EXHIBIT 10(t)
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PURCHASE AGREEMENT
among
UNITED RENTALS, INC.,
UNITED RENTALS OF CANADA, INC.,
ACCESS RENTALS, INC.,
XXXXXXXX LEASING, LLC
and
THE STOCKHOLDERS OF ACCESS RENTALS, INC.
Dated as of January 22, 1998
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TABLE OF CONTENTS
ARTICLE I
SALE AND PURCHASE..................................................... 1
1.1 Sale and Purchase of the Subsidiary Shares.................. 1
1.2 Sale and Purchase of Shares................................. 2
1.3 Sale and Purchase of Assets................................. 2
1.4 Assumed Obligations; Retained Liabilities................... 2
ARTICLE II
PURCHASE CONSIDERATION................................................ 2
2.1 Amount of Purchase Price.................................... 2
2.2 Adjustments to the Purchase Price........................... 3
2.3 Escrow...................................................... 6
2.4 Collection of Receivables................................... 7
ARTICLE III
CLOSING............................................................... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS 8
4.1 Organization and Good Standing.............................. 8
4.2 Authorization of Agreement.................................. 8
4.3 Capitalization.............................................. 9
4.4 Subsidiaries................................................ 9
4.5 Corporate Records........................................... 9
4.6 Conflicts; Consents......................................... 10
4.7 Ownership and Transfer of Shares............................ 10
4.8 Financial Statements........................................ 10
4.9 No Undisclosed Liabilities.................................. 11
4.10 Absence of Certain Developments............................. 11
4.11 Taxes 13
4.12 Real Property............................................... 15
4.13 Tangible Property; Assets................................... 16
4.14 Intangible Property......................................... 16
4.15 Material Contracts.......................................... 17
4.16 Employee Benefits........................................... 18
4.17 Labor; Personnel............................................ 20
4.18 Litigation.................................................. 20
4.19 Compliance with Laws; Permits............................... 21
4.20 Environmental Matters....................................... 21
4.21 Insurance................................................... 22
4.22 Related Party Transactions.................................. 22
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4.23 Banks....................................................... 23
4.24 Product Quality, Warranty Claims, Product Liability......... 23
4.25 Investment Intention........................................ 23
4.26 No Misrepresentation........................................ 24
4.27 Brokers; Finders............................................ 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF URI 24
5.1 Organization and Good Standing.............................. 24
5.2 Authorization of Agreement.................................. 24
5.3 Conflicts; Consents of Third Parties........................ 25
5.4 Litigation.................................................. 25
5.5 Investment Intention........................................ 25
5.6 Stock Consideration......................................... 25
5.7 Brokers; Finders............................................ 25
ARTICLE VI
COVENANTS............................................................. 26
6.1 Access to Information....................................... 26
6.2 Publicity; Non-disclosure................................... 26
6.3 Use of Name................................................. 26
6.4 Records..................................................... 27
6.5 Senior Managers; Bonuses.................................... 27
6.6 Release of Guarantees....................................... 27
ARTICLE VII
CLOSING DELIVERIES.................................................... 27
7.1 Closing Deliveries of ARI................................... 27
7.2 Closing Deliveries of URI Sub............................... 28
7.3 Closing Deliveries of the Sellers........................... 28
7.4 Closing Deliveries of URI................................... 29
ARTICLE VIII
INDEMNIFICATION; TAX MATTERS.......................................... 30
8.1 Indemnification............................................. 30
8.2 Survival of Representations and Warranties.................. 31
8.3 Limitations on Indemnification.............................. 31
8.4 Non-Tax Indemnification Procedures.......................... 32
8.5 Right of Set-Off............................................ 34
8.6 Tax Indemnification and Related Matters..................... 34
8.7 Tax Treatment of Indemnity Payments......................... 37
ARTICLE IX
MISCELLANEOUS......................................................... 37
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9.1 Rules of Construction; Certain Definitions.................. 37
9.2 Payment of Sales, Use, Transfer or Similar Taxes............ 42
9.3 Bulk Sales Laws............................................. 42
9.4 Expenses.................................................... 42
9.5 Specific Performance........................................ 42
9.6 Further Assurances.......................................... 43
9.7 Entire Agreement; Amendments and Waivers.................... 43
9.8 Governing Law............................................... 43
9.9 Section Headings............................................ 43
9.10 Notices..................................................... 43
9.11 Severability................................................ 44
9.12 Binding Effect; Assignment.................................. 44
9.13 No Third Party Beneficiaries................................ 45
9.14 Sellers' Representative..................................... 45
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PURCHASE AGREEMENT
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PURCHASE AGREEMENT, dated as of January 22, 1998 (this "Agreement"), among
United Rentals, Inc., a Delaware corporation ("URI"), United Rentals of Canada,
Inc., an Ontario, Canada corporation and wholly-owned subsidiary of URI ("URI
Sub"), Access Rentals, Inc., a New York corporation ("ARI"), Xxxxxxxx Leasing,
LLC, a New York limited liability company ("Xxxxxxxx Leasing"), and the
stockholders of ARI executing a signature page hereto (the "Stockholders" and,
together with Xxxxxxxx Leasing, the "Sellers").
W I T N E S S E T H:
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WHEREAS, ARI, its wholly-owned subsidiary Access Lift Equipment Inc., a
Canadian corporation (the "Subsidiary"), and its affiliate, Xxxxxxxx Leasing,
are engaged in the equipment rental business;
WHEREAS, the Stockholders own an aggregate of 100 shares of Class A Voting
Common Stock, par value $1.00 per share, of ARI, and 9,900 shares of Class B
Nonvoting Common Stock, par value $1.00 per share, of ARI (such 10,000 shares of
common stock of ARI are hereinafter collectively referred to as the "Shares"),
constituting all of the issued and outstanding shares of capital stock of ARI;
WHEREAS, ARI desires to sell to URI Sub, and URI Sub desires to purchase from
ARI, all of the issued and outstanding shares of capital stock of the Subsidiary
(the "Subsidiary Shares"), for the purchase price and upon the terms and
conditions hereinafter set forth;
WHEREAS, the Stockholders desire to sell to URI, and URI desires to purchase
from the Stockholders, all of the Shares, and Xxxxxxxx Leasing desires to sell
to URI, and URI desires to purchase from Xxxxxxxx Leasing, the Assets of
Xxxxxxxx Leasing, in each case, for the purchase price and upon the terms and
conditions hereinafter set forth; and
WHEREAS, certain terms used in this Agreement are defined in Section 9.1.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE
1.1 Sale and Purchase of the Subsidiary Shares. At the Closing (as
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hereinafter defined), upon the terms and subject to the conditions contained
herein, ARI shall sell,
assign, transfer, convey and deliver to URI Sub, free and clear of all Liens,
and URI Sub shall purchase from ARI, all of the Subsidiary Shares.
1.2 Sale and Purchase of Shares. At the Closing, immediately following the
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sale and purchase of the Subsidiary Shares pursuant to Section 1.1 and upon the
terms and subject to the conditions contained herein, the Stockholders shall
sell, assign, transfer, convey and deliver to URI, free and clear of all Liens,
and URI shall purchase from the Stockholders, all of the Shares.
1.3 Sale and Purchase of Assets. At the Closing, immediately following the
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sale and purchase of the Subsidiary Shares pursuant to Section 1.1 and upon the
terms and subject to the conditions contained herein, Xxxxxxxx Leasing shall
sell, assign, transfer, convey and deliver to URI, free and clear of all Liens,
and URI shall purchase from Xxxxxxxx Leasing, all of Xxxxxxxx Leasing's right,
title and interest in and to the Assets, such sale and transfer to be evidenced
by a Xxxx of Sale substantially in the form of Exhibit A hereto (the "Xxxx of
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Sale") and by such other instruments of transfer and assignment as URI may from
time to time reasonably request in order to evidence and more formally vest in
URI, as of the Closing, title to the Assets which are owned, and a valid and
assignable leasehold or other contractual interest in the Assets which are
leased or otherwise held under Contract, by Xxxxxxxx Leasing.
1.4 Assumed Obligations; Retained Liabilities. From and after the Closing,
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and prorated from and as of the Closing Date, URI shall assume, perform and
discharge the obligations and liabilities of Xxxxxxxx Leasing under the
equipment lease with KeyCorp Leasing Ltd. dated August 5, 1994 with ARI and
Equipment Schedule #1 thereto dated June 28, 1996 with Xxxxxxxx Leasing (lease
#11074) (collectively, the "Assumed Obligations") pursuant to an Assumption
Agreement substantially in the form of Exhibit B hereto (the "Assumption
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Agreement"); provided that URI shall have received all necessary consents with
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respect to the assignment thereof to URI. No other liabilities or obligations
of Xxxxxxxx Leasing are expressly or by implication being assumed by URI under
this Agreement. Without limiting the generality of the preceding sentence,
Xxxxxxxx Leasing shall retain and remain responsible for all Retained
Liabilities.
ARTICLE II
PURCHASE CONSIDERATION
2.1 Amount of Purchase Price.
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(a) Subsidiary Shares. The aggregate purchase price for the Subsidiary
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Shares shall be $1,000,000, payable in cash.
(b) Shares and Assets. The aggregate purchase price for the Shares,
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the Assets and the Non-Competition Agreements shall be (i) $86,507,600, which
amount shall
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be (x) decreased by the amount of the Closing Date Debt (as defined in Section
2.2(a)) and (y) subject to further adjustment pursuant to the provisions of
Section 2.2 (as so adjusted, the "Purchase Price") plus (ii) a warrant issued
substantially the form of Exhibit C hereto (the "Warrant") to purchase an
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aggregate of 30,000 shares of URI Common Stock. The Purchase Price shall be
payable as follows: (A) $79,907,600 shall be paid in cash (the "Cash Component")
and allocated among the Sellers in accordance with Schedule 2.1(b)(A), of which
aggregate amount $5,500,000 (the "Escrow Amount") will be deposited in escrow as
described in Section 2.3, and (B) URI shall issue (I) an aggregate of 347,369
shares of URI Common Stock (the "Stock Component") to the Sellers, allocated as
set forth on Schedule 2.1(b)(A), and (II) the Warrant
(c) Purchase Price Allocation. The Purchase Price and the Warrant
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shall be allocated among the Shares, the Assets and the Non-Competition
Agreements in accordance with Exhibit D hereto. Subject to the requirements of
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any applicable Tax law, all Tax Returns and reports filed by URI and the Sellers
shall be prepared consistently with such allocation. In the event any purchase
price adjustments are made hereunder, the parties hereto agree to adjust such
allocation to reflect such purchase price adjustment and to file consistently
any Tax Returns and reports required as a result of such purchase price
adjustment.
2.2 Adjustments to the Purchase Price. The Purchase Price was or shall be
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adjusted as follows:
(a) Closing Date Debt. The "Closing Date Debt" shall be as set forth
on Schedule 2.2(a) and shall include (i) the amount of the aggregate debt
(excluding trade payables) of ARI and the Subsidiary, and of Xxxxxxxx Leasing to
the extent such debt constitutes an Assumed Obligation, outstanding on the close
of business on January 21, 1998 (the "Accounting Date") to be repaid by URI at
or immediately after the Closing and all prepayment penalties incurred or to be
incurred by URI and URI Sub in connection with the repayment of any such debt;
(ii) the amount of the aggregate debt (excluding trade payables) of ARI and the
Subsidiary, and of Xxxxxxxx Leasing to the extent such debt constitutes an
Assumed Obligation, outstanding on the Accounting Date which will remain
outstanding obligations of ARI, the Subsidiary or URI after the Closing Date,
including in each case all interest thereon accrued through and including the
Accounting Date; and (iii) the aggregate amount of the present value of all
capitalized lease obligations (determined in accordance with GAAP) of ARI and
the Subsidiary, and of Xxxxxxxx Leasing to the extent such obligations
constitute Assumed Obligations. Schedule 2.2(a) includes wire transfer
instructions for creditors whose Closing Date Debt will be repaid by URI, and
attached to Schedule 2.2(a) are pay-off letters or instructions from such
creditors.
(b) Equipment Adjustment. The Rental Asset Listings attached as
Schedule 2.2(b)(i) set forth the asset description, make, model, original cost
and net book value of all rental equipment and inventory held for rent to
customers and related transportation equipment (collectively, the "Equipment")
of ARI, the Subsidiary and Xxxxxxxx Leasing
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(A) as of March 31, 1997 (the "3/31/97 RAL"), and (B) as of the Accounting Date,
which Accounting Date RAL identifies and reflects all purchases and sales of
Equipment by the Company, the Subsidiary and Xxxxxxxx Leasing since March 31,
1997 (the "Closing Date RAL"), in each case, as used in the preparation of the
Balance Sheets (as defined in Section 4.8). The Equipment reflected on the
Closing Date RAL is Rental Ready (as defined below). The Purchase Price shall
be (i) reduced for each item of Equipment listed on the 3/31/97 RAL which is
missing (or non-existing), not Rental Ready, has been sold or is otherwise not
available for rent to customers, and (ii) increased by the cost of each item of
Equipment (including freight charges) not listed on the 3/31/97 RAL that was
purchased between March 31, 1997 and the Closing Date, excluding approximately
$600,000 of purchases of additional equipment for the Rent-It location
consisting of six Genie S-60 units, four Z-45/22 units and one JL600S unit
(collectively, the "Equipment Adjustment"). An estimated Equipment Adjustment
shall be made on the Closing Date based on a comparison of the 3/31/RAL and the
Closing Date RAL (the "Closing Date Equipment Adjustment"). Within 45 days
following the Closing Date, URI shall complete a physical inventory of each item
of Equipment on the Closing Date RAL, including by visiting renters' locations
as necessary to inspect such Equipment, and the Purchase Price shall be further
decreased or increased, if and as necessary, based on the Equipment Adjustment
resulting from the findings of URI's physical inventory (the "Post Closing
Equipment Adjustment"). The reduction in the Purchase Price described in clause
(i) of the definition of "Equipment Adjustment" above shall be calculated by the
aggregate fair market value (as determined by URI and the Representative) of all
missing or unavailable Equipment and at the lesser of (x) the repair cost and
(y) the replacement cost for all non-Rental Ready Equipment, but the Purchase
Price shall only be reduced by the extent that the aggregate fair market value
(determined as aforesaid) of all such missing, sold or unavailable Equipment,
plus the repair/replacement costs of all such non Rental Ready Equipment,
exceeds $25,000. In the event of a Purchase Price reduction due to a Post
Closing Equipment Adjustment, the Sellers shall pay URI the amount of such
adjustment and URI shall be entitled to be paid out of the Escrow Amount, and
URI and the Sellers shall give instructions to the Escrow Agent to pay, an
amount equal to such adjustment within five Business Days of completion of the
determination of the Equipment Adjustment. In the event of a Purchase Price
increase due to a Post Closing Equipment Adjustment, URI shall pay the
Representative the amount of such adjustment, net of any reductions to the
Purchase Price as a result of any provision of this Article II, not less than
120 but not more than 150 days following the Closing Date. For purposes of this
Agreement, an item of Equipment is "Rental Ready" only if all required
maintenance (other than routine maintenance) has been performed and it does not
require any repairs that would cost in excess of $750 per item. The parties
agree that the items of Equipment listed in Schedule 2.2(b)(ii) shall not give
rise to an Equipment Adjustment solely by reason of their failure to be Rental
Ready. Any disputes as to the physical count, fair market value or Rental
Readiness of any item of Equipment will, if possible, be resolved while the
physical inventory of such Equipment is being taken. Any disputes not so
resolved within 15 days shall be resolved by an independent third party mutually
acceptable to URI and the Representative or, if URI and the Representative
cannot agree
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on the designation of such independent third party within five Business Days, by
the Independent Firm, whose determination shall be final, binding and conclusive
on the parties hereto. Unless otherwise agreed to by URI in writing, operating
leases entered into by ARI, the Subsidiary or Xxxxxxxx Leasing shall not cause
an adjustment to the Purchase Price pursuant to an Equipment Adjustment.
(c) [Intentionally Omitted].
(d) Net Current Position Adjustment. Schedule 2.2(d) sets forth the
estimated consolidated Net Current Position (as hereinafter defined) of ARI, the
Subsidiary and Xxxxxxxx Leasing at the Accounting Date (the "Projected Net
Current Position"), which Schedule the Sellers represent and warrant to URI has
been prepared on a basis consistent with the Balance Sheets, subject to the
adjustments detailed on such Schedule. The Purchase Price shall be increased by
the amount shown as a positive balance on Schedule 2.2(d), or decreased by the
amount shown as a negative balance on Schedule 2.2(d). Promptly following the
Closing Date (but in any event no later than 90 days after the Closing Date),
URI shall prepare (on a basis consistent with the preparation of Schedule
2.2(d)) and deliver to the Representative a schedule showing the actual
consolidated Net Current Position of ARI and the Subsidiary at the Accounting
Date and after giving effect to the contribution and assignment by URI to ARI
immediately following the Closing of the Assets and the Assumed Liabilities (the
"Closing Net Current Position"). If the Sellers agree with the Closing Net
Current Position, it shall be accepted as final, binding and conclusive on the
parties hereto. If a notice of objection to the Closing Net Current Position is
given by the Sellers within 15 days after their receipt of such schedule
specifying any objections they may have (an "Objection Notice"), the Sellers and
URI shall attempt to reconcile such items as are in dispute. If the Sellers and
URI are unable to reconcile all such items within 15 days after the date on
which the Objection Notice is given, then such items as remain in dispute shall
be resolved by an independent third party mutually acceptable to URI and the
Sellers or, if the parties cannot agree on the designation of such independent
third party within five Business Days, by the Independent Firm, whose
determination shall be final, binding and conclusive on the parties hereto. If
the Closing Net Current Position is greater than the Projected Net Current
Position, then URI shall pay to the Sellers the amount of such excess. If the
Closing Net Current Position is less than the Projected Net Current Position,
the amount of such shortfall shall be deducted from the Purchase Price by
payment from the Escrow Amount or, if such amount is insufficient, the Sellers
shall pay to URI the amount of such shortfall.
As used in this Agreement, the term "Net Current Position" means, with
respect to any Person, the difference between the (A) aggregate current assets
(including cash and cash equivalents (including, in the case of ARI, the cash
received on the Accounting Date in consideration of the sale of Subsidiary
Shares to URI Sub pursuant to Section 1.1 hereof)), advances, unearned premiums,
notes receivable, prepaid expenses and deposits, the fair market value of
merchandise inventory (but not parts) held for
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resale, manufacturers' credits for warranty work performed prior to the
Accounting Date, 68% of the Alternative Minimum Tax credit of such Person as of
the Accounting Date, 90% of the net operating loss carryforward of the
Subsidiary as of the Accounting Date for Canadian federal and Ontario provincial
Tax purposes and, with respect to operating leases of equipment for which such
Person is a lessee, the net reduction in the amortizable principal balance from
the original purchase price to the lessee for such equipment as set forth in the
lease, which net reductions are identified and individually quantified on
Schedule 2.2(d), but excluding accounts receivable, and (B) aggregate current
liabilities (excluding the current portion of long-term debt) of such Person.
(e) The fees and expenses hereunder of the Sellers' accountants and
URI's accountants shall be paid by the Sellers and URI, respectively, and those
of the independent firms selected pursuant to Section 2.2(b) or 2.2(d) shall be
paid one-half by URI and one half by the Sellers.
(f) The parties agree that any deferred Tax obligations of ARI, the
Subsidiary or Xxxxxxxx Leasing, computed in accordance with GAAP, shall not be
included in the computation of any Purchase Price adjustment pursuant to the
foregoing provisions of this Section 2.2; it being understood that the Sellers
shall remain solely responsible for all Tax liabilities of ARI, the Subsidiary
and Xxxxxxxx Leasing for all periods through and including the Accounting Date.
2.3 Escrow. (a) The Escrow Amount shall be deposited with State Street Bank
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and Trust Company (the "Escrow Agent") pursuant to, and shall be held, applied
and disbursed in accordance with, an escrow agreement substantially in the form
of Exhibit E-1 hereto (the "Escrow Agreement"). All interest and dividends
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earned on the Escrow Amount during the term of the escrow shall be paid to the
parties entitled, pursuant to the provisions hereof, to such Escrow Amount on a
pro rata basis in relation to such entitlements.
(b) It is acknowledged and agreed that the adjustments made to the
Purchase Price on the Closing Date were based on estimates prepared by the
Sellers and delivered to URI. To the extent that the aggregate amount of the
adjustments pursuant to Section 2.2, as subsequently determined, exceed the
Escrow Amount, the Sellers, jointly and severally, shall pay to URI any such
deficiency by wire transfer of immediately available funds not later than five
Business Days after calculation of such deficiency. Notwithstanding anything in
this Article II, URI shall not be limited to the Escrow Amount as a sole remedy
in the event that any Purchase Price adjustment exceeds the Escrow Amount.
2.4 Collection of Receivables. On the Closing Date, URI shall deposit
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$10,000,000 (the "Receivables Escrow Amount") with the Escrow Agent pursuant to
an escrow agreement substantially in the form of Exhibit E-2 hereto (the
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"Receivables
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Escrow Agreement"). The Sellers represent and warrant that all of
the accounts receivable (including earned but not yet billed receivables) of ARI
and the Subsidiary existing as of the Closing Date (the "Receivables") have
arisen from bona fide transactions in the ordinary course of business consistent
with past practice, are good and valid, and will be collectable by ARI, URI Sub
and URI at the aggregate recorded amounts thereof not later than 120 days after
the Closing Date. URI shall instruct the Escrow Agent to pay to the
Representative, on a weekly basis, out of the Receivables Escrow Amount an
amount equal to the amount of Receivables collected by ARI and the Subsidiary
between the Closing Date and the date that is 120 days following the Closing
Date and, to the extent the Receivables Escrow Amount is insufficient to cover
such payments, URI shall cause ARI and/or the Subsidiary to pay the
Representative the amount of such shortfall upon completion of such 120 day
period. On the 120th day following the Closing Date, URI shall provide to the
Representative a reconciliation of the outstanding uncollected Receivables as of
such date. The parties will agree to such reconciliation and to the extent any
Receivables existing on the Closing Date remain outstanding following such 120
day period, URI shall be entitled to be paid, and the parties hereto shall give
instructions to the Escrow Agent to pay, out of the Receivables Escrow Amount an
amount (on a dollar-for-dollar basis) equal to the Receivables remaining unpaid
at such time (provided that no additional payment is due to URI from ARI or
Subsidiary if the Receivables remaining unpaid at such time shall exceed the
remaining Receivables Escrow Amount). Upon receipt of such payment in respect
of unpaid Receivables, URI shall assign such unpaid Receivables to the
Representative. For a period of 120 days following the Closing Date, URI and
URI Sub shall cause ARI and the Subsidiary to take all reasonable commercial
action, consistent with past practice, to collect the Receivables and, upon any
assignment to the Representative of any uncollected Receivables pursuant to the
preceding sentence, URI and URI Sub shall cause ARI and the Subsidiary to
continue to use reasonable commercial efforts, at the Representative's cost and
expense (including a reasonable allocation of the cost of ARI and Subsidiary
personnel), to collect the Receivables on behalf of the Representative for a
period to end not later than the first anniversary of the Closing Date. Unless
otherwise specified by the customer (in any remittance or otherwise) (i)
collected Receivables will be applied against invoices on a "FIFO" basis and
(ii) remittances from a customer received by ARI in respect of receivables that
arose after the Closing Date shall be first applied against the Receivables of
such customer, if any. All interest and dividends earned on the Receivables
Escrow Amount during the term of the escrow shall be paid to the party entitled,
pursuant to the provisions hereof, to such Receivables Escrow Amount on a pro
rata basis in relation to such entitlement.
ARTICLE III
CLOSING
The closing of the sale and purchase of the Subsidiary Shares, the Shares and
the Assets provided for in Article I hereof (the "Closing") took place
concurrently with the
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execution and delivery of this Agreement at 10:00 a.m., New York City time, at
the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, on January 22, 1998 (the "Closing Date"), at which Closing the parties
also executed and delivered the items described in Article VII hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby jointly and severally represent and warrant to URI and URI
Sub that as of the close of business on the Accounting Date:
4.1 Organization and Good Standing. ARI is a corporation duly organized,
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validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now conducted. Xxxxxxxx Leasing
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of New York and has all requisite limited
liability company power and authority to own, lease and operate its properties
and to carry on its business as now conducted. Each of ARI, the Subsidiary and
Xxxxxxxx Leasing is duly qualified and authorized to do business as a foreign
corporation in each jurisdiction listed on Schedule 4.1, which listed
jurisdictions are (except as set forth on such Schedule) the only jurisdictions
where the nature of their respective businesses or operations, or their
respective ownership or leasing of property, requires such qualification or
authorization (other than any jurisdiction where the failure to be so qualified
or authorized would not result in a Material Adverse Change).
4.2 Authorization of Agreement. ARI and Each Seller has all requisite
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(corporate, limited liability company, partnership, trust or otherwise) power,
authority and legal capacity to execute and deliver this Agreement and each
other Seller Document to which such Person is a party, and to consummate the
transactions contemplated hereby and thereby. This Agreement and the other
Seller Documents have been duly authorized by all requisite action (corporate,
limited liability company, partnership, trust or otherwise) on the part of ARI
and the Sellers. This Agreement and each of the other Seller Documents have
been duly and validly executed and delivered by ARI and each Seller party
thereto and (assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement and each of the other Seller
Documents constitutes legal, valid and binding obligations of ARI and each
Seller party thereto, enforceable against each Seller in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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4.3 Capitalization. The authorized capital stock of ARI consists of 100
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shares of Class A Voting Common Stock, par value $1.00 per share ("Class A
Stock"), and 10,000 shares of Class B Nonvoting Common Stock, par value $1.00
per share ("Class B Stock"), of which, as of the date hereof, there are 100
shares of Class A Stock issued and outstanding and 9,900 shares of Class B Stock
issued and outstanding. All of the issued and outstanding shares of capital
stock of ARI were duly authorized for issuance, are validly issued, fully paid
and non-assessable, and have not been issued in violation of any preemptive or
similar rights of any Person. The Shares being acquired by URI hereunder
constitute all of the outstanding shares of capital stock of ARI. There is no
existing option, warrant, call, right, commitment or other agreement of any
character to which any Stockholder or ARI is a party requiring, and there are no
securities of ARI outstanding which upon conversion or exchange would require,
the issuance, sale or transfer of any additional shares of capital stock or
other equity securities of ARI or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of ARI. There are no voting trust or
other agreements with respect to any shares of capital stock of ARI or any
agreements relating to the issuance, sale, redemption, transfer or other
disposition of the capital stock of ARI.
4.4 Subsidiaries. The Subsidiary is the only Person in or of which ARI owns
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any stock, limited liability company membership, partnership or other equity
interest. The Subsidiary does not own any stock, limited liability company
membership, partnership or other equity interest in any Person. The authorized
capital stock of the Subsidiary is unlimited. As of the date hereof, there are
1,500 issued and outstanding shares of the Subsidiary's capital stock, all of
which shares are validly issued, fully paid and non-assessable and are owned
beneficially and of record by ARI, free and clear of any and all Liens. No
shares of capital stock are held by the Subsidiary as treasury stock. There is
no existing option, warrant, call, commitment or agreement to which the
Subsidiary is a party requiring, and there are no convertible or exchangeable
securities of the Subsidiary outstanding which upon conversion or exchange would
require, the issuance of any additional shares of capital stock or other equity
interests of the Subsidiary or other securities convertible into or exchangeable
for shares of capital stock or other equity interests of the Subsidiary or other
equity security of the Subsidiary. The Subsidiary has all requisite corporate
power and authority to own its properties and carry on its business as presently
conducted. ARI has the power and authority to sell, transfer, assign and
deliver the Subsidiary Shares to URI Sub as provided in this Agreement, and such
delivery will convey to URI Sub good and marketable title to the Subsidiary
Shares, free and clear of any and all Liens.
4.5 Corporate Records. The Stockholders have delivered to URI true, correct
-----------------
and complete copies of the certificate of incorporation of ARI and the
Subsidiary, certified by the Secretary of State of their respective
jurisdictions of incorporation, and the by-laws of ARI and the Subsidiary, each
certified by their respective corporate secretaries. The minute books of ARI and
the Subsidiary made available to URI contain complete and
9
accurate records in all material respects of all meetings and accurately reflect
all other corporate action of the stockholders and board of directors (including
committees thereof) of ARI and the Subsidiary. The stock certificate books and
stock transfer ledgers of ARI and the Subsidiary delivered to URI are true,
correct and complete. All stock transfer taxes levied or payable with respect to
all transfers of shares of ARI and the Subsidiary prior to the date hereof have
been paid and appropriate transfer tax stamps affixed.
4.6 Conflicts; Consents. None of the execution, delivery or performance by
-------------------
the Sellers of this Agreement and the other Seller Documents, the consummation
of the transactions contemplated hereby or thereby, or compliance by the Sellers
with any of the provisions hereof or thereof will (a) conflict with, or result
in the breach of, any provision of the certificate of incorporation, by-laws or
comparable organizational documents of ARI or the Subsidiary, the certificate of
formation, limited liability company agreement or comparable organizational or
governing documents of Xxxxxxxx Leasing, or the trust documents of any
Stockholder; (b) except as set forth on Schedule 4.6, with notice, lapse of time
or both, conflict with, violate, result in the breach or termination of,
constitute a default or give rise to the right to accelerate the rights or
obligations of any Person under any note, bond, mortgage, indenture, license,
agreement, lease or other instrument or obligation to which any Seller, ARI or
the Subsidiary is a party or by which any of them or any of their respective
properties or assets is bound; (c) violate any statute, rule, regulation, order
or decree of any Governmental Body by which any Seller, ARI or the Subsidiary is
bound; or (d) result in the creation of any Lien upon the properties or assets
of any Seller, ARI or the Subsidiary. Except as set forth on Schedule 4.6
hereto, and except for any required filings under the HSR Act, no consent,
waiver, approval, Order, Permit or authorization of, declaration or filing with,
or notification to, any Person or Governmental Body is required on the part of
any Seller, ARI or the Subsidiary (pursuant to any Law, Material Contract (as
defined in Section 4.15) or otherwise) in connection with the execution and
delivery of this Agreement or the other Seller Documents, consummation of the
transactions contemplated hereby or thereby or the compliance by the Sellers
with any of the provisions hereof or thereof.
4.7 Ownership and Transfer of Shares. Schedule 4.7 sets forth the ownership
--------------------------------
of the outstanding Shares by the Stockholders. Each Stockholder is the record
and beneficial owner of all of the Shares indicated on Schedule 4.7 as being
owned by such Stockholder, free and clear of any and all Liens. Each
Stockholder has the power and authority to sell, transfer, assign and deliver
the Shares to URI as provided in this Agreement, and such delivery will convey
to URI good and marketable title to the Shares, free and clear of any and all
Liens.
4.8 Financial Statements. The Sellers have delivered to URI copies of (a)
--------------------
the audited balance sheets of (i) ARI as at September 30, 1995, March 31, 1996
and Xxxxx
00, 0000, (xx) the Subsidiary as at December 31, 1995 and December 31, 1996 and
(iii) Xxxxxxxx Leasing as at December 31, 1996 and the related audited
statements of income and of cash flows of ARI, the Subsidiary and of Xxxxxxxx
Leasing for the years then
10
ended, respectively, and (b) the unaudited balance sheets of ARI, the Subsidiary
and Xxxxxxxx Leasing as at December 31, 1997 and the related statement of income
of ARI for the 9-month period then ended and the related statement of income of
the Subsidiary and Xxxxxxxx Leasing for the 12-month period then ended (such
audited and unaudited statements, including the related notes and schedules
thereto, are referred to herein as the "Financial Statements"). Each of the
Financial Statements is complete and correct in all material respects, has been
prepared in accordance with GAAP (subject to normal year-end adjustments in the
case of the unaudited statements) and in conformity with the practices
consistently applied by ARI, the Subsidiary and Xxxxxxxx Leasing, respectively,
without modification of the accounting principles used in the preparation
thereof and presents fairly the financial position, results of operations and
cash flows of ARI, the Subsidiary and Xxxxxxxx Leasing, respectively, as at the
dates and for the periods indicated. For the purposes hereof, the balance sheets
of ARI, the Subsidiary and Xxxxxxxx Leasing as at December 31, 1997 are referred
to as the "Balance Sheets" and the date December 31, 1997 is referred to as the
"Balance Sheet Date."
4.9 No Undisclosed Liabilities; Operating Leases. (a) Except as set forth
--------------------------------------------
on Schedule 4.9(a), none of ARI, the Subsidiary or Xxxxxxxx Leasing has any
indebtedness, obligations or liabilities of any kind (whether accrued, absolute,
fixed, contingent or otherwise, and whether due or to become due) that would
have been required to be reflected in, reserved against or otherwise described
on the Balance Sheets or in the notes thereto in accordance with GAAP which was
not fully reflected in, reserved against or otherwise described in the Balance
Sheets or the notes thereto or was not incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date.
(b) Schedule 4.9(b) sets forth a list of all operating leases to which
ARI, the Subsidiary or Xxxxxxxx Leasing are a party, and for each such operating
lease, Schedule 4.9(b) sets forth the aggregate annual amount of lease and other
payments required to be made by the lessee thereunder.
4.10 Absence of Certain Developments. Except as expressly contemplated by
-------------------------------
this Agreement or as set forth on Schedule 4.10, since the Balance Sheet Date:
(i) there has not been any Material Adverse Change nor has there
occurred any event which is reasonably likely to result in a Material Adverse
Change;
(ii) there has not been any damage, destruction or loss with respect to
the property and assets of ARI, the Subsidiary or Xxxxxxxx Leasing having a
replacement cost of more than $10,000 for any single loss or $20,000 for all
such losses;
(iii) there has not been any declaration, setting aside or payment of
any dividend or other distribution in respect of any shares of capital stock of
ARI or any repurchase, redemption or other acquisition of capital stock or other
securities of, or other ownership interest in, ARI;
11
(iv) there has not been any award, announcement or payment of bonuses
to employees of ARI, the Subsidiary or Xxxxxxxx Leasing except to the extent
accrued on the Balance Sheets (other than normal and customary year-end bonuses
in the ordinary course of business consistent with past practice and that in the
aggregate do not represent a material increase in the compensation expense of
ARI, the Subsidiary or Xxxxxxxx Leasing); none of ARI, the Subsidiary or
Xxxxxxxx Leasing has entered into any employment, deferred compensation,
severance or similar agreement (nor amended any such agreement) or agreed to
increase the compensation payable or to become payable by it to any of its
directors, officers, employees, agents or representatives or agreed to increase
the coverage or benefits available under any severance pay, termination pay,
vacation pay, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, medical plan,
pension or other employee benefit plan, payment or arrangement made to, for or
with such directors, officers, employees, agents or representatives (other than
normal increases in the ordinary course of business consistent with past
practice and that in the aggregate have not resulted in a material increase in
the benefits or compensation expense of ARI, the Subsidiary or Xxxxxxxx
Leasing);
(v) there has not been any change by ARI, the Subsidiary or Xxxxxxxx
Leasing in accounting or Tax reporting principles, methods or policies;
(vi) none of ARI, the Subsidiary or Xxxxxxxx Leasing has entered into
any transaction or Contract or conducted its business other than in the ordinary
course consistent with past practice;
(vii) none of ARI, the Subsidiary or Xxxxxxxx Leasing has failed to
promptly pay and discharge current liabilities except where disputed in good
faith by appropriate proceedings;
(viii) none of ARI, the Subsidiary or Xxxxxxxx Leasing has made any
loans, advances or capital contributions to, or investments in, any Person or
paid any fees or expenses to any Seller or any Affiliate of ARI or Xxxxxxxx
Leasing, in each case, except in the ordinary course consistent with past
practice;
(ix) none of ARI, the Subsidiary or Xxxxxxxx Leasing has mortgaged,
pledged or subjected to any Lien any of its assets, or acquired any assets or
sold, assigned, transferred, conveyed, leased or otherwise disposed of any of
its assets, except for assets acquired or sold, assigned, transferred, conveyed,
leased or otherwise disposed of in the ordinary course of business consistent
with past practice;
(x) none of ARI, the Subsidiary or Xxxxxxxx Leasing has discharged or
satisfied any Lien, or paid any obligation or liability (fixed or contingent),
except in the ordinary course of business consistent with past practice and
which, in the aggregate, would not cause a Material Adverse Change;
12
(xi) none of ARI, the Subsidiary or Xxxxxxxx Leasing has canceled or
com promised any debt or claim or amended, canceled, terminated, relinquished,
waived or re leased any Contract or right except in the ordinary course of
business consistent with past practice and which, in the aggregate, would not
cause a Material Adverse Change;
(xii) none of ARI, the Subsidiary or Xxxxxxxx Leasing has made or
committed to make any capital expenditures or capital additions or betterments
in excess of $5,000 individually or $15,000 in the aggregate;
(xiii) none of ARI, the Subsidiary or Xxxxxxxx Leasing has instituted
or settled any material Legal Proceeding; and
(xiv) none of the Sellers, ARI or any of the Subsidiary has agreed to
do anything set forth in this Section 4.10.
4.11 Taxes. (a) Except as set forth on Schedule 4.11(a), (i) all Tax
-----
Returns required to be filed by or on behalf of ARI and the Subsidiary have been
properly prepared and duly and timely filed with the appropriate taxing
authorities in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns were true, complete and correct in all
material respects; and (ii) all Taxes that are due from ARI or the Subsidiary
with respect to the periods covered by such Tax Returns have been fully and
timely paid, and adequate reserves or accruals for Taxes have been provided in
the Balance Sheets with respect to any period for which Tax Returns have not yet
been filed or for which Taxes are not yet due and owing.
(b) Each of ARI and the Subsidiary has complied in all material respects
with all applicable Laws, rules and regulations relating to the payment and
withholding of Taxes and has duly and timely withheld from employee salaries,
wages and other compensation and has paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under all applicable Laws.
(c) URI has received complete copies of (i) all federal, state, local
and foreign income or franchise Tax Returns of ARI, the Subsidiary and Xxxxxxxx
Leasing relating to the last three taxable periods of ARI, the Subsidiary and
Xxxxxxxx Leasing and (ii) any audit report issued within the last three years
(or otherwise with respect to any audit or investigation in progress) relating
to Taxes due from or with respect to ARI or the Subsidiary, their respective
income, assets or operations. All income and franchise Tax Returns filed by or
on behalf of ARI and the Subsidiary for the taxable years ended on the
respective dates set forth on Schedule 4.11 have been examined by the relevant
taxing authority or the statute of limitations with respect to such Tax Returns
has expired.
(d) Schedule 4.11(d)(1) lists all material types of Taxes paid and
material types of Tax Returns filed by or on behalf of ARI and the Subsidiary.
Except as
13
set forth on Schedule 4.11(d)(2), no claim has been made by a taxing
authority in a jurisdiction where ARI or the Subsidiary does not file Tax
Returns such that it is or may be subject to taxation by that jurisdiction.
(e) Except as set forth on Schedule 4.11(e), all deficiencies asserted
or assessments made as a result of any examinations by the Internal Revenue
Service (the "IRS") or any other taxing authority of the Tax Returns of or
covering or including ARI, the Subsidiary and Xxxxxxxx Leasing have been fully
paid, and there are no other audits or investigations by any taxing authority in
progress, nor has any Seller, ARI, the Subsidiary or any member of Xxxxxxxx
Leasing received any notice from any taxing authority that it intends to conduct
such an audit or investigation. No issue has been raised by a federal, state,
local or foreign Taxing authority in any current or prior examination which, by
application of the same or similar principles, could reasonably be expected to
result in a proposed deficiency for any subsequent taxable period. None of ARI,
the Subsidiary or Xxxxxxxx Leasing is subject to any private letter ruling of
the IRS or comparable rulings of other taxing authorities.
(f) Except as set forth on Schedule 4.11(f), none of the Sellers, ARI,
the Subsidiary, or any other Person on behalf of ARI or Xxxxxxxx Leasing has (i)
agreed to or is required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of state, local or foreign Law by reason of a
change in accounting method initiated by ARI or the Subsidiary or has any
knowledge that the IRS has proposed any such adjustment or change in accounting
method, or has any application pending with any taxing authority requesting
permission for any changes in accounting methods that relate to the business or
operations of ARI or the Subsidiary, (ii) executed or entered into a closing
agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign Law with respect to
ARI or the Subsidiary, (iii) extended the time within which to file any Tax
Return, which Tax Return has since not been filed or the assessment or
collection of Taxes, which Taxes have not since been paid or (iv) any power of
attorney with respect to any Tax matter currently in force.
(g) No property owned by ARI or Xxxxxxxx Leasing is (i) property
required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) constitutes "tax-exempt use property" within the meaning of Section
168(h)(1) of the Code or (iii) is "tax-exempt bond financed property" within the
meaning of Section 168(g) of the Code.
(h) There are no Liens as a result of any unpaid Taxes upon any of the
assets of ARI, the Subsidiary or Xxxxxxxx Leasing.
(i) No Seller is a foreign person within the meaning of Section 1445 of
the Code.
14
(j) Neither ARI nor the Subsidiary is a party to any tax sharing or
similar Contract or arrangement (whether or not written).
(k) There is no Contract, plan or arrangement involving ARI and covering
any Person that, individually or collectively, could give rise to the payment of
any amount that would not be deductible by URI, ARI or their Affiliates by
reason of Section 280G of the Code.
(l) Except as set forth on Schedule 4.11(l), ARI has no elections in
effect for federal income tax purposes under Sections 108, 168, 338, 441, 463,
472, 1017, 1033 or 4977 of the Code.
(m) Except as set forth on Schedule 4.11(m), ARI has never been a member
of any consolidated, combined or affiliated group of corporations for any Tax
purposes and the Subsidiary has not been a member of any consolidated, combined,
affiliated or similar group of corporations for any Tax purposes since December
31, 1989.
4.12 Real Property. (a) ARI, the Subsidiary and Xxxxxxxx Leasing own no
-------------
real property or interests in real property. Schedule 4.12 sets forth a
complete list of all real property and interests in real property leased by ARI,
the Subsidiary and Xxxxxxxx Leasing, respectively, and used in the operation of
their respective businesses (such real properties being referred to herein as
the "Company Property" and the leases covering such real properties being
referred to herein as the "Real Property Leases"). The Company Property
constitutes all interests in real property currently used or currently held for
use in connection with the businesses of ARI, the Subsidiary and Xxxxxxxx
Leasing and which are necessary for the continued operation of the businesses of
ARI, the Subsidiary and Xxxxxxxx Leasing as such businesses are currently
conducted. ARI, the Subsidiary and Xxxxxxxx Leasing have valid and enforceable
leasehold interests under each of the Real Property Leases to which they are a
party with Persons that are Affiliates of any Seller and, to the Sellers'
knowledge, under all other Real Property Leases, and none of the Sellers nor ARI
has received any notice of any default or event that with notice or lapse of
time, or both, would constitute a default by ARI, the Subsidiary or Xxxxxxxx
Leasing under any of the Real Property Leases. All of the Company Property,
buildings, fixtures and improvements thereon owned or leased by ARI, the
Subsidiary and Xxxxxxxx Leasing are in good operating condition and repair
(subject to normal wear and tear), with sufficient access to roads and utilities
to operate the businesses of ARI, the Subsidiary and Xxxxxxxx Leasing as
presently conducted. The Sellers have delivered to URI true, correct and
complete copies of the Real Property Leases, together with all amendments,
modifications or supplements, if any, thereto.
(b) ARI, the Subsidiary and Xxxxxxxx Leasing have all material
certificates of occupancy and Permits of any Governmental Body necessary or
useful for the current use and operation of each Company Property, and ARI, the
Subsidiary and Xxxxxxxx Leasing have fully complied with all material conditions
of the Permits applicable
15
to them. No default or violation, or event that with the lapse of time or giving
of notice or both would become a default or violation, has occurred in the due
observance of any Permit, except for any default or violation that has not
caused and would not cause a Material Adverse Change.
(c) There does not exist any actual or, to the best knowledge of the
Sellers, threatened or contemplated condemnation or eminent domain proceedings
that affect any Company Property or any part thereof, and none of the Sellers
nor ARI has received any notice, oral or written, of the intention of any
Governmental Body or other Person to take or use all or any part thereof.
(d) Except as set forth on Schedule 4.12(d), none of ARI, the Subsidiary
or Xxxxxxxx Leasing owns or holds, or is obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any real estate or any portion thereof or interest
therein.
4.13 Tangible Property; Assets. (a) Schedule 2.2(b) sets forth a list, as
-------------------------
of the date hereof, of all Equipment owned or leased by ARI, the Subsidiary and
Xxxxxxxx Leasing for lease or rent to their respective customers. Schedule 4.13
(a) sets forth a list, as of the date hereof, of all items of tangible property
(other than Equipment) owned or leased by ARI, the Subsidiary and Xxxxxxxx
Leasing having a fair market value in excess of $10,000 ("Other Assets").
(b) Except as set forth in Schedule 4.13(b), ARI, the Subsidiary and
Xxxxxxxx Leasing have good and marketable title to all of their Equipment and
Other Assets (except as sold or disposed of subsequent to the date indicated in
Section 4.13(a) in the ordinary course of business consistent with past
practice), free and clear of any and all Liens other than the Permitted
Exceptions. All such Other Assets are in good condition and in a state of good
maintenance and repair (ordinary wear and tear excepted) and are suitable for
the purposes used.
4.14 Intangible Property. Schedule 4.14 contains a complete and correct
-------------------
list of each patent, trademark, trade name, service xxxx and copyright owned or
used by ARI, the Subsidiary or Xxxxxxxx Leasing during the past five years, as
well as all registrations thereof and pending applications therefor, and each
license or other agreement relating thereto. Except as set forth on Schedule
4.14, each of the foregoing is owned by the party shown on such Schedule as
owning the same, free and clear of all Liens, and is in good standing and not
the subject of any challenge. There have been no claims made and neither the
Sellers nor ARI have received any notice or otherwise knows or has reason to
believe that any of the foregoing is invalid or conflicts with the asserted
rights of others.
4.15 Material Contracts. Schedule 4.15 sets forth all of the following
------------------
Contracts to which ARI, the Subsidiary or Xxxxxxxx Leasing is a party or by
which it is bound (collectively, the "Material Contracts"): (i) Contracts with
any stockholder, member,
16
director, officer or manager of ARI, the Subsidiary or Xxxxxxxx Leasing that
will not terminate on or prior to the Closing Date without further obligation or
liability on the part of any party thereto; (ii) Contracts with any labor union
or association representing any employee of ARI, the Subsidiary or Xxxxxxxx
Leasing; (iii) Contracts for the sale of any assets (other than in the ordinary
course of business or as set forth on Schedule 4.10), or for the grant to any
Person of any preferential rights to purchase any of its assets or requiring any
Person to purchase or sell all or a fixed portion of its requirements or output
to or from another Person; (iv) Contracts containing covenants of ARI, the
Subsidiary or Xxxxxxxx Leasing not to compete in any line of business or with
any Person in any geographical area or covenants of any other Person not to
compete with ARI, the Subsidiary or Xxxxxxxx Leasing in any line of business or
in any geographical area; (v) Contracts relating to the acquisition by ARI, the
Subsidiary or Xxxxxxxx Leasing of any operating business or the capital stock of
any other Person; (vi) Contracts relating to the borrowing of money or the
issuance of guarantees; (vii) Contracts under which ARI, the Subsidiary or
Xxxxxxxx Leasing acts as a distributor, dealer, franchisor, licensee or
authorized service Person; or (viii) any other Contracts which (A) involve the
expenditure of more than $20,000 in the aggregate or $20,000 annually, (B) are
not terminable by each party thereto, without further obligation or liability,
upon less than 60 days' notice, or (C) require performance by any party more
than six months from the date hereof. There have been made available to URI and
its representatives true and complete copies of all of the Material Contracts.
Except as set forth on Schedule 4.15, all of the Material Contracts are in full
force and effect and are the legal, valid and binding obligation of ARI, the
Subsidiary, Xxxxxxxx Leasing and, to the best knowledge of the Sellers, each
other party thereto, enforceable against each such party in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity. Except as set forth on Schedule 4.15, none of ARI, the Subsidiary or
Xxxxxxxx Leasing is, with notice or lapse of time, or both, in default in any
material respect under any Material Contracts nor, to the best knowledge of the
Sellers, is any other party to any Material Contract in default thereunder in
any material respect. None of the Sellers nor ARI has received notice that any
party to a Material Contract intends to terminate or not renew the same at its
next renewal date.
4.16 Employee Benefits. (a) Schedule 4.16(a) sets forth a complete and
-----------------
correct list of (i) all "employee benefit plans", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
any other benefit plans or employee benefit arrangements, programs or payroll
practices (including
severance pay, vacation pay, company awards, salary continuation for disability,
sick leave, retirement, deferred compensation, bonus or other incentive
compensation, stock purchase arrangements or policies, hospitalization, medical
insurance, life insurance and scholarship programs) maintained by ARI, the
Subsidiary or Xxxxxxxx Leasing or as to which any of ARI, the Subsidiary or
Xxxxxxxx Leasing has any obligation or liability (contingent or otherwise)
("Employee Benefit Plans") and (ii) all "employee pension plans", as defined in
Section 3(2) of ERISA, maintained by ARI, the Subsidiary or
17
Xxxxxxxx Leasing or any trade or business (whether or not incorporated) which
are under control, or which are treated as a single employer, with ARI, the
Subsidiary or Xxxxxxxx Leasing under Section 414(b), (c), (m) or (o) of the Code
("ERISA Affiliate") or to which ARI, the Subsidiary, Xxxxxxxx Leasing or any
ERISA Affiliate contributed or is obligated to contribute thereunder ("Pension
Plans"). Schedule 4.16(a) clearly identifies, in separate categories, Employee
Benefit Plans or Pension Plans that are (i) subject to Section 4063 and 4064 of
ERISA ("Multiple Employer Plans"), (ii) multiemployer plans (as defined in
Section 4001(a)(3) of ERISA) ("Multiemployer Plans") or (iii) "benefit plans",
within the meaning of Section 5000(b)(1) of the Code providing continuing
benefits after the termination of employment (other than as required by Section
4980B of the Code or Part 6 of Title I of ERISA and at the former employee's or
his beneficiary's sole expense). True, correct and complete copies of the
following documents, with respect to each of the single employer Employee
Benefit Plans and Pension Plans (as applicable), have been delivered to URI: (i)
any plans, agreements, policies or other governing document and related trust
documents, and all amendments thereto, (ii) the most recent Forms 5500 and
schedules thereto, (iii) the most recent financial statements and actuarial
valuations, (iv) the most recent IRS determination letter, (v) the most recent
summary plan descriptions (including letters or other documents updating such
descriptions) and (v) written descriptions of all non-written agreements
relating to the Employee Benefit Plans and Pension Plans.
(b) ARI participates in and contributes to six Multiemployer Plans.
None of ARI, the Subsidiary, Xxxxxxxx Leasing or any ERISA Affiliate has
incurred any withdrawal liability (contingent or otherwise) under Title IV of
ERISA with respect to any Multiple Employer Plan or Multiemployer Plan.
(c) Each of the single employer Employee Benefit Plans and Pension Plans
intended to qualify under Section 401 of the Code ("Qualified Plans") so qualify
and the trusts maintained thereto are exempt from federal income taxation under
Section 501 of the Code and, except as disclosed on Schedule 4.16(c), nothing
has occurred with respect to the operation of any such plan which could cause
the loss of such qualification or exemption or the imposition of any liability,
penalty or tax under ERISA or the Code.
(d) All contributions and premiums required by Law or by the terms of
any Employee Benefit Plan or Pension Plan which are defined benefit plans or
money purchase plans or any agreement relating thereto have been timely made
(without regard to any waivers granted with respect thereto) to any funds or
trusts established thereunder or in connection therewith, and no accumulated
funding deficiencies exist in any of such plans subject to Section 412 of the
Code.
(e) The benefit liabilities, as defined in Section 4001(a)(16) of ERISA,
of each of the Employee Benefit Plans and Pension Plans (excluding any
Multiemployer Plan) subject to Title IV of ERISA using the actuarial assumptions
that would be used by
18
the Pension Benefit Guaranty Corporation (the "PBGC") in the event it terminated
each such plan do not exceed the fair market value of the assets of each such
plan.
(f) There are no pending or, to the Sellers' knowledge, threatened Legal
Proceedings which have been asserted or instituted against any of the Employee
Benefit Plans or Pension Plans, the assets of any such plans or ARI, the
Subsidiary, Xxxxxxxx Leasing or the plan administrator or any fiduciary of the
single employer Employee Benefit Plans or Pension Plans with respect to the
operation of such plans (other than routine, uncontested benefit claims), and
there are no facts or circumstances known to the Sellers which could form the
basis for any such Legal Proceeding. There has been no "reportable event" as
that term is defined in Section 4043 of ERISA and the regulations thereunder
with respect to any of the single employer Pension Plans subject to Title IV of
ERISA which would require the giving of notice, or any event requiring notice to
be provided under Section 4041(c)(3)(C) or 4063(a) of ERISA.
(g) Each of the single employer Employee Benefit Plans and Pension Plans
has been maintained, in all material respects, in accordance with its terms and
all provisions of applicable Law. All amendments and actions required to bring
each of the single employer Employee Benefit Plans and Pension Plans into
conformity in all material respects with all of the applicable provisions of
ERISA and other applicable Laws have been made or taken except to the extent
that such amendments or actions are not required by law to be made or taken
until a date after the Closing Date.
(h) Neither ARI, the Subsidiary, Xxxxxxxx Leasing nor any ERISA
Affiliate has terminated any Employee Benefit Plan or Pension Plan subject to
Title IV of ERISA, or incurred any outstanding liability under Section 4062 of
ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA.
(i) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee of ARI, the Subsidiary or Xxxxxxxx Leasing;
(ii) increase any benefits otherwise payable under any Employee Benefit Plan or
Pension Plan; or (iii) result in the acceleration of the time of payment or
vesting of any such benefits.
(j) No stock or other security issued by ARI, the Subsidiary or Xxxxxxxx
Leasing forms or has formed a material part of the assets of any Employee
Benefit Plan or Pension Plan.
4.17 Labor; Personnel. (a) Schedule 4.17(a) sets forth a complete list, as
----------------
of the date hereof, of all officers, directors and employees (by type or
classification) of ARI, the Subsidiary and Xxxxxxxx Leasing and their respective
rates of compensation, including (i) the portions thereof attributable to
bonuses, (ii) any other salary, bonus, equity participation, or other
compensation arrangement made with or promised to any of them, and (iii) copies
of all employment agreements with officers, directors and employees.
19
(b) Except as set forth on Schedule 4.17(b), none of ARI, the Subsidiary
or Xxxxxxxx Leasing is a party to any labor or collective bargaining agreement
and there are no labor or collective bargaining agreements which pertain to
their employees and none of their employees are represented by any labor
organization. No labor organization or group of employees of ARI, the
Subsidiary or Xxxxxxxx Leasing has made a pending demand for recognition, and
there are no representation proceedings or petitions seeking a representation
proceeding presently pending or, to the best knowledge of the Sellers,
threatened to be brought or filed, with the National Labor Relations Board or
other labor relations tribunal. There is no organizing activity involving ARI,
the Subsidiary or Xxxxxxxx Leasing pending or, to the best knowledge of any
Seller, threatened by any labor organization or group of employees of ARI, the
Subsidiary or Xxxxxxxx Leasing.
(c) There are no (i) strikes, work stoppages, slowdowns, lockouts or
arbitrations or (ii) material grievances or other labor disputes pending or, to
the best knowledge of any Seller, threatened against or involving ARI, the
Subsidiary or Xxxxxxxx Leasing. There are no unfair labor practice charges,
grievances or complaints pending or, to the best knowledge of any Seller,
threatened by or on behalf of any employee or group of employees of ARI, the
Subsidiary or Xxxxxxxx Leasing.
4.18 Litigation. Except as set forth in Schedule 4.18, there is no suit,
----------
action, proceeding, investigation, claim or order pending before any court, or
before any governmental department, commission, board, agency, or
instrumentality or, to the knowledge of the Sellers, threatened against ARI, the
Subsidiary or Xxxxxxxx Leasing (or to the knowledge of the Sellers, pending or
threatened against any of the officers, directors or key employees of ARI, the
Subsidiary or Xxxxxxxx Leasing with respect to their business activities on
behalf of ARI, the Subsidiary or Xxxxxxxx Leasing), or to which the Sellers, ARI
or the Subsidiary is otherwise a party or to which any of their properties or
operations is subject, in each case, which if adversely determined, could result
in a liability in excess of $50,000 or require any specific performance or act,
or injunction not to act, by any such Person; nor to the knowledge of the
Sellers is there any reasonable basis for any such action, proceeding, or
investigation. None of ARI, the Subsidiary or Xxxxxxxx Leasing is subject to
any judgment, order or decree of any Governmental Body, nor is any of them
engaged in any legal action to recover monies due it or for damages sustained by
it. All matters disclosed on Schedule 4.18 are covered by insurance in favor of
ARI, subject to deductibles not in excess of $10,000 per occurrence, and the
insurance carriers have not disputed or denied coverage for any such matter.
4.19 Compliance with Laws; Permits.
-----------------------------
(a) ARI, the Subsidiary and Xxxxxxxx Leasing are in compliance in all
material respects with all Laws applicable to them or to the conduct of their
respective businesses or operations or the use of their properties (including
any leased properties) and assets. Except as set forth on Schedule 4.19(a) or
as would not, individually or in the aggregate, cause a Material Adverse Change,
there has been no assertion by any party,
20
and none of the Sellers, ARI or the Subsidiary has received any notice, of any
violation of any Laws.
(b) Schedule 4.19(b) sets forth a full and complete list of all Permits
owned by, issued to, or otherwise benefitting ARI, the Subsidiary and Xxxxxxxx
Leasing and which are material to the operation of their respective businesses.
Such Permits constitute all material Permits necessary or useful in the
operation of the businesses of ARI, the Subsidiary and Xxxxxxxx Leasing as
currently conducted. All of such material Permits are valid and in full force
and effect and there are no proceedings pending, or to the knowledge of the
Sellers, threatened which may result in the revocation, cancellation, suspension
or adverse modification of any such Permit.
4.20 Environmental Matters. The Sellers have provided to URI all
---------------------
environmentally related audits, studies, reports, analyses, and results of
investigations that have been performed with respect to the currently or
previously owned, leased or operated properties of ARI, the Subsidiary or
Xxxxxxxx Leasing. To the Sellers' knowledge, except as set forth on Schedule
4.20 hereto and except for any factual matters (as opposed to evaluations,
assessments, interpretations or recommendations) disclosed in any Phase 1
environmental study commissioned by URI with respect to the Company Property
that has been completed prior to the date hereof (copies of which have been
delivered to the Representative):
(a) the operations of ARI, the Subsidiary and Xxxxxxxx Leasing are in
compliance in all material respects with all applicable Environmental Laws and
all Permits issued pursuant to Environmental Laws or otherwise;
(b) ARI, the Subsidiary and Xxxxxxxx Leasing have obtained all Permits
required under all applicable Environmental Laws necessary to operate their
respective businesses;
(c) none of ARI, the Subsidiary or Xxxxxxxx Leasing is the subject of
any outstanding written order or Contract with any governmental authority or
Person respecting (i) Environmental Laws, (ii) Remedial Action or (iii) any
Release or threatened Release of a Hazardous Material;
(d) none of ARI, the Subsidiary or Xxxxxxxx Leasing has received any
communication alleging that it may be in violation of any Environmental Law or
any Permit issued pursuant to Environmental Law or may have any liability under
any Environmental Law;
(e) none of ARI, the Subsidiary or Xxxxxxxx Leasing has any current
contingent liability in connection with any Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or off-site);
21
(f) there are no investigations of the businesses, operations, or
currently or previously owned, operated or leased property of ARI, the
Subsidiary or Xxxxxxxx Leasing pending or threatened which could lead to the
imposition of any liability pursuant to Environmental Law; and
(g) there is not located at any of the properties of ARI, the Subsidiary
or Xxxxxxxx Leasing (including the Company Property) any (i) underground storage
tanks, (ii) asbestos-containing material or (iii) equipment containing
polychlorinated biphenyls.
4.21 Insurance. Schedule 4.21 sets forth (i) a complete and accurate list
---------
of all policies of insurance of any kind or nature covering ARI, the Subsidiary,
Xxxxxxxx Leasing or any of their respective employees, properties or assets,
including policies of life, disability, fire, theft, workers compensation,
employee fidelity and other casualty and lia bility insurance; and (ii) as to
each such policy, the name of the insurer, the type of risks insured, the
deductible and limits of coverage and the annual premium therefor. All such
policies are in full force and effect and, to the Sellers' knowledge, none of
ARI, the Subsidiary or Xxxxxxxx Leasing is in default of any provision thereof.
4.22 Related Party Transactions. Except as set forth on Schedule 4.22, no
--------------------------
Stockholder nor any other Affiliate of ARI, the Subsidiary or Xxxxxxxx Leasing
has borrowed any moneys from or has outstanding any indebtedness or other
similar obli gations to ARI, the Subsidiary or Xxxxxxxx Leasing. Except as set
forth in Schedule 4.22, no Stockholder nor any director, officer, member,
manager, employee or Affiliate of ARI or Xxxxxxxx Leasing (i) owns any direct or
indirect interest of any kind in, or controls or is a director, officer,
employee, member or partner of, or consultant to, or lender to or borrower from
or has the right to participate in the profits of, any Person which is (A) a
competitor, supplier, customer, landlord, tenant, creditor or debtor of ARI, the
Subsidiary or Xxxxxxxx Leasing, (B) engaged in a business related to the
business of ARI, the Subsidiary or Xxxxxxxx Leasing, or (C) a participant in any
transaction to which ARI, the Subsidiary or Xxxxxxxx Leasing is a party or (ii)
is a party to any Contract with ARI, the Subsidiary or Xxxxxxxx Leasing.
4.23 Banks. Schedule 4.23 contains a complete and correct list of the names
-----
and locations of all banks in which ARI or the Subsidiary has accounts or safe
deposit boxes and the names of all Persons authorized to draw thereon or to have
access thereto. Except as set forth on Schedule 4.23, no Person holds a power
of attorney to act on behalf of ARI or the Subsidiary.
4.24 Product Quality, Warranty Claims, Product Liability. All products and
---------------------------------------------------
services sold, rented, leased, provided or delivered by ARI, the Subsidiary and
Xxxxxxxx Leasing to their respective customers on or prior to the Closing Date
conform or will conform in all material respects to applicable contractual
commitments, express and implied warranties, product and service specifications
and quality standards and, to the knowledge of the Sellers, none of ARI, the
Subsidiary or Xxxxxxxx Leasing has any
22
liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
ARI, the Subsidiary or Xxxxxxxx Leasing giving rise to any liability) for
replacement or repair thereof or other damages in connection therewith. No
product or service sold, leased, rented, provided or delivered by ARI, the
Subsidiary or Xxxxxxxx Leasing to customers on or prior to the Closing Date is
subject to any guaranty, warranty or other indemnity beyond the applicable
standard terms and conditions of sale, rent or lease. Except as set forth on
Schedule 4.24 and Schedule 4.18, none of ARI, the Subsidiary or Xxxxxxxx Leasing
has any liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
ARI, the Subsidiary or Xxxxxxxx Leasing which might give rise to any liability)
arising out of any injury to a person or property as a result of the ownership,
possession, provision or use of any Equipment, product or service sold, rented,
leased, provided or delivered by ARI, the Subsidiary or Xxxxxxxx Leasing on or
prior to the Closing Date, and all matters disclosed on Schedules 4.18 and 4.24
are covered by insurance in favor of ARI, subject to deductibles not in excess
of $10,000 per occurrence, and the insurance carriers have not disputed or
denied coverage for any such matter. All product liability claims that have been
asserted against ARI or Xxxxxxxx Leasing since January 1, 1991 or against the
Subsidiary since February 21, 1995, whether covered by insurance or not and
whether litigation has resulted or not, are listed and summarized on Schedules
4.18 and 4.24.
4.25 Investment Intention. Each of the Sellers listed on Schedule
--------------------
2.1(b)(A): (a) is acquiring the shares of URI Common Stock constituting the
Stock Component and the Warrant for its own account, for investment purposes
only and not with a view to the distribution thereof in contravention of the
Securities Act; (b) is an "accredited investor" as that term is defined in Rule
501(a) under the Securities Act; and (c) understands that (i) none of (A) the
shares of URI Common Stock constituting the Stock Component, (B) the Warrant or
(C) the shares of URI Common Stock issuable upon exercise of the Warrant have
been registered under the Securities Act or any state securities laws and,
accordingly, such securities cannot be sold unless registered under the
Securities Act and applicable state securities laws or pursuant to an available
exemption from such registration requirements and (ii) except as set forth in
that certain agreement between URI and certain Sellers, dated the Closing Date,
URI is under no obligation to register any of such securities under the
Securities Act.
4.26 No Misrepresentation. No representation or warranty of any Seller
--------------------
contained in this Agreement or any other Seller Document or in any schedule
hereto, or in any certificate or other instrument furnished by any Seller or ARI
to URI pursuant to the terms hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
4.27 Brokers; Finders. No Person has acted, directly or indirectly, as a
----------------
broker, finder or financial advisor for any Seller or ARI in connection with the
transactions
23
contemplated by this Agreement and no Person is entitled to any fee, commission
or like payment in respect thereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF URI
URI hereby represents and warrants to the Sellers that:
5.1 Organization and Good Standing. URI is a corporation duly organized,
------------------------------
validly existing and in good standing under the laws of the State of Delaware.
5.2 Authorization of Agreement. URI has full corporate power and authority
--------------------------
to execute and deliver this Agreement and each of the other Purchaser Documents
to which it is a party, and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance by URI of this Agreement
and each other Purchaser Document have been duly authorized by all necessary
corporate action on behalf of URI. This Agreement and each other Purchaser
Document to which URI is a party has been duly executed and delivered by URI and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement and each other Purchaser Document to which
URI is a party constitutes legal, valid and binding obligations of URI,
enforceable against URI in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
------------------------------------
(a) Except as set forth on Schedule 5.3 hereto, neither the execution
and delivery by URI of this Agreement and the other Purchase Documents to which
URI is a party, nor the compliance by URI with any of the provisions hereof or
thereof will (i) conflict with, or result in the breach of, any provision of the
certificate of incorporation or by-laws of URI, (ii) conflict with, violate,
result in the breach of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other obligation to which URI is a party or by
which URI or any of its properties or assets are bound or (iii) violate any
statute, rule, regulation, order or decree of any governmental body or authority
by which URI is bound, except, in the case of clauses (ii) and (iii), for such
violations, breaches or defaults as would not, individually or in the aggregate,
have a material adverse effect on the business, properties, results of
operations, prospects, conditions (financial or otherwise) of URI and its
subsidiaries, taken as a whole. Except as set forth on Schedule 5.3 hereto, and
except for any required filings under the HSR Act, no consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Body is required on the part of
24
URI in connection with the execution and delivery of this Agreement or the other
Purchaser Documents to which URI is a party or the compliance by URI with any of
the provisions hereof or thereof.
5.4 Litigation. There are no Legal Proceedings pending or, to the best
----------
knowledge of URI, threatened that are reasonably likely to prohibit or restrain
the ability of URI to enter into this Agreement or consummate the transactions
contemplated hereby.
5.5 Investment Intention. URI is acquiring the Shares for its own account,
--------------------
for investment purposes only and not with a view to the distribution thereof in
contravention of the Securities Act. URI understands that the Shares have not
been registered under the Securities Act and cannot be sold unless registered
under the Securities Act or pursuant to an available exemption from such
registration requirements.
5.6 Stock Consideration. The shares of URI Common Stock constituting the
-------------------
Stock Component, and the shares of URI Common Stock issuable upon exercise of
the Warrant, have been duly authorized and, when issued against the
consideration therefor as provided herein, will be fully paid for and non-
assessable.
5.7 Brokers; Finders. No Person has acted, directly or indirectly, as a
----------------
broker, finder or financial advisor for URI in connection with the transactions
contemplated by this Agreement and no Person is entitled to any fee, commission
or like payment in respect thereof.
ARTICLE VI
COVENANTS
6.1 Access to Information. The Sellers agree that, prior to the Closing
---------------------
Date, URI shall be entitled, through its officers, employees and representatives
(including legal advisors and accountants), to make such investigation of the
properties, businesses and operations of ARI, the Subsidiary and Xxxxxxxx
Leasing and such examination of the books, records and financial condition of
ARI, the Subsidiary and Xxxxxxxx Leasing as URI reasonably requests and to make
extracts and copies of such books and records. Any such investigation and
examination shall be conducted during regular business hours and under
reasonable circumstances, and the Sellers shall cooperate, and shall cause ARI
and the Subsidiary to cooperate, fully therein. No investigation by URI prior
to or after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Sellers contained in
this Agreement or the Seller Documents. In order that URI may have full
opportunity to make such physical, business, accounting and legal review,
examination or investigation as it may reasonably request of the affairs of ARI,
the Subsidiary and Xxxxxxxx Leasing, the Sellers shall cause the officers,
employees, consultants, agents, accountants, attorneys and other representatives
25
of ARI, the Subsidiary and Xxxxxxxx Leasing to cooperate fully with such
representatives in connection with such review and examination.
6.2 Publicity; Non-disclosure. (a) None of the Sellers, ARI or URI shall
-------------------------
issue any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the other parties hereto, which approval will not be unreasonably withheld or
delayed; provided, however, that URI may, in its exclusive judgement and
-------- -------
discretion, make such disclosure as URI deems is required by applicable Law or
by the rules of any stock exchange on which any securities of URI are listed.
(b) For a period of three years following the date hereof, URI will not
disclose the results of any "Phase 1" environmental study commissioned by URI
with respect to any Company Property without the prior consent of the
Representative, such consent not to be unreasonably withheld; provided, however,
-------- -------
that URI may, in its exclusive discretion, make such disclosure (i) to (A) URI's
lenders, (B) any prospective underwriter or placement agent of any securities of
URI or (C) any Person contemplating the acquisition of a material portion of the
securities or assets of URI (by merger, purchase or otherwise), (ii) pursuant to
any request or order of any Governmental Body or (iii) as URI deems is required
by applicable Law or by the rules of any stock exchange on which any securities
of URI are listed.
6.3 Use of Name. The Sellers hereby agree that upon the consummation of the
-----------
transactions contemplated hereby, URI and ARI shall have the sole right to the
use of the name "Access Rentals" and the Sellers shall not, and shall not cause
or permit any of their Affiliates to, use such name or any variation or
simulation thereof in any business.
6.4 Records. The Sellers and URI agree that each of them shall preserve and
-------
keep the records held by them relating to the business of ARI, the Subsidiary
and Xxxxxxxx Leasing for a period of three years from the Closing Date (except
that records pertaining to Tax matters shall be retained for a period of six
years or such other period as required by applicable Law) and shall make such
records and personnel available to the other as may be reasonably required by
such party in connection with, among other things, any insurance claims by,
legal proceedings against or governmental investigations or audits of their or
their Affiliates' businesses. In the event either the Sellers or URI desire to
destroy such records after that time, such party shall first give 60 days prior
written notice to the other and such other party shall have the right at its
option and expense, upon prior written notice given to such party within that 60
day period, to take possession of the records within 90 days after the date of
such notice.
6.5 Senior Managers; Bonuses. (a) URI agrees to cause ARI to offer at-will
------------------------
employment (subject to such terms and conditions, including covenants not to
compete, as are consistent with URI's custom and practice) to the senior
managers of ARI designated in writing by the Representative on the Closing Date.
26
(b) Promptly following the Closing Date, URI shall cause ARI to pay the
senior managers of ARI designated by the Representative the bonuses set forth on
Schedule 6.5 hereto to the extent, and only to the extent, that the amounts of
such bonuses (and any Tax cost to ARI on account thereof) have been reflected in
a reduction in the Purchase Price pursuant to Section 2.2(d) hereof.
6.6 Release of Guarantees. As soon as practicable (and in any event within
---------------------
30 days) following the Closing Date, the Sellers shall use their best efforts to
cause ARI to be unconditionally released from, and discharged from all
obligations under, each of the guarantees described on Schedule 4.9 hereto
(other than the guarantees of obligations of the Subsidiary and Excelsior
Xxxxxxxxx listed on such Schedule) which have not been released or discharged on
or prior to the Closing Date.
ARTICLE VII
CLOSING DELIVERIES
7.1 Closing Deliveries of ARI. On the Closing Date, ARI delivered to URI
-------------------------
Sub certificates, duly endorsed in blank or accompanied by stock transfer powers
and with all requisite stock transfer tax stamps attached, representing 100% of
the Shares, for transfer to URI Sub, free and clear of any and all Liens.
7.2 Closing Deliveries of URI Sub. On the Closing Date, URI Sub delivered
-----------------------------
to ARI the purchase price set forth in Section 2.1 hereof, by wire transfer to
the account designated in writing by ARI.
7.3 Closing Deliveries of the Sellers. On or prior to the Closing Date, the
---------------------------------
Sellers delivered the following to URI:
(a) certificates, duly endorsed in blank or accompanied by stock transfer
powers and with all requisite stock transfer tax stamps attached, representing
100% of the Shares, for transfer to URI, free and clear of any and all Liens;
(b) the Xxxx of Sale, duly executed by Xxxxxxxx Leasing;
(c) a copy of the Escrow Agreement, executed by the Sellers and the Escrow
Agent;
(d) a copy of the Receivables Escrow Agreement, executed by the Sellers and
the Escrow Agent;
(e) copies of each of the Leases;
27
(f) copies of the Non-Competition Agreements in the forms of Exhibit F-1 and
-----------
Exhibit F-2 hereto (the "Non-Competition Agreement"), executed by JLR, Xxxxx X.
-----------
Xxxxxxxx and the other parties named therein;
(g) executed copies of Employment Agreements, duly executed by each of
Xxxxxx XxXxxxxxxxx and Xxxxx X. Xxxxxxxx, in substantially the forms of Exhibit
-------
G-1 and Exhibit G-2 hereto, respectively;
--- -----------
(h) an executed copy of the Consulting Agreement in substantially the form
of Exhibit H hereto, between ARI and JLR;
---------
(i) the opinion of Xxxxxxxx & Xxxxxxxx, LLP, counsel to the Sellers,
addressed to URI, in substantially the form of Exhibit I hereto;
---------
(j) copies of all consents and waivers referred to in Section 4.6 hereof
with respect to the transactions contemplated by this Agreement and the other
Seller Documents;
(k) affidavits of non-foreign status that comply with Section 1445 of the
Code, executed by each of the Sellers;
(l) the written resignations of each director and officer of ARI and the
Subsidiary;
(m) releases, in the form of Exhibit J hereto, executed by each Stockholder
---------
and each officer or director of ARI and the Subsidiary;
(n) a copy of the agreement referred to in Section 4.25 hereof, executed by
the Sellers party thereto and Xxxxxx X. XxXxxxxxxxx; and
(o) certificates of good standing with respect to ARI, the Subsidiary and
Xxxxxxxx Leasing issued by the Secretary of State or comparable official of
their jurisdiction of organization and for each jurisdiction in which they are
qualified to do business as a foreign corporation.
7.4 Closing Deliveries of URI. On or prior to the Closing Date, URI
-------------------------
delivered the following to the Representative on behalf of the Sellers:
(a) the Cash Component of the Purchase Price, by wire transfer to the
accounts designated in writing by the Representative, with the Escrow Amount
being contemporaneously delivered to the Escrow Agent;
(b) the Receivables Escrow Amount to the Escrow Agent;
(c) a stock certificate or certificates representing the Stock Component;
28
(d) the Warrant;
(e) the Assumption Agreement, executed by URI;
(f) a copy of the Escrow Agreement, executed by URI and the Escrow Agent;
(g) a copy of the Receivables Escrow Agreement, executed by URI and the
Escrow Agent;
(h) a copy of the employment and consulting agreements and the Leases
referred to in Section 7.3, executed by ARI;
(i) a copy of the agreement referred to in Section 4.25 hereof, executed by
URI; and
(j) the opinion of Weil, Gotshal & Xxxxxx LLP, counsel to URI, in
substantially the form of Exhibit K hereto.
---------
ARTICLE VIII
INDEMNIFICATION; TAX MATTERS
8.1 Indemnification. (a) Subject to Sections 8.2, 8.3 and 8.6 hereof, the
---------------
Sellers hereby agree, jointly and severally, to indemnify and hold URI, URI Sub,
ARI and their respective Affiliates, directors, officers, employees, agents,
successors and assigns (collectively, the "URI Indemnified Parties") harmless
from and against:
(i) any and all Losses based upon, attributable to or resulting from
the failure of any representation or warranty of the Sellers set forth in
this Agreement, or any representation or warranty contained in any
certificate delivered by or on behalf of the Sellers pursuant to this
Agreement, to be true and correct in all respects;
(ii) any and all Losses based upon, attributable to or resulting from
the breach of any covenant or other agreement on the part of the Sellers
under this Agreement;
(iii) any and all Losses (including any loss of use of Company Property
or any of the Assets or tangible personal property of ARI or the
Subsidiary) arising from: (A) any Release of Hazardous Materials in, on,
at, or from Company Properties which occurred, or resulted from operations
occurring, as of or prior to the Closing; (B) any tort liability to third
parties as a result of any Releases or from exposure to Hazardous Materials
arising from any Releases as of or prior to the Closing; (C) notification
or designation under any Environmental Law as a
29
potentially responsible party for on-site or off-site disposal of Hazardous
Materials, which disposal occurred as of or prior to the Closing, or the
listing of any Company Property on the CERCLA National Priorities List or
any similar list under any Environmental Law as a result of on-site
disposal of Hazardous Materials as of or prior to the Closing; and (D) any
fines or penalties with respect to any violation of Environmental Law
occurring as of or prior to the Closing;
(iv) any and all Losses in connection with any product liability,
failure to label or warn, or similar claims asserted with respect to items
rented, leased, serviced or sold by ARI, the Subsidiary or Xxxxxxxx Leasing
prior to the Closing;
(v) any and all Retained Liabilities;
(vi) any and all Losses attributable to or resulting from any guaranty
by ARI of obligations of any Person (other than the Subsidiary and
Excelsior Xxxxxxxxx, which in the case of Excelsior Xxxxxxxxx is in the
amount set forth on Schedule 4.9) in existence as of the Closing Date
(including the guarantees described on Schedule 4.9 hereto);
(vii) the operation of Xxxxxxxx Leasing or its business or assets after
the Closing; and
(viii) Xxxxxxxx Leasing's non-compliance with applicable "bulk sales"
Laws.
(b) Subject to Section 8.2 hereof, URI hereby agrees to indemnify and
hold the Sellers and their respective Affiliates, agents, successors and assigns
(collectively, the "Seller Indemnified Parties") harmless from and against:
(i) any and all Losses based upon, attributable to or resulting from
the failure of any representation or warranty of URI set forth in Article V
hereof, or any representation or warranty contained in any certificate
delivered by or on behalf of URI pursuant to this Agreement, to be true and
correct as of the date made;
(ii) any and all Losses based upon, attributable to or resulting from
the breach of any covenant or other agreement on the part of URI under this
Agreement; and
(iii) the Assumed Obligations.
8.2 Survival of Representations and Warranties. The parties hereto hereby
------------------------------------------
agree that the representations and warranties contained in this Agreement or in
any certificate, document or instrument delivered in connection herewith, shall
survive the execution and
30
delivery of this Agreement, and the Closing hereunder, regardless of any
investigation made by the parties hereto; provided, however, that any claims or
actions with respect thereto (other than claims for indemnification with respect
to the representations and warranties contained in Sections 4.2, 4.3, 4.7, 4.27,
5.2 and 5.7, which shall survive indefinitely, and those in Sections 4.11, 4.16,
4.18 and 4.20, which shall survive for periods coterminous with any applicable
statutes of limitation) shall terminate on the date of the third anniversary of
the Closing Date unless prior to such date written notice of such claims is
given to the Representative, in the case of claims against the Sellers, or URI,
in the case of claims against URI, or such actions are commenced.
8.3 Limitations on Indemnification.
------------------------------
(a) The Sellers shall not have any liability under Section 8.1(a)(i) hereof
unless the aggregate amount of Losses to the URI Indemnified Parties finally
determined to arise thereunder based upon, attributable to or resulting from the
failure of any representation or warranty to be true and correct, exceeds
$500,000 (the "Deductible Amount") and, in such event, the indemnifying party
shall be required to pay the entire amount of such Losses in excess of $500,000;
provided, however, that Losses finally determined to arise thereunder based
-------- -------
upon, attributable to or resulting from the failure of any representation or
warranty set forth in Sections 4.2, 4.3, 4.7, 4.11, the first sentence of
Section 4.13(b), Section 4.16 (to the extent such representations and warranties
relate to (x) Pension Plans or ERISA Affiliates or (y) any failure to file any
Form 5500 with respect to the Employee Benefit Plans, regardless of whether or
not such failure was disclosed on any Schedule), and Section 4.27 hereof to be
true and correct shall not be subject to the foregoing limitation and shall be
indemnified pursuant to this Article VIII even if less than the Deductible
Amount; and provided further, however, that Losses finally determined to arise
-------- ------- -------
based upon, attributable to or resulting from the failure of any representation
or warranty set forth in Sections 4.18 and 4.24 to be true and correct
(including the failure of any matter represented therein as being covered by
insurance to be so covered) shall be indemnifiable pursuant to Section 8.1(a)(i)
to the extent the aggregate amount of all such Losses exceeds $100,000 even if
such Losses, taken together with all other Losses indemnifiable pursuant to
Section 8.1(a)(i), aggregate less than the Deductible Amount. Solely for
purposes of this Section 8.3(a), the term "material" as used in any
representation or warranty in Article IV hereof shall refer to a value,
liability, cost or expense, as the case may be, in excess of $5,000; it being
understood that this qualification shall not apply to the defined term "Material
Adverse Change."
(b) The maximum amount of Losses for which the Sellers shall be liable for
pursuant to Section 8.1(a) shall not exceed $50,000,000.
8.4 Non-Tax Indemnification Procedures. (a) In the event that any Legal
----------------------------------
Proceedings shall be instituted or that any claim or demand ("Claim") shall be
asserted by any Person in respect of which payment may be sought under Section
8.1 hereof, the indemnified party shall reasonably and promptly cause written
notice of the assertion of
31
any Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the indemnifying party. The indemnifying party shall have the
right, at its sole option and expense, to be represented by counsel of its
choice, which must be reasonably satisfactory to the indemnified party, and to
defend against, negotiate, settle or otherwise deal with any Claim which relates
to any Losses indemnified against hereunder; provided however, that URI shall
-------- -------
have the right to control the defense to the extent of any claim seeking
equitable relief or Remedial Action. If the indemnifying party elects to defend
against, negotiate, settle or otherwise deal with any Claim which relates to any
Losses indemnified against hereunder, it shall within fifteen (15) days (or
sooner, if the nature of the Claim so requires) notify the indemnified party of
its intent to do so. If the indemnifying party elects not to defend against,
negotiate, settle or otherwise deal with any Claim which relates to any Losses
indemnified against hereunder, fails to notify the indemnified party of its
election as herein provided or contests its obligation to indemnify the
indemnified party for such Losses under this Agreement, the indemnified party
may defend against, negotiate, settle or otherwise deal with such Claim;
provided that the indemnified party shall not settle any Claim without the
--------
indemnifying party's prior consent, such consent not to be unreasonably
withheld. If the indemnified party defends any Claim, then the indemnifying
party shall reimburse the indemnified party for the costs and expenses
(including reasonable attorneys' and other professionals' fees and expenses) of
defending such Claim upon submission of periodic bills. If the indemnifying
party shall assume the defense of any Claim, the indemnified party may
participate, at his or its own expense, in the defense of such Claim; provided,
--------
however, that such indemnified party shall be entitled to participate in any
-------
such defense with separate counsel at the expense of the indemnifying party if,
(i) so requested by the indemnifying party to participate or (ii) in the
reasonable opinion of counsel to the indemnified party, a conflict or potential
conflict exists between the indemnified party and the indemnifying party that
would make such separate representation advisable; and provided, further, that
-------- -------
the indemnifying party shall not be required to pay for more than one such
separate counsel for all indemnified parties in connection with any Claim. The
parties hereto agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any such Claim.
(b) After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter and the indemnifying party shall be required to pay all of the sums
so due and owing to the indemnified party by wire transfer of immediately
available funds within 10 Business Days after the date of such notice.
(c) The failure of an indemnified party to give reasonably prompt notice of
any Claim shall not release, waive or otherwise affect the indemnifying party's
obligations
32
with respect thereto except to the extent that the indemnifying party can
demonstrate actual loss and prejudice as a result of such failure.
(d) Except for claims against Xxxxxxxx Leasing, and without limitation of, or
prejudice to, any of URI's rights under this Agreement, at Law or otherwise, URI
agrees to pursue any claim for indemnification under Section 8.1(a) against JLR
before pursuing such claim against the other Sellers, it being understood that
(i) URI need not exhaust its available remedies against JLR before pursuing any
claims against the other Sellers and (ii) the foregoing shall not limit the
ability of JLR to seek contribution from the other Sellers in connection with
any such claim.
(e) URI will use its reasonable commercial efforts to update the
Representative, upon request, as to the status of any pending litigation to
which ARI is a party for which the Sellers are obligated to indemnify the URI
Indemnified Parties hereunder.
8.5 Right of Set Off. URI may, but shall not be obligated to, set off
----------------
against any and all payments due to the Sellers out of the Escrow Amount, any
amount to which any URI Indemnified Party is entitled hereunder. URI shall have
no right of set off against the Receivables Escrow Amount. Such right of set
off shall be separate and apart from any and all other rights and remedies that
such Persons may have against the Sellers or their successors.
8.6 Tax Indemnification and Related Matters. (a) The Sellers, jointly and
---------------------------------------
severally, shall be responsible for and shall indemnify and hold harmless URI,
URI Sub, ARI and their respective Affiliates from and against any and all Losses
for or in respect of each of the following:
(i) any and all Taxes (including any Taxes resulting from the inclusion
of ARI and/or the Subsidiary in a consolidated, combined or unitary Tax
Return) with respect to all taxable periods of ARI and the Subsidiary
ending on or prior to the Closing Date and, to the extent provided in
Section 8.6(b) hereof, all taxable periods that include, and end after, the
Closing Date (other than, in each case, Taxes for which sufficient current
accruals have been made on the Balance Sheets); and
(ii) any and all Taxes resulting from any breach of the representations
and warranties contained in Section 4.11 hereof.
(b) The Sellers, ARI, the Subsidiary, and URI will, to the extent permitted
by applicable Law, close the taxable periods of ARI and the Subsidiary on the
Closing Date. In any case where applicable Law does not permit ARI and/or the
Subsidiary to close its taxable year on the Closing Date, then Taxes, if any,
attributable to the taxable periods of ARI and the Subsidiary beginning on or
before and ending after the Closing Date shall be allocated (i) to the Sellers
for the period up to and including the Closing Date, and (ii) to
33
URI for the period subsequent to the Closing Date. For purposes of this Section
8.6(b), Taxes for the period up to and including the Closing Date and for the
period subsequent to the Closing Date shall be determined on the basis of an
interim closing of the books as of the Closing Date or, to the extent not
susceptible to such allocation, by apportionment on the basis of elapsed days.
(c) URI shall be responsible for, and shall pay or cause to be paid, and
shall indemnify and hold harmless the Sellers from and against any and all
Losses for or in respect of each of the following:
(i) any and all Taxes (including any Taxes resulting from the inclusion
of ARI and/or the Subsidiary in a consolidated, combined or unitary Tax
Return) with respect to all taxable periods of ARI and the Subsidiary
beginning after the Closing Date and, to the extent provided in Section
8.6(b) hereof, all taxable periods that include, and end after, the Closing
Date (other than, in each case, Taxes for which the Sellers are responsible
pursuant to Section 8.6(a)(ii) hereof);
(ii) Taxes for which sufficient current accruals have been made on the
Balance Sheets; and
(iii) Taxes incurred by ARI solely as a result of the purchase of the
Subsidiary Shares by URI Sub on the Closing Date.
(d) (i) The Sellers shall be responsible for causing to be filed all Tax
Returns required to be filed by or on behalf of ARI and the Subsidiary and any
of their operations and assets on or before the Closing Date (taking into
account applicable extensions of time) and shall pay or cause to be paid any
Taxes shown to be due thereon. The Sellers shall file all such Tax Returns in a
manner consistent with past practices and, upon URI's request, shall provide
copies of such Tax Returns to URI for URI's review and comment at least fifteen
(15) business days prior to filing. URI shall be responsible for filing or
causing to be filed all Tax Returns required to be filed by or on behalf of ARI
and the Subsidiary and any of their operations and/or assets after the Closing
Date (taking into account applicable extensions of time) and shall pay or cause
to be paid any Taxes shown to be due thereon.
(ii) With respect to any Tax Return required to be filed by URI for a
taxable period of ARI and/or the Subsidiary beginning on or before and ending on
or after the Closing Date, URI shall provide the Representative with a statement
setting forth the amount of Tax shown on such Tax Return for which the Sellers
are responsible pursuant to Section 8.6(a) hereof or that are allocable to the
Sellers pursuant to Section 8.6(b) hereof (as the case may be) (the "Statement")
at least thirty (30) business days prior to the due date for filing of such Tax
Return (including extensions). The Representative shall have the right to
review such Tax Return and the Statement prior to the filing of such Tax Return.
The Sellers and URI agree to consult and resolve in good faith any issue arising
34
as a result of the review of such Tax Return and such Statement and to mutually
consent to the filing as promptly as possible of such Tax Return. If the
parties are unable to resolve any disagreement within fifteen Business Days
following the Representative's receipt of such Tax Return and Statement, the
parties shall jointly request the Independent Firm to resolve any issue in
dispute as promptly as possible and shall cooperate with the Independent Firm to
resolve such disagreement. If the Independent Firm is unable to make a
determination with respect to any disputed issue prior to the due date
(including extensions) for the filing of the Tax Return in question, then URI
may file such Tax Return on the due date (including extensions) therefor without
such determination having been made. Notwithstanding the filing of such Tax
Return, the Independent Firm shall make a determination with respect to any
disputed issue, and the amount of Taxes that are allocated to the Sellers
pursuant to this Section 8.6(d)(ii) shall be as determined by the Independent
Firm. The fees and expenses of the Independent Firm shall be paid one-half by
URI and one-half by the Sellers. Not later than five (5) Business Days before
the due date (including extensions) for payment of Taxes with respect to such
Tax Return or, in the case of a dispute, not later than five (5) Business Days
after notice to the Representative of resolution thereof, the Sellers shall pay
to URI an amount equal to the Taxes shown on the Statement or as shown in such
notice, as the case may be, as being the responsibility of the Sellers pursuant
to Section 8.6(a) hereof or allocable to the Sellers pursuant to Section 8.6(b)
hereof (as the case may be). No payment pursuant to this Section 8.6(d)(ii)
shall excuse the Sellers from their indemnification obligations pursuant to
Section 8.6(a) hereof should the amount of Taxes as ultimately determined (on
audit or otherwise), for the periods covered by such Tax Returns and which are
the responsibility of the Sellers, exceed the amount of the Sellers' payment
under this Section 8.6(d)(ii).
(iii) The Sellers may not file any amended Tax Returns or refund claims
in respect of any taxable period of ARI or the Subsidiary ending on or prior to
the Closing Date without the prior written consent of URI, such consent not to
be unreasonably withheld.
(iv) The Sellers shall cooperate fully with URI and make available to
URI in a timely fashion such Tax data and other information as may be reasonably
required for the preparation by URI of any Tax Returns required to be prepared
and filed by URI hereunder. The Sellers and URI shall make available to the
other, as reasonably requested, all information, records or documents in their
possession relating to Tax liabilities of ARI and/or the Subsidiary for all
taxable periods of ARI and the Subsidiary ending on, prior to or including the
Closing Date and shall preserve all such information, records and documents
until the expiration of any applicable Tax statute of limitations or extensions
thereof; provided, however, that if a proceeding has been instituted for which
-------- -------
the information, records or documents is required prior to the expiration of the
applicable statute of limitations, such information, records or documents shall
be retained until there is a final determination with respect to such
proceeding.
35
(e) URI shall promptly notify the Representative in writing upon
receipt by URI, ARI or the Subsidiary of notice of any Tax audits of or proposed
assessments against ARI or the Subsidiary for taxable periods of ARI and the
Subsidiary ending on or prior to the Closing Date; provided, however, that the
-------- -------
failure of URI to give the Sellers prompt notice as required herein shall not
relieve the Sellers of any of their obligations under this Section 8.6, except
to the extent that the Sellers are actually and materially prejudiced thereby.
URI shall have the right to represent ARI's and the Subsidiary's interests in
any such Tax audit or administrative or court proceeding and to employ counsel
of its choice at URI's expense; provided, however, that URI may not agree to a
-------- -------
settlement or compromise thereof without the prior consent of the
Representative, which consent will not be unreasonably withheld. The Sellers
and their counsel may participate (at the Sellers' expense) in any such audit or
proceeding. The Sellers agree that they will cooperate fully with URI and its
counsel in the defense against or compromise of any claim in any said audit or
proceeding.
(f) Any dispute as to any matter covered hereby shall be resolved by an
independent accounting firm mutually acceptable to the Representative and URI.
The fees and expenses of such accounting firm shall be borne equally by the
parties.
(g) The parties hereto agree to furnish or cause to be furnished to
each other, at their own expense, such information, access to books and records,
and assistance, including making employees available during regular business
hours on a mutually convenient basis, as may reasonably be necessary for the
preparation and filing of any Tax Return contemplated by this Section 8.6.
8.7 Tax Treatment of Indemnity Payments. The Sellers and URI agree to treat
-----------------------------------
any indemnity payment made pursuant to this Article VIII as an adjustment to the
Purchase Price for federal, state, local and foreign income tax purposes.
ARTICLE IX
MISCELLANEOUS
9.1 Rules of Construction; Certain Definitions. (a) As used in this
------------------------------------------
Agreement, the words "herein," "hereof," "hereto" and "hereunder" and other
------ ------ ------ ---------
words of similar import refer to this Agreement as a whole, including the
Schedules hereto, and not to any subdivision contained in this Agreement. The
word "including" when used herein is not intended to be exclusive and means
---------
"including, without limitation." Statements, representations or warranties made
-----------------------------
to a Person's "knowledge" mean such Person's knowledge after diligent inquiry of
---------
appropriate Persons and sources using prudent business standards.
(b) For purposes of this Agreement, the following terms shall have the
meanings specified in this Section 9.1(b):
36
"Affiliate" means, with respect to any Person, any other Person
---------
controlling, controlled by or under common control with such Person.
"Assets" means all of Xxxxxxxx Leasing's right, title and interest in
------
and to all assets (other than cash), properties and rights of Xxxxxxxx Leasing
of every kind and description, wherever located, whether tangible or intangible,
including the following: (a) all equipment, vehicles, tools, spare parts,
machinery, computers, furnishings, furniture, office supplies or other equipment
used in the operation of Xxxxxxxx Leasing's business (in each case, including
all accessories, supplies, operating manuals and other documentation with
respect thereto) and all of Xxxxxxxx Leasing's interests in the leases of the
equipment described in this clause (a) and all other fixed assets that are
located at Xxxxxxxx Leasing's facilities or otherwise used in its business; (b)
all inventories of parts, supplies, fuels, chemicals, solvents, components,
labels, stationary, forms, packing materials and other goods and personal
property used in Xxxxxxxx Leasing's business; (c) all Contracts of Xxxxxxxx
Leasing and all rights of Xxxxxxxx Leasing thereunder, and all rights of
Xxxxxxxx Leasing under any non-disclosure, confidentiality or non-competition
Contracts relating to Xxxxxxxx Leasing's business; (d) all rights of Xxxxxxxx
Leasing under or pursuant to all warranties, representations or guarantees made
by suppliers, manufacturers and contractors in connection with products or
services of, or used in, Xxxxxxxx Leasing's business, or otherwise affecting
Xxxxxxxx Leasing's equipment, assets or inventory; (e) all customer and vendor
lists relating to Xxxxxxxx Leasing's business, all files or documents relating
to customers and vendors of Xxxxxxxx Leasing's business, and all financial
records, files, books or documents otherwise relating to the Assets and the
Assumed Obligations, including computer programs, manuals, sales and advertising
materials, billing records, and sales, distribution and purchase correspondence;
(f) all intellectual property rights of Xxxxxxxx Leasing and all of Xxxxxxxx
Leasing's rights under all intellectual property license arrangements and all
documentation relating thereto in whatever media it is embodied, other than the
name "Xxxxxxxx Leasing"; (g) all computer software owned by Xxxxxxxx Leasing or
used by Xxxxxxxx Leasing in connection with its business, and all documentation
and specifications relating thereto; (h) all Permits and licenses issued by any
governmental authority held or used by Xxxxxxxx Leasing in connection with its
business; (i) all prepaid deposits, expenses or charges of Xxxxxxxx Leasing's
business; (j) all claims, choses of action and rights relating to the Assets and
the Assumed Obligations, and all insurance proceeds, judgements or settlements
with respect to the Assets and the Assumed Obligations; and (k) the current
telephone numbers and telephone listings of Xxxxxxxx Leasing's business.
"Balance Sheets" has the meaning ascribed to such term in Section 4.8.
--------------
"Business Day" means any day of the year on which national banking
------------
institutions in New York are open to the public for conducting business and are
not required or authorized to close.
37
"Closing" and "Closing Date" have the respective meanings ascribed in
------- ------------
Article III hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Company Property" shall have the meaning ascribed to such term in
----------------
Section 4.12 hereof.
"Contract" means any contract, agreement, indenture, note, bond, loan,
--------
instrument, lease, commitment or other arrangement.
"Environmental Law" means any foreign, federal, state or local Law or
-----------------
rule of common law as now or hereafter in effect in any way relating to the
protection of human health and safety or the environment, including the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
(S) 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App.
-- ----
(S) 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. (S)
-- ----
6901 et seq.), the Clean Water Act (33 U.S.C. (S) 1251 et seq.), the Clean Air
-- ---- -- ----
Act (42 U.S.C. (S) 7401 et seq.) the Toxic Substances Control Act (15 U.S.C. (S)
-- ----
2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
-- ----
(S) 136 et seq.), and the Occupational Safety and Health Act (29 U.S.C. (S) 651
-- ----
et seq.), and the regulations promulgated pursuant thereto.
-- ----
"Equipment" has the meaning ascribed to such term in Section 2.2(b).
---------
"GAAP" means generally accepted accounting principles in the United
----
States as of the date hereof.
"Governmental Body" means any government or governmental or regulatory
-----------------
body thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
"Hazardous Material" means any substance, material or waste which is
------------------
regulated by the United States, foreign jurisdictions in which ARI, the
Subsidiary or Xxxxxxxx Leasing conducts business, or any state or local
governmental authority, including petroleum and its by-products, asbestos, and
any material or substance which is defined as a "hazardous waste," "hazardous
substance," "hazardous material," "restricted hazardous waste," "industrial
waste," "solid waste," "contaminant," "pollutant," "toxic waste" or "toxic
substance" under any provision of Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
-------
1976, as amended.
"Independent Firm" shall mean Deloitte & Touche LLP.
----------------
38
"JLR" means Xxxxx X. Xxxxxxxx, an individual and one of the
---
Stockholders.
"Law" means any federal, state, local or foreign law (including common
---
law), statute, code, ordinance, rule, regulation or other requirement.
"Leases" shall mean the real property leases with Affiliates of the
------
Sellers, and the assignments of rights to, and landlord estoppel certificates
with respect to, real property leases with third-parties, in each case, to be
entered into on the Closing Date relating to each of the Company Properties.
"Legal Proceeding" means any judicial, administrative or arbitral
----------------
actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, mortgage, encumbrance, deed or trust,
----
security interest, claim, lease, charge, option, right of first refusal,
easement, transfer restriction under any Contract or any other restriction or
limitation whatsoever.
"Losses" shall mean, collectively, with respect to any Person, any and
------
all losses, liabilities, obligations, damages, costs and expenses, and all
notices, actions, suits, proceedings, claims, demands, assessments, judgments,
costs, penalties and expenses, including attorneys' and other professionals'
fees and disbursements incident to any such loss, liability, obligation, damage,
cost or expense, in each case, incurred or suffered by such Person; provided
--------
that a Person shall be deemed not to have suffered or incurred a Loss to the
extent that such Person has (i) recovered insurance proceeds or has otherwise
been reimbursed by another Person or (ii) received an actual Tax benefit which
offsets an otherwise required Tax liability, in respect of the same.
"Material Adverse Change" means any material adverse change in the
-----------------------
business, assets, properties, results of operations, prospects, condition
(financial or otherwise) of ARI, the Subsidiary or Xxxxxxxx Leasing.
"Non-Competition Agreements" has the meaning ascribed to such term in
--------------------------
Section 7.3.
"Order" means any order, injunction, judgment, decree, ruling, writ,
-----
assessment or arbitration award.
"Permits" means any approvals, authorizations, consents, licenses,
-------
permits or certificates of any type.
"Permitted Exceptions" means (i) all defects, exceptions, restrictions,
--------------------
easements, rights of way and encumbrances disclosed in policies of title
insurance which have been made available to URI; (ii) statutory liens for
current taxes, assessments or other governmental charges not yet delinquent or
the amount or validity of which is being
39
contested in good faith by appropriate proceedings, provided an appropriate
reserve is established therefor; (iii) mechanics', carriers', workers',
repairers' and similar Liens arising or incurred in the ordinary course of
business that are not material to the business, operations and financial
condition of the property so encumbered or the owner or user thereof; (iv)
zoning, entitlement and other land use and environmental regulations by any
Governmental Body, provided that such regulations have not been violated; and
(v) such other imperfections in title, charges, easements, restrictions and
encumbrances which do not materially detract from the value of or materially
interfere with the present use of any Company Property or other assets subject
thereto or affected thereby.
"Person" means any individual, corporation, limited liability company,
------
part nership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.
"Purchaser Documents" shall mean, collectively, this Agreement, the
-------------------
Assumption Agreement, the Escrow Agreement and the Warrant.
"Release" means any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, or leaching into the indoor
or outdoor environment, or into or out of any property.
"Remedial Action" means all actions to (i) clean up, remove, treat or in
---------------
any other way address any Hazardous Material; (ii) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (iii) perform pre-remedial
studies and investigations or post-remedial monitoring and care.
"Representative" has the meaning ascribed to such term in Section 9.14.
--------------
"Retained Liabilities" means all obligations and liabilities (known or
--------------------
unknown, contingent or fixed, liquidated or unliquidated, accrued or unaccrued,
or otherwise) relating to, arising out of or accruing from the operation of
Xxxxxxxx Leasing's business, including any and all obligations of Xxxxxxxx
Leasing for performance under Contracts (other than the Assumed Obligations),
any and all Taxes with respect to the ownership, use or leasing of any of the
assets or the operations of Xxxxxxxx Leasing on or prior to the Closing Date,
any liabilities under any Environmental Law, and any liabilities with respect to
any Employee Benefit Plan or Pension Plan.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller Documents" shall mean, collectively, this Agreement, the Xxxx of
----------------
Sale, the Escrow Agreement, the Employment, Consulting and Non-Competition
Agreements referred to in Section 7.3 and the Leases.
40
"Taxes" means (i) all federal, state, local or foreign taxes, charges,
-----
fees, imposts, levies or other assessments, including, without limitation, all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inven tory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any taxing authority in connection with
any item described in clause (i) and (iii) any transferee liability in respect
of any items described in clauses (i) and/or (ii).
"Tax Return" means all returns, declarations, reports, estimates,
----------
information returns and statements required to be filed in respect of any Taxes.
"URI Common Stock" means the common stock, par value $.01 per share, of
----------------
URI.
"Warrant" has the meaning ascribed to such term in Section 2.1(b).
-------
9.2 Payment of Sales, Use, Transfer or Similar Taxes. All sales, use,
------------------------------------------------
transfer, recordation, documentary stamp or similar Taxes or charges, of any
nature whatsoever, applicable to, or resulting from, the transactions
contemplated by this Agreement shall be borne by the Sellers.
9.3 Bulk Sales Laws. The parties hereby waive compliance by Xxxxxxxx
---------------
Leasing with the requirements of Article 6 of the Uniform Commercial Code as in
effect in applicable jurisdictions and any other "bulk sales" Laws applicable to
the transfers contemplated by this Agreement, and the Sellers hereby covenant
and agree to indemnify URI and hold URI harmless from any costs or liabilities
resulting from such non-compliance.
9.4 Expenses. Except as otherwise provided in this Agreement, the Sellers
--------
and URI shall each bear their own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document
and instrument contemplated by this Agreement and the consummation of the
transactions contemplated hereby and thereby; provided that ARI may pay any such
--------
expenses to the extent such expenses are reflected as a current liability on the
Net Current Position statement referred to in Section 2.2(d) hereof.
9.5 Specific Performance. The Sellers acknowledge and agree that the breach
--------------------
of this Agreement would cause irreparable damage to URI and that URI will not
have an adequate remedy at law. Therefore, the obligations of the Sellers under
this Agreement, including the Sellers' obligation to sell the Shares and the
Assets to URI, shall be enforceable by a decree of specific performance issued
by any court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection
41
therewith. Such remedies shall, however, be cumulative and not exclusive and
shall be in addition to any other remedies which any party may have under this
Agreement or otherwise.
9.6 Further Assurances. The Sellers and URI agree to execute and deliver
------------------
such other documents or agreements and to take such other action as may be
reasonably necessary or desirable for the implementation of this Agreement and
the consummation of the transactions contemplated hereby.
9.7 Entire Agreement; Amendments and Waivers. This Agreement (including the
----------------------------------------
schedules and exhibits hereto) represents the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof and can be
amended, supplemented or changed, and any provision hereof can be waived, only
by written instrument making specific reference to this Agreement signed by the
party against whom enforcement of any such amendment, supplement, modification
or waiver is sought. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a further or continuing waiver of such breach or as a waiver of any
other or subsequent breach. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
9.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9.9 Section Headings. The captions and section headings of this Agreement
----------------
are for reference purposes only and are to be given no effect in the
construction or interpretation of this Agreement.
9.10 Notices. All notices and other communications under this Agreement
-------
shall be in writing and shall be deemed given when delivered personally or by
facsimile transmission (with record of successful transmission/answerback
received), the Business Day following being sent by reputable next day delivery
service or three Business Days after being mailed by certified mail, return
receipt requested, to the parties (and shall also be transmitted by facsimile to
the Persons receiving copies thereof) at the following addresses (or to such
other address as a party may have specified by notice given to the other party
pursuant to this provision):
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If to any Seller or the Representative, to:
Xx. Xxxxx X. Xxxxxxxx
000 Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
With a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxxxxx, LLP
3950 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to URI or URI Sub, to:
United Rentals, Inc.
Four Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxx, Esq. -and- Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
9.11 Severability. If any provision of this Agreement is invalid or
------------
unenforceable, the balance of this Agreement shall remain in effect.
9.12 Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity not a party to
this Agreement except as provided below. No assignment of this Agreement or of
any rights or obligations hereunder may be made by either the Sellers or URI (by
operation of law or otherwise) without the prior written consent of the other
parties hereto and any attempted assignment without the required consents shall
be void; provided, however, that URI may assign this Agreement and any or all
-------- -------
rights or obligations hereunder (including rights to purchase the Shares and the
Assets and rights to seek indemnification hereunder) to any Affiliate of URI,
and upon
43
any such permitted assignment, the references in this Agreement to URI, as the
case may be, shall also apply to any such assignee unless the context otherwise
requires.
9.13 No Third Party Beneficiaries. Except as expressly set forth in this
----------------------------
Agreement, nothing herein, express or implied, is intended to or shall confer
upon any Person (including any employees of ARI, the Subsidiary or Xxxxxxxx
Leasing), other than the parties hereto and the Persons described in Section 8.1
hereof, any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
9.14 Sellers' Representative. JLR is hereby designated as the representative
-----------------------
(the "Representative") to act for and represent the Sellers with respect to all
matters arising out of Article II and Article VIII hereof, all matters relating
to the Escrow Agreement, and in those other matters with respect to which this
Agreement specifies that the Representative shall so act, as well as matters
which require notice to be given to the Sellers under this Agreement. Each of
the Sellers hereby appoints the Representative as such Seller's agent, proxy and
attorney-in-fact, with full power of substitution, for all purposes set forth in
this Agreement, including, without limitation, the full power and authority on
such Seller's behalf (i) to consummate the transactions contemplated by this
Agreement, (ii) to disburse any funds received hereunder to the Sellers, (iii)
to execute and deliver on behalf of each Seller any amendment or waiver under
this Agreement or the Escrow Agreement, and to agree to resolution of all
purchase price adjustments and Claims hereunder and thereunder, and (iv) to do
each and every act and exercise any and all rights which such Seller or Sellers
are permitted or required to do or exercise under this Agreement and the other
agreements, documents and certificates executed in connection herewith.
[signature pages follow]
44
IN WITNESS WHEREOF, the parties hereto have, as appropriate, executed this
Agreement or caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first written above.
URI:
UNITED RENTALS, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Vice Chairman and
Chief Acquisition Officer
URI SUB:
UNITED RENTALS OF CANADA, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title:
XXXXXXXX LEASING:
XXXXXXXX LEASING; LLC
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Member
ARI:
ACCESS RENTALS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
THE STOCKHOLDERS:
/s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
45
XXXXX X. XXXXXXXX CHARITABLE
REMAINDER UNITRUST
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Trustee
XXXXX X. XXXXXXXX 1997 TRUST FOR
THE BENEFIT OF XXXXX X. XXXXXXXX
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Trustee
XXXXX X. XXXXXXXX 1997 TRUST FOR
THE BENEFIT OF XXXXXXXX XXXXXXXX
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Trustee
XXXXX X. XXXXXXXX 1997 TRUST FOR
THE BENEFIT OF XXXXX XXXXXXXX
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Trustee
XXXXX X. XXXXXXXX 1997 TRUST FOR
THE BENEFIT OF XXXXXXXX XXXXXXXX
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Trustee
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Schedule 5.3
------------
Consent of Bank of America National Trust and Savings Association, as
agent, under URI's Credit Agreement
47
