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EXHIBIT 10.12
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ASSET PURCHASE AGREEMENT
AMONG
RENTX INDUSTRIES, INC.,
XXXX RENTAL & SALES OF EL DORADO, INC.,
XXXX RENTAL & SALES OF HOT SPRINGS, INC.,
XXXX RENTAL & SALES OF MAGNOLIA, INC.,
XXXX RENTAL & SALES OF CAMDEN, INC.,
XXXX RENTAL & SALES OF ARKADELPHIA, INC.,
XXXX LEASING, INC.
AND THE
SHAREHOLDER
OF CERTAIN
OF
SUCH SELLERS
AS OF JANUARY 31, 1997
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1. Basic Transaction . . . . . . . . . . . . . . . . . . . . . . 1
2.2. Assumption of Certain Liabilities . . . . . . . . . . . . . . 1
2.3. Purchase Price; Payment . . . . . . . . . . . . . . . . . . . 1
2.4. Sales Taxes, Etc. . . . . . . . . . . . . . . . . . . . . . . 2
2.5. Closing; Closing Date . . . . . . . . . . . . . . . . . . . . 3
2.6. Deliveries at the Closing . . . . . . . . . . . . . . . . . . 3
3. Representations and Warranties. . . . . . . . . . . . . . . . . . . . 3
3.1. Representations and Warranties of the Sellers and the
Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Representations and Warranties of the Buyer . . . . . . . . . 11
3.3. Survival of Representations . . . . . . . . . . . . . . . . . 11
3.4. Representations as to Knowledge . . . . . . . . . . . . . . . 11
4. Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1. General . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2. Operation and Preservation of Business . . . . . . . . . . . . 12
4.3. Full Access . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4. Notice of Developments . . . . . . . . . . . . . . . . . . . . 12
4.5. Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6. Conveyance of Shareholder Property . . . . . . . . . . . . . . 13
4.7. Announcements . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8. Bulk Sales Laws . . . . . . . . . . . . . . . . . . . . . . . 13
5. Post-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . 13
5.1. Further Assurances . . . . . . . . . . . . . . . . . . . . . . 13
5.2. Transition . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3. Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.4. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 13
5.5. Post-Closing Announcements . . . . . . . . . . . . . . . . . . 13
5.6. Financial Statements . . . . . . . . . . . . . . . . . . . . . 14
5.7. Satisfaction of Liabilities . . . . . . . . . . . . . . . . . 14
5.8. Certain Environmental Matters . . . . . . . . . . . . . . . . 14
5.9. Repurchase of Unpaid Receivables . . . . . . . . . . . . . . . 14
6. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1. Conditions to Obligation of the Buyer . . . . . . . . . . . . 15
6.2. Conditions to Obligation of the Sellers and the Shareholder . 16
7. Remedies for Breaches of This Agreement . . . . . . . . . . . . . . . 17
7.1. Indemnification Provisions for Benefit of the Buyer . . . . . 17
7.2. Indemnification Provisions for Benefit of the Sellers and the
Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 18
(i)
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7.3. Matters Involving Third Parties . . . . . . . . . . . . . . . 18
7.4. Right of Offset. . . . . . . . . . . . . . . . . . . . . . . . 19
7.5. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . 19
8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1. Termination of Agreement . . . . . . . . . . . . . . . . . . . 19
8.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . 20
8.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 20
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.1. No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . 20
9.2. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 20
9.3. Succession and Assignment . . . . . . . . . . . . . . . . . . 20
9.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 21
9.8. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 21
9.9. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.11. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.12. Construction . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.13. Incorporation of Exhibits . . . . . . . . . . . . . . . . . . 22
9.14. Sellers' and Shareholder's Agent. . . . . . . . . . . . . . . 23
Exhibits:
Exhibit 1.1(a) Exhibit 3.1(g)(i)(A)
Exhibit 1.1(b) Exhibit 3.1(g)(i)(B)
Exhibit 1.1(c)(i) Exhibit 3.1(g)(i)(C)
Exhibit 1.1(c)(ii) Exhibit 3.1(g)(ii)
Exhibit 1.1(d) Exhibit 3.1(h)(i)
Exhibit 1.1(e) Exhibit 3.1(h)(ii)
Exhibit 1.1(f) Exhibit 3.1(i)
Exhibit 1.1(g) Exhibit 3.1(k)
Exhibit 1.1(h) Exhibit 3.1(l)
Exhibit 1.1(i) Exhibit 3.1(m)
Exhibit 1.1(j) Exhibit 3.1(n)
Exhibit 1.1(k) Exhibit 3.1(p)(i)
Exhibit 3.1(c) Exhibit 3.1(p)(ii)
Exhibit 3.1(d)(i) Exhibit 3.1(s)(ii)
Exhibit 3.1(d)(ii) Exhibit 3.1(s)(iii)
Exhibit 3.1(d)(iii) Exhibit 5.8
Exhibit 3.1(e) Exhibit 6.1(j)
Exhibit 3.1(f) Exhibit 6.2(e)
(ii)
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This Asset Purchase Agreement is entered into as of January 31,
1997 among RentX Industries, Inc., a Delaware corporation (the "Buyer"), Xxxx
Rental & Sales of El Dorado, Inc., an Arkansas corporation ("El Dorado"), Xxxx
Rental & Sales of Hot Springs, Inc., an Arkansas corporation ("Hot Springs"),
Xxxx Rental & Sales of Magnolia, Inc., an Arkansas corporation ("Magnolia"),
Xxxx Rental & Sales of Camden, Inc., an Arkansas corporation ("Camden"), Xxxx
Rental & Sales of Arkadelphia, Inc., an Arkansas corporation ("Arkadelphia"),
Xxxx Leasing, Inc., an Arkansas corporation ("Leasing") (El Dorado, Hot
Springs, Magnolia, Camden, Arkadelphia and Leasing are also referred to
individually as a "Seller" and collectively as the "Sellers"), and Xxxx X. Xxxx
(the "Shareholder").
Recitals
The Shareholder owns all of the issued and outstanding capital
stock of El Dorado, Arkadelphia and Leasing. El Dorado owns all of the issued
and outstanding capital stock of Hot Springs, Magnolia and Camden. The Sellers
desire to sell, and the Buyer desires to purchase, substantially all of each
Seller's assets as provided in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the premises, the mutual
representations, warranties and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
1. Definitions. The terms defined in Exhibit 1.1(a) shall have the
meanings designated therein.
2. Purchase and Sale.
2.1. Basic Transaction. Subject to the terms and conditions set forth
in this Agreement, the Buyer agrees to purchase from each Seller, and each
Seller agrees to sell to the Buyer, all the Acquired Assets free and clear of
any Encumbrance or Tax, for the consideration specified in Section 2.3. The
Buyer will have no obligation under this Agreement to purchase less than all of
the Acquired Assets of all the Sellers.
2.2. Assumption of Certain Liabilities. Subject to the terms and
conditions set forth in this Agreement, the Buyer agrees to assume and become
responsible at the Closing, but effective as of the Closing Date, for all of
the Assumed Liabilities. The Buyer will not assume or have any responsibility
with respect to any other Liability not expressly included within the
definition of Assumed Liabilities.
2.3. Purchase Price; Payment.
(a) The cash purchase price for the Acquired Assets of (i) El
Dorado is $480,000, (ii) Hot Springs is $295,000, (iii) Magnolia is $135,000,
(iv) Camden is $100,000, (v) Arkadelphia is $110,000 and (vi) Leasing is
$3,420,609. At the Closing, the Buyer will, by wire transfer or other delivery
of immediately available funds, (i) (A) pay to the Sellers (subject to Section
2.3(b)) $4,090,609, less the estimated Pre-Closing Personal Property Tax Amount
(which estimated amount shall be agreed upon by the Buyer and the Seller's
Agent at least three business days prior to the Closing), and (B) deposit
$450,000 into the Escrow Account and (ii) assume the Assumed Liabilities (and
the amounts paid and deposited to and in respect of the Sellers and the Assumed
Liabilities will constitute the full purchase price for the Acquired Assets).
The amount deposited in the Escrow
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Account will belong to the Sellers, subject to the Sellers' indemnification
obligations set forth in this Agreement, and will be held, invested,
administered and disbursed according to Section 7.1(b) hereof and the Escrow
Agreement.
(b) At the Closing, the Buyer will deposit into a demand
deposit account in the name of the Buyer and the Sellers' Agent, from the
amount otherwise payable to the Sellers pursuant to Section 2.3(a)(i)(A), an
amount equal to the Reserve Amount, and such funds shall initially constitute
the Liabilities Reserve. The funds on deposit in the Liabilities Reserve will
belong to the Sellers, subject to the provisions of this Section 2.3(b).
Following the Closing, the Liabilities Reserve will be applied to the payment
of Reserved Seller Liabilities, by disbursements from that account by the Buyer
or the Sellers' Agent, as the Reserved Seller Liabilities become due and
payable. To the extent that the Buyer receives a xxxx or invoice representing,
or is otherwise aware of, any Reserved Seller Liabilities, the Buyer may cause
funds to be disbursed from the Reserve Amount to satisfy such Reserved Seller
Liabilities. Reserved Seller Liabilities representing accrued vacation and
other accrued employee benefits with respect to those persons who are employees
of any Seller as of the Closing Date and who become employees of the Buyer
effective as of the Closing will be satisfied by payment of the amount thereof
to the Buyer as the Buyer provides such benefits or makes cash payments in lieu
thereof to employees. The Sellers' Agent will take all actions necessary to
cause the Liabilities Reserve to be applied to satisfy Reserved Seller
Liabilities and, if the Liabilities Reserve has been exhausted, the Sellers and
the Shareholder will provide additional funds as required to satisfy Reserved
Seller Liabilities. Nothing in this Agreement will be deemed to limit the
joint and several obligations of the Sellers and the Shareholder to pay the
Reserved Seller Liabilities in full. After all Reserved Seller Liabilities
have been satisfied, any excess Liabilities Reserve on deposit in the account
created pursuant to this Section 2.3(b) will be paid to the Sellers. Any
disputes concerning the Liabilities Reserve will be settled by arbitration as
provided in this Agreement.
(c) As soon as practicable after the Closing, but effective as
of the Closing, the Buyer and the Sellers' Agent will prepare and initial a
"Price Allocation Schedule" with respect to each Seller, allocating for Tax
reporting purposes the total consideration for the Acquired Assets acquired
from such Seller among the various categories of Acquired Assets acquired from
such Seller in the following order and amounts: (i) to cash and cash
equivalents, the $400 amount on the Closing Balance Sheet applicable to such
Seller (except there will be no such amount allocated to Leasing); (ii) to
Closing Accounts Receivable, the amount on the Closing Balance Sheet applicable
to such Seller; (iii) to Closing Inventory, the amount on the Closing Balance
Sheet applicable to such Seller; (iv) to equipment and leasehold improvements,
the greater of the appraised fair market value (if the Buyer in its sole
discretion obtains an appraisal before or after the Closing) or the current
book value thereof as reflected on the Closing Balance Sheet applicable to such
Seller; (v) to prepaid expenses, the unamortized balance on the Closing Balance
Sheet applicable to such Seller; (vi) to any other assets, other than goodwill,
the amount on the Closing Balance Sheet applicable to such Seller; and (vii)
the entire remaining balance of the consideration shall be allocated to the
goodwill of such Seller's business or, at the Buyer's sole discretion, to the
other intangible assets which are included in the Acquired Assets acquired from
such Seller. The parties acknowledge that such allocations for Tax reporting
purposes were determined pursuant to arm's length bargaining regarding the fair
market values of the Acquired Assets in accordance with the provisions of Code
Section 1060. The parties agree to be bound by the allocations set forth in
the Price Allocation Schedules for all federal, state and local Tax reporting
purposes, including for purposes of determining any income, gain, loss,
depreciation or other deductions in respect of such assets. The parties
further agree to prepare and file
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all Tax Returns (including Form 8594 under the Code) in a manner consistent
with such allocations.
2.4. Sales Taxes, Etc. The Sellers will pay all sales, use, transfer
and other Taxes, fees and charges payable in respect of the sale and transfer
of the Acquired Assets to the Buyer pursuant to this Agreement, including,
without limitation, all vehicle sales and transfer Taxes. The Buyer will have
obtained an Arkansas Sales and Use Tax Permit from the State of Arkansas prior
to the Closing.
2.5. Closing; Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place promptly upon
satisfaction of all conditions to the Closing on a date agreed upon by the
parties, commencing at 8:00 a.m. local time in Denver, Colorado, at the offices
of Xxxxxxx & Xxxxxx L.L.C., and all transactions contemplated by this Agreement
will be effective at 11:59 p.m. local time in Arkansas on the day immediately
preceding the Closing (such effective time being the "Closing Date").
2.6. Deliveries at the Closing. At the Closing, (a) the Sellers and
the Shareholder will deliver, or cause to be delivered, to the Buyer the
certificates, instruments and documents referred to in Section 6.1, (b) the
Buyer will deliver to the Sellers and the Shareholder the certificates,
instruments and documents referred to in Section 6.2, (c) the Sellers will
deliver to the Buyer instruments transferring to the Buyer title to the
Acquired Assets free and clear of any Encumbrances or Taxes and (d) the Buyer
will pay and deposit the purchase price in accordance with Section 2.3.
3. Representations and Warranties.
3.1. Representations and Warranties of the Sellers and the
Shareholder. The Sellers and the Shareholder jointly and severally represent
and warrant to the Buyer that the statements contained in this Section 3.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were then substituted for the date of this Agreement throughout this
Section 3.1).
(a) Organization, Good Standing, Authority, Etc. Each Seller
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Arkansas, and is duly qualified and authorized to do
business as a foreign corporation and is in good standing in Arkansas which is
the only jurisdiction in which the nature of the business conducted by it or
the properties owned, leased or operated by it make such qualification
necessary. Each Seller has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. This Agreement and the Other Seller Agreements and the consummation
of the transactions contemplated hereby and thereby have been duly and
unanimously approved by the board of directors and shareholder of each Seller,
and this Agreement has been duly executed and delivered by each Seller. Each
Seller has full corporate power and authority to execute, deliver and perform
this Agreement and the Other Seller Agreements to which such Seller is a party,
the Shareholder and each relative or affiliate of such Seller or the
Shareholder who is party to any Other Seller Agreement has full and absolute
right, power, authority and legal capacity to execute, deliver and perform this
Agreement and all Other Seller Agreements to which such Shareholder, relative
or affiliate is a party, and this Agreement constitutes, and the Other Seller
Agreements will when executed and delivered constitute, the legal, valid and
binding obligations of, and shall be enforceable in accordance with their
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respective terms against, each Seller, the Shareholder and each such relative
or affiliate who is a party thereto.
(b) Ownership. The Shareholder owns, beneficially and of
record, free and clear of any Encumbrance or Tax, 3,520, 300 and 300 shares of
the common stock, $1.00 par value, of El Dorado, Arkadelphia and Leasing,
respectively, which constitutes all outstanding shares of the capital stock of
such Sellers. El Dorado owns, beneficially and of record, free and clear of
any Encumbrance or Tax, 300, 210 and 510 shares of the common stock, $1.00 par
value, of Hot Springs, Magnolia and Camden, respectively, which constitutes all
outstanding shares of capital stock of such Sellers. No other Person has any
right to acquire any equity interest in any Seller.
(c) No Violation. The execution, delivery and performance of
this Agreement and the Other Seller Agreements and the consummation of the
transactions contemplated hereby and thereby will not (i) violate any Legal
Requirement to which any Seller, the Shareholder, or any relative or affiliate
of any Seller or the Shareholder who is a party to any Other Seller Agreement
or Xxxxxxxx X. Xxxxxx is subject or any provision of the articles of
incorporation or bylaws of any Seller or any such affiliate, or (ii) violate,
with or without the giving of notice or the lapse of time or both, or conflict
with or result in the breach or termination of any provision of, or constitute
a default under, or give any Person the right to accelerate any obligation
under, or result in the creation of any Encumbrance upon any properties, assets
or business of any Seller, the Shareholder, any such relative or affiliate or
Xx. Xxxxxx pursuant to, any indenture, mortgage, deed of trust, lien, lease,
license, Permit, agreement, instrument or other arrangement to which any
Seller, the Shareholder, any such relative or affiliate or Xx. Xxxxxx is a
party or by which any Seller, the Shareholder, any such relative or affiliate
or Xx. Xxxxxx or any of their respective assets and properties is bound or
subject. Except for notices that will be given and consents that will be
obtained by the Sellers and the Shareholder prior to the Closing (which are set
forth in Exhibit 3.1(c)), neither any Seller, the Shareholder, any such
relative or affiliate nor Xx. Xxxxxx need give any notice to, make any filing
with or obtain any authorization, consent or approval of any Governmental
Authority or other Person in order for the parties to consummate the
transactions contemplated by this Agreement and the Other Seller Agreements.
(d) Financial Statements. The financial statements identified
on the first page of Exhibit 3.1(d)(ii) have been prepared in accordance with
good accounting practices and on a basis consistent with those of prior years,
are in accordance with the books and records of the applicable Seller or
Sellers (which books and records are complete and correct), are accurate and
fairly present the financial position and results of operations of the
applicable Seller or Sellers as of the dates and for each of the periods
indicated, do not list book values for the assets that are in excess of their
fair market values, and, except as set forth on Exhibit 3.1(d)(i), make
adequate provision for all Liabilities to which each Seller is subject. Copies
of the financial statements described in the first sentence of this Section are
attached as part of Exhibit 3.1(d)(ii). The expenses itemized on Exhibit
3.1(d)(iii) and reflected in the Sellers' financial performance for the 12-
month period ended October 31, 1996 (and information sufficient to determine
such financial performance has been provided by the Sellers to the Buyer prior
to the date of this Agreement) will not be realized on an on-going basis.
(e) Absence of Certain Leases, Changes or Events. No Seller
is, except as set forth on Exhibit 3.1(e), a party to or otherwise bound by
any contract or agreement that has a term of three or more months
pursuant to which such Seller is obligated to furnish any equipment,
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products or services, and no such contract or agreement has been prepaid with
respect to any period after the Closing Date. Since May 1, 1996, no Seller
has, except as set forth on Exhibit 3.1(e), (i) incurred any debt, indebtedness
or other Liability, except current Liabilities incurred in the ordinary course
of business; (ii) delayed or postponed the payment of accounts payable
or other Liabilities or accelerated the collection of any receivable beyond
stated, normal terms; (iii) sold or otherwise transferred any of its equipment
or other assets or properties; (iv) cancelled, compromised, settled, released,
waived, written-off or expensed any account or note receivable, right, debt or
claim involving more than $5,000 in the aggregate for such Seller, and the
aggregate amount thereof for all Sellers does not involve more than $10,000;
(v) changed in any significant manner the way in which it conducts its
business; (vi) made or granted any individual wage or salary increase in excess
of 10% or $1.00 per hour, any general wage or salary increase, or any
additional benefits of any kind or nature; (vii) except as otherwise expressly
permitted by this Section 3.1(e), (A) entered into any contracts or agreements,
or made any commitments, involving more than $5,000 individually or in the
aggregate for such Seller, and the aggregate amount thereof for all Sellers
does not involve more than $5,000, or (B) accelerated, terminated, delayed,
modified or cancelled any agreement, contract, lease or license (or series of
related agreements, contracts, leases and licenses) involving more than $5,000
individually or in the aggregate for such Seller, and the aggregate amount
thereof for all Sellers does not involve more than $5,000; (viii) suffered any
adverse fact or change, including, without limitation, to or in its business,
assets, financial condition, prospects or customer or supplier relationships;
(ix) made any payment or transfer to or for the benefit of any shareholder,
officer or director or any relative or affiliate thereof or permitted any
Person, including, without limitation, any shareholder, officer, director or
employee or any relative or affiliate thereof, to withdraw assets from the
Seller (other than cash of the Seller distributed to its shareholder as set
forth on Exhibit 3.1(e) and other than the payment to the Shareholder of the
proportionate monthly amount of his normal annualized salaries due and payable
during such period); (x) failed to make purchases of new or used equipment
necessary to maintain its rental/lease inventory at the level which is
reasonably necessary to maintain the revenue base experienced by the Seller
during the 12 months preceding such date; (xi) increased or decreased its lease
rate with respect to any equipment by 10% or more from the applicable lease
rate in effect on May 1, 1996 or rented or leased any equipment or sold or
otherwise transferred any inventory, equipment or services at below-normal
rental or lease rates or margins; (xii) suffered any other significant
occurrence, event, incident, action, failure to act or transaction outside the
ordinary course of business; or (xiii) agreed to incur, take, enter into, make
or permit any of the matters described in clauses (i) through (xii).
(f) Tax Matters. Neither any Seller nor any of its
shareholders has ever filed (i) an election pursuant to Section 1362 of the
Code that the Seller be taxed as an "S" corporation, except as set forth on
Exhibit 3.1(f), or (ii) a consent pursuant to Section 341(f) of the Code
relating to collapsible corporations. The Sellers and the Shareholder will pay
all Taxes attributable to each Seller's business and activities, including all
Taxes attributable to the transactions contemplated by this Agreement, on or
before the due date. There are no Encumbrances on any of the assets of any
Seller that arose in connection with any failure (or alleged failure) to pay
any Tax. Exhibit 3.1(f) lists all federal, state and local income Tax Returns
filed with respect to each Seller for taxable periods ended on or after January
1, 1990, indicates those Tax Returns that have been audited and indicates those
Tax Returns that currently are the subject of audit. The Sellers have
delivered to the Buyer correct and
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complete copies of all federal, state and local income Tax Returns and
examination reports of, and statements of deficiencies assessed against or
agreed to by, any Seller since January 1, 1990.
(g) Assets and Properties.
(i) As of the date of this Agreement, each Seller owns
all of the Acquired Assets (other than certain items of Shareholder Property),
free and clear of all Encumbrances (except for those Encumbrances which the
Sellers shall cause to be terminated as of the Closing). As of the Closing,
all of the Acquired Assets of each Seller (including all of the Shareholder
Property) will be owned by such Seller, free and clear of all Encumbrances, and
such Seller will have good and marketable title to (or, in the case of Acquired
Assets that are leased, valid leasehold interests in) all the Acquired Assets
of each Seller. The Acquired Assets of each Seller consist of (A) the tangible
and intangible assets of such Seller (exclusive of the Excluded Assets) in
existence as of May 1, 1996 (except as set forth on Exhibit 3.1(e) with respect
to cash of such Seller which was distributed to its shareholder and except for
such changes in inventory and in accounts receivable in the ordinary course of
business as are not in violation of Section 3.1(e)) and (B) all tangible and
intangible assets, including, without limitation, all improvements, fixtures
and fittings, owned by the Shareholder or any relative or affiliate thereof or
of any Seller which have been used in its business at any time on or after
October 31, 1995 (the "Shareholder Property"), including, without limitation,
the tangible and intangible assets set forth on Exhibit 3.1(g)(i)(A) owned by
the Shareholder or relative or affiliate thereof. Except as set forth in
Exhibit 3.1(g)(i)(B), the Premises constitute all of the real property,
buildings and improvements used by the Sellers in their respective businesses.
The Acquired Assets of each Seller are all of the tangible and intangible
assets (other than the Excluded Assets) used by such Seller in, or necessary
for the conduct of, its business. The Acquired Assets of each Seller and the
equipment leased by such Seller from third parties who are not relatives or
affiliates of the Sellers or the Shareholder for lease by such Seller to its
customers (the "Third-Party Equipment") encompass all equipment used by such
Seller to generate the income reflected in the financial statements attached as
Exhibit 3.1(d)(ii), and the aggregate total cost to all Sellers to lease such
Third-Party Equipment during the fiscal year ended October 31, 1996 and the
two-month period ended December 31, 1996 did not exceed $40,000 and $6,000,
respectively. Exhibit 3.1(g)(i)(C) lists all Third Party Equipment. No Seller
leases any equipment from the Shareholder or any relative or affiliate of any
Seller or the Shareholder, except that certain of the Sellers lease from
Leasing the Acquired Assets of Leasing. Except for items rented or leased to
customers, all of the tangible Acquired Assets of the Sellers are located on
the Premises.
(ii) Except as set forth on Exhibit 3.1(g)(ii), the
Premises are free from defects, have been maintained in accordance with normal
industry practice, are in good operating condition and repair and are suitable
for the purposes for which they presently are used. No Seller has received
notice of violation of any Legal Requirement or Permit relating to its
operations or its owned or leased properties.
(iii) No party to any lease has repudiated any provision
thereof, and there are no disputes, oral agreements or forbearance programs in
effect as to any such lease. To the best knowledge of the Sellers and the
Shareholder, the Premises have received all approvals of Governmental
Authorities (including Permits) required in connection with the occupation and
operation thereof and have been occupied, operated and maintained in accordance
with applicable Legal
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10
Requirements. The Premises are supplied with utilities and other services
necessary for the operation of said Premises.
(h) Lists of Properties, Contracts and Other Data. Attached
as Exhibit 3.1(h)(ii) is a correct and complete list setting forth, as to each
Seller, the items identified on Exhibit 3.1(h)(i). True and complete copies of
the items referred to in Exhibit 3.1(h)(ii) have been delivered to the Buyer.
All such rights, licenses, leases, registrations, Permits, Intellectual
Property, applications, contracts, agreements and commitments and other items
referred to in Exhibit 3.1(h)(ii) are valid, in full force and effect,
enforceable in accordance with their respective terms for the period stated
therein, and no party has repudiated any provision thereof and no action or
claim is pending or threatened to revoke, modify, terminate or render invalid
any of such items. Neither any Seller nor any other party thereto is in breach
or default in performance of any of its respective obligations under, and no
event exists which, with the giving of notice or lapse of time or both, would
constitute a breach, default or event of default on the part of a party to, any
of the foregoing that is continuing unremedied.
(i) Litigation, Etc. There is no outstanding Order against,
nor is there any litigation (except as set forth on Exhibit 3.1(i)),
proceeding, arbitration or investigation by any Governmental Authority or other
Person pending or threatened against, any Seller, its properties or its
business or relating to the transactions contemplated by this Agreement, nor is
there any basis for any such action.
(j) Notes and Accounts Receivable. The notes receivable, if
any, and accounts receivable of each Seller reflected on its Latest Balance
Sheet, and all notes and accounts receivable arising prior to the Closing Date
in existence as of the Closing Date), arose and will arise from bona fide
transactions by such Seller in the ordinary course of business, are valid
receivables with trade customers subject to no setoffs or counterclaims, and
are current and collectible.
(k) Product Quality, Warranty and Liability. All products and
services sold, rented, leased, provided or delivered by each Seller to
customers on or prior to the Closing Date conform to applicable contractual
commitments, express and implied warranties, product and service specifications
and quality standards, and no Seller has any Liability and there is no basis
for any Liability for replacement or repair thereof or other damages in
connection therewith. No product or service sold, rented, leased, provided or
delivered by any Seller to customers on or prior to the Closing is subject to
any guaranty, warranty or other indemnity beyond the applicable standard terms
and conditions of sale, rent or lease. No Seller has any Liability and there
is no basis for any Liability arising out of any injury to a Person or property
as a result of the ownership, possession, provision or use of any product or
service sold, rented, leased, provided or delivered by any Seller on or prior
to the Closing Date. All product or service liability claims that have been
asserted against any Seller since January 1, 1991, whether covered by insurance
or not and whether litigation has resulted or not, are listed and summarized on
Exhibit 3.1(k).
(l) Insurance. Each Seller has policies of insurance (i)
covering risk of loss on its Acquired Assets, (ii) covering products and
services liability and liability for fire, property damage, personal injury and
workers' compensation coverage and (iii) for business interruption, all, to the
best knowledge of the Sellers and the Shareholder, with responsible and
financially sound insurance carriers in adequate amounts and in compliance with
governmental requirements and in accordance with good industry practice. All
such insurance policies are valid, in full force and effect and enforceable in
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accordance with their respective terms and no party has repudiated any
provision thereof. All such policies will remain in full force and effect
until midnight on the Closing Date. Neither any Seller nor any other party to
any such policy is in breach or default (including with respect to the payment
of premiums or the giving of notices) in the performance of any of their
respective obligations thereunder, and no event exists which, with the giving
of notice or the lapse of time or both, would constitute a breach, default or
event of default, or permit termination, modification or acceleration under any
such policy. There are no claims, actions, proceedings or suits arising out of
or based upon any of such policies nor, to the best knowledge of the Sellers
and the Shareholder, does any basis for any such claim, action, suit or
proceeding exist. All premiums have been paid on such policies as of the date
of this Agreement and will be paid on such policies through the Closing Date.
Each Seller has been covered during the five years prior to the date of this
Agreement by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. All
claims made during such five-year period with respect to any insurance coverage
of each Seller, other than those described on Exhibit 3.1(k), are set forth on
Exhibit 3.1(l).
(m) Compliance with Applicable Laws and Rights. To the best
knowledge of the Sellers and the Shareholder, except as set forth on Exhibit
3.1(m), neither any Seller nor any Seller's assets (including its Premises,
facilities, machinery and equipment) are in violation of any applicable Legal
Requirement or Right. No Seller has received notice from any Governmental
Authority or other Person of any violation or alleged violation of any Legal
Requirement or Right, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been filed or commenced or is
pending or threatened against any Seller alleging any such violation.
(n) Pension and Employee Benefit Matters. The Buyer will not
suffer any Liability or Adverse Consequence from any Seller's administration or
termination of any of its Employee Benefit Plans or from any failure of any
pre-Closing or post-Closing distribution of benefits to employees of any Seller
to be made by such Seller in compliance with all applicable Legal Requirements.
The Buyer will have no obligation to employ any employee of any Seller or to
continue any Employee Benefit Plan, and will have no Liability under any plan
or arrangement maintained by any Seller for the benefit of any employee. Each
Seller will remain liable for all costs of employee compensation, including
benefits and Taxes relating to employment and employees attributable to periods
through the Closing Date, whether reported by the Closing Date or thereafter,
and all group health plan continuation coverage to which any employee, former
employee or dependent is entitled because of a qualifying event (as defined in
Section 4980B(f)(3) of the Code) occurring through the Closing Date or as a
result of termination of employment with any Seller because of the transactions
contemplated by this Agreement and any benefit or excise tax liability or
penalty or other costs arising from any failure by any Seller to provide group
health plan continuation coverage. Except as set forth on Exhibit 3.1(n),
neither any Seller nor any Affiliated Group which includes any Seller (if any)
maintains, administers or contributes to, has maintained, administered or
contributed to, or has any Liability to contribute to, any Employee Benefit
Plan. Exhibit 3.1(n) lists each Employee Benefit Plan that is, or at any time
during the past six years was, maintained, administered, contributed to or
required to be contributed to by any Seller or any Affiliated Group (if any)
which includes or has included any Seller, and the date of termination of each
such Employee Benefit Plan (if any) which has been terminated. No Seller has
any Liability (and there is no basis for the assertion of any Liability) as a
result of any Seller's or any such Affiliated Group's maintenance,
administration or termination of, or contribution to, any Employee Benefit
Plan. Neither any Seller nor any member of any Affiliated Group (if any) which
includes or has included any Seller has ever been required to
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contribute to any Multiemployer Plan (as defined in ERISA Section 3(37)) nor
has incurred any Liability under Title IV of ERISA.
(o) Employees and Labor. No Seller has received any notice,
nor, to the best knowledge of the Sellers and the Shareholder, is there any
reason to believe that any executive or key employee of any Seller or any group
of employees of any Seller has any plans to terminate his, her or its
employment with such Seller. No executive or key employee is subject to any
agreement, obligation, Order or other legal hindrance that impedes or might
impede such executive or key employee from devoting his or her full business
time to the affairs of the Sellers prior to the Closing Date and, if such
person becomes an employee of the Buyer, to the affairs of the Buyer after the
Closing Date. No Seller will be required to give any notice under the Worker
Adjustment and Retraining Notification Act, as amended, or any similar Legal
Requirement as a result of this Agreement, the Other Seller Agreements or the
transactions contemplated hereby or thereby. No Seller has any labor relations
problems or disputes, nor has any Seller experienced any strikes, grievances,
claims of unfair labor practices or other collective bargaining disputes. No
Seller is a party to or bound by any collective bargaining agreement, there is
no union or collective bargaining unit at any Seller's facilities, and no union
organization effort has been threatened, initiated or is in progress with
respect to any employees of any Seller.
(p) Customer and Supplier Relationships. Exhibit 3.1(p)(i)
lists, as to the Sellers (in the aggregate), each customer that individually or
with its affiliates was, based upon the sales, rental or lease revenues of the
Sellers (in the aggregate) during the period consisting of the fiscal years
ended October 31, 1993 through October 31, 1996, one of such Seller's 20
largest customers during such period (the "Principal Customers"). Exhibit
3.1(p)(ii) lists, as to the Sellers (in the aggregate), each supplier that
individually or with its affiliates was, based upon the purchases of inventory
or supplies by the Sellers (in the aggregate) during the period from January 1,
1996 through December 31, 1996, one of such Seller's 10 largest suppliers
during such period (the "Principal Suppliers"). Each Seller has good
commercial working relationships with its Principal Customers and Principal
Suppliers and since November 1, 1994 no Principal Customer has, and since
January 1, 1996 no Principal Supplier has, cancelled or otherwise terminated
its relationship with such Seller, materially decreased or limited its
purchases, rentals or leases from, or inventory or supplies supplied to, such
Seller, or threatened to take any such action. The Sellers and the Shareholder
have no basis to anticipate any problems with any Seller's customer, supplier
or business relationships. No Principal Customer or Principal Supplier has any
plans to reduce its purchases, rentals or leases from, or inventory or supplies
supplied to, any Seller below levels prevailing since November 1, 1994 with
respect to Principal Customers and since January 1, 1996 with respect to
Principal Suppliers, and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not adversely affect
the relationship of any Seller with any Principal Customer or Principal
Supplier prior to the Closing Date or of the Buyer with any Principal Customer
or Principal Supplier after the Closing Date.
(q) Resale Inventory. The resale inventory of each Seller
consists of goods which, in the aggregate, are merchantable, are fit for the
purposes for which they were procured and are held by such Seller, are usable
in the ordinary course of such Seller's business and are not obsolete.
(r) Condition, Adequacy and Type of Equipment. The
rental/lease inventory of each Seller consists of machinery, equipment and
other tangible personal property which are merchantable, are fit and suitable
for the purpose for which they were procured and are held by such Seller,
useable
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in the ordinary course of such Seller's business and are not obsolete. All of
the machinery, equipment and other tangible personal property included in the
Acquired Assets (including that held for rental, lease or sale) has been well
maintained and is in good repair and good operating condition. None of the
machinery, equipment or other tangible personal property included in the
Acquired Assets (including that held for rental, lease or sale) is damaged or
defective, no Seller has experienced material problems or deficiencies with
respect to its machinery, equipment and other tangible personal property, and,
to the best knowledge of the Sellers and the Shareholder, there is no basis to
anticipate any such problems or deficiencies.
(s) Environmental Matters.
(i) Each Seller is conducting and at all times has
conducted its business and operations, and has occupied, used and operated the
Premises and all other real property and facilities presently or previously
owned, occupied, used or operated by such Seller, in compliance with all
Environmental Obligations and so as not to give rise to Liability under any
Environmental Obligations or to any impact on such Seller's business or
activities. The Sellers and the Shareholder do not have any knowledge of
pending or proposed changes to any Environmental Obligations which would
require any changes in any Seller's Premises, facilities, equipment, operations
or procedures or affect any Seller's business or its cost of conducting its
business as now conducted.
(ii) Except as set forth in the Environmental Study,
no conditions, circumstances or activities have existed or currently exist, and
neither any Seller nor the Shareholder has engaged in any acts or omissions,
with respect to the Premises or any other real properties, facilities or
business presently or previously owned, occupied, used or operated by any Seller
or any predecessor (including, without limitation, off-site disposal or
treatment of Hazardous Materials) which could give rise to any Liability
pursuant to any Environmental Obligation. Exhibit 3.1(s)(ii) identifies all
real properties and facilities, including the addresses thereof, which have
been owned, occupied, used or operated by any Seller or any predecessor at any
time on or prior to the date of this Agreement. There are no outstanding,
pending or threatened Orders against any Seller or the Shareholder, nor are
there any current, pending or threatened investigations of any kind against
any Seller or the Shareholder, concerning any Environmental Obligations. There
are no actions, suits or administrative, arbitral or other proceedings alleged,
claimed, threatened, pending against or affecting any Seller or the Shareholder
at law or in equity with respect to any Environmental Obligations, and neither
any Seller nor the Shareholder has knowledge of any existing grounds on which
any such action, suit or proceedings might be commenced.
(iii) Any chemicals and chemical compounds and mixtures
which are included among the assets of any Seller are integral to and required
for the conduct of such Seller's business, have not been and are not intended
to be discarded or abandoned, and are not waste or waste materials. Except as
set forth in the environmental studies attached as Exhibit 3.1(s)(iii)
(collectively, the "Environmental Study"), no Seller has generated, handled,
used, transported or disposed of Hazardous Materials. All waste materials
which are generated as part of the business of any Seller are handled, stored,
treated and disposed of in accordance with applicable Legal Requirements and
Environmental Obligations.
(iv) Except as set forth in the Environmental Study, no
underground or above ground storage tanks are or have been located on the
Premises or any other real properties or any
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facilities presently or previously owned, occupied, used or operated by any
Seller or any predecessor. Except as set forth in the Environmental Study,
neither any of the Premises nor any other real properties or facilities
presently or previously owned, occupied, used or operated by any Seller or any
predecessor has been used at any time as a gasoline service station or any
facility for storing, pumping, dispensing or producing gasoline or any other
petroleum products (other than such storage, pumping and dispensing of gasoline
and oil as is incidental to each Seller's equipment rental/leasing business) or
Hazardous Materials. No building or other structure on any of the Premises
contains asbestos-containing materials. There are not nor have there been any
incinerators, septic tanks, xxxxx fields, cesspools or xxxxx (including without
limitation dry, drinking, industrial, agricultural and monitoring xxxxx) on any
of the Premises.
(t) Intellectual Property. Each Seller owns or has the legal
right to use and to transfer to the Buyer each item of Intellectual Property
required to be identified by it on Exhibit 3.1(h)(ii). The continued operation
of the business of each Seller as currently conducted will not interfere with,
infringe upon, misappropriate or conflict with any Intellectual Property rights
of another Person. To the best knowledge of the Sellers and the Shareholder,
no other Person has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of any
Seller or any Intellectual Property included in the Shareholder Property.
Neither any Seller nor any owner of any Intellectual Property included in the
Shareholder Property has granted any license, sublicense or permission with
respect to any Intellectual Property owned or used in any Seller's business.
(u) Disclosure. None of the documents or information provided
to the Buyer by any Seller, the Shareholder or any agent or employee thereof in
the course of the Buyer's due diligence investigation and the negotiation of
this Agreement and Section 3.1 of this Agreement and the disclosure Exhibits
referred to therein, including the financial statements referred to above in
Section 3.1, contain any untrue statement of any material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact which materially adversely affects
the business, prospects, condition, affairs or operations of any Seller or any
of its properties or assets which has not been set forth in this Agreement or
such Exhibits, including such financial statements.
Nothing in the disclosure Exhibits referred to in Section 3.1
shall be deemed adequate to disclose an exception to a representation or
warranty made herein unless the applicable disclosure Exhibit identifies the
exception with particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate
to disclose an exception to a representation or warranty made herein (unless
the representation or warranty has to do with the existence of the document or
other item itself). The Sellers and the Shareholder acknowledge and agree that
the fact that they have made disclosures pursuant to Section 3.1 or otherwise
of matters, or did not have knowledge of matters, which result in Adverse
Consequences to the Buyer shall not relieve the Sellers and the Shareholder of
their obligation pursuant to Article 7 to indemnify and hold the Buyer harmless
from all Adverse Consequences.
3.2. Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Sellers and the Shareholder that the statements
contained in this Section 3.2 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
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made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Section 3.2).
(a) Organization, Good Standing, Power, Etc. The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. This Agreement and the Other Buyer Agreements
and the transactions contemplated hereby and thereby have been duly approved by
all requisite corporate action. The Buyer has full corporate power and
authority to execute, deliver and perform this Agreement and the Other Buyer
Agreements, and this Agreement constitutes, and the Other Buyer Agreements will
when executed and delivered constitute, the legal, valid and binding
obligations of the Buyer, and shall be enforceable in accordance with their
respective terms against the Buyer.
(b) No Violation of Agreements, Etc. The execution, delivery
and, if the Closing occurs, performance of this Agreement and the Other Buyer
Agreements, and the consummation, if the Closing occurs, of the transactions
contemplated hereby and thereby will not (i) violate any Legal Requirement to
which the Buyer is subject or any provision of the certificate of incorporation
or bylaws of the Buyer or (ii) violate, with or without the giving of notice or
the lapse of time or both, or conflict with or result in the breach or
termination of any provision of, or constitute a default under, or give any
Person the right to accelerate any obligation under, or result in the creation
of any Encumbrance upon any properties, assets or business of the Buyer
pursuant to, any indenture, mortgage, deed of trust, lien, lease, license,
agreement, instrument or other arrangement to which the Buyer is a party or
which the Buyer or any of its assets and properties is bound or subject.
Except for notices and consents that will be given or obtained by the Buyer
prior to the Closing if the Closing occurs, the Buyer does not need to give any
notice to, make any filing with or obtain any authorization, consent or
approval of any Governmental Authority or other Person in order for the parties
to consummate the transactions contemplated by this Agreement.
3.3. Survival of Representations. The representations and warranties
contained in Sections 3.1 and 3.2 and the Liabilities of the parties with
respect thereto shall survive any investigation thereof by the parties and
shall survive the Closing for four years, except that (a) the Liabilities of
the Sellers and the Shareholder with respect to the representations and
warranties set forth in Sections 3.1(f) and 3.1(n) shall survive until
expiration of all applicable statutes of limitation and (b) the Liabilities of
the Sellers and the Shareholder with respect to the representations and
warranties set forth in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(g), 3.1(s), 3.1(t)
and 3.1(u), and the Liabilities of the Buyer with respect to the
representations and warranties set forth in Sections 3.2(a) and 3.2(b), shall
survive without termination.
3.4. Representations as to Knowledge. The representations and
warranties contained in Article 3 hereof will in each and every case where an
exercise of discretion or a statement to the "best knowledge," "best of
knowledge" or "knowledge" is required on behalf of any party to this Agreement
be deemed to require that such exercise of discretion or statement be in good
faith after reasonable investigation, with due diligence, to the best efforts
of such party and be exercised always in a reasonable manner and within
reasonable times.
4. Pre-Closing Covenants. The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
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4.1. General. Each of the parties will use its best efforts to take
all actions necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including the
satisfaction, but not the waiver, of the closing conditions set forth in
Section 6) and the other agreements contemplated hereby. Without limiting the
foregoing, the Shareholder will, and will cause the Sellers to, give any
notices, make any filings and obtain any consents, authorizations or approvals
needed to consummate the transactions contemplated by this Agreement.
4.2. Operation and Preservation of Business. No Seller will, and the
Shareholder will not cause or permit any Seller to, engage in any practice,
take any action or enter into any transaction outside its ordinary course of
business; provided, however, that in no event will any action be taken or fail
to be taken or any transaction be entered into which would result in a breach
of any representation, warranty or covenant of any Seller or the Shareholder.
The Sellers will, and the Shareholder will cause the Sellers to, keep their
business and properties, including their current operations, physical
facilities, working conditions, and relationships with customers, suppliers,
lessors, licensors and employees, intact and, in connection therewith, to
continue to purchase new or used equipment necessary to maintain its
rental/lease inventory at the level specified in Section 3.1(e)(x).
4.3. Full Access. The Sellers will permit the Buyer and its agents to
have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, to all premises,
properties, personnel, books, records (including Tax records), contracts and
documents of or pertaining to the Sellers.
4.4. Notice of Developments. The Sellers will give prompt written
notice to the Buyer of any material development which occurs after the date of
this Agreement and affects the business, assets, Liabilities, financial
condition, operations, results of operations, future prospects,
representations, warranties, covenants or disclosure Exhibits of any Seller.
No such written notice, however, will be deemed to amend or supplement any
disclosure Exhibit or to prevent or cure any misrepresentation, breach of
warranty or breach of covenant.
4.5. Exclusivity. Neither any Seller nor the Shareholder will, and
the Shareholder will not cause or permit any Seller to, (a) solicit, initiate
or encourage the submission of any proposal or offer from any Person relating
to the acquisition of any capital stock or other voting securities, or any
portion of the assets of, any Seller (including any acquisition structured as a
merger, consolidation or share exchange) or (b) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. Neither any Seller nor the
Shareholder will vote shares of any Seller's stock in favor of any such
transaction. The Sellers and the Shareholder will notify the Buyer immediately
if the Person makes any proposal, offer, inquiry or contact with respect to any
of the foregoing.
4.6. Conveyance of Shareholder Property. Prior to the Closing Date,
the Shareholder shall convey, and shall cause each relative or affiliate of the
Shareholder or of any Seller to convey, to the applicable Seller, free and
clear of any Encumbrance or Tax, all of the Shareholder's and each such
relative's or affiliate's right, title and interest to the Shareholder
Property.
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4.7. Announcements. Prior to the Closing, no party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other parties;
provided, however, that the Buyer may announce the transaction contemplated
hereby at the rental industry trade show in January and February, 1997.
4.8. Bulk Sales Laws. In reliance upon its indemnification rights set
forth in Section 7, the Buyer waives compliance by the Seller with the bulk
transfer law and any other similar law of any applicable jurisdiction in
respect to the transactions contemplated by this Agreement.
5. Post-Closing Covenants. The parties agree as follows with respect to
the period following the Closing.
5.1. Further Assurances. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the
requesting party (unless the requesting party is entitled to indemnification
therefor under Section 7).
5.2. Transition. Neither any Seller nor the Shareholder will take any
action at any time that is designed or intended to have the effect of
discouraging any customer, supplier, lessor, licensor or other business
associate of any Seller from establishing or continuing a business relationship
with the Buyer after the Closing.
5.3. Cooperation. In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (a) any
transaction contemplated by this Agreement or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving any of the Acquired Assets or any Seller's business, each of the
other parties will cooperate with such party and its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting or
defending party (unless the contesting or defending party is entitled to
indemnification therefor under Section 7).
5.4. Confidentiality. Each Seller and the Shareholder will treat and
hold as confidential all Confidential Information concerning the Buyer, each
Seller's business or the Acquired Assets, refrain from using any such
Confidential Information and deliver promptly to the Buyer or destroy, at the
request and option of the Buyer, all of such Confidential Information in its or
their possession.
5.5. Post-Closing Announcements. Following the Closing, neither any
Seller nor the Shareholder will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the Buyer.
5.6. Financial Statements. The Sellers and the Shareholder will, upon
request of the Buyer, cooperate with the Buyer to produce such historical and
on-going financial statements and audits as the Buyer may request, all at the
sole cost and expense of the Buyer.
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5.7. Satisfaction of Liabilities. The Sellers and the Shareholder
will pay and perform, as and when due, all Liabilities (other than the Assumed
Liabilities) relating to any Seller, the business of any Seller and the
Acquired Assets, including, without limitation, all Taxes attributable to the
transactions contemplated by this Agreement and all accrued vacation and other
accrued employee benefits; provided, however, that accrued vacation and other
accrued employee benefits with respect to those persons who are employees of
any Seller as of the Closing Date and who become employees of the Buyer
effective as of the Closing will be satisfied as set forth in Section 2.3(b).
In addition, the Sellers and the Shareholder will pay to the Buyer an amount
equal to the portion of the personal property taxes on the Acquired Assets of
the Sellers attributable to the period from January 1, 1997 to and including
the date on which the Closing occurs (the "Pre-Closing Personal Property Tax
Amount"). The Pre-Closing Personal Property Amount payable by the Sellers and
the Shareholder will be determined by prorating personal property taxes on the
Acquired Assets of the Sellers for 1997 in proportion to the number of days in
the year prior to and including the date on which the Closing occurs compared
to the number of days in the year remaining after the date on which the Closing
occurs. If the actual Pre-Closing Property Tax Amount exceeds the estimated
Pre-Closing Property Tax Amount used for purposes of Section 2.3(a), the
Sellers and the Shareholder shall pay such excess amount to the Buyer within
five days after their receipt of notice from the Buyer stating the amount
payable by them and a copy of the invoices from Governmental Authorities
relating thereto. If the estimated Pre-Closing Property Tax Amount used for
purposes of Section 2.3(a) exceeds the actual Pre-Closing Property Tax Amount,
the Buyer shall pay such excess amount to the Sellers within five days of
receipt of the invoices from Governmental Authorities relating thereto. The
Buyer will pay and perform, as and when due (except to the extent the validity
thereof or the liability therefor is being contested by the Buyer), the Assumed
Liabilities. Further, the Sellers and the Shareholder, at their expense,
promptly will take or cause to be taken any action necessary to remedy any
failure of the Premises or the acquired businesses to comply at the Closing
Date with any Legal Requirement, upon receipt of notice from the Buyer at any
time.
5.8. Certain Environmental Matters. The Sellers and the Shareholder
shall (a) within 45 days of the Closing remove such of the above-ground storage
tanks ("ASTs") located on the Premises as are agreed upon by the Buyer and the
Seller and construct concrete secondary containment fueling pads relating to
any remaining ASTs at a location on each of the applicable Premises and in a
design to be determined by the Buyer, in each case in compliance with all
applicable Environmental Obligations, and (b) take or cause to be taken, in
compliance with all applicable Environmental Obligations, such actions with
respect to other environmental matters or Environmental Obligations disclosed
in the Environmental Study as are requested by the Buyer in writing to the
Seller prior to the Closing, which written request(s) shall be attached hereto
as Exhibit 5.8 when given. The Sellers and the Shareholder shall take such
actions at their expense. Nothing in this Section 5.8 shall relieve the
Sellers or the Shareholder from any obligation or Liability under Section 7 of
this Agreement, obligate the Buyer to take any action or impose any Liability
on the Buyer.
5.9. Repurchase of Unpaid Receivables. The Sellers and the
Shareholder jointly and severally guarantee that the Closing Accounts
Receivable will be fully paid to the Buyer in accordance with their terms at
their recorded amounts not later than 120 days from the Closing Date. Upon
demand by the Buyer at any time after 120 days from the Closing Date, the
Sellers and the Shareholder shall jointly and severally pay to the Buyer the
full amount of any unpaid Closing Accounts Receivables which are the subject of
such demand. Upon such payment to the Buyer, the Closing Accounts Receivable
which are so paid for by the Sellers and the Shareholder shall, without further
action of any party, become
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the property of the Seller that owned such Closing Account Receivable
immediately prior to the Closing.
6. Conditions to Closing.
6.1. Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the purchase of the Acquired Assets and the consummation of
the other transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:
(a) each Seller's and the Shareholder's representations and
warranties shall be correct and complete at and as of the Closing Date and the
Closing and any written notices delivered to the Buyer pursuant to Section 4.5
and the subject matter thereof shall be satisfactory to the Buyer;
(b) each Seller and the Shareholder shall have performed and
complied with all of their covenants hereunder through the Closing;
(c) each Seller and the Shareholder shall have given all
notices and procured all of the third-party consents, authorizations and
approvals required to consummate the transactions contemplated by this
Agreement, all in form and substance reasonably satisfactory to the Buyer;
(d) no action, suit or proceeding shall be pending or
threatened before any Governmental Authority or any other Person wherein an
unfavorable Order would (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation or (iii) affect
adversely the right of the Buyer to own the Acquired Assets of any Seller or to
conduct the acquired business, and no such Order shall be in effect;
(e) there shall have been no adverse change in the Acquired
Assets of any Seller or any Seller's business between the date of execution of
this Agreement and the Closing;
(f) the Sellers shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in
Sections 6.1(a) through (e) is satisfied in all respects and as to the adoption
of resolutions by the board of directors and shareholders of each Seller
authorizing the execution, delivery and performance of this Agreement and the
Other Seller Agreements and the consummation of the transactions contemplated
hereby and thereby;
(g) the Buyer shall have completed its due diligence with
respect to each Seller, each Seller's business and the Acquired Assets of each
Seller with results satisfactory to the Buyer.
(h) the Other Seller Agreements and documentation necessary to
accomplish the conveyance of the specific ownership tax and fee payments made
by the Seller prior to the Closing in respect of vehicles and mobile equipment
included in the Acquired Assets shall have been executed and delivered by the
Sellers and the Shareholder, as applicable;
(i) each Person having an Encumbrance on any property subject
to a Shareholder Lease shall have executed and delivered a nondisturbance
agreement relating thereto satisfactory to the Buyer;
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20
(j) the Buyer shall have received from counsel to the Sellers
and the Shareholder an opinion in form and substance as set forth in Exhibit
6.1(j) addressed to the Buyer and its debt and equity financing sources and
dated as of the Closing;
(k) financing necessary for the consummation of the
transactions contemplated hereby and the operation of the acquired business
shall be available to the Buyer on terms and conditions satisfactory to the
Buyer;
(l) "Phase I" environmental studies of the Premises, and such
additional environmental testing as the Buyer shall request, shall have been
completed at the Sellers' expense and supplied to the Buyer, and the contents
and results thereof shall be satisfactory to the Buyer;
(m) each Seller shall have delivered to the Buyer possession
and control of the Acquired Assets;
(n) the Sellers and the Shareholder shall have executed and
delivered to the Buyer (i) appropriate documentation to transfer to the Buyer
record ownership of all registered Intellectual Property and applications
therefor and (ii) an amendment to each Seller's articles of incorporation for
the purpose of changing its name to a name that does not include the term "Xxxx
Rental & Sales" or "Xxxx Rental and Sales" or any derivation thereof; and
(o) the Sellers and the Shareholder shall have delivered, or
caused the Sellers to deliver, to the Buyer such other instruments,
certificates and documents as are reasonably requested by the Buyer in order to
consummate the transactions contemplated by this Agreement, all in form and
substance reasonably satisfactory to the Buyer.
The Buyer may waive any condition specified in this Section 6.1 at or prior to
the Closing.
6.2. Conditions to Obligation of the Sellers and the Shareholder. The
obligation of the Sellers and the Shareholder to consummate the sale of the
Acquired Assets is subject to satisfaction of the following conditions:
(a) the Buyer's representations and warranties shall be
correct and complete at and as of the Closing Date and the Closing;
(b) the Buyer shall have performed and complied with all of
its covenants hereunder through the Closing Date;
(c) the Buyer shall have delivered to the Sellers a
certificate to the effect that each of the conditions specified above in
Sections 6.2(a) and (b) is satisfied in all respects;
(d) the Other Buyer Agreements shall have been executed and
delivered by the Buyer;
(e) the Sellers and Shareholder shall have received from
counsel to the Buyer an opinion in form and substance as set forth in Exhibit
6.2(e), addressed to the Sellers and Shareholder and dated as of the Closing;
and
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(f) the Buyer shall have paid and deposited the purchase price
for the Acquired Assets pursuant to Section 2.3.
The Sellers' Agent may waive any condition specified in this Section 6.2 at or
prior to the Closing.
7. Remedies for Breaches of This Agreement.
7.1. Indemnification Provisions for Benefit of the Buyer.
(a) If any Seller or the Shareholder breaches (or if any
Person other than the Buyer alleges facts that, if true, would mean any Seller
or the Shareholder has breached) any of the representations or warranties of
any Seller or the Shareholder contained herein and the Buyer gives notice
thereof to the Sellers' Agent within the Survival Period, or if any Seller or
the Shareholder breaches (or if any Person other than the Buyer alleges facts
that, if true, would mean any Seller or the Shareholder has breached) any
covenants of any Seller or the Shareholder contained herein or any
representations, warranties or covenants of any Seller or the Shareholder
contained in any Other Seller Agreement and the Buyer gives notice thereof to
the Sellers' Agent, then the Sellers and the Shareholder agree to jointly and
severally indemnify and hold harmless the Buyer from and against any Adverse
Consequences the Buyer may suffer resulting from, arising out of, relating to
or caused by any of the foregoing regardless of whether the Adverse
Consequences are suffered during or after the Survival Period. In determining
whether there has been a breach of any representation or warranty contained in
Section 3.1 and in determining for purposes of the preceding sentence the
amount of Adverse Consequences suffered by the Buyer, such representations and
warranties shall not be qualified (other than by the references to "material"
set forth in Section 3.1(u)) by "material," "materiality," "in all material
respects," "best knowledge," "best of knowledge" or "knowledge" or words of
similar import, or by any phrase using any such terms or words. The Sellers
and the Shareholder also agree to jointly and severally indemnify and hold
harmless the Buyer from and against any Adverse Consequences the Buyer may
suffer which result from, arise out of, relate to or are caused by the
consummation of the transactions contemplated by this Agreement, whether or not
such matter was known or disclosed to the Buyer, was disclosed on any Exhibit
hereto or is a matter with respect to which any Seller or the Shareholder did
or did not have knowledge, including, without limitation, any act or omission
of any Seller, the Shareholder or any predecessor with respect to, or any event
or circumstance related to, any Seller's, the Shareholder's or any
predecessor's ownership, occupation, use or operation of any of the Acquired
Assets, the Excluded Assets or any other assets or properties or the conduct of
its or their business, regardless of whether such act, omission, event or
circumstance occurred or existed prior to, at or after the Closing Date or
whether a claim with respect to such matter was asserted before or is asserted
after the Closing Date, any Liability of any Seller or the Shareholder not
included in the Assumed Liabilities (including, without limitation, those
concerning Hazardous Materials or the failure of any Seller, the Shareholder or
any predecessor to comply with any Environmental Obligation or other Legal
Requirement), and any Liability resulting from any failure of the parties to
comply with any applicable bulk sales or transfer Legal Requirement in
connection with the transactions contemplated by this Agreement. If any
dispute arises concerning whether any indemnification is owing which cannot be
resolved by negotiation among the parties within 30 days of notice of the claim
for indemnification from the party claiming indemnification to the party
against whom such claim is asserted, the dispute will be resolved by
arbitration pursuant to this Agreement.
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22
(b) Amounts needed to cover any indemnification claims
resolved in favor of the Buyer against any Seller or the Shareholder during the
Escrow Period will be paid to the Buyer first out of the funds escrowed
pursuant to the Escrow Agreement, along with interest from the date of the
Closing at the rate applicable to the escrowed funds. The Sellers and the
Shareholder will have joint and several Liability for any additional amounts
needed to cover such claims, which amounts will be paid directly to the Buyer.
At the end of the Escrow Period amounts that may be needed to cover pending
indemnification claims made by the Buyer (such amounts to be determined by the
Buyer based upon the reasonable exercise of its business judgment) will be
retained in the Escrow Account until such claims are resolved, and any excess
on deposit therein, including any accrued interest, will be paid to the
Sellers. Nothing in this Section 7.1(b) will be construed to limit the Buyer's
right to indemnification to amounts on deposit in the Escrow Account. The
Buyer and the Sellers' Agent shall jointly give instructions to the Escrow
Agent to carry out the intent of this Section 7.1(b). Any disputes concerning
the escrowed funds will be settled by arbitration as provided in this
Agreement. The Buyer, on the one hand, and the Sellers and the Shareholder
jointly and severally, on the other hand, shall each be responsible for one-
half of the fees, charges and expenses payable to the Escrow Agent pursuant to
paragraph a. of Article 2 of the Escrow Agreement and, except as otherwise
determined pursuant to Section 9.11 of this Agreement, one-half of any amounts
payable pursuant to paragraph b. of such Article 2.
7.2. Indemnification Provisions for Benefit of the Sellers and the
Shareholder. If the Buyer breaches (or if any Person other than any Seller or
the Shareholder alleges facts that, if true, would mean the Buyer has breached)
any of its representations or warranties contained herein and the Sellers'
Agent gives notice of a claim for indemnification against the Buyer within the
Survival Period, or if the Buyer breaches (or if any Person other than any
Seller or the Shareholder alleges facts that, if true, would mean the Buyer has
breached) any of its covenants contained herein or any of its representations,
warranties or covenants contained in any Other Buyer Agreement and the Sellers'
Agent gives notice thereof to the Buyer, then the Buyer agrees to indemnify and
hold harmless the Sellers and the Shareholder from and against any Adverse
Consequences the Sellers and the Shareholder may suffer which result from,
arise out of, relate to, or are caused by the breach or alleged breach,
regardless of whether the Adverse Consequences are suffered during or after the
Survival Period. In determining whether there has been a breach of any
representation or warranty contained in Section 3.2 and in determining the
amount of Adverse Consequences suffered by the Buyer for purposes of this
Section, such representations and warranties shall not be qualified by
"material," "materiality," "in all material respects," "best knowledge," "best
of knowledge" or "knowledge" or words of similar import, or by any phrase using
any such terms or words. If any dispute arises concerning whether any
indemnification is owing which cannot be resolved by negotiation among the
parties within 30 days of notice of the claim for indemnification from the
party claiming indemnification to the party against whom such claim is
asserted, the dispute will be resolved by arbitration pursuant to this
Agreement.
7.3. Matters Involving Third Parties.
(a) If any Person not a party to this Agreement (including,
without limitation, any Governmental Authority) notifies any party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other party (the
"Indemnifying Party"), then the Indemnified Party will notify each Indemnifying
Party thereof in writing within 15 days after receiving such notice. No delay
on the part of the Indemnified Party in
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notifying any Indemnifying Party will relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right, at its sole
cost and expense, to defend the Indemnified Party against the Third Party Claim
with counsel of its choice satisfactory to the Indemnified Party so long as (i)
the Indemnifying Party notifies the Indemnified Party in writing within 10 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to or caused by the Third Party Claim, (ii) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification obligations hereunder, (iii) the Third Party Claim involves
only money damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the Third Party
Claim is not, in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently. If the Indemnifying Party does not assume control of the defense
or settlement of any Third Party Claim in the manner described above, it will
be bound by the results obtained by the Indemnified Party with respect to the
Third Party Claim.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7.3(b) above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (iii)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section 7.3(b) above
is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (iii) the Indemnifying
Parties will remain responsible for any Adverse Consequences the Indemnified
Party may suffer resulting from, arising out of, relating to or caused by the
Third Party Claim to the fullest extent provided in this Section 7.
7.4. Right of Offset. The Buyer will have the right to offset any
Adverse Consequences it may suffer against any amounts payable pursuant to this
Agreement or any Other Seller Agreement to any Seller, the Shareholder or any
relative or affiliate of any Seller or the Shareholder at or after the Closing.
7.5. Other Remedies. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy any party may have.
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8. Termination.
8.1. Termination of Agreement. The parties may terminate this
Agreement as provided below:
(a) the Buyer and the Sellers' Agent may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written
notice to the Sellers' Agent at any time prior to the Closing (i) in the event
any Sellers or the Shareholder has breached any representation, warranty or
covenant contained in this Agreement in any material way, the Buyer has
notified the Sellers' Agent of the breach, and the breach has not been cured
within 10 days after the notice of breach or (ii) if the Closing has not
occurred on or before March 15, 1997 because of the failure of any condition
precedent to the Buyer's obligations to consummate the Closing (unless the
failure results primarily from the Buyer breaching any representation, warranty
or covenant contained in this Agreement in any material way); or
(c) the Sellers' Agent may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (i) if the Buyer
has breached any representation, warranty or covenant contained in this
Agreement in any material way, the Sellers' Agent has notified the Buyer of the
breach, and the breach has not been cured within 10 days after the notice of
breach or (ii) if the Closing has not occurred on or before March 15, 1997
because of the failure of any condition precedent to the Sellers' and the
Shareholder's obligations to consummate the Closing (unless the failure results
primarily from any Seller or the Shareholder breaching any representation,
warranty or covenant contained in this Agreement in any material way).
8.2. Effect of Termination. The termination of this Agreement by a
party pursuant to Section 8.1 will in no way limit any obligation or liability
of any other party based on or arising from a breach or default by such other
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement, and the terminating party will be
entitled to seek all relief to which it is entitled under applicable law.
8.3. Confidentiality. If this Agreement is terminated, each party
will treat and hold as confidential all Confidential Information concerning the
other parties which it acquired from such other parties in connection with this
Agreement and the transactions contemplated hereby.
9. Miscellaneous.
9.1. No Third-Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.
9.2. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, to the extent they relate in any way to the
subject matter hereof.
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25
9.3. Succession and Assignment. This Agreement will be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Neither any Seller nor the Shareholder may assign this
Agreement or any of their rights, interests or obligations hereunder without
the prior written approval of the Buyer. The Buyer may assign its rights and
obligations hereunder as permitted by law, including, without limitation, to
any debt or equity financing source.
9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall be deemed to be one and the same instrument. The execution of a
counterpart of the signature page to this Agreement will be deemed the
execution of a counterpart of this Agreement.
9.5. Headings. The section headings contained in this Agreement are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
9.6. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if it is
sent by registered or certified mail, return receipt requested, postage
prepaid, or by courier, telecopy or facsimile, and addressed to the intended
recipient as set forth below:
If to any Seller or
the Shareholder: Copy to:
Addressed to the Xxxxxxx, Xxxxxxx, Xxxxxx & Xxxxxx P.A.
Sellers' Agent at: X.X. Xxx 0000
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxx X. Xxxx Xx Xxxxxx, Xxxxxxxx 00000-0000
0000 Xxxxx Xxxx. Attn: Xxxxx X. Xxxxxx, Xx., Esq.
Xx Xxxxxx, Xxxxxxxx 00000 Telecopy: (000) 000-0000
Telecopy: (___) ___-____
If to the Buyer: Copy to:
RentX Industries, Inc. Xxxxxxx & Xxxxxx L.L.C.
0000 Xxxxx Xxxxxx 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000 Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx Attn: B. Xxxxx Xxxxxxx
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Notices will be deemed given three days after mailing if sent by certified
mail, when delivered if sent by courier, and upon receipt of confirmation by
person or machine if sent by telecopy or facsimile transmission. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
9.7. Governing Law. This Agreement will be governed by and construed
in accordance with the domestic laws of the State of Colorado without giving
effect to any choice or conflict of law
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provision or rule (whether of the State of Colorado or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Colorado.
9.8. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same is in writing and signed by the Buyer
and the Sellers' Agent. No waiver by any party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence, and no waiver will be effective unless set forth in writing and
signed by the party against whom such waiver is asserted.
9.9. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
9.10. Expenses. Except as otherwise provided in Section 8.2, (a) the
Buyer shall bear its own costs and expenses (including, without limitation,
legal fees and expenses) incurred either before or after the date of this
Agreement in connection with this Agreement or the transactions contemplated
hereby and (b) the Sellers and the Shareholder will bear all costs and expenses
(including, without limitation, all legal, accounting and tax related fees and
expenses, all fees, commissions, expenses and other amounts payable to any
broker, finder or agent and the costs of any environmental study and additional
environmental testing contemplated by Section 6.1) incurred by the Sellers or
the Shareholder either before or after the date of this Agreement in connection
with this Agreement or the transactions contemplated hereby.
9.11. Arbitration. Any disputes arising under or in connection with
this Agreement, including, without limitation, those involving claims for
specific performance or other equitable relief, will be submitted to binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association under the authority of federal and state arbitration statutes, and
shall not be the subject of litigation in any forum. EACH PARTY, BY SIGNING
THIS AGREEMENT, VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVES ANY RIGHTS SUCH
PARTY MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR OTHER FORUMS, INCLUDING
THE RIGHT TO JURY TRIAL. The arbitration will be conducted only in Denver,
Colorado, before a single arbitrator selected by the parties or, if they are
unable to agree on an arbitrator, before a panel of three arbitrators, one
selected by the Buyer, one selected by the Sellers' Agent and the third
selected by the other two arbitrators. The arbitrators shall have full
authority to order specific performance and award damages and other relief
available under this Agreement or applicable law, but shall have no authority
to add to, detract from, change or amend the terms of this Agreement or
existing law. All arbitration proceedings, including settlements and awards,
shall be confidential. The decision of the arbitrators will be final and
binding, and judgment on the award by the arbitrators may be entered in any
court of competent jurisdiction. THIS SUBMISSION AND AGREEMENT TO ARBITRATE
WILL BE SPECIFICALLY ENFORCEABLE. The prevailing party or parties in any such
arbitration or in any action to enforce this Agreement will be entitled to all
reasonable costs and expenses, including fees and expenses of the arbitrators
and attorneys, incurred in connection therewith.
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27
9.12. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The word "including" will mean including
without limitation. The parties intend that each representation, warranty and
covenant contained herein will have independent significance. If any party
breaches any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant.
9.13. Incorporation of Exhibits. The Exhibits identified in this
Agreement are incorporated herein by reference and made a part hereof.
9.14. Sellers' and Shareholder's Agent. Each Seller and the
Shareholder hereby authorize and appoint the Sellers' Agent to act as its, his
or her exclusive agent and attorney-in-fact to act on behalf of each of them
with respect to all matters which are the subject of this Agreement, including,
without limitation, (a) receiving or giving all notices, instructions, other
communications, consents or agreements that may be necessary, required or given
hereunder and (b) asserting, settling, compromising, or defending, or
determining not to assert, settle, compromise or defend, (i) any claims which
any Seller or the Shareholder may assert, or have the right to assert, against
the Buyer, or (ii) any claims which the Buyer may assert, or have the right to
assert, against any Seller or the Shareholder. The Sellers' Agent hereby
accepts such authorization and appointment. Upon the receipt of written
evidence satisfactory to the Buyer to the effect that the Sellers' Agent has
been substituted as agent of the Sellers and the Shareholder by reason of his
death, disability or resignation, the Buyer shall be entitled to rely on such
substituted agent to the same extent as they were theretofore entitled to rely
upon the Sellers' Agent with respect to the matters covered by this Section
9.14. Neither any Seller nor the Shareholder shall act with respect to any of
the matters which are the subject of this Agreement except through the Sellers'
Agent. The Sellers and the Shareholder acknowledge and agree that the Buyer
may deal exclusively with the Sellers' Agent in respect of such matters, that
the enforceability of this Section 9.14 is material to the Buyer, and that the
Buyer has relied upon the enforceability of this Section 9.14 in entering into
this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BUYER:
RENTX INDUSTRIES, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
----------------------------------
Name: XXXXXXX X. XXXXXXXXX
--------------------------------
Title: Vice President
-------------------------------
SELLERS:
XXXX RENTAL & SALES OF EL DORADO,
INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
XXXX RENTAL & SALES OF HOT SPRINGS,
INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
XXXX RENTAL & SALES OF MAGNOLIA, INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
XXXX RENTAL & SALES OF CAMDEN, INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT.]
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29
XXXX RENTAL & SALES OF ARKADELPHIA,
INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
XXXX LEASING, INC.
By: /s/ XXXX X. XXXX
----------------------------------
Name: Xxxx X. Xxxx
Title: President
SHAREHOLDER:
/s/ XXXX X. XXXX
-------------------------------------
Xxxx X. Xxxx
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT.]
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