EXHIBIT 10.44
EXECUTIVE UNIT PURCHASE AGREEMENT
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THIS EXECUTIVE UNIT PURCHASE AGREEMENT (this "Agreement") is made as
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of October 25, 1999, by and between Bain/ACR, L.L.C., a Delaware limited
liability company ("Bain/ACR"), Xxxxxxx Xxxxx Rental Holdings, L.P., a
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Pennsylvania limited partnership ("Holdings"), ACR Management, L.L.C., a
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Delaware limited liability company and the general partner of Holdings and
Xxxxxxx Xxxxx ("ACR Management") and Xxxxxxx X. Xxxxxx ("Executive"). Any
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capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in Section 5 hereof.
WHEREAS, Bain/ACR, Holdings, ACR Management and Executive desire to
enter into this Agreement (i) to provide for the sale to Executive by Holdings
of 44,939.19 of Holding's Class A Common Units (the "Class A Units"), 4,993.24
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of Holding's Class L Common Units (the "Class L Units"), 50,667.55 of Holding's
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Class B Common Units (the "Class B Units") and 50,667.55 of Holding's Class C
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Common Units (the "Class C Units", and collectively with such Class B Units, the
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"Incentive Units"), (ii) to provide for the sale to Executive by ACR Management
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of a 1.60% Membership Interest in ACR Management (the "Membership Interest", and
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collectively with any Class A Units and Class L Units, the "Purchased Units")
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and (iii) to provide for certain rights and obligations of the parties with
respect to the Purchased Units and the Incentive Units (collectively, the
"Executive Units").
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NOW THEREFORE, in consideration for the promises contained herein and
the mutual obligations of the parties hereto, the receipt and sufficiency of
which are hereby acknowledged, Bain/ACR, Holdings, ACR Management and the
Executive hereto agree as follows:
1. Purchase and Sale of Executive Units.
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(a) Upon execution of this Agreement, (i) Executive shall purchase,
and Holdings shall sell, 44,939.19 Class A Units at a price of $1.00 per unit,
4,993.24 Class L Units at a price of $81.00 per unit, 50,667.55 Class B Units at
a price of $0.70 per unit and 50,667.55 Class C Units at a price of $0.40 per
unit and (ii) Executive shall purchase, and ACR Management shall sell, a 1.60%
Membership Interest in ACR Management for $21,219.28. Holdings shall deliver to
Executive an executed copy of the Fifth Amended and Restated Limited Partnership
Agreement of Holdings (the "Partnership Agreement") indicating Executive's
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ownership of such Class A Units, Class L Units, Class B Units and Class C Units
and an executed copy of the First Amended and Restated Limited Liability Company
Agreement of ACR Management (the "LLC Agreement") indicating Executive's
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ownership of such Membership Interest, and Executive shall deliver a cashier's
check or wire transfer of funds in the aggregate amount of $505,125.94 to
Holdings and a cashier's check or wire transfer of funds in the aggregate amount
of $21,219.28 to ACR Management.
(b) Within 30 days after Executive purchases any Executive Units from
Holdings and ACR Management, Executive shall make an effective election with the
Internal Revenue Service under Section 83(b) of the Internal Revenue Code and
the regulations promulgated thereunder in the form of Exhibit A attached hereto.
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(c) Concurrently with the execution of this Agreement, Executive will
enter into an Employment Agreement with Xxxxxxx Xxxxx in the form of Exhibit B
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attached hereto (the "Employment Agreement").
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2. Representations and Warranties; Acknowledgments.
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(a) Representations and Warranties by Executive. In connection with
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the purchase and sale of the Executive Units hereunder, Executive represents and
warrants to Holdings and ACR Management that:
(i) The Executive Units to be acquired by Executive pursuant to
this Agreement shall be acquired for Executive's own account and not with a
view to, or intention of, distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the Executive
Units shall not be disposed of in contravention of the Securities Act or
any applicable state securities laws.
(ii) Executive is an executive officer of Xxxxxxx Xxxxx, is
sophisticated in financial matters and is able to evaluate the risks and
benefits of the investment in the Executive Units.
(iii) Executive is able to bear the economic risk of his
investment in the Executive Units for an indefinite period of time because
the Executive Units have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions and
receive answers concerning the terms and conditions of the offering of
Executive Units and has had full access to such other information
concerning Holdings and ACR Management as he has requested. Executive has
also reviewed, or has had an opportunity to review, the following
documents: (A) the Partnership Agreement; (B) the LLC Agreement; (C) the
loan agreements, indentures, notes and related documents with the senior
and subordinated lenders of Holdings; and (D) Holdings' audited and
unaudited financial statements.
(v) The execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound and upon the
execution and delivery of this Agreement by Bain/ACR, Holdings and ACR
Management, this Agreement shall be the legal, valid and binding obligation
of Executive, enforceable in accordance with its terms.
(vi) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any
person or entity other than Xxxxxxx Xxxxx, which would adversely affect his
ability to perform his duties on behalf of Xxxxxxx Xxxxx.
(vii) Executive has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and he fully
understands the terms and conditions contained herein.
(b) Acknowledgments.
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(i) As an inducement to Holdings and ACR Management to sell the
Executive Units to Executive, as a condition thereto, Executive
acknowledges and agrees that:
(A) neither the sale of the Executive Units to Executive nor
any provision contained herein shall entitle Executive to remain in
the employment of Xxxxxxx Xxxxx or affect the right of Xxxxxxx Xxxxx
to terminate Executive's employment at any time; and
(B) neither Holdings nor ACR Management shall have any duty
or obligation to disclose to Executive, and Executive shall have no
right to be advised of, any material information regarding Holdings
and its Subsidiaries at any time prior to, upon or in connection with
the repurchase of Executive Units upon the termination of Executive's
employment with Xxxxxxx Xxxxx or as otherwise provided hereunder.
(ii) Holdings, ACR Management and Executive acknowledge and agree
that this Agreement has been executed and delivered, and the Executive
Units have been sold hereunder, in connection with and as a part of the
compensation and incentive arrangements between Holdings, ACR Management
and Executive.
3. Right to Purchase Executive Units Upon Termination of Employment.
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(a) Repurchase Option. In the event that Executive is no longer
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employed by Xxxxxxx Xxxxx for any reason (the date of such termination being
referred to herein as the "Termination Date"), the Executive Units, whether held
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by Executive or one or more Permitted Transferees, will be subject to repurchase
by Holdings, Bain/ACR and/or ACR Management pursuant to the terms and conditions
set forth in this Section 3 (the "Repurchase Option").
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(b) Termination Other than for Cause. If Executive is no longer
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employed by Xxxxxxx Xxxxx as a result of Executive's death or permanent
disability (as determined by the Board in its good faith judgment), Executive's
termination by Xxxxxxx Xxxxx without Cause or voluntary termination, then on or
after the Termination Date, (1) Holdings may elect to purchase all or any
portion of (i) the Purchased Units (other than the Membership Interest) and the
Vested Incentive Units at a price per unit equal to the Fair Market Value
thereof as determined as of a date set by the Board within thirty (30) days
prior to the delivery of the Repurchase Notice (as defined in subparagraph 3(d)
below) and (ii) the Unvested Incentive Units at a price per unit equal to the
lower of their Original Cost or the Fair Market Value thereof determined as
described in clause 3(b)(i) above and (2) ACR Management may elect to purchase
all or any portion of the Membership Interest at a price equal to the Fair
Market Value thereof as determined as of a date set by the Board within thirty
(30) days prior to the delivery of the Repurchase Notice.
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(c) Termination for Cause. If Executive is no longer employed by
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Xxxxxxx Xxxxx as a result of Executive's termination for Cause, then on or after
the Termination Date, (i) Holdings may elect to purchase all or any portion of
the Executive Units (other than the Membership Interest) and (ii) ACR Management
may elect to purchase the Membership Interest at a price equal to the lower of
the Original Cost thereof or the Fair Market Value thereof determined as
described in clause 3(b)(1) above.
(d) Repurchase Procedures. Holdings or ACR Management may elect to
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exercise the right to purchase all or any portion of the Executive Units
pursuant to the Repurchase Option by delivering written notice (the "Repurchase
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Notice") to the holder or holders of Executive Units within 180 days after
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Executive's Termination Date. The Repurchase Notice will set forth the number
of Executive Units to be acquired from such holder(s), the aggregate
consideration to be paid for such units or membership interest and the time and
place for the closing of the transaction. Holdings may elect to purchase all or
any portion of the Unvested Incentive Units without or before purchasing any
Vested Incentive Units. If any of the Executive Units are held by Permitted
Transferees of Executive, Holdings or ACR Management shall purchase the units or
Membership Interest elected to be purchased from such holder(s) of Executive
Units pro rata according to the number of Executive Units held by such holder(s)
at the time of delivery of such Repurchase Notice (determined as nearly as
practicable to the nearest unit). If both Unvested Units and Vested Units are
to be purchased by Holdings or ACR Management and Executive Units are held by
Permitted Transferees of Executive, the number of Unvested Units and Vested
Units to be purchased will be allocated among such holders pro rata according to
the total number of Executive Units to be purchased from each such person.
(e) Investors' Rights.
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(i) If for any reason Holdings and/or ACR Management does not
elect to purchase all of the Executive Units pursuant to the Repurchase
Option prior to the 180th day following the Termination Date, Bain/ACR will
be entitled to exercise the Repurchase Option, in the manner set forth in
this Section 3, for the Executive Units Holdings and/or ACR Management has
not elected to purchase (the "Available Units"). As soon as practicable,
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but in any event within thirty (30) days after Holdings determines that
there will be any Available Units, Holdings or ACR Management will deliver
written notice (the "Option Notice") to Bain/ACR setting forth the number
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of Available Units and the price for each Available Unit.
(ii) Bain/ACR will initially be permitted to purchase the
Available Units by delivering written notice to Holdings and ACR Management
within twenty (20) days after receipt of the Option Notice from Holdings
and/or ACR Management (such 20-day period being referred to herein as the
"Investor Election Period").
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(iii) As soon as practicable but in any event within five (5)
business days after the expiration of the Investor Election Period,
Holdings or ACR Management will, if necessary, notify the holder(s) of
Executive Units as to the number of Executive Units being purchased from
the holder(s) by Bain/ACR (the "Supplemental Repurchase Notice"). The
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Supplemental Repurchase Notice will set forth the number of Executive Units
Holdings,
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ACR Management and Bain/ACR will acquire from such holder(s), the
aggregate consideration to be paid for such units or membership interest
and the time and place of the closing of the transaction.
(f) Closing. The closing of the transactions contemplated by this
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Section 3 will take place on the date designated by Holdings or ACR Management
in the Repurchase Notice or the Supplemental Repurchase Notice, as the case may
be, which date will not be more than ninety (90) days after the delivery of such
notice. Holdings, ACR Management and/or Bain/ACR, as the case may be, will pay
for the Executive Units to be purchased pursuant to the Repurchase Option by
delivery of, in the case of Bain/ACR, a check payable to the holder of Executive
Units, and in the case of Holdings or ACR Management (i) a check payable to the
holder of such Executive Units, (ii) a note or notes payable in three equal
annual installments beginning on the first anniversary of the Termination Date
and bearing interest (payable quarterly) at a rate per annum equal to 8% or
(iii) both (i) and (ii) in the aggregate amount of the purchase price for such
units or membership interest. Any notes issued by Holdings pursuant to this
paragraph 3(f) shall be subject to any restrictive covenants to which Holdings
is subject at the time of such purchase. Holdings, ACR Management and/or
Bain/ACR, as the case may be, will receive customary representations and
warranties from each seller regarding the sale of the Executive Units,
including, but not limited to, the representation that such seller has good and
marketable title to the Executive Units to be transferred free and clear of all
liens, claims and other encumbrances, other than liens pursuant to the Pledge
Agreement.
(g) Termination of Repurchase Right. The rights of Holdings, ACR
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Management and Bain/ACR to repurchase Executive Units pursuant to this Section 3
shall terminate upon the earlier of (i) a Sale of the Company or (ii) a Public
Offering.
4. Restrictions on Transfer. The parties hereby agree that the
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Executive Units will be subject to the restrictions on Transfer and other
provisions contained in the Securityholders Agreement and will be considered
"Other Securities" for purposes of the Securityholders Agreement.
5. Definitions.
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"Xxxxxxx Xxxxx" means Xxxxxxx Xxxxx Rental, L.P., a Pennsylvania
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limited partnership and a subsidiary of Holdings.
"Affiliate" shall have the meaning assigned to it in the Partnership
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Agreement.
"Board" shall mean the Board of Managers of ACR Management.
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"Cause" shall have the meaning assigned to it in the Employment
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Agreement.
"Common Units" is defined in the Partnership Agreement and includes
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any equity securities issued or issuable directly or indirectly with respect to
such Common Units by way of any dividend or split or exchange or in connection
with a combination of units, recapitalization, merger, consolidation or other
reorganization.
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"Executive Units" means collectively the Class A Units, Class L
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Units, the Class B Units, the Class C Units and the Membership Interest acquired
by the Executive pursuant to Section 1. Such Units shall continue to be
Executive Units in the hands of any holder other than Executive (except for
Holdings, ACR Management, Bain/ACR and transferees in a Public Sale), and except
as otherwise provided herein, each such other holder of Executive Units shall
succeed to all rights and obligations attributable to Executive as a holder of
Executive Units hereunder. Executive Units shall include both vested and
unvested Executive Units and shall include interests in Holdings or ACR
Management issued with respect to Executive Units by way of any split, dividend
or recapitalization.
"Fair Market Value" of each Executive Unit means the amount which each
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such Unit would receive upon a complete liquidation of Holdings and ACR
Management following a sale of Holdings and ACR Management at their aggregate
fair market value as determined in good faith by the Board and Executive. If the
Board and Executive are unable to agree upon such fair market value, it shall be
determined in good faith by a nationally recognized investment banking
institution selected by the Board, the fees and expenses of which will be split
evenly between Holdings and ACR Management, on the one hand, and Executive, on
the other hand.
"LLC Agreement" has the meaning assigned to it in Section 1(a) hereof.
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"Original Cost" means $81.00 for each Class L Unit, $1.00 for each
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Class A Unit, $0.70 for each Class B Unit, $0.40 for each Class C Unit and
$21,219.28 for the Membership Interest.
"Partnership Agreement" has the meaning assigned to it in Section 1(a)
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hereof.
"Permitted Transferee" has the meaning assigned to it in the
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Securityholders Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
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limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency, or political subdivision thereof.
"Public Offering" means an offering of Holding's (or a corporate
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successor's) equity securities to the public pursuant to an effective
registration statement under the Securities Act.
"Public Sale" means any sale pursuant to a registered public offering
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under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Recapitalization Agreement" means that certain Recapitalization
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Agreement, dated as of June 1, 1998 and amended as of July 22, 1998, by and
among Holdings, the purchasers listed on the Schedule of Purchasers and the
current owners listed on the Schedule of Current Owners attached thereto.
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"Sale of the Company" means (i) any sale of all or substantially all
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(as defined in the Model Business Corporation Act) of the assets of Holdings and
its Subsidiaries on a consolidated basis in one transaction or series of related
transactions, (ii) any sale of all or substantially all of the Common Units in
one transaction or series of related transactions, excluding any sales of Common
Units in a Public Sale or (iii) a merger or consolidation which accomplishes one
of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
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time to time.
"Securityholders Agreement" means that certain Securityholders
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Agreement, dated as of July 22, 1998 and as amended from time to time, among
Holdings and the signatories parties thereto.
"Subsidiary" shall have the meaning assigned to it in the Partnership
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Agreement.
"Transfer" shall have the meaning assigned to it in the
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Securityholders Agreement.
"Units" means collectively the Class L Units, the Class A Units, the
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Class B Units, the Class C Units and the Membership Interests.
"Unvested Units" means any Executive Units which are not Vested Units.
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"Unvested Incentive Units" means any Incentive Units which have not
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become Vested Incentive Units.
"Vested Units" means any Purchased Units and any Vested Incentive
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Units.
"Vested Incentive Units" means any Incentive Units which have become
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vested on a monthly basis in accordance with the following schedule, if as of
each such date Executive is employed by Xxxxxxx Xxxxx:
Cumulative Percentage
Date of Incentive Units Vested
Date of this Agreement 0%
October 25, 2000 20%
October 25, 2001 40%
October 25, 2002 60%
October 25, 2003 80%
October 25, 2004 100%
Notwithstanding the foregoing, upon the occurrence of a Sale of the Company, so
long as Executive is employed by Xxxxxxx Xxxxx as of the date on which such Sale
of the Company occurs, all Incentive Units which have not yet become vested
shall immediately become vested; provided that a merger or consolidation
involving Holdings in which the holders of voting securities of Holdings own
more than 25% of the voting securities of the combined entity following such
transaction shall not be considered a Sale of the Company for purposes of the
immediately preceding clause.
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6. Notices. Any notice provided for in this Agreement must be in
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writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the Investors at the addresses indicated in
the Company's records and to the other recipients at the address indicated
below:
Notices to Executive:
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Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
with a copy to:
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Xxxxx X. Xxxxxx
Xxxxxxx Aronchick Xxxxx & Xxxxxx
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx
Notices to Bain/ACR:
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Bain/ACR, L.L.C.
x/x Xxxx Xxxxxxx, Xxx.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx
with a copy to:
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Learner, P.C.
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Notices to Holdings:
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Xxxxxxx Xxxxx Rental Holdings, L.P.
c/o Bain Capital, Inc.
Two Xxxxxx Place
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx Xxx
Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx
with a copy to:
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Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Learner, P.C.
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
7. General Provisions.
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(a) Transfers in Violation of Agreement. Any Transfer or attempted
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Transfer of any Executive Units in violation of any provision of this Agreement
shall be void, and Holdings shall not record such Transfer on its books or treat
any purported transferee of such Executive Units as the owner of such Executive
Units for any purpose.
(b) Severability. Whenever possible, each provision of this Agreement
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shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(c) Complete Agreement. This Agreement, those documents expressly
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referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(d) Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
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(e) Successors and Assigns. Except as otherwise provided herein, this
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Agreement shall bind and inure to the benefit of and be enforceable by
Executive, Holdings, ACR Management, Bain/ACR and their respective successors
and assigns (including subsequent holders of Executive Units); provided that the
rights and obligations of Executive under this Agreement shall not be assignable
except in connection with a Permitted Transfer of Executive Units hereunder.
(f) Arbitration. Any controversy, dispute or claim arising out of or
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relating in any way to this Agreement that cannot be resolved by negotiations
between Bain/ACR, Holdings and Executive shall be settled by arbitration in
accordance with the terms and provisions of Section 8.02 of the Recapitalization
Agreement.
(g) Choice of Law. The partnership law of the Commonwealth of
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Pennsylvania shall govern all questions concerning the relative rights of
Holdings and its partners. The limited liability company law of the State of
Delaware shall govern all questions concerning the relative rights of ACR
Management and its members. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
(h) Remedies. Each of the parties to this Agreement shall be entitled
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to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement may be
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amended and waived only with the prior written consent of Bain/ACR, Holdings,
ACR Management and Executive.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Executive
Unit Purchase Agreement on the date first written above.
BAIN/ACR, L.L.C.
By: ______________________________________
Its: ____________________________________
XXXXXXX XXXXX RENTAL HOLDINGS, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: ______________________________________
Its: ____________________________________
ACR MANAGEMENT, L.L.C.
By: ______________________________________
Its: ____________________________________
__________________________________________
Xxxxxxx X. Xxxxxx
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