EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of January 20, 1999 (this
"Agreement"), between NATIONSRENT, INC., a Delaware corporation
("NationsRent"), and RENTAL SERVICE CORPORATION, a Delaware corporation ("RSC"
and, together with NationsRent, the "Constituent Corporations");
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of NationsRent and RSC (each, a
"Party" and, together, the "Parties") have each approved this Agreement and
the merger (the "Merger") of NationsRent with and into RSC upon the terms and
subject to the conditions set forth herein;
WHEREAS, it is intended that, for U.S. federal income tax purposes, the
Merger shall qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code");
WHEREAS, it is intended that, for financial accounting purposes, the Merger
shall be accounted for as a "pooling of interests" under generally accepted
accounting principles in the United States ("GAAP");
WHEREAS, as an inducement to the willingness of NationsRent to enter into
this Agreement, the board of directors of RSC has approved the grant to
NationsRent of an option to purchase shares of common stock, par value $.01
per share ("RSC Common Stock"), of RSC, pursuant to a stock option agreement,
dated as of the date of this Agreement, between NationsRent and RSC (the "RSC
Stock Option Agreement") and, as an inducement to the willingness of RSC to
enter into this Agreement, the board of directors of NationsRent has approved
the grant to RSC of an option to purchase shares of common stock, par value
$.01 per share ("NationsRent Common Stock"), of NationsRent pursuant to a
stock option agreement, dated as of the date of this Agreement, between RSC
and NationsRent (the "NationsRent Stock Option Agreement" and, together with
the RSC Stock Option Agreement, the "Stock Option Agreements"), and each of
NationsRent and RSC has duly authorized, executed and delivered each of the
Stock Option Agreements as of the date hereof; and
WHEREAS, NationsRent and RSC desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time (as defined in Section 1.3) NationsRent
shall be merged with and into RSC and the separate corporate existence of
NationsRent shall thereupon cease. RSC shall be the surviving corporation in
the Merger (sometimes hereinafter referred to as the "Surviving Corporation")
and shall continue to be governed by the laws of the State of Delaware, and
the separate corporate existence of RSC, with all its rights, privileges,
immunities, powers and franchises, shall continue unaffected by the Merger
except as set forth in Article III hereof. The Merger shall have the effects
specified in the Delaware General Corporation Law, as amended (the "DGCL").
1.2. Closing. The closing of the Merger (the "Closing") shall take place (i)
at the offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000 at 9:00 A.M., local time, on the third business day after the
date on which the last to be fulfilled or waived of the conditions set forth
in Article VII
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(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions) shall
be satisfied or waived in accordance with this Agreement or (ii) at such other
place and time and/or on such other date as NationsRent and RSC may agree in
writing (the "Closing Date").
1.3. Effective Time. Immediately following the Closing, NationsRent and RSC
will cause a Certificate of Merger (the "Certificate of Merger") to be
executed, acknowledged and filed with the Secretary of State of Delaware as
provided in Section 251 of the DGCL. The Merger shall become effective at the
time when the Certificate of Merger has been duly filed with the Secretary of
State of Delaware or such other time as shall be agreed upon by the parties
and set forth in the Certificate of Merger in accordance with the DGCL (the
"Effective Time").
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION
2.1. The Certificate of Incorporation. The certificate of incorporation of
RSC as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Charter"),
until duly amended as provided therein or by applicable law, except that the
Charter shall be amended as set forth in Exhibit A (the "Charter Amendments").
2.2. The By-Laws. The by-laws of RSC, as amended in accordance with Section
5.1.15 and in effect at the Effective Time, shall be the by-laws of the
Surviving Corporation (the "By-Laws"), until thereafter amended as provided
therein or by applicable law.
ARTICLE III
OFFICERS AND DIRECTORS
3.1. Directors of Surviving Corporation. At the Effective Time, the board of
directors of the Surviving Corporation shall be increased by one member and
shall consist of nine directors, four of which shall be directors designated
by NationsRent from among NationsRent's present directors (the "NationsRent
Directors"), four of which shall be directors designated by RSC from among
RSC's present directors (the "RSC Directors"), and one of which (the "Agreed
Director") shall be designated by NationsRent with the consent of RSC (such
consent not to be unreasonably withheld), provided, however, that such Agreed
Director may not be related to H. Xxxxx Xxxxxxxx, or be an Affiliate (as
defined herein) of or serve as a director or executive officer of, any entity
of which H. Xxxxx Xxxxxxxx, any person related to him or any trust or entity
for the benefit of any such persons, owns, directly or indirectly, an equity
interest or interests having more than 15 percent of the ordinary voting power
in such entity. Each of such designations shall occur prior to the date that
the Form S-4 (as defined in Section 6.3.3) is declared effective. All of such
directors designated for the board of directors of RSC shall be the "New
Directors," each to serve until his successor has been duly elected or
appointed and qualified or until his earlier death, resignation or removal in
accordance with the Charter and the By-Laws. If, prior to the Effective Time,
any New Director shall decline or be unable to serve, the Party entitled to
designate such New Director shall designate another individual (a "New
Director Successor") to serve in such New Director's stead. Xxxxxx X. Xxxx and
Xxxxx X. Xxxx shall be designated as the initial and only members of the
nominating committee of the RSC board of directors.
3.2. Officers of Surviving Corporation. From and after the Effective Time,
the following persons shall be the officers of the Surviving Corporation and
hold the indicated offices: (A) Xxxxxx X. Xxxx, Chairman, (B) Xxxxx X. Xxxx,
Vice-Chairman, President and Chief Executive Officer and (C) Xxxxxx Xxxxxx,
Senior Executive Vice President and Chief Financial Officer (each, a "New
Officer"), each to serve until his successor has been duly appointed or until
his earlier death, resignation or removal in accordance with the By-Laws. If,
prior to the Effective Time, any New Officer shall decline or be unable to
serve, a person to fill such position shall be designated by the New
Directors.
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ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
4.1. Effect on Capital Stock. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock
of NationsRent:
4.1.1. Merger Consideration. Each share of NationsRent Common Stock (each,
a "NationsRent Common Share" and, together, the "NationsRent Common Shares")
issued and outstanding immediately prior to the Effective Time (other than
NationsRent Common Shares that are owned by RSC or any direct or indirect
subsidiary of RSC or NationsRent Common Shares that are owned or held in
treasury by NationsRent, or owned by any direct or indirect subsidiary of
NationsRent (collectively, "Excluded NationsRent Shares")) shall be converted
into and become exchangeable for 0.355 (the "Exchange Ratio") of a share of
RSC Common Stock, subject to adjustment as provided in Section 4.5 (the
"Merger Consideration"). At the Effective Time, all NationsRent Common Shares
shall no longer be outstanding, shall be cancelled and retired and shall cease
to exist, and each certificate (a "Certificate") formerly representing any of
such NationsRent Common Shares (other than Excluded NationsRent Shares) shall
thereafter represent only the right to receive the Merger Consideration and
the right, if any, to receive pursuant to Section 4.2.4 cash in lieu of
fractional shares of RSC Common Stock into which such NationsRent Common
Shares have been converted pursuant to this Section 4.1.1 and any distribution
or dividend pursuant to Section 4.2.2, in each case without interest.
4.1.2. Cancellation of Shares. Each Excluded NationsRent Share issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, no longer be
outstanding, shall be cancelled and retired without payment of any
consideration therefor and shall cease to exist.
4.1.3. Effect on RSC Common Stock. Each share of RSC Common Stock issued
and outstanding immediately prior to the Effective Time shall remain unchanged
by the Merger and shall remain issued and outstanding after the Effective
Time.
4.2. Exchange of Certificates for Shares.
4.2.1. Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause an exchange agent selected by RSC with
NationsRent's prior approval, which shall not be unreasonably withheld (the
"Exchange Agent"), to mail to each holder of record as of the Effective Time
of a Certificate (other than holders of a Certificate in respect of Excluded
NationsRent Shares) (i) a letter of transmittal specifying that delivery shall
be effected, and that risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates (or affidavits of loss and
indemnification in lieu thereof as provided in Section 4.2.6) to the Exchange
Agent (the "Letter of Transmittal"), such letter of transmittal to be in such
form and have such other provisions as RSC and NationsRent may reasonably
agree, and (ii) instructions for exchanging Certificates for (A) certificates
representing shares of RSC Common Stock and (B) any unpaid dividends and other
distributions and cash in lieu of fractional shares. Subject to Section 4.2.7,
upon surrender of a Certificate (or affidavit of loss and indemnification in
lieu thereof as provided in Section 4.2.6) for cancellation to the Exchange
Agent together with a duly executed Letter of Transmittal, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of RSC Common Stock that such holder
is entitled to receive pursuant to this Article IV and a check in the amount
(after giving effect to any required tax withholdings) of (A) any cash in lieu
of fractional shares determined in accordance with Section 4.2.4 hereof plus
(B) any cash dividends and any other dividends or other distributions that
such holder has the right to receive pursuant to the provisions of this
Article IV, and any Certificate so surrendered shall forthwith be cancelled.
No interest will be paid or accrued on any amount payable upon due surrender
of any Certificate. In the event of a transfer of ownership of NationsRent
Common Shares that is not registered in the transfer records of NationsRent, a
certificate representing the proper number of shares of RSC Common Stock,
together with a check for any cash in lieu of fractional shares to be paid
upon due surrender of the Certificate and any other dividends or distributions
in respect thereof, may be issued and/or paid to such a transferee if the
Certificate
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formerly representing such NationsRent Common Shares is presented to the
Exchange Agent accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable stock transfer taxes have
been paid. If any certificate for shares of RSC Common Stock is to be issued
in a name other than that in which the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such exchange that the
Person (as defined below) requesting such exchange shall pay any transfer or
other taxes required by reason of the issuance of a certificate for shares of
RSC Common Stock in a name other than that of the registered holder of the
Certificate surrendered or shall establish to the satisfaction of RSC or the
Exchange Agent that such tax has been paid or is not applicable.
For the purposes of this Agreement, the term "Person" shall mean any
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, Governmental Entity (as defined in Section 5.1.4)
or other entity of any kind or nature.
4.2.2. Distributions with Respect to Unexchanged Shares; Voting.
4.2.2.1. Whenever a dividend or other distribution is declared by RSC in
respect of RSC Common Stock, the record date for which is at or after the
Effective Time, that declaration shall include dividends or other
distributions in respect of all shares of RSC Common Stock issuable pursuant
to this Agreement. No dividends or other distributions in respect of such RSC
Common Stock shall be paid to any holder of any unsurrendered Certificate
until such Certificate is surrendered for exchange in accordance with this
Article IV. Subject to the effect of applicable laws, following surrender of
any such Certificate there shall be issued and/or paid to the holder of the
certificates representing whole shares of RSC Common Stock issued in exchange
therefor, without interest, (A) at the time of such surrender, the dividends
or other distributions with a record date after the Effective Time and a
payment date on or prior to the date of issuance of such whole shares of RSC
Common Stock and not previously paid and (B) at the appropriate payment date,
the dividends or other distributions payable with respect to such whole shares
of RSC Common Stock with a record date after the Effective Time but with a
payment date subsequent to surrender. For purposes of dividends or other
distributions in respect of shares of RSC Common Stock, all shares of RSC
Common Stock to be issued pursuant to the Merger shall be deemed issued and
outstanding as of the Effective Time.
4.2.2.2. Registered holders of unsurrendered Certificates shall be
entitled to vote after the Effective Time at any meeting of RSC stockholders
with a record date at or after the Effective Time the number of whole shares
of RSC Common Stock represented by such Certificates, as the case may be,
regardless of whether such holders have surrendered their Certificates.
4.2.3. Transfers. After the Effective Time, there shall be no transfers on
the stock transfer books of NationsRent of NationsRent Common Shares that were
outstanding immediately prior to the Effective Time.
4.2.4. Fractional Shares. Notwithstanding any other provision of this
Agreement, no fractional shares of RSC Common Stock will be issued and any
holder of NationsRent Common Shares entitled to receive a fractional share of
RSC Common Stock but for this Section 4.2.4 shall be entitled to receive an
amount in cash (without interest) determined by multiplying such fraction
(rounded to the nearest one-hundredth of a share) by the closing price of a
share of RSC Common Stock, as reported in The Wall Street Journal, New York
City edition, on the trading day immediately prior to the Effective Time.
4.2.5. Termination of Exchange Period; Unclaimed Stock. Any shares of RSC
Common Stock and any portion of the cash, dividends or other distributions
with respect to the RSC Common Stock deposited by RSC with the Exchange Agent
(and the proceeds of any investments thereof) that remain unclaimed by the
stockholders of NationsRent 180 days after the Effective Time shall be paid to
RSC. Any stockholders of NationsRent who have not theretofore complied with
this Article IV shall thereafter look only to RSC for payment of their shares
of RSC Common Stock and any cash, dividends and other distributions in respect
thereof issuable and/or payable pursuant to Section 4.1.1, Section 4.2.2 and
Section 4.2.4 upon due surrender of their Certificates (or affidavits of loss
and indemnification in lieu thereof as provided in Section 4.2.6), without any
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interest thereon. Notwithstanding the foregoing, none of RSC, the Surviving
Corporation, the Exchange Agent nor any other Person shall be liable to any
former holder of NationsRent Common Shares for any amount properly delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
4.2.6. Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and the posting by such Person of a bond in the form
customarily required by RSC as indemnity against any claim that may be made
against it with respect to such Certificate, RSC will issue the shares of RSC
Common Stock and the Exchange Agent will deliver any cash, dividends and other
distributions in respect thereof issuable and/or payable in exchange for such
lost, stolen or destroyed Certificate pursuant to Section 4.1.1, Section 4.2.2
and Section 4.2.4 upon due surrender of and deliverable in respect of
NationsRent Common Shares represented by such Certificate pursuant to this
Agreement, in each case, without interest.
4.2.7. Affiliates. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any "affiliate" (as determined
pursuant to Section 6.12) of NationsRent shall not be exchanged until RSC has
received a written agreement from such Person as provided in Section 6.12
hereof.
4.3. Dissenters' Rights. In accordance with Section 262 of the DGCL, no
appraisal rights shall be available to holders of NationsRent Common Stock or
RSC Common Stock in connection with the Merger.
4.4. NationsRent Stock Options. At the Effective Time, each outstanding
option to purchase NationsRent Common Shares (each, a "NationsRent Stock
Option"), whether vested or unvested, issued under the NationsRent Stock Plans
(as defined in Section 5.1.2.1), shall cease to represent a right to acquire
shares of NationsRent Common Stock and shall be converted automatically into
an option to purchase shares of RSC Common Stock, and RSC shall assume each
such NationsRent Stock Option subject to the terms of any of the NationsRent
Stock Plans, and the agreements evidencing grants thereunder; provided,
however, that from and after the Effective Time, (i) the number of shares of
RSC Common Stock purchasable upon exercise shall be equal to the number of
shares of NationsRent Common Stock that were purchasable under such
NationsRent Stock Option immediately prior to the Effective Time multiplied by
the Exchange Ratio, subject to adjustment as provided in Section 4.5, and
rounding down to the nearest whole share of RSC Common Stock, and (ii) the per
share exercise price shall be equal to the result of dividing the per share
exercise price of such NationsRent Stock Option by the Exchange Ratio, subject
to adjustment as provided in Section 4.5, and rounding down to the nearest
cent. Notwithstanding the foregoing, the number of and the per share exercise
price of each NationsRent Stock Option which is an "incentive stock option"
(as defined in Section 422 of the Code) shall be adjusted in accordance with
the requirements of Section 424 of the Code, as necessary in order for such
NationsRent Stock Option to be an "incentive stock option." Accordingly, with
respect to any incentive stock options, fractional shares of RSC Common Stock
shall be rounded down to the nearest whole number of shares and, where
necessary, the per share exercise price shall be rounded up to the nearest
cent. After the Effective Time, the board of directors of RSC shall keep
reserved for issuance a number of shares of RSC Common Stock sufficient for
issuance upon exercise of all NationsRent Stock Options outstanding after the
Effective Time. At the Effective Time, RSC shall send a notice to each holder
of a NationsRent Stock Option informing such holder of the number of shares of
RSC Common Stock that are subject to, and the exercise price of, such holder's
NationsRent Stock Options assumed by RSC and as soon as practicable after the
Effective Time, RSC shall file with the Securities and Exchange Commission
(the "SEC") a registration statement on an appropriate form or a post-
effective amendment to a previously filed registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of RSC Common Stock subject to NationsRent Stock Options assumed
pursuant to this Section, and shall use its best reasonable efforts to
maintain the current status of the prospectus contained therein, as well as
comply with any applicable state securities or "blue sky" laws while such
NationsRent Stock Options remain outstanding.
4.5. Adjustments to Prevent Dilution. In the event that prior to the
Effective Time there is a change in the number of NationsRent Common Shares or
shares of RSC Common Stock or securities convertible or exchangeable into or
exercisable for shares of NationsRent Common Stock or shares of RSC Common
Stock
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issued and outstanding as a result of a distribution, reclassification, stock
split (including a reverse split), stock dividend or distribution, or other
similar transaction, the Exchange Ratio shall be equitably adjusted to
eliminate the effects of such event.
4.6. Treatment of Other Equity Rights. The Other NationsRent Equity Rights
(as defined in paragraph 5.1.2.1) outstanding at the Effective Time shall be
treated as set forth in Section 6.17.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of NationsRent and RSC. Except as set
forth in the corresponding sections or subsections of the disclosure letter,
dated the date hereof, delivered by NationsRent to RSC or by RSC to
NationsRent (each a "Disclosure Letter", and the "NationsRent Disclosure
Letter" and the "RSC Disclosure Letter", respectively), as the case may be,
NationsRent (except for subparagraphs 5.1.2.2, 5.1.3.2, 5.1.14(ii), 5.1.15 and
5.1.16.1 below and references in paragraphs 5.1.1 and 5.1.8.1 below to
documents made available by RSC to NationsRent) hereby represents and warrants
to RSC, and RSC (except for paragraphs 5.1.2.1, 5.1.3.1, 5.1.14(i) and
5.1.16.2 below and references in paragraphs 5.1.1 and 5.1.8.1 below to
documents made available by NationsRent to RSC) hereby represents and warrants
to NationsRent, that:
5.1.1. Organization, Good Standing and Qualification. Each of it and its
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority,
and has been duly authorized by all necessary approvals and orders, to own and
operate its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership or operation of its
properties or conduct of its business requires such qualification, except
where the failure to be so authorized, qualified or in good standing is not,
when taken together with all other such failures, reasonably likely to have a
Material Adverse Effect (as defined below) on it. It has made available to
RSC, in the case of NationsRent, and to NationsRent, in the case of RSC, a
complete and correct copy of its certificate of incorporation and by-laws,
each as amended to the date hereof. Such certificates of incorporation and by-
laws as so made available are in full force and effect.
As used in this Agreement, (i) the term "Subsidiary" means, with respect
to NationsRent or RSC, as the case may be, any entity, whether incorporated or
unincorporated, of which at least fifty percent of the securities or ownership
interests having by their terms ordinary voting or other power (including by
contract) (A) to elect directors having at least fifty percent of the voting
power of the entire board of directors or other persons performing similar
functions or (B) to directly perform such functions is directly or indirectly
owned by such Party or by one or more of its respective Subsidiaries or by
such Party and any one or more of its respective Subsidiaries, (ii) the term
"Material Adverse Effect" means, with respect to either RSC or NationsRent, as
the case may be, a material adverse effect on the financial condition,
properties, business or results of operations of such Person and its
Subsidiaries, taken as a whole, other than any change or effect arising out of
general economic conditions or conditions generally affecting the equipment
rental industry and (iii) unless otherwise specified, "Affiliate" shall have
the meaning specified in Rule 12b-2 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
5.1.2. Capital Structure.
5.1.2.1. The authorized capital stock of NationsRent consists of
250,000,000 shares of NationsRent Common Stock, of which 55,618,024 shares of
NationsRent Common Stock were issued and outstanding and no shares of
NationsRent Common Stock were held in treasury as of the close of business on
January 19, 1999, 5,000,000 shares of Preferred Stock, $0.01 par value per
share (the "NationsRent Preferred Shares"), none of which was outstanding as
of the date hereof. All of the outstanding shares of NationsRent Common Stock
have been duly authorized and are validly issued, fully paid and
nonassessable. Other than shares
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of NationsRent Common Stock subject to issuance under the NationsRent Stock
Option Agreement or subject to issuance as set forth below, NationsRent has no
shares of NationsRent Common Stock or NationsRent Preferred Shares reserved
for or otherwise subject to issuance. As of the date hereof, there were not
more than 4,055,780 shares of NationsRent Common Stock that were subject to
outstanding options, whether vested or unvested, issued by NationsRent, or
that NationsRent was obligated to issue, pursuant to NationsRent Compensation
and Benefit Plans identified in Section 5.1.8 of the NationsRent Disclosure
Letter as being the only NationsRent Compensation and Benefit Plans pursuant
to which NationsRent Common Stock (or options to purchase NationsRent Common
Stock) may be issued (collectively the "NationsRent Stock Plans"). As of the
date hereof, there were not more than 8,911,337 shares of NationsRent Common
Stock that were subject to warrants, convertible notes or other securities of
NationsRent convertible into or exercisable or exchangeable for, or
obligations of NationsRent (whether subject to condition or not) to issue,
shares of NationsRent Common Stock (excluding the NationsRent Stock Options)
("Other NationsRent Equity Rights") outstanding on the date hereof. All
agreements and instruments creating or giving rise to any Other NationsRent
Equity Rights as of the date hereof are set forth in the NationsRent
Disclosure Letter. Each of the outstanding shares of capital stock or other
securities of each of NationsRent's Subsidiaries is duly authorized and
validly issued, fully paid and nonassessable and owned by NationsRent or a
direct or indirect wholly-owned Subsidiary of NationsRent, free and clear of
any lien, pledge, security interest, claim or other encumbrance. Except as set
forth above, for the NationsRent Stock Option Agreement and for options to
purchase shares of NationsRent Common Stock and Other NationsRent Equity
Rights which are permitted to be issued in accordance with Section 6.1, there
are no agreements or instruments creating or giving rise to preemptive or
other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or sell any shares of capital stock or
other securities of NationsRent or any of its Subsidiaries or any securities
or obligations convertible or exchangeable into or exercisable for, or giving
any Person a right to subscribe for or acquire, any securities of NationsRent
or any of its Subsidiaries, and no securities or obligations evidencing such
rights are authorized, issued or outstanding. The shares of NationsRent Common
Stock issuable pursuant to the NationsRent Stock Option Agreement have been
duly reserved for issuance by NationsRent, and upon any issuance of such
NationsRent Common Shares in accordance with the terms of the NationsRent
Stock Option Agreement, such shares of NationsRent Common Stock will be duly
authorized and validly issued, fully paid and nonassessable. NationsRent does
not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or, except for obligations referred
to above, convertible into or exercisable for securities having the right to
vote) with the stockholders of NationsRent on any matter. NationsRent does
not, directly or indirectly, hold any equity interests (or securities
convertible into equity interests) in any entity, whether or not incorporated,
other than its Subsidiaries. NationsRent has no contingent payment, earnout or
other similar payment obligations which have arisen in connection with
acquisitions currently outstanding.
5.1.2.2. The authorized capital stock of RSC consists of 40,000,000
shares of RSC Common Stock, of which 24,097,648 shares were issued and
outstanding and no shares were held in treasury as of the close of business on
January 19, 1999, and 500,000 shares of Preferred Stock, par value $0.01 per
share (the "RSC Preferred Shares"), none of which shares was outstanding as of
the close of business on the date hereof. All of the outstanding shares of RSC
Common Stock have been duly authorized and are validly issued, fully paid and
nonassessable. Other than shares of RSC Common Stock subject to issuance under
the RSC Stock Option Agreement or subject to issuance as set forth below, RSC
has no shares of RSC Common Stock or RSC Preferred Shares reserved for or
subject to issuance. As of the date hereof, there were not more than 1,995,091
shares of RSC Common Stock that were subject to outstanding options, whether
vested or unvested, issued by RSC, or that RSC was obligated to issue,
pursuant to the RSC Compensation and Benefit Plans identified in Section 5.1.8
of the RSC Disclosure Letter as being the only RSC Compensation and Benefit
Plans pursuant to which shares of RSC Common Stock (or options to purchase RSC
Common Stock) may be issued (collectively, the "RSC Stock Plans"). As of the
date hereof, no shares of RSC Common Stock were subject to warrants,
convertible notes or other securities of RSC convertible into or exercisable
or exchangeable for, or obligations of RSC (whether subject to condition or
not) to issue, shares of RSC Common Stock (excluding the RSC Stock Options)
("Other RSC Equity Rights") outstanding on the date hereof. All agreements and
instruments creating
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or giving rise to any Other RSC Equity Rights as of the date hereof are set
forth in the RSC Disclosure Letter. Each of the outstanding shares of capital
stock of each of RSC's Subsidiaries is duly authorized and validly issued,
fully paid and nonassessable and owned by RSC or a direct or indirect wholly-
owned subsidiary of RSC, free and clear of any lien, pledge, security
interest, claim or other encumbrance. Except as set forth above, for the RSC
Stock Option Agreement and for options to purchase shares of RSC Common Stock
and Other RSC Equity Rights which are permitted to be issued in accordance
with Section 6.1, there are no agreements or instruments creating or giving
rise to preemptive or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments to issue or to sell any shares of
capital stock or other securities of RSC or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire, any securities of
RSC or any of its Subsidiaries, and no securities or obligations evidencing
such rights are authorized, issued or outstanding. The shares of RSC Common
Stock issuable pursuant to the RSC Stock Option Agreement have been duly
reserved for issuance by RSC, and upon any issuance of such shares in
accordance with the terms of the RSC Stock Option Agreement, such RSC Common
Shares will be duly authorized and validly issued, fully paid and
nonassessable. RSC does not have outstanding any bonds, debentures, notes or
other obligations the holders of which have the right to vote (or, except for
obligations referred to above, convertible into or exercisable for securities
having the right to vote) with the stockholders of RSC on any matter. RSC does
not, directly or indirectly, hold any equity interests (or securities
convertible into equity interests) in any entity, whether or not incorporated,
other than its Subsidiaries. RSC has no contingent payment, earnout or other
similar payment obligations currently outstanding.
5.1.3. Corporate Authority; Approval and Fairness.
5.1.3.1. NationsRent has all requisite corporate power and authority and
has taken all corporate action necessary in order to execute, deliver and
perform its obligations under this Agreement and the NationsRent Stock Option
Agreement to consummate the Merger and the other transactions contemplated
hereby and thereby, subject only to approval and adoption of this Agreement by
the holders of a majority of the outstanding shares of NationsRent Common
Stock (the "NationsRent Requisite Vote"). Each of this Agreement and the
NationsRent Stock Option Agreement has been duly executed and delivered by
NationsRent and is a valid and binding agreement of NationsRent enforceable
against NationsRent in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles (the "Bankruptcy and Equity Exception"). On or prior
to the date hereof, the board of directors of NationsRent (i) has unanimously
approved and declared advisable this Agreement and approved each of the Stock
Option Agreements and the Merger and the other transactions contemplated
hereby and thereby and has resolved to recommend that the holders of
NationsRent Common Stock approve and adopt the Merger Agreement and the
transactions contemplated hereby, and (ii) has received the opinion of its
financial advisors, Bear, Xxxxxxx & Co. Inc., in a customary form and to the
effect that the Exchange Ratio is fair, from a financial point of view, to
such holders.
5.1.3.2. RSC has all requisite corporate power and authority and has
taken all corporate action necessary in order to execute, deliver and perform
its obligations under this Agreement and the RSC Stock Option Agreement and to
consummate the Merger and the other transactions contemplated hereby and
thereby, subject only to approval and adoption of this Agreement by the
holders of a majority of the outstanding shares of RSC Common Stock and the
approval of the Charter Amendments by the holders of a majority of the
outstanding shares of RSC Common Stock (together, the "RSC Requisite Vote").
Each of this Agreement and the RSC Stock Option Agreement has been duly
executed and delivered by RSC and is a valid and binding agreement of RSC,
enforceable against RSC in accordance with its terms, subject to the
Bankruptcy and Equity Exception. On or prior to the date hereof, the board of
directors of RSC (i) has unanimously approved and declared advisable this
Agreement, and approved each of the Stock Option Agreements and the Merger and
the other transactions contemplated hereby and thereby and has resolved to
recommend that the holders of RSC Common Stock approve and adopt the Merger
Agreement and the transactions contemplated hereby, and (ii) has received the
opinion of its financial advisors, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, in a customary form and to the effect that the Exchange Ratio is
fair to RSC from a financial point of view. The shares of RSC
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Common Stock, when issued pursuant to this Agreement, will be duly authorized
and validly issued, fully paid and nonassessable and no stockholder of RSC
will have any preemptive right of subscription or purchase in respect thereof.
5.1.4. Governmental Filings; No Violations.
5.1.4.1. Other than the necessary filings, notices, approvals and/or
consents (i) pursuant to Sections 1.3 and 7.1.5, (ii) under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act")
and (iii) to comply with state securities or "blue-sky" laws (such filings,
notices and/or approvals of NationsRent being the "NationsRent Required
Consents" and of RSC being the "RSC Required Consents"), no filings, notices
and/or reports are required to be made by it with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
it from, any governmental or regulatory authority, court, agency, commission,
body or other governmental entity ("Governmental Entity"), in connection with
the execution and delivery of this Agreement or the Stock Option Agreements by
it and the consummation by it of the Merger and the other transactions
contemplated hereby and thereby, except those that the failure to make or
obtain are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on it or prevent, materially delay or materially
impair its ability to consummate the Merger and the other transactions
contemplated by this Agreement or the Stock Option Agreements.
5.1.4.2. The execution, delivery and performance of this Agreement and
each Stock Option Agreement by it do not, and the consummation by it of the
Merger and the other transactions contemplated hereby and thereby will not,
constitute or result in (i) a breach or violation of, or a default under, its
certificate of incorporation or by-laws or the comparable governing
instruments of any of its Significant Subsidiaries, (ii) a breach or violation
of, or a default under, the acceleration of any rights or obligations or the
creation of a lien, pledge, security interest or other encumbrance on its
assets or the assets of any of its Subsidiaries (with or without notice, lapse
of time or both) pursuant to, any agreement, lease, contract, note, mortgage,
indenture, arrangement or other obligation ("Contracts") binding upon it or
any of its Subsidiaries or, assuming the filings, notices and/or approvals
referred to in Section 5.1.4.1 are made or obtained, any Law (as defined in
Section 5.1.9) or governmental or non-governmental permit or license to which
it or any of its Subsidiaries is subject or (iii) any change in the rights or
obligations of any party under any of its Contracts, including any
acceleration thereof, except, in the case of clause (ii) or (iii) above, for
any breach, violation, default, acceleration, creation or change that is not,
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect on it or prevent, materially delay or materially impair its ability to
consummate the Merger and the other transactions contemplated by this
Agreement or the Stock Option Agreements. The NationsRent Disclosure Letter,
with respect to NationsRent, and the RSC Disclosure Letter, with respect to
RSC, sets forth a correct and complete list of Contracts of it and its
Subsidiaries pursuant to which consents or waivers are or may be required
prior to consummation of the transactions contemplated by this Agreement other
than those where the failure to obtain such consents or waivers is not,
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect on it or prevent or materially impair its ability to consummate the
Merger and the other transactions contemplated by this Agreement or the Stock
Option Agreements.
5.1.5. Reports; Financial Statements. It has made available to the other
Party, each registration statement, report, proxy statement or information
statement prepared by it since December 31, 1997 (the "Audit Date"), in the
form (including exhibits, annexes and any amendments thereto) filed with the
SEC (collectively, including any such reports filed subsequent to the date
hereof, its "Reports") and unaudited historical financial statements for the
quarter to date, ended November 30, 1998 (the "Fourth Quarter Reports"). As of
their respective dates, its Reports did not, and any Report filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into its
Reports (including the related notes and schedules) fairly presents, or will
fairly present, in all material respects, the consolidated financial position
of it and its Subsidiaries as of its date and each of the consolidated
statements of
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income, of stockholders' equity and of cash flows included in or incorporated
by reference into its Reports (including any related notes and schedules)
fairly presents, or will fairly present, in all material respects, the
consolidated results of operations, retained earnings and cash flows, as the
case may be, of it and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to the absence of complete
notes and normal year-end audit adjustments that will not be material in the
aggregate in amount or effect), in each case in accordance with GAAP
consistently applied during the periods involved, except as may be noted
therein. The consolidated balance sheet included in the Fourth Quarter Reports
fairly presents, in all material respects, the consolidated financial position
of it and its Subsidiaries as of its date and the consolidated statements of
income included in the Fourth Quarter Reports (including any related notes and
schedules) fairly presents, in all material respects, the consolidated results
of operations of it and its Subsidiaries for the periods set forth therein
(subject to the absence of complete notes and normal year-end audit
adjustments that will not be material in the aggregate in amount or effect),
in each case in accordance with GAAP consistently applied during the periods
involved, except as may be noted therein. When NationsRent's audited financial
statements for the one-year period ended December 31, 1998 (the "Audited
Statements") are available and delivered to RSC, the consolidated fully
diluted earnings per share of NationsRent for the three months ended December
31, 1998, as reflected in its Audited Statements, will not be materially and
adversely inconsistent with $.11 per share, fully diluted.
As used herein, "Fourth Quarter Reports" means (i) in the case of RSC, its
unaudited historical financial statements for the quarter ended December 31,
1998, and (ii) in the case of NationsRent, its unaudited financial statements
for the quarter to date ended November 30, 1998.
5.1.6. Absence of Certain Changes. Except as disclosed in its Reports
filed prior to the date hereof or as expressly contemplated or permitted by
this Agreement, since the Audit Date it and its Subsidiaries have conducted
their respective businesses only in, and have not engaged in any material
transaction other than according to, the ordinary and usual course of such
businesses and there has not been (i) any change in the financial condition,
properties, business or results of operations of it and its Subsidiaries,
except those changes that, individually or in the aggregate, have not had and
are not reasonably likely to have, a Material Adverse Effect on it; (ii) any
declaration, setting aside or payment of any dividend or other distribution in
respect of its capital stock; (iii) any split in its capital stock,
combination, subdivision or reclassification of any of its capital stock; or
(iv) any change by it in accounting principles, practices or methods, except
as required by changes in GAAP. Since the Audit Date, except as provided for
herein, in its respective Disclosure Letter or as disclosed in the Reports
filed prior to the date hereof, there has not been any increase in the salary,
wage, bonus or other compensation payable or that could become payable by it
or any of its Subsidiaries to directors or executive officers, other than
increases in the ordinary course.
5.1.7. Litigation and Liabilities. Except as disclosed in its Reports
filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of its executive officers, threatened against it
or any of its Affiliates or (ii) obligations or liabilities, whether or not
accrued, contingent or otherwise and whether or not required to be disclosed,
or any other facts or circumstances, in either such case, of which its
executive officers have knowledge that would reasonably be expected to result
in any claims against or obligations or liabilities of it or any of its
Affiliates, except for those that are not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect on it or prevent,
materially delay or materially impair its ability to consummate the Merger and
the transactions contemplated by this Agreement.
5.1.8. Employee Benefits; Labor Matters.
5.1.8.1. A copy of each "employee benefit plan", within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and each bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, employment, change of control,
termination, severance, compensation, medical, health or other plan,
agreement, policy or arrangement that covers one or more employees, directors,
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former employees or former directors of it and its Subsidiaries (in the case
of NationsRent, the "NationsRent Compensation and Benefit Plans" and, in the
case of RSC, the "RSC Compensation and Benefit Plans," and, in the case of
NationsRent or RSC, respectively, the "Compensation and Benefit Plans") and
any trust agreements or insurance contracts forming a part of such
Compensation and Benefit Plans has been made available by NationsRent to RSC
or by RSC to NationsRent, as the case may be, prior to the date hereof and
each such applicable Compensation and Benefit Plan is listed in Section 5.1.8
of its respective Disclosure Letter.
5.1.8.2. Each of its respective Compensation and Benefit Plans is in
substantial compliance with all applicable Law, including the Code and ERISA.
Each of its Compensation and Benefit Plans that is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan")
and that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service
(the "IRS") with respect to "TRA" (as such term is defined in Section 1 of
Rev. Proc 93-39), and it is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. There is no pending or,
to the knowledge of its executive officers, threatened in writing material
litigation or claim relating to its Compensation and Benefit Plans. Neither it
nor any Subsidiary has engaged in a transaction with respect to any of its
Compensation and Benefit Plans that, assuming the taxable period of such
transaction expired as of the date hereof, would subject it or any of its
Subsidiaries to a material tax or penalty imposed by either Section 4975 of
the Code or Section 502 of ERISA.
5.1.8.3. As of the date hereof, no liability under Subtitle C or D of
Title IV of ERISA (other than the payment of premiums to the Pension Benefit
Guaranty Corporation) has been or is expected to be incurred by it or any
Subsidiary with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any of them, or the single-employer plan of any entity
which (i) is considered one employer with it under Section 4001 of ERISA or
Section 414 of the Code (its "ERISA Affiliate") (each such single-employer
plan, its "ERISA Affiliate Plan") or (ii) at any relevant time was considered
one employer with it under Section 4001 of ERISA or Section 414 of the Code.
It and its Subsidiaries and ERISA Affiliates have not contributed, or been
obligated to contribute, to a "multiemployer plan", within the meaning of
Section 4001(a)(3) of ERISA, and have not incurred, and are not expected to
incur, any liability under Subtitle E of Title IV of ERISA. No "reportable
event", within the meaning of Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived, has occurred for any of its Pension
Plans or any of its ERISA Affiliate Plans within the 12-month period ending on
the date hereof or will occur in connection with the consummation of the
Merger or the other transactions contemplated by this Agreement.
5.1.8.4. All contributions required to be made under the terms of any of
its Compensation and Benefit Plans as of the date hereof have been timely made
or have been reflected on the most recent consolidated balance sheet filed or
incorporated by reference in its Reports prior to the date hereof. Neither any
of its Pension Plans nor any of any of its ERISA Affiliate Plans has an
"accumulated funding deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA. Neither it nor its
Subsidiaries has provided, or is required to provide, security to any of its
Pension Plans or to any other single-employer plan pursuant to Section
401(a)(29) of the Code, or is subject to any lien pursuant to Section 412 of
the Code or Section 302 of ERISA.
5.1.8.5. Under each of its Pension Plans which is a single-employer plan
and each of its ERISA Affiliate Plans, as of the last day of the most recent
plan year ended prior to the date hereof, the actuarially determined present
value of all "benefit liabilities", within the meaning of Section 4001(a)(16)
of ERISA (as determined on the basis of the actuarial assumptions contained in
such Pension Plan's or ERISA Affiliate Plan's most recent actuarial
valuation), did not exceed the then current value of the assets of such
Pension Plan or ERISA Affiliate Plan, and there has been no material change in
the financial condition of such Pension Plan or ERISA Affiliate Plan since the
last day of the most recent plan year.
5.1.8.6. Neither it nor its Subsidiaries have any obligations for
retiree health, life or other welfare benefits under any of its Compensation
and Benefit Plans, except as set forth in its Reports filed prior to the date
hereof or as required by applicable Law.
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5.1.8.7. Except as may be provided in agreements, plans and instruments
identified in its Disclosure Letter, none of the consummation of the Merger
and the other transactions contemplated by this Agreement, the performance of
its obligations under the Stock Option Agreements or the adoption of this
Agreement by its stockholders, shall (x) except as may be provided in this
Agreement, entitle any of its or its Subsidiaries' employees, consultants or
directors, or former employees, consultants or directors, to compensation and
benefits, directly or indirectly, upon termination of employment, (y)
accelerate the time of funding (whether through a grantor trust or otherwise),
payment or vesting or cause any payment of compensation or benefits under,
increase the amount payable or cause any other material obligation pursuant
to, any of its respective Compensation and Benefit Plans or (z) result in any
payments under any of its Compensation and Benefit Plans the deduction for
which would be disallowed under Section 162(m) or Section 280G of the Code.
5.1.8.8. To the knowledge of its executive officers, it has no material
labor relations disputes pending and its labor relations are satisfactory in
all material respects. Except as disclosed in the applicable Disclosure
Letter, it is not a party to any labor agreement and its employees are not
members of any union or similar organization or the subject of any union
organizing efforts. It has complied with any applicable labor or union
agreement, and all laws relating to the employment of labor, including
provisions relating to wages, hours, equal opportunity and collective
bargaining.
5.1.8.9. Notwithstanding anything to the contrary contained in this
Section 5.1.8, the representations and warranties contained in this Section
5.1.8 shall be deemed to be true and correct with respect to it unless such
failures to be true and correct (without giving effect to the individual
materiality qualifications and thresholds otherwise contained in this Section
5.1.8) are, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on it.
5.1.9. Compliance with Laws. Except as set forth in its Reports filed
prior to the date hereof, the businesses of each of it and its Subsidiaries
have not been, and are not being, conducted in violation of any law, statute,
ordinance, regulation, judgment, order, decree, injunction, arbitration award,
license, authorization, opinion, agency requirement or permit of any
Governmental Entity or common law (collectively, "Laws"), except for
violations that are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on it or to prevent, materially delay or
materially impair its ability to consummate the Merger and the transactions
contemplated by this Agreement or the Stock Option Agreements. Each of it and
its Subsidiaries has all permits, licenses, franchises, variances, exemptions,
orders and other governmental authorizations, consents and approvals
(collectively, "Permits") necessary to conduct their business as presently
conducted, except for those the absence of which are not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect on it.
5.1.10. Environmental Protection.
Except as set forth in its respective Disclosure Letter or in its Reports
filed prior to the date hereof:
5.1.10.1. it and each of its subsidiaries is in compliance with all
applicable Environmental Laws (as defined below), and neither it nor any of
its Subsidiaries has received any communication from any person or
Governmental Authority that alleges that it or any of its Subsidiaries is not
in compliance with applicable Environmental Laws, except where any failure or
alleged failure to be in such compliance would not individually or in the
aggregate have a Material Adverse Effect.
5.1.10.2. it and each of its Subsidiaries has obtained or has applied
for all environmental, health and safety permits and governmental
authorizations (collectively, the "Environmental Permits") necessary for the
construction of their facilities or the conduct of their operations except
where the failure to so obtain would not individually or in the aggregate have
a Material Adverse Effect, and all such Environmental Permits are in good
standing or, where applicable, a renewal application has been timely filed and
is pending agency approval, and it and its subsidiaries are in compliance with
all terms and conditions of the Environmental Permits except as would not
individually or in the aggregate have a Material Adverse Effect.
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5.1.10.3. there is no Environmental Claim (as defined below) pending or,
to the knowledge of its executive officers, threatened (A) against it or any
of its Subsidiaries, (B) against any person or entity whose liability for such
Environmental Claim it or any of its Subsidiaries has retained or assumed
either contractually or by operation of law, or (C) against any real or
personal property or operations which it or any of its subsidiaries owns,
leases or manages, in whole or in part, which, in any such case described in
this paragraph 5.1.10.3, would individually or in the aggregate have a
Material Adverse Effect.
5.1.10.4. it has no knowledge of any Releases (as defined below) of any
Hazardous Materials (as defined below) that would be reasonably likely to
result in any Environmental Claim against it or any of its Subsidiaries, or
against any person or entity whose liability for such Environmental Claim it
or any of its Subsidiaries has retained or assumed either contractually or by
operation of law or which would result in it incurring liability under any
Environmental Law, except for any Environmental Claim or liability which would
not individually or in the aggregate have a Material Adverse Effect.
5.1.10.5. it has no knowledge, with respect to any predecessor of it or
any of its Subsidiaries or any real property formerly owned, leased or
operated by it or any of its Subsidiaries, of any pending or threatened
Environmental Claim which would have a Material Adverse Effect, or of any
Release of Hazardous Materials that would be reasonably likely to result in
any Environmental Claim which would have a Material Adverse Effect.
5.1.10.6. Each of NationsRent and RSC has made available to RSC and
NationsRent, respectively, true and complete copies of all material
environmental audits, surveys, reports and assessments relating to real
property owned, leased or operated by it or any of its subsidiaries.
5.1.10.7. As used in this Agreement:
(i) "Environmental Claim" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims,
liens, investigations, proceedings or notices of noncompliance or violation
(written or oral) by any person or entity (including any Governmental
Authority) alleging potential liability (including potential responsibility
for or liability for enforcement, investigatory costs, cleanup costs,
governmental response costs, removal costs, remedial costs, natural resources
damages, property damages, personal injuries or penalties) relating to a
Release or threatened Release into the environment of any Hazardous Materials
at any location, whether or not owned, operated, leased or managed by it or
any of its subsidiaries any and all claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from the presence or Release of any Hazardous Materials.
(ii) "Environmental Laws" means all applicable federal, state and local
laws, rules and regulations relating to pollution, the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata),
natural resources or protection of human health as it relates to the
environment including laws and regulations relating to Releases or threatened
Releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
(iii) "Hazardous Materials" means (A) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid containing regulated levels of polychlorinated
biphenyls ("PCBs"); (B) any chemicals, materials or substances which are now
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of similar
import under any Environmental Law and (C) any other chemical, material,
substance or waste, exposure to which is now prohibited, limited or regulated
under any Environmental Law in a jurisdiction in which it or any of its
subsidiaries operates.
(iv) "Release" means any release, spill, emission, leaking, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the
atmosphere, soil, surface water, groundwater or property.
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5.1.11. Takeover Statutes. Its board of directors has taken all
appropriate and necessary actions such that it will not be prohibited from
entering into a "business combination" with NationsRent or RSC, as the case
may be, as an "interested stockholder" (in each case as such term is used in
Section 203 of the DGCL) as a result of the execution and delivery of this
Agreement and each Stock Option Agreement or the consummation of the
transactions contemplated hereby or thereby. No other "fair price,"
"moratorium," "control share acquisition" or other similar anti-takeover
statute or regulation (each a "Takeover Statute") as in effect on the date
hereof is applicable to the NationsRent Common Stock, the Merger or the other
transactions contemplated by this Agreement or the Stock Option Agreements. No
anti-takeover provision contained in its certificate of incorporation or its
by-laws is, or at the Effective Time will be, applicable to the NationsRent
Common Stock, the Merger or the other transactions contemplated by this
Agreement or the Stock Option Agreements.
5.1.12. Tax Matters. As of the date hereof, neither it nor any of its
affiliates (as determined in accordance with Section 6.12) has taken or agreed
to take any action, nor do its executive officers have any knowledge of any
fact or circumstance, that, to their knowledge, would prevent the Merger and
the other transactions contemplated by this Agreement from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
5.1.13. Taxes. It and each of its Subsidiaries have prepared in good faith
and duly and timely filed (taking into account any extension of time within
which to file) all material Tax Returns (as defined below) required to be
filed by any of them and all such filed tax returns are complete and accurate
in all material respects and: (i) it and each of its Subsidiaries have paid
all Taxes (as defined below) that are shown as due on such filed Tax Returns
or that it or any of its Subsidiaries is obligated to withhold from amounts
owing to any employee, creditor or third party, except with respect to matters
contested in good faith or for such amounts that, alone or in the aggregate,
are not reasonably likely to have a Material Adverse Effect on it; (ii) as of
the date hereof, there are not pending or threatened any audits, examinations,
investigations or other proceedings in respect of Taxes or Tax matters; and
(iii) there are not any unresolved questions or claims concerning its or any
of its Subsidiaries' Tax liability that are reasonably likely to have a
Material Adverse Effect on it. Neither it nor any of its Subsidiaries has any
liability with respect to income, franchise or similar Taxes in excess of the
amounts accrued in respect thereof that are reflected in the financial
statements included in its Reports, except such excess liabilities as are not,
individually or in the aggregate, reasonably likely to have a Material Adverse
Effect on it.
As used in this Agreement, (i) the term "Tax" (including, with correlative
meaning, the terms "Taxes", and "Taxable") includes all federal, state, local
and foreign income, profits, franchise, gross receipts, environmental, customs
duty, capital stock, severance, stamp, payroll, sales, employment,
unemployment, disability, use, property, withholding, excise, production,
value added, occupancy and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "Tax Return" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority relating to
Taxes.
5.1.14. Brokers and Finders. Neither it nor any of its officers, directors
or employees has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders, fees in connection with the Merger
or the other transactions contemplated in this Agreement except that (i)
NationsRent has employed Bear, Xxxxxxx & Co. Inc. as its financial advisors,
the arrangements with which have been disclosed to RSC prior to the date
hereof, and (ii) RSC has employed Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated as its financial advisors, the arrangements with which have been
disclosed to NationsRent prior to the date hereof.
5.1.15. Amended By-Laws. Effective simultaneously with the execution of
this Agreement, RSC has adopted the amendments to its by-laws set forth in
Exhibit C.
5.1.16. Ownership of Other Party's Common Stock
5.1.16.1. Neither RSC nor any of its Subsidiaries "beneficially owns"
(as such term is defined in Rule 13d-3 under the Exchange Act) any shares of
NationsRent Common Stock.
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5.1.16.2. Neither NationsRent nor any of its Subsidiaries "beneficially
owns" (as such term is defined in Rule 13d-3 under the Exchange Act) any
shares of RSC Common Stock.
5.1.17. Material Contracts. It has filed as an exhibit to an Annual Report
on Form 10-K or another Report, or has delivered or otherwise made available
to the other Party, true, correct and complete copies of all contracts and
agreements to which it or any of its Subsidiaries is a party (a) that are or
would be required to be filed in an exhibit to an Annual Report on Form 10-K
filed by it with the SEC as of the date of this Agreement or (b) that purport
to limit, curtail or restrict the ability of it or any of its Subsidiaries to
operate or compete in any geographic area or line of business as of the date
hereof (collectively, its "Material Contracts"). Each of the Material
Contracts is valid and enforceable against it or its Subsidiaries, as
applicable, in accordance with its terms (subject to the Bankruptcy and Equity
Exception), and neither it nor any such Subsidiary, as the case may be, nor,
to the knowledge of its executive officers, any other party, is in breach of
or in default under any Material Contract, and no event has occurred that with
the lapse of time or the giving of notice or both would constitute a default
thereunder by it or any such Subsidiary or, to the knowledge of its executive
officers, any other party, except for any such unenforceability, default or
event which, individually or in the aggregate, is not reasonably likely to
have a Material Adverse Effect on it. No party to any Material Contract has
given notice to it of or made a claim against it with respect to any breach or
default thereunder, in any such case in which such breach or default,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect on it.
5.1.18. Intellectual Property. It owns or possesses adequate licenses or
other valid rights to use all material patents and applications therefore,
trademarks, trade names, service marks and copyrights (collectively,
"Proprietary Rights") necessary to the conduct of its business in the manner
in which it is presently being conducted, except for such lack of or defects
in ownership or possession as is not, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect on it. As of the date of
this Agreement, neither it nor any of its Subsidiaries has received any
written notice that any of its Proprietary Rights have been declared
unenforceable or otherwise invalid by any court or governmental agency other
than notices relating to Proprietary Rights whose loss would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect on
it. There is no existing infringement, misuse, or misappropriation of any
Proprietary Rights by others that is, individually or in the aggregate,
reasonably likely to have a Material Adverse Effect on it. Neither it nor any
of its Subsidiaries has received any written notice alleging that the
operation of its business or that of any of its Subsidiaries infringes in any
material respect upon the intellectual property rights of others other than
allegations that are not, individually or in the aggregate, reasonably likely
to have a Material Adverse Effect on it. There is no license or any other
right to use any Proprietary Rights whose loss is, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on it and that
is scheduled to expire on or before January 1, 2001.
5.1.19. Rental Fleet. Its rental fleet is "rental ready" except where the
failure to be rental ready is not reasonably likely to have a Material Adverse
Effect. "Rental ready" means that each item of rental equipment is fully
operable and available for rental to customers, excluding items which are
undergoing maintenance and repairs in the ordinary course of business.
5.1.20. Affiliated Transactions and Certain Other Agreements. Set forth in
the NationsRent Disclosure Letter or RSC Disclosure Letter, as applicable, is
a list of (a) all contracts, arrangements, agreements or understandings that
it would be required to describe pursuant to Item 404 of Regulation S-K of the
Securities Act if disclosure thereunder was made on the date hereof, except
for those contracts, arrangements, agreements or understandings disclosed (or
incorporated by reference), in the case of NationsRent, in NationsRent's
Registration Statement on Form S-1, filed on December 31, 1998, and, in the
case of RSC, in RSC's 1998 Annual Report on Form 10-K for the year ended
December 31, 1997 or any RSC Report filed as of the date hereof and (b) all
arrangements or understandings, whether written or oral, giving any Person the
right to require it to register shares of its capital stock or securities
convertible into or exercisable for capital stock or to participate in any
such registration.
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ARTICLE VI
COVENANTS
6.1. Interim Operations. Each of NationsRent and RSC covenants and agrees as
to itself and its Subsidiaries that, after the date hereof and prior to the
Effective Time (unless the other party shall otherwise approve in writing, and
except as otherwise expressly contemplated by this Agreement, disclosed in its
respective Disclosure Letter or required by applicable Law):
6.1.1. the business of it and its Subsidiaries shall be conducted in the
ordinary and usual course and, to the extent consistent therewith, it and its
Subsidiaries shall use its best reasonable efforts to preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, regulators, distributors, lessors, employees and
business associates;
6.1.2. it shall not (A) amend its certificate of incorporation or by-laws,
except that the certificate of incorporation and by-laws of RSC shall be
amended as contemplated by the Charter Amendments and Section 5.1.15,
respectively; (B) split, combine, subdivide or reclassify its outstanding
shares of capital stock; (C) declare, set aside or pay any dividend or
distribution payable in cash, stock or property in respect of any capital
stock (other than pursuant to the terms of any Rights Plan (as defined in
Section 6.1.3)); or (D) repurchase, redeem or otherwise acquire (other than
Rights (as defined in Section 6.1.3) pursuant to any Rights Plan), or permit
any of its Subsidiaries to purchase or otherwise acquire, any shares of its
capital stock or any securities convertible into or exchangeable or
exercisable for any shares of its capital stock;
6.1.3. neither it nor any of its Subsidiaries shall (i) issue, sell,
pledge, dispose of or encumber any shares of, or securities convertible into
or exchangeable or exercisable for, or rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements, calls, commitments or rights of any kind to acquire,
its capital stock of any class (other than (w) shares of capital stock
issuable pursuant to options outstanding on the date hereof under the
NationsRent Stock Plans or RSC Stock Plans, pursuant to the applicable Stock
Option Agreement, or pursuant to outstanding options or rights to acquire
shares of capital stock described in Section 5.1.2.1 or 5.1.2.2, (x)
additional options or rights to acquire shares of capital stock granted under
the terms of any NationsRent Stock Plan or RSC Stock Plan, as the case may be,
as in effect on the date hereof in the ordinary course of the operation of
such Stock Plan, (y) shares of capital stock issuable pursuant to the options
or rights described in clause (x) and (z) pursuant to the terms of any
stockholder rights protection plan adopted by NationsRent or RSC, as the case
may be, after consultation with the other party (with respect to either party,
a "Rights Plan"); provided that (A) the terms of any Rights Plan shall provide
that none of (I) the acquisition by NationsRent or RSC, as the case may be, of
shares of RSC Common Stock or NationsRent Common Stock, respectively, pursuant
to, or the exercise or performance by either Party of its rights or
obligations under, the RSC Stock Option Agreement or the NationsRent Stock
Option Agreement, (II) in the case of any such Rights Plan of RSC, the receipt
or ownership by any Person of the shares of RSC Common Stock to be issued in
the Merger, (III) the consummation of any of the other transactions
contemplated hereby or by the Stock Option Agreements or (IV) the acquisition
by any director or officer or any Person who may be deemed to be an
"affiliate" of NationsRent or RSC (as determined under Section 6.12) of any
shares of capital stock of NationsRent or RSC, as the case may be, issuable
pursuant to any NationsRent Stock Options or RSC Stock Options, as the case
may be, shall be deemed to cause or give rise to any distribution of the
rights to purchase capital stock of a Party to be issued pursuant to the
applicable Rights Plan (in either case, the "Rights") or to cause such Rights
to become void, separable, distributable, unredeemable or exercisable; (B)
neither RSC or NationsRent nor any officer, director, affiliate or associate
of NationsRent or RSC (or any group comprised of such persons) shall be deemed
to become an "acquiring person" or to meet any other similar definition of a
Person which would (whether upon notice or lapse of time or both) cause any
such Rights to become void, separable, distributable, unredeemable or
exercisable as a result of the transactions contemplated hereby, by the Stock
Option Agreements or by any acquisition referred to in clause (A) above,
individually or in the aggregate; (C) any such Rights Plan (and any Rights
issued thereunder) adopted by RSC shall, by its own terms and without any
further action on the part of the board of directors of the Surviving
Corporation, terminate (without payment) 60 days after the earlier of the
termination of this Agreement or the
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Effective Time unless the New Directors shall elect, by affirmative vote of
not less than two-thirds of the entire board of directors of the Surviving
Corporation, to have such Rights Plan continue in full force and effect); and
(D) any such Rights Plan adopted by NationsRent shall, by its own terms and
without any further action on the part of the board of directors of the
Surviving Corporation terminate on the earlier of immediately before the
Effective Time and 60 days after the termination of this Agreement; (ii)
transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or
encumber any assets or incur or modify any indebtedness or other liability
except in the ordinary and usual course of business, pursuant to its budget
plan previously delivered to the other Party, pursuant to financial plans
previously disclosed in its Disclosure Letter, for long-term indebtedness
incurred in connection with the refinancing of existing indebtedness, or
pursuant to any transaction permitted by clause (iii) of this Section 6.1.3,
in each case without the consent of the other Party; or (iii) enter into any
agreement concerning, or make, any acquisition or series of acquisitions or
capital expenditures unless, in the case of RSC, such transaction or series of
transactions is pursuant to letters of intent pending as of the date hereof
and, in the case of either NationsRent or RSC, such transaction or such
transaction or series of transactions (A) is in the ordinary and usual course
of business, (B) does not, individually or in the aggregate with all other
transactions relying on this clause (B), involve consideration that (x) has a
value in excess of $10 million plus, in the case of NationsRent, the amount of
consideration actually paid by RSC for acquisitions by RSC or its Subsidiaries
pursuant to letters of intent pending as of the date hereof or (y) is
consideration other than cash or obligations that are not convertible into
shares of its capital stock, (C) is not reasonably likely to prevent or
materially delay the mailing of the Prospectus/Proxy Statement or the Closing,
and (D) is not violative of Section 6.1.6;
6.1.4. except as contemplated by this Agreement, neither it nor any of its
Subsidiaries shall grant any severance or termination pay to, or enter into
any employment or severance agreement with, any director or executive officer
or establish any plan or program of severance or termination pay for other
employees generally or any group of employees of it or its Subsidiaries, in
each case without the consent of the other Party; and neither it nor any of
its Subsidiaries shall terminate, establish, adopt, enter into, make any new
grants or awards of stock-based compensation or other benefits under, amend or
otherwise modify any compensation or benefit plan or agreement or increase the
salary, wage, bonus or other compensation of any directors, officers or
employees except for grants or awards to directors, officers and employees of
it or its Subsidiaries under existing compensation or benefit plans or
agreements (including agreements to be offered to new employees) entered into
in the normal and usual course of business and related compensation and
benefit increases, and except for actions necessary to satisfy existing
contractual obligations under compensation or benefit plans or agreements
existing as of the date hereof or to comply with applicable Law;
6.1.5. neither it nor any of its Subsidiaries shall settle or compromise
any material claims or litigation or, except in the ordinary and usual course
of business, modify, amend or terminate any of its Material Contracts or
waive, release or assign any material rights or claims;
6.1.6. neither it nor any of its Subsidiaries shall take any action or
omit to take any action for the purpose or with the reasonably foreseeable
consequence of preventing, delaying or impeding the consummation of the Merger
or the other transactions contemplated by this Agreement or the Stock Option
Agreements including any action or omission that would cause (i) the Merger to
(A) fail to qualify as a "pooling of interests" under GAAP (and each Party
agrees to use its best reasonable efforts to remove any impediment that would
cause the Merger to fail to qualify as a "pooling of interests" under GAAP) or
(B) fail to qualify as a reorganization under Section 368(a) of the Code or
(ii) the exchange of shares of RSC Common Stock for NationsRent Common Shares
in the Merger to fail to qualify for nonrecognition of gain (except with
respect to cash received in lieu of fractional shares of RSC Common Stock);
6.1.7. notwithstanding anything contained in the foregoing Sections 6.1.1
to 6.1.6, neither it nor any of its Subsidiaries shall take any action that
would cause the number of authorized but unissued shares of NationsRent Common
Stock or RSC Common Stock, as the case may be, that (i) are not reserved for
issuance or otherwise contemplated to be issued under any Contract, plan or
understanding (other than a Stock Option Agreement) and (ii) are available for
issuance under the Stock Option Agreement under which it is the issuer to
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be less than 19.9% of the outstanding shares of NationsRent Common Stock or
RSC Common Stock, as the case may be; and
6.1.8. neither it nor any of its Subsidiaries shall authorize or enter
into an agreement to do any of the foregoing.
6.2. Acquisition Proposals.
6.2.1. Each of NationsRent and RSC agrees that, subject to paragraph 6.2.3
and except as expressly contemplated by this Agreement, neither it nor any of
its Subsidiaries nor any of the officers or directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' officers, directors, employees, investment bankers,
attorneys, accountants, financial advisors, agents or other representatives
(collectively, with respect to each of NationsRent and RSC, such Person's
"Representatives") not to, directly or indirectly, initiate, solicit,
encourage or otherwise facilitate any inquiries or the making of any proposal
or offer with respect to a merger, reorganization, share exchange,
consolidation or similar transaction involving NationsRent or RSC or any of
its respective Significant Subsidiaries, or any purchase of, or offer to
purchase, all or substantially all of the equity securities of NationsRent or
RSC, as the case may be, or any of its respective Significant Subsidiaries, or
all or substantially all of the assets of it or of any of its Significant
Subsidiaries (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"). Each of NationsRent and RSC further agrees that
neither it nor any of its Subsidiaries nor any of its or its Subsidiaries'
officers or directors shall, and that it shall direct and use its best efforts
to cause its Representatives not to, directly or indirectly, have any
discussions with or provide any confidential information or data to any Person
relating to an Acquisition Proposal or engage in any negotiations concerning
an Acquisition Proposal, or otherwise facilitate any effort or attempt to make
or implement an Acquisition Proposal; provided, however, that nothing
contained in this Agreement shall prevent either NationsRent or RSC or its
board of directors from (i) making any disclosure to its shareholders if, in
the good faith judgment of its board of directors (after consultation with its
outside counsel), failure so to disclose would be inconsistent with its
obligations under applicable Law; (ii) negotiating with or furnishing
information to any Person who has made a bona fide written Acquisition
Proposal received after the date hereof which did not result from a breach of
this Section 6.2.1; or (iii) recommending (and in connection therewith,
withdrawing or modifying its approval or recommendation of this Agreement, the
Merger or the other transactions contemplated hereby) such an Acquisition
Proposal to its shareholders, if and only to the extent that, in the case of
actions referred to in clause (ii) or clause (iii), such Acquisition Proposal
is a Superior Proposal (as defined below). For purposes of this Agreement, a
"Superior Proposal" means in respect of NationsRent or RSC, as applicable, any
Acquisition Proposal by a third party (y) on terms which the board of
directors of such Party determines in its good faith judgment after
consultation with its financial advisors (whose advice shall be communicated
to the other Party), (i) to be more favorable from a financial point of view
to its shareholders than the Merger and the other transactions contemplated
hereby and (ii) to be more favorable to such Party than the Merger and the
other transactions contemplated hereby after taking into account any other
relevant factors permitted under applicable Law, and after giving the other
Party at least ten business days to respond to such third party Acquisition
Proposal and (z) which the board of directors of such Party determines in its
good faith judgment to constitute a transaction that is reasonably likely to
be consummated on the terms set forth, taking into account all legal,
financial (including the financing terms of any such proposal), regulatory,
and other aspects of such proposal. Each of NationsRent and RSC agrees that it
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Person conducted heretofore with respect
to any Acquisition Proposal. Each of NationsRent and RSC also agrees that if
it has not already done so, it will promptly request each Person, if any, that
has heretofore executed a confidentiality agreement within the 12 months prior
to the date hereof in connection with its consideration of any Acquisition
Proposal to return or destroy all confidential information heretofore
furnished to such Person by or on behalf of it or any of its Subsidiaries.
6.2.2. Each of NationsRent and RSC agrees that it will take the necessary
steps promptly to inform its Subsidiaries and its and its Subsidiaries'
Representatives of the obligations undertaken in this Section 6.2. Each of
NationsRent and RSC agrees that it will notify the other promptly if any such
inquiries, proposals or
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offers relating to or constituting an Acquisition Proposal are received by,
any such information is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, any of its or its
Subsidiaries' Representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any proposals or
offers.
6.2.3. Nothing contained herein shall prohibit a Party from taking and
disclosing to its shareholders a position contemplated by Rules 14d-9 and 14e-
2(a) under the Exchange Act with respect to an Acquisition Proposal by means
of a tender or exchange offer or prohibit either Party's directors or officers
from voting or tendering any securities beneficially owned by them as they may
determine.
6.3. Information Supplied.
6.3.1. Each of NationsRent and RSC shall cooperate and promptly prepare,
and RSC shall file with the SEC, as soon as practicable a Registration
Statement on Form S-4, including the joint prospectus/proxy statement
constituting a part thereof (the "Prospectus/Proxy Statement") (the "Form S-
4"), under the Securities Act with respect to the issuance of RSC Common Stock
in the Merger. The Parties will cause the Form S-4 to comply as to form in all
material respects with the applicable provisions of the Securities Act and the
rules and regulations thereunder. Each of NationsRent and RSC shall use its
respective best reasonable efforts to have the Form S-4 declared effective by
the SEC as promptly as practicable after such filing. RSC shall use its best
reasonable efforts to obtain, prior to the effective date of the Form S-4, all
necessary state securities law or "Blue Sky" permits or approvals required to
carry out the transactions contemplated by this Agreement. RSC will advise
NationsRent, promptly after it receives notice thereof, of the time when the
Form S-4 has become effective or any supplement or amendment has been filed,
the issuance of any stop order, the suspension of the qualification of the
shares of RSC Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or any request by the SEC for amendment of the
Prospectus/Proxy Statement or the Form S-4 or comments thereon and responses
thereto or requests by the SEC for additional information.
6.3.2. NationsRent and RSC each agrees, as to itself and its Subsidiaries,
that none of the information supplied or to be supplied by it or its
Subsidiaries for inclusion or incorporation by reference in the Form S-4,
including, without limitation the Prospectus/Proxy Statement, and any
amendment or supplement thereto will, at the time the Form S-4 becomes
effective under the Securities Act, at the date of mailing to shareholders and
at the time or times of each Shareholders Meeting (as defined below), contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to the date of each Shareholders Meeting any
information relating to NationsRent or RSC, or any of their respective
Affiliates, officers or directors, should be discovered by NationsRent or RSC,
respectively, which should be set forth in an amendment to the Form S-4 or a
supplement to the Prospectus/Proxy Statement, so that such document would not
include any misstatement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, the Party which discovers such information shall promptly notify
the other Party and, to the extent required by Law, an appropriate amendment
or supplement describing such information shall be promptly filed with the SEC
and, to the extent required by law, disseminated to the shareholders of the
appropriate Party.
6.3.3. Shareholders Meetings. NationsRent will take, in accordance with
applicable law and its certificate of incorporation and by-laws, all action
necessary to convene a special meeting of the holders of shares of NationsRent
Common Stock at which such holders shall consider approval and adoption of the
Merger Agreement and the other transactions contemplated hereby (the
"NationsRent Shareholders Meeting") as promptly as practicable after the Form
S-4 has been declared effective by the SEC and, if practicable, prior to the
next NationsRent annual meeting. RSC will take, in accordance with applicable
Law and its certificate of incorporation and by-laws, all action necessary to
convene a special meeting of the holders of RSC Common Stock at which such
holders shall consider approval and adoption of the Merger Agreement and the
other transactions contemplated hereby and the other matters specified in the
second succeeding sentence (the "RSC
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Shareholders Meeting", and each of the NationsRent Shareholders Meeting and
the RSC Shareholders Meeting, a "Shareholders Meeting") as promptly as
practicable after the Form S-4 has been declared effective by the SEC and, if
practicable, prior to the next RSC annual meeting. NationsRent and RSC shall
each use its best reasonable efforts to schedule and hold their respective
Shareholders Meetings at the same date and time. RSC shall include in the
notice of meeting referred to above resolutions to approve, inter alia: (i)
approval and adoption of this Agreement and the transactions contemplated
hereby; (ii) amendments to the certificate of incorporation of RSC to (A)
increase the number of authorized shares of RSC Common Stock to 150,000,000
and (B) change the name of RSC to "RSC NationsRent", each of such amendments
to become effective as of the Effective Time; and (iii) an increase in the
number of shares of RSC Common Stock available for issuance under the RSC
Stock Plans to such number as the Parties may agree. The board of directors of
each of RSC and NationsRent shall recommend to its respective shareholders the
approval and adoption of this Agreement and the other transactions
contemplated hereby and shall use its respective best reasonable efforts to
solicit such approval; provided that, notwithstanding any other provision of
this Agreement, including, without limitation, the provisions of Section 6.2,
either Party's board of directors may withdraw or modify its recommendation if
it concludes such action is advisable in the discharge of is fiduciary duties.
6.4. Filings; Other Actions; Notification.
6.4.1. NationsRent and RSC shall each cooperate with the other and (i) use
(and shall use its best reasonable efforts to cause their respective
Subsidiaries to use) all their respective best reasonable efforts promptly to
take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable under this Agreement, the Stock Option
Agreements and applicable Laws to consummate and make effective the Merger and
the other transactions contemplated by this Agreement and the Stock Option
Agreements as soon as practicable, including preparing and filing as promptly
as practicable all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of information, applications
and other documents, and (ii) use (and shall use its best reasonable efforts
to cause their respective Subsidiaries to use) all their respective best
reasonable efforts to obtain as promptly as practicable all approvals,
consents, registrations, permits, authorizations and other confirmations
required to be obtained from any third party necessary, proper or advisable to
consummate the Merger and the other transactions contemplated by this
Agreement and the Stock Option Agreements, including with respect to obtaining
consents or waivers under their respective senior credit facilities or the
replacement thereof. Subject to applicable Laws relating to the exchange of
information, NationsRent and RSC shall have the right to review in advance,
and to the extent practicable each will consult the other on, all the
information relating to NationsRent and its Subsidiaries or RSC and its
Subsidiaries, as the case may be, that appears in any filing made with, or
written materials submitted to, any third party and/or any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement and the Stock Option Agreements. In exercising the foregoing right,
each of NationsRent and RSC shall act reasonably and as promptly as
practicable. Notwithstanding anything to the contrary in this Section 6.4.1,
neither RSC nor any of its Subsidiaries shall be required to sell, otherwise
dispose of or hold separate (through the establishment of a trust or
otherwise) assets or Subsidiaries of RSC that are material to it and its
Subsidiaries taken as a whole or to restrict, require changes in or limit, the
operation of any assets or businesses of RSC or any of its Subsidiaries or to
take any other action that is, in any such case, individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on RSC after
the Effective Time (it being understood that, for this purpose, materiality
shall be considered with reference to the combined companies following the
Merger).
6.4.2. NationsRent and RSC each shall, upon request by the other, furnish
the other with all information concerning itself, its Subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Form S-4, the Prospectus/Proxy
Statement or any other necessary or appropriate filing, notice, petition,
statement, registration, submission of information or application made by or
on behalf of NationsRent or RSC or any of their respective Subsidiaries to any
third party and/or any Governmental Entity in connection with the Merger and
the other transactions contemplated by this Agreement and the Stock Option
Agreements.
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6.4.3. NationsRent and RSC each shall keep the other apprised of the
status of matters relating to completion of the Merger and the other
transactions contemplated by this Agreement and the Stock Option Agreements,
including promptly furnishing the other with copies of notices or other
communications received by NationsRent or RSC, as the case may be, or any of
its Subsidiaries, from any third party and/or any Governmental Entity with
respect to the Merger and the other transactions contemplated by this
Agreement and the Stock Option Agreements. NationsRent and RSC each shall give
prompt notice to the other of any change that is reasonably likely to result
in a Material Adverse Effect on it or of any failure of any condition set
forth in Article VII to the other Party's obligations to effect the Merger.
6.4.4. In the event any claim, action, suit, investigation or other
proceeding by any Governmental Entity or other Person or other legal or
administrative proceeding is commenced that questions the validity or legality
of this Agreement, either Stock Option Agreement, or the Merger or the other
transactions contemplated by this Agreement and the Stock Option Agreements or
claims damages in connection therewith, the Parties agree to cooperate and use
their respective best reasonable efforts to defend against and respond
thereto.
6.5. Access; Confidentiality.
6.5.1. In order to facilitate consummation of the Merger and the other
transactions contemplated by this Agreement, the Parties hereby agree that
upon reasonable notice, and except as may otherwise be required by applicable
Law, NationsRent and RSC each shall (and shall cause its Subsidiaries to)
afford the other's Representatives reasonable access, during normal business
hours throughout the period prior to the Effective Time, to its properties,
books, contracts and records and, during such period, each shall (and shall
cause its Subsidiaries to) furnish promptly to the other all information
concerning its business, properties and personnel as may reasonably be
requested, provided that no receipt of information pursuant to this Section
shall affect or be deemed to modify any representation or warranty made by
NationsRent or RSC hereunder, and provided, further, that the foregoing shall
not require NationsRent or RSC to permit any inquiry, or to disclose any
information, that in the reasonable judgment of NationsRent or RSC, as the
case may be, would (i) violate any antitrust or competition Law or (ii) result
in the disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality to third parties if NationsRent or
RSC, as the case may be, shall have used its best reasonable efforts to obtain
the consent of such third party to such inquiry or disclosure. All requests
for information pursuant to this Section 6.5. shall be directed to an
executive officer of NationsRent or RSC, as the case may be, or such Person as
may be designated by any such executive officer, as the case may be.
6.5.2. NationsRent and RSC each acknowledges and confirms that it has
entered into a Confidentiality Agreement, dated January 12, 1999 (the
"Confidentiality Agreement"), and that the Confidentiality Agreement shall
remain in full force and effect in accordance with its terms, whether or not
the Merger is consummated.
6.6. Publicity. The initial press release concerning this Agreement, the
Merger and the other transactions contemplated by this Agreement and the Stock
Option Agreements shall be a joint press release, and thereafter NationsRent
and RSC shall consult with each other prior to issuing any press release or
otherwise making public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and the Stock Option Agreements.
6.7. Benefits and Other Matters.
6.7.1. Employee Benefits.
6.7.1.1. Following the Effective Time, RSC shall, and shall cause its
Subsidiaries to, recognize service with NationsRent and its Subsidiaries and
any predecessor entities (to the same extent such service was credited by
NationsRent under similar benefit plans) prior to the Effective Time for all
purposes under any benefit plans of RSC or its Subsidiaries in which the
employees or former employee of NationsRent (or its respective Subsidiaries)
shall participate; provided, however, that the foregoing shall not limit the
rights of the RSC board of directors, subject to applicable laws and
contractual obligations to amend, modify or terminate any such
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benefit plans. During the portion of the applicable period for each of the
plans in which the Effective Time occurs, RSC shall, and shall cause its
Subsidiaries to, recognize under its applicable medical, dental and health
plans all appropriate expenses of each employee or former employee of
NationsRent and its Subsidiaries (including their beneficiaries and
dependents) for purposes of satisfying applicable deductible, co-insurance and
maximum out-of-pocket expenses.
6.7.1.2. From and after the Effective Time, RSC shall honor, and shall
cause its Subsidiaries to comply, in accordance with its terms, with each (i)
existing employment, change of control, severance and termination agreement
between RSC or NationsRent or any of their respective Subsidiaries, and any
officer, director or employee of such company and (ii) obligation pursuant to
outstanding employee benefit compensation plans and arrangements which had
accrued as of the Effective Time. NationsRent acknowledges that it has been
advised by RSC that the Merger constitutes a change of control for purposes of
certain RSC Compensation and Benefit Plans specifically identified in Section
5.1.8 of the RSC Disclosure Letter.
6.7.1.3. After the Effective Time, RSC shall use its best efforts to
cause the compensation and benefits available upon any termination of
employment to officers who were formerly executive officers, and Senior
executives previously identified, of NationsRent immediately prior to the
Effective Time to be no less favorable than the compensation and benefit
arrangements to which the current executive officers of RSC (other than Xxxxxx
Xxxx) are entitled immediately upon any termination of employment after the
Effective Time.
6.7.1.4. Prior to the Effective Time, NationsRent shall and shall cause
its Subsidiaries to terminate each NationsRent Compensation and Benefit Plan
that is intended to qualify under Section 401(k) of the Code. RSC shall make
available to the participants in any such plan, as soon as practicable
following the Effective Time, the plan that is intended to be qualified under
Section 401(k) of the Code in which other employees of RSC participate.
6.7.2. Indemnification; Director and Officer Liability.
6.7.2.1. From and after the Effective Time, RSC agrees that it will
indemnify and hold harmless each individual who on or prior to the Effective
Time was an officer or director at NationsRent or any of its Subsidiaries
(each, an "Indemnitee") against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent permitted under the DGCL and
its certificate of incorporation or by-laws in effect on the date hereof to
indemnify such Person (and RSC shall also advance expenses as incurred to the
fullest extent permitted under applicable Law, provided the Person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Person is not entitled to indemnification).
6.7.2.2. For six years after the Effective Time, RSC shall procure the
provision of officers' and directors' liability insurance in respect of acts
or omissions occurring prior to the Effective Time covering each such Person
currently covered by NationsRent's officers' and directors' liability
insurance policy on terms with respect to coverage and in amounts no less
favorable than those of such policy in effect on the date hereof (provided
that the Surviving Corporation may substitute therefor policies (which may be
"tail" policies) with an insurer of equal claims paying ratings, of at least
the same coverage and amounts containing terms and conditions which are no
less advantageous in any material respect to the insured parties thereunder);
provided, however, that during such period, RSC shall not be required to
procure any amount of coverage in excess of that which may be obtained for the
remainder of such period for an annual premium of 250% of the current annual
premium paid by NationsRent for its existing coverage.
6.7.2.3. The obligations of RSC under this Section 6.7.2 shall not be
terminated or modified in such a manner as to adversely affect any Indemnitee
to whom this Section 6.7.2 applies without the consent of
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such affected Indemnitee (it being expressly agreed that the Indemnitees to
whom this Section 6.7.2 applies shall be third party beneficiaries of this
Section 6.7.2).
6.7.2.4. If RSC or the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) shall transfer all or substantially all
of its properties and assets to any Person then and in each such case, proper
provisions shall be made so that the successors and assigns of RSC or the
Surviving Corporation, as the case may be, shall assume all of the obligations
set forth in this Section 6.7.2.
6.7.3. Directors of RSC. RSC agrees to take all such actions as may be
required to implement the provisions of Section 3.1, including, without
limitation, (i) increasing the size of its board of directors, (ii) procuring
such resignations of its current directors as may be necessary and (iii)
causing the election to its board of directors of such new directors, so that
at the Effective Time the New Directors are the only directors of RSC.
6.7.4. 1999 RSC Annual Meeting. If the RSC 1999 Annual Meeting of
Stockholders (the "1999 Annual Meeting") occurs after the Effective Time, each
of the New Directors or New Director Successors shall be nominated to serve on
the RSC board of directors at the 1999 Annual Meeting. If any New Director or
New Director Successor is no longer serving on the RSC board of directors at
the time of the 1999 Annual Meeting or is unable to or declines to stand for
election, the remaining RSC Directors shall be entitled to designate a
candidate to fill such position if such position was previously designated a
RSC Director, and the remaining NationsRent Directors shall be entitled to
designate a director to fill such position if the position was previously
designated as a position to be held by a NationsRent Director. If the Agreed
Director position is vacant at the time of the 1999 Annual Meeting, the
successor to the Agreed Director shall be designated by the NationsRent
Directors, subject to the consent of the RSC Directors (which consent shall
not be unreasonably withheld) and subject to the limitation set forth in the
proviso to Section 3.1.
6.8. Expenses. Except as otherwise provided in Section 8.5 (Effect of
Termination and Abandonment), whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement, the Stock
Option Agreements, the Merger and the other transactions contemplated by this
Agreement and the Stock Option Agreements shall be paid by the Party incurring
such expense, except that the Parties shall share equally the costs and
expenses of filing, printing and distributing the Form S-4, the
Prospectus/Proxy Statement and related documents.
6.9. Takeover Statutes. If any Takeover Statute is or may become applicable
to the Merger or the other transactions contemplated by this Agreement and the
Stock Option Agreements, each of NationsRent and RSC and its board of
directors shall, subject to applicable Law, grant such approvals and take such
actions as are necessary so that the Merger and the other transactions
contemplated by this Agreement and the Stock Option Agreements may be
consummated as promptly as practicable on the terms contemplated by this
Agreement or the Stock Option Agreements, as the case may be, and otherwise
act to eliminate or minimize the effects of such Takeover Statute on such
transactions. Without limiting the foregoing, the boards of directors of each
of RSC and NationsRent have approved the terms of this Agreement and the Stock
Option Agreements and the consummation of the transactions contemplated by
this Agreement and by such Stock Option Agreements, and such approval is
sufficient, in the case of RSC, to render the restrictions of Section 203 of
the DGCL inapplicable to the Merger and to the other transactions contemplated
by this Agreement and by the Stock Option Agreements.
6.10. Listing Application. RSC shall promptly prepare and submit to the NYSE
a listing application in respect of the shares of RSC Common Stock issuable in
the Merger, and shall use its best efforts to obtain, prior to the Effective
Time, approval for the listing of such shares, on the NYSE, subject to
official notice of issuance, under the symbol "RSV". The Surviving Corporation
shall use its best efforts to cause the NationsRent Common Stock to be
delisted from the NYSE and deregistered under the Exchange Act as soon as
practicable following the Effective Time.
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6.11. Letters of Accountants.
6.11.1. NationsRent shall use its best reasonable efforts to cause to be
delivered to RSC "comfort" letters of Xxxxxx Xxxxxxxx LLP, NationsRent's
independent public accountants, dated the effective date of the Form S-4 and
the Closing Date, respectively, and addressed to RSC and its directors, in
form reasonably satisfactory to RSC and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
6.11.2. RSC shall use its best reasonable efforts to cause to be delivered
to NationsRent "comfort" letters of Ernst & Young LLP, RSC's independent
public accountants, dated the effective date of the Form S-4 and the Closing
Date, respectively, and addressed to NationsRent and its directors, in form
reasonably satisfactory to NationsRent and customary in scope and substance
for "comfort" letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
6.12. Affiliates. Each of NationsRent and RSC shall deliver to the other a
letter identifying all Persons whom such party believes to be, at the date of
the NationsRent Shareholders Meeting or RSC Shareholders Meeting, as the case
may be, "affiliates" of such party for purposes of applicable interpretations
regarding use of the "pooling of interests" accounting method and, in the case
of "affiliates" of NationsRent, for purposes of Rule 145 under the Securities
Act. Each of NationsRent and RSC shall use its best reasonable efforts to
cause each Person who is identified as an "affiliate" in the letter referred
to above to deliver to RSC prior to the date of the NationsRent Shareholders
Meeting a written agreement, in the form attached hereto as Exhibit B-1, in
the case of affiliates of NationsRent (the "NationsRent Affiliate's Letter"),
and Exhibit B-2, in the case of affiliates of RSC (the "RSC Affiliate's
Letter"). Prior to the Effective Time, each of NationsRent and RSC shall use
its best reasonable efforts to cause each additional Person who is identified
as an "affiliate" to execute the applicable written agreement as set forth in
this Section 6.12. If the Merger would otherwise qualify for "pooling of
interests" accounting treatment, shares of RSC Common Stock issued to such
affiliates of NationsRent in exchange for NationsRent Common Shares shall not
be transferable until such time as financial results covering at least 30 days
of combined operations of RSC and NationsRent shall have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section, except to the extent permitted by, and
in accordance with, SEC Accounting Series Release 135 and SEC Staff Accounting
Bulletins 65 and 76. If the Merger would otherwise qualify for "pooling of
interests" accounting treatment, any shares of NationsRent Common Stock held
by any such affiliate shall not be transferable, regardless of whether such
affiliate has provided the applicable written agreement referred to in this
Section, if such transfer, either alone or in the aggregate with other
transfers by affiliates, would preclude RSC's ability to account for the
Merger as a "pooling of interests." NationsRent shall not register the
transfer of any Certificate, unless such transfer is made in compliance with
the foregoing.
6.13. Registration Rights.
6.13.1. At or prior to the Effective Time, RSC shall enter into a
registration rights agreement with NationsRent's "affiliates" (as determined
in accordance with Section 6.12), substantially in the form of Exhibit D, with
respect to the shares of RSC Common Stock to be issued to such affiliates in
the Merger.
6.13.2. At and after the Effective Time, RSC shall comply with and assume
all outstanding obligations of NationsRent under agreements or arrangements
granting registration rights in accordance with their terms.
6.14. Tax Representation Letters. For purposes of the tax opinions described
in Sections 7.2.4 and 7.3.4, each of NationsRent and RSC shall provide
representation letters, in form and substance reasonably satisfactory to RSC
and NationsRent, respectively, each dated as of the date that is two business
days prior to the date the Prospectus/Proxy Statement is first mailed to
shareholders of NationsRent and RSC and reissued as of the Closing Date.
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6.15. Transfer Taxes. Except as provided in Section 4.2.1., all state,
local, foreign or provincial sales, use, real property transfer, stock
transfer or similar Taxes (including any interest or penalties with respect
thereto) attributable to the Merger (collectively, the "Transfer Taxes") shall
be timely paid by RSC.
6.16. Assumption of Indebtedness. At the Effective Time the Surviving
Corporation shall execute such agreements and instruments, and take all other
actions, that may be necessary to comply with the terms of the Indenture,
including Section 5.01 thereof, relating to NationsRent's 10 3/8% Senior
Subordinated Notes due 2008.
6.17. Other Equity Rights. At the Effective Time, RSC shall comply with and
assume NationsRent's obligations under each Other NationsRent Equity Right,
including any terms of such Other NationsRent Equity Right requiring such
Other NationsRent Equity Right be converted into a right to acquire RSC Common
Stock.
6.18. Use of Name. Unless the board of directors of the Surviving
Corporation otherwise determines, the parties agree and acknowledge that at or
prior to the first anniversary of the Effective Date, RSC shall amend the
Charter to change the name of the Surviving Corporation to "NationsRent".
6.19. Voting Agreement. NationsRent shall cause to be delivered as promptly
as practicable, but in no event later than ten days, after the date hereof to
RSC in the form previously agreed between the Parties, a voting agreement
executed by H. Xxxxx Xxxxxxxx Sr., H. Family Investments and Xxxxx X. Xxxx.
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
7.1.1. Shareholder Approvals. This Agreement and the transactions
contemplated by this Agreement shall have been duly approved and adopted by
holders of NationsRent Common Stock constituting the NationsRent Requisite
Vote and this Agreement and the other transactions contemplated by this
Agreement, and the matters specified in clause (ii) of Section 6.3.3 and
proposed for adoption at the RSC Shareholders Meeting shall have been duly
approved and adopted by holders of RSC Common Stock constituting the RSC
Requisite Vote.
7.1.2. Regulatory Consents. All NationsRent Required Consents and RSC
Required Consents from or with any Governmental Entity (collectively,
"Governmental Consents") in connection with the consummation of the Merger and
the other transactions contemplated hereby shall have been made or obtained,
and such Governmental Consents shall not contain any terms or impose any
condition or restriction relating or applying to, or requiring changes in or
limitations on, the operation of any asset or businesses of NationsRent, RSC
or any of their respective Subsidiaries which term, condition or restriction
that is, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on RSC after the Effective Time (it being understood
that, for this purpose, materiality shall be considered with reference to the
combined companies following the Merger).
7.1.3. Laws and Orders. No Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary or permanent) that is in effect and restrains, enjoins
or otherwise prohibits the consummation of the Merger or the other
transactions contemplated by this Agreement or that, individually or in the
aggregate with all other such Laws, is reasonably likely to have a Material
Adverse Effect on RSC after the Effective Time (it being understood that, for
this purpose, materiality shall be considered with reference to the combined
companies following the Merger) or that would materially frustrate the intent
and purposes of this Agreement (collectively, an "Order"), and no Governmental
Entity shall have instituted or threatened in writing any proceeding seeking
any such Order.
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7.1.4. Effectiveness of Form S-4. The Form S-4 shall have become effective
and no stop order with respect thereto shall be in effect.
7.1.5. Exchange Listing. The shares of RSC Common Stock to be issued
pursuant to the Merger shall have been authorized for listing on the NYSE,
subject to official notice of issuance.
7.1.6. Blue Sky Approvals. RSC shall have received all state securities
and "blue sky" permits and approvals, if any, necessary to consummate the
transactions contemplated hereby.
7.2. Conditions to Obligations of RSC. The obligation of RSC to effect the
Merger is also subject to the satisfaction or waiver by RSC prior to the
Effective Time of the following conditions:
7.2.1. Representations and Warranties of NationsRent. The representations
and warranties of NationsRent set forth in this Agreement (i) to the extent
qualified by Material Adverse Effect or any other materiality qualification
shall be true and correct and (ii) to the extent not qualified by Material
Adverse Effect or any other materiality qualification shall be true and
correct (provided that this clause (ii) shall be deemed satisfied so long as
any failures of such representations and warranties to be true and correct,
taken together, do not have a Material Adverse Effect on NationsRent) as of
the Closing Date as though made on and as of the Closing Date (except to the
extent any such representation or warranty expressly speaks as of an earlier
date), and RSC shall have received a certificate signed on behalf of
NationsRent by an executive officer of NationsRent to such effect.
7.2.2. Performance of Obligations of NationsRent. NationsRent shall have
performed all material obligations required to be performed by it under this
Agreement at or prior to the Closing Date, and RSC shall have received a
certificate signed on behalf of NationsRent by an executive officer of
NationsRent to such effect.
7.2.3. Consents Under Agreements. NationsRent shall have obtained the
consent or approval of each Person whose consent or approval shall be required
in order to consummate the Merger and the other transactions contemplated by
this Agreement under any Contract to which NationsRent or any of its
Subsidiaries is a party, except those for which the failure to obtain such
consent or approval, individually or in the aggregate, is not reasonably
likely to have a Material Adverse Effect on the Surviving Corporation and its
Subsidiaries (is being understood that, for this purpose, materiality shall be
considered with reference to the combined companies following the Merger), or
is not reasonably likely to prevent or materially impair the ability of
NationsRent to consummate the Merger and the other transactions contemplated
by this Agreement.
7.2.4. Tax Opinion. RSC shall have received an opinion from Xxxxxx &
Xxxxxxx, dated as of the Closing Date, substantially to the effect that the
Merger will be treated for U.S. federal income tax purposes as a
"reorganization" within the meaning of Section 368(a) of the Code and that
each of NationsRent and RSC will be a party to that reorganization within the
meaning of Section 368(b) of the Code; it being understood that in rendering
such opinion, such counsel may require and rely upon the representations by
the Parties in the representation letters referred to in Section 6.14.
7.3. Conditions to Obligations of NationsRent. The obligation of NationsRent
to effect the Merger is also subject to the satisfaction or waiver by
NationsRent prior to the Effective Time of the following conditions:
7.3.1. Representations and Warranties. The representations and warranties
of RSC set forth in this Agreement (i) to the extent qualified by Material
Adverse Effect or any other materiality qualification shall be true and
correct and (ii) to the extent not qualified by Material Adverse Effect or any
other materiality qualification shall be true and correct (provided that this
clause (ii) shall be deemed satisfied so long as any failures of such
representations and warranties to be true and correct, taken together, do not
have a Material Adverse Effect on RSC) as of the Closing Date as though made
on and as of the Closing Date (except to the extent any such representation
and warranty expressly speaks as of an earlier date), and NationsRent shall
have received a certificate signed on behalf of RSC by an executive officer of
RSC to such effect.
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7.3.2. Performance of Obligations of RSC. RSC shall have performed all
material obligations required to be performed by it under this Agreement at or
prior to the Closing Date, and NationsRent shall have received a certificate
signed on behalf of RSC by an executive officer of RSC to such effect.
7.3.3. Consents Under Agreements. RSC shall have obtained the consent or
approval of each Person whose consent or approval shall be required in order
to consummate the Merger and the other transactions contemplated by this
Agreement under any Contract to which RSC or any of its Subsidiaries is a
party, except those for which the failure to obtain such consent or approval,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect on the Surviving Corporation and its Subsidiaries, (it being
understood that, for such purpose, materiality shall be considered with
reference to the combined companies following the Merger), or is not
reasonably likely to prevent or materially impair the ability of RSC to
consummate the Merger and the other transactions contemplated by this
Agreement.
7.3.4. Tax Opinion. NationsRent shall have received an opinion from
Xxxxxxxx & Xxxxxxxx, dated as of the Closing Date, substantially to the effect
that the Merger will be treated for U.S. federal income tax purposes as a
"reorganization" within the meaning of Section 368(a) of the Code and that
each of NationsRent and RSC will be a party to that reorganization within the
meaning of Section 368(b) of the Code; it being understood that in rendering
such opinion, such counsel may require and rely upon the representations by
the Parties in the representation letters referred to in Section 6.14.
ARTICLE VIII
TERMINATION
8.1. Termination by Mutual Consent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approvals by shareholders of NationsRent and RSC referred
to in paragraph 7.1.1, by mutual written consent of NationsRent and RSC, by
action of their respective boards of directors.
8.2. Termination by Either RSC or NationsRent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either RSC or NationsRent if (i)
the Merger shall not have been consummated by August 31, 1999, whether such
date is before or after the date of approval by the shareholders of
NationsRent or RSC (the "Termination Date"), (ii) any Order permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger
shall have become final and non-appealable, whether before or after the
approval by the shareholders of NationsRent or RSC, (iii) the NationsRent
Requisite Vote shall not have been obtained at the duly held NationsRent
Shareholders Meeting, including any adjournments or postponements thereof, or
(iv) the RSC Requisite Vote shall not have been obtained at the duly held RSC
Shareholders Meeting, including any adjournments or postponements thereof;
provided that the right to terminate this Agreement shall not be available to
a Party that has breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the failure
of the Merger to be consummated.
8.3. Termination by NationsRent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by shareholders of NationsRent referred to in
Section 7.1.1, by action of the board of directors of NationsRent, if (i) the
board of directors of RSC shall have withdrawn or adversely modified its
approval or recommendation to shareholders of the Merger or, following the
public announcement or disclosure of an Acquisition Proposal or the intention
of any Person to make an Acquisition Proposal with respect to RSC, failed to
reconfirm such recommendation within ten business days after a written request
by NationsRent to do so; or (ii) RSC or its board of directors shall take any
of the actions described in clause (ii) (but only if RSC and its
Representatives shall fail to terminate all such actions within five business
days of the commencement thereof) or clause (iii) of the proviso to Section
6.2.1; (iii) any Person or "group" (within the meaning of Rule 13d-5 under the
Exchange Act) shall acquire 40% or more of the outstanding shares of RSC
Common Stock; or (iv) there shall be a breach by RSC of any representation,
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warranty, covenant or agreement contained in this Agreement which would result
in a failure of a condition set forth in Section 7.3.1 or 7.3.2 and cannot be
or is not cured prior to the Termination Date.
8.4. Termination by RSC. This Agreement may be terminated and the Merger may
be abandoned at any time prior to the Effective Time, whether before or after
the approval by the shareholders of RSC referred to in Section 7.1.1, by
action of the board of directors of RSC, if (i) the board of directors of
NationsRent shall have withdrawn or adversely modified its approval or
recommendation to shareholders of the Merger, following the public
announcement or disclosure of an Acquisition Proposal or the intention of any
Person to make an Acquisition Proposal with respect to NationsRent, or failed
to reconfirm such recommendation within ten business days after a written
request by RSC to do so; or (ii) NationsRent or its board of directors shall
take any of the actions described in clause (ii) (but only if NationsRent and
its Representatives shall fail to terminate all such actions within five
business days of the commencement thereof) or clause (iii) of the proviso to
Section 6.2.1; (iii) any Person or "group" (within the meaning of Rule 13d-5
under the Exchange Act) (excluding for this purpose (A) any shares of
NationsRent Common Stock beneficially owned by, or issuable pursuant to
securities beneficially owned by, H. Xxxxx Xxxxxxxx or Xxxxx X. Xxxx or
affiliates or associates of either of them, considered separately or together
as a group, as of the date hereof and (B) an additional number of shares of
NationsRent Common Stock, or securities exercisable for or convertible into
such shares, that may be acquired after the date hereof by any of such
Persons, considered separately or as a group, not in excess of 5% of the
number of shares specified in clause (A), in the aggregate) shall acquire 40%
or more of the outstanding shares of NationsRent Common Stock; or (iv) there
shall be a breach by NationsRent of any representation, warranty, covenant or
agreement contained in this Agreement which would result in a failure of a
condition set forth in Section 7.2.1 or 7.2.2 and cannot be or is not cured
prior to the Termination Date
8.5. Effect of Termination and Abandonment.
8.5.1. In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article VIII, this Agreement (other than as set
forth in Section 9.1) shall become void and of no effect with no liability on
the part of either Party (or of any of its Representatives) whether under
contract, equity or Law; provided, however, that no such termination shall
relieve either Party of any liability for damages resulting from any willful
and intentional breach of this Agreement or from any obligation to pay, if
applicable, the amounts payable pursuant to Section 8.5.2 or 8.5.3.
8.5.2. In the event that (i) this Agreement is terminated by either
NationsRent or RSC pursuant to Section 8.2(iii) or (ii) this Agreement is
terminated by RSC pursuant to Section 8.4(i), 8.4(ii) (solely with respect to
clause (iii) of the proviso to Section 6.2.1), 8.4(iii) or 8.4(iv) (solely
with respect to a willful and intentional breach of Section 6.2), then
NationsRent shall pay to RSC promptly, but in no event later than two days
after the date of such termination, (A) the amount of $5,000,000 for RSC's
expenses in connection with the negotiation and execution of, and its
performance of its obligations under this Agreement and (B) as liquidated
damages and not as a penalty, an additional termination payment equal to
$35,000,000 (the "NationsRent Termination Amount"). Any payments to be made
pursuant to this Section shall be made by wire transfer of same day funds.
NationsRent acknowledges that the agreements contained in this Section 8.5.2
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, RSC would not enter into this Agreement;
accordingly, if NationsRent fails promptly to pay any amount due pursuant to
this Section 8.5.2, and, in order to obtain such payment, RSC commences a suit
which results in a judgment against NationsRent for the payment set forth in
this Section 8.5.2, NationsRent shall pay to RSC its costs and expenses
(including attorneys' fees) in connection with such suit, together with
interest on the amount of expense reimbursement and the NationsRent
Termination Amount from each date for payment until the date of such payment
at the prime rate of Citibank N.A. in effect on the date such payment was
required to be made plus 2 percent.
8.5.3. In the event that (i) this Agreement is terminated by either
NationsRent or RSC pursuant to Section 8.2(iv) or (ii) this Agreement is
terminated by NationsRent pursuant to Section 8.3(i), 8.3(ii) (solely with
respect to clause (iii) of the proviso to Section 6.2.1), 8.3(iii) or 8.3(iv)
(solely with respect to a willful and intentional breach of Section 6.2), then
RSC shall pay to NationsRent promptly, but in no event later than two
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days, after the date of such termination, (A) the amount of $5,000,000 for
NationsRent's expenses in connection with the negotiation and execution of,
and its performance of its obligations under, this Agreement and (B) as
liquidated damages and not as a penalty, an additional termination payment
equal to $35,000,000 (the "RSC Termination Amount"). Any payments to be made
pursuant to this Section shall be made by wire transfer of same day funds. RSC
acknowledges that the agreements contained in this Section 8.5.3 are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, NationsRent would not enter into this Agreement;
accordingly, if RSC fails promptly to pay any amount due pursuant to this
Section 8.5.3, and, in order to obtain such payment, NationsRent commences a
suit which results in a judgment against RSC for the payment set forth in this
Section 8.5.3, RSC shall pay to NationsRent its costs and expenses (including
attorneys' fees) in connection with such suit, together with interest on the
amount of expense reimbursement and the RSC Termination Amount from each date
for payment until the date of such payment at the prime rate of Citibank N.A.
in effect on the date such payment was required to be made plus 2 percent.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1. Survival. This Article IX and the agreements of NationsRent and RSC
contained in Sections 4.4 (NationsRent Stock Options), 6.7.1 (Benefits and
Other Matters), 6.7.2 (Indemnification; Director and Officer Liability), 6.7.4
(1999 RSC Annual Meeting), 6.8 (Expenses), 6.9 (Takeover Statutes), 6.13
(Registration Statements), 6.15 (Transfer Taxes), 6.16 (Assumption of
Indebtedness), 6.17 (Other Equity Rights) and 6.18 (Use of Name) shall survive
the Effective Time. This Article IX (other than Section 9.2 (Modification or
Amendment), Section 9.3 (Waiver of Conditions) and Section 9.12 (Assignment)),
the representations and warranties contained in Section 5.1.3 (Corporate
Authority; Approval and Fairness), the agreements of NationsRent and RSC
contained in Section 4.4.2 (NationsRent Stock Options), Section 6.5.2 (Access;
Confidentiality), Section 6.8 (Expenses) and Section 8.5 (Effect of
Termination and Abandonment) shall survive the termination of this Agreement.
All other representations, warranties, agreements and covenants in this
Agreement shall not survive the Effective Time or the termination of this
Agreement.
9.2. Modification or Amendment. This Agreement may be modified or amended by
agreement of the Parties, by action taken or authorized by their respective
boards of directors, at any time prior to the Effective Time; provided,
however, that, after approval by shareholders of the matters presented at the
NationsRent Shareholders Meeting or the RSC Shareholders Meeting, no
modification or amendment shall be made which under applicable Law requires
further approval by such shareholders without such further approval. This
Agreement may not be modified or amended except by an instrument in writing
executed and delivered by duly authorized officers of each of the Parties.
9.3. Waiver of Conditions. Any provision of this Agreement may be waived
prior to the Effective Time if, and only if, such waiver is in writing and
signed by the Party against whom the waiver is to be effective.
9.4. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay by any Party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. Except as otherwise herein provided, the rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by Law.
9.5. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.6. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
9.6.1. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN, AND IN ALL RESPECTS
SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS TO
BE PERFORMED WHOLLY IN SUCH STATE. The parties hereby (i) irrevocably submit
to the jurisdiction of the Chancery Court of the State of Delaware and the
federal courts of the United States of America located in the State of
Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and the Stock Option Agreements and in respect of
the transactions contemplated hereby and thereby and (ii) waive, and agree not
to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof, that it is not subject to such
jurisdiction or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or the Stock Option Agreements may not be
enforced in or by such courts, and the Parties irrevocably agree that all
claims with respect to such action or proceeding shall be heard and determined
in such courts. The parties hereby consent to and grant any such court's
jurisdiction over the person of such Parties and over the subject matter of
such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 9.7
(Notices), or in such other manner as may be permitted by Law, shall be valid
and sufficient service thereof.
9.6.2. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE STOCK OPTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR THE STOCK OPTION AGREEMENTS. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF SUCH PARTY HAS
BEEN AUTHORIZED BY SUCH PARTY TO REPRESENT OR, TO THE KNOWLEDGE OR SUCH PARTY,
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.6.
9.7. Notices. Notices, requests, instructions or other documents to be given
under this Agreement shall be in writing and shall be deemed given, (i) when
sent if sent by facsimile, provided that the facsimile is promptly confirmed
by telephone confirmation thereof, (ii) when delivered, if delivered
personally to the intended recipient, and (iii) one business day later, if
sent by overnight delivery via a national courier service, and in each case,
addressed to a Party at the following address for such Party:
if to NationsRent:
NationsRent, Inc.
000 Xxxx Xxx Xxxx Xxxx.
00xx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
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if to RSC:
Rental Service Corporation
0000 Xxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
or to such other Persons or addresses as may be designated in writing by the
Party to receive such notice as provided above.
9.8. Entire Agreement. This Agreement (including any exhibits hereto), the
NationsRent Disclosure Letter, the RSC Disclosure Letter, the Stock Option
Agreements and the Confidentiality Agreement constitute the entire agreement,
and supersede all other prior agreements, understandings, representations and
warranties both written and oral, between the Parties with respect to the
subject matter hereof. References herein to this Agreement shall for all
purposes be deemed to include references to the NationsRent Disclosure Letter
and the RSC Disclosure Letter. Except as set forth in Section 6.7.2
(Indemnification; Director and Officer Liability), this Agreement is not
intended to confer upon any Person other than the Parties any rights or
remedies hereunder. No employee or former employee of NationsRent or RSC who
is not a director of NationsRent or RSC shall be deemed a third party
beneficiary with respect to any provision of this Agreement. EACH PARTY HERETO
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT OR THE STOCK OPTION AGREEMENTS, NEITHER NATIONSRENT NOR RSC MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE STOCK OPTION AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE
OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT
TO ANY ONE OR MORE OF THE FOREGOING.
9.9. Obligations of NationsRent and of RSC. Whenever this Agreement requires
a Subsidiary of RSC to take any action, such requirement shall be deemed to
include an undertaking on the part of RSC to use best reasonable efforts to
cause such Subsidiary to take such action. Whenever this Agreement requires a
Subsidiary of NationsRent to take any action, such requirement shall be deemed
to include an undertaking on the part of NationsRent to use best reasonable
efforts to cause such Subsidiary to take such action.
9.10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may
be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision unless the substitution of such provision would
materially frustrate the express intent and purposes of this Agreement and
(ii) the remainder of this Agreement and the application of such provision to
other Persons or circumstances
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shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
9.11. Interpretation. The headings herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to
limit or otherwise affect any of the provisions hereof. Where a reference in
this Agreement is made to a Section, paragraph of or Exhibit, such reference
shall be to a Section or paragraph of or Exhibit to this Agreement unless
otherwise indicated. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the words
"without limitation."
9.12. Assignment. This Agreement shall not be assignable by operation of law
or otherwise, and any purported assignment in violation of this provision
shall be void.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of NationsRent and RSC as of the date hereof.
NATIONSRENT, INC.
/s/ Xxxxx X. Xxxx
By: _________________________________
Name: Xxxxx X. Xxxx
Title:
RENTAL SERVICE CORPORATION
/s/ Xxxxxx X. Xxxx
By: _________________________________
Name: Xxxxxx X. Xxxx
Title:
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