each other Person that has or had any
obligation or liability under any Contract under which the
Company has or had any rights is, and at all times has been,
in full compliance with all applicable terms and requirements
of such Contract;
(iii) no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene,
conflict with, or result in a violation or breach of, or give
the Company or other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, the
Applicable Contract; and
(iv) the Company has not given to or received from
any other Person, at any time any notice or other
communication (whether oral or written) regarding
35
any actual, alleged, possible, or potential violation or
breach of, or default under, any Contract.
(e) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or
payable to the Company under current or completed Contracts with any
Person and, to the Knowledge of the Sellers, no such Person has made
written demand for such renegotiation.
(f) The Contracts relating to the sale, design, manufacture,
or provision of products or services by the Company have been entered
into in the Ordinary Course of Business and have been entered into
without the commission of any act alone or in concert with any other
Person, or any consideration having been paid or promised, that is or
would be in violation of any Legal Requirement.
SS.3.19 INSURANCE.
(a) The Sellers have delivered to the Buyer:
(i) true and complete copies of all policies of
insurance to which the Company is a party or under which the
Company, or any director of the Company, is or has been
covered at any time within the five years preceding the date
of this Agreement;
(ii) true and complete copies of all pending
applications for policies of insurance; and
(iii) any statement by the auditor of the Company's
financial statements with regard to the adequacy of such
entity's coverage or of the reserves for claims.
(b) ss.3.19(b) of the Sellers' Disclosure Schedule describes:
(i) any self-insurance arrangement by or affecting
the Company, including any reserves established thereunder
(excluding normal and usual deductibles specified in policies
of insurance delivered to Buyer pursuant to ss.3.19(a));
(ii) any contract or arrangement, other than a
policy of insurance, for the transfer or sharing of any risk
by the Company; and
(iii) all obligations of the Company to third parties
with respect to insurance (including such obligations under
leases and service agreements) and identifies the policy under
which such coverage is provided.
36
(c) ss.3.19(c) of the Sellers' Disclosure Schedule sets
forth, by year, for the current policy year and each of the preceding
policy years:
(i) a summary of the loss experience under each
policy;
(ii) a statement describing each claim under an
insurance policy for an amount in excess of $2,500.00, which
sets forth (A) the name of the claimant; (B) a description of
the policy by insurer, type of insurance, and period of
coverage; and (C) the amount and a brief description of the
claim; and
(iii) a statement describing the loss experience for
all claims that were self-insured, including the number and
aggregate cost of such claims.
(d) Except as set forth on ss.3.19(d) of the Sellers'
Disclosure Schedule,
(i) All policies to which the Company is or was a
party or that provide coverage to either the Sellers, the
Company, or any director or officer of the Company:
(A) are or were valid, outstanding, and
enforceable;
(B) to the Knowledge of Sellers, are or were
issued by an insurer that is financially sound and
reputable;
(C) to the Knowledge of Sellers, taken
together, provide or provided adequate insurance
coverage for the assets and the operations of the
Company for all risks normally insured against by a
Person carrying on the same business or businesses as
the Company;
(D) to the Knowledge of Sellers, are or were
sufficient for compliance with all Legal Requirements
and Contracts to which the Company is a party or by
which any of them is bound;
(E) will continue in full force and effect
following the consummation of the Contemplated
Transactions; and
(F) do not provide for any retrospective
premium adjustment or other experienced-based
liability on the part of the Company.
(ii) No Seller or the Company has received (A) any
refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (B) any notice of
cancellation or any other indication that any insurance policy
is no longer
37
in full force or effect or will not be renewed or that the
issuer of any policy is not willing or able to perform its
obligations thereunder.
(iii) The Company has paid all premiums due, and has
otherwise performed all of its obligations, under each policy
to which the Company is a party or that provides coverage to
the Company or director thereof.
(iv) The Company have given notice to the insurer of
all claims that may be insured thereby.
SS.3.20 ENVIRONMENTAL MATTERS.
(a) Except as set forth in ss.3.20(a) of the Sellers'
Disclosure Schedule,
(i) The Company is, and at all times has been, in
full compliance with, and has not been and is not in violation
of or liable under, any Environmental Law. No Seller or the
Company has any basis to expect, nor has any of them or any
other Person for whose conduct they are or may be held to be
responsible received, any actual or Threatened order, notice,
or other communication from (A) any Governmental Body or
private citizen acting in the public interest, or (B) the
current or prior owner or operator of any Facilities, of any
actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation
to undertake or bear the cost of any Environmental, Health,
and Safety Liabilities with respect to any of the Facilities
or any other properties or assets (whether real, personal, or
mixed) in which the Sellers or the Company has had an
interest, or with respect to any property or Facility at or to
which Hazardous Materials were generated, manufactured,
refined, transferred, imported, used, or processed by the
Sellers, the Company, or any other Person for whose conduct
they are or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(ii) There are no pending or Threatened claims,
Encumbrances, or other restrictions of any nature, resulting
from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law, with
respect to or affecting any of the Facilities or any other
properties and assets (whether real, personal, or mixed) in
which the Sellers or the Company has or had an interest.
(iii) The Sellers have no Knowledge of any basis to
expect, nor has any of them or any other Person for whose
conduct they are or may be held responsible, received, any
citation, directive, inquiry, notice, Order, summons, warning,
or other communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual, or potential
violation or failure to comply with
38
any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Environmental,
Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real,
personal, or mixed) in which the Sellers or the Company had an
interest, or with respect to any property or facility to which
Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by the Sellers, the
Company, or any other Person for whose conduct they are or may
be held responsible, have been transported, treated, stored,
handled, transferred, disposed, recycled, or received.
(iv) Neither the Sellers nor the Company nor any
other Person for whose conduct they are or may be held
responsible, has any Environmental, Health, and Safety
Liabilities with respect to the Facilities. To the Knowledge
of the Sellers, neither the Sellers nor the Company nor any
other Person for whose conduct they are or may be held
responsible, has any Environmental, Health, and Safety
Liabilities with respect to any other properties and assets
(whether real, personal, or mixed) in which the Sellers or the
Company (or any predecessor), has or had an interest, or at
any property geologically or hydrologically adjoining the
Facilities or any such other property or assets.
(v) There are no Hazardous Materials present on or
in the Environment at the Facilities or, to the Knowledge of
the Sellers, at any geologically or hydrologically adjoining
property, including any Hazardous Materials contained in
barrels, above or underground storage tanks, landfills, land
deposits, dumps, equipment (whether moveable or fixed) or
other containers, either temporary or permanent, and deposited
or located in land, water, sumps, or any other part of the
Facilities or such adjoining property, or incorporated into
any structure therein or thereon. Neither Sellers, the Company
nor any other Person for whose conduct they are or may be held
responsible, nor any other Person, has permitted or conducted,
or is aware of, any Hazardous Activity conducted with respect
to the Facilities or any other properties or assets (whether
real, personal, or mixed) in which the Sellers or the Company
has or had an interest.
(vi) There has been no Release or, to the Knowledge
of the Sellers, Threat of Release, of any Hazardous Materials
at or from the Facilities or at any other locations where any
Hazardous Materials were generated, manufactured, refined,
transferred, produced, imported, used, or processed from or by
the Facilities, or from or by any other properties and assets
(whether real, personal, or mixed) in which the Sellers or the
Company has or had an interest, or any geologically or
hydrologically adjoining property, whether by the Sellers, the
Company, or any other Person.
39
(b) The Sellers have delivered to Buyer true and complete
copies and results of any reports, studies, analyses, tests, or
monitoring possessed or initiated by Sellers or the Company pertaining
to Hazardous Materials or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by Sellers, the Company, or any
other Person for whose conduct they are or may be held responsible,
with Environmental Laws.
SS.3.21 EMPLOYEES.
(a) ss.3.21(a) of the Sellers' Disclosure Schedule contains a
complete and accurate list of the following information for each
employee, officer, or director of the Company, including each employee
on leave of absence or layoff status: employer, name, job title,
current compensation paid or payable, vacation accrued, and service
credited for purposes of vesting and eligibility to participate in the
Company Plans, Company VEBA, and Company Other Benefit Obligation.
(b) Except as set forth in ss.3.21(b) of the Sellers'
Disclosure Schedule, there are no employment or consulting contracts
with any employee of the Company and the employment of each employee is
terminable at will by the Company without restriction, penalty or
payment of any kind, other than payments with respect to liabilities
reflected on the Financial Statements, payments for services actually
performed, non-material payments for accrued benefits and any severance
payments payable under the employment agreements listed in ss.3.21(b)
of the Sellers' Disclosure Schedule or as may be provided for under
federal, state or local laws, rules or regulations.
(c) No officer or director or, to the Knowledge of Sellers,
the Company, employee, of the Company is a party to, or is otherwise
bound by, any agreement or arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement, between such officer
or director or employee and any other Person ("Proprietary Rights
Agreement") that in any way adversely affects or will affect (i) the
performance of his duties as an officer or director or employee of the
Company, or (ii) the ability of the Company to conduct its business,
including any Proprietary Rights Agreement with Sellers or the Company
by any such officer or director or employee. To the Knowledge of
Sellers, no director, officer, or other key employee of the Company
intends to terminate his employment with the Company and no such
director, officer, or other key employee of the Company has Threatened
to terminate his employment with the Company.
(d) ss.3.21(d) of the Sellers' Disclosure Schedule also
contains a complete and accurate list of the following information for
each retired employee, officer, or director of the Company, or their
dependents, receiving benefits or scheduled to receive benefits in the
future: name, pension benefit, pension option election, retiree medical
insurance coverage, retiree life insurance coverage, and other
benefits.
40
(e) The employees of the Company are not represented by a
labor organization, no union claims to represent any such employees
and, to the Knowledge of the Sellers, no union organizing effort is or
within the last two (2) years has been underway involving employees of
the Company.
SS.3.22 LABOR RELATIONS; COMPLIANCE.
(a) The Company has not been and is not currently a party to any
collective bargaining or other labor Contract. There has not been, there is not
presently pending, existing or Threatened, (i) any strike, slowdown, picketing,
work stoppage, or employee grievance process, (ii) any Proceeding against or
affecting the Company relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including any charge or
complaint filed by an employee with the National Labor Relations Board, the
Equal Employment Opportunity Commission, or any comparable Governmental Body,
organizational activity, or other labor or employment dispute against or
affecting the Company or its premises, or (iii) any application for
certification of a collective bargaining agent. To the Knowledge of Sellers no
event has occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute. There is no lockout of any employees by
the Company, and no such action is contemplated by the Company. The Company has
complied in all respects with all Legal Requirements relating to employment,
equal employment opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security and similar
taxes, occupational safety and health, and plant closing. The Company is not
liable for the payment of any compensation, damages, taxes, fines, penalties, or
other amounts, however designated, for failure to comply with any of the
foregoing Legal Requirements.
(b) ss.3.22(b) of the Sellers' Disclosure Schedule contains a
complete and correct list of all employees of the Company whose employment by
the Company was terminated within the past three years for any reason (whether
voluntarily or involuntarily and whether initiated by the Company or the
employee).
SS.3.23 INTELLECTUAL PROPERTY.
(a) Intellectual Property Assets. The term "Intellectual Property
Assets" includes:
(i) the name Titan Rentals, Inc., all fictional business
names, trading names, registered and unregistered trademarks, service
marks, and applications (collectively, "Marks");
(ii) all copyrights in both published works and unpublished
works (collectively, "Copyrights"); and
(iii) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, patents, plans, drawings, rights
41
in mask works and blue prints (collectively, "Trade Secrets"); owned,
used, or licensed by the Company as licensee or licenser.
(b) Agreements. ss.3.23(b) of the Sellers' Disclosure Schedule
contains a complete and accurate list and summary description, including any
royalties paid or received by the Company, of all Contracts relating to the
Intellectual Property Assets to which the Company is a party or by which the
Company is bound, except for any license implied by the sale of a product and
perpetual, paid-up licenses for commonly available software programs with a
value of less than $5,000 under which the Company is the licensee. There are no
outstanding and, to the Knowledge of the Sellers, no Threatened disputes or
disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business.
(i) The Intellectual Property Assets are all those necessary
for the operation of the Company's business as its is currently
conducted. The Company is the owner of all right, title, and interest
in and to each of the Intellectual Property Assets, free and clear of
all liens, security interests, charges, encumbrances, equities, and
other adverse claims, and has the right to use without payment to a
third party all of the Intellectual Property Assets.
(ii) Except as set forth in ss.3.23(c)(ii) of the Sellers'
Disclosure Schedule, all former and current employees of the Company
have executed written Contracts with the Company that assign the
Company all rights to any inventions, improvements, discoveries, or
information relating to the business of the Company. No employee of the
Company has entered into any Contract that restricts or limits in any
way the scope or type of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information
concerning his work to anyone other than the Company.
(d) Trademarks.
(i) ss.3.23(d)(i) of the Sellers' Disclosure Schedule
contains a complete and accurate list and summary description of all
Marks. The Company is the owner of all right, title, and interest in
and to each of the Marks, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims.
(ii) All Marks that have been registered with the United
States Patent and Trademark Office are currently in compliance with all
formal legal requirements (including the timely post-registration
filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days
after the Closing Date.
42
(iii) No Xxxx has been or is now involved in any opposition,
invalidation, or cancellation and, to the Knowledge of the Sellers, no
such action is Threatened with the respect to any of the Marks.
(iv) To the Knowledge of the Sellers, there is no potentially
interfering trademark or trademark application of any third party.
(v) No Xxxx is infringed or, to the Knowledge of the
Sellers, has been challenged or threatened in any way. None of the
Marks used by the Company infringes or is alleged to infringe any trade
name, trademark, or service xxxx of any third party.
(vi) All products and materials containing a Xxxx xxxx the
proper federal registration notice where permitted by law.
(e) Copyrights.
(i) ss.3.23(e)(i) of the Sellers' Disclosure Schedule
contains a complete and accurate list and summary description of all
Copyrights. The Company is the owner of all right, title, and interest
in and to each of the Copyrights, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims.
(ii) All the Copyrights have been registered and are
currently in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within ninety days after the date of Closing.
(iii) No Copyright is infringed or, to the Knowledge of the
Sellers, has been challenged or threatened in any way. None of the
subject matter of any of the Copyrights infringes or is alleged to
infringe any copyright of any third party or is a derivative work based
on the work of a third party.
(iv) All works encompassed by the Copyrights have been marked
with the proper copyright notice.
(f) Trade Secrets.
(i) With respect to each Trade Secret, the documentation
relating to such Trade Secret is current, accurate, and sufficient in
detail and content to identify and explain it and to allow its full and
proper use without reliance on the Knowledge or memory of any
individual.
43
(ii) To the Knowledge of the Sellers, the Sellers and the
Company have taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets.
(iii) The Company has good title and an absolute (but not
necessarily exclusive) right to use the Trade Secrets. The Trade
Secrets are not part of the public Knowledge or literature, and, to the
Knowledge of the Sellers, have not been used, divulged, or appropriated
either for the benefit of any Person (other than the Company) or to the
detriment of the Company. No Trade Secret is subject to any adverse
claim or has been challenged or threatened in any way.
SS.3.24 CERTAIN PAYMENTS. Neither the Company, nor any director,
officer, agent, or employee of the Company, nor to the Knowledge of the Sellers
any other Person associated with or acting for or on behalf of the Company, has
directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment in violation of any Legal
Requirement, applicable tort law, or any Applicable Contract, to any Person,
private or public, regardless of form, whether in money, property, or services
(i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, or (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of the Company or
any Affiliate of the Company, or (b) established or maintained any fund or asset
that has not been recorded in the books and records of the Company.
SS.3.25 RELATIONSHIPS WITH RELATED PERSONS.
(a) Except as set forth in ss.3.25(a) of the Sellers'
Disclosure Schedule, no Seller or any Related Person of Sellers or of
the Company has, or since December 31, 1992, has had, any interest in
any property (whether real, personal, or mixed and whether tangible or
intangible), used in or pertaining to the business of the Company. No
Seller or any Related Person of Sellers or of the Company is, or since
December 31, 1992, has owned (of record or as a beneficial owner) an
equity interest or any other financial or profit interest in, a Person
that has (i) had business dealings or a material financial interest in
any transaction with the Company, or (ii) engaged in competition with
the Company with respect to any line of the products or services of the
Company (a "Competing Business") in any market presently served by the
Company.
(b) Except as set forth in ss.3.25(b) of the Sellers'
Disclosure Schedule, no Seller or any Related Person of Sellers or of
the Company is, or since December 31, 1992, was, a party to any
Contract with, or has or had any claim or right against, the Company.
SS.3.26 CUSTOMERS AND SUPPLIERS. ss.3.26 of the Sellers' Disclosure
Schedule sets forth the Company's top twenty customers based on the revenue
generated by such customers during the fiscal year ended December 31, 1997, and
sale projections for the current fiscal year of the top twenty customers. Also
set forth therein are the Company's top ten vendors based on the
44
expenditures of the Company with such vendor during such fiscal year. To the
best of the Knowledge of Sellers, nothing has occurred since the Most Recent
Fiscal Month End that would in any way have an adverse effect on the
relationship that the Company has with any party listed in ss.3.26 of the
Sellers' Disclosure Schedule.
SS.3.27 BROKERS OR FINDERS. The Sellers and their agents have incurred
no obligation or liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in connection with this
Agreement.
SS.3.28 BANK ACCOUNT. ss.3.28 of the Sellers' Disclosure Schedule
contains (a) a true and complete list of the names and locations of all banks,
trust companies, securities brokers, and other financial institutions at which
the Company has an account or safe deposit box or maintains a banking,
custodial, trading, trust, or other similar relationship, (b) a true and
complete list and description of each such account, box, and relationship, and
(c) a list of all signatories for each such account and box.
SS.3.29 DISCLOSURE.
(a) No representation or warranty of Sellers or the Company in
this Agreement and no statement in the Sellers' Disclosure Schedule
omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
(b) No notice given pursuant to ss.5.5 will contain any untrue
statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances
in which they were made, not misleading.
(c) There is no fact known to any Seller that has specific
application to any Seller or the Company (other than general economic
or industry conditions) and that materially adversely affects or, as
far as any Seller or the Company can reasonably foresee, materially
Threatens, the assets, business, prospects, financial condition, or
results of operations of the Company (separately or on a consolidated
basis) that has not been set forth in this Agreement or the Sellers'
Disclosure Schedule.
SS.3.30 INDEBTEDNESS. The Indebtedness of the Company as of the date
of this Agreement does not exceed $600,000 and will not exceed $600,000 as of
the Closing Date (the "Maximum Indebtedness").
45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to Sellers that the statements
contained in this Article IV are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article IV). Such representatives and warranties are
made and given subject to the disclosures in the Buyer's schedules accompanying
this Agreement executed, delivered and certified by the Buyer.
SS.4.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.
SS.4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Upon the execution and delivery by Buyer of the Promissory
Notes, the Employment Agreements, and the Lease Agreements
(collectively, the "Buyer's Closing Documents"), the Buyer's Closing
Documents will constitute the legal, valid, and binding obligations of
Buyer, enforceable against Buyer in accordance with their respective
terms. Buyer has the absolute and unrestricted right, power, and
authority to execute and deliver this Agreement and the Buyer's Closing
Documents and to perform its obligations under this Agreement and the
Buyer's Closing Documents.
(b) Except as set forth in ss.4.2 of the Buyer's Disclosure
Schedule, neither the execution and delivery of this Agreement by Buyer
nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay,
or otherwise interfere with any of the Contemplated Transactions
pursuant to:
(i) any provision of Buyer's Organizational
Documents;
(ii) any resolution adopted by the board of
directors or the stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer
may be subject; or
(iv) any Contract to which Buyer is a party or by
which Buyer may be bound.
(c) Except as set forth in ss.4.2(c) of the Buyer's
Disclosure Schedule, Buyer is not and will not be required to obtain
any Consent from any Person in connection with the
46
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
SS.4.3 CERTAIN PROCEEDINGS. No Proceeding has been commenced or to
the Knowledge of the Buyer Threatened against the Buyer that challenges, or may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.
SS.4.4 BROKERS OR FINDERS. The Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold the Sellers harmless from any such
payment alleged to be due by or through the Buyer as a result of the action of
the Buyer or its officers or agents.
ARTICLE V
COVENANTS OF SELLERS AND THE COMPANY
The Sellers and the Company covenant and agree with Buyer that, at all
times before the earlier of the Closing Date or the termination of this
Agreement in accordance with Article IX hereof, the Sellers and the Company will
comply with all covenants and provisions of this Article V applicable to it,
except to the extent (i) the Buyer may otherwise consent in writing, (ii)
otherwise required by applicable law, or (iii) otherwise expressly required or
permitted by this Agreement.
SS.5.1 ACCESS AND INVESTIGATION.
(a) Between the date of this Agreement and the Closing Date,
Sellers, the Company, and their Representatives will (i) afford Buyer
and its Representatives and prospective investors and their
Representatives (collectively, "Buyer's Advisors") full, free, and
unrestricted access to the Company's personnel, Representatives,
properties (including subsurface testing), contracts, books and
records, and other documents and data, (ii) furnish Buyer and Buyer's
Advisors with copies of all such contracts, books and records, and
other existing documents and data as Buyer may reasonably request,
(iii) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information as Buyer may
reasonably request, (iv) instruct the employees, counsel and financial
advisors of Sellers, Sellers' Affiliates, and the Company to cooperate
with the Buyer in its investigation of the Company, and (v) otherwise
cooperate with the investigation by Buyer and Buyer's Advisors, and
shall authorize independent certified public accountants of the Company
to permit Buyer and Buyer's Advisors to examine all accounting records
and working papers pertaining to the Financial Statements. Buyer,
Sellers, and the Company will coordinate such activities in a manner so
as to eliminate or reduce the disruption to the Company's business
resulting therefrom.
47
(b) No investigation pursuant to this ss.5.1 shall affect or
be deemed to modify any representation or warranty made by the Sellers
or the Company.
SS.5.2 OPERATION OF THE BUSINESS OF THE COMPANY. Between the date of
this Agreement and the Closing Date, Sellers and the Company will:
(a) conduct the business of the Company only in the Ordinary
Course of Business and otherwise refrain from any extraordinary
transactions;
(b) use their Best Efforts to preserve intact the current
business organization of the Company, keep available the services of
the current officers, employees, and agents of the Company, and
maintain the relations and good will with suppliers, customers,
landlords, creditors, employees, agents, and others having business
relationships with the Company; and
(c) report periodically to the Buyer concerning the status of
the business, operations, and finances of the Company.
SS.5.3 NEGATIVE COVENANT. Except as otherwise expressly permitted by
this Agreement, between the date of this Agreement and the Closing Date, Sellers
and the Company will not without the prior consent of Buyer, take any
affirmative action, or fail to take any reasonable action as a result of which
any of the changes or events listed in ss.3.17 will occur.
SS.5.4 REQUIRED APPROVALS; COOPERATION.
(a) As promptly as practicable after the date of this
Agreement, Sellers and the Company will (i) make all filings and obtain
all approvals, authorizations, consents and clearances required by
Legal Requirements to be made by them in order to consummate the
Contemplated Transactions and (ii) obtain all approvals and consents
required of any Person to consummate the Contemplated Transactions.
(b) Between the date of this Agreement and the Closing Date,
Sellers and the Company will (i) cooperate with Buyer with respect to
all filings that Buyer elects to make or is required by Legal
Requirements to make in connection with the Contemplated Transactions,
and (ii) cooperate with Buyer in obtaining all consents identified in
Schedule 4.2.
SS.5.5 NOTIFICATION. The Sellers and the Company will notify the
Buyer promptly in writing of, and contemporaneously will provide the Buyer with
true and complete copies of any and all information or documents relating to,
and will use all commercially reasonable efforts to cure before the Closing, any
event, transaction, or circumstance occurring after the date of this Agreement
that causes or will cause any covenant or agreement of the Seller under this
Agreement to be breached, or that renders or will render untrue any
representation or warranty of the Sellers
48
and the Company contained in this Agreement as if the same were made on or as of
the date of such event, transaction, or circumstance. The Sellers and the
Company also will use all commercially reasonable efforts to cure, before the
Closing, any violation or breach of any representation, warranty, covenant, or
agreement made by it in this Agreement, whether occurring or arising before or
after the date of this Agreement. No disclosure by the Sellers and the Company
pursuant to this ss.5.5, however, shall be deemed to amend or supplement the
Sellers' Disclosure Schedule, or to prevent or cure any misrepresentation or
breach of warranty, unless consented to in writing by the Buyer.
SS.5.6 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Except as expressly
provided in this Agreement, Sellers and the Company will cause all Indebtedness
owed to the Company by any Seller or any Related Person of any Seller to be paid
in full prior to Closing.
SS.5.7 MAXIMUM INDEBTEDNESS. In the event the Indebtedness of the
Company exceeds the Maximum Indebtedness as of the Closing Date, Sellers agree
to (a) pay, or assume the obligation to pay, such portion of the Company's
Indebtedness to cause the amount of such Indebtedness to be less than or equal
to the Maximum Indebtedness and (b) execute and deliver such agreements,
instruments, certificates or other documents as necessary to evidence the
payment or assumption of such amount of the Company's Indebtedness in excess of
the Maximum Indebtedness.
SS.5.8 NO NEGOTIATION. Until such time, if any, as this Agreement is
terminated pursuant to Article IX, the Sellers and the Company, and their
respective Representatives will not directly or indirectly solicit, initiate, or
encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Buyer) relating to any
transaction involving the sale of the business or assets (other than in the
Ordinary Course of Business) of the Company, or any of the capital stock of the
Company, or any merger, consolidation, business combination, or similar
transaction involving the Company. The Sellers, the Company, and their
Representatives will immediately notify Buyer regarding any contact between the
Sellers, the Company, or their Representatives and any other Person regarding
any such offer or proposal or any related inquiry.
SS.5.9 NO CHARTER AMENDMENTS. The Sellers will cause the Company to
refrain from amending its Organizational Documents and from taking any action
with respect to any such amendment.
SS.5.10 RESIGNATIONS OF DIRECTORS AND OFFICERS. The Sellers will cause
such directors and officers of the Company as are designated by the Buyer at
least two (2) days prior to the Closing Date to tender their resignations
effective at, and subject to, the Closing.
49
SS.5.11 RESTRICTIONS ON COMPETITION.
(a) For period ending in the later (i) three (3) years from
the Closing Date and (ii) one (1) year after the termination of
employment with the Buyer or an Affiliate of the Buyer, neither of the
Principal Sellers nor any Affiliate of the Principal Sellers shall
engage in directly or indirectly in any business that the Company
conducts as of the Closing Date (except for the lease of the Properties
as set forth herein) in any area within a 250-mile radius of any of the
Properties; provided, however that ownership of less than 1% of the
outstanding stock of any publicly traded corporation shall not be
deemed to be engaging solely by reason thereof in any of its
businesses.
(b) For a period of five (5) years from and after the Closing
Date, neither the Other Sellers nor any Affiliate of the Other Sellers
shall engage directly or indirectly in any business that the Company
conducts as of the Closing Date (except for lease of the Properties as
set forth herein) in any area within a 250-mile radius of any of the
Properties; provided, however, that ownership of less than 1% of the
outstanding stock of any publicly traded corporation shall not be
deemed to be engaging solely by reason thereof in any of its
businesses.
(c) For a period ending one (1) year after the Closing Date,
neither Sellers nor any Affiliate of the Sellers shall, directly or
indirectly, (i) solicit or induce, or attempt to solicit or induce, any
employee of the Company, the Buyer or any Affiliate of the Buyer to
leave such employ of such entity for any reason whatsoever, or (ii)
hire any of the employees of the Company, the Buyer or any Affiliate of
the Buyer; provided, however, that the prohibition imposed by this
subsection (ii) shall not apply to any employee whose employment by the
Company, the Buyer or any Affiliate of the Buyer is terminated by such
entity without cause.
(d) In the event of a breach by any Seller or any Affiliate of
any Seller of the terms of this ss.5.11, Buyer shall (notwithstanding
the provisions of Article X) be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or
to enforce the specific performance of such terms by such Seller or
Affiliate of such Seller and to enjoin such Seller or Affiliate of such
Seller from any further violation and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies
provided by law. The Sellers acknowledge, however, that the remedies at
law for any breach by any of the Sellers or its Affiliates of the
provisions of this ss.5.11 may be inadequate and that Buyer shall be
entitled to injunctive relief against such Parties in the event of any
breach.
(e) If the final judgment of a court of competent jurisdiction
declares that any term or provision of this ss.5.11 is invalid or
unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to
reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases,
50
or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
SS.5.12 BEST EFFORTS. The Sellers will use their Best Efforts to take
all action and to do all things reasonably necessary, proper or advisable in
order to consummate and make effective the Contemplated Transactions (including
satisfaction, but not waiver, of the closing conditions set forth in Article VII
and VIII below.
ARTICLE VI
COVENANTS OF BUYER
Buyer covenants and agrees with Sellers that, at all times before the
earlier of the Closing Date, or the termination of this Agreement in accordance
with Article IX hereof, the Buyer will comply with all covenants and provisions
of this Article VI applicable to it, except to the extent (i) the Sellers may
otherwise consent in writing, (ii) otherwise required by applicable law, or
(iii) otherwise expressly required or permitted by this Agreement.
SS.6.1 APPROVALS OF GOVERNMENTAL BODIES.
(a) As promptly as practicable after the date of this
Agreement, Buyer will make all filings and obtain all approvals,
authorizations, consents and clearances required by Legal Requirements
to be made by it to consummate the Contemplated Transactions.
(b) Between the date of this Agreement and the Closing Date,
Buyer will cooperate with Sellers and the Company with respect to all
filings that Sellers and the Company are required by Legal Requirements
to make in connection with the Contemplated Transactions and cooperate
with Sellers and the Company in obtaining all consents identified in
ss.3.2 of the Sellers' Disclosure Schedule; provided that this
Agreement will not require Buyer to dispose of or make any change in
any portion of its business or to incur any other burden to obtain a
Governmental Authorization.
SS.6.2 NOTIFICATION. The Buyer will notify the Sellers and the
Company promptly in writing of, and contemporaneously will provide the Sellers
and the Company with true and complete copies of any and all information or
documents relating to, and will use all commercially reasonable efforts to cure
before the Closing, any event, transaction, or circumstance occurring after the
date of this Agreement that causes or will cause any covenant or agreement of
the Buyer under this Agreement to be breached, or that renders or will render
untrue any representation or warranty of the Buyer contained in this Agreement
as if the same were made on or as of the date of such event, transaction, or
circumstance. The Buyer also will use all commercially reasonable efforts to
cure, before the Closing, any violation or breach of any representation,
warranty, covenant, or agreement made by it in this Agreement, whether occurring
or arising before or after
51
the date of this Agreement. No disclosure by the Buyer pursuant to this ss.6.2,
however, shall be deemed to amend or supplement the Buyer's Disclosure Schedule,
or to prevent or cure any misrepresentation or breach of warranty, unless
consented to in writing by the Sellers and the Company.
SS.6.3 BEST EFFORTS. The Buyer will use its Best Efforts to take all
action and to do all things reasonably necessary, proper or advisable in order
to consummate and make effective the Contemplated Transactions (including
satisfaction but not waiver, of the closing conditions set forth in Articles VII
and VIII below.
SS.6.4 ACCOUNTS RECEIVABLE COLLECTION. The Buyer shall use its usual
efforts in the Ordinary Cause of Business (short of litigation, employment of
counsel or engagement or assignment to a collection agency) to collect the
Accounts Receivable. All amounts collected by the Buyer from customers whose
accounts receivable are included in the Accounts Receivable shall be deemed to
be in payment of the accounts receivable of such customer, unless such customer
indicates in writing that such amounts so collected relate to the accounts
receivable of the Buyer. Any unpaid Accounts Receivable to which the Buyer has
exercised its right of set-off shall be assigned by the Buyer to the Seller.
ARTICLE VII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
The obligation of the Buyer to purchase the Shares and to take the
other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part) if it executes a
writing so stating at or prior to Closing:
SS.7.1 ACCURACY OF REPRESENTATIONS.
(a) All of the representations and warranties of Sellers and
the Company in this Agreement (considered collectively), and each of
these representations and warranties (considered individually), must
have been accurate in all material respects as of the date of this
Agreement, and must be accurate in all material respects at and as of
the Closing Date, as if made at and as of the Closing Date.
(b) Each of the representations and warranties of Sellers and
the Company in ss.ss.3.3, 3.4, 3.12, 3.13, and 3.29 must have been
accurate in all respects as of the date of this Agreement, and must be
accurate in all respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Sellers'
Disclosure Schedule.
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SS.7.2 SELLERS' PERFORMANCE.
(a) Except as set forth in ss.7.2(b) below, all of the
covenants and obligations that Sellers and the Company are required to
perform or to comply with pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed
and complied with in all material respects.
(b) Each document required to be delivered pursuant to
ss.2.4(a) must have been delivered, and each of the other covenants and
obligations in ss.5.4 must have been performed and complied with in all
respects.
SS.7.3 CONSENTS. All Consents required in ss.3.2 of the Sellers'
Disclosure Schedule, each Consent identified in ss.4.2 of the Buyer's Disclosure
Schedule, and any and all other Consents must have been obtained and must be in
full force and effect.
SS.7.4 INDEBTEDNESS.
(a) Amendments to loan agreements, new loan agreements,
estoppel certificates, and/or other documentation fully assuring Buyer
of continuation and/or replacement of the Company's Senior
Indebtedness, to such extent as Buyer reasonably determines to be
necessary or advisable (and otherwise in a form reasonably satisfactory
to Buyer and its counsel), must have been delivered to or obtained by
Buyer.
(b) Sellers and the Company shall have delivered to the Buyer
(i) a schedule of Indebtedness of the Company as of the Closing Date
showing that the Indebtedness of the Company does not exceed the
Maximum Indebtedness and (ii) such agreements, instruments,
certificates or other documentation as may be necessary to evidence the
Sellers' payment or assumption of any Indebtedness of the Company in
excess of the Maximum Indebtedness as of the Closing Date.
SS.7.5 FINANCIAL STATEMENTS. Sellers and the Company shall have
delivered to Buyer the Financial Statements and Buyer shall be satisfied in its
sole discretion with such Financial Statements.
SS.7.6 ADDITIONAL DOCUMENTS. Sellers and the Company must have
caused the following documents to be delivered to Buyer:
(a) an opinion of Berthold & Xxxxx, dated the Closing Date, in
the form of Exhibit 7.6(a);
(b) such other documents as Buyer may reasonably request for
the purpose of enabling its counsel to provide the opinion referred to
in ss.8.3(a) below;
53
(c) a certificate of Sellers and the Company certifying as to
(i) the accuracy of any of the representations and warranties of
Sellers and the Company, (ii) the performance by Sellers and the
Company of, or the compliance by Sellers and the Company with, any
covenant or obligation required to be performed or complied with by
Sellers and the Company, and (iii) the satisfaction of any condition
referred to in this Article VII; and
(d) such other documents as Buyer may reasonably request for
the purpose of facilitating the consummation or performance of any of
the Contemplated Transactions.
SS.7.7 DUE DILIGENCE. The Buyer must be satisfied, in its sole
discretion, with the results of its due diligence of the Company including
taxes, ERISA, health and welfare policies, OSHA, insurance, environmental.
SS.7.8 NO PROCEEDINGS. Since the date of this Agreement, there must
not have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
SS.7.9 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There
must not have been made or Threatened by any Person any claim asserting that
such Person (a) is the holder or the beneficial owner of, or has the right to
acquire or to obtain beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, the Company, or (b) is entitled to all or any
portion of the Purchase Price payable for the Shares.
SS.7.10 NO PROHIBITION. Neither the consummation nor the performance
of any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any Governmental Body.
SS.7.11 BUYER'S BOARD APPROVAL. This Agreement and the Contemplated
Transactions shall have been approved by the Board of Directors of the Buyer.
SS.7.12 SATISFACTION OF BUYER. All actions to be taken by the Sellers
and the Company in connection with consummation of the Contemplated Transactions
and all certificates, opinions, instruments, and other documents required to
effect the Contemplated Transactions hereby will be reasonably satisfactory in
form and substance to the Buyer.
SS.7.13 SCHEDULES AND EXHIBITS. The Sellers' Disclosure Schedule,
and the Exhibits, shall be in form and substance acceptable to the Buyer;
provided, however, that the Sellers shall deliver
54
the form of such Sellers' Disclosure Schedule, and the form of any Exhibits
required to be delivered by the Seller to the Buyer at least two (2) days prior
to the Closing.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATION TO CLOSE
The obligation of Sellers to sell the Shares and to take the other
actions required to be taken by them at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by them, in whole or in part if they execute a
writing so stating at or prior to Closing):
SS.8.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations
and warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, except for those representations and warranties made of a
specified date.
SS.8.2 BUYER'S PERFORMANCE.
(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing (considered collectively), and each of these
covenants and obligations (considered individually), must have been
performed and complied with in all material respects.
(b) Buyer must have delivered each of the documents required
to be delivered by Buyer pursuant to ss.2.4(b) and must have made the
Cash Payment required to be made by Buyer pursuant to ss.2.4(b)(i).
SS.8.3 ADDITIONAL DOCUMENTS. The Buyer must have caused the
following documents to be delivered to Sellers:
(a) an opinion of Squire, Xxxxxxx & Xxxxxxx L.L.P., dated the
Closing Date, in the form of Exhibit 8.3(a); and
(b) such other documents as Sellers may reasonably request for
the purpose of enabling their counsel to provide the opinion referred
to in ss.7.6(a) above;
(c) a certificate of the Buyer certifying as to (i) the
accuracy of any of the representations and warranties of Buyer, (ii)
the performance by Buyer of, or the compliance by Buyer with, any
covenant or obligation required to be performed or complied with by
Buyer, and (iii) the satisfaction of any condition referred to in this
Article VIII; and
55
(d) such other documents as the Sellers may reasonably request
for the purposes of otherwise facilitating the consummation of any of
the Contemplated Transactions.
SS.8.4 NO INJUNCTION. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the sale of the
Shares by Sellers to Buyer, and (b) has been adopted or issued, or has otherwise
become effective, since the date of this Agreement.
SS.8.5 SATISFACTION OF SELLERS. All actions to be taken by the Buyers
in connection with consummation of the Contemplated Transactions and all
certificates, opinions, instruments, and other documents required to effect the
Contemplated Transactions hereby will be reasonably satisfactory in form and
substance to the Sellers.
SS.8.6 SCHEDULES AND EXHIBITS. The Buyers's Disclosure Schedule, and
the Exhibits, shall be in form and substance acceptable to the Seller; provided,
however, that the Seller shall deliver the form of such Sellers' Disclosure
Schedule and the form of any Exhibits required to be delivered by the Buyer to
the Seller at least two (2) days prior to the Closing.
ARTICLE IX
TERMINATION
SS.9.1 TERMINATION EVENTS. This Agreement may be terminated at any
time prior to Closing:
(a) by the Buyer and the Sellers by mutual written consent at
any time prior to the Closing;
(b) by either the Buyer or the Sellers if the Closing shall
not have been consummated on or before January 15, 1998;
(c) by either the Sellers or the Buyer if there shall be any
law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if consummation
of the transactions contemplated hereby would violate any nonappealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction;
(d) by the Buyer by giving written notice to the Sellers at
any time prior to the Closing in the event (i) the Sellers have given
the Buyer any notice pursuant to ss.5.5 above and (ii) the development
that is the subject of the notice (together with the development(s)
that are the subject of any prior notice pursuant to such section) in
the aggregate have had a material adverse effect.
(e) by the Sellers by giving written notice to the Buyer at
any time prior to the Closing in the event (i) the Buyer has given the
Sellers any notice pursuant to ss.6.2 above
56
and (ii) the development that is the subject of the notice (together
with the development(s) that are the subject of any prior notice
pursuant to such section) in the aggregate have had a material adverse
effect.
(f) by the Buyer by giving written notice to the Sellers at
any time prior to the Closing (i) in the event the Sellers have
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, the Buyer has notified the Sellers
of the breach, and the breach has continued without cure for a period
of thirty (30) days after the notice of breach or (ii) if events occur
which render impossible compliance with one or more conditions set
forth in Article VII hereof and such conditions are not waived by
Buyer; provided that such events did not result from any action or
omission by Buyer which were within its control and which it was not
expressly permitted to take or omit by the terms of this Agreement; and
(g) by the Sellers by giving written notice to the Buyer at
any time prior to the Closing (i) in the event the Buyer has breached
any representation, warranty, or covenant contained in this Agreement
in any material respect, the Sellers have notified the Buyer of the
breach, and the breach has continued without cure for a period of 30
days after the notice of breach or (ii) if events occur which render
impossible compliance with one or more conditions set forth in Article
VII hereof, and such conditions are not waived by Sellers; provided
that such events did not result from any action or omission by Sellers
or the Company which were within the control of such entity and which
such entity was not expressly permitted to take or omit by the terms of
this Agreement.
SS.9.2 EFFECT OF TERMINATION. Each Party's right of termination under
ss.9.1 is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to ss.9.1, all further
obligations of the parties under this Agreement will terminate, except that the
obligations in ss.ss.11.1 and 11.3 will survive; provided, however, that if this
Agreement is terminated by a party because of the Breach of this Agreement by
the other party or because one or more of the conditions to the terminating
party's obligations under this Agreement is not satisfied as a result of the
other party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
ARTICLE X
INDEMNIFICATION; REMEDIES
SS.10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants, and obligations in this Agreement,
the Sellers' Disclosure Schedule, the supplements to the Sellers' Disclosure
Schedule, the Buyer's Disclosure Schedule, the supplements to the Buyer's
Disclosure Schedule and any other certificate or document delivered pursuant to
this Agreement will survive the Closing. The right to indemnification,
57
payment of Damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any Knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant, or obligation. The waiver of
any condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
SS.10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS. Sellers,
jointly and severally, will indemnify and hold harmless the Buyer and the
Company, and their respective Representatives, stockholders, controlling
persons, and affiliates (collectively, the "Indemnified Persons") for, and will
pay to the Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Sellers and the Company in this Agreement (without giving effect to any
supplement to the Sellers' Disclosure Schedule), the Sellers'
Disclosure Schedule, the supplements to the Sellers' Disclosure
Schedule made pursuant to ss.5.5, or any other certificate or document
delivered by Sellers and the Company pursuant to this Agreement;
(b) any Breach by any of Sellers of any of their respective
covenants or obligations in this Agreement;
(c) any product sold, leased, or rented by, or any services
provided by the Company prior to the Closing Date;
(d) any Tax in excess of amounts accrued on the Balance Sheet
or disclosed in ss.3.12(a) of the Sellers' Disclosure Schedule (without
giving effect to any supplement to the Sellers' Disclosure Schedule);
(e) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such Person with any of
Sellers and the Company (or any Person acting on their behalf) in
connection with any of the Contemplated Transactions.
The remedies provided in this ss.10.2 will not be exclusive of or limit
any other remedies that may be available to Buyer or the other Indemnified
Persons.
58
SS.10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Sellers, and will pay to Sellers the amount of any
Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions.
The remedies provided in this ss.10.3 will not be exclusive of or limit
any other remedies that may be available to Sellers.
SS.10.4 TIME LIMITATIONS. If the Closing occurs, in order for the
Sellers to have any liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date (excepting those in ss.ss.3.3, 3.4,
3.12, 3.14 and 3.20), the Buyer must notify Sellers of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by the
Buyer on or before the third anniversary of the Closing Date. There shall be no
such notification requirement as to any claim with respect to ss.ss.3.3, 3.4,
3.12, 3.14 or 3.20, or any claim for indemnification or reimbursement not based
upon any representation or warranty or any covenant or obligation to be
performed and complied with prior to the Closing Date. If the Closing occurs, in
order for the Buyer to have any liability (for indemnification or otherwise)
with respect to any representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, the Sellers must notify
the Buyer of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by the Sellers on or before the third
anniversary of the Closing Date.
SS.10.5 RIGHT OF SET-OFF.
(a) Upon notice to Sellers specifying in reasonable detail the
basis for such set-off, Buyer may set-off any amount to which it may be
entitled under this Article X (other than as a result of a breach of
the representation and warranty set forth in ss.3.8) against amounts
otherwise payable under the Promissory Notes and the Lease Agreements.
The Buyer shall have no right of set-off against the Employment
Agreements.
(b) With respect to a breach of ss.3.8 above, if any Accounts
Receivable remain unpaid as of the 180th day following the Closing
Date, the Buyer may set-off the amount of such unpaid Accounts
Receivable against amounts otherwise payable under the Promissory Notes
by notifying the Sellers that it is reducing the principal amount
outstanding under such Promissory Notes. Any unpaid Accounts Receivable
to which the Buyer has exercised its right of set-off shall be assigned
by the Buyer to the Sellers, provided that such assignment does not
result in a Breach of any obligation under the Senior Indebtedness.
59
(c) Any amounts set-off against the Promissory Notes shall be
set-off on a pro-rata basis among all the Promissory Notes.
(d) The exercise of such right of set-off by the Buyer in good
faith, whether or not ultimately determined to be justified, will not
constitute an event of default under either the Promissory Notes or the
Lease Agreements. Neither the exercise of nor the failure to exercise
such right of set-off will constitute an election of remedies or limit
the Buyer in any manner in the enforcement of any other remedies that
may be available to it.
SS.10.6 PROCEDURE FOR INDEMNIFICATION-THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under
ss.ss.10.2 or 10.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the failure
to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's
failure to give such notice; provided, however, that if the indemnified
party intentionally failed to give such notice, the indemnifying party
will be deemed to have been prejudiced by the amount of attorneys' fees
incurred with respect thereto through the date notice is received by
the indemnifying party and the indemnifying party will not be required
to indemnify the indemnified party for such attorneys' fees.
(b) If any Proceeding referred to in ss.10.6(a) is brought
against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party
will, unless the claim involves Taxes (as to any such claims involving
Taxes, the Buyer must select counsel satisfactory to the Sellers, it
being acknowledged and agreed that Squire, Xxxxxxx & Xxxxxxx L.L.P. is
satisfactory to the Sellers), be entitled to participate in such
Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation
would be inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such Proceeding, the indemnifying party will not, as
long as it diligently conducts such defense, be liable to the
indemnified party under this Article X for any fees of other counsel or
any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection
with the defense of such Proceeding, other than reasonable costs of
investigation and monitoring of defense of such Proceeding. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes
60
of this Agreement that the claims made in that Proceeding are within
the scope of and subject to indemnification; (ii) no compromise or
settlement of such claims may be effected by the indemnifying party
without the indemnified party's consent unless (A) there is no finding
or admission of any violation of Legal Requirements or any violation of
the rights of any Person and no effect on any other claims that may be
made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and
(iii) the indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its consent.
If notice is given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten (10) days
after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by any determination
made in such Proceeding or any compromise or settlement effected by the
indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding 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 indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) The Sellers hereby consent to the non-exclusive
jurisdiction of any court in which a Proceeding is brought against any
Indemnified Person for purposes of any claim that an Indemnified Person
may have under this Agreement with respect to such Proceeding or the
matters alleged therein, and agree that process may be served on them
with respect to such a claim anywhere in the world.
SS.10.7 PROCEDURE FOR INDEMNIFICATION-OTHER CLAIMS. Subject to the
provisions of ss.10.4, 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.
SS.10.8 DETERMINATION OF DAMAGES. The Parties shall make appropriate
adjustments for the time cost of money (using the Applicable Rate as the
discount rate) in determining Damages for purposes of Article X. All
indemnification payments under this Article X shall be deemed to be adjustments
to the Purchase Price.
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ARTICLE XI
GENERAL PROVISIONS
SS.11.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. Sellers will cause the
Company not to incur any out-of-pocket expenses in connection with this
Agreement, or, to the extent so incurred, will cause the Company to be
reimbursed therefor by Sellers. In the event of termination of this Agreement,
the obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a breach of this Agreement by another party.
SS.11.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as the Buyer and the
Sellers shall agree. Unless consented to by Buyer in advance or required by
Legal Requirements, prior to the Closing the Sellers and the Company shall keep
this Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person. The Buyer and the Sellers will consult with each other
concerning the means by which the employees, customers, and suppliers of the
Company and others having dealings with the Company will be informed of the
Contemplated Transactions, and Buyer will have the right to be present for any
such communication.
SS.11.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, except as and to the extent required by law, absent express,
written consent of the Sellers, the Buyer shall not, directly or indirectly,
disclose to third parties or use for its own purposes any confidential or secret
information of the Sellers, except to the extent permitted under this Agreement.
The Buyer also agrees that it will, upon the completion of its investigation,
return to the Sellers, all documents and other records or confidential
information previously authorized to be reviewed by the Buyer. It is understood
that both Federal and State laws apply to some incidences of release of
information, and that violation of this provision may also be a violation of
these laws. The term "confidential information," as used in this paragraph,
means any information received from the Sellers, including but not limited to,
the names or addresses of customers, research, inventions, discoveries,
improvements, equipment, methods of production, costs or prices or uses of
either party's products or services, business plans of either party, suppliers
and costs thereof, development work, any other information containing business
information which is required to be maintained as such for the business success
of either party, and any other trade secrets, whether or not contained in any
written documents or financial information other than information which (a) is
already in the possession of the Buyer, its employees, representatives or agents
(b) from customers of the Sellers known to the Buyer prior to the date of this
Agreement; (c) is or becomes generally available to the public through no fault
or actions by the Buyer or its employees, representatives or agents; or (d)
becomes available to the Buyer from a source which is not prohibited from
disclosing such information to the Buyer by a contractual obligation to the
Company. The parties hereto agree that the Sellers would suffer irreparable harm
in the event the
62
Buyer violates this paragraph and either discloses or uses for its own purposes
information received from the Sellers.
During the course of discussions between the Buyer and the Sellers, the
Sellers and its employees, representatives and agents may receive confidential,
proprietary, non-public business and other information concerning the Buyer.
With respect to such information, and the fact that the Buyer has furnished such
information and the fact that there are ongoing discussions regarding the
Contemplated Transaction, the Sellers agree to be bound with respect thereto to
the same extent that the Buyer is bound hereunder with respect to information
concerning the Sellers.
SS.11.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
Sellers: Xxxxxxx X. Xxxxx, III
0000 XxxXxxxxx Xxx. X.X.
Xx. Xxxxxx, Xxxx Xxxxxxxx 00000
Xxxx X. Xxxxxx
0000 XxxXxxxxx Xxx. X.X.
Xx. Xxxxxx, Xxxx Xxxxxxxx 00000
with a copy to Berthold & Xxxxx
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
Buyer: NationsRent of West Virginia, Inc.
00 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
63
with a copy to: Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxx Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
SS.11.5 RESOLUTION OF DISPUTES.
(a) The parties desire to avoid and settle without litigation
future disputes which may arise between them concerning the rights,
duties and obligations of the parties under this Agreement.
Accordingly, any such dispute shall be settled by arbitration
administered by the American Arbitration Association under its
Arbitration Rules and the Supplemental Procedures for Large, Complex
Disputes (hereinafter "Rules") then in effect; provided, however, that
any party may seek injunctive or other similar equitable relief from
any court of competent jurisdiction pending settlement of the
underlying dispute by such arbitration.
(b) Three arbitrators shall be appointed in accordance with
the Rules. The place of arbitration shall be Columbus, Ohio and a
stenographic record shall be made of any arbitration hearing. The award
rendered by the arbitrators shall be in writing and shall be based on
applicable law and judicial precedent. Unless the parties otherwise
agree, the award shall include the findings of fact and conclusions of
law on which the award is based. Judgment on such award may be entered
in any court having jurisdiction thereof.
(c) Upon the application by any party to a court for an order
confirming, modifying or vacating the award, the court shall have the
power to review whether, as a matter of law based on the findings of
fact determined by the arbitrator, the award should be confirmed,
modified or vacated in order to correct any errors of law made by the
arbitrator. In order to effectuate such judicial review limited to
issues of law, the parties agree (and shall so stipulate to the court)
that the findings of fact made by the arbitrator shall be final and
binding on the parties and shall serve as the facts to be submitted to
and relied on by the court in determining the extent to which the award
should be confirmed, modified or vacated.
(d) A request by one party for arbitration of any dispute
subject to arbitration shall be made in writing to the American
Arbitration Association and a copy thereof shall be sent to the other
party. The party requesting arbitration shall pay any deposit required
by the American Arbitration Association subject to reimbursement, if
required, from the other party in accordance with any award by the
arbitrators.
64
SS.11.6 FURTHER ASSURANCES.
(a) The parties agree (i) to furnish upon request to each
other such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do such other acts and things,
all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and the documents referred to
in this Agreement.
(b) In the event and for so long as any party actively is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with
(i) the Contemplated Transactions, or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence,
event, incident, action, failure to act, or transaction on or prior to
the Closing Date involving the Company, each of the other parties will
cooperate with him or it and his or its counsel in the contest or
defense, make available their personnel, and provide such testimony and
access to their books and records as shall be necessary in connection
with the contest or defense, all at the sole cost and expense of the
contesting or defending party (unless the contesting or defending party
is entitled to indemnification therefor under Article X above).
(c) In order to establish a factual basis for the resolution
of disputes with respect to environmental and related matters,
subsequent to the Closing the Buyer and the Sellers will establish a
benchmark as to the physical integrity of the Premises. For such
purpose, the Buyer and the Sellers will determine the scope of and will
perform such soil tests, topographical, environmental, or wetland
studies and any other physical and engineering examinations. The Buyer
and the Sellers will each pay one-half of the costs and expenses of
such studies and examinations.
SS.11.7 WAIVER. The rights and remedies of the Parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any Party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
65
SS.11.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter
(including the Letter of Intent dated November 13, 1997) and constitutes (along
with the documents referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
SS.11.9 DISCLOSURE SCHEDULES.
(a) The disclosures in the Disclosure Schedules, and those in
any Supplement thereto, must relate only to the representations and
warranties in the Section of the Agreement to which they expressly
relate and not to any other representation or warranty in this
Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Schedules
(other than an exception expressly set forth as such in the Disclosure
Schedules with respect to a specifically identified representation or
warranty), the statements in the body of this Agreement will control.
SS.11.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither
Party may assign any of its rights under this Agreement without the prior
consent of the other Parties, which will not be unreasonably withheld, except
that the Buyer may assign any of its rights under this Agreement to any Related
Person of the Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the Parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the Parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
SS.11.11 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
SS.11.12 SECTION HEADINGS, CONSTRUCTION. The headings of sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to a section ("ss.") or sections
("xx.xx.") refer to the corresponding section or sections of this Agreement. All
words used in this Agreement will be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
66
SS.11.13 TIME OF ESSENCE. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
SS.11.14 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Ohio without regard to conflicts of laws principles.
SS.11.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
67
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER:
NATIONSRENT OF WEST VIRGINIA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------------
Its: Vice President
-------------------------------------
SELLERS:
/s/ Xxxxxxx X. Xxxxx, III
-----------------------------------------
Xxxxxxx X. Xxxxx, III
/s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
/s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Orders
-----------------------------------------
Xxxxxx Orders
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
COMPANY:
TITAN RENTALS, INC.
By: /s/ Xxxxxxx X. Xxxxx, III
--------------------------------------
Xxxxxxx X. Xxxxx, III, President
68
AMENDMENT TO THE STOCK PURCHASE AGREEMENT
This is an amendment ("Amendment") to the Stock Purchase Agreement
("Agreement") dated December 20, 1997, among NationsRent of West Virginia, Inc.,
a Delaware corporation ("Buyer"), Xxxxxxx X. Xxxxx, III, Xxxx X. Xxxxxx, Xxxxx
X. Xxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx, Xx., Xxxxxx Xxxxxx, Xxxxxx
Orders, and Xxxxxx Xxxxxx ("Sellers"), and Titan Rentals Inc., a West Virginia
corporation (the "Company").
The Buyer, the Sellers, and the Company do hereby amend the Agreement
as follows:
1. Section 2.4(b)(ii)(A) through (H) shall be amended to read as
follows:
(A) $361,291 Promissory Note payable to Xxxxxxx X. Xxxxx,
III,
(B) $225,806 Promissory Note payable to Xxxxx X. Xxxxx,
(C) $180,645 Promissory Note payable to Xxxx X. Xxxxxxxx,
(D) $180,645 Promissory Note payable to Xxxxxx X.
Xxxxxxxx, Xx.,
(E) $180,645 Promissory Note payable to Xxxx X. Xxxxxx,
(F) $90,322 Promissory Note payable to Xxxxxx Xxxxxx,
(G) $90,322 Promissory Note payable to Xxxxxx Orders, and
(H) $90,322 Promissory Note payable to Xxxxxx Xxxxxx;
2. A new subsection (c) shall be added to Section 3.17 as
follows:
(c) Notwithstanding the provisions of the last sentence of
paragraph seven of the Letter of Intent dated November 13, 1997, no
$250,000 distributions to managers or any other distributions to any of
the Sellers (other than salaries in the Ordinary Course of Business)
have been made since the Most Recent Fiscal Month End, and no such
distributions shall be made to any of the Sellers prior to the Closing.
3. Section 3.30 shall be amended to read as follows:
SS.3.30 INDEBTEDNESS. The Indebtedness of the Company as of the date
of this Agreement does not exceed $478,227.73 and will not exceed
$478,227.73 as of the Closing Date (the "Maximum Indebtedness").
4. A semicolon shall replace the period at the end of
subsection (e) of Section 10.2 and a new subsection (f) shall be added to
Section 10.2 immediately after subsection (e) thereof as follows:
69
AMENDMENT TO THE STOCK PURCHASE AGREEMENT
This is an amendment ("Amendment") to the Stock Purchase Agreement
("Agreement") dated December 20, 1997, among NationsRent of West Virginia, Inc.,
a Delaware corporation ("Buyer"), Xxxxxxx X. Xxxxx, III, Xxxx X. Xxxxxx, Xxxxx
X. Xxxxx, Xxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx, Xx., Xxxxxx Xxxxxx, Xxxxxx
Orders, and Xxxxxx Xxxxxx ("Sellers"), and Titan Rentals Inc., a West Virginia
corporation (the "Company").
The Buyer, the Sellers, and the Company do hereby amend the Agreement
as follows:
1. Section 2.4(b)(ii)(A) through (H) shall be amended to read as
follows:
(A) $361,291 Promissory Note payable to Xxxxxxx X. Xxxxx,
III,
(B) $225,806 Promissory Note payable to Xxxxx X. Xxxxx,
(C) $180,645 Promissory Note payable to Xxxx X. Xxxxxxxx,
(D) $180,645 Promissory Note payable to Xxxxxx X.
Xxxxxxxx, Xx.,
(E) $180,645 Promissory Note payable to Xxxx X. Xxxxxx,
(F) $90,322 Promissory Note payable to Xxxxxx Xxxxxx,
(G) $90,322 Promissory Note payable to Xxxxxx Orders, and
(H) $90,322 Promissory Note payable to Xxxxxx Xxxxxx;
2. A new subsection (c) shall be added to Section 3.17 as
follows:
(c) Notwithstanding the provisions of the last sentence of
paragraph seven of the Letter of Intent dated November 13, 1997, no
$250,000 distributions to managers or any other distributions to any of
the Sellers (other than salaries in the Ordinary Course of Business)
have been made since the Most Recent Fiscal Month End, and no such
distributions shall be made to any of the Sellers prior to the Closing.
3. Section 3.30 shall be amended to read as follows:
SS.3.30 INDEBTEDNESS. The Indebtedness of the Company as of the date
of this Agreement does not exceed $478,227.73 and will not exceed
$478,227.73 as of the Closing Date (the "Maximum Indebtedness").
4. A semicolon shall replace the period at the end of
subsection (e) of Section 10.2 and a new subsection (f) shall be added to
Section 10.2 immediately after subsection (e) thereof as follows:
70
(f) The transfer of the capital stock, business and/or
assets of Subsurface, Inc. to Sellers, including any Tax resulting from
such transfer (whether as a result of recognition of gain on such
transfer or otherwise).
5. The following subsection (c) shall be added to the end of
Section 3.4:
The Financial Statements (including the Balance Sheet and the
most Recent Balance Sheet) fully and properly reflect all Indebtedness,
liabilities and obligations of the Company required to be so reflected
(whether as an accrual or in footnotes thereto).
Any references in the Agreement to any sections amended by this
Amendment are hereby deemed to refer to those sections as amended hereby. The
Agreement shall, except as provided above, remain unchanged and continue in full
force and effect. All capitalized terms used in this Amendment without
definition shall have the respective meanings set forth in the Agreement.
This Amendment may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Amendment and all of which,
when taken together, will be deemed to constitute one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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71
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of
December 31, 1997.
BUYER:
NATIONSRENT OF WEST VIRGINIA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Secretary
SELLERS:
/s/ Xxxxxxx X . Xxxxx, III
-----------------------------------------
Xxxxxxx X . Xxxxx, III
/s/ Xxxxx X. Xxxxx
-----------------------------------------
Xxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
/s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Orders
-----------------------------------------
Xxxxxx Orders
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
COMPANY:
TITAN RENTALS, INC.
By: /s/ Xxxxxxx X. Xxxxx, III
-----------------------------------------
Xxxxxxx X. Xxxxx, III, President
- 3 -
