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EXHIBIT 10.17
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of April 21, 1998, by and between NATIONSRENT OF FLORIDA, INC., a
Delaware corporation (the "Buyer"), and NAPLES RENT-ALL AND SALES COMPANY, INC.,
a Florida corporation (the "Seller"). The Buyer and the Seller are referred to
herein collectively as the "Parties."
RECITALS
This Agreement contemplates a transaction in which the Buyer will
purchase substantially all of the assets (and assume certain of the liabilities)
of the Seller in return for cash and other consideration.
STATEMENT OF AGREEMENT
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties hereby agree as follows.
SS.1. DEFINITIONS.
For purposes of this Agreement, in addition to the terms defined
elsewhere in this Agreement, the following terms shall have the meanings set
forth below:
"Acquired Assets" means all right, title, and interest in and to all of
the assets and business of Seller, including all Cash, tangible and intangible
personal property and real property interests, machinery, equipment (including
Rental Equipment), inventories of materials and supplies, furniture and
fixtures, automobiles, trucks, tractors, trailers, leases, subleases and rights
thereunder, Marks, agreements, contracts, accounts, notes, and other
receivables, claims, deposits, prepayments, refunds, causes of action, rights of
recovery, rights of set off and rights of recoupment, franchises, approvals,
permits, licenses, orders, registrations, certificates, variances, and similar
rights obtained from governments and governmental agencies, books, records,
ledgers, files, documents, correspondence and lists, the Employee Benefit Plans
(and the assets corresponding thereto) that the Seller maintains and each trust,
insurance contract, annuity contract or other funding arrangement that the
Seller has established with respect thereto, including, without limitation, all
assets set forth in Schedule A attached hereto; provided, however, that the
Acquired Assets shall not include (i) the corporate charter, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance, and
existence of the Seller as a corporation, (ii) any of the rights of the Seller
under this Agreement (or any other agreement between the Seller on the one hand
and the Buyer on the other hand entered into on or after the date of this
Agreement, (iii) the key man like insurance policies insuring the life of the
Stockholder owned by the Seller; and (iv) the Seller's real property interests
relating to its three (3) Facilities.
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"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934, as amended.
"Agreement with Stockholder" means the Agreement with the Stockholder
entered into concurrently herewith and attached hereto as Exhibit F.
"Applicable Rate" means the interest rate announced from time to time
by Fifth Third Bank, as its prime lending rate, expressed as a percent per
annum, determined on a daily basis.
"Assumed Liabilities" means the Liabilities, if any, of the Seller to
be assumed by the Buyer hereunder as set forth in Schedule B attached hereto.
"Assumption Agreement" has the meaning set forth in ss.6(a)(vi) below.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Benefit Arrangement" has the meaning set forth in ss.3(v) below.
"Xxxx of Sale" has the meaning set forth in ss.6(a)(v) below.
"Business Records" has the meaning set forth in ss.5(a) below.
"Buyer" has the meaning set forth in the preface above.
"Buyer's Parent" means NationsRent, Inc., a Delaware corporation and
the sole shareholder of the Buyer.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Seller's financial statements.
"Certificate of Title" means the certificate of title or manufacturer's
or importer's certificate, as applicable, issued by the Registrar of Title in
the jurisdiction in which the applicable item of Titled Property is registered.
"Closing" has the meaning set forth in ss.2(g) below.
"Closing Date" has the meaning set forth in ss.2(g) below.
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"Confidential Information" means any information concerning the
businesses and affairs of the Seller or the Buyer that is neither already
generally available to the public nor becomes generally available to the Public
through no fault of the Seller or its Affiliates.
"Consent to Sublease Agreement" and "Consents to Sublease Agreements"
have the respective meanings set forth in ss.2(d) below.
"2600 Xxxxx Blvd. Facility" means the parcel of real property and the
improvements thereon located at 0000 Xxxxx Xxxx., Xxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx, which property is leased by the Seller and used by the Seller as an
equipment rental location.
"2636 Xxxxx Blvd. Facility" means the parcel of real property and the
improvements thereon located at 0000 Xxxxx Xxxx., Xxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx, which property is leased by the Seller and used by the Seller as an
equipment rental location.
"Disclosure Schedule" has the meaning set forth in ss.3 below.
"Employment Agreement" has the meaning set forth in ss.2(f) below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
ss.3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
ss.3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in ss.3(v) below.
"Facility" means, individually, the 0000 Xxxxx Xxxx. Facility, the 2636
Xxxxx Facility and the North Airport Road Facility.
"Facilities" means, collectively, the 0000 Xxxxx Xxxx. Facility, the
2636 Xxxxx Facility and the North Airport Road Facility.
"Financial Statements" has the meaning set forth in ss.3(g) below.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Indemnified Party" has the meaning set forth in ss.8(d)(i) below.
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"Indemnifying Party" has the meaning set forth in ss.8(d)(i) below.
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes and any liability related to, under, or
with respect to any Employee Benefit Plan that the Seller or any subsidiary or
ERISA Affiliate of Seller maintains or ever has maintained.
"Marks" has the meaning set forth in ss.3(t) below.
"Most Recent Balance Sheet" means the balance sheet contained within
the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in ss.3(g)
below.
"Most Recent Fiscal Month End" has the meaning set forth in ss.3(g)
below.
"Most Recent Fiscal Year End" has the meaning set forth in ss.3(g)
below.
"Multiemployer Plan" has the meaning set forth in ERISA ss.3(37)
"North Airport Road Facility" means the parcel of real property and the
improvements thereon located at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxx, which property is leased by the Seller and used by the Seller as an
equipment rental location.
"Note" has the meaning set forth in ss.2(c) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"401(k) Plan" has the meaning set forth in ss.7(h) below.
"Purchase Price" has the meaning set forth in ss.2(c) below.
"Registrar of Title" means the department, agency, court or official in
the jurisdiction in which an item of Titled Property is registered that is
responsible for accepting applications for, and maintaining records regarding,
Certificates of Title and liens thereon.
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"Rental Equipment" means all machinery, equipment, tools, supplies and
other similar tangible personal property used or held for use by the Seller or
its customers.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge or other security interest.
"Seller" has the meaning set forth in the preface above.
"Stockholder" means Xxxxxxx X. Xxxxxxxx, the sole stockholder of the
Seller.
"Sublease Agreement" and "Sublease Agreements" have the respective
meanings set forth in ss.2(d) below
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Internal Revenue
Code ss.59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Third Party Claim" has the meaning set forth in ss.8(d)(i) below.
"Titled Property" means the automobiles, trucks, trailers,
semitrailers, equipment, machinery and other tangible personal property of the
Seller included in the Acquired Assets, the ownership of which is evidenced by a
Certificate of Title.
"Titled Property Transfer Documents" has the meaning set forth in
ss.6(a)(v) below.
SS.2. BASIC TRANSACTION.
(A) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, at the Closing the Buyer shall purchase from the
Seller, and the Seller shall sell, assign, transfer, convey, and agree to
deliver to the Buyer, all of the Acquired Assets for the consideration specified
below in this ss.2.
(B) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, at the Closing the Buyer agrees to assume and
become responsible for all of the Assumed Liabilities. The Buyer shall not
assume or have any responsibility, however, with respect to any other obligation
or Liability of the Seller not included within the definition of Assumed
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Liabilities. The Assumed Liabilities shall not include any liability of Seller
under that certain consulting agreement dated November 22, 1994 between Seller
and Xxxx Xxxxxx, Xx.
(C) PURCHASE PRICE. The Buyer agrees to pay to the Seller an
amount equal to Four Million One Hundred Thousand Fifty Dollars ($4,150,000)
(the "Purchase Price"). The Purchase Price shall be paid at the Closing by (i)
wire transfer or delivery of other immediately available funds in the amount of
Three Million One Hundred Fifty Thousand Dollars ($3,150,000) and (ii) execution
and delivery by the Buyer's Parent to the Seller of an unsecured convertible
subordinated promissory note in the original principal amount of One Million
Dollars ($1,000,000) in the form of Exhibit A attached hereto (the "Note").
(D) SUBLEASE OF FACILITIES. At the Closing, the Buyer and the
Seller shall enter into a sublease agreement relating to each Facility in the
form of Exhibit B attached hereto (individually, a "Sublease Agreement" and
collectively, the "Sublease Agreements"), at the monthly rental rates specified
in Schedule C attached hereto, and (ii) an agreement with the Seller's landlord
for each facility in the form of Exhibit C attached hereto (with such changes
thereto as are reasonably acceptable to the Parties), whereby such landlords
shall consent to the Sublease Agreements (individually, a "Consent to Sublease
Agreement" and collectively, the "Consent to Sublease Agreements").
(E) EMPLOYMENT AGREEMENT. At the Closing, the Buyer shall enter
into an employment agreement with the Stockholder in the form of Exhibit C
attached hereto (the "Employment Agreement").
(F) THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Squire,
Xxxxxxx & Xxxxxxx L.L.P. in Columbus, Ohio commencing at 11:00 a.m. (local time)
on April 21, 1998 or such other date as the Parties may mutually determine (the
"Closing Date"). Subject to the provisions of ss.9 hereof, failure to consummate
the transactions contemplated by this Agreement on the date and time specified
in this ss.2(f) shall not result in the termination of this Agreement and shall
not relieve any party of its obligations under this Agreement.
(G) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller
shall deliver to the Buyer the various agreements, certificates, instruments and
documents required herein; (ii) the Buyer shall deliver to the Seller the
various agreements, certificates, instruments and documents required herein;
(iii) the Seller shall execute, acknowledge (if appropriate) and deliver to the
Buyer such instruments of sale, transfer, conveyance and assignment as the Buyer
and its counsel reasonably may request; (iv) the Buyer will execute, acknowledge
(if appropriate) and deliver to the Seller such instruments of assumption as the
Seller and its counsel reasonably may request; and (v) the Buyer shall deliver
to the Seller the consideration specified in ss.2(c) above.
SS.3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Buyer that the statements
contained in this ss.3 are true, correct and complete as of the date of this
Agreement and shall be true, correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
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date of this Agreement throughout this ss.3), except as set forth in the
disclosure schedule accompanying this Agreement executed and delivered by the
Seller to the Buyer on the date hereof (the "Disclosure Schedule"). The
Disclosure Schedule shall be arranged in paragraphs corresponding to the
lettered and numbered paragraphs contained in this ss.3. The Seller shall have
the right to amend and/or supplement the Disclosure Schedule by giving the Buyer
written notice thereof on or before April 23, 1998; provided, however, that in
such event the Buyer shall have the right and option to terminate this Agreement
in accordance with the provisions of ss.9(a)(iv)(B) hereof.
(A) ORGANIZATION OF THE SELLER. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida. The Stockholder is the owner of all of the issued and outstanding
shares of capital stock of the Seller.
(B) AUTHORIZATION OF TRANSACTION. The Seller has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Seller, enforceable
in accordance with its terms and conditions.
(C) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling or charge, or, to the Knowledge of the Seller, any other
restriction of any government, governmental agency or court to which the Seller
is subject; (ii) any provision of the charter or bylaws of the Seller; or (iii)
except as set forth in ss.3(c)(iii) of the Disclosure Schedule, conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under any agreement, contract, lease, license, instrument or
other arrangement to which the Seller is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets). The Seller does not need to give any notice
to, make any filing with, or obtain any authorization, consent or approval of
any government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in ss.2 above).
(D) BROKERS' FEES. The Seller has no Liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(E) TITLE TO ASSETS. The Seller has good and marketable title to,
or a valid leasehold interest in, the properties and assets used by it, located
on its premises, or shown on the Most Recent Balance Sheet or acquired after the
date thereof, free and clear of all Security Interests, except for properties
and assets disposed of in the Ordinary Course of Business since the date of the
Most Recent Balance Sheet. Without limiting the generality of the foregoing, the
Seller has (and at the Closing shall transfer to the Buyer) good and marketable
title to all of the Acquired Assets, free and clear of any Security Interest or
restriction on transfer, except for Security Interests securing Assumed
Liabilities. ss.3(e) of the Disclosure Schedule identifies in reasonable detail
(including, without limitation, the make, model, serial and registration numbers
and year) all Titled Property.
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(F) SUBSIDIARIES; AFFILIATES. The Seller has no Subsidiaries. None
of the Seller's Affiliates is engaged in any business except as a stockholder,
director, officer and/or employee of the Seller.
(G) FINANCIAL STATEMENTS. Attached hereto as Exhibit D are the
following financial statements (collectively, the "Financial Statements"): (i)
unaudited balance sheets and statements of income, changes in stockholders'
equity, and changes in cash flows as of and for the fiscal years ended December
31, 1996 and December 31, 1997 (the "Most Recent Fiscal Year End") for the
Seller, and (ii) unaudited balance sheets and statements of income, changes in
stockholders' equity, and changes in cash flows (the "Most Recent Financial
Statements") as of and for the three months ended March 31, 1998 (the "Most
Recent Fiscal Month End") for the Seller. The Financial Statements (including
the notes thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of the Seller as of such dates and the results of operations
of the Seller for such periods, are correct and complete in all material
respects, and are consistent with the books and records of the Seller (which
books and records are correct and complete); provided, however, that the Most
Recent Financial Statements are subject to normal year end adjustments (which
will not be material individually or in the aggregate) and lack footnotes and
other presentation items.
(H) UNDISCLOSED LIABILITIES. The Seller has no Liability relating
to its business (and, to the Knowledge of the Seller, there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against the Seller giving rise to any such
Liability), except for Liabilities which have arisen after the Most Recent
Fiscal Month End in the Ordinary Course of Business (none of which results from,
arises out of, relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of law).
(I) LEGAL COMPLIANCE. Except as set forth in ss.3(i) of the
Disclosure Schedule, the Seller has complied with and is not in violation of any
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, complaint, claim, demand, notice or, to Seller's Knowledge,
investigation has been filed or commenced against it alleging any failure so to
comply.
(J) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the
Most Recent Fiscal Year End, the Seller has operated its business and otherwise
conducted its affairs only in the Ordinary Course of Business and there has not
been any material adverse change in the business, financial condition,
operations, results of operations or future prospects of the Seller. Without
limiting the generality of the foregoing, since that date (except as set forth
in ss.3(j) of the Disclosure Schedule):
(i) the Seller has not sold, leased, transferred or
assigned any of its assets, tangible or intangible, other than for a
fair consideration in the Ordinary Course of Business;
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(ii) the Seller has not entered into any agreement,
contract, lease or license (or series of related agreements, contracts,
leases and licenses) either involving more than $5,000 (except for the
purchase of Rental Equipment and other inventory in the Ordinary Course
of Business and leases of Rental Equipment to Customers in the Ordinary
Course of Business) or outside the Ordinary Course of Business;
(iii) no party (including the Seller) has accelerated,
terminated, modified, or canceled any agreement, contract, lease or
license (or series of related agreements, contracts, leases, and
licenses) involving more than $5,000 to which the Seller is a party or
by which it is bound;
(iv) the Seller has not imposed any Security Interest upon
any of its assets, tangible or intangible;
(v) the Seller has not made any capital expenditure (or
series of related capital expenditures) either involving more than
$5,000 or outside the Ordinary Course of Business;
(vi) the Seller has not made any capital investment in,
any loan to, or any acquisition of the securities or assets of, any
other Person (or series of related capital investments, loans and
acquisitions) either involving more than $5,000 or outside the Ordinary
Course of Business;
(vii) the Seller has not issued any note, bond or other
debt security or created, incurred, assumed or guaranteed any
indebtedness for borrowed money or capitalized lease obligation either
involving more than $2,000 singly or $5,000 in the aggregate;
(viii) the Seller has not delayed or postponed the payment
of accounts payable and other Liabilities outside the Ordinary Course
of Business;
(ix) the Seller has not canceled, compromised, waived or
released any right or claim (or series of related rights and claims)
either involving more than $2,000 or outside the Ordinary Course of
Business;
(x) the Seller has not granted any license or sublicense
of any rights under or with respect to any intellectual property;
(xi) there has been no change made or authorized in the
charter or bylaws of the Seller;
(xii) the Seller has not issued, sold or otherwise disposed
of any of its capital stock, or granted any options, warrants or other
rights to purchase or obtain (including upon conversion, exchange or
exercise) any of its capital stock;
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(xiii) the Seller has not declared, set aside or paid any
dividend or made any distribution with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased or otherwise
acquired any of its capital stock;
(xiv) the Seller has not experienced any damage,
destruction or loss (whether or not covered by insurance) to its
property;
(xv) the Seller has not made any loan to, or entered into
any other transaction with, any of its directors, officers,
stockholders or employees outside the Ordinary Course of Business;
(xvi) the Seller has not entered into any employment
contract or collective bargaining agreement, written or oral, or
modified the terms of any existing such contract or agreement;
(xvii) the Seller has not granted any increase in the base
compensation of any of its directors, officers or employees exceeding
$5,000 per year or outside the Ordinary Course of Business;
(xviii) the Seller has not adopted, amended, modified or
terminated any bonus, profit-sharing, incentive, severance or other
plan, contract or commitment for the benefit of any of its directors,
officers and employees (or taken any such action with respect to any
other employee benefit plan);
(xix) the Seller has not made any other change in
employment terms for any of its directors, officers and employees
outside the Ordinary Course of Business;
(xx) the Seller has not made or pledged to make any
charitable or other capital contribution in excess of an aggregate of
$1,000;
(xxi) the Seller has not paid any amount to any third party
with respect to any Liability or obligation (including any costs and
expenses which the Seller has incurred or may incur in connection with
this Agreement and the transactions contemplated hereby) which would
not constitute an Assumed Liability if in existence as of the Closing;
(xxii) there has not been any other material occurrence,
event, incident, action, failure to act or transaction outside the
Ordinary Course of Business involving the Seller; and
(xxiii) the Seller has not committed to any of the foregoing.
(K) INVENTORY. Except as set forth in ss.3(k) of the Disclosure
Schedule, all inventory of the Seller, whether or not reflected in the Most
Recent Balance Sheet, consists of a quality and quantity usable and salable in
the Ordinary Course of Business, except for obsolete items and items
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of below-standard quality, all of which have been written off or written down to
net realizable value in the Most Recent Balance Sheet. All such inventories not
written off have been priced at the lower of cost or net realizable value on a
first in, first out basis. To the Knowledge of the Seller, the quantities of
each item of inventory are not excessive, but are reasonable in the present
circumstances of the Seller.
(L) CONTRACTS. ss.3(l) of the Disclosure Schedule lists all
material contracts, including the following contracts and other agreements to
which the Seller is a party:
(i) any agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for
lease payments in excess of $3,000.00 per annum;
(ii) any agreement (or group of related agreements) for
the purchase or sale of machinery, equipment or supplies, products, or
other personal property, or for the furnishing or receipt of services,
the performance of which will extend over a period of more than one
year, result in a material loss to the Seller, or involve consideration
in excess of $5,000.00;
(iii) any agreement concerning a partnership or joint
venture;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of
$5,000.00 or under which it has imposed a Security Interest on any of
its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement involving the Stockholder and any of
his Affiliates;
(vii) any agreement for the employment of any individual on
a full-time, part-time, consulting, or other basis providing annual
compensation in excess of $5,000.00 or providing severance benefits;
(viii) any agreement under which it has advanced or loaned
any amount to any of the directors, officers, and employees of the
Seller outside the Ordinary Course of Business;
(ix) any agreement under which the consequences of a
default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of the Seller; or
(x) any other agreement (or group of related agreements)
the performance of which involves consideration in excess of $5,000.00.
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The Seller has delivered to the Buyer a correct and complete copy of each
written agreement listed in ss.3(l) of the Disclosure Schedule (as amended to
date) and a written summary setting forth the terms and conditions of each oral
agreement referred to in ss.3(l) of the Disclosure Schedule. With respect to
each such agreement: (A) the agreement is legal, valid, binding, enforceable,
and in full force and effect; (B) the agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby (including
the assignments and assumptions referred to in ss.2 above); (C) no party is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (D) no party has repudiated any provision
of the agreement.
(M) LITIGATION. ss.3(m) of the Disclosure Schedule sets forth each
instance in which the Seller (i) is subject to any outstanding injunction,
judgment, order, decree, ruling or charge or (ii) is a party or, to the
Knowledge of the Seller, is threatened to be made a party to any action, suit,
proceeding, hearing or investigation of, in, or before any court or
quasi-judicial or administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator. None of the actions, suits, proceedings,
hearings and investigations set forth in ss.3(m) of the Disclosure Schedule
could result in any adverse change in the business, financial condition,
operations, results of operations, or, to the Knowledge of the Seller, future
prospects of the Seller. None of the stockholders, directors and officers (and
employees with responsibility for litigation matters) of the Seller has any
reason to believe that any such action, suit, proceeding, hearing or
investigation may be brought or threatened against the Seller and its
Affiliates.
(N) CONDITION AND SUFFICIENCY OF THE ACQUIRED ASSETS. The Acquired
Assets, where applicable, are structurally sound, are in good operating
condition and repair (subject to normal wear and tear), and are adequate for the
uses to which they are being put, and none of the Acquired Assets, where
applicable, is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The Acquired
Assets are sufficient for the continued conduct of the Seller's business after
the Closing in substantially the same manner as conducted prior to the Closing.
(O) PRODUCT LIABILITY. None of the Seller and its Affiliates has
any Liability (and, to the Knowledge of the Seller, there is no Basis for any
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any Liability) arising out
of any injury to individuals or property as a result of the ownership,
possession or use of any product manufactured, sold, leased or delivered by the
Seller.
(P) RENTAL EQUIPMENT. All Rental Equipment of the Seller, whether
or not reflected in the Most Recent Balance Sheet, consists of a quality and
quantity usable, rentable or salable in the Ordinary Course of Business, except
for obsolete items and items of below-standard quality, all of which have been
written off or written down to net realizable value in the Most Recent Balance
Sheet. All such Rental Equipment not written off has been recorded at net
realizable value and has been depreciated consistent with the economic life of
such Rental Equipment. To the Knowledge
13
of the Seller, the quantities of each item of such Rental Equipment are not
excessive, but are reasonable in the present circumstances of the Seller. All
such Rental Equipment is in good operating condition and repair, subject to
normal wear and tear, and has been maintained in the ordinary course in a manner
consistent with normal industry practice.
(Q) DISCLOSURE. The representations and warranties contained in
this ss.3 do not contain any untrue statement of a fact or omit to state any
fact necessary in order to make the statements and information contained in this
ss.3 not misleading.
(R) INVESTMENT. The Seller (i) understands that the Note has not
been, and will not be, registered under the Securities Act, or under any state
securities laws, and is being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (ii) is
acquiring the Note solely for its own account for investment purposes, and not
with a view to the distribution thereof, (iii) is a sophisticated investor with
knowledge and experience in business and financial matters, (iv) has received
certain information concerning the Buyer and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in holding the Note, (v) is able to bear the economic risk and lack of
liquidity inherent in holding the Note, and (vi) is an "accredited investor," as
such term is defined in Rule 501(a) promulgated under the Securities Act.
(S) ACCOUNTS RECEIVABLE. All accounts receivable of the Seller
that are reflected on the Most Recent Balance Sheet or on the accounting records
of the Seller as of the Closing Date (collectively, the "Accounts Receivable")
represent or will represent valid obligations arising from sales actually made
or services actually performed in the Ordinary Course of Business. Unless paid
prior to the Closing Date, the Accounts Receivable are or will be as of the
Closing Date current and collectible net of a reserve in an amount not to exceed
$10,000 (the "A/R Reserve") to be accrued by the Seller with the concurrence of
Buyer prior to the Closing Date (which reserve shall be adequate). ss.3(s) of
the Disclosure Schedule contains a complete and accurate list and description of
actions pending as of the date hereof to pursue collection of the Accounts
Receivable (the "Collection Actions A/R"), it being acknowledged by the Buyer
that the Seller will continue to utilize and pay for reasonable collection
efforts with respect thereto after the Closing. Subject to the foregoing A/R
Reserve, each of the Accounts Receivable either has been or will be collected in
full, without any set-off, within ninety (90) days after the day on which it
first becomes due and payable; provided, however, that Collection Actions A/R
have been or will be collected in full, without any set-off, within ninety (90)
days after the date hereof. There is no contest, claim or right of set-off,
other than adjustments in the Ordinary Course of Business, under any Contract
with any obligor of an Accounts Receivable relating to the amount or validity of
such Accounts Receivable. ss.3(s) of the Disclosure Schedule contains a complete
and accurate list of all Accounts Receivable as of March 31, 1998, which list
sets forth the aging of such Accounts Receivable. Buyer agrees to assign to the
Seller any particular Accounts Receivable for which the Seller is required to
indemnify the Buyer as a result of a Breach of this ss.3(s).
14
(T) MARKS. ss.3(t) of the Disclosure Schedule contains a complete
and accurate list and summary description of the name of the Seller, all
fictional business names, trading names, registered or unregistered trademarks,
servicemarks, and applications therefor (collectively, the "Marks"). The Seller
is the owner of all right, title and interest in and to each of the Marks, free
and clear of all liens, Security Interests, charges, encumbrances and equities.
(U) EMPLOYEE BENEFITS MATTERS.
(i) Paragraph (u)(i) of the Disclosure Schedule lists and
identifies: (i) each Employee Pension Benefit Plan; (ii) each Employee
Welfare Benefit Plan; and (iii) each compensation and employment
arrangement, including, but not limited to, any fringe benefit,
incentive compensation, bonus, severance, deferred compensation,
supplemental executive compensation plan, and employment arrangement (a
"Benefit Arrangement"), that is maintained by the Seller.
(ii) Each Employee Welfare Benefit Plan that provides
medical benefits has been administered in compliance in all respects
with the requirements of Code ss.4980B and ss.ss.601 through 608 of
ERISA.
(iii) Neither the Seller nor any ERISA Affiliate (as
hereinafter defined) of the Seller has participated in any
Multiemployer Plan during the most recent (5) five years. As used
herein, the term "ERISA Affiliate" shall mean any subsidiary of the
Seller and any trade or business (whether or not incorporated) that is
part of the same controlled group, or under common control with, or
part of an affiliated service group that includes the Seller within the
meaning of Code ss.ss.414(b), (c), (m) or (o).
(iv) Except as set forth in ss.7 of this Agreement, no
Employee Pension Benefit Plan, Employee Welfare Benefit Plan, or
Benefit Arrangement shall result in any liability to the Buyer or shall
have an adverse impact upon the Acquired Assets or subject the Acquired
Assets to any lien under ERISA, the Code, or the laws of any state or
country.
(v) No Employee Benefit Pension Plan is subject to Title
IV of ERISA.
(vi) Each Employee Benefit Pension Plan is qualified in
form and operation under Code ss.401(a) and any related trust is exempt
from taxation under Code ss.501(a) and has received a current favorable
determination letter from the Internal Revenue Service to such effect,
and each Pension Plan has complied in all material respects with ERISA
and the applicable provisions of the Code.
(vii) Each Employee Benefit Pension Plan has been
administered in accordance with its terms and applicable law.
15
(V) INTERCOMPANY ARRANGEMENTS. Except as set forth in the
Disclosure Schedule, no Affiliate of the Seller (i) provides or causes to be
provided to the Seller any products, services, equipment, facilities or similar
items or (ii) has been involved in any material business arrangement or
relationship with the Seller within the past two (2) years.
SS.4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
The Buyer represents and warrants to the Seller that the statements
contained in this ss.4 are true, correct and complete as of the date of this
Agreement and will be true, correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this ss.4).
(A) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(B) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions.
(C) NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling charge, or, to the Knowledge of the Buyer, any other
restriction of any government, governmental agency or court to which the Buyer
is subject; (ii) any provision of its charter or bylaws; or (iii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license, instrument
or other arrangement to which the Buyer is a party or by which it is bound or to
which any of its assets is subject. The Buyer does not need to give any notice
to, make any filing with, or obtain any authorization, consent or approval of
any government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in ss.2 above).
(D) BROKERS' FEES. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which the Seller could become
liable or obligated.
SS.5. POST-CLOSING COVENANTS.
The Parties agree as follows with respect to the period following the
Closing:
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(A) GENERAL. 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 the other Party
reasonably may request, at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under ss.8
below). The Seller acknowledges and agrees that from and after the Closing the
Buyer (unless otherwise prohibited by law) will be entitled to possession of all
documents, books, records (including Tax records and the personnel records of
any former employees of the Seller hired by the Buyer), agreements and data of
any sort relating to the Seller (the "Business Records"), other than as excluded
in the definition of Acquired Assets. From and after the Closing Date the Buyer
agrees to provide the Seller with access, upon notice and at reasonable times,
to records of the Buyer relating to the Acquired Assets, including the Business
Records of the Seller transferred to the Buyer, to the extent necessary to
permit the Seller and the Stockholder to prepare their respective tax returns
and to respond to any governmental inquiry, litigation, prospective litigation,
threatened litigation, claims or other events.
(B) LITIGATION SUPPORT. 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 asserted by a third
party in connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to the Closing Date involving the Seller and its
Affiliates, the other Party will cooperate with the contesting or defending
Party and its counsel in the contest or defense, make available its personnel,
and provide such testimony and access to its books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or defending
Party is entitled to indemnification therefor under ss.8 below).
(C) TRANSITION. The Seller shall not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier or other business associate of the Seller from maintaining
the same business relationships with the Buyer after the Closing as it
maintained with the Seller prior to the Closing. The Seller shall refer all
customer inquiries relating to the business of the Seller to the Buyer from and
after the Closing. In addition, Seller shall file an amendment to its articles
of incorporation changing its name to remove "Naples" and "Rent-All" (and all
variations thereof or words of similar import) from its name within five (5)
days after the Closing.
(D) CONFIDENTIALITY. The Seller shall treat and hold as such all
of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement. In the event that the
Seller is requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand or similar process) to disclose any Confidential Information, the Seller
shall notify the Buyer promptly of the request or requirement so that the Buyer
may seek an appropriate protective order or waive compliance with the provisions
of this ss.5(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, the Seller is, on the advice of counsel, compelled to disclose
17
any Confidential Information to any tribunal or else stand liable for contempt,
then the Seller may disclose the Confidential Information to the tribunal;
provided, however, that the Seller shall use its best efforts to obtain, at the
reasonable request of the Buyer, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as the Buyer shall designate.
(E) COVENANT NOT TO COMPETE. In consideration for the Purchase
Price and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, for a period of five (5) years from and after the
Closing Date, neither the Seller, the Stockholder nor any Affiliate of the
Seller shall engage, directly or indirectly, in any business that the Seller
conducts as of the Closing Date (except as an employee of the Buyer or as the
sublessor of the Facilities, as contemplated herein) in any area within a
250-mile radius of any Facility; provided, however, that the purchase and sale
of real property by the Seller, the Stockholder and/or any Affiliate of the
Seller shall not be deemed to be engaging solely by reason thereof in any such
businesses; and provided, further, that ownership of less than 1% of the
outstanding stock of any publicly traded corporation shall not be deemed to be
engaging solely by reason thereof in any of such businesses. If the final
judgment of a court of competent jurisdiction declares that any term or
provision of this ss.5(e) is invalid or unenforceable, then the Parties agree
that the court making the determination of invalidity or unenforceability shall
have the power to reduce the scope, duration or area of the term or provision,
to delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
(F) SALES TAXES, ETC. The Seller shall be responsible for sales,
use, documentary stamp or other transfer taxes, fees or expenses incurred as a
result of the transactions contemplated by this Agreement.
(G) NOTICE OF DEVELOPMENTS; CURE. The Seller shall notify the
Buyer promptly in writing of, and contemporaneously will provide the Buyer with
true and complete copies of any and all information or documents relating to,
and will use all commercially reasonable efforts to cure before the Closing, any
event, transaction, or circumstance occurring after the date of this Agreement
that causes or will cause any covenant or agreement of the Seller under this
Agreement to be breached, or that renders or will render untrue any
representation or warranty of the Seller contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
The Seller also shall use all commercially reasonable efforts to cure, before
the Closing, any violation or breach of any representation, warranty, covenant,
or agreement made by it in this Agreement, whether occurring or arising before
or after the date of this Agreement. No disclosure by the Seller pursuant to
this ss.5(g), however, shall be deemed to amend or supplement the Disclosure
Schedule, or to prevent or cure any misrepresentation or breach of warranty,
unless consented to in writing by the Buyer.
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SS.6. CONDITIONS TO OBLIGATION TO CLOSE.
(A) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.3
above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Seller shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing;
(iii) the Seller shall have executed and delivered to the
Buyer the Sublease Agreements and the Consent to Sublease Agreements,
and the landlord of each Facility shall have executed and delivered to
the Buyer a Consent to Sublease Agreement;
(iv) the Stockholder shall have executed and delivered to
the Buyer the Employment Agreement and the Agreement with Stockholder;
(v) the Seller shall have executed and delivered to the
Buyer (A) a warranty xxxx of sale in the form attached hereto as
Exhibit G transferring all of the Acquired Assets to the Buyer (the
"Xxxx of Sale") and, (B) with respect to each item of Titled Property,
the original Certificate of Title and registration therefore, together
with such other agreements, documents and instruments as are necessary
to transfer title thereof to the Buyer (collectively, the "Titled
Property Transfer Documents");
(vi) the Buyer and the Seller shall have executed an
instrument for assignment and assumption of the Assumed Liabilities in
the form attached hereto as Exhibit G (the "Assumption Agreement");
(vii) the Seller shall have delivered, or caused to be
delivered, to the Buyer a certificate of the Secretary of the Seller
(A) stating that the resolutions adopted by its board of directors and
stockholders authorizing the actions taken in connection with the
transactions contemplated by this Agreement, including, without
limitation, the execution and delivery of this Agreement, were duly
adopted and continue in full force and effect (with a copy of such
resolution to be annexed to such certificate) and (B) certifying the
names and signatures of the officers of the Seller authorized to sign
this Agreement and the other documents to be delivered hereunder;
(viii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling or charge would (A) prevent consummation of any of the
transactions contemplated by this
19
Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) affect adversely
the right of the Buyer to own the Acquired Assets or to operate the
former business of the Seller (and no such injunction, judgment, order,
decree, ruling or charge shall be in effect);
(ix) the Seller shall have delivered to the Buyer an
opinion of counsel for the Seller and the Stockholder dated the Closing
Date in form and substance as attached hereto as Exhibit I, together
with such other opinions as the Buyer may reasonably request;
(x) the Seller shall have delivered to the Buyer current
Uniform Commercial Code and state, local and federal tax, sales and
unemployment compensation tax, judgment, bankruptcy, and similar lien
searches showing no liens, security interests, claims, or judgments
against the assets of the Buyer, other than those related solely to
Assumed Liabilities;
(xi) all necessary consents, approvals, certifications,
licenses and permits with respect to the transactions contemplated
hereby, the absence of which would have an adverse effect on the
Buyer's rights under this Agreement, or which would constitute a breach
pursuant to the provision of, or which would result in the termination
or loss of any right under, any contract, agreement, instrument,
document, lease, license, certification, permit, indenture or other
obligation, or without which the Buyer is precluded or impeded from
conducting the Seller's business after the Closing Date, shall have
been received by the Buyer on or before the Closing Date;
(xii) the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above
in ss.6(a)(i)-(xi) is satisfied in all respects;
(xiii) the Buyer must be satisfied, in its sole discretion,
with the results of its financial, legal and other due diligence with
respect to the Seller and its business and assets; and
(xiv) all actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this ss.6(a) if it
executes a writing so stating at or prior to the Closing.
(B) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
20
(i) the representations and warranties set forth in ss.4
above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Buyer shall have performed and complied with all
of its covenants hereunder in all material respects through the
Closing;
(iii) the Buyer shall have executed and delivered to the
Seller the Sublease Agreements and the Consent to Sublease Agreements;
(iv) the Buyer shall have executed and delivered to the
Stockholder the Employment Agreement and the Agreement with
Stockholder;
(v) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling
or charge shall be in effect);
(vi) the Buyer shall have delivered to the Seller an
opinion of counsel for the Buyer dated the Closing Date in form and
substance as attached hereto as Exhibit J;
(vii) the Buyer shall have delivered, or caused to be
delivered, to the Seller a certificate of the Secretary of the Buyer
(A) stating that the resolutions adopted by the Buyer's board of
directors authorizing the actions taken in connection with the
transactions contemplated by this Agreement, including, without
limitation, the execution and delivery of this Agreement, were duly
adopted and continue in full force and effect (with a copy of such
resolution to be annexed to such certificate) and (B) certifying the
names and signatures of the officers of the Buyer authorized to sign
this Agreement and the other documents to be delivered hereunder;
(viii) the Buyer shall have delivered, or caused to be
delivered, to the Seller a certificate of the Secretary of the Buyer's
Parent (A) stating that the resolutions adopted by the Buyer's Parent's
board of directors authorizing the actions taken in connection with the
Buyer's Parent's execution and delivery of the Note were duly adopted
and continue in full force and effect (with a copy of such resolution
to be annexed to such certificate) and (B) certifying the names and
signatures of the officers of the Buyer's Parent authorized to sign the
Note;
(ix) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above
in ss.6(b)(i)-(viii) is satisfied in all respects;
21
(x) the Buyer shall have paid to the Seller the Purchase
Price in accordance with ss.2(c) hereof; and
(xi) all actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this ss.6(b) if it
executes a writing so stating at or prior to the Closing.
SS.7. EMPLOYMENT MATTERS.
(A) TREATMENT OF EMPLOYEES.
(i) The Seller shall terminate all of its employees
effective as of the Closing Date. Any amounts owing to such employees,
including, without limitation, any severance or termination pay
obligations arising from the transactions contemplated hereby as of the
Closing Date (or any matching 401(K) Plan contribution with respect
thereto), will be paid by the Seller.
(ii) Immediately following the Closing Date, the Buyer
may, but shall not be obligated to, hire certain former employees of
the Seller terminated by the Seller pursuant to ss.7(a)(i) above who
desire to be employed by the Buyer.
(B) RETIREMENT PLAN.
(i) The Buyer shall become the successor plan sponsor to
the Seller of Seller's 401(K) Plan (the "401(K) Plan") and, at the
Buyer's election, may appoint a successor trustee with respect to the
401(K) Plan at any time after the Closing Date.
(ii) The Seller has provided the Buyer with a full and
complete copy of the 401(K) Plan, as well as the most recent
determination letter received from the Internal Revenue Service with
respect to the 401(K) Plan, all related trust agreements and all other
funding arrangements and documents that describe the features of the
401(K) Plan.
(iii) Except for the Seller's post-Closing Date
contributions (and liabilities therefor) to the 401(K) Plan for all
time periods preceding the Closing Date, the Seller shall not
thereafter be responsible for making any contributions to, or have any
other liability with respect to, the 401(K) Plan. The Buyer shall
indemnify and hold harmless the Seller from any costs, expenses,
contributions or Liabilities associated with the operation or
termination of the 401(K) Plan which relate to the time period after
the Closing Date. The Seller shall indemnify and hold harmless the
Buyer from any costs, expenses, contributions or Liabilities
22
associated with the operation or termination of the 401(K) Plan which
relate to the time period prior to or on the Closing Date.
(iv) The Seller agrees to take any and all actions
necessary to cause the transfer of all books and records of the 401(K)
Plan to the Buyer or to any person designated by the Buyer as successor
trustee with respect to the 401(K) Plan. The Seller shall perform all
acts and execute all documents as may be necessary to accomplish such
transfer of the assets of the 401(K) Plan.
(C) HEALTH INSURANCE.
(i) The Seller shall use reasonable efforts to cause the
group health insurance contract of the Seller to be assigned to the
Buyer. Until the earlier of such time as such assignment is effected or
such time as the Buyer obtains a group health insurance plan pursuant
to the provisions of ss.7(c)(ii) below, the Seller shall maintain the
group health insurance plan of the Seller that the former employees of
the Seller participated in prior to the Closing Date. The Buyer agrees
to reimburse the Seller for the Seller's premium costs for maintaining
such group health insurance.
(ii) If the Seller is unable to assign to the Buyer the
Seller's group health insurance contract as contemplated under
ss.7(c)(i) above, then, within one (1) year after the Closing Date, the
Buyer shall establish or otherwise adopt a group health plan which
shall provide group health benefits to former employees of the Seller
who are at that time employed by the Buyer, on an uninterrupted basis
on substantially similar terms and at substantially similar prices as
are available to all other employees of the Buyer or its Affiliates.
(D) NO THIRD-PARTY BENEFICIARIES. Nothing contained in this
section shall be construed to confer any benefit or standing to pursue any claim
on any person other than the Parties, and nothing contained in this section
shall create any third-party beneficiaries.
SS.8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(A) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Buyer and the Seller contained in this
Agreement shall survive the Closing (even if the damaged Party knew or had
reason to know of any misrepresentation or breach of warranty at the time of
Closing, it being agreed that the damaged Party shall nevertheless endeavor to
give the other Party notice of any misrepresentation or breach actually known to
the damaged Party) and continue in full force and effect forever thereafter
(subject to any applicable statutes of limitations).
23
(B) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) If the Seller breaches (or if any third party alleges
facts that, if true, would mean that the Seller has breached) any of
its representations, warranties or covenants contained in this
Agreement, then the Seller shall indemnify the Buyer from and against
the entirety of any Adverse Consequences which the Buyer may suffer
through and after the date of the claim for indemnification resulting
from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach); provided, however, that the Seller and
the Stockholder shall not have any obligation to indemnify the Buyer
from and against any Adverse Consequences caused by the breach of any
representation, warranty or covenant of the Seller or the Stockholder
(A) until the sum of the Adverse Consequences suffered by the Buyer by
reason of the Seller or Stockholder exceeds a $10,000 aggregate
deductible (after which point the Seller and the Stockholder will be
obligated to indemnify the Buyer from and against further such Adverse
Consequences) or (B) to the extent the Adverse Consequences the Buyer
has suffered by reason of all such breaches exceeds a $4,150,000
aggregate ceiling (after which point the Seller and the Stockholder
will have no obligation to indemnify the Buyer from and against further
such Adverse Consequences). The foregoing deductible and ceiling
provisions shall not apply to any breach by the Seller or the
Stockholder of the aforementioned representations and warranties if the
Seller or the Stockholder had knowledge of such breach at any time
prior to the date on which such representation or warranty is made or
to any breach of any covenant of the Seller or the Stockholder, and the
Seller and the Stockholder shall be liable for the entirety of such
Adverse Consequences with respect to such breaches.
(ii) In addition to, and without limiting in any way, the
Seller's liability and obligations under any other provision of this
ss.8(b), the Seller shall indemnify the Buyer from and against the
entirety of any Adverse Consequences which the Buyer may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by:
(A) any Liability of the Seller which is not an
Assumed Liability (including any Liability of the Seller that
becomes a Liability of the Buyer under any bulk transfer law
of any jurisdiction, under any common law doctrine of de facto
merger or successor liability, or otherwise by operation of
law); or
(B) any Liability of the Seller (other than the
Assumed Liabilities) for unpaid Taxes, with respect to any Tax
year or portion thereof ending on or before the Closing Date
(or for any Tax year beginning before and ending after the
Closing Date to the extent allocable to the portion of such
period beginning before and ending on the Closing Date)
including, but not limited to, any Taxes assessed as a result
of the current sales tax audit or as a result of any other
audit of the Seller.
(iii) In addition to, and without limiting in any way, the
Seller's liability and obligations under any other provision of this
ss.8(b), the Seller shall indemnify the Buyer from
24
and against the entirety of any Adverse Consequences which the Buyer
may suffer resulting from, arising out of, relating to, in the nature
of, or caused by the Seller's operation of the business prior to the
Closing (other than the Assumed Liabilities).
(C) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER.
(i) If the Buyer breaches (or if any third party alleges facts
that, if true, would mean the Buyer has breached) any of its
representations, warranties, or covenants contained in this Agreement,
then the Buyer shall indemnify the Seller from and against the entirety
of any Adverse Consequences which the Seller may suffer through and
after the date of the claim for indemnification resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the
alleged breach).
(ii) The Buyer shall indemnify the Seller from and against the
entirety of any Adverse Consequences which the Seller may suffer
resulting from, arising out of, relating to, in the nature of, or
caused by any Assumed Liability or by the Buyer's operation of its
business after the Closing Date, except to the extent related to or
caused by the negligence or intentional misconduct of the Stockholder
or his Affiliates.
(D) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against the other
Party (the "Indemnifying Party") under this ss.8, then the Indemnified
Party shall promptly notify the Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party
in notifying the Indemnifying Party shall relieve the Indemnifying
Party from any obligation hereunder unless (and then solely to the
extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party shall have the right to defend
the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
15 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, in the nature of, or caused by the Third Party Claim, (B) 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, (C)
the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) 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
25
Indemnified Party, and (E) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with ss.8(d)(ii) above,
(A) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party shall 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 unreasonably withheld), and (C) the Indemnifying Party shall 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 unreasonably withheld).
(iv) In the event any of the conditions in ss.8(d)(ii)
above is or becomes unsatisfied, however, (A) 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, the Indemnifying Party in
connection therewith), (B) the Indemnifying Party shall reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees and
expenses), and (C) the Indemnifying Party shall remain responsible for
any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the
Third Party Claim to the fullest extent provided in this ss.8.
(E) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall take
into account the time cost of money (using the Applicable Rate as the discount
rate) in determining Adverse Consequences for purposes of this ss.8. All
indemnification payments under this ss.8 shall be deemed to be adjustments to
the Purchase Price.
(F) OTHER INDEMNIFICATION PROVISIONS. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable or common law remedy any Party may have for breach of
representation, warranty or covenant any Party may have with respect to the
Seller, or the transactions contemplated by this Agreement.
SS.9. TERMINATION OF AGREEMENT.
(A) TERMINATION OF AGREEMENT. This Agreement may be terminated at
any time prior to the Closing:
(i) by the Buyer and the Seller by mutual written consent
at any time prior to the Closing;
26
(ii) by either the Buyer or the Seller if the Closing
shall not have been consummated on or before May 15, 1998, or such
later date as the parties may agree upon;
(iii) by either the Seller or the Buyer if there shall be
any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if consummation
of the transactions contemplated hereby would violate any nonappealable
final order, decree or judgment of any court or governmental body
having competent jurisdiction;
(iv) by the Buyer by giving written notice to the Seller
at any time prior to the Closing (A) in the event the Seller has
breached any representation, warranty or covenant contained in this
Agreement in any material respect, the Buyer has notified the Seller of
the breach, and the breach has continued without cure for a period of
thirty (30) days after the Buyer gave such notice of breach; (B) if the
Buyer objects to any amendment or supplement to the Disclosure Schedule
made by the Seller pursuant to ss.3 hereof within five (5) days after
the Buyer's receipt of notice of the same and the Seller fails to
modify the Disclosure Schedule so as to be acceptable to the Buyer
within five (5) days after Seller's receipt of Buyer's objection, said
notice to specify in reasonable detail the reasons for the Buyer's
objection; or (C) if events occur which render impossible compliance
with one or more conditions set forth in ss.6(a) hereof and such
conditions are not waived by Buyer; provided that such events did not
result from any action or omission by the Buyer which were within its
control and which it was not expressly permitted to take or omit by the
terms of this Agreement; and
(v) by the Seller by giving written notice to the Buyer
at any time prior to the Closing (i) in the event the Buyer has
breached any representation, warranty or covenant contained in this
Agreement in any material respect, the Seller has notified the Buyer of
the breach, and the breach has continued without cure for a period of
thirty (30) days after the Seller gave such notice of breach or (ii) if
events occur which render impossible compliance with one or more
conditions set forth in ss.6(b) hereof, and such conditions are not
waived by Seller; provided that such events did not result from any
action or omission by the Seller which were within the control of such
entity and which such entity was not expressly permitted to take or
omit by the terms of this Agreement.
(B) EFFECT OF TERMINATION. If any Party terminates this Agreement
as permitted by ss.9(a) above, then all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
provided that in the event that such termination results from the willful
failure of one Party to fulfill a condition to the performance of the
obligations of the other Party or to perform a covenant of this Agreement or
from a willful breach by such Party to this Agreement, such Party shall be fully
liable for any and all damages incurred or suffered by the other Party as a
result of such failure or breach. The provisions of ss.5(d) shall survive any
termination hereof pursuant to ss.9(b).
27
SS.10. MISCELLANEOUS.
(A) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its best efforts to advise the other Party prior to
making the disclosure).
(B) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(C) ENTIRE AGREEMENT. This Agreement and the exhibits and
schedules attached hereto constitute the entire agreement between the Parties
and supersede all prior understandings, agreements or representations by or
between the Parties, written or oral, to the extent they have related in any way
to the subject matter hereof.
(D) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval of the other Party; provided however, that the Buyer may (i) assign any
or all of its rights and interests hereunder to one or more of its Affiliates
and (ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the Buyer nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
(E) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(F) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(G) NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Seller: With a copy to:
Naples Rent-All and Sales Company, Inc. Xxxxxxx & Xxxxx
0000 Xxxxx Xxxx. 000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
28
Attn: Xxxxxxx X. Xxxxxxxx, President Attn: Xxxxxxx X. Xxxxx, Esq.
If to the Buyer: With a copy to:
NationsRent of Florida, Inc. Squire, Xxxxxxx & Xxxxxxx L.L.P.
000 Xxxx Xxx Xxxx Xxxx. 0000 Xxxxxxxxxx Center
Suite 1400 00 Xxxxx Xxxx Xxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxx and Attn: Xxxxxxx X. Sugar, Esq.
Xxxxxxxx X. Xxxxx
and
Xxxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxxxxx Xxxxxx
00 Xxxxx xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, request,
demand, claim or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
(H) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the State of
Florida.
(I) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
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.
(J) 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.
29
(K) EXPENSES. Each of the Buyer, the Seller, and the Stockholder
will bear its or his own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.
(L) 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 shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with reasonable 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 Parties intend that each representation,
warranty and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty or covenant contained herein
in any respect, then 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 shall not detract from
or mitigate the fact that the Party is in breach of the first representation,
warranty or covenant.
(M) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(N) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to, notwithstanding the provisions of ss.9(o)
below, an injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the Parties and the matter, in
addition to any other remedy to which it may be entitled, at law or in equity.
(O) SUBMISSION TO JURISDICTION. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in the State of Florida in
any action or proceeding arising out of or relating to this Agreement, agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto.
(P) BULK TRANSFER LAWS. The Buyer acknowledges that the Seller
will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this Agreement.
30
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
BUYER:
NATIONSRENT OF FLORIDA, INC., a Delaware
corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, President
SELLER:
NAPLES RENT-ALL AND SALES COMPANY,
INC., a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxxx, President
