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EXHIBIT 10.26
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 17,
1997, is made by and among National Equipment Services, Inc., a Delaware
corporation (the "Company"), Xxxxx Xxxxxxx (the "Purchaser"), Golder, Thoma,
Xxxxxxx, Xxxxxx Fund V, L.P., a Delaware limited partnership ("GTCR"), Xxxxx
Xxxxxxx ("Xxxxxxx"), Xxxxxx X'Xxxxxx ("X'Xxxxxx") and Xxxx Xxxxxxxxx
("Xxxxxxxxx," and together with GTCR, Xxxxxxx and X'Xxxxxx referred to herein
as the "Existing Stockholders"). Except as otherwise indicated, capitalized
terms used herein are defined in Section 9 hereof.
WHEREAS, pursuant to an Asset Purchase Agreement, dated as of the date
hereof (the "Acquisition Agreement"), by and among the Company, NES Acquisition
Corp., a Delaware corporation and wholly-owned subsidiary of the Company
("Acquisition Corp."), the Purchaser and Lone Star Rentals, Inc., a Texas
corporation ("LSR"), Acquisition Corp. agreed to purchase, and LSR agreed to
sell, substantially all of the assets of LSR (the "Acquisition").
WHEREAS, the purchase and sale of stock contemplated by this Agreement
will be consummated immediately following with the consummation of the
Acquisition pursuant to the terms of the Acquisition Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Authorization of Stock. The Company will authorize the issuance and
sale to the Purchaser of 485 shares of the Company's Class A Common Stock, par
value $.01 per share (the "Class A Common Stock") at a purchase price of
$1000.00 per share, and 1,500 shares of the Company's Class B Common Stock, par
value $.01 per share (the "Class B Common Stock") at a purchase price of $10.00
per share, each having the rights described in the Company's Certificate of
Incorporation (as amended, the "Certificate of Incorporation"). The shares of
Class A Common Stock and Class B Common Stock which are purchased by the
Purchaser hereunder are collectively referred to herein as the "Shares."
2. Purchase and Sale of Shares.
(a) Initial Purchase and Sale. The Company will sell to the Purchaser,
and, on the terms and subject to the conditions set forth herein, the Purchaser
will purchase from the Company, 97 shares of Class A Common Stock and 300
shares of Class B Common Stock, at the purchase price per Share as set forth in
Section 1 above.
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(b) The Initial Closing. The initial closing of the sale and purchase of
Shares (the "Initial Closing") will take place on March 17, 1997, at the
offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, 00000
or such other place as the parties may agree. At the Initial Closing, the
Company will deliver to the Purchaser certificates evidencing the 97 shares of
Class A Common Stock and 300 shares of Class B Common Stock, issued in the name
of the Purchaser, upon payment of the purchase price therefor by certified
check or wire transfer of immediately available funds to the bank account
designated by the Company.
(c) Optional Purchase. The Purchaser may, at his sole discretion, within
120 days of the Initial Closing, elect to purchase up to 388 shares of Class A
Common Stock and up to 1,200 shares of Class B Common Stock at a single closing
(the "Second Closing") by delivering written notice of such election (the
"Purchase Election Notice") which sets forth the number of shares of Class A
Common Stock (the "Second Closing Class A Quantity") and the number of shares
of Class B Common Stock (the "Second Closing Class B Quantity") which the
Purchaser desires to purchase from the Company; provided that the ratio of the
Second Closing Class A Quantity to the Second Closing Class B Quantity shall
equal 97:300. At the Second Closing, the Company will sell to the Purchaser,
and, on the terms and subject to the conditions set forth herein, the Purchaser
will purchase from the Company, the Second Closing Class A Quantity of shares
of Class A Common Stock and Second Closing Class B Quantity of shares of Class
B Common Stock, at the purchase price per Share as set forth in Section 1
above.
(d) The Second Closing. The Second Closing of the sale and purchase of
Shares will take place, at the offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx, 00000 or such other place as the parties may agree
on a date determined by the Company; provided that such date shall be more than
ten (10) business days after the delivery of the Purchase Election Notice. At
the Second Closing, the Company will deliver to the Purchaser certificates
evidencing the Second Closing Class A Quantity of shares of Class A Common
Stock and the Second Closing Class B Quantity of shares of Class B Common
Stock, issued in the name of the Purchaser, upon payment of the purchase price
therefor by certified check or wire transfer of immediately available funds to
the bank account designated by the Company.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser that as of the Initial Closing:
(a) Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power and authority to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement.
(b) Authorization; No Breach. The execution, delivery and performance of
this Agreement has been duly authorized by the Company. This Agreement
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to the
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availability of equitable remedies and to the laws of bankruptcy and other
similar laws affecting creditors' rights generally. The execution and delivery
by the Company of this Agreement and the offering, sale and issuance of the
Shares hereunder, do not and will not (i) conflict with or result in a breach
of the terms, conditions or provisions of, (ii) constitute a default under,
(iii) result in the creation of any lien, security interest, charge or
encumbrance upon the Company's capital stock or assets pursuant to, (iv) give
any third party the right to accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption
or other action by or notice to any court or administrative or governmental
body (other than in connection with certain state and federal securities laws)
pursuant to, the Certificate of Incorporation or the Company's bylaws, or any
law, statute, rule, regulation, instrument, order, judgment or decree to which
the Company is subject or any agreement or instrument to which the Company is a
party.
4. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that as of the Initial Closing:
(a) Authority, etc. The Purchaser has full power, authority and legal
capacity to enter into this Agreement and to perform his obligations hereunder.
(b) Authorization; No Breach. This Agreement has been duly executed and
delivered by the Purchaser. This Agreement constitutes a valid and binding
obligation of the Purchaser enforceable in accordance with its terms, subject
to the availability of equitable remedies and to the laws of bankruptcy and
other similar laws affecting creditors' rights generally. The execution and
delivery by the Purchaser of this Agreement does not and will not (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii)
constitute a default under, (iii) result in the creation of any lien, security
interest, charge or encumbrance upon the Purchaser's assets pursuant to, (iv)
give any third party the right to accelerate any obligation under, (v) result
in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body (other than in connection with certain state and federal
securities laws) pursuant to, any law, statute, rule, regulation, instrument,
order, judgment or decree to which the Purchaser is subject or any agreement or
instrument to which the Purchaser is a party.
(c) Investment Representations. The Purchaser (a) understands that the
Shares have not been, and will not be, registered under the Securities Act of
1933, as amended, or under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering, (b) understands that the Shares are not
transferable, (c) is acquiring the Shares solely for its own account for
investment purposes, and not with a view to the distribution thereof, (d) is an
"accredited investor" as defined in Rule 501(a) under the Securities Act, (e)
acknowledges that it has been furnished with such financial and other
information concerning the Company as it considers necessary in connection with
its purchase of the Shares and evaluating the merits and the risks inherent in
holding the Shares, (f) has carefully reviewed such information and is
thoroughly familiar with the proposed business, operations, properties and
financial condition of the the Company, (g) has discussed with representatives
of the
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Company any questions it may have had with respect thereto has received certain
information concerning the Company and (h) is able to bear the economic risk
and lack of liquidity inherent in holding the Shares.
5. Joinder. The Company, the Purchaser and the Existing Stockholders
hereby agree that the Stockholders Agreement and the Registration Agreement are
hereby amended by adding the Purchaser as a party thereto and as a Stockholder
under the Stockholders Agreement. The Purchaser hereby agrees to be subject to
all of the rights and obligations and to be bound by all of the terms and
conditions set forth in the Stockholders Agreement and the Registration
Agreement to the same extent as if the Purchaser were originally a party
thereto. The Company and the Existing Stockholders hereby waive any and all
requirements and/or breaches arising under the Stockholders Agreement, the
Registration Agreement and any agreements mentioned therein resulting from the
consummation of the transactions contemplated herein.
6. Restrictions on Transfer of Shares. In addition to the restrictions on
transfer set forth in the Stockholders Agreement, the holders of the Shares
shall not sell, transfer, assign pledge or otherwise dispose of (a "Transfer")
any interest in any of the Shares except pursuant to the following provisions:
(a) Retention of Shares. Until the fifth anniversary of the date of this
Agreement, each holder of Shares shall not Transfer any interest in any of the
Shares, except for Exempt Transfers (as defined in Section 6(b) below).
(b) Transfer of Shares. Subject to Section 6(a) above and to any other
restrictions set forth in the Stockholders Agreement and the Acquisition
Agreement, each holder of Shares shall not Transfer any interest in any of the
Shares, except pursuant to (i) the provisions of Section 7 below or the
provisions of Section 5 or 7 of the Stockholders Agreement ("Exempt Transfers")
or (ii) the provisions of this Section 6; provided that in no event shall any
Transfer of Shares pursuant to this Section 6 be made for any consideration
other than cash payable upon consummation of such Transfer or in installments
over time. Prior to making any Transfer other than an Exempt Transfer, each
holder of Shares proposing to Transfer Shares (a "Selling Holder") will give
written notice (the "Sale Notice") to the Company and GTCR. The Sale Notice
will disclose in reasonable detail the identity of the prospective
transferee(s), the number and class of Shares to be transferred and the terms
and conditions of the proposed Transfer. The Selling Holder will not
consummate any Transfer until 110 days after the Sale Notice has been given to
the Company and to GTCR, unless the parties to the Transfer have been finally
determined pursuant to this Section 6 prior to the expiration of such 110-day
period (the date of the first to occur of such events is referred to herein as
the "Authorization Date").
(c) First Refusal Rights. The Company may elect to purchase all (but not
less than all) of the Shares to be transferred upon the same terms and
conditions as those set forth in the Sale Notice by delivering a written notice
of such election to the Selling Holder and GTCR within 60 days after the Sale
Notice has been given to the Company. If the Company has not elected to
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purchase all of the Shares to be Transferred, GTCR may elect to purchase all
(but not less than all) of the Shares to be transferred upon the same terms and
conditions as those set forth in the Sale Notice by giving written notice of
such election to the Selling Holder within 90 days after the Sale Notice has
been given to GTCR. If neither the Company nor GTCR elect to purchase all of
the Shares specified in the Sale Notice, the Selling Holder may Transfer the
Shares specified in the Sale Notice at a price and on terms no more favorable
to the transferee(s) thereof than specified in the Sale Notice during the
60-day period immediately following the Authorization Date. Any Shares not
transferred within such 60-day period will be subject to the provisions of this
Section 6(c) upon subsequent Transfer. The Company may pay the purchase price
for such shares by offsetting amounts outstanding under any bona fide debts
owed by the Selling Holder to the Company.
(d) Certain Permitted Transfers. The restrictions contained in this
Section 6 will not apply with respect to transfers of Shares pursuant to
applicable laws of descent and distribution; provided that such restrictions
will continue to be applicable to the Shares after any such transfer and the
transferees of such Shares have agreed in writing to be bound by the provisions
of this Agreement.
(e) Termination of Restrictions. The restrictions on the Transfer of
Shares set forth in this Section 6 will continue with respect to each Share
until the date on which such Share has been transferred in a transaction
permitted by this Section 6 (except in a transaction contemplated by Section
6(d)); provided that in any event such restrictions will terminate on the first
to occur of a Sale of the Company or a Public Offering.
7. Repurchase of Shares.
(a) In the event the Purchaser ceases to be employed by the Company or its
subsidiaries for any reason (the "Termination"), the Shares (whether held by
the Purchaser or one or more of the Purchaser's transferees, other than the
Company, GTCR or an affiliate of the Company or GTCR) will be subject to
repurchase by the Company and GTCR pursuant to the terms and conditions set
forth in this Section 7 (the "Repurchase Option"). In the event of
Termination, the purchase price for each Share will be the Fair Market Value
for such share.
(b) The Company's board of directors (the "Board") may elect to purchase
all or any portion of the Shares by delivering written notice (the "Repurchase
Notice") to the holder or holders of the Shares within 90 days after the
Termination. The Repurchase Notice will set forth the number of Shares to be
acquired from each holder, the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction.
(c) If for any reason the Company does not elect to purchase all of the
Shares pursuant to the Repurchase Option, GTCR shall be entitled to exercise
the Repurchase Option for the Shares the Company has not elected to purchase
(the "Available Shares"). As soon as practicable after the Company has
determined that there will be Available Shares, but in any event within 45 days
after the Termination, the Company shall give written notice (the "Option
Notice") to GTCR
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setting forth the number of Available Shares and the purchase price for the
Available Shares. GTCR may elect to purchase any or all of the Available
Shares by giving written notice to the Company within one month after the
Option Notice has been given by the Company. As soon as practicable, and in
any event within ten days after the expiration of the one-month period set
forth above, the Company shall notify each holder of Shares as to the number of
Shares being purchased from such holder by GTCR (the "Supplemental Repurchase
Notice"). At the time the Company delivers the Supplemental Repurchase Notice
to the holder(s) of Shares, the Company shall also deliver written notice to
GTCR setting forth the number of shares GTCR is entitled to purchase, the
aggregate purchase price and the time and place of the closing of the
transaction.
(d) The closing of the purchase of the Shares pursuant to the Repurchase
Option shall take place on the date designated by the Company in the Repurchase
Notice or Supplemental Repurchase Notice, which date shall not be more than one
month nor less than five days after the delivery of the later of either such
notice to be delivered. The Company and/or GTCR will pay for the Shares to be
purchased pursuant to the Repurchase Option by delivery of a check or wire
transfer of funds in the aggregate amount of the purchase price for such
shares. In addition, the Company may pay the purchase price for such shares by
offsetting amounts outstanding under any bona fide debts owed by the Purchaser
or LSR to the Company. The Company and GTCR will be entitled to receive
representations and warranties from the sellers as to their title to the Shares
being sold and to require all sellers' signatures be guaranteed.
(e) The right of the Company and GTCR to repurchase Shares pursuant to
this Section 7 shall terminate upon the occurrence of a Public Offering.
8. Legend. The certificates representing the Shares will bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED AS OF _______, 1997, HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION
FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER, CERTAIN RIGHTS OF
FIRST REFUSAL AND CERTAIN OTHER AGREEMENTS SET FORTH
IN A STOCK PURCHASE AGREEMENT BETWEEN THE COMPANY AND
CERTAIN STOCKHOLDERS OF THE COMPANY DATED AS OF MARCH
17, 1997. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF
BUSINESS WITHOUT CHARGE."
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No holder of Shares may sell, transfer or dispose of any Shares (except
pursuant to an effective registration statement under the Securities Act)
without first delivering to the Company an opinion of counsel (reasonably
acceptable in form and substance to the Company) that neither registration nor
qualification under the Securities Act and applicable state securities laws is
required in connection with such transfer.
9. Definitions.
"Fair Market Value" of each Share means the value agreed upon by the
holder thereof and the Board; provided that if the holder thereof and the Board
are unable to agree upon such value, then the holder thereof and the Company
will share the cost, on an equal basis, of a mutually acceptable business
appraiser whose determination will be binding.
"Person" means an individual, a partnership, a limited liability company,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Public Offering" means the sale in an underwritten public offering
registered under the Securities Act of 1933, as amended from time to time, of
shares of the Company's capital stock approved by the Board.
"Registration Agreement" means that certain Registration Agreement, dated
as of June 4, 1996, among the Company and others, as the same may be amended or
amended and restated from time to time.
"Sale of the Company" means any transaction or series of transactions
pursuant to which any person(s) or entity(ies) other than GTCR in the aggregate
acquire(s) (i) capital stock of the Company possessing the voting power (other
than voting rights accruing only in the event of a default, breach or event of
noncompliance) to elect a majority of the Company's board of directors (whether
by merger, consolidation, reorganization, combination, sale or transfer of the
Company's capital stock, shareholder or voting agreement, proxy, power of
attorney or otherwise) or (ii) all or substantially all of the Company's assets
determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Stockholders Agreement" means that certain Stockholders Agreement, dated
as of June 4, 1996, among the Company and others, as the same may be amended or
amended and restated from time to time.
10. Miscellaneous.
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(a) Remedies. The holders of Shares acquired hereunder (directly or
indirectly) will have all of the rights and remedies set forth in this
Agreement, and all of the rights and remedies which such holders have been
granted at any time under any other agreement or contract, and all of the
rights and remedies which such holders have under any law. Any Person having
any rights under any provision of this Agreement will be entitled to enforce
such rights specifically, to recover damages by reason of any breach of any
provision of this Agreement, and to exercise all other rights granted by law.
(b) Amendments and Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision hereof will be effective
against the Company or the Purchaser unless such modification, amendment or
waiver is approved in writing by each of the Company and the Purchaser. The
failure of any party to enforce any provision of this Agreement or under any
agreement contemplated hereby or under the Company's certificate of
incorporation or bylaws will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement, any agreement referred to herein,
the Company's certificate of incorporation or bylaws in accordance with their
terms.
(c) Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith will survive the execution and delivery of this Agreement, regardless
of any investigation made by the Company or the Purchaser or on any of their
behalves.
(d) Successors and Assigns.
(i) Except as otherwise expressly provided herein, all covenants and
agreements contained in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the respective
successors and assigns of such parties whether so expressed or not. In
addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for the Purchaser's benefit as a
holder of Shares are also for the benefit of and enforceable by any
subsequent holder of the Purchaser's Shares.
(ii) If a sale, transfer, assignment or other disposition of any
Shares is made in accordance with the provisions of this Agreement to any
Person, such Person shall, at or prior to the time such securities are
acquired, execute a counterpart of this Agreement with such modifications
thereto as may be necessary to reflect such acquisition, and such other
documents as are necessary to confirm such Person's agreement to become a
party to, and to be bound by, all covenants, terms and conditions of this
Agreement, the Stockholders Agreement and the Registration Agreement,
each as theretofore amended.
(e) Severability. Whenever possible, each provision of this Agreement
will 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 under any applicable law or rule in any jurisdiction,
such provision will be ineffective only to the extent of such invalidity,
illegality or
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unenforceability in such jurisdiction, without invalidating the remainder of
this Agreement in such jurisdiction or any provision hereof in any other
jurisdiction.
(f) Counterparts. This Agreement may be executed simultaneously in
separate counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same Agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(h) Governing Law. The corporate laws of the State of Delaware will
govern all questions concerning the relative rights of the Company and its
securityholders. All other questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in
accordance with the domestic laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of
the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered or
received by certified mail, return receipt requested, or sent by guaranteed
overnight courier service. Notices, demands and communications will be sent to
parties hereto at the addresses indicated below:
Notices to the Company:
----------------------
National Equipment Services, Inc.
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
--------------
Xxxxxxxx and Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Perl
Notices to the Purchaser:
------------------------
Xxxxx Xxxxxxx
00000 Xxxxxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
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with a copy to:
--------------
Xxxxxxx X. Xxxx
000 Xxxx
Xxxxxx, XX 00000
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement on the day and year first above written.
NATIONAL EQUIPMENT SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------
Its: President
------------------------
/s/ Xxxxx X. Xxxxxxx
-----------------------------
XXXXX XXXXXXX
XXXXXX, THOMA, CRESSEY, XXXXXX
FUND V, L.P.
By: GTCR V, L.P.
Its: General Partner
By: Golder, Thoma, Cressey, Rauner, Inc.
Its: General Partner
By: /s/ Xxxx X. Xxxxx
-----------------------------
Its: Principal
/s/ Xxxxx Xxxxxxx
-----------------------------
XXXXX XXXXXXX
/s/ Xxxxxx X'Xxxxxx
-----------------------------
XXXXXX X'XXXXXX
/s/ Xxxx X. Xxxxxxxxx
-----------------------------
XXXX XXXXXXXXX
