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Exhibit 10.34
NATIONSRENT, INC.
SERIES A CONVERTIBLE PREFERRED STOCK, $.01 Par Value
PREFERRED STOCK PURCHASE AGREEMENT
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PREFERRED STOCK PURCHASE AGREEMENT ("Agreement") dated July 20, 1999,
by and among NationsRent, Inc., a Delaware corporation (the "Company"), NR
Holdings Limited, a Cayman Islands corporation and NR Investments Limited, a
Cayman Islands corporation (collectively the "Purchasers").
RECITALS
WHEREAS, the Company proposes that the Company issue to the Purchasers
and the Purchasers agree to purchase, shares of the Company's Convertible
Preferred Stock, Series A, par value $.01 per share, upon the terms and subject
to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. AUTHORIZATION OF STOCK. The Company will authorize the issue and
sale of 100,000 shares (the "Shares", such term to include any such shares
issued in substitution therefor pursuant to Section 8) of its Series A
Convertible Preferred Stock, $.01 par value, to be designated as its "Series A
Convertible Preferred Stock" (the "Stock"). The relative rights, preferences and
limitations of the Stock, including, without limitation, the right to convert
Shares into shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), will be as set forth in the form of the Certificate of
Designation of the Stock of the Company attached as Exhibit A hereto (the
"Certificate of Designation"). Certain capitalized terms used in this Agreement
are defined in Section 9; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement and
references to a "Section" are, unless otherwise specified, to one of the
Sections of this Agreement.
2. SALE AND PURCHASE OF STOCK.
2.1 Subject to the terms and conditions herein set forth, the
Company agrees that it will issue to the Purchasers, and the Purchasers agree
that they will acquire from the Company, at the First Closing, an aggregate of
78,000 shares of Preferred Stock (the "First Preferred Shares") for a purchase
price of $1,000 per share or an aggregate of $78,000,000 (the "First Purchase
Price"). The number of Shares to be purchased by each Purchaser at such Closing
shall be as set forth in Exhibit B.
2.2 Subject to the terms and conditions herein set forth, the
Company agrees that it will issue to the Purchasers, and the Purchasers agree
that they will acquire from the Company, at the Second Closing, an aggregate of
22,000 shares of Preferred Stock (the "Second Preferred Shares" and together
with the First Preferred Shares, the "Shares") for a purchase price of $1,000
per share or an aggregate of $22,000,000 (the "Second Purchase Price" and
together with the First Purchase Price, the "Purchase Price"). The number of
Shares to be purchased by each Purchaser at such Closing shall be as set forth
in Exhibit B.
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3. CLOSINGS; PAYMENT OF PURCHASE PRICE.
3.1 The sale of the First Preferred Shares to be purchased by
the Purchasers shall take place at the offices of Akerman, Senterfitt & Xxxxxx,
P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, 0xx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, at
10:00 a.m., local time, at a closing (the "First Closing") on Tuesday, July 20,
1999, provided the conditions to closing set forth in Section 4 (other than
Section 4.15 which shall be satisfied at the Second Closing) have been satisfied
or waived by the party entitled to waive such condition or on such other
Business Day thereafter or prior to such date as may be agreed upon by the
Company and the Purchasers.
3.2 The sale of the Second Preferred Shares to be purchased by
the Purchasers shall take place at the offices of Akerman, Senterfitt & Xxxxxx,
P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, 0xx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 at
10:00 a.m., local time, at a closing (the "Second Closing" and together with the
First Closing, the "Closings") on the third Business Day after the conditions to
the Second Closing set forth in Section 4 have been satisfied or waived by the
party entitled to waive such conditions or on such other Business Day thereafter
or prior to such date as may be agreed upon by the Company and the Purchasers.
3.3 The names in which the Company will register the shares of
the Stock to be purchased at the Closings are as set forth in Exhibit B. At each
of the Closings, the Company will deliver to the Purchasers the Shares to be
purchased by the Purchasers in the form of a single certificate (or such greater
number of certificates representing such Shares as the Purchasers may request)
dated the date of the Closing and registered in the names aforesaid, and the
Purchasers jointly and severally shall deliver to the Company or its order cash
in immediately available funds in the amount of the purchase price for such
Shares to an account designated by the Company. If at a Closing the Company
shall fail to tender to the Purchasers the Shares to be purchased by the
Purchasers, as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled, the Purchasers shall, at
their election, be relieved of all further obligations under this Agreement,
without thereby waiving any other rights the Purchasers may have by reason of
such failure or such nonfulfillment; provided, however, that if the First
Closing has already occurred, then only the obligation to proceed with the
Second Closing may be relieved, and all other obligations of the parties
hereunder shall remain in effect with respect to the Shares issued to the
Purchasers at the First Closing. If at a Closing, (i) the Purchasers shall fail
to tender to the Company the purchase price for the Shares, as provided above in
this Section 3, other than on account of any of the conditions specified in
Section 4 not having been fulfilled or on account of the breach by the Company
of any of its obligations under this Agreement, or (ii) if the representations
and warranties of Purchasers contained in Section 6 shall not be true and
correct, then the Company shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any other rights the
Company may have by reason of such failure; provided, however, that if the First
Closing has already occurred, then only the obligation to proceed with the
Second Closing may be relieved, and all other obligations of the parties
hereunder shall remain in effect with respect to the Shares issued to the
Purchasers at the First Closing. If the stockholders of the Company vote on but
do not approve the issue and sale of the Shares to the Purchasers, then the
Company shall, at its election, be relieved of the obligation to proceed with
the Second Closing, in which case all other
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obligations of the parties hereunder shall remain in effect with respect to the
Shares issued to the Purchasers at the First Closing.
4. CONDITIONS TO EACH CLOSING. The Purchasers' obligation to purchase
and pay for the Shares to be sold to the Purchasers at each Closing is subject
to the fulfillment, prior to or concurrently with such Closing, of the following
conditions. The obligation of each Purchaser to purchase the First Preferred
Shares at the First Closing shall be subject to the satisfaction or waiver of
all of the conditions set forth below except for the condition in Section 4.15.
The obligation of each Purchaser to purchase the Second Preferred Shares at the
Second Closing shall be subject to the satisfaction or waiver of the conditions
set forth in Sections 4.1, 4.2, 4.3 and 4.15.
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 5.6 of this Agreement shall be
true and correct when made and at the time of the Closing, except that any
inaccuracy in a number of shares that does not exceed 500,000 shares shall not
be deemed to be a breach of the representations contained in Section 5.6. The
other representations and warranties of the Company contained in this Agreement
shall be true and correct when made and at the time of the Closing, except as
affected by the consummation of the transactions contemplated by this Agreement,
and except where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) would not individually or in the
aggregate have a Material Adverse Effect.
4.2 PERFORMANCE; NO DEFAULT. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing.
4.3 COMPLIANCE CERTIFICATES. The Company shall have delivered
to the Purchasers an Officers' Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled.
4.4 OPINION OF COUNSEL. The Purchasers shall have received the
favorable opinion of Akerman, Senterfitt & Xxxxxx, P.A., counsel for the
Company, substantially in the form set forth in Exhibit B and dated the date of
the Closing.
4.5 CERTIFICATE OF DESIGNATION. The Certificate of Designation
shall have been duly filed under the laws of the State of Delaware, and the
Amended and Restated Certificate of Incorporation of the Company, as amended by
the Certificate of Designation, shall be in full force and effect, and shall not
have been otherwise amended or modified.
4.6 REGISTRATION RIGHTS AGREEMENT. The Purchasers shall have
received a fully executed counterpart of the Registration Rights Agreement
substantially in the form set out in Exhibit C (the "Registration Rights
Agreement"), such agreement shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived.
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4.7 NO ACTIONS PENDING. There shall be no suit, action,
investigation, inquiry or other proceeding by any Governmental Authority or any
other Person or any other legal or administrative proceeding pending or to the
knowledge of the Company threatened which questions the validity or legality of
the transactions contemplated by this Agreement, or seeks damages in connection
therewith.
4.8 COMPLIANCE WITH SECURITIES LAWS. The offering and sale by
the Company, at or prior to the Closing, of the Shares pursuant to this
Agreement shall have been made in compliance with all applicable requirements of
federal and state securities laws and the Purchasers shall have received
evidence thereof in form and substance reasonably satisfactory to the
Purchasers.
4.9 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to the Purchasers, and the Purchasers shall have
received all such counterpart originals or certified or other copies of such
documents as the Purchasers or their counsel may reasonably request.
4.10 RESERVATION OF COMMON STOCK. The shares of Common Stock
initially issuable upon conversion of the Stock shall have been duly authorized
and reserved for issuance upon conversion of the Stock.
4.11 AMENDED CREDIT AGREEMENT. The Company, BankBoston, N.A.
and the other lending institutions and parties thereto shall have executed the
Fourth Amended and Restated Revolving Credit and Term Loan Agreement
substantially in the form of the draft dated July 18, 1999, a copy of which has
been furnished by the Company to the Purchasers with such changes that the
Company and BankBoston, N.A. may have agreed upon, which, to the extent such
changes are material, shall be reasonably satisfactory to the Purchasers, and
such agreement shall be in full force and effect.
4.12 EXECUTIVE COMMITTEE. The Board of Directors of the
Company shall have adopted the resolutions modifying the authority of the
Executive Committee set forth in Exhibit D, and such resolutions shall not have
been rescinded, amended or modified and shall be in full force and effect.
4.13 VOTING AGREEMENTS. Persons having aggregate voting power
with respect to a majority of the outstanding shares of Common Stock shall have
executed and delivered to Purchasers voting agreements in the form of Exhibit C
attached hereto ("Voting Agreements") and such agreements shall not have been
rescinded, amended or modified and shall be in full force and effect.
4.14 SECOND QUARTER RESULTS. The Purchasers shall be
reasonably satisfied that the Company's results for the quarter ended June 30,
1999 when publicly announced will be consistent with the estimated results
previously disclosed to the Purchasers' representative.
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4.15 STOCKHOLDER APPROVAL. In connection with the Second
Closing only, the stockholders of the Company shall have approved the
transactions contemplated hereby in accordance with the requirements of the New
York Stock Exchange.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants that:
5.1 ORGANIZATION, STANDING, ETC. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into and perform all of its obligations under
this Agreement and the Registration Rights Agreement, to issue and sell the
Shares to be issued and sold at the Closing (except that the issue and sale of
the Second Preferred Shares shall require the approval of the stockholders of
the Company) and to carry out the transactions contemplated hereby or thereby.
5.2 SUBSIDIARIES. SCHEDULE 5.2 lists as to each Subsidiary of
the Company on the date of this Agreement (a) its name, (b) the jurisdiction of
its incorporation or organization and (c) the percentage of its issued and
outstanding shares or other ownership interests owned by the Company or by
another Subsidiary of the Company (specifying such other Subsidiary), as the
case may be. Each Subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted. All the outstanding shares of capital stock of each
Subsidiary of the Company are validly issued, fully paid and nonassessable, and
all such shares indicated in SCHEDULE 5.2 as owned by the Company or by a
Subsidiary of the Company are so owned beneficially and of record by the Company
or by such Subsidiary, as the case may be, free and clear of any Lien except as
indicated in SCHEDULE 5.2.
5.3 QUALIFICATION. Each of the Company and its Subsidiaries is
duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction (other than the jurisdiction of its incorporation)
in which the nature of its activities or the character of the properties it owns
or leases makes such qualification necessary and in which the failure so to
qualify would have a Material Adverse Effect. A "Material Adverse Effect" shall
mean any effect that is or is reasonably likely to be materially adverse to the
properties, business, results of operations or financial condition of the
Company and its Subsidiaries taken as a whole.
5.4 BUSINESS; FINANCIAL STATEMENTS. The Company has delivered
to the Purchasers complete and correct copies of the audited consolidated
balance sheets of the Company and its Subsidiaries as of December 31, 1998 and
December 31, 1997, and the related audited consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
year ended December 31, 1998 and for the period from August 14, 1997 (inception)
to December 31, 1997. Such audited financial statements are hereinafter referred
to as the "Financial Statements." The Financial Statements are accompanied by
the report of Xxxxxx Xxxxxxxx LLP, which states that the Financial Statements
present fairly, in all material respects, the consolidated
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financial position of the Company and its Subsidiaries as of December 31, 1998
and 1997, and the results of their operations and their cash flows for the year
ended December 31, 1998 and for the period from August 14, 1997 (inception) to
December 31, 1997 in conformity with GAAP, and that the audit by such
accountants of the Financial Statements has been made in accordance with
generally accepted auditing standards. The Company has also delivered to the
Purchasers complete and correct copies of the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of March 31, 1999, and the related
unaudited consolidated statement of income, stockholders' equity and cash flows
of the Company and its Subsidiaries for the three month period ended on such
date. Such unaudited financial statements are hereinafter referred to as the
"Unaudited Statements." The Financial Statements and the Unaudited Statements
have been prepared in accordance with GAAP consistently applied throughout the
periods involved (except as otherwise specified therein) and present fairly the
financial position of the Company and its Subsidiaries as of the respective
dates specified, and the results of their operations and their cash flows for
the respective periods specified. The Company's results for the quarter ended
June 30, 1999 will be consistent with the estimated results previously disclosed
to the Purchasers' representative.
5.5 CHANGES, ETC. Since December 31, 1998, except as disclosed
in Commission Documents and except as set forth on SCHEDULE 5.5, neither the
Company nor any of the Subsidiaries has sustained any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree which would be material to the Company and the Subsidiaries
taken as a whole, otherwise than as reserved for as disclosed in the Company's
financials statements; and there has not been any change in the capital stock of
the Company or increase in the long-term debt (other than accretion or scheduled
repayments thereof) of the Company and the Subsidiaries taken as a whole, or any
change which has had a Material Adverse Effect.
5.6 CAPITAL STOCK AND RELATED MATTERS. The authorized capital
stock of the Company consists of 250,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock, $.01 par value per share (the "Preferred
Stock"). As of the date hereof, there were (i) no shares of Preferred Stock
issued or outstanding, (ii) 56,453,781 shares of Common Stock issued and
outstanding, (iii) 14,939,357 shares of Common Stock issuable upon the exercise
of outstanding stock options and warrants and upon the conversion or exchange of
outstanding convertible or exchangeable securities, (iv) an aggregate of
7,000,000 shares of Common Stock reserved for issuance under the Company's 1998
Stock Option Plan, and (v) no shares of capital stock of the Company held in the
treasury of the Company. All issued and outstanding shares of Common Stock have
been duly authorized and are validly issued, fully paid, nonassessable and free
of preemptive rights. The Shares, when issued to the Purchasers in accordance
with this Agreement, will be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except as set forth above and on
SCHEDULE 5.6, as of the date hereof, there are no outstanding securities
convertible into or exchangeable for any shares of capital stock of the Company
or any of its Subsidiaries, or any outstanding rights (either preemptive or
other) to subscribe for or to purchase, or any outstanding options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any outstanding calls, commitments or claims of any character
relating to, any capital stock of the Company or any of its Subsidiaries or any
stock or securities convertible into or exchangeable for any capital stock of
the Company or any of its Subsidiaries. Except as set forth on SCHEDULE 5.6, as
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of the date hereof, neither the Company nor any of its Subsidiaries is subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock or any convertible securities, rights
or options of the type described in the preceding sentence. Neither the Company
nor any of its Subsidiaries is a party to, or has knowledge of, any agreement
(except as set forth on SCHEDULE 5.6) restricting the transfer of any shares of
the Company's capital stock which would affect the transferability of the Common
Stock issuable upon conversion of the Stock. Except as set forth on SCHEDULE
5.6, as of the date hereof, the Company is not a party to or bound by any
agreement or commitment pursuant to which the Company is or could be required to
register any securities under the Securities Act of 1933.
5.7 TAX RETURNS AND PAYMENTS. The Company and each of the
Subsidiaries have filed all material federal, state, local and foreign income,
payroll, franchise and other tax returns required to be filed (after giving
effect to extensions) and have paid all taxes shown as due thereon, all such tax
returns are true, complete and accurate in all material respects, and there is
no tax deficiency that has been, or to the knowledge of the Company is likely to
be, asserted against the Company, any of the Subsidiaries or any of their
properties or assets that would result in a Material Adverse Effect, except for
taxes that are being contested in good faith by appropriate proceedings and with
respect to which the Company has established adequate reserves in accordance
with United States generally accepted accounting principles.
5.8 INDEBTEDNESS OF THE COMPANY. SCHEDULE 5.8 correctly
describes all secured and unsecured Indebtedness of the Company and its
Subsidiaries (other than intercompany items) outstanding, or for which the
Company or one of its Subsidiaries has commitments, which is individually in
excess of $5,000,000 ("Significant Indebtedness") (excluding operating leases),
as of June 30, 1999. Neither the Company nor any of its Subsidiaries is in
default with respect to any Indebtedness or any instrument or agreement relating
thereto, nor has any event occurred (i) that with the giving of notice or the
lapse of time or both would constitute a default thereunder, or (ii) that has
given or that with the giving of notice or the lapse of time or both would give
rise to a right of termination, amendment, cancellation or acceleration of any
right or obligation of the Company or any of its Subsidiaries thereunder, or to
a loss of any material benefit to which the Company or any of its Subsidiaries
is entitled thereunder, except for any default, termination, amendment,
cancellation, acceleration or loss of material benefit related to Indebtedness
other than Significant Indebtedness as would not, either in any case or in the
aggregate, have a Material Adverse Effect.
5.9 TITLE TO PROPERTIES; LIENS. The Company and each of the
Subsidiaries have good and marketable title to all real property (other than
property which is leased) material to the conduct of the business of the Company
and the Subsidiaries, taken as a whole, and good and marketable title to all
personal property (other than property which is leased) material to the conduct
of the business of the Company and the Subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such as are
described on SCHEDULE 5.9 or such as do not in the aggregate have a Material
Adverse Effect; and any real property and buildings held under lease by the
Company and the Subsidiaries, material to the conduct of the business of the
Company and the Subsidiaries, taken as a whole, are held by them under valid,
subsisting and enforceable leases with such exceptions as are described on
SCHEDULE 5.9 and except for such other exceptions as do not have a Material
Adverse Effect.
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5.10 LITIGATION, ETC. There is no action, proceeding or
investigation pending or (to the knowledge of the Company) threatened (or any
basis therefor known to the Company) which questions the validity of this
Agreement, the Shares or any action taken or to be taken pursuant to this
Agreement, the Shares or the Registration Rights Agreement. Other than as set
forth on SCHEDULE 5.10 and as disclosed in Commission Documents, there are no
legal or governmental proceedings pending to which the Company or any of the
Subsidiaries is a party or of which any property of the Company or the
Subsidiaries is the subject, which if determined adversely to the Company or any
of the Subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the Company's knowledge, no such proceedings which would
in the aggregate have a Material Adverse Effect are threatened or contemplated
by governmental authorities or threatened by others.
5.11 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
Company nor any of its Subsidiaries is in violation of any term of its
certificate or articles of incorporation, by-laws or other organizational
document, and neither the Company nor any of its Subsidiaries is in violation of
any term of any agreement or instrument to which it is a party or by which it is
bound or any term of any applicable law, ordinance, rule or regulation of any
Governmental Authority or any term of any applicable order, judgment or decree
of any court, arbitrator or Governmental Authority, the consequences of which
violation could reasonably be expected to have a Material Adverse Effect. Except
as set forth on SCHEDULE 5.11, the compliance by the Company with all of the
provisions of this Agreement and the Registration Rights Agreement, the
execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement, the issuance by the Company of the Common Stock
upon the conversion of the Shares, and the compliance with the terms of the
Certificate of Designation will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default (or an
event that with the giving of notice or the lapse of time or both would
constitute a default) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any right or obligation of the Company or any of
its Subsidiaries under, or give rise to a loss of any material benefit to which
the Company or any of its Subsidiaries is entitled under, or require any
consent, approval or authorization under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of the property or assets of the Company
or any of the Subsidiaries is subject, or constitute a Repayment Event
thereunder, nor will such actions result in any violation of the provisions of
the certificate or articles of incorporation or bylaws of the Company or any of
the Subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties except in each case as would not,
individually or in the aggregate have a Material Adverse Effect. Except as set
forth on SCHEDULE 5.11, the execution, delivery and performance by the Company
of this Agreement and the transactions contemplated hereby will not subject the
Company to or accelerate any obligation to make payments to any Person.
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5.12 GOVERNMENTAL CONSENTS, ETC. No consent, approval or
authorization of, or declaration or filing with, any Governmental Authority on
the part of the Company is required for the valid execution and delivery of this
Agreement, the valid offer, issue, sale and delivery of the Shares pursuant to
this Agreement or the valid issue and delivery of shares of Common Stock
issuable upon conversion of the Stock. Except for (a) applicable state
securities or blue sky laws, and (b) consents, approvals, filings or notices
that will be given or made at or prior to the time of the Closing, neither the
Company nor any of its Subsidiaries is required to obtain any consent, approval
or authorization of, or to make any declaration or filing with, any Governmental
Authority as a condition to the valid execution, delivery or performance of the
Registration Rights Agreement or the consummation of the transactions
contemplated thereby.
5.13 OFFERING OF SECURITIES. Neither the Company nor any
Person acting on its behalf has offered the Stock or any similar securities of
the Company to, or solicited any offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any Person or Persons other
than the Purchasers in such manner as would subject the offering, issuance or
sale of any of the Stock to the provisions of Section 5 of the Securities Act.
Neither the Company nor any Person acting on behalf of the Company has taken or
will take any action which would subject the offering, issuance or sale of any
of the Stock to the provisions of Section 5 of the Securities Act.
5.14 CERTAIN FEES. Except for the fees payable by the Company
to Bear Xxxxxxx & Co., Inc. and to Deutsche Bank/Alex. Xxxxx, the amount of
which will be disclosed to the Purchasers in writing prior to the Closing, no
broker's or finder's fees or commissions will be payable by the Company with
respect to the transactions contemplated by this Agreement and the Registration
Rights Agreement, and the Company hereby agrees to indemnify the Purchasers
against and agrees that it will hold the Purchasers harmless from any claim,
demand or liability for broker's or finder's fees alleged to have been incurred
at the instance of the Company or any Person acting on behalf of or at the
request of the Company or any agent of the Company in connection with any of the
transactions contemplated by this Agreement and the Registration Rights
Agreement, and from any expenses, including reasonable legal fees, arising in
connection with any such claim, demand or liability.
5.15 INVESTMENT COMPANY ACT. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
5.16 DISCLOSURE. None of the Company's Annual Report on Form
10-K, as amended on Form 10-K/A, for the year ended December 31, 1998, each
document filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1994 (the "Exchange Act") since the
Annual Report on Form 10-K, as amended on Form 10-K/A, for the year ended
December 31, 1998, the Company's Prospectus dated August 7, 1998 in respect of
its initial public offering or the Company's Offering Memorandum dated December
8, 1998 in respect of its 10-3/8% Senior Subordinated Notes due 2008, contains
(in each case, as of its date) any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
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5.17 ENFORCEABILITY. This Agreement and the Registration
Rights Agreement have been duly authorized and when validly executed and
delivered by the Company (assuming the due authorization, execution and delivery
thereof by the other parties thereto) will constitute the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
5.18 INTEGRATION. Neither the Company nor any affiliate (as
such term is defined in Rule 501(b) under the Securities Act) has, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Shares, in a manner that would
require the registration of the Shares under the Securities Act.
5.19 MANIPULATION. Prior to the date hereof, neither the
Company nor any of its affiliates has taken any action which is designed to or
which has constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the sale of the Shares.
5.20 INTELLECTUAL PROPERTY. The Company and the Subsidiaries
own or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to carry
on the business now operated by them, and neither the Company nor any of the
Subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
the Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
5.21 GOVERNMENT LICENSES. The Company and the Subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to so possess such
Government Licenses would not, singly or in the aggregate, have a Material
Adverse Effect; the Company and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have, singly or
in the aggregate, a Material Adverse Effect; and neither the Company nor any of
the Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the
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aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
5.22 ENVIRONMENTAL LAWS. Except as described on SCHEDULE 5.22
or except as would not, singly or in the aggregate, result in a Material Adverse
Effect: (a) neither the Company nor any of the Subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (b) neither the Company nor any of the Subsidiaries is
lacking any permits, authorizations and approvals required under any applicable
Environmental Laws or are in violation of the requirements of such Environmental
Laws, (c) there are no pending or, to the best knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of the Subsidiaries and (d) to the knowledge of the Company there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of the Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
5.23 INSURANCE. Neither the Company nor any Subsidiary has
received notice from any insurer providing insurance coverage for the Company
and the Subsidiaries or agent of such insurer that capital improvements or other
expenditures will have to be made in order to continue present insurance
coverage, except such as could not reasonably be expected, singularly or in the
aggregate, to have a Material Adverse Effect.
5.24 INTERNAL CONTROLS. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are recorded as
necessary (i) to permit preparation of financial statements in conformity with
generally accepted accounting principles and (ii) to maintain accountability for
assets; (c) access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any material differences; except as described on
SCHEDULE 5.24 and except where the failure to so maintain such system could not
reasonably be expected, singularly or in the aggregate, to have a Material
Adverse Effect.
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5.25 ERISA. Neither the Company nor any of the Subsidiaries
has violated any provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
Material Adverse Effect. If any plan subject to ERISA is adopted, the execution
and delivery of this Agreement and the sale of the Shares will not involve any
non-exempt prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
5.26 YEAR 2000 DISCLOSURE. The Company has made all
disclosures in Commission Documents required by the Securities and Exchange
Commission's Staff Legal Bulletin No. 5 related to Year 2000 compliance. Such
disclosures (as of the date made) do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
5.27 NO LIABILITIES. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations (direct or indirect, contingent
or absolute, matured or unmatured) of any nature whatsoever, whether arising out
of contract, tort, statute or otherwise ("Liabilities"), except (i) as reflected
in the notes to the Financial Statements for the year ended December 31, 1998
and not heretofore discharged, (ii) as reflected or reserved against in the
unaudited balance sheet of the Company at March 31, 1999 included in the
Company's Form 10-Q for the quarter ended March 31, 1999 and not heretofore
discharged, (iii) Liabilities incurred in the ordinary course of business since
March 31, 1999, (iv) contractual liabilities incurred in the ordinary course of
business, (v) Liabilities incurred in connection with any acquisition of another
business entity made by the Company after the date hereof, (vi) other
Liabilities that do not, singly or in the aggregate, have a Material Adverse
Effect, (vii) as disclosed in Commission Documents or (viii) as set forth in
SCHEDULE 5.27.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. The Purchasers
hereby represent and warrant as follows:
6.1 INVESTMENT REPRESENTATIONS.
(a) Each Purchaser understands that neither the
Shares nor any Common Stock issuable upon conversion, if any, of the
Shares have been registered under the Securities Act and that the
certificates for the Shares and such Common Stock will bear a legend to
that effect, based in part upon Purchasers' representations contained
in this Agreement.
(b) Each Purchaser has been organized by Investcorp
S.A. ("Investcorp") for the purpose of purchasing its respective number
of Shares. Each Purchaser is acquiring the Shares for its account
and/or for the account of affiliates of Investcorp and certain other
international investors with whom Investcorp has administrative
relationships and who have acquired or may acquire equity interests in
such Purchaser not with a view toward distribution in a manner which
would violate the Securities Act. Neither Purchaser, nor Investcorp nor
any Person acting on their behalf has taken or will take any action in
connection with the transactions contemplated by this Agreement or the
offering, sale or issuance of any equity
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interests in either Purchaser which would subject the offering,
issuance or sale of the Shares to the provisions of Section 5 of the
Securities Act.
(c) Each Purchaser represents that by reason of the
business or financial experience of Investcorp and its affiliates, and
the business or financial experience of each of the other international
investors who have or may acquire equity interests in such Purchaser,
such Purchaser and its shareholders have the capacity to protect their
own interests in connection with the transaction contemplated in this
Agreement.
(d) Each Purchaser has been given access to all
Company documents, records, and other information, and has had adequate
opportunity to ask questions of, and receive answers from, the
Company's officers, employees, agents, accountants, and
representatives, concerning the Company's business, operations,
financial condition, assets, liabilities, and other matters considered
by the Purchasers as relevant to its investment in the Shares.
6.2 NO BROKERS. Purchasers represent and warrant to the
Company that no broker's or finder's fees or commissions will be payable by the
Purchasers with respect to the transactions contemplated by this Agreement and
the Registration Rights Agreement, and the Purchasers hereby jointly and
severally agree to indemnify and hold the Company harmless from any claim,
demand or liability for broker's or finder's fees alleged to have been incurred
at the instance of the Purchasers, their affiliates or agents or any Person
acting on behalf of or at the request of the Purchasers, their affiliates or
agents.
6.3 COMPLIANCE WITH LAWS. Purchasers and their transferees
will comply with all filing and other reporting obligations under all
Requirements of Law which shall be applicable to Purchasers with respect to the
Shares and to the Common Stock issuable or issued on conversion of the Shares.
6.4 POWER AND AUTHORITY; ENFORCEABILITY. Each of the
Purchasers has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. Each of the Purchasers has taken all actions
necessary to authorize its execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of the Purchasers and constitutes a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws). The Purchasers have sufficient financial means and ability to deliver the
purchase price for the Shares at Closing.
6.5 HSR ACT. Each Purchaser warrants and represents that
neither Purchaser shall be required to file a notification within the meaning of
such term in the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder, 16 C.F.R. Parts 000-000 (xxx "XXX
Xxx"), at any time in connection with the Purchasers' execution and delivery of
this Agreement and the conclusion of the transactions contemplated hereby.
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6.6 NO OTHER REPRESENTATIONS. The Purchasers acknowledge that,
in connection with the acquisition of the Shares, no representations or
warranties of any type or description have been made to any Purchaser by any
Person with regard to the Company, any of its subsidiaries, any of their
respective businesses, properties or prospects or the acquisition of the Shares
contemplated herein, other than the representations and warranties set forth in
Section 5.
7. AFFIRMATIVE COVENANTS. The Company covenants that from and after the
date of this Agreement through the Closing and thereafter, but, in the cases of
Sections 7.1, 7.2 and 7.10, only so long as the holders of Shares are entitled
under the Certificate of Designation to elect as a class at least one member of
the Company's Board of Directors:
7.1 EXCHANGE ACT AND SECURITIES ACT FILINGS. The Company will
deliver to the Purchasers, within three Business Days of their filing with the
Securities and Exchange Commission, all Commission Documents filed by it with
the Securities and Exchange Commission.
7.2 CERTIFICATES; OTHER INFORMATION. The Company will deliver
to the Purchasers: (a) promptly upon receipt thereof, copies of all final
reports submitted to the Company or any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or (but
only if the holders of the Shares are then entitled under the Certificate of
Designation to elect as a class at least one member of the Company's Board of
Directors) special audit of the books of the Company or any of its Subsidiaries
made by such accountants, including, without limitation, any final comment
letter submitted by such accountants to management in connection with their
annual audit; (b) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by the Company to all of its security holders in their
capacity as such or by any Subsidiary of the Company to its security holders;
and (c) the monthly financial package of information of the Company internally
prepared by the Company for distribution to its senior management, within five
(5) Business Days after such information has been distributed internally in
final form.
7.3 BOOKS AND RECORDS. The Company will, and will cause each
of its Subsidiaries to keep proper books of record and account in which entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities.
7.4 RESERVATION OF COMMON STOCK. The Company will at all times
reserve and keep available, solely for issuance and delivery upon conversion of
the Stock, the number of shares of Common Stock from time to time issuable upon
conversion of all shares of the Stock at the time outstanding. All shares of
Common Stock issuable upon conversion of the Stock shall be duly authorized and,
when issued upon such conversion, shall be validly issued, fully paid and
non-assessable.
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7.5 AVAILABILITY OF INFORMATION. The Company will comply with
the reporting requirements of Sections 13 and 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and will comply with all other
public information reporting requirements of the Securities and Exchange
Commission (including Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act) from time to time in effect and relating to
the availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will also reasonably cooperate with each
holder of any Restricted Securities in supplying such information as may be
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Securities and Exchange Commission as a
condition to the availability of an exemption from the Securities Act for the
sale of any Restricted Securities.
7.6 STOCKHOLDER APPROVAL. As soon as practicable following the
date hereof, the Company will take all action necessary in accordance with the
Exchange Act, Delaware law and its certificate of incorporation and by-laws to
obtain the approval of its stockholders of the transactions contemplated hereby
in accordance with the requirements of the New York Stock Exchange (the
"Stockholder Approval"). Purchasers covenant that each shall cooperate and
assist the Company as reasonably required to obtain such stockholder approval
and each covenants that it shall vote to approve the transactions contemplated
hereby.
7.7 NO CONVERSION PRICE ADJUSTMENT EVENTS PRIOR TO SECOND
CLOSING. The Company shall not take any action prior to the consummation of the
Second Closing which would entitle the holders of the Shares to an adjustment of
the conversion price of the Shares pursuant to the Certificate of Designation.
7.8 APPOINTMENT OF PURCHASER DESIGNEES TO THE BOARD. Promptly
following the First Closing, the Company's Board of Directors will increase the
size of the Company's Board of Directors from six to at least eight and will
appoint Xxxxxxxxxxx X. X'Xxxxx and Xxxxxxx X. Xxxxxxxxx to the Company's Board
of Directors to fill two of such vacancies created thereby, to serve until the
next annual meeting of the stockholders of the Company and until their
successors are elected. In the event that none of the foregoing directors or the
directors elected by the holders of the Shares is able to attend a meeting of
the Company's Board of Directors, then the Purchasers shall have the right to
have a representative selected by the Purchasers attend such meeting as a guest
without voting rights; provided, however, that any such representative shall be
reasonably acceptable to the Company, such representative shall have signed a
confidentiality agreement in a form reasonably satisfactory to the Company
concerning Company information provided in connection with such meeting and that
a Purchasers' representative shall not attend any two board of directors
meetings in succession. At all times during which the holders of the Stock are
entitled to elect at least one member of the Company's Board of Directors, the
Certificate of Incorporation or Bylaws of the Company will provide for
indemnification of the Company's directors to the fullest extent permitted under
Delaware law.
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7.9 CONDUCT OF BUSINESS PENDING FIRST CLOSING. The Company
will not take any action prior to the First Closing without the consent of the
Purchasers if such action would require the consent or vote of the Purchasers or
the holders of the Stock pursuant to this Agreement, the Certificate of
Designation or the Registration Rights Agreement if taken after the First
Closing.
7.10 EXECUTIVE COMMITTEE. The Company agrees that it will not
rescind, amend or modify the resolution adopted to satisfy the condition set
forth in Section 4.12 without the unanimous consent of the members of the
Company's Board of Directors.
7.11 VOTING AGREEMENTS. The Company agrees that it will not
permit any shares of Common Stock that are subject to a Voting Agreement to be
transferred, prior to the time the Stockholder Approval is obtained, unless the
transferee has executed and delivered a Voting Agreement to the Purchasers.
8. REGISTRATION, TRANSFER AND SUBSTITUTION OF CERTIFICATES FOR STOCK.
8.1 STOCK REGISTER; OWNERSHIP OF STOCK.
(a) The Company will keep at its principal office a
register in which the Company will provide for the registration of the
Stock and the registration of transfers or conversion of the Stock. The
Company may treat the Person in whose name any of the Shares or shares
issued upon conversion of any of the Stock are registered on such
register as the owner thereof and the Company shall not be affected by
any notice to the contrary. All references in this Agreement to a
"holder" of any Shares or shares issued upon conversion of any of the
Stock shall mean the Person in whose name such Shares or shares issued
upon conversion of any of the Stock are at the time registered on such
register.
(b) Upon the surrender of any certificate for Stock,
properly endorsed, for registration of transfer or for conversion at
the office of the Company maintained pursuant to subdivision (a) of
this Section 8.1, the Company at its expense will (subject to
compliance with Section 8.2 hereof, if applicable) execute and deliver
to or upon the order of the holder thereof (i) a new certificate or
certificates for the same aggregate number of Shares of Stock less the
number of Shares of Stock being converted or transferred, if any, in
the name of such holder or as such holder (upon payment by such holder
of any applicable transfer taxes) may direct, (ii) a certificate or
certificates for the number of shares of Common Stock to be issued upon
conversion of the Shares of Stock so surrendered, if applicable, in the
name of such holder or as such holder (upon payment by such holder of
any applicable transfer taxes) may direct, and (iii) a new certificate
or certificates for the number of Shares of Stock transferred, if
applicable, in the name of the transferee (upon payment by such holder
of any applicable transfer taxes).
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8.2 REPLACEMENT OF CERTIFICATES. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any certificate representing shares of Stock or Common Stock
issued upon the conversion of Shares of Stock and, in the case of any such loss,
theft or destruction of any certificate representing shares of Stock or Common
Stock issued upon the conversion of Shares of Stock held by a Person other than
the Purchasers, upon delivery of indemnity reasonably satisfactory to the
Company in form and amount or, in the case of any such mutilation, upon
surrender of such certificate representing shares of Stock or Common Stock
issued upon the conversion of Shares of Stock for cancellation at the office of
the Company maintained pursuant to subdivision (a) of Section 8.1 hereof, the
Company at its expense will execute and deliver, in lieu thereof, a new
certificate representing shares of Stock or Common Stock of like tenor.
8.3 RESTRICTIVE LEGENDS. Except as otherwise permitted by this
Section 8, each certificate for Stock (including each certificate for Stock
issued upon the transfer of any certificate for Stock) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares represented by this Certificate and any shares of
Common Stock issuable upon conversion of any such shares have
not been registered under the Securities Act of 1933 and may
not be transferred in the absence of such registration or an
exemption therefrom under such Act. Such shares and any such
shares of Common Stock may be transferred only in compliance
with the conditions specified in the Preferred Stock Purchase
Agreement dated July 20, 1999 between NationsRent, Inc. (the
"Company") and the purchasers identified therein. A complete
and correct copy of such Agreement is available for inspection
at the principal office of the Company and will be furnished
without charge to the holder of such shares upon written
request."
Except as otherwise permitted by this Section 8, each certificate for Common
Stock issued upon the conversion of any of the Stock, and each certificate
issued upon the transfer of any such Common Stock, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred in the absence of such registration or an
exemption therefrom under such Act. Such shares may be
transferred only in compliance with the conditions specified
in the Preferred Stock Purchase Agreement dated July 20, 1999
between NationsRent, Inc. (the "Company") and the purchasers
identified therein. A complete and correct copy of such
Agreement is available for inspection at the principal office
of the Company and will be furnished without charge to the
holder of such shares upon written request."
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8.4 NOTICE OF PROPOSED TRANSFER; OPINIONS OF COUNSEL. Prior to
any transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act, the holder thereof
will give written notice to the Company of such holder's intention to effect
such transfer and to comply in all other respects with this Section 8.4. Each
such notice shall describe the manner and circumstances of the proposed transfer
and shall be accompanied by an opinion of counsel for such holder, which counsel
and opinion shall each be reasonably satisfactory to the Company, that the
proposed transfer may be effected without registration of such shares of
Restricted Securities under the Securities Act. Such holder shall thereupon be
entitled to transfer such shares in accordance with the terms of the notice
delivered by such holder to the Company. Each certificate representing such
shares issued upon or in connection with such transfer shall bear the
restrictive legends required by Section 8.3, unless the related restrictions on
transfer shall have ceased and terminated as to such shares pursuant to Section
8.5 hereof.
8.5 TERMINATION OF RESTRICTIONS. The restrictions imposed by
this Section 8 upon the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities when such restrictions are
no longer required in order to insure compliance with the Securities Act.
Whenever such restrictions shall cease and terminate as to any Restricted
Securities, the holder thereof shall be entitled to receive from the Company,
without expense (other than applicable transfer taxes, if any), new certificates
for such securities of like tenor not bearing the applicable legends required by
Section 8.3 hereof.
9. DEFINITIONS.
9.1 CERTAIN DEFINED TERMS. As used in this Agreement the
following terms have the following respective meanings:
Affiliate: Shall have the meaning attributed thereto under
Rule 12b-2 under the Exchange Act.
Business Day: Any day except a Saturday, a Sunday, or any day
on which banking institutions in New York, New York are required or authorized
by law or other governmental action to be closed.
Certificate of Designation: As defined in Section 1 of this
Agreement.
Closing: As defined in Section 3 of this Agreement.
Closing Date: The date of the Closing.
Code: The Internal Revenue Code of 1986, as amended from time
to time.
Commission Document: All registration statements, proxy
statements, reports and other documents (and all amendments thereto) filed by
the Company under the Securities Act or the Exchange Act.
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Common Stock: As defined in Section 1 of this Agreement.
Company: As defined in the introduction to this Agreement.
Exchange Act: At any time, the Securities Exchange Act of
1934, as amended.
Financial Statements: As defined in Section 5.4 of this
Agreement.
First Closing: As defined in Section 3 of this Agreement.
First Closing Date: The date of the First Closing.
First Preferred Shares: As defined in Section 3 of this
Agreement.
GAAP: Generally accepted accounting principles set forth in
the Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements by the Financial Accounting
Standards Board or in such other statement by such other entity as may be
approved by a significant segment of the accounting profession; and the
requisite that such principles be applied on a consistent basis shall mean that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
Governmental Authority: Any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Indebtedness: With respect to any Person, at a particular time
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property, (b) the face amount of all letters of credit issued
for the account of such Person and, without duplication, all drafts drawn
thereunder, (c) all liabilities secured by any Lien on any property owned by
such Person, to the extent attributable to such Person's interest in such
property, even though such Person has not assumed or become liable for the
payment thereof, (d) lease obligations of such Person which, in accordance with
GAAP, should be capitalized, and (e) all guarantees by such Person of any such
indebtedness, letters of credit, drafts, liabilities or lease obligations of any
other Person; but excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms and which are not
overdue for a period of more than 60 days or, if overdue for more than 60 days,
as to which a dispute exists and adequate reserves in conformity with GAAP have
been established on the books of such Person. The term "Indebtedness" shall not
include amounts which have not been drawn under credit facilities,
notwithstanding that such amounts when drawn will automatically be secured by an
existing Lien.
Lien: Any mortgage, pledge, hypothecation, assignment,
security interest, lien, charge or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effects as
any of the
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foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction).
Majority in Interest: At any time, the holders of a majority,
by number of shares, of the outstanding Shares and the outstanding shares of
Common Stock, if any, issued upon conversion of any Shares, such majority to be
determined by reference to the number of shares of Common Stock into which all
outstanding Shares are at the time convertible.
Officers' Certificate: As to the Company, a certificate
executed on behalf of the Company by its Chief Executive Officer, and any one of
its Vice Presidents or Chief Financial Officer.
Person: An individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
Registration Rights Agreement: As defined in Section 4.6 of
this Agreement.
Repayment Event: Any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of the
Subsidiaries.
Requirement of Law: As to any Person, the Certificate of
Incorporation and by-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
Restricted Securities: All of the following: (a) any
certificates for Stock bearing the applicable legend or legends referred to in
Section 8.3 hereof, (b) any shares of Common Stock which have been issued upon
the conversion of any of the Stock and which are evidenced by a certificate or
certificates bearing the applicable legend or legends referred to in such
Section and (c) unless the context otherwise requires, any shares of Common
Stock which are at the time issuable upon the conversion of Stock and which,
when so issued, will be evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section.
Second Closing: As defined in Section 3 of this Agreement.
Second Closing Date: The date of the Second Closing.
Second Preferred Shares: As defined in Section 3 of this
Agreement.
Securities Act: At any time, the Securities Act of 1933 as
then in effect or any similar federal statute then in effect, and any reference
to a particular Section of such Act shall be deemed to include a reference to
the comparable Section, if any, in any such similar federal statute.
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Securities and Exchange Commission: The U.S. Securities and
Exchange Commission, or any other federal agency at the time administering the
Securities Act or the Exchange Act, whichever is the relevant statute for the
particular purpose.
Shares: As defined in Section 1 of this Agreement.
Stock: As defined in Section 1 of this Agreement.
Subsidiaries: With respect to any Person, any corporation with
respect to which more than 50% of the combined voting power of each class having
ordinary voting power (other than stock having such power only by reason of the
happening of a contingency) is at the time owned by such Person or by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person.
Any of the above-defined terms may, unless the context
otherwise requires, be used in the singular or plural depending on the
reference.
9.2 ACCOUNTING TERMS. As used in this Agreement, and in any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 9.1 and accounting terms
partly defined in said Section 9.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
9.3 OTHER PROVISIONS REGARDING DEFINITIONS: Unless otherwise
defined therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate, report or other document made or
delivered pursuant to this Agreement. The words "hereof", "herein", and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
10. EXPENSES, ETC. Whether or not the transactions contemplated by this
Agreement shall be consummated, the Company will pay all of its expenses in
connection with such transactions and in connection with any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement or the Shares purchased by the Purchasers hereunder, including,
without limitation: (a) the cost and expenses of reproducing this Agreement and
the Shares purchased by the Purchasers, of furnishing all opinions of counsel
for the Company and all certificates on behalf of the Company, and of the
Company's performance of and compliance with all agreements and conditions
contained herein to be performed or complied with by it; and (b) the cost (other
than any applicable stock transfer taxes) of delivering to their principal
office, insured to their satisfaction, the Shares sold to the Purchasers
hereunder and any Shares delivered to the Purchasers upon any substitution of
Shares pursuant to Section 8 and of the Purchasers delivering any Shares,
insured to their satisfaction, upon any such substitution. At the First Closing,
the Company shall pay to Investcorp Management Services Ltd. a fee equal to 4%
of the gross proceeds to the Company of the sale of the First Preferred Shares
to the Purchasers at the First Closing. At the Second Closing, the Company shall
pay to Investcorp Management Services Ltd. an additional fee equal to 4% of the
gross proceeds to the Company of the sale of the Second Preferred Shares to the
Purchasers at the Second Closing. In addition, if the transactions contemplated
hereby have been consummated, the Company shall pay
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all of the reasonably itemized out-of-pocket expenses incurred by the Purchasers
in connection with such transactions (including the fees and disbursements of
their counsel), provided that the Company's liability under this sentence shall
not exceed $550,000. Reference is made to Section 5 of this Agreement for
certain agreements among the parties regarding the fees, if any, of brokers and
finders.
11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION;
CERTAIN LIMITATIONS. The Company's indemnification obligations and all
representations and warranties contained in this Agreement shall survive the
execution and delivery of this Agreement, any investigation at any time made by
the Purchasers or on their behalf, and the purchase of the Shares by the
Purchasers under this Agreement and any conversion of any of the Stock or any
disposition of any shares of Common Stock issued upon conversion of any of the
Stock; provided that all such representations and warranties (and the
indemnities in respect thereof with respect to claims not made prior to such
date) shall expire 30 days after the date the Company's audited financial
statements for the fiscal year ending December 31, 1999 are publicly filed with
the Commission or delivered to Purchasers, except that the representations and
warranties set forth in Section 5.6 (and the indemnities in respect thereof)
shall survive for a period of two (2) years following the First Closing Date. No
written (except as explicitly stated therein) or oral statements made by or on
behalf of the Company, other than in this Agreement, the Registration Rights
Agreement and the exhibits hereto and thereto, shall constitute representations
or warranties within the meaning of this Agreement. In no event shall Purchasers
be entitled to the remedy of rescission.
12. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
or modified and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and (a) in the case
of any such action prior to the Closing, the Purchasers; and (b) in the case of
any other such action, a Majority in Interest.
13. NOTICES, ETC. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be delivered, or mailed by first-class mail, postage pre-paid, addressed,
(a) if to the Purchasers or any other holder of Shares or shares of Common Stock
into which the Shares have been converted, at the address set forth below, or at
such other address as the Purchasers or such other holder shall have furnished
to the Company in writing, and (b) if to the Company at the address of the
Company set forth below, to the attention of its Chief Executive Officer, or at
such other address, or to the attention of such other officer, as the Company
shall have furnished to the Purchasers and each such other holder in writing.
If to the Purchasers: NR Holdings Limited
NR Investments Limited
c/o Investcorp Management Services Ltd.
c/o Investcorp International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
Facsimile: 000-000-0000
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If to the Company: NationsRent, Inc.
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
14. INDEMNIFICATION.
(a) The Company shall indemnify, defend and hold
harmless the Purchasers, their affiliates, partners, officers,
employees and agents (each, an "Indemnified Person") from and against
any and all losses, liabilities, damages, judgments, settlements and
expenses (including interest and penalties recovered by a third party
with respect thereto and reasonable attorneys' fees and expenses and
reasonable accountants' fees and expenses incurred in the investigation
or defense of any of the same or in asserting, preserving or enforcing
any of rights hereunder), that arise out of any breach by the Company
of any of its representations, warranties or covenants contained in
this Agreement or in the Registration Rights Agreement.
(b) The Purchasers shall give the Company prompt
notice of any third-party claim that may give rise to any
indemnification obligation under this Section 14 and the Company shall
(except as set forth below) have the right to assume and control the
defense (at its expense) and settlement of any such claim through the
Company's own counsel or through other counsel reasonably acceptable to
the Purchasers. The Purchasers may retain additional counsel at their
own expense. If, under applicable standards of professional conduct, a
conflict with respect to any significant issue between the Purchasers
and the Company exists in respect of such third-party claim, the
Company shall not assume the defense of such claim and shall also pay
the reasonable fees and expenses of one counsel selected by Purchasers
in respect of such claim. Notwithstanding the foregoing, without the
Purchasers' consent, the Company will not settle any action or
proceeding which does not provide the Purchasers a full, unconditional
release from all liability with respect to such claim by each claimant
or plaintiff in a form acceptable to the Purchasers' counsel, nor will
the Company consent to any injunctive or other non-monetary relief
affecting any Indemnified Person.
15. CONTROL BY INVESTCORP. Each Purchaser covenants and agrees that
Investcorp or an Affiliate of Investcorp will control, directly or indirectly, a
majority of the voting and dispositive power with respect to the Shares so long
as any Shares remain outstanding. Each Purchaser covenants and agrees that
Investcorp or an Affiliate of Investcorp will control, directly or indirectly, a
majority of the voting and dispositive power with respect to the shares of
Common Stock into which any of the Shares have been converted which continue to
be held by Purchasers and their respective Affiliates.
16. TERMINATION. This Agreement may be terminated (a) by the mutual
written consent of the Purchasers and the Company at any time, (b) by the
Purchasers or the Company if the First
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Closing shall not have been consummated on or before August 15, 1999, (c) by the
Purchasers or the Company if the Second Closing shall not have been consummated
on or before November 30, 1999, (d) by the Purchasers or the Company if the
stockholder meeting occurs and the stockholders do not vote to approve the
transactions contemplated hereby, (e) by either party if any representation or
warranty of the other party contained herein proves not to have been true and
correct in any material respect when made, or (f) by either party if the other
party materially breaches any covenant hereunder; provided, however, that the
right to terminate this Agreement pursuant to clause (b) or (c) of this Section
15 shall not be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure to consummate the
transactions by such time.
17. PUBLIC ANNOUNCEMENTS. The initial press release or releases
concerning the transactions contemplated hereby shall be in the form agreed to
by the Company and the Purchasers. Prior to the First Closing, neither party
will issue any other press release or make any other public announcement
concerning this Agreement or the transactions contemplated hereby without the
prior consent of the other, except that either party may make such public
disclosure as may be required by law or a court of competent jurisdiction (in
which event such party will notify the other party as long in advance as
practicable prior to making such disclosure and will, unless not practicable
under the circumstances, give the other party the opportunity to comment on the
language of the disclosure prior to making such disclosure) or by any national
securities exchange on which the Common Stock is listed.
18. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each the parties hereto; provided
that neither of the Purchasers may assign, delegate or otherwise transfer any of
its rights, interests or obligations under this Agreement, without the prior
written consent of the Company, except to the other Purchaser or an Affiliate of
either of the Purchasers or of Investcorp. This Agreement embodies the entire
agreement and understanding between the Purchasers and the Company and
supersedes all prior agreements and understandings relating to the subject
matter hereof, except that certain Confidentiality Agreement dated May 26, 1999
by and between Investcorp and Bear Xxxxxxx & Co., Inc. shall not be superseded
by this Agreement, is affirmed by Investcorp and shall remain in full force and
effect. This Agreement shall be construed and enforced in accordance with and
governed by the law of the State of Delaware without regard to the principles
regarding conflicts of laws. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective representatives hereunto duly
authorized as of the date first above written.
NATIONSRENT, INC., a Delaware corporation
By: /s/ XXXXX X. XXXX
-------------------------
Xxxxx X. Xxxx,
Chairman of the Board and
Chief Executive Officer
NR HOLDINGS LIMITED, a Cayman Islands
corporation
By: /s/ SYDNEY X. XXXXXXX
-------------------------
The Director Ltd.
Director
NR INVESTMENTS LIMITED, a Cayman Islands
corporation
By: /s/ SYDNEY X. XXXXXXX
-------------------------
The Director Ltd.
Director
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Certificate of Designation
Exhibit B Number of Shares to be Purchased by Purchasers
Exhibit C Form of Opinion of Akerman, Senterfitt & Xxxxxx, P.A.
Exhibit D Form of Registration Rights Agreement
Exhibit E Proposed Board Resolutions Amending Authority of
Executive Committee
Exhibit F Form of Voting Agreements
Schedule 5.2 Subsidiaries
Schedule 5.5 Changes Since December 31, 1998
Schedule 5.6 Capitalization
Schedule 5.8 Indebtedness
Schedule 5.9 Liens
Schedule 5.10 Litigation
Schedule 5.11 Compliance with Other Instruments, etc.
Schedule 5.22 Environmental Matters
Schedule 5.24 Internal Controls
Schedule 5.27 Undisclosed Liabilities
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