Exhibit 10.16
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STOCK PURCHASE AGREEMENT
BY AND AMONG
AERIAL PLATFORMS, INC.,
CARTER B. WILSON,
AND
NATIONAL EQUIPMENT SERVICES, INC.
DATED AS OF FEBRUARY 18, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I--DEFINITIONS
1.1 Definitions............................................................................................ 1
1.2 Other Definitional Provisions.......................................................................... 4
1.3 Cross Reference of Other Definitions................................................................... 5
ARTICLE II--PURCHASE AND SALE OF STOCK................................................................................ 6
2.1 Stock Purchase......................................................................................... 6
2.2 Purchase Price for Company Stock....................................................................... 6
2.3 Purchase Price Adjustments............................................................................. 6
2.4 Distribution of Holdback............................................................................... 8
2.5 Closing Transactions................................................................................... 8
ARTICLE III--CONDITIONS TO CLOSING.................................................................................... 9
3.1 Conditions to the Purchaser's Obligations.............................................................. 9
3.2 Conditions to the Sellers' Obligations................................................................. 11
ARTICLE IV--COVENANTS PRIOR TO CLOSING................................................................................ 12
4.1 Affirmative Covenants of the Company and the Seller.................................................... 13
4.2 Negative Covenants of the Company and the Seller...................................................... 14
4.3 Covenants of Purchaser................................................................................. 14
ARTICLE V--REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY...................................................... 15
5.1 Organization and Corporate Power....................................................................... 15
5.2 Authorization of Transactions.......................................................................... 15
5.3 Capitalization......................................................................................... 15
5.4 Subsidiaries; Investments.............................................................................. 16
5.5 Absence of Conflicts................................................................................... 16
5.6 Financial Statements and Related Matters............................................................... 16
5.7 Absence of Undisclosed Liabilities..................................................................... 16
5.8 Absence of Certain Developments........................................................................ 17
5.9 Title to Properties.................................................................................... 18
5.10 Taxes.................................................................................................. 19
5.11 Contracts and Commitments.............................................................................. 20
5.12 Proprietary Rights..................................................................................... 21
5.13 Litigation; Proceedings................................................................................ 21
5.14 Brokerage.............................................................................................. 22
5.15 Governmental Licenses and Permits...................................................................... 22
5.16 Employees.............................................................................................. 22
5.17 Employee Benefit Plans................................................................................. 22
5.18 Insurance.............................................................................................. 23
5.19 Officers and Directors; Bank Accounts.................................................................. 23
5.20 Affiliate Transactions................................................................................. 23
5.21 Compliance with Laws................................................................................... 24
5.22 Environmental Matters.................................................................................. 24
5.23 Disclosure............................................................................................. 25
5.24 Closing Date........................................................................................... 25
ARTICLE VI--REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER..................................................... 25
6.1 Authorization of Transactions.......................................................................... 25
6.2 Absence of Conflicts................................................................................... 25
6.3 Brokerage.............................................................................................. 26
6.4 Shares................................................................................................. 26
6.5 Investment in Subordinated Notes and NES Common Stock.................................................. 26
6.6 Closing Date........................................................................................... 26
ARTICLE VI--REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER.................................................. 27
7.1 Organization and Corporate Power....................................................................... 27
7.2 Authorization.......................................................................................... 27
7.3 No Violation........................................................................................... 27
7.4 Governmental Authorities and Consents.................................................................. 27
7.5 Litigation............................................................................................. 27
7.6 Brokerage.............................................................................................. 27
7.7 Closing Date........................................................................................... 28
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ARTICLE VIII--TERMINATION 28
8.1 Termination............................................................................................ 28
8.2 Effect of Termination.................................................................................. 28
ARTICLE IX--INDEMNIFICATION AND RELATED MATTERS....................................................................... 28
9.1 Survival............................................................................................... 28
9.2 Indemnification........................................................................................ 29
ARTICLE X--ADDITIONAL AGREEMENTS...................................................................................... 33
10.1 NES Securities......................................................................................... 33
10.2 Continuing Assistance.................................................................................. 33
10.3 Tax Matters............................................................................................ 34
10.4 Press Releases and Announcements....................................................................... 34
10.5 Further Transfers...................................................................................... 34
10.6 Specific Performance................................................................................... 34
10.7 Transition Assistance.................................................................................. 34
10.8 Expenses............................................................................................... 34
10.9 Exclusivity............................................................................................ 35
10.10 Books and Records...................................................................................... 35
10.11 Noncompetition, Nonsolicitation and Confidentiality.................................................... 35
ARTICLE XI--MISCELLANEOUS............................................................................................. 37
11.1 Amendment and Waiver................................................................................... 37
11.2 Notices................................................................................................ 37
11.3 Binding Agreement; Assignment.......................................................................... 38
11.4 Severability........................................................................................... 38
11.5 No Strict Construction................................................................................. 39
11.6 Captions............................................................................................... 39
11.7 Entire Agreement....................................................................................... 39
11.8 Counterparts........................................................................................... 39
11.9 Governing Law.......................................................................................... 39
11.10 Parties in Interest.................................................................................... 39
INDEX OF EXHIBITS
Exhibit A - Form of Subordinated Promissory Note
Exhibit B - Form of Employment Agreement
Exhibit C - Form of Finder's Fee Agreement
Exhibit D - Form of Stock Transfer Agreement
Exhibit E - Form of Opinion of Counsel to the Company and the Seller
INDEX OF SCHEDULES
Specified Leased Equipment Schedule
Organization Schedule
Conflicts Schedule
Financial Statements Schedule
Developments Schedule
Leased Real Property Schedule
Taxes Schedule
Contracts Schedule
Proprietary Rights Schedule
Litigation Schedule
Brokerage Schedule
Permits Schedule
Employees Schedule
Benefit Plans Schedule
Insurance Schedule
Officers, Directors and Bank Accounts Schedule
Affiliated Transactions Schedule
Environmental Schedule
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of February 18, 1997, by and among
AERIAL PLATFORMS, INC., a Georgia corporation (the "Company"), Carter B. Wilson
(the "Seller"), and NATIONAL EQUIPMENT SERVICES, INC., a Delaware corporation
(the "Purchaser"). The Company, the Seller and the Purchaser are referred to
herein collectively as the "Parties" and individually as a "Party."
WHEREAS, the authorized capital stock of the Company consists of 10,000 shares
of Common Stock, par value $0.01 per share (the "Common Stock"), of which 500
shares are issued and outstanding;
WHEREAS, the Seller owns beneficially and of record 100% of the issued and
outstanding Common Stock; and
WHEREAS, the Purchaser desires to acquire from the Seller, and the Seller
desires to sell to the Purchaser, all of the Common Stock owned by the Seller
(collectively, the "Acquired Stock").
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes hereof, the following terms, when used herein
with initial capital letters, shall have the respective meanings set forth
herein:
"Affiliate" of any Person means any other Person controlling, controlled by or
under common control with such first Person, where "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities or
otherwise.
"Affiliated Group" means an affiliated group as defined in Section 1504 of the
Code (or any similar combined, consolidated or unitary group defined under
state, local or foreign income Tax law).
"Agreement" means this Stock Purchase Agreement, including all Exhibits and
Schedules hereto, as it may be amended from time to time in accordance with its
terms.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Environmental Affiliates" of any Person means, with respect to any particular
matter, all other Persons whose liabilities or obligations with respect to that
particular matter have been assumed by, or are otherwise deemed by law to be
those of, such first Person.
"Environmental and Safety Requirements" means all federal, state, local and
foreign statutes, regulations, ordinances and similar provisions having the
force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety and pollution or protection of the
environment, including all such standards of conduct and bases of obligations
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or by-products,
asbestos, polychlorinated biphenyls (or PCBs), noise or radiation.
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"Environmental Lien" means any Lien, whether recorded or unrecorded, in favor
of any governmental entity or any department, agency or political subdivision
thereof relating to any liability of the Company or the Seller or any
Environmental Affiliate of the Company or the Seller arising under any
Environmental and Safety Requirement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"GAAP" means, at a given time, United States generally accepted accounting
principles, consistently applied.
"Indebtedness" of any Person means, without duplication: (a) indebtedness for
borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business) and any commitment by which such Person assures
a creditor against loss, including contingent reimbursement obligations with
respect to letters of credit; (b) indebtedness guaranteed in any manner by such
Person, including a guarantee in the form of an agreement to repurchase or
reimburse; (c) obligations under capitalized leases in respect of which such
Person is liable, contingently or otherwise, as obligor, guarantor or otherwise,
or in respect of which obligations such Person assures a creditor against loss;
and (d) any unsatisfied obligation of such Person for "withdrawal liability" to
a "multiemployer plan," as such terms are defined under ERISA.
"Insider" means, any officer, director, employee, stockholder, partner or
Affiliate, as applicable, of the Company or any individual related by marriage
or adoption to any such individual or any entity in which any such Person owns
any beneficial interest.
"Knowledge" means, with respect to a Person, (a) the actual knowledge of such
Person (which includes the actual knowledge of all officers, directors and
executive employees of such Person) and (b) the knowledge which a prudent
business person would have obtained in the conduct of his or her business after
making reasonable inquiry and exercising reasonable diligence with respect to
the particular matter in question.
"Licenses" means all permits, licenses, franchises, certificates, approvals
and other authorizations of foreign, federal, state and local governments or
other similar rights.
"Lien" means any mortgage, pledge, security interest, encumbrance, easement,
restriction, charge, or other lien.
"Loss" means, with respect to any Person, any diminution in value,
consequential or other damage, liability, demand, claim, action, cause of
action, cost, damage, deficiency, Tax, penalty, fine or other loss or expense,
whether or not arising out of a third party claim, including all interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid or
incurred in connection with any action, demand, proceeding, investigation or
claim by any third party (including any governmental entity or any department,
agency or political subdivision thereof) against or affecting such Person or
which, if determined adversely to such Person, would give rise to, evidence the
existence of, or relate to, any other Loss and the investigation, defense or
settlement of any of the foregoing, together with interest thereon from the date
on which such Person provides the written notice of the related claim as
described in Section 9.2 through and including the date on which the total
amount of the claim, including such interest, is recovered or recouped pursuant
to Article IX.
"Material Adverse Effect" means any material adverse effect on the business,
financial condition, operations, results of operations, or future prospects of
the Company.
"Net Equity" means (i) the Company's assets minus (ii) the Company's
liabilities, determined on a consolidated basis in accordance with GAAP.
"Ordinary Course of Business" means the ordinary course of the Company's
business consistent with past practice (including, without limitation, with
respect to collection of accounts receivable, purchases of inventory and
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supplies, repairs and maintenance, payment of accounts payable and accrued
expenses, levels of capital expenditures and operation of cash management
practices generally).
"Person" means an individual, a partnership, a corporation, an association, a
limited liability company, a joint stock company, a trust, a joint venture, an
unincorporated organization, a governmental entity or any department, agency or
political subdivision thereof and any other entity.
"Proprietary Rights" means any and all patents, patent applications,
trademarks, service marks, trademark or service mark applications and
registrations, trade and corporate names, copyrights, copyright applications and
registrations, trade secrets, know-how, technology, computer software and
software systems, business and marketing plans, customer and supplier lists,
confidential information and all other proprietary property, rights and
interests.
"Release" shall have the meaning set forth in CERCLA.
"Subsidiary" means, with respect to any Person, any corporation a majority of
the total voting power of shares of stock of which is entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or any partnership, association or other
business entity a majority of the partnership or other similar ownership
interest of which is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes of this definition, a Person is deemed to have a majority ownership
interest in a partnership, association or other business entity if such Person
is allocated a majority of the gains or losses of such partnership, association
or other business entity or is or controls the managing director or general
partner of such partnership, association or other business entity.
"Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
"Taxes" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes imposed pursuant to Section 59A
of the Code), customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
or other tax, fee, assessment or charge of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Transaction Documents" means this Agreement, and all other agreements,
instruments, certificates and other documents to be entered into or delivered by
any Party in connection with the transactions contemplated to be consummated
pursuant to this Agreement.
"Treasury Regulations" means the United States Treasury Regulations
promulgated pursuant to the Code.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Accounting Terms. Accounting terms which are not otherwise defined in
this Agreement have the meanings given to them under GAAP. To the extent that
the definition of accounting term that is defined in this Agreement is
inconsistent with the meaning of such term under GAAP, the definition set forth
in this Agreement will control.
(b) "Hereof," etc. The terms "hereof," "herein" and "hereunder" and terms of
similar import are references to this Agreement as a whole and not to any
particular provision of this Agreement. Section, clause, Schedule and Exhibit
references contained in this Agreement are references to Sections, clauses,
Schedules and Exhibits in or to this Agreement, unless otherwise specified.
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(c) Successor Laws. Any reference to any particular Code section or any other
law or regulation will be interpreted to include any revision of or successor to
that section regardless of how it is numbered or classified.
1.3 CROSS REFERENCE OF OTHER DEFINITIONS. Each capitalized term listed below
is defined in the corresponding Section of this Agreement:
Term Section
---- -------
Acquired Stock Recitals
Actual Net Equity 2.3(b)
Applicable Limitation Date 9.1
Cap 9.2(b)(ii)
Cash Portion 2.2
Closing 2.5(a)
Closing Date 2.5(a)
Closing Review 2.3(b)
Closing Transactions 2.5(b)
COBRA 5.17(a)
Common Stock Recitals
Company Preface
Confidential Information 10.11(c)
Draft Computation 2.3(b)
Employment Agreement 2.5(g)
ERISA 5.17(a)
Financial Statements 5.6(a)
Finder's Fee Agreement 2.5(h)
Firm 2.3(b)
Indemnified Party 9.2(e)
Indemnifying Party 9.2(e)
Holdback 2.2
Latest Balance Sheet 5.6(a)
Leased Properties 5.9(b)
NES Class A Common 2.2
NES Class B Common 2.2
NES Common Stock 2.2
NES Securities 6.5
Net Equity Shortfall 2.3(b)
Noncompete Period 10.11(a)
Noncompete Payment 10.11(a)
Objection Notice 2.3(b)
Party Preface
Pending Claim 2.4
Purchase Price 2.2
Purchased Equipment Item 2.3(c)
Purchaser Preface
Purchaser Parties 9.2(a)
Remaining Holdback 2.4
Seller Preface
Seller Parties 9.2(c)
Subordinated Notes 2.2
Transaction Expenses 10.8
ARTICLE II
PURCHASE AND SALE OF STOCK
2.1 STOCK PURCHASE. On and subject to the terms and conditions set forth in
this Agreement, on the Closing Date, the Purchaser shall purchase from the
Seller, and the Seller shall sell and transfer to the Purchaser, all of the
shares of Common Stock owned by the Seller, free and clear of any Liens.
2.2 PURCHASE PRICE FOR COMPANY STOCK. The aggregate purchase price to be
paid to the Seller for the Acquired Stock (the "Purchase Price") is $4,350,000,
which amount shall be paid as follows: (a) the Purchaser shall deliver to the
Seller $3,750,000 (as adjusted pursuant to Section 2.3 below) in cash (as
adjusted, the "Cash Portion"); (b) the Purchaser shall issue to the Seller
$350,000 of Subordinated Promissory Notes in the form of Exhibit A attached
hereto (the "Subordinated Notes"); (c) the Purchaser shall issue to the Seller
97 shares of its
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Class A Common Stock, par value $.01 per share (the "NES Class A Common") which
NES Class A Common, for purposes of this Agreement, shall be deemed to have a
fair market value of $1,000 per share and $97,000 in the aggregate; (d) the
Purchaser shall issue to the Seller 300 shares of its Class B Common Stock, par
value $.01 per share (the "NES Class B Common" and, collectively with the NES
Class A Common, the "NES Common Stock") which NES Class B Common, for purposes
of this Agreement, shall be deemed to have a fair market value of $10 per share
and $3,000 in the aggregate; and (e) the Purchaser shall maintain $150,000 in a
book entry account of the Purchaser (the "Holdback"). The Holdback shall be
available to satisfy any amounts owing to the Purchaser pursuant to Section 2.3
and/or Section 9.2. The Cash Portion is subject to adjustment pursuant to
Section 2.3.
2.3 PURCHASE PRICE ADJUSTMENTS.
(a) Adjustment at Closing for Bonus Payment. Notwithstanding anything herein
to the contrary, and in addition to any other adjustments set forth in this
Agreement, the Cash Portion will be reduced dollar-for-dollar by an amount equal
to the aggregate amount of any bonuses or other cash compensation paid by the
Company to Carter Wilson between December 1, 1996 and the Closing (other than
Carter Wilson's base salary paid in the Ordinary Course of Business).
(b) Post-Closing Adjustment for Net Equity. Within 90 days after the Closing
Date, the Purchaser and its auditors will conduct a review (the "Closing
Review") of the Net Equity as of the close of business on the day before the
Closing Date and will prepare and deliver to the Seller a computation of the Net
Equity as of the close of business on the day before the Closing Date (the
"Draft Computation"). The Purchaser and its auditors will give the Seller and
his auditors an opportunity to observe the Closing Review and will make
available to such Persons all records and work papers used in preparing the
Draft Computation. If the Seller disagrees with the computation of the Net
Equity reflected on the Draft Computation, the Seller may, within thirty (30)
days after receipt of the Draft Computation, deliver a notice (an "Objection
Notice") to the Purchaser setting forth the Seller's calculation of the amount
of the Net Equity as of the close of business on the day before the Closing
Date. The Purchaser and the Seller will use reasonable efforts to resolve any
disagreements as to the computation of the Net Equity, but if they do not obtain
a final resolution within 30 days after the Purchaser has received the Objection
Notice, the Purchaser and the Seller will jointly retain an independent
accounting firm of recognized national or regional standing (the "Firm") to
resolve any remaining disagreements. If the Purchaser and the Seller are unable
to agree on the choice of the Firm, the Firm will be a "big-six" accounting firm
selected by lot (after excluding one firm designated by the Purchaser and one
firm designated by the Seller). The Purchaser and the Seller will direct the
Firm to render a determination within 15 days of its retention and the
Purchaser, the Seller and their respective agents will cooperate with the Firm
during its engagement. The Firm will consider only those items and amounts in
the Draft Computation set forth in the Objection Notice which the Purchaser and
the Seller are unable to resolve. The Firm's determination will be based on the
definition of Net Equity included herein. The determination of the Firm will be
conclusive and binding upon the Purchaser and the Seller. The Purchaser and the
Seller shall bear the costs and expenses of the Firm based on the percentage
which the portion of the contested amount not awarded to each Party bears to the
amount actually contested by such Party. The amount of the Net Equity, as
finally determined pursuant to this Section 2.3(a), is referred to herein as the
"Actual Net Equity." If the Actual Net Equity is less than $1,350,000, the
Purchaser shall be entitled to receive from the Holdback, within two (2)
Business Days after the determination thereof, the amount of such shortfall (the
"Net Equity Shortfall"); provided, however, that if the amount then left in the
Holdback is less than the amount of the Net Equity Shortfall, the Seller shall
pay to the Purchaser, within two (2) Business Days after the determination of
the Actual Net Equity, the amount by which the Holdback is less than Net Equity
Shortfall by wire transfer or delivery of other immediately available funds.
(c) Post-Closing Adjustment for Leased Rental Equipment. At the Closing, the
Company shall purchase all of the items of equipment set forth on the "Specified
Leased Equipment Schedule" attached hereto from the owners thereof (any such
item of equipment so purchased is hereinafter referred to as a "Purchased
Equipment Item"). With respect to any purchase by the Company of a Purchased
Equipment Item: (i) to the extent the purchase price actually paid by the
Company for such Purchased Equipment Item is less than the "Payoff Amount" set
forth on the Specified Leased Equipment Schedule for such Purchased Equipment
Item, the Purchaser shall pay to the Seller, on the date of purchase of such
Purchased Equipment Item, the amount of such deficit by wire transfer or
delivery of other immediately available funds, and (ii) to the extent the
purchase price actually paid by the Company for such
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Purchased Equipment Item is greater than the "Payoff Amount" set forth on the
Specified Leased Equipment Schedule for such Purchased Equipment Item, the
Purchaser shall be entitled to receive from the Holdback, on the date of
determination thereof, the amount of such excess; provided, however, that if the
amount then left in the Holdback is less than the amount of such excess, the
Seller shall pay to the Purchaser, on the date of determination of such excess,
the amount by which the Holdback is less than such excess by wire transfer or
delivery of other immediately available funds.
(d) Accounts Receivable Adjustment. Notwithstanding anything herein to the
contrary, and in addition to any other adjustments set forth in this Agreement,
the Purchase Price will be reduced dollar-for-dollar by the aggregate amount of
the notes and accounts receivable of the Company in existence as of the Closing
(net of the $22,000 reserve for doubtful accounts) (such net amount, the
"Accounts Receivable"), which are uncollected by the Company (the "Uncollected
Receivables Amount") as of the 120th day following the Closing Date (the
"Receivables Determination Date"). If there is an Uncollected Receivables
Amount, the Purchaser shall be entitled to receive the Uncollected Receivables
Amount from the Holdback within two (2) Business Days after the Receivables
Determination Date; provided, however, that if the amount then left in the
Holdback is less than the amount of the Uncollected Receivables Amount, the
Seller shall pay to the Purchaser, within two (2) Business Days after the
Receivables Determination Date, the amount by which the Holdback is less than
Uncollected Receivables Amount by wire transfer or delivery of other immediately
available funds. For the purpose of determining amounts collected by the
Company with respect to the Accounts Receivable, (i) in the absence of a bona
fide dispute between an account debtor and the Company regarding receivables of
such account debtor accrued prior to the Closing Date, all payments by an
account debtor shall first be applied to the oldest outstanding invoice due from
that account debtor, and (ii) in the case of a dispute between the Company and
an account debtor with respect to a particular invoice, all payments shall be
first applied to the next oldest invoice due from that account debtor. The
Company shall not be required to retain a collection agency, bring any suit, or
take any other action out of the ordinary course of business to collect any of
the Accounts Receivable. To the extent that the Company has not collected the
full amount of the Accounts Receivable and the Purchaser has been compensated
therefor in accordance with this Section, the Company shall assign any such
uncollected Accounts Receivable to the Seller.
2.4 DISTRIBUTION OF HOLDBACK. On the 130th day after the Closing Date, the
Purchaser shall pay to the Seller an amount equal to the amount of the Holdback,
if any, remaining after (i) all amounts owing to the Purchaser pursuant to
Section 2.3 have been satisfied and (ii) all claims of the Purchaser under
Section 9.2 which have theretofore been finally resolved have been satisfied
(the "Remaining Holdback") less any amount for which the Purchaser claims, prior
to such 130th day, that it is entitled to receive indemnification pursuant to
Section 9.2 (each, a "Pending Claim"). As soon as practicable following final
resolution of all Pending Claims, the Purchaser shall pay to the Seller an
aggregate amount equal to the portion, if any, of the Holdback which remains
after payment of the Remaining Holdback and final resolution of all Pending
Claims.
2.5 CLOSING TRANSACTIONS.
(a) Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Kirkland & Ellis, 200 East
Randolph Drive, Chicago, Illinois 60601, commencing at 10:00 a.m. on February
18, 1997, or at such other place or on such other date as may be mutually
agreeable to the Purchaser and the Seller. The date and time of the Closing are
herein referred to as the "Closing Date."
(b) Closing Transactions. Subject to the conditions set forth in this
Agreement, the Parties shall consummate the following transactions (the "Closing
Transactions") on the Closing Date:
(i) the Seller shall deliver to the Purchaser certificates representing
the Acquired Stock owned by the Seller, duly endorsed for transfer or
accompanied by duly executed stock powers with all requisite state and federal
transfer stamps affixed thereto, and with signatures guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange;
(ii) The Purchaser shall deliver to the Seller the Cash Portion in
immediately available funds;
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(iii) The Purchaser shall deliver to the Seller the Subordinated Notes
for the Purchase Price and the Noncompete Payment;
(iv) The Purchaser shall deliver to the Seller the certificates
evidencing the NES Common Stock; and
(v) the Company, the Seller and the Purchaser, as applicable, shall
deliver the opinions, certificates and other documents and instruments
required to be delivered by or on behalf of such Party under Article III.
ARTICLE III
CONDITIONS TO CLOSING
3.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligation of the
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of the following conditions as of the Closing Date:
(a) The representations and warranties set forth in Article V and Article VI
hereof shall be true and correct in all material respects at and as of the
Closing Date as though then made and as though the Closing Date were substituted
for the date of this Agreement throughout such representations and warranties
(without taking into account any disclosures made by the Company or the Seller
to the Purchaser pursuant to Sections 4.1(g), 5.24 and 6.6 hereof);
(b) The Company and the Seller shall have performed and complied with all of
the covenants and agreements required to be performed by each of them under this
Agreement on or prior to the Closing;
(c) All consents by third parties that are required for the transfer of the
Acquired Stock to the Purchaser, and the consummation of the other transactions
contemplated hereby or that are required in order to prevent a breach of, a
default under, a termination or modification of, or any acceleration of, any
obligations under any material contract to which the Company is a party shall
have been obtained, and payoff letters with respect to all of the Company's
Indebtedness outstanding as of the Closing and releases of any and all Liens
held by third parties against property of the Company shall have been obtained,
all on terms reasonably satisfactory to the Purchaser;
(d) All governmental filings, authorizations and approvals that are required
for the transfer of the Acquired Stock to the Purchaser and the consummation of
the oth er transactions contemplated hereby shall have been duly made and
obtained on terms reasonably satisfactory to the Purchaser;
(e) 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
judgment, decree, injunction, order or ruling would prevent the performance of
this Agreement or any of the transactions contemplated hereby, declare unlawful
the transactions contemplated by this Agreement, cause such transactions to be
rescinded or materially and adversely affect the right of the Purchaser to own,
operate or control the Company, and no judgment, decree, injunction, order or
ruling shall have been entered which has any of the foregoing effects;
(f) Except as otherwise specified in writing by the Purchaser to the Seller,
all of the Company's directors shall have resigned and such resignations shall
be effective as of the Closing Date;
(g) Carter Wilson and the Company shall have entered into an agreement
relating to his employment with the Company (the "Employment Agreement"),
substantially in the form of Exhibit B attached hereto, and the Employment
Agreement shall be in full force and effect;
(h) Carter Wilson and the Company shall have entered into an agreement
relating to finder's fees for the possible acquisitions of West Georgia Aerials
and/or Balwin Rental by the Company (the "Finder's Fee Agreement"),
substantially in the form of Exhibit C attached hereto, and the Finder's Fee
Agreement shall be in full force and effect;
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(i) Carter Wilson and the Company shall have entered into an agreement
relating to restrictions on transfer of the NES Common Stock (the "Stock
Transfer Agreement"), substantially in the form of Exhibit D attached hereto,
and the Stock Transfer Agreement shall be in full force and effect;
(j) Purchaser shall have received an opinion, dated the Closing Date, of
Kearns, Benedict & Harp, counsel to the Company and the Seller, substantially in
the form of Exhibit E attached hereto;
(k) On or prior to the Closing Date, the Seller shall have delivered to
Purchaser all of the following:
(i) a certificate from the Company and the Seller in a form reasonably
satisfactory to the Purchaser, dated the Closing Date, stating that the
preconditions specified in Sections 3.1(a) through (i) have been satisfied;
(ii) copies of all third party and governmental consents, approvals,
filings, releases and terminations required in connection with the
consummation of the transactions contemplated herein;
(iii) certified copies of the resolutions of the Company's board of
directors approving the transactions contemplated by this Agreement;
(iv) certificates of the secretary of state of the State of Georgia and
each state where the Company is qualified to do business providing that the
Company is in good standing;
(v) copies of the resignations described in Section 3.1(f);
(vi) all documents and records relating to the business of the Company
that are in the Seller's possession;
(vii) landlord consents and estoppel certificates from the Company's
landlords in form and substance satisfactory to the Purchaser; and
(viii) such other documents or instruments as the Purchaser may reasonably
request to effect the transactions contemplated hereby;
(l) Purchaser shall have obtained on terms and conditions satisfactory to it
all of the debt and equity financing required in order to consummate the
transactions contemplated hereby, and to fund the working capital requirements
of the Company after the Closing; and
(m) All proceedings to be taken by the Company and the Seller in connection
with the consummation of the Closing Transactions and the other transactions
contemplated hereby and all certificates, opinions, instruments and other
documents required to be delivered by the Company and the Seller to effect the
transactions contemplated hereby reasonably requested by the Purchaser shall be
reasonably satisfactory in form and substance to the Purchaser.
Any condition specified in this Section 3.1 may be waived by the Purchaser;
provided that no such waiver shall be effective unless it is set forth in a
writing executed by the Purchaser.
3.2 CONDITIONS TO THE SELLERS' OBLIGATIONS. The obligation of the Seller to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions as of the Closing Date:
(a) The representations and warranties set forth in Article VII shall be true
and correct in all material respects at and as of the Closing Date as though
then made and as though the Closing Date were substituted for the date of this
Agreement throughout such representations and warranties (without taking into
account any disclosures made by the Purchaser to the Seller pursuant to Sections
4.3(a) and 7.7 hereof);
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(b) The Purchaser shall have performed and complied with all of the covenants
and agreements required to be performed by it under this Agreement on or prior
to the Closing;
(c) All governmental filings, authorizations and approvals that are required
for the transfer of the Acquired Stock to the Purchaser and the consummation of
the other transactions contemplated hereby shall have been duly made and
obtained on terms reasonably satisfactory to the Seller;
(d) No action, suit, or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable judgment, decree,
injunction, order or ruling would prevent the performance of this Agreement or
any of the transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement, cause such transactions to be rescinded or
materially and adversely affect the right of the Purchaser to own, operate or
control the Company, and no judgment, decree, injunction, order or ruling shall
have been entered which has any of the foregoing effects;
(e) Carter Wilson and the Company shall have entered into the Employment
Agreement, and the Employment Agreement shall be in full force and effect;
(f) Carter Wilson and the Company shall have entered into the Finder's Fee
Agreement, and the Finder's Fee Agreement shall be in full force and effect;
(g) Carter Wilson and the Company shall have entered into the Stock Transfer
Agreement, and the Stock Transfer Agreement shall be in full force and effect;
(h) On or prior to the Closing Date, the Purchaser shall have delivered to
the Seller all of the following:
(i) a certificate from the Purchaser in a form reasonably satisfactory
to the Seller, dated the Closing Date, stating that the preconditions
specified in Sections 3.2(a) through (d), inclusive, have been satisfied;
(ii) certified copies of the resolutions of the Purchaser's board of
directors approving the transactions contemplated by this Agreement; and
(iii) such other documents or instruments as the Seller may reasonably
request to effect the transactions contemplated hereby;
(i) All proceedings to be taken by the Purchaser in connection with the
consummation of the Closing Transactions and the other transactions contemplated
hereby and all certificates, opinions, instruments and other documents required
to be delivered by the Purchaser to effect the transactions contemplated hereby
reasonably requested by the Seller shall be reasonably satisfactory in form and
substance to the Seller;
(j) Payoff letters with respect to all of the Company's Indebtedness
outstanding as of the Closing and releases of any and all Liens held by third
parties against property of the Company shall have been obtained; and
(k) All guarantees of the Seller with respect to the Company's real estate
lease shall have been released or the Seller shall have received an indemnity
from the Purchaser in form and substance reasonably satisfactory to the Seller
providing reasonably adequate security that the Seller will not become liable
under such guarantees.
Any condition specified in this Section 3.2 may be waived by the Seller;
provided that no such waiver shall be effective unless it is set forth in a
writing executed by the Seller.
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ARTICLE IV
COVENANTS PRIOR TO CLOSING ARTICLE IV
4.1 AFFIRMATIVE COVENANTS OF THE COMPANY AND THE SELLER. Prior to the
Closing, unless the Purchaser otherwise agrees in writing, the Seller shall
cause the Company to, and in the case of Sections 4.1(f), (g), (h) and (i) the
Seller also shall:
(a) conduct its business and operations only in the Ordinary Course of
Business;
(b) keep in full force and effect its corporate existence and all rights,
franchises and intellectual property relating or pertaining to its business and
use its best efforts to cause its current insurance (or reinsurance) policies
not to be canceled or terminated or any of the coverage thereunder to lapse;
(c) use its best efforts to carry on the business of the Company in the same
manner as presently conducted and to keep the Company's business organization
and properties intact, including its present business operations, physical
facilities, working conditions and employees and its present relationships with
lessors, licensors, suppliers and customers and others having business relations
with it;
(d) maintain the material assets of the Company in good repair, order and
condition (normal wear and tear excepted) consistent with current needs, replace
in accordance with prudent practices its inoperable, worn out or obsolete assets
with assets of good quality consistent with prudent practices and current needs
and, in the event of a casualty, loss or damage to any of such assets or
properties prior to the Closing Date, whether or not the Company is insured,
either repair or replace such damaged property or use the proceeds of such
insurance in such other manner as mutually agreed upon by the Seller and the
Purchaser;
(e) maintain the books, accounts and records of the Company in accordance
with past custom and practice as used in the preparation of the Financial
Statements;
(f) encourage employees to continue their employment with the Company after
the Closing;
(g) promptly (once the Company or the Seller obtains Knowledge thereof)
inform Purchaser in writing of any variances from the representations and
warranties contained in Article V or Article VI hereof or any breach of any
covenant hereunder by the Company or the Seller;
(h) cooperate with the Purchaser and use best efforts to cause the conditions
to the Purchaser's obligation to close to be satisfied (including, without
limitation, the execution and delivery of all agreements contemplated hereunder
to be so executed and delivered and the making and obtaining of all third party
and governmental notices, filings, authorizations, approvals, consents, releases
and terminations); and
(i) cooperate with the Purchaser in the Purchaser's investigation of the
business and properties of the Company, to permit the Purchaser and its
employees, agents, accounting, legal and other authorized representatives to (i)
have full access to the premises, books and records of the Company at reasonable
hours, (ii) visit and inspect any of the properties of the Company, and (iii)
discuss the affairs, finances and accounts of the Company with the directors,
officers, partners, key employees, key customers, key sales representatives, key
suppliers and independent accountants of the Company.
4.2 NEGATIVE COVENANTS OF THE COMPANY AND THE SELLER. Prior to the Closing,
unless Purchaser otherwise agrees in writing, the Seller shall cause the Company
to not:
(a) take any action that would require disclosure under Section 5.8;
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(b) make any loans, enter into any transaction with any Insider or make or
grant any increase in any employee's or officer's compensation or make or grant
any increase in any employee benefit plan, incentive arrangement or other
benefit covering any of the employees of the Company;
(c) establish or, except in accordance with past practice, contribute to any
pension, retirement, profit sharing or stock bonus plan or multiemployer plan
covering the employees of the Company;
(d) except as specifically contemplated by this Agreement, enter into any
contract, agreement or transaction, other than in the Ordinary Course of
Business and at arm's length with unaffiliated Persons;
(e) declare, pay, make or otherwise effectuate any dividends, distributions,
redemptions, equity repurchases or other transactions involving the Company's
capital stock or equity securities;
(f) sell, transfer, contribute, distribute, or otherwise dispose of any
securities or assets of the Company, or agree to do any of the foregoing, to
any Person, or negotiate or have any discussions with any Person with respect to
any of the foregoing, other than in the Ordinary Course of Business.
4.3 COVENANTS OF PURCHASER. Prior to the Closing, the Purchaser shall:
(a) promptly (once it obtains Knowledge thereof) inform the Seller in writing
of any variances from the representations and warranties contained in Article
VII or any breach of any covenant hereunder by Purchaser; and
(b) cooperate with the Seller and use its best efforts to cause the
conditions to the Seller's obligation to close to be satisfied (including,
without limitation, the execution and delivery of all agreements contemplated
hereunder to be so executed and delivered and the making and obtaining of all
third party and governmental filings, authorizations, approvals, consents,
releases and terminations).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
As a material inducement to Purchaser to enter into this Agreement, the Seller
hereby represents and warrants that:
5.1 ORGANIZATION AND CORPORATE POWER. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Georgia and is qualified to do business in every jurisdiction in which it is
required to be qualified. All jurisdictions in which the Company is qualified
to do business are set forth on the "Organization Schedule" attached hereto. The
Company has full power and authority and all licenses, permits and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. Correct and complete copies of the Company's
articles of incorporation and by-laws have been furnished to the Purchaser,
which documents reflect all amendments made thereto at any time prior to the
date of this Agreement. Correct and complete copies of the minute books
containing the records of meetings of the stockholders and board of directors,
the stock certificate books and the stock record books of the Company have been
furnished to the Purchaser. The Company is not in default under or in violation
of any provision of its articles of incorporation or by-laws.
5.2 AUTHORIZATION OF TRANSACTIONS. The Company has full corporate power and
authority to execute and deliver the Transaction Documents and to consummate the
transactions contemplated hereby and thereby. The board of directors of the
Company has duly approved the Transaction Documents and has duly authorized the
execution and delivery of the Transaction Documents and the consummation of the
transactions contemplated thereby. No other corporate proceedings on the part
of the Company are necessary to approve and authorize the execution and delivery
of the Transaction Documents and the consummation of the transactions
contemplated thereby. All Transaction Documents have been duly executed and
delivered by the Company and
14
constitute the valid and binding agreements of the Company, enforceable against
the Company in accordance with their terms.
5.3 CAPITALIZATION. The authorized, issued and outstanding stock of the
Company consists of 10,000 shares of Common Stock, par value $0.01 per share, of
which 500 shares are issued and outstanding, and are held of record and
beneficially by the Seller free and clear of all Liens and are not subject to,
nor were they issued in violation of, any preemptive rights or rights of first
refusal. All of the issued and outstanding shares of the Company's capital
stock have been duly authorized, are validly issued, fully paid, and
nonassessable. There are no outstanding or authorized options, warrants,
rights, contracts, calls, puts, rights to subscribe, conversion rights or other
agreements or commitments to which the Company is a party or which are binding
upon the Company providing for the issuance, disposition or acquisition of any
of its capital stock (other than this Agreement). There are no outstanding or
authorized stock appreciation, phantom stock or similar rights with respect to
the Company. There are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of the capital stock of the Company.
The Company is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock.
5.4 SUBSIDIARIES; INVESTMENTS. The Company does not own or hold any shares of
stock or any other security or interest in any other Person or any rights to
acquire any such stock or other security or interest, and the Company has ever
owned any Subsidiary.
5.5 ABSENCE OF CONFLICTS. Except as set forth on the "Conflicts Schedule"
attached hereto, the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby by the
Company do not and shall not (a) conflict with or result in any breach of any of
the terms, conditions or provisions of, (b) constitute a default under, (c)
result in a violation of, (d) give any third party the right to modify,
terminate or accelerate any obligation under, (e) result in the creation of any
Lien upon the Acquired Stock or the assets of the Company, or (f) require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or other
governmental body or agency, under the provisions of the articles of
incorporation or by-laws of the Company or any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which the Company is bound or
affected, or any law, statute, rule or regulation to which the Company is
subject or any judgment, order or decree to which the Company is subject.
5.6 FINANCIAL STATEMENTS AND RELATED MATTERS.
(a) Financial Statements. Attached hereto as the "Financial Statements
Schedule" are copies of the Company's (i) unaudited balance sheet as of December
31, 1996 (the "Latest Balance Sheet") and the related statements of income and
cash flows for the 11-month period then ended and (ii) reviewed balance sheets
and statements of income and cash flows for the fiscal years ended January 31,
1996, 1995 and 1994. Each of the foregoing financial statements (including in
all cases the notes thereto, if any) (the "Financial Statements") is accurate
and complete, is consistent with the Company's books and records (which, in
turn, are accurate and complete), present fairly the Company's financial
condition and results of operations as of the times and for the periods referred
to therein, and has been prepared in accordance with GAAP, subject in the case
of unaudited financial statements to changes resulting from normal year-end
adjustments for recurring accruals (which shall not be material individually or
in the aggregate) and to the absence of footnote disclosure.
(b) Receivables. The Company's notes and accounts receivable are valid
receivables, current, and are subject to no valid counterclaims or setoffs, at
the aggregate amount recorded on the Company's books and records as of the
Closing, net of an amount of allowances for doubtful accounts which relate to
those receivables computed in a manner consistent with GAAP and the accounting
practices used in the preparation of the Latest Balance Sheet.
(c) Inventory. The Company's inventory, net of the reserves applicable to
such inventory, consists of a quantity and quality which, except as reflected in
such reserve, is usable and saleable in the Ordinary Course of Business, and the
items of such inventory are not defective, slow-moving, obsolete or damaged and
are merchantable and fit for their particular use.
15
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no obligations or
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether or not known, whether due or to become due and regardless of when
asserted) arising out of transactions entered into at or prior to the Closing,
or any action or inaction at or prior to the Closing, or any state of facts
existing at or prior to the Closing, except (i) obligations under contracts or
commitments described on the Contracts Schedule attached hereto or under
contracts and commitments which are not required to be disclosed thereon (but
not liabilities for breaches thereof), (ii) liabilities reflected on the
liabilities side of the Latest Balance Sheet, and (iii) liabilities which have
arisen after the date of the Latest Balance Sheet in the Ordinary Course of
Business or otherwise in accordance with the terms and conditions of this
Agreement (none of which is a liability for breach of contract, breach of
warranty, tort or infringement or a claim or lawsuit or an environmental
liability).
5.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on the "Developments
Schedule" attached hereto and except as expressly contemplated by this
Agreement, since October 31, 1996, the Company has not:
(a) suffered any change that has had or could reasonably be expected to have
a Material Adverse Effect or suffered any theft, damage, destruction or casualty
loss in excess of $10,000, to its assets, whether or not covered by insurance or
suffered any substantial destruction of the Company's books and records;
(b) redeemed or repurchased, directly or indirectly, any shares of capital
stock or other equity security or declared, set aside or paid any dividends or
made any other distributions (whether in cash or in kind) with respect to any
shares of its capital stock or other equity security;
(c) issued, sold or transferred any equity securities, any securities
convertible, exchangeable or exercisable into shares of its capital stock or
other equity securities, or warrants, options or other rights to acquire shares
of its capital stock or other equity securities of the Company;
(d) incurred or become subject to any liabilities, except liabilities
incurred in the Ordinary Course of Business;
(e) subjected any portion of its properties or assets to any Lien;
(f) sold, leased, assigned or transferred (including, without limitation,
transfers to the Seller or any Insider) a portion of its tangible assets, except
for sales of inventory in the Ordinary Course of Business, or canceled without
fair consideration any material debts or claims owing to or held by it;
(g) sold, assigned, licensed or transferred (including, without limitation,
transfers to the Seller or any Insider) any Proprietary Rights owned by, issued
to or licensed to the Company or disclosed any confidential information (other
than pursuant to agreements requiring the disclosure to maintain the
confidentiality of and preserving all rights of the Company in such confidential
information) or received any confidential information of any third party in
violation of any obligation of confidentiality;
(h) suffered any extraordinary losses or waived any rights of material value;
(i) entered into, amended or terminated any material lease, contract,
agreement or commitment, or taken any other action or entered into any other
transaction other than in the Ordinary Course of Business;
(j) entered into any other material transaction, or materially changed any
business practice;
(k) made or granted any bonus or any wage, salary or compensation increase to
any director, officer, employee or sales representative, group of employees or
consultant or made or granted any increase in any employee benefit plan or
arrangement, or amended or terminated any existing employee benefit plan or
arrangement or adopted any new employee benefit plan or arrangement;
16
(l) made any other change in employment terms for any of its directors,
officers, and employees outside the Ordinary Course of Business;
(m) incurred intercompany charges or conducted its cash management customs
and practices other than in the Ordinary Course of Business (including, without
limitation, with respect to collection of accounts receivable, purchases of
inventory and supplies, repairs and maintenance, and payment of accounts payable
and accrued expenses);
(n) made any capital expenditures or commitments for capital expenditures
that aggregate in excess of $20,000;
(o) made any loans or advances to, or guarantees for the benefit of, any
Persons;
(p) made charitable contributions, pledges, association fees or dues; or
(q) changed (or authorized any change) in its articles of incorporation or
by-laws.
5.9 TITLE TO PROPERTIES.
(a) The Company does not own, and has never owned, any real property.
(b) The leases and subleases described on the "Leased Real Property Schedule"
attached hereto (the "Leased Properties") constitute all of the leases and
subleases under which the Company holds leasehold or subleasehold interests in
real property. The real property leases and subleases described on the Leased
Real Property Schedule are valid, binding, enforceable and in full force and
effect and have not been modified (except to the extent disclosed in the
documents delivered to the Purchaser), and the Company holds a valid and
existing leasehold interest under such leases or subleases to which it is a
party for the term set forth on the Leased Real Property Schedule. The Company
has delivered to Purchaser complete and accurate copies of each of the leases or
subleases described on the Leased Real Property Schedule. With respect to each
lease and sublease listed on the Leased Real Property Schedule:
(i) the lease or sublease shall continue to be legal, valid, binding,
enforceable and in full force and effect on identical terms immediately
following the Closing;
(ii) neither the Company nor any other party to the lease or sublease is
in breach or default, and no event has occurred which, with notice or lapse of
time, would constitute such a breach or default or permit termination,
modification or acceleration under the lease or sublease;
(iii) no party to the lease or sublease has repudiated any provision
thereof and there are no disputes, oral agreements or forbearance programs in
effect as to the lease or sublease;
(iv) the Company has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold or subleasehold;
and
(v) all buildings, improvements or other property leased or subleased
thereunder have received all approvals of governmental authorities required in
connection with the operation thereof and have been operated and maintained in
accordance with applicable laws, rules and regulations.
(c) The real property described on the Leased Real Property Schedule
constitutes all of the real property used or occupied by the Company.
(d) Except as set forth on the Leased Real Property Schedule, the Company
owns good and marketable title to, or a valid leasehold interest in, free and
clear of all Liens, all of the personal property and assets which are shown on
the Latest Balance Sheet or acquired thereafter or located on the Leased
Properties or used by the Company.
17
(e) The buildings, machinery, equipment, personal properties, vehicles and
other tangible assets of the Company located upon or used in connection with the
Leased Properties are operated in conformity with all applicable laws and
regulations, are in good condition and repair, reasonable wear and tear
excepted, and are usable in the Ordinary Course of Business. The Company owns
or leases under valid leases all buildings, machinery, equipment and other
tangible assets necessary for the conduct of its business.
5.10 TAXES.
(a) Except as set forth on the "Taxes Schedule" attached hereto, (i) the
Company has timely filed or shall timely file all Tax Returns which are required
to be filed on or before the Closing Date, and all such Tax Returns are true,
complete and accurate, (ii) all Taxes due and payable by the Company have been
paid or shall be paid by the Company or the Seller on or before the Closing Date
and all Taxes accrued but not yet due are shown on the Latest Balance Sheet or
are set forth on the Taxes Schedule and no Taxes are delinquent, (iii) no
deficiency for any amount of Tax has been asserted or assessed by a taxing
authority against the Company and neither the Company nor the Seller reasonably
expects that any such assertion or assessment of Tax liability will be made,
(iv) the Company has not consented to extend the time in which any Tax may be
assessed or collected by any taxing authority, (v) the Company has not been a
member of an Affiliated Group, (vi) no claim has ever been made by a taxing
authority in a jurisdiction where the Company does not file Tax Returns that the
Company is or may be subject to Taxes assessed by such jurisdiction, (vii) the
Company has no liability for Taxes of any other Person under Treasury
Regulations Section 1.1502-6 (or any similar provision or state, local or
foreign Tax law), as a transferee, by contract, or otherwise, and (viii) the
Company has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party. The Taxes Schedule
contains a list of states, territories and jurisdictions (whether foreign or
domestic) in which the Company is required to file Tax Returns.
5.11 CONTRACTS AND COMMITMENTS.
(a) Except as specifically contemplated by this Agreement and except as set
forth on the "Contracts Schedule" attached hereto, the Company is not a party to
or bound by, whether written or oral, any:
(i) collective bargaining agreement or contract with any labor union or
any bonus, pension, profit sharing, retirement or any other form of deferred
compensation plan or any stock purchase, stock option, hospitalization
insurance or similar plan or practice, whether formal or informal;
(ii) any contract for the employment of any officer, individual employee
or other person on a full-time or consulting basis or any severance
agreements;
(iii) agreement or indenture relating to the borrowing of money or to
mortgaging, pledging or otherwise placing a Lien on any of its assets;
(iv) agreements with respect to the lending or investing of funds;
(v) license or royalty agreements;
(vi) guaranty of any obligation, other than endorsements made for
collection;
(vii) lease or agreement under which it is lessee of, or holds or
operates, any personal property owned by any other party calling for payments
in excess of $10,000 annually;
(viii) contract or group of related contracts with the same party
continuing over a period of more than six months from the date or dates
thereof, not terminable by it on 30 days or less notice without penalties or
involving more than $10,000;
(ix) contract which prohibits it from freely engaging in business
anywhere in the world; or
18
(x) other agreement material to it whether or not entered into in the
Ordinary Course of Business.
(b) Except as disclosed on the Contracts Schedule, (i) no contract or
commitment required to be disclosed on the Contracts Schedule has been breached
or cancelled by the other party and the Company has no Knowledge of any
anticipated breach by any other party to any contract set forth on the Contracts
Schedule, (ii) no customer or supplier has indicated in writing or orally to the
Company or the Seller that it shall stop or decrease the rate of business done
with the Company or that it desires to renegotiate its contract or current
arrangement with the Company, (iii) the Company has performed all the
obligations required to be performed by it in connection with the contracts or
commitments required to be disclosed on the Contracts Schedule and is not in
default under or in breach of any contract or commitment required to be
disclosed on the Contracts Schedule, and no event has occurred which with the
passage of time or the giving of notice or both would result in a default or
breach thereunder, (iv) the Company has no present expectation or intention of
not fully performing any obligation pursuant to any contract set forth on the
Contracts Schedule, and (vi) each agreement is legal, valid, binding,
enforceable and in full force and effect and will continue as such following the
consummation of the transactions contemplated hereby.
(c) The Seller has provided the Purchaser with a true and correct copy of all
written contracts which are required to be disclosed on the Contracts Schedule,
in each case together with all amendments, waivers or other changes thereto (all
of which are disclosed on the Contracts Schedule). The Contracts Schedule
contains an accurate and complete description of all material terms of all oral
contracts referred to therein.
5.12 PROPRIETARY RIGHTS.
(b) The "Proprietary Rights Schedule" attached hereto sets forth a complete
and correct list of: (i) all patented, registered or applied for Proprietary
Rights owned or used by the Company; (ii) all trade names, unregistered
trademarks and material unregistered copyrights owned or used by the Company;
(iii) all licenses or other agreements to which the Company is a party, either
as licensee or licensor, for the Proprietary Rights.
(c) Except as set forth on the Proprietary Rights Schedule, (i) the Company
owns and possesses without restriction as to use, all right, title and interest
in and to the Proprietary Rights necessary for the operation of the Company's
businesses as currently conducted; (ii) the Company has not received any notices
of invalidity, infringement or misappropriation from any third party with
respect to any such Proprietary Rights; (iii) the Company has not interfered
with, infringed upon, misappropriated or otherwise come into conflict with any
Proprietary Rights of any third parties; and (iv) to the Company's Knowledge, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Proprietary Rights of the Company.
(d) The transactions contemplated by this Agreement shall have no adverse
effect on the Company's right, title and interest in and to any of their
Proprietary Rights. The Company has taken all necessary and desirable actions
to maintain and protect its Proprietary Rights and shall continue to maintain
and protect those rights prior to the Closing so as to not adversely affect the
validity or enforcement of such Proprietary Rights.
5.13 LITIGATION; PROCEEDINGS. Except as set forth on the "Litigation
Schedule" attached hereto, there are no actions, suits, proceedings, orders,
judgments, decrees or investigations pending or, to the Company's Knowledge,
threatened against or affecting the Company at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and to the
Knowledge of the Company there is no basis known for any of the foregoing. The
Company is not subject to any outstanding order, judgment or decree issued by
any court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or any arbitrator.
5.14 BROKERAGE. Except as set forth on the "Brokerage Schedule" attached
hereto, there are no claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of the Company.
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5.15 GOVERNMENTAL LICENSES AND PERMITS. The "Permits Schedule" attached
hereto contains a complete listing and summary description of all Licenses owned
or possessed by the Company or used by the Company in the conduct of its
business. Except as indicated on the Permits Schedule, the Company owns or
possesses all right, title and interest in and to all Licenses which are
necessary to conduct its business as presently conducted and as proposed to be
conducted and shall use its reasonable efforts to maintain all such Licenses. No
loss or expiration of any License is pending or, to the Company's Knowledge,
threatened or reasonably foreseeable (including, without limitation, as a result
of the transactions contemplated hereby) other than expiration in accordance
with the terms thereof.
5.16 EMPLOYEES. Except as set forth on the "Employees Schedule" attached
hereto, to the Knowledge of the Company, no key executive employee and no group
of employees or independent contractors of the Company has any plans to
terminate his, her or its employment or relationship as an independent
contractor with the Company. The Company has complied with all applicable laws
relating to the employment of personnel and labor. The Company is not a party
to or bound by any collective bargaining agreement, nor has such party
experienced any strikes, grievances, unfair labor practices claims or other
material employee or labor disputes. The Company has not engaged in any unfair
labor practice. The Company has no Knowledge of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of the Company.
5.17 EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on the "Benefit Plans Schedule" attached hereto, with
respect to current or former employees of the Company, the Company does not
maintain or contribute to or have any actual or potential liability with respect
to any (i) deferred compensation or bonus or retirement plans or arrangements,
(ii) qualified or nonqualified defined contribution or defined benefit plans or
arrangements which are employee pension benefit plans (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA")), or (iii)
employee welfare benefit plans, (as defined in Section 3(1) of ERISA), stock
option or stock purchase plans, or material fringe benefit plans or programs
whether in writing or oral and whether or not terminated. The Company has not
ever contributed to any multiemployer pension plan (as defined in Section 3(37)
of ERISA), and the Company has not ever maintained or contributed to any defined
benefit plan (as defined in Section 3(35) of ERISA). The Company does not
maintain or contribute to any employee welfare benefit plan which provides
health, accident or life insurance benefits to former employees, their spouses
or dependents, other than in accordance with Section 4980B of the Code
("COBRA").
(b) The employee welfare benefit plans (and related trusts and insurance
contracts) set forth on the Benefit Plans Schedule comply in form and in
operation in all respects with the requirements of applicable laws and
regulations, including ERISA and the Code and the nondiscrimination rules
thereof.
(c) All required reports and descriptions (including Form 5500 Annual
Reports, Summary Annual Reports and Summary Plan Descriptions) with respect to
the employee pension benefit plans and employee welfare benefit plans set forth
on the Benefit Plans Schedule have been properly and timely filed with the
appropriate government agency and distributed to participants as required. The
Company has complied with the requirements of COBRA.
(d) With respect to each employee welfare benefit plan set forth on the
Benefit Plans Schedule, (i) there have been no prohibited transactions as
defined in Section 406 of ERISA or Section 4975 of the Code, (ii) no fiduciary
(as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary
duty or any other failure to act or comply in connection with the administration
or investment of the assets of such plans, and (iii) no actions, investigations,
suits or claims with respect to the assets thereof (other than routine claims
for benefits) are pending or threatened, and the Company has no Knowledge of any
facts which would give rise to or could reasonably be expected to give rise to
any such actions, suits or claims.
(e) With respect to each of the employee welfare benefit plans listed on the
Benefit Plans Schedule, the Seller has furnished to the Purchaser true and
complete copies of (i) the plan documents, summary plan descriptions and
summaries of material modifications and other material employee communications,
(ii) the Form 5500 Annual Report (including all schedules and other attachments
for the most recent three years), (iii) all related trust
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agreements, insurance contracts or other funding agreements which implement such
plans and (iv) all contracts relating to each such plan, including, without
limitation, service provider agreements, insurance contracts, investment
management agreements and recordkeeping agreements.
5.18 INSURANCE. The "Insurance Schedule" attached hereto lists and briefly
describes each insurance policy maintained by the Company with respect to its
properties, assets and business, together with a claims history for the past
five years. All of such insurance policies are in full force and effect, and
the Company is not in default with respect to its obligations under any such
insurance policies and the Company has not been denied insurance coverage.
Except as set forth on the Insurance Schedule, the Company does not have any
self-insurance or co-insurance programs, and the reserves set forth on the
Latest Balance Sheet are adequate to cover all anticipated liabilities with
respect to self-insurance or coinsurance programs.
5.19 OFFICERS AND DIRECTORS; BANK ACCOUNTS. The "Officers, Directors and Bank
Accounts Schedule" attached hereto lists all officers and directors of the
Company, and all bank accounts, safety deposit boxes and lock boxes (designating
each authorized signatory with respect thereto) for the Company.
5.20 AFFILIATE TRANSACTIONS. Except as disclosed on the "Affiliated
Transactions Schedule" attached hereto, no Insider is a party to any agreement,
contract, commitment or transaction with the Company or which is pertaining to
the business of the Company or has any interest in any property, real or
personal or mixed, tangible or intangible, used in or pertaining to the business
of the Company.
5.21 COMPLIANCE WITH LAWS. The Company and its officers, directors, partners,
agents and employees have complied with and are in compliance with all
applicable laws, regulations and ordinances of foreign, federal, state and local
governments and all agencies thereof which are applicable to the business,
business practices (including, but not limited to, the Company's marketing and
sales of its products and services) or any owned or leased properties of the
Company and to which the Company may be subject, and no claims have been filed
against the Company alleging a violation of any such laws or regulations, and
the Company has not received notice of any such violations.
5.22 ENVIRONMENTAL MATTERS. Except as set forth on the "Environmental
Schedule" attached hereto:
(a) The Company has complied with and are currently in compliance with all
Environmental and Safety Requirements, and the Company has not received any oral
or written notice, report or information regarding any liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise) or any corrective,
investigatory or remedial obligations arising under Environmental and Safety
Requirements which relate to the Company or any of its properties or facilities.
(b) Without limiting the generality of the foregoing, the Company has
obtained and complied with, and is currently in compliance with, all permits,
licenses and other authorizations that may be required pursuant to any
Environmental and Safety Requirements for the occupancy of its properties or
facilities or the operation of its business. A list of all such permits,
licenses and other authorizations which are material to the Company is set forth
on the Environmental Schedule.
(c) Neither this Agreement or the other Transaction Documents nor the
consummation of the transactions contemplated hereby and thereby shall impose
any obligations on the Company or otherwise for site investigation or cleanup,
or notification to or consent of any government agencies or third parties under
any Environmental and Safety Requirements (including, without limitation, any so
called "transaction-triggered" or "responsible property transfer" laws and
regulations).
(d) None of the following exists at any property or facility owned, occupied
or operated by the Company: (i) underground storage tanks or surface
impoundments; (ii) asbestos-containing material in any form or condition; (iii)
materials or equipment containing polychlorinated biphenyls; or (iv) landfills.
21
(e) The Company has not treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled or Released any substance
(including, without limitation, any hazardous substance) or owned, occupied or
operated any facility or property, so as to give rise to liabilities of the
Company for response costs, natural resource damages or attorneys' fees pursuant
to CERCLA or any other Environmental and Safety Requirements.
(f) Without limiting the generality of the foregoing, no facts, events or
conditions relating to the past or present properties, facilities or operations
of the Company shall prevent, hinder or limit continued compliance with
Environmental and Safety Requirements, give rise to any corrective,
investigatory or remedial obligations pursuant to Environmental and Safety
Requirements or give rise to any other liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental and Safety
Requirements, including, without limitation, those liabilities relating to
onsite or offsite Releases or threatened Releases of hazardous materials,
substances or wastes, personal injury, property damage or natural resources
damage.
(g) The Company has not, either expressly or by operation of law, assumed or
undertaken any liability or corrective investigatory or remedial obligation of
any other Person relating to any Environmental and Safety Requirements.
(h) No Environmental Lien has attached to any property owned, leased or
operated by the Company.
5.23 DISCLOSURE. Neither this Agreement, the other Transaction Documents, nor
any of the schedules, attachments or Exhibits hereto, contain any untrue
statement of a material fact or omit a material fact necessary to make each
statement contained herein or therein, not misleading; There is no fact which
has not been disclosed to the Purchaser of which the Company has Knowledge which
has a Material Adverse Effect or could reasonably be anticipated to have a
Material Adverse Effect.
5.24 CLOSING DATE. All of the representations and warranties contained in
this Article V and elsewhere in this Agreement and all information delivered in
any schedule, attachment or Exhibit hereto or in any writing delivered to the
Purchaser are true and correct on the date of this Agreement and shall be true
and correct on the Closing Date, except to the extent that the Seller has
advised the Purchaser otherwise in writing prior to the Closing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER
As a material inducement to the Purchaser to enter into this Agreement, the
Seller represents and warrants to the Purchaser that:
6.1 AUTHORIZATION OF TRANSACTIONS. The Seller has full power, authority and
legal capacity to enter into this Agreement and the other documents contemplated
hereby to which the Seller is a party and to perform his obligations hereunder
and thereunder. This Agreement and the other documents contemplated hereby to
which the Seller is a party have been duly executed and delivered by the Seller
and constitute the valid and binding agreements of the Seller, enforceable in
accordance with their respective terms.
6.2 ABSENCE OF CONFLICTS. Neither the execution and the delivery of this
Agreement and the other documents contemplated hereby to which the Seller is a
party, nor the consummation of the transactions contemplated hereby and thereby,
shall (a) conflict with, result in a breach of any of the provisions of, (b)
constitute a default under, (c) result in the violation of, (d) give any third
party the right to terminate or to accelerate any obligation under, (e) result
in the creation of any Lien upon the Acquired Stock owned by the Seller, or (f)
require any authorization, consent, approval, execution or other action by or
notice to any court or other governmental body, under the provisions of any
indenture, mortgage, lease, loan agreement or other agreement or instrument to
which the Seller is bound or affected, or any statute, regulation, rule,
judgment, order, decree or other restriction of any government, governmental
agency or court to which the Seller is subject. No notice to, filing with or
authorization, consent or approval of any government or governmental agency by
the Seller is necessary for the
22
consummation of the transactions contemplated by this Agreement and the other
documents contemplated hereby to which the Seller is a party.
6.3 BROKERAGE. Except as set forth on the Brokerage Schedule, there are no
claims for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Seller.
6.4 SHARES. The Seller is not a party to any option, warrant, right,
contract, call, put or other agreement or commitment providing for the
disposition or acquisition of any capital stock of the Company (other than this
Agreement). The Seller is not a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any capital stock of
the Company.
6.5 INVESTMENT IN SUBORDINATED NOTES AND NES COMMON STOCK. The Seller (a)
understands that the Subordinated Notes and NES Common Stock (collectively, the
"NES Securities") 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 NES
Securities are not transferable, (c) is acquiring the NES Securities solely for
his or its own account for investment purposes, and not with a view to the
distribution thereof, (d) is a sophisticated investor with knowledge and
experience in business and financial matters, (e) has received certain
information concerning Purchaser and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in holding the NES Securities and (f) is able to bear the economic risk
and lack of liquidity inherent in holding the NES Securities.
6.6 CLOSING DATE. All of the representations and warranties concerning the
Seller contained in this Article VI and elsewhere in this Agreement and all
information delivered in any schedule, attachment or Exhibit hereto or in any
writing delivered to the Purchaser are true and correct on the date of this
Agreement and shall be true and correct on the Closing Date except to the extent
that the Seller has advised the Purchaser otherwise in writing prior to the
Closing.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES CONCERNING THE PURCHASER
As a material inducement to the Seller to enter into this Agreement, the
Purchaser hereby represents and warrants to the Seller that:
7.1 ORGANIZATION AND CORPORATE POWER. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with full corporate power and authority to enter into this Agreement
and the other agreements contemplated hereby to which the Purchaser is a party
and perform its obligations hereunder and thereunder.
7.2 AUTHORIZATION. The execution, delivery and performance of this Agreement
and the other agreements contemplated hereby to which the Purchaser is a party
have been duly and validly authorized by all requisite corporate action on the
part of the Purchaser, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement constitutes, and each of the other agreements contemplated hereby
to which the Purchaser is a party shall when executed constitute, a valid and
binding obligation of the Purchaser, enforceable in accordance with their terms.
7.3 NO VIOLATION. The Purchaser is not subject to or obligated under its
certificate of incorporation, its by-laws, any applicable law, or rule or
regulation of any governmental authority, or any agreement or instrument, or any
license, franchise or permit, or subject to any order, writ, injunction or
decree, which would be breached or violated by its execution, delivery or
performance of this Agreement and the other agreements contemplated hereby to
which the Purchaser is a party.
23
7.4 GOVERNMENTAL AUTHORITIES AND CONSENTS. The Purchaser is not required to
submit any notice, report or other filing with any governmental authority in
connection with the execution or delivery by it of this Agreement and the other
agreements contemplated hereby to which the Purchaser is a party or the
consummation of the transactions contemplated hereby or thereby. No consent,
approval or authorization of any governmental or regulatory authority or any
other party or person is required to be obtained by the Purchaser in connection
with its execution, delivery and performance of this Agreement and the other
agreements contemplated hereby to which the Purchaser is a party or the
transactions contemplated hereby or thereby.
7.5 LITIGATION. There are no actions, suits, proceedings or orders pending
or, to the Purchaser's knowledge, threatened against or affecting the Purchaser
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would adversely affect the Purchaser's performance
under this Agreement and the other agreements contemplated hereby to which the
Purchaser is a party or the consummation of the transactions contemplated hereby
or thereby.
7.6 BROKERAGE. There are no claims for brokerage commissions, finders' fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement or agreement made by or on behalf of the
Purchaser.
7.7 CLOSING DATE. All of the representations and warranties contained in this
Article VII and elsewhere in this Agreement and all information delivered in any
schedule, attachment or Exhibit hereto or in any writing delivered to the Seller
are true and correct on the date of this Agreement and shall be true and correct
on the Closing Date, except to the extent that the Purchaser has advised the
Seller otherwise in writing prior to the Closing.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing:
(a) by mutual written consent of the Seller and the Purchaser;
(b) by the Seller or the Purchaser if there has been a material
misrepresentation or breach on the part of the other Party of the
representations, warranties or covenants set forth in this Agreement or if
events have occurred which have made it impossible to satisfy a condition
precedent to the terminating Party's obligations to consummate the transactions
contemplated hereby unless such terminating Party's willful or knowing breach of
this Agreement has caused the condition to be unsatisfied; or
(c) by the Seller or the Purchaser if the Closing has not occurred on or
prior to February 28, 1997; provided, however, that neither the Purchaser nor
the Seller shall be entitled to terminate this Agreement pursuant to this
Section 8.1(c) if such Party's willful or knowing breach of this Agreement has
prevented the consummation of the transactions contemplated hereby at or prior
to such time.
8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement by
either the Seller or the Purchaser as provided in Section 8.1, this Agreement
shall forthwith become void and there shall be no liability on the part of any
Party to any other Party under this Agreement, except that the provisions of
Sections 10.4 and 10.8 and Article XI shall continue in full force and effect
and except that nothing herein shall relieve any Party from liability for any
breach of this Agreement prior to such termination.
24
ARTICLE IX
INDEMNIFICATION AND RELATED MATTERS
9.1 SURVIVAL. All representations, warranties, covenants and agreements set
forth in this Agreement or in any writing or certificate delivered in connection
with this Agreement shall survive the Closing Date and the consummation of the
transactions contemplated hereby and shall not be affected by any examination
made for or on behalf of any Party, the knowledge of any of such Party's
officers, directors, stockholders, employees or agents, or the acceptance of any
certificate or opinion. Notwithstanding the foregoing, no Party shall be
entitled to recover for any Loss pursuant to Section 9.2(a)(i) or Section
9.2(c)(i) unless written notice of a claim thereof is delivered to the other
Party prior to the Applicable Limitation Date. For purposes of this Agreement,
the term "Applicable Limitation Date" shall mean the second anniversary of the
Closing Date; provided that the Applicable Limitation Date with respect to the
following Losses shall be as follows: (i) with respect to any Loss arising from
or related to a breach of the representations and warranties of the Company and
the Seller set forth in Section 5.10 (Taxes), the Applicable Limitation Date
shall be the 30th day after expiration of the statute of limitations (including
any extensions thereto to the extent that such statute of limitations may be
tolled) applicable to the Tax which gave rise to such Loss, (ii) with respect to
any Loss arising from or related to a breach of the representations and
warranties of the Company and the Seller set forth in Section 5.22
(Environmental), the Applicable Limitation Date shall be the fifth anniversary
of the Closing Date, (iii) with respect to any Loss arising from or related to a
breach of the representations and warranties contained in Section 5.24 (Closing
Date), Section 6.6 (Closing Date) and Section 7.7 (Closing Date) where the
subject matter of such breach is addressed by one of the representations and
warranties referred to in clauses (i), (ii), or (iv) of this Section 9.1, the
time limitation set forth in the relevant item of this clause (iii) shall
control when written notice of such breach must be given, and (iv) with respect
to any Loss arising from or related to a breach of the representations and
warranties of the Company and the Seller set forth in Section 5.1 (Organization
and Corporate Power), Section 5.2 (Authorization of Transactions), Section 5.3
(Capitalization), Section 5.5 (Absence of Conflicts), Section 5.14 (Brokerage)
or Article V (Representations and Warranties with Respect to the Seller) and
with respect to any Loss arising from or related to a breach of the
representations and warranties of Purchaser set forth in Section 7.1
(Organization an Corporate Power), 7.2 (Authorization of Transactions), 7.3 (No
Violation) or 7.6 (Brokerage), there shall be no Applicable Limitation Date
(i.e., such representations and warranties shall survive forever).
9.2 INDEMNIFICATION.
(a) The Seller shall indemnify the Purchaser, and the Company and each of
their respective officers, directors, stockholders, employees, agents,
representatives, affiliates, successors and assigns (collectively, the
"Purchaser Parties") and hold each of them harmless from and against and pay on
behalf of or reimburse such Purchaser Parties in respect of any Loss which any
such Purchaser Party may suffer, sustain or become subject to, as a result of or
relating to:
(i) the breach of any representation or warranty made by the Company or
the Seller contained in Article V of this Agreement or any certificate
delivered by the Company or the Seller to the Purchaser with respect thereto
in connection with the Closing;
(ii) the breach of any representation or warranty made by the Seller
contained in Article VI of this Agreement or any certificate delivered by the
Seller to Purchaser with respect thereto in connection with the Closing; or
(iii) the breach of any representation, warranty (other than
representations or warranties set forth in Articles V and VI), covenant or
agreement made by the Company or the Seller contained in this Agreement, the
other Transaction Documents, any Exhibit hereto or any certificate delivered
by the Company or the Seller to the Purchaser with respect thereto in
connection with the Closing.
The Purchaser's remedy for any indemnification of Losses hereunder may be
satisfied by proceeding against Seller for all or any portion of any such Loss.
In addition, Purchaser shall have the option of recouping all or any part of
25
any Losses it may suffer (in lieu of seeking an equivalent amount of
indemnification to which it is entitled under this Section 9.2) by notifying the
Seller that Purchaser is reducing the principal amount outstanding under his
Subordinated Note. This shall affect the timing and amount of payments required
under such Subordinated Note in the same manner as if Purchaser had made a
prepayment (without premium or penalty) thereunder.
(b) The indemnification provided for in Section 9.2(a)(i) above is subject to
the following limitations:
(i) The Seller will be liable to the Purchaser Parties with respect to
claims referred to in Section 9.2(a)(i) only if Purchaser gives the Seller
written notice thereof within the Applicable Limitation Date; and
(ii) The aggregate amount of all payments made by the Seller in
satisfaction of claims for indemnification pursuant to Section 9.2(a)(i)
shall not exceed the Purchase Price (the "Cap").
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Purchaser delivers written notice of a claim to Seller no later than
the Applicable Limitation Date, the Seller shall be required to indemnify the
Purchaser Parties for all Losses (up to the Cap) which the Purchaser Parties may
incur in respect of the matters which are the subject of such claim, regardless
of when incurred.
(c) The Purchaser shall indemnify the Seller and hold the Seller and its
officers, directors, stockholders, employees, agents, representatives,
affiliates, successors and assigns (collectively, the "Seller Parties") harmless
from and against and pay on behalf of or reimburse the Seller in respect of any
Loss which the Seller Parties may suffer, sustain or become subject to, as a
result of or relating to:
(i) the breach of any representation or warranty made by the Purchaser
contained in Article VII of this Agreement or any certificate delivered by
the Purchaser to the Seller with respect thereto in connection with the
Closing;
(ii) the breach of any representation, warranty (other than
representations or warranties set forth in Article VII), covenant or
agreement made by the Purchaser contained in this Agreement, the other
Transaction Documents, any Exhibit hereto or any certificate delivered by the
Purchaser to the Seller with respect thereto in connection with the Closing;
or
(iii) any liability or obligation of Seller with respect to any guaranty
executed by Seller prior to the date hereof in favor of third parties with
respect to Indebtedness of the Company, the lease of property of the Company
or other obligations of the Company described on the Contracts Schedule
attached hereto.
(d) The indemnification provided for in Section 9.2(c)(i) above is subject to
the following limitations:
(i) The Purchaser will be liable to the Seller Parties with respect to
claims referred to in Section 9.2(c)(i) only if the Seller gives the
Purchaser written notice thereof within the Applicable Limitation Date; and
(ii) The aggregate amount of all payments made by the Purchaser in
satisfaction of claims for indemnification pursuant to Section 9.2(c)(i)
shall not exceed the Cap.
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Seller delivers written notice of a claim to the Purchaser no later
than the Applicable Limitation Date, the Purchaser shall be required to
indemnify the Seller Parties for all Losses (up to the Cap) which the Seller
Parties may incur in respect of the matters which are the subject of such claim,
regardless of when incurred.
(e) If a party hereto seeks indemnification under this Article VIII, such
party (the "Indemnified Party") shall give written notice to the other party
(the "Indemnifying Party") after receiving written notice of any action,
lawsuit, proceeding, investigation or other claim against it (if by a third
party) or discovering the liability, obligation or facts giving rise to such
claim for indemnification, describing the claim, the amount thereof (if known
and quantifiable), and the basis thereof; provided that the failure to so notify
the Indemnifying
26
Party shall not relieve the Indemnifying Party of its or his obligations
hereunder except to the extent such failure shall have harmed the Indemnifying
Party. In that regard, if any action, lawsuit, proceeding, investigation or
other claim shall be brought or asserted by any third party which, if adversely
determined, would entitle the Indemnified Party to indemnity pursuant to this
Article IX, the Indemnified Party shall promptly notify the Indemnifying Party
of the same in writing, specifying in detail the basis of such claim and the
facts pertaining thereto and the Indemnifying Party shall be entitled to
participate in the defense of such action, lawsuit, proceeding, investigation or
other claim giving rise to the Indemnified Party's claim for indemnification at
its expense, and at its option (subject to the limitations set forth below)
shall be entitled to appoint lead counsel of such defense with reputable counsel
reasonably acceptable to the Indemnified Party; provided that, as a condition
precedent to the Indemnifying Party's right to assume control of such defense,
it must first:
(i) enter into an agreement with the Indemnified Party (in form and
substance reasonably satisfactory to the Indemnified Party) pursuant to which
the Indemnifying Party agrees to be fully responsible for all Losses relating
to such claims and that it will provide full indemnification to the
Indemnified Party for all Losses relating to such claim, and
(ii) unconditionally guarantees the payment and performance of any
liability or obligation which may arise with respect to such claim or the
facts giving rise to such claim for indemnification, and
(iii) furnish the Indemnified Party with reasonable evidence that the
Indemnifying Party is and will be able to satisfy any such liability;
and provided further that the Indemnifying Party shall not have the right to
assume control of such defense and shall pay the fees and expenses of counsel
retained by the Indemnified Party, if the claim which the Indemnifying Party
seeks to assume control (i) seeks non-monetary relief, (ii) involves criminal
or quasi-criminal allegations, (iii) involves a claim to which the Indemnified
Party reasonably believes an adverse determination would be detrimental to or
injure the Indemnified Party's reputation or future business prospects, or (iv)
involves a claim which, upon petition by the Indemnified Party, the appropriate
court rules that the Indemnifying Party failed or is failing to vigorously
prosecute or defend.
If the Indemnifying Party is permitted to assume and control the defense and
elects to do so, the Indemnified Party shall have the right to employ counsel
separate from counsel employed by the Indemnifying Party in any such action and
to participate in the defense thereof, but the fees and expenses of such counsel
employed by the Indemnified Party shall be at the expense of the Indemnified
Party unless (i) the employment thereof has been specifically authorized by the
Indemnifying Party in writing, or (ii) the Indemnifying Party has been advised
by counsel that a reasonable likelihood exists of a conflict of interest between
the Indemnifying Party and the Indemnified Party.
If the Indemnifying Party shall control the defense of any such claim, the
Indemnifying Party shall obtain the prior written consent of the Indemnified
Party (which shall not be unreasonably withheld) before entering into any
settlement of a claim or ceasing to defend such claim, if pursuant to or as a
result of such settlement or cessation, injunction or other equitable relief
will be imposed against the Indemnified Party or if such settlement does not
expressly unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim, without prejudice.
(f) The Indemnifying Party shall pay the Indemnified Party in immediately
available funds promptly after the Indemnified Party provides the Indemnifying
Party with written notice of a claim hereunder and the Parties reasonably agree
that there is a reasonable basis for such claim.
(g) Amounts paid to or on behalf of the Seller or the Purchaser as
indemnification shall be treated as adjustments to the Purchase Price.
(h) Effective upon the Closing, the Seller hereby irrevocably waives, releases
and discharges the Company from any and all liabilities and obligations to the
Seller of any kind or nature whatsoever, whether in his capacity as Seller
27
hereunder, as a stockholder, officer or director of the Company or otherwise
(including, without limitation, in respect of rights of contribution or
indemnification other than compensation as an employee of the Company), in each
case whether absolute or contingent, liquidated or unliquidated, and whether
arising hereunder or under any other agreement or understanding or otherwise at
law or equity, and the Seller shall not seek to recover any amounts in
connection therewith or thereunder from the Company.
ARTICLE X
ADDITIONAL AGREEMENTS
10.1 NES SECURITIES.
(a) Subordinated Notes. Each Subordinated Note will be imprinted with a
legend substantially in the following form:
THE PAYMENT OF PRINCIPAL AND INTEREST ON THIS NOTE IS SUBJECT TO CERTAIN
RECOUPMENT PROVISIONS SET FORTH IN A STOCK PURCHASE AGREEMENT DATED AS OF
FEBRUARY 18, 1997 (THE "PURCHASE AGREEMENT") AMONG THE ISSUER OF THIS NOTE,
THE PERSON TO WHOM THIS NOTE ORIGINALLY WAS ISSUED, AND CERTAIN OTHER PERSONS.
THIS NOTE WAS ORIGINALLY ISSUED ON FEBRUARY 18, 1997, AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE TRANSFER OF THIS
NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE PURCHASE AGREEMENT.
THE ISSUER OF THIS NOTE WILL FURNISH A COPY OF THESE PROVISIONS TO THE HOLDER
HEREOF WITHOUT CHARGE UPON WRITTEN REQUEST.
(b) NES Common Stock. Each certificate representing shares of NES Common
Stock will be imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
FEBRUARY 18, 1997, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE STOCK PURCHASE
AGREEMENT, DATED AS OF FEBRUARY 18, 1997 AND AS AMENDED AND MODIFIED FROM TIME
TO TIME, BETWEEN THE ISSUER (THE "COMPANY") AND CERTAIN OTHER PERSONS, AND THE
COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL
SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF
SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST AND WITHOUT CHARGE.
The NES Securities shall not be transferable without the Purchaser's prior
written consent.
10.2 CONTINUING ASSISTANCE. Subsequent to the Closing, the Seller and the
Purchaser (at their own cost) shall assist each other (including making records
available) in the preparation of their respective Tax Returns and the filing and
execution of Tax elections, if required, as well as any audits or litigation
that ensue as a result of the filing thereof, to the extent that such assistance
is reasonably requested. In addition, to the extent not otherwise obtained by
Closing, the Seller will use best efforts to obtain (a) all consents by third
parties that are required for the transfer of the Acquired Stock to the
Purchaser, and the consummation of the other transactions contemplated hereby or
that are required in order to prevent a breach of, a default under, a
termination or modification of, or any acceleration of, any obligations under
any material contract to which the Company is a party, (b) payoff letters with
respect to all of the Company's Indebtedness outstanding as of the Closing and
(c) releases of any and all Liens (including obtaining and filing appropriate
UCC termination statements) held by third parties against property of the
Company, all on terms reasonably satisfactory to the Purchaser.
10.3 TAX MATTERS. All transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest thereon)
incurred in connection with this Agreement shall be paid by the Seller
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when due, and the Seller shall, at his own expense, file all necessary Tax
Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and if required by
applicable law, the Purchaser shall, and shall cause its affiliates to, join in
the execution of any such Tax Returns and other documentation.
10.4 PRESS RELEASES AND ANNOUNCEMENTS. Prior to the Closing Date, no press
releases related to this Agreement and the transactions contemplated herein, or
other announcements to the employees, customers or suppliers of the Company
shall be issued without the mutual approval of all Parties, except for any
public disclosure which any Party in good faith believes is required by law or
regulation (in which case the disclosure shall be prepared jointly by the Seller
and the Purchaser). After the Closing Date, no press releases related to this
Agreement and the transactions contemplated herein, or other announcements to
the employees, customers or suppliers of the Company shall be issued without the
Purchaser's consent (which shall not be unreasonably withheld).
10.5 FURTHER TRANSFERS. The Seller shall execute and deliver such further
instruments of conveyance and transfer and take such additional action as the
Purchaser may reasonably request to effect, consummate, confirm or evidence the
transfer to the Purchaser of the Acquired Stock and any other transactions
contemplated hereby.
10.6 SPECIFIC PERFORMANCE. The Seller acknowledges that the Company's
business is unique and recognizes and affirms that in the event of a breach of
this Agreement by the Seller, money damages may be inadequate and Purchaser may
have no adequate remedy at law. Accordingly, the Seller agrees that Purchaser
shall have the right, in addition to any other rights and remedies existing in
its favor, to enforce its rights and the Seller's obligations hereunder not only
by an action or actions for damages but also by an action or actions for
specific performance, injunctive and/or other equitable relief.
10.7 TRANSITION ASSISTANCE. The Seller shall not in any manner take any
action which is designed, intended, or might be reasonably anticipated to have
the effect of discouraging customers, suppliers, lessors, licensors and other
business associates from maintaining the same business relationships with the
Company after the date of this Agreement as were maintained with the Company
prior to the date of this Agreement.
10.8 EXPENSES. Except as otherwise provided herein, the Seller and the
Purchaser shall pay all of their own fees, costs and expenses (including,
without limitation, fees, costs and expenses of legal counsel, investment
bankers, brokers or other representatives and consultants and appraisal fees,
costs and expenses) incurred in connection with the negotiation of the this
Agreement and the other agreements contemplated hereby, the performance of its
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby (collectively, the "Transaction Expenses"); it
being understood that the Seller shall pay the fees, costs and expenses of the
Company and that the Company shall pay any of the Seller's fees, costs and
expenses (including, without limitation, legal and accounting fees, costs and
expenses) arising in connection with the transactions contemplated hereby if the
transactions are not consummated. At the request of the Seller, the fees, costs
and expenses for which they are liable pursuant to this Section 10.8 may be
deducted from the Cash Purchase Price and paid directly to the Seller's legal
counsel, investment bankers and other agents and representatives. To the
extent that the Company pays or becomes liable with respect to any Transaction
Expenses of the Company or the Seller, the Cash Purchase Price shall be reduced
dollar-for-dollar. Notwithstanding the foregoing, the Purchaser shall pay, on
behalf of the Company, the commission owing to Grand Teton Acquisitions pursuant
to that certain Commission Agreement dated as of November 20, 1996, and no
reduction to the Cash Purchase Price shall be made as a result of such payment.
10.9 EXCLUSIVITY. Until this Agreement is terminated by its terms, neither
the Company nor the Seller (and neither the Company nor the Seller shall cause
or permit any Insider or agent or any other Person acting on behalf of the
Seller, the Company, or its Affiliates to), (a) solicit, initiate or encourage
the submission of any proposal or offer from any Person (including any of them)
relating to any (i) liquidation, dissolution or recapitalization of, (ii) merger
or consolidation with or into, (iii) acquisition or purchase of assets of or any
equity interest in or (iv) similar transaction or business combination involving
the Company or (b) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any
29
effort or attempt by any other Person to do or seek any of the foregoing. The
Company and the Seller agrees that it will discontinue immediately any
negotiations or discussion with respect to any of the foregoing. Until this
Agreement is terminated by its terms, the Seller and the Company shall notify
the Purchaser immediately if any Person makes any proposal, offer, inquiry or
contact with respect to any of the foregoing.
10.10 BOOKS AND RECORDS. Unless otherwise consented to in writing by the
Seller or the Purchaser (as the case may be), the Purchaser and the Seller will
not, for a period of seven years following the date hereof, destroy, alter or
otherwise dispose of any of the books and records of the Company acquired by the
Purchaser hereunder or retained by the Seller without first offering to
surrender to the Seller or the Purchaser such books and records or any portion
thereof of which the Seller or the Purchaser may intend to destroy, alter or
dispose. The Purchaser and the Seller will allow the other party's
representatives, attorneys and accountants access to such books and records,
upon reasonable request for during such party's normal business hours, for the
purpose of examining and copying the same in connection with any matter whether
or not related to or arising out of this Agreement or the transactions
contemplated hereby.
10.11 NONCOMPETITION, NONSOLICITATION AND CONFIDENTIALITY
(a) Noncompetition. In consideration of the mutual covenants provided for
herein to the Seller at the Closing, during the period beginning on the Closing
Date and ending on the fifth anniversary of the Closing Date (the "Noncompete
Period"), the Seller shall not engage (whether as an owner, operator, manager,
employee, officer, director, consultant, advisor, representative or otherwise)
directly or indirectly in any business that the Company conducts or proposes to
conduct as of the Closing Date in the State of Georgia or any other geographic
area in which the Company conducts its business as of the Closing Date, except
as expressly permitted under any employment agreement with the Company executed
at the Closing as contemplated hereunder; provided that ownership of less than
2% of the outstanding stock of any publicly-traded corporation shall not be
deemed to be engaging solely by reason thereof in any of its businesses. The
parties hereto agree that the covenant set forth in this Section 10.11 is
reasonable with respect to its duration, geographical area and scope. If the
final judgment of a court of competent jurisdiction declares that any term or
provision of this Section 10.11(a) is invalid or unenforceable, 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. As further consideration for the obligations of the Seller pursuant
to this Section 10.11, the Purchaser shall pay to the Seller $150,000 on the
Closing Date in the form of Subordinated Notes (the "Noncompete Payment").
(b) Nonsolicitation. The Seller agrees that, during the Noncompete Period,
the Seller (i) shall not, and shall use his best efforts not to permit the
Seller's affiliates to, directly or indirectly contact, approach or solicit for
the purpose of offering employment to or hiring (whether as an employee,
consultant, agent, independent contractor or otherwise) or actually hire any
person employed by the Company at any time prior to the Closing Date or during
the Noncompete Period, without the prior written consent of the Company and (ii)
shall not induce or attempt to induce any customer or other business relation of
the Company into any business relationship which might materially harm the
Company. The term "indirectly" as used in this Section 10.11 is intended to
mean any acts authorized or directed by or on behalf of the Seller or any person
controlled by the Seller.
(c) Confidentiality. The Seller shall treat and hold as confidential any
information concerning the business and affairs of the Company that is not
already generally available to the public (the "Confidential Information"),
refrain from using any of the Confidential Information except in connection with
this Agreement, and deliver promptly to the Purchaser or destroy, at the request
and option of the Purchaser, all tangible embodiments (and all copies) of the
Confidential Information which are in his possession or under his control. 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 Purchaser promptly of the request or
requirement so that the Purchaser may seek an appropriate protective order or
waive compliance with the provisions of this Section 10.11(c). If, in the
absence of a protective order or the receipt
30
of a waiver hereunder, the Seller is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, the Seller may disclose the Confidential Information to the tribunal;
provided that the Seller shall use his best efforts to obtain, at the request of
the Purchaser, an order or other assurance that confidential treatment shall be
accorded to such portion of the Confidential Information required to be
disclosed as the Purchaser shall designate.
(d) Trade Names. The Seller shall not use or permit any of his affiliates to
use the "Aerial Platforms" name or any name confusingly similar thereto in any
manner anywhere in the world after Closing.
(e) Remedy for Breach. The Seller acknowledges and agrees that in the event
of a breach by the Seller of any of the provisions of this Section 10.11,
monetary damages shall not constitute a sufficient remedy. Consequently, in the
event of any such breach, the Company, Purchaser and/or their respective
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof, in each case without the
requirement of posting a bond or proving actual damages.
ARTICLE XI
MISCELLANEOUS
11.1 AMENDMENT AND WAIVER. This Agreement may be amended and any provision of
this Agreement may be waived, provided that any such amendment or waiver shall
be binding upon a Party only if such amendment or waiver is set forth in a
writing executed by Purchaser and the Seller. No course of dealing between or
among any persons having any interest in this Agreement shall be deemed
effective to modify, amend or discharge any part of this Agreement or any rights
or obligations of any Party under or by reason of this Agreement.
11.2 NOTICES. All notices, demands and other communications given or
delivered under this Agreement shall be in writing and shall be deemed to have
been given when personally delivered, mailed by first class mail, return receipt
requested, or delivered by express courier service or telecopied (with hard copy
to follow). Notices, demands and communications to the Seller, the Company and
Purchaser shall, unless another address is specified in writing, be sent to the
address or telecopy number indicated below:
31
Notices to the Seller: with a copy to:
Carter B. Wilson Kearns, Benedict & Harp
c/o Aerial Platforms, Inc. 5775-B Glenridge Drive
1857 Doan Way Suite 210
Norcross, GA 30093 Atlanta, GA 30328
Attention: President Attn: William R. Harp
Telecopy: (770) 717-9227 Telecopy: (404) 256-3252
Notices to the Company (before Closing): with a copy to:
Aerial Platforms, Inc. Kearns, Benedict & Harp
1857 Doan Way 5775-B Glenridge Drive
Norcross, GA 30093 Suite 210
Attention: President Atlanta, GA 30328
Telecopy: (770) 717-9227 Attn: William R. Harp
Telecopy: (404) 256-3252
Notices to the Company (after Closing): with a copy to:
c/o National Equipment Services, Inc. Kirkland & Ellis
6100 Sears Tower 200 East Randolph Drive
Chicago, IL 60606 Chicago, IL 60601
Attention: President Attention: Sanford E. Perl
Telecopy: (312) 382-2201 Telecopy: (312) 861-2200
Notices to Purchaser: with a copy to:
National Equipment Services, Inc. Kirkland & Ellis
6100 Sears Tower 200 East Randolph Drive
Chicago, IL 60606 Chicago, IL 60601
Attention: President Attention: Sanford E. Perl
Telecopy: (312) 382-2201 Telecopy: (312) 861-2200
11.3 BINDING AGREEMENT; ASSIGNMENT. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns; provided that neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by the Seller without the prior written consent of Purchaser or by
Purchaser (except as otherwise provided in this Agreement) without the prior
written consent of the Seller. Without limiting the generality of the
foregoing:
(a) Purchaser may at any time prior to the Closing, at its sole discretion,
assign, in whole or in part, its rights and obligations pursuant to this
Agreement to one or more of its wholly-owned Subsidiaries. The Purchaser's
"wholly-owned Subsidiaries" include Subsidiaries which may be organized
subsequent to the date hereof;
(b) Purchaser may assign its rights under this Agreement for collateral
security purposes to any lender providing financing to Purchaser, the Company,
or any of their Affiliates and any such lender may exercise all of the rights
and remedies of the Purchaser hereunder; and
(c) Purchaser may assign its rights under this Agreement, in whole or in
part, to any subsequent purchaser of the Company or any material portion of its
assets (whether such sale is structured as a sale of stock, a sale of assets, a
merger or otherwise).
11.4 SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Agreement.
11.5 NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any person.
32
11.6 CAPTIONS. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no caption had been used in this Agreement.
11.7 ENTIRE AGREEMENT. This Agreement and the documents referred to herein
contain the entire agreement between the Parties and supersede any prior
understandings, agreements or representations by or between the Parties, written
or oral, which may have related to the subject matter hereof in any way.
11.8 COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
11.9 GOVERNING LAW. All questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Georgia, without giving effect
to any choice of law or conflict of law provision (whether of the State of
Georgia or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Georgia.
11.10 PARTIES IN INTEREST. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the Parties and their respective
successors and assigns any rights or remedies under or by virtue of this
Agreement.
IN WITNESS WHEREOF, the Parties have executed this Stock Purchase Agreement as
of the date first written above.
NATIONAL EQUIPMENT SERVICES, INC.
By: /s/ Kevin Rodgers
--------------------------------
Its: President
AERIAL PLATFORMS, INC.
By: /s/ Carter B. Wilson
--------------------------------
Its: President
/s/ Carter B. Wilson
--------------------------------------
Carter B. Wilson
33