10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTIONS 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2006
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 333-130841

NEFF RENTAL LLC

(Exact name of registrant as specified in our charter)

Delaware	11-3753649
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
3750 N.W. 87th Avenue, Suite 400
Miami, FL	33178
(Address of principal executive offices)	(Zip Code)

(305) 513-3350

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:  None

Securities registered pursuant to Section 12 (g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.
			Yes o No x
If this report is annual or transition, indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934.			Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.			Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.			x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as
defined in Rule 12b-2).	Large accelerated filer o  Accelerated filer o  Non-accelerated filer x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2).		Yes o  No x

NEFF RENTAL LLC
ANNUAL REPORT OF FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2006

TABLE OF CONTENTS

	PART I
ITEM 1.	BUSINESS
ITEM 1A.	RISK FACTORS
ITEM 1B.	UNRESOLVED STAFF COMMENTS
ITEM 2.	PROPERTIES
ITEM 3.	LEGAL PROCEEDINGS
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6.	SELECTED FINANCIAL DATA
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
ITEM 9A.	CONTROLS AND PROCEDURES
ITEM 9B.	OTHER INFORMATION
	PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11.	EXECUTIVE COMPENSATION
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES
	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

PART I

Forward Looking Statements

This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  All statements, other than statements of historical facts, included in this Annual Report on Form 10-K regarding the prospects of our industry and our prospects, plans, financial position and business strategy may constitute forward-looking statements.  In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “plan,” “foresee,” “believe” or “continue” or the negatives of these terms or variations of them or similar terminology.  Although we believe that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct.  All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement.

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:

·cyclicality or seasonality affecting our or our customers’ industries;

·a significant decline in non-residential construction and industrial spending;

·competitive factors in the industries in which we operate;

·a significant increase in the costs associated with our equipment fleet, including the cost of new equipment and the cost of maintenance of existing equipment, as well as the timing of capital expenditures;

·exposure to liability claims which may exceed the level of our insurance or not be covered at all;

·environmental and occupational health and safety regulations;

·the termination of one or more relationships with our suppliers;

·our reliance on complex information systems;

·our inability to obtain additional capital as required;

·the loss of key members of our senior management team;

·our inability to make timely deliveries to our customers;

·conflicts between the interests of our financial sponsor, which has the power to control our affairs and policies, and the interests of our creditors, such as the pursuit of acquisitions that could enhance the equity investments of our sponsor but involve risk to our creditors;

·our substantial indebtedness; and

·our ability to identify and consummate acquisitions and to integrate any acquired business.

Readers are urged to consider these factors carefully in evaluating the forward-looking statements.  For further information about these and other risks and uncertainties, see Item 1A, “Risk Factors.”

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.  The forward-looking statements included herein are made only as of the date of this Annual Report on Form 10-K, and we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Market and Industry Data

In this Annual Report on Form 10-K, we rely on and refer to information and statistics regarding the equipment and equipment rental industry, the size of certain markets and our position and the position of our competitors within the sectors in which we compete.  Some of the market and industry data contained in this Annual Report on Form 10-K is based on independent industry publications or other publicly available information, while other information is based on our good faith estimates, which are derived from our review of internal surveys, as well as independent sources listed in this annual report and management’s knowledge and experience in the markets in which we operate.  In particular, we made our determinations of

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market size and market share within our industry based on information from Manfredi & Associates, McGraw Hill Construction, F.W. Dodge, Rental Equipment Register and the American Rental Association.  Our estimates have also been based on information obtained from our customers, suppliers and other contacts in the markets in which we operate.

Item 1.Business

References in this section to “us” or “we” refer to Neff Rental LLC (“Neff LLC”) and its wholly-owned subsidiaries.

Recapitalization and Corporate Reorganization

On June 3, 2005, the transactions contemplated by the Recapitalization Agreement between Neff Corp. and Iron Merger Sub, Inc. (“Iron”) were consummated.  Iron was a newly formed Delaware corporation and wholly-owned subsidiary of Iron Merger Partnership (“Holdings”).  Holdings is a Delaware general partnership, the partners of which are affiliates of Odyssey Investment Partners, LLC (“Odyssey”).  Under the Recapitalization Agreement, Iron merged with and into Neff Corp. (the “Recapitalization”), and Neff Corp. remained as the surviving entity and a majority-owned subsidiary of Holdings.  All of the equity capital in Holdings is owned by Odyssey.  Substantially all of Neff Corp.’s former stockholders and holders of options to purchase Class A common stock received cash in exchange for their shares or for the cancellation of certain options.

The total purchase price related to the Recapitalization was approximately $240.5 million (or $8.214 per share of Neff Corp.’s common stock).  The merger consideration and the repayment of previously outstanding indebtedness were funded with the proceeds from:

·the investment by Holdings and certain co-investors in Iron and the subsequent contribution of the cash proceeds from such investment through the merger of Iron into Neff Corp.;

·borrowings under a $245.0 million bridge facility (the “Bridge Loan”);

·the issuance by Neff Corp. of $80.0 million in aggregate principal amount of 13% senior subordinated notes (the “13% Notes”); and

·borrowings under a $225.0 million Asset Based Lending credit facility (the “Credit Facility”).

On July 8, 2005, we repaid the amounts outstanding under the Bridge Loan from our issuance of $245.0 million aggregate principal amount of our 11¼% second priority senior secured notes (the “11¼ Notes” and, when taken together with the 13% Notes, the “Notes”).

Concurrently with the completion of the offering of the 11¼% Notes, we chose to modify our corporate organization.  In the reorganization, Neff Corp. transferred substantially all of its assets (including all of the capital stock of its operating subsidiary, Neff Rental, Inc.) and substantially all of its obligations (including its obligations under its guarantee of the Credit Facility and the 13% Notes) to Neff LLC.  Contemporaneously, Neff Finance Corp. (“Neff Finance”), became a co-obligor of all of Neff LLC’s obligations under the 13% Notes and a guarantor of the Credit Facility.  Neff Finance was created solely to serve as a corporate co-obligor on the obligations of Neff LLC, and Neff Finance has and will continue to have nominal assets and no operations or revenues.  As a result of the corporate reorganization, Neff LLC assumed and succeeded to substantially all of Neff Corp.’s assets and liabilities, and Neff Corp. was released from all of its obligations under the Credit Facility and the 13% Notes.  In connection with the reorganization, we amended certain terms of the 13% Notes and Neff LLC became, along with Neff Finance, the issuers of the 13% Notes.  As a result of the reorganization, Neff Corp. is not subject to any of the restrictive covenants in the credit agreement governing the Credit Facility or the indentures governing the  Notes.

We refer to the transactions contemplated by the Recapitalization Agreement and the corporate reorganization as the “Transactions.”

Our Company

We are one of the largest equipment rental companies in the United States.  Through our 66 branches, located primarily in the sunbelt states, we rent a broad variety of construction and industrial equipment, including earthmoving, material handling, aerial, compaction and related equipment.  We believe what differentiates us from many of our competitors is that we have a particular focus on renting earthmoving equipment, which comprises approximately 47.6% of the total original equipment cost (which we define as the cost originally paid to manufacturers or the original amount financed under operating leases, “Original Cost”) of our rental fleet.  Our target customer base consists of mid-sized, regional and local nonresidential construction firms, which we believe value our high level of service and our equipment reliability standards.  During 2006, we served over 20,000 customers and generated 83.4% of our revenues from equipment rentals, 11.9% of our revenues from the sale of used and new equipment and 4.7% of our revenues from the sale of parts, supplies and related maintenance.  For the years ended December 31, 2002, 2003, 2004, 2005 and 2006, our net income (loss) was approximately $(98.0) million, $20.4 million, $6.0 million, $(13.0) million

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and $35.1 million.  Our ratio of earnings to fixed charges for the years ended December 31, 2003, 2004 and 2006 was 1.9x, 1.3x and 1.6x, respectively.  For the years ended December 31, 2002 and 2005 our earnings were insufficient to cover our fixed charges by approximately $98.3 million and $13.0 million, respectively.  As of December 31, 2006, our rental fleet consisted of 12,519 major pieces of equipment with an Original Cost of approximately $512.4 million.  From 2002 through 2006, we increased total revenues at a compounded annual growth rate of 14.6%.

Our strategy is to focus on geographic markets that we believe feature favorable demographic trends, high levels of employment growth and strong construction activity.  Our branches are organized into operating clusters in five geographic regions in the United States:  Florida, Atlantic, Southeastern, Central and Western.  This clustering strategy enables us to establish a strong local presence and to transfer equipment efficiently between branches in order to optimize utilization and profitability and better manage our capital expenditures.  We believe that our regional operating strategy, targeted customer focus and differentiated focus on earthmoving equipment, along with the breadth and quality of our rental equipment fleet, provide us with significant competitive advantages that help us to generate attractive revenue growth and strong EBITDA margins compared to our peers.

As a result of the Recapitalization, we are now controlled by Odyssey.  In connection with the Recapitalization, we incurred a substantial amount of indebtedness and became subject to covenants that restrict our operations.  As of December 31, 2006, we had total indebtedness of approximately $485.7 million (of which $245.0 million consisted of the 11¼ Notes, $77.2 million consisted of the 13% Notes and $163.5 million consisted of borrowings under the Credit Facility).  See Item 1A, ‘‘Risk Factors.’’

Our History

MP Equipment was founded by the Mas family in 1988.  In 1989, the Mas family purchased Neff Machinery, a John Deere dealership with locations throughout South Florida.  Throughout the 1990s, we grew quickly and completed an initial public offering in 1998 as part of an effort to continue to fund our expansion.  In 2003, we voluntarily deregistered our equity securities and ceased filing reports with the SEC.  Prior to the Transactions, we were majority owned by the Mas family and General Electric Capital Corporation.

Throughout the course of our history, we have strategically acquired and divested certain rental equipment locations and rental equipment businesses.  On May 18, 2006, we acquired River City Connections, Inc., or River City, a rental equipment business with two locations, one in Roseville, California and the other in Elk Grove, California.  Immediately subsequent to the acquisition, River City was merged with and into Valley Rents and Ready Mix, Inc., or Valley Rents, a Delaware corporation, with Valley Rents remaining as the surviving entity and a wholly-owned subsidiary of Neff Rental, Inc.  On December 22, 2006 Valley Rents was merged into Neff Rental, Inc., with Neff Rental, Inc. remaining as the surviving entity.

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Operations

We generate revenues primarily through the rental of a broad variety of construction and industrial equipment, the sale of new and used equipment and the sale of parts, supplies and related merchandise.  Our branches are organized into operating clusters in five geographic regions in the United States:  Florida, Atlantic, Southeastern, Central and Western.  For more information regarding our financial results see Item 8, “Financial Statements and Supplementary Data.”

Equipment Rentals.We rent a broad variety of construction and industrial equipment, including earthmoving, material handling, aerial, compaction and related equipment.  We emphasize the earthmoving category, which accounts for 47.6% of the Original Cost of our rental fleet, because it has lower rate pressure, retains strong resale value and has a longer equipment lifespan than small equipment categories.  Our fleet includes the latest models from leading branded OEMs, including John Deere, Kobelco, Case New Holland, Bomag, Ingersoll-Rand, JCB, Gradall, Lull, JLG, Genie, Bobcat, MultiQuip, Komatsu and Wacker.

Major categories of equipment represented the following percentages (based on Original Cost) of our total rental fleet as of December 31, 2006: 

Percentage of Total Rental Fleet  Major Equipment Category (Based on Original Cost)
Earthmoving	47.6	%
Material Handling	19.5
Aerial	12.2
Trucks	7.3
Concrete/Compaction	6.1
Air Compressors	2.9
Welders	1.3
Generators	1.3
Lighting	0.7
Pumps	0.4
Other	0.7
Total	100.0	%

We generate our rental revenues from the rental of equipment, damage waivers and other surcharges.  We perform operational and safety inspections between each rental and conduct preventive maintenance services at the manufacturers’ recommended intervals.  We believe our preventive maintenance program increases our fleet utilization, extends the useful life of the equipment and produces higher resale values.  As of December 31, 2006, our equipment rental fleet had an Original

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Cost of approximately $512.4 million with a current average age of approximately 42 months.

We offer our equipment for rent on a daily, weekly and monthly basis.  We determine rental rates for each type of equipment based on the cost and expected utilization of the equipment and adjust rental rates at each location based on demand, length of rental, volume of equipment rented and other competitive considerations.

New and Used Equipment Sales.We maintain a regular program of selling used equipment in order to adjust the size and composition of our rental fleet to changing market conditions and to maintain the quality and average age of our rental fleet.  We attempt to balance the objective of obtaining acceptable prices from used equipment sales against the recurring revenues obtainable from equipment rentals.  Our highly experienced staff of mechanics and branch and regional managers evaluate every disposition on a piece by piece basis to determine the optimal time to sell our used equipment.  We believe we are generally able to achieve favorable resale prices for our used equipment due to our strong preventative maintenance program and our practice of selling used equipment before it becomes obsolete or irreparable.  We believe that this proactive management of our rental fleet allows us to adjust the rate and timing of new equipment purchases and used equipment sales to maximize equipment utilization rates, take advantage of attractive disposition opportunities and respond to changing economic conditions.  Used equipment disposition is an integral part of our capital management program and an important focus of management.  Proceeds from the sale of used rental equipment represent an important source of re-investment capital for us.  We sell rental equipment to our existing customers, used equipment buyers, OEMs as part of trade packages for new fleet and third party auctioneers.

Parts and Service.We sell complementary parts, supplies and merchandise to our customers in conjunction with our equipment rental and sales businesses.  We maintain a wide range of maintenance and replacement parts and related products, which is important for timely parts and service support and helps minimize downtime for both our customers and us.

Fleet Management

Our branches are often within close geographic proximity to each other and are all connected through a central system which allows any other branch to view equipment availability throughout our entire branch network.  As a result, we can respond quickly to the needs of our customers and increase the utilization rates of our equipment, thereby improving profitability and reducing capital expenditures.

We monitor fleet purchases to maintain appropriate inventory levels and to manage capital expenditures.  We regularly review our fleet to determine which pieces of equipment should be replaced in order to maintain our high-quality standards.  Our approach to fleet management assumes the replacement of a fleet item upon expiration of its useful rental life.

We purchase our equipment from vendors who we believe have the best reputations for product quality and support.  We identify vendors who can supply quality, reliable products and provide value added support services.  We believe that the length of our vendor relationships has helped us to compete effectively with the largest rental companies in the industry.

The following table lists our top ten OEM vendors in percentage of total fleet costs as of December 31, 2006: 

Percent of Total Fleet Cost  Manufacturer (Based on Original Cost)
Kobelco	12.1	%
Case New Holland	9.7
John Deere	9.5
Genie	8.5
Ingersoll-Rand	7.9
JCB	5.9
Komatsu	5.4
Bobcat	4.4
Lull	4.2
JLG	3.5

Customers

Our large customer base, which includes more than 20,000 customers, is diversified among various industries, including non-residential, industrial and civil construction, manufacturing, public utilities, offshore oil exploration and drilling, refineries and petrochemical facilities, municipalities, golf course construction, shipping and the military.  We target mid-sized regional and local construction companies that value customer service.  Our customer base includes both large Fortune 500

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companies who have elected to outsource some of their equipment needs and small construction contractors, subcontractors and machine operators whose equipment needs are job-based.  Our top ten customers accounted for approximately 4.8% of our total rental revenues in 2006 and no single customer accounted for more than 1.0% of our total rental revenues in 2006.

We largely conduct our business on account with customers who are screened through a credit application process.  Credit account customers are our core customers, accounting for approximately 96.4% of our total revenues in 2006. We also assist customers in arranging financing for purchases of large equipment through a variety of sources, including manufacturers, banks, finance companies and other financial institutions.

Sales and Marketing

We maintain a strong sales and marketing orientation throughout our organization, which we believe helps us to increase our customer base and better understand and serve our customers.  Managers develop relationships with local customers and assist them in planning their equipment rental requirements.  They are also responsible for managing the mix of equipment at their locations, keeping current on local construction activity and monitoring competitors in their respective markets.  To stay informed about their local markets, salespeople track rental opportunities and construction projects in the area through Equipment Data Reports, F.W. Dodge Reports, PEC (Planning, Engineering and Construction) Reports and local contacts.

Our sales training program emphasizes customer service and focuses on sales generation.  Additionally, our Customer Relationship Management (“CRM”) system helps maximize sales and revenue opportunities.  As part of this system, the sales force is automatically updated regarding new construction projects in their territories.  We believe that this ability to track, manage and share recent account activity enables us to maximize our rental success.  We believe that our CRM system helps us to identify opportunities that might otherwise go undetected by our sales force and management, and that such opportunities help us create company-wide sales synergies.

Management Information Systems

We have developed customized management information systems, capable of monitoring operations on a real-time basis at up to 300 branches.  These systems link all of our rental locations and allows management to track customer and sales information, as well as the location, rental status and maintenance history of every major piece of equipment in the rental fleet.  Using these systems, branch managers can search our entire rental fleet for needed equipment, quickly determine the closest location of such equipment and arrange for delivery to the customer’s work site.  This practice helps diminish lost opportunities, improves utilization and makes equipment available in markets where it can maximize revenue potential.  We use these systems to optimize fleet utilization and determine the optimal fleet composition by market.

Employees

As of December 31, 2006, we had 1,131 full-time employees.  None of our employees are represented by a union or covered by a collective bargaining agreement.  We believe we have satisfactory relations with our employees.

Competition

We are one of the largest equipment rental companies in the United States.  As a result of our regional focus, we believe that our position in many of the markets in which we compete is substantially stronger.  The equipment industry is highly fragmented and competitive.  While the competitive landscape also includes small, independent businesses with one or two rental locations, we believe that we mostly compete against regional competitors which operate in one or more states, public companies or divisions of public companies and equipment vendors and dealers who both sell and rent equipment directly to customers.  Some of these competitors include United Rentals, Hertz Equipment Rental, Ahern Rentals, RSC Equipment Rental, H&E Equipment Services, CAT Rental, Sunstate Equipment and Sunbelt Rentals.

We believe that, in general, large companies may enjoy competitive advantages compared to smaller operators, including greater purchasing power, a lower cost of capital, the ability to provide customers with a broader range of equipment and services and greater flexibility to transfer equipment among locations in response to customer demand.  Given our focus on competing in select markets, our diverse and well-maintained rental fleet and our focus on customer service, we do not believe that we have been disadvantaged by the pricing and buying power that larger national businesses may possess.  See Item 1A, ‘‘Risk Factors—Risks Relating to our Business—The equipment rental industry is highly competitive and competitive pressures could lead to a decrease in our market share or in rental rates and our ability to sell equipment at favorable prices.’’

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Environmental and Safety Regulations

Our facilities and operations are subject to comprehensive and frequently changing federal, state and local environmental and occupational safety and health requirements, including those relating to discharges of substances to the air, water and land, the handling, storage, use and disposal of hazardous materials and wastes and the cleanup of properties affected by pollutants.  In connection with our vehicle and equipment fueling and maintenance, repair and washing operations, we use regulated substances such as petroleum products and solvents and we generate small quantities of regulated waste such as used oil, radiator fluid and spent solvents.  Some of our properties contain, or previously contained, aboveground or underground storage tanks and/or oil-water separators.  We believe that we are in substantial compliance with environmental requirements.  Although we have made, and will continue to make, capital and other expenditures to comply with environmental requirements, we do not anticipate that compliance with such requirements will have a material adverse effect on our business or financial condition or competitive position.  However, in the future, new or more stringent laws or regulations could be adopted.  Accordingly, we cannot assure you that we will not have to make significant capital expenditures in the future in order to comply with applicable laws and regulations or that we will be able to remain in compliance at all times.

Most, but not all, of our properties have been the subject of environmental site assessments in order to establish a baseline of environmental conditions or to identify conditions that may cause us to incur obligations or liabilities (including remediation costs) under applicable environmental laws.  In addition, most of our properties are leased and are subject to lease agreements whereby the site owner has assumed responsibility for the pre-existing condition of the property and we are liable only for contamination caused by us or during the term of our lease.  We are not aware of any existing conditions at our properties or at off-site locations that are likely to result in material remediation costs or liabilities to us.  However, given the nature of our operations and the historical operations conducted at these properties, we cannot assure you that all potential instances of contamination have been identified, even where environmental site assessments have been conducted.  Future events, such as changes in laws or policies, the discovery of previously unknown contamination, or the failure of another party to honor an obligation it may have to indemnify us for any such remediation costs or liabilities, may give rise to remediation costs which may be material.  See Item 1A, ‘‘Risk Factors—Risks Relating to our Business—We must comply with numerous environmental and occupational health and safety regulations on a continuing basis that may subject us to unanticipated liabilities which could have a material adverse effect on our operating performance.’’

Additional Information

You can inspect and copy the reports and other information filed by us at the public reference facilities maintained by the SEC at 100 F Street, NE, Washington, D.C. 20549. You can obtain copies of such material from the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549 at prescribed rates. You can call the SEC at 1-800-732-0330 for information regarding the operations of its Public Reference Room. The SEC also maintains a web site at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants (including us) that file periodically.

Item 1A.Risk Factors

In addition to the other information included in this annual report, you should carefully consider the risks described below.  Any of the following risks could materially and adversely affect our business, financial condition, results of operations or cash flows.

Risks Related to Our Business

Our revenues and operating results will fluctuate which could materially adversely affect our revenues and operating results.

Our revenues and operating results fluctuate from quarter to quarter due to various factors, including:

·changes in rental rates or changes in demand for our equipment due to economic conditions, competition, weather or other factors;

·seasonal rental and purchasing patterns of our customers, with rental and purchasing activity tending to be lower in the winter due to weather and the holiday season;

·the cyclical nature of the businesses of our construction customers;

·the timing of capital expenditures for rental fleet expansion;

·changes in the cost and availability of equipment we purchase, including changes in manufacturer incentive programs;

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·changes in corporate spending for plants and facilities or changes in government spending for infrastructure projects;

·severe weather and seismic conditions temporarily affecting the regions we serve (such as hurricanes and flooding);

·increased costs, including fuel costs and other raw material costs such as the price of steel;

·the timing and cost of opening new rental or customer repair center locations or acquiring new locations; and

·our effectiveness in integrating new or acquired rental or customer repair center locations, or in integrating acquisitions with existing operations.

Any of these factors could decrease our revenue and profitability, which may significantly adversely affect our financial condition.

Decreases in construction or industrial activities could adversely affect our revenues and operating results by decreasing the demand for our equipment or the rental rates or prices we can charge.

The equipment rental industry is highly cyclical and its revenues are closely tied to general economic conditions and to conditions in the non-residential construction industry in particular.  Our products and services are used primarily in non-residential construction and, to a lesser extent, in industrial activity.  These are cyclical businesses that are sensitive to changes in general economic conditions.  Weakness in our end markets, such as a decline in non-residential construction or industrial activity, has led and may in the future lead to a decrease in the demand for our equipment or the rental rates or prices we can charge.  For example, in the period from 2001 through the first half of 2003, there were significant decreases in non-residential construction activity compared to prior periods.  This weakness in our end market had an adverse effect on our results in 2001 through the first half of 2003.  Factors that may cause weakness in the non-residential construction industry include:

·weakness in the economy or the onset of a new recession;

·reductions in corporate spending for plants and facilities;

·oversupply of available commercial real estate in the markets we serve;

·continuing increases in interest rates; and

·terrorism or hostilities involving the United States.

Future declines in non-residential construction and industrial activity could adversely affect our operating results by decreasing our revenues and gross profit margins.

The equipment rental industry is highly competitive and competitive pressures could lead to a decrease in our market share or in rental rates and our ability to sell equipment at favorable prices.

The equipment rental industry is highly fragmented and very competitive.  Our competitors include:

·a few large national companies, including public companies and divisions of public companies;

·several regional competitors that operate in multiple states;

·thousands of small, independent businesses with only one or a few rental locations; and

·hundreds of equipment manufacturers and dealers that both sell and rent equipment directly to customers.

Some of our competitors are significantly larger than we are and have greater financial and marketing resources than we have.  Some of our competitors also have greater technical resources, longer operating histories, lower cost structures and better relationships with equipment manufacturers than we have.  In addition, certain of our competitors are more geographically diverse than we are and have greater name recognition among customers than we do.  As a result, our competitors that have the advantages identified above may be able to provide their products and services at lower costs.  We may in the future encounter increased competition in the equipment rental market, equipment sales market or in the equipment repair and services market from existing competitors or from new market entrants.

We believe that rental rates, fleet size and quality are the primary competitive factors in the equipment rental industry.  From time to time, we or our competitors may attempt to compete aggressively by lowering rental rates or prices.  Competitive pressures could adversely affect our revenues and operating results by decreasing our market share or depressing the rental rates.  To the extent we lower rental rates or increase our fleet in order to retain or increase market share, our operating

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margins would be adversely impacted.  In addition, we may not be able to increase rates further or be able to match a larger competitor’s price reductions or fleet investment because of its greater financial resources, all of which could adversely impact our operating results through a combination of a decrease in our market share and revenues.  If we do not, we may lose market share, resulting in decreased revenues and cash flow, which could have a material adverse effect on our business.

Additionally, existing or future competitors may compete with us for start-up locations or acquisition candidates, which may increase acquisition prices and reduce the number of suitable acquisition candidates or expansion locations.

We may recognize significantly higher maintenance costs in connection with increases in the weighted average age of our rental fleet.

As our fleet of rental equipment ages, the cost of maintaining such equipment, if not replaced, will likely increase.  In the past, we have allowed the average age of our rental equipment fleet to increase, which generally requires us to invest more capital in maintenance, parts and repair.  We manage the average age of different types of equipment according to the expected wear-and-tear that a specific type of equipment is expected to experience over its useful life.  As of December 31, 2006, the average age of our rental equipment fleet was approximately 42 months.  As of December 31, 2006, approximately 47.6% of the total original equipment cost of our rental fleet consisted of earthmoving equipment, which generally has a shorter useful life and higher maintenance costs than aerial or material handling equipment.  If we allow the average age of our earthmoving equipment, or other types of equipment, to increase, our investment in the maintenance, parts and repair for individual pieces of equipment may exceed the book value or replacement value of that equipment.  We cannot assure you that costs of maintenance will not materially increase in the future.  Any material increase in such costs could have a material adverse effect on our business, financial condition and results of operations.

The nature of our business as a company which leases, rents and sells heavy machinery, equipment and vehicles exposes us to liability claims on a continuing basis, which may exceed the level of our insurance or not be covered at all, and if our cost of insurance increases or our coverage is limited, we may incur unanticipated liabilities that would have a material adverse effect on our operating performance.

Our business exposes us to claims for personal injury, death or property damage resulting from the use of the heavy machinery, equipment and vehicles we rent, sell, service or repair and from injuries caused in motor vehicle accidents in which our personnel are involved.  Our business also exposes us to worker compensation claims and other employment-related claims.  The insurance we carry against such claims may be less than our liability on existing and future claims.  In addition, we may be exposed to multiple claims that individually do not exceed our deductibles but that together lead to aggregate costs that could adversely affect our financial condition and results of operations.  Furthermore, the cost of our insurance policies may increase significantly as a result of general rate increases for the type of insurance we carry as well as our historical experience and experience in our industry.  If our insurance costs rise, if we choose to reduce or eliminate coverage or if we must pay amounts in excess of claims covered by our insurance, we could experience higher costs that could adversely affect our financial condition and results of operations.  In addition, we may be subject to various legal proceedings and claims, such as claims for punitive damages or damages arising from intentional misconduct, either asserted or unasserted, that may not be covered by our insurance.  Any such claims, whether with or without merit, could be time-consuming and expensive to defend and could divert management’s attention and resources.

We must comply with numerous environmental and occupational health and safety regulations on a continuing basis that may subject us to unanticipated liabilities which could have a material adverse effect on our operating performance.

Our facilities and operations are subject to comprehensive and frequently changing federal, state and local laws and regulations relating to environmental protection and occupational health and safety.  These laws and regulations govern, among other things, the discharge of substances into the air, water and land, the handling, storage, use and disposal of hazardous materials and wastes and the cleanup of properties affected by pollutants.  If we violate environmental laws or regulations, we may be required to implement corrective actions and could be subject to civil or criminal fines or penalties.  Although expenses related to environmental compliance have not been material to date, we cannot assure you that we will not have to make significant capital expenditures in the future in order to remain in compliance with applicable laws and regulations or that we will comply with applicable environmental laws at all times.  Such violations or liability could have a material adverse effect on our business, financial condition and results of operations.

Environmental laws also impose obligations and liability for the cleanup of properties affected by hazardous substance spills or releases.  These liabilities can be imposed on the parties generating or disposing of such substances or on the owner or operator of affected property, often without regard to whether the owner or operator knew of, or was responsible for, the presence of hazardous substances.  Accordingly, we may become liable, either contractually or by operation of law, for remediation costs even if the contaminated property is not presently owned or operated by us, or if the contamination was caused by third parties during or prior to our ownership or operation of the property.  Given the nature of our operations (which involve the use of

9

petroleum products, solvents and other hazardous substances for fueling and maintaining our rental equipment and vehicles) and the historical operations at some of our properties, we cannot assure you that prior site assessments or investigations have identified all potential instances of soil or groundwater contamination.  Some of our properties contain, or previously contained, above ground or underground storage tanks and/or oil-water separators.  Future events, such as changes in existing laws or policies or their enforcement, or the discovery of currently unknown contamination, may give rise to additional remediation liabilities that may be material.

We purchase a significant amount of our equipment from a limited number of manufacturers.  Termination of one or more of our relationships with any of those manufacturers could have a material adverse effect on our business because we may be unable to obtain adequate rental and sales equipment from other sources in a timely manner, on favorable terms or at all.

We purchase most of our rental and sales equipment from a limited number of original equipment manufacturers.  For example, as of December 31, 2006, Kobelco, Case New Holland and John Deere represented 12.1%, 9.7% and 9.5%, respectively, of our Original Cost.  Termination of one or more of our relationships with any of these or other major suppliers could have a material adverse effect on our business, financial condition or results of operations if we were unable to obtain adequate equipment for rental and sale from other sources in a timely manner, on favorable terms or at all.  Because our major suppliers also sell equipment to our competitors, our relationships with our suppliers do not provide us any particular competitive advantage.

In addition, the equipment manufacturing industry has experienced consolidation in recent years.  Further consolidation could result in a decrease in the number of our major suppliers or a decrease in the number of alternative supply sources available to us, which could make it more likely that termination of one or more of our relationships with major suppliers would result in a material adverse effect on our business, financial condition or results of operations.  Consolidation could also result in price increases for the equipment we purchase, which could adversely affect our business.

In the past, there have been delays in receiving equipment from some manufacturers because of raw material shortages.  To the extent there are future delays, our business could be hurt by the resulting inability to service our customers.

Our rental fleet is subject to residual value risk upon disposition.

The market value of any given piece of rental equipment could be less than its depreciated value at the time it is sold.  The market value of used rental equipment depends on several factors, including:

·the market price for new equipment of a like kind;

·wear and tear on the equipment relative to its age;

·the time of year that it is sold (generally prices are higher during the peak construction season);

·worldwide and domestic demand for used equipment; and

·general economic conditions.

If prices we are able to obtain for our used rental equipment decline as a result of these or other factors, our operating results may be materially adversely effected.

The cost of new equipment we use in our rental fleet is increasing which may cause us to spend significantly more for replacement equipment, and in some cases we may not be able to procure equipment at all due to supplier constraints.

We operate in a capital intensive business environment.  The cost of new equipment used in our rental fleet has increased steadily since 2004.  These cost increases are due primarily to:

·a significant increase in the cost of steel, which is a primary material used in most of the equipment we use;

·the manufacturers of equipment are operating at full capacity with long lead-times for orders and therefore commanding higher prices; and

·the prices for new equipment were comparatively lower in recent years due to an oversupply of equipment in the rental equipment marketplace and reduced construction and industrial activity.

Price increases could materially adversely impact our financial condition and results of operations.

While we can manage the size and aging of our fleet generally over time, eventually we must retire older equipment and either allow our fleet to shrink or replace the older equipment in our fleet with newer models. We will need to purchase

10

additional equipment in 2007 in order to maintain our current operations as well as expand our fleet.  We may be at a competitive disadvantage if the average age of our fleet increases compared to the age of our competitors’ fleets.

In some cases, we may not be able to procure replacement equipment on a timely basis to the extent that manufacturers for the equipment we need are not able to produce sufficient inventory on schedules that meet our timing demands.  If demand for new equipment increases significantly, manufacturers may not be able to meet customer orders on a timely basis.  As a result, we at times may experience long lead-times for certain types of new equipment and we cannot assure you that we will be able to acquire the types or sufficient numbers of the equipment we need to replace older equipment as quickly as we would like.  Consequently, we may have to age our fleet longer than we would consider optimal or shrink our fleet, either of which could restrict our ability to grow our business.

Disruptions in our information technology and customer relationship management systems could adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.

Our information technology systems facilitate our ability to monitor and control our operations to adjust to changing market conditions, including management of our rental fleet.  Our CRM system allows our sales force to access comprehensive information about customer activity relating to specific accounts to assist their sales efforts.  The effectiveness of our sales force depends upon the continuous availability and reliability of our CRM system.  Consequently, any disruptions in our information technology or customer relationship management systems or the failure of these systems, including our redundant systems, to operate as expected could, depending on the magnitude of the problem, impair our ability to effectively monitor and control our operations and improve our sales efforts, and thereby adversely affect our operating results.

Potential acquisitions and expansions into new markets may result in significant transaction expenses and expose us to risks associated with entering new markets and integrating new or acquired operations.

We plan to grow our business and to do this, in part, by opening new rental or customer repair center locations, acquiring other equipment rental companies, or both.  The success of these endeavors will depend, in part, on identifying sites for start-up locations and selecting acquisition candidates at attractive prices.  Zoning restrictions could prevent us from being able to open start-up locations at sites we identify.  We may also encounter substantial competition in our efforts to acquire start-up sites and acquisition candidates, which may limit the number of acquisition opportunities and lead to higher acquisition costs.  We may not have the financial resources necessary to open any new start-up locations or complete any acquisitions in the future or the ability to obtain the necessary funds on satisfactory terms or at all.

We may also encounter risks associated with entering new markets in which we have limited or no experience.  Start-up rental locations, in particular, require significant capital expenditures and may initially have a negative impact on our short-term cash flow, net income and results of operations.  New start-up locations may not become profitable when projected or ever.  Acquisitions may impose significant strains on our management, operating systems and financial resources, and could result in unexpected difficulties.  The pursuit and integration of acquisitions will require substantial attention from our senior management, which will limit the amount of time they have available to devote to our existing operations.  Our ability to realize the expected benefits from any future acquisitions depends in large part on our ability to integrate and consolidate the new operations with our existing operations in a timely and effective manner.  Future acquisitions also could result in the incurrence of substantial amounts of indebtedness and contingent liabilities (including potentially environmental, employee benefits and occupational safety and health liabilities), accumulation of goodwill that may become impaired, and an increase in amortization expenses related to intangible assets.  Any significant diversion of management’s attention from our existing operations, the loss of key employees or customers of any acquired business, any major difficulties encountered in the opening of start-up locations or the integration of acquired operations or any associated increases in indebtedness, liabilities or expenses could have a material adverse effect on our business, financial condition or results of operations.

If we are unable to obtain additional capital as required, we may be unable to fund the capital outlays required for the success of our business, including those relating to purchasing equipment, opening new rental locations, making acquisitions and refinancing existing indebtedness.

Our business has significant capital requirements.  Our ability to remain competitive, sustain our growth and expand our operations through start-up locations and acquisitions largely depends on our access to capital.  If the cash that we generate from our business, together with cash on hand and borrowings under the Credit Facility, to the extent available, is not sufficient to implement our growth strategy and meet our capital needs, we will require additional financing.  However, we may not succeed in obtaining additional financing on terms that are satisfactory to us or at all.  In addition, our ability to obtain additional financing will be restricted by the indentures governing the Notes and the terms of the Credit Facility.  See “—Risks Relating to our Indebtedness—The terms of the Credit Facility and the indentures governing the Notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.” If we are unable to obtain sufficient additional capital in the future, we may be unable to fund the capital outlays required for the success and growth of our

11

business, including those relating to purchasing equipment, opening new rental locations and customer repair centers, and completing acquisitions.  Any additional indebtedness that we do incur will make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures.

We depend on key personnel whom we may not be able to retain.

Our operations are managed by a small number of key executive officers, and our future performance depends on the continued contributions of those management personnel.  A loss of one or more of these key people could harm our business and prevent us from implementing our business strategy.  We do not maintain “key man” life insurance on the lives of any members of our senior management.  In connection with the Recapitalization, Mr. J.C. Mas, our Chief Executive Officer and a member of our Board of Managers, and Merger Sub entered into an employment agreement that became effective upon the consummation of the Recapitalization.  In addition, we have existing employment agreements with Mark Irion, our Chief Financial Officer, Graham Hood, our President and Chief Operating Officer, and certain other key executives and managers.  However, each of the employment agreements is of limited duration.  We cannot assure you that these executives will remain employed with us for the full term of their agreements or that the term of their agreements will be extended beyond the current term.

The success of our operations also depends in part on our ability to attract, hire, train and retain qualified managerial, sales and marketing personnel.  Competition for these types of personnel is high.  We may be unsuccessful in attracting and retaining the personnel we require to conduct our operations successfully and, in such an event, our business could be materially and adversely affected.

We have experienced significant costs as a result of operating as a public company.

As a company subject to the reporting requirements of the Securities Exchange Act of 1934, we incur significant legal, accounting and other expenses that we did not incur as a private company. These expenses are associated with our reporting requirements and corporate governance requirements.  We expect these rules and regulations to continue to increase our legal, accounting and other expenses and to make some activities more time-consuming to our management.  Also, as a result of operating as a public company, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.

Risks Relating to our Indebtedness

Our substantial indebtedness could adversely affect our financial health, our cash flow and our ability to operate our business, and prevent us from fulfilling our obligations under our indebtedness.

We have a significant amount of indebtedness.  On December 31, 2006, we had total indebtedness of approximately $485.7 million (of which $245.0 million consisted of the 11¼ Notes, $77.2 million consisted of the 13% Notes and $163.5 million consisted of borrowings under the Credit Facility).

Our substantial indebtedness could have important consequences to our business.  For example, it could:

·make it more difficult for us to satisfy our obligations with respect to our indebtedness;

·increase our vulnerability to general adverse economic and industry conditions;

·require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, strategic growth efforts and other general corporate purposes;

·limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

·place us at a competitive disadvantage compared to our competitors who have less indebtedness; and

·limit our ability to borrow additional funds.

In addition, the indentures governing the Notes and the credit agreement governing the Credit Facility contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests.  Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of

12

all of our indebtedness.  We cannot assure you that we will not be required to seek waivers and amendments in the future or that, if sought, our lenders would grant such waivers or amendments.

Any of the above described factors could materially and adversely affect our business and results of operations.  Furthermore, our interest expense could increase if interest rates increase because the entire amount of our indebtedness under the Credit Facility bears interest at floating rates.  If we do not have sufficient earnings to service our indebtedness, we may be required to refinance all or part of our indebtedness, sell assets, borrow more money or sell securities, none of which we can guarantee we will be able to do.

We may incur substantially more indebtedness.  This could further exacerbate the risks associated with our substantial leverage.

We will be able to incur substantially more indebtedness in the future.  The terms of the indentures governing the Notes and the credit agreement governing the Credit Facility do not prohibit us from doing so, and indebtedness which can be incurred in compliance with the restrictions under the indentures and the Credit Facility could be substantial.  The Credit Facility permits additional borrowings, subject to a borrowing base calculation.  As of December 31, 2006, we had approximately $51.9 million of remaining availability for additional borrowings under the Credit Facility.  If new indebtedness is added to our current indebtedness levels, the related risks that we and it now face could intensify.

To service our indebtedness, we will require a significant amount of cash.  Our ability to generate cash depends on many factors beyond our control and any failure to meet our debt service obligations could harm our business, financial condition and results of operations.

We have substantial long-term indebtedness, including interest obligations on such indebtedness.  See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual and other Commitments.” Borrowings under our Credit Facility are subject to variable interest rates.  As of December 31, 2006, borrowings under the Credit Facility totaled $163.5 million.  If interest rates rose 1% and borrowings under our Credit Facility remained constant, our interest rate for a full twelve-month period would increase by approximately $1.6 million.  Our ability to make payments on and to refinance our indebtedness, including the Notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future.  This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the Credit Facility in an amount sufficient to enable us to pay our indebtedness, including the Notes, or to fund our other liquidity needs.  We may need to refinance all or a portion of our indebtedness, including the Notes, on or before maturity.  Our ability to restructure or refinance our indebtedness will depend on the capital markets and our financial condition at such time.  Any refinancing of our indebtedness could be at high interest rates and may require us to comply with more restrictive covenants, which could further restrict our business operations.  We cannot assure you that we will be able to refinance any of our indebtedness, including the Credit Facility and the Notes on commercially reasonable terms or at all.

Without a refinancing, we could be forced to sell assets to make up for any shortfall in our payment obligations under unfavorable circumstances.  Furthermore, none of Neff Corp., Odyssey or any other of our affiliates has any obligation to provide us with debt or equity financing.  The Credit Facility and the indentures governing the Notes limit our ability to sell assets and also restrict the use of proceeds from that sale.  Moreover, the Credit Facility is secured on a first-priority basis by substantially all of our assets and the 11¼ Notes and the guarantees are secured on a second-priority basis by substantially the same assets.  We may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations.

Repayment of our indebtedness is dependent on cash flow generated by our operating subsidiaries, and we may not have access to the cash flow and other assets of our subsidiaries that will be needed to make payment on our indebtedness.

Substantially all of our business is conducted through our operating subsidiary, Neff Rental, Inc.  Accordingly, our ability to make payments on our indebtedness is dependent on the earnings and the distribution of funds from Neff Rental, Inc.  Neff Rental, Inc. is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from it.  For example, the Credit Facility prohibits distributions from Neff Rental, Inc. to us, except for debt service of the Notes and certain other specified purposes or amounts.  Furthermore, Neff Rental, Inc. will be permitted under the terms of the indentures to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by it to us to the same extent as the Credit Facility.  We cannot assure you that the agreements governing the current and future indebtedness of Neff Rental, Inc. will permit it to provide us with sufficient dividends, distributions or loans to fund payments on our indebtedness when due.

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The terms of the Credit Facility and the indentures governing the Notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.

The Credit Facility and the indentures governing the Notes contain, and the terms of any future indebtedness of ours would likely contain, a number of restrictive covenants that will impose significant operating and other restrictions on us.  These restrictions will affect, and in many respects will limit or prohibit, among other things, our ability to:

·incur additional indebtedness;

·pay dividends and make distributions;

·issue stock of subsidiaries;

·make certain investments, acquisitions or capital expenditures;

·repurchase stock;

·create liens;

·enter into affiliate transactions;

·enter into sale-leaseback transactions;

·merge or consolidate; and

·transfer and sell assets.

In addition, the Credit Facility includes other more restrictive covenants and limits us from prepaying our other indebtedness while borrowings under the Credit Facility are outstanding.

The operating and financial restrictions and covenants in our existing debt agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities.  In addition, a failure to comply with the covenants contained in the credit agreement governing the Credit Facility could result in an event of default under that facility which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations.  If we default under the Credit Facility, the lenders thereunder:

·will not be required to lend any additional amounts to us;

·could elect to declare all of our outstanding borrowings, together with accrued and unpaid interest and fees, to be immediately due and payable;

·could effectively require us to apply all of our available cash to repay these borrowings even if they do not accelerate the borrowings;

which actions could also result in an event of default under the Notes.

If the indebtedness under the Credit Facility or the Notes were to be accelerated, we cannot assure you that our assets would be sufficient to repay such indebtedness in full or to repay the Notes.

Item 1B.Unresolved Staff Comments

None.

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Item 2.Properties

We currently operate in 66 rental locations in 14 states.  We lease 18,000 square feet for our corporate headquarters in an office building in Miami, Florida.  We own the buildings and the land at one of our locations.  All other sites are leased, generally for terms of five years with renewal options.  Owned and leased sites range from approximately 4,000 to 40,000 square feet and typically include:  (1) offices for sales, administration and management, (2) a customer showroom displaying equipment and parts, (3) an equipment service area and (4) outdoor and indoor storage facilities for equipment.  Each location offers a full range of rental equipment, with the mix of equipment available designed to meet the anticipated needs of the customers in each location.

The following table presents summary information regarding our rental facility locations (one of the below facilities, Texas City, TX, is owned by us, and all other facilities are leased by us).

Florida Region	Central Region
Miami, FL	Houston, TX
West Palm Beach, FL	Ft. Worth, TX
Port St. Lucie, FL	Texas City, TX
Ft. Myers, FL	Austin, TX
Pompano, FL	Odessa, TX
Tampa, FL	Houma, LA
Venice, FL	Morgan City, LA
Jacksonville, FL	Lafayette, LA
Brunswick, GA	St. Rose, LA
Tallahassee, FL	Baton Rouge, LA
South Orlando, FL	Lake Charles, LA
Sanford, FL	Fouchon, LA
Merritt Island, FL	New Iberia, LA
Atlantic Region	Western Region
Charlotte, NC	Las Vegas, NV
Myrtle Beach, SC	Phoenix, AZ
Raleigh, NC	Denver (North), CO
Charleston, SC	Denver (Central), CO
Augusta, GA	Littleton, CO
Wilmington, NC	San Bernardino, CA
Durham, NC	Anaheim, CA
Fayetteville, NC	Escondido, CA
Florence, SC	San Diego, CA
Columbia, SC	Sacramento, CA
Greenville, NC	Roseville, CA
Sumter, SC	Elk Grove, CA
Greer, SC	Spokane, WA
Richmond, VA	Tucson, AZ
Fredericksburg, VA
Norfolk, VA
Newport News, VA
Greensboro, NC
Landover, MD
Southeast Region
Doraville, GA
Forest Park, GA
Nashville, TN
Marietta, GA
Athens, GA
Macon, GA
Knoxville, TN

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Item 3.Legal Proceedings

We are party to various litigation matters in the ordinary course of our business.  We cannot estimate with certainty our ultimate legal and financial liability with respect to our pending litigation matters.  However, we believe, based on our examination of such matters, that our ultimate liability with respect to these matters will not have a material adverse effect on our financial position, results of operations or cash flows.

Our parent company, Neff Corp., certain of our employees, including our chief executive officer, and others have received subpoenas from the U.S. Securities and Exchange Commission relating to an investigation entitled ‘‘In the Matter of Trading in the Securities of Neff Corp.’’ This investigation is a non-public, fact-finding inquiry.  The investigation relates to trading in our parent’s common stock during the period from June 1, 2004 through July 1, 2005.  Our parent and our employees have cooperated and intend to continue to cooperate fully with the investigation.

Item 4.Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our security holders during the fourth quarter of the fiscal year ended December 31, 2006.

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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

There is no established public market for our equity interests.

Holders

All of our equity interests are held by Neff Corp.  An affiliate of Odyssey controls a majority of the common stock of Neff Corp.

Dividends

We have not declared or paid any dividends on our equity interests.  Our Credit Facility and the indentures governing the Notes limit our ability to declare or pay dividends.  We have no current intention to declare or pay any dividends in the future.  For more detailed information on our Credit Facility and the indentures governing the Notes, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and notes to our consolidated financial statements.

Securities Authorized for Issuance Under Equity Compensation Plans

We do not have any compensation plans under which our equity interests are authorized for issuance. Neff Corp., our parent, adopted a stock option plan in June 2005 that authorizes the issuance of options to purchase its common stock to our employees.

Sales of Unregistered Equity Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

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Item 6.Selected Financial Data

The following table presents our selected consolidated financial data.  The following selected consolidated financial data should be read in conjunction with, and is qualified by reference to, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto included in Item 8 of this annual report, as well as other financial information included elsewhere in this annual report.

The consolidated statement of operations data for each of the three years in the period ended December 31, 2006 and the consolidated balance sheet data as of December 31, 2005 and 2006 have been derived from our audited consolidated financial statements included elsewhere in this annual report and have been prepared in accordance with accounting principles generally accepted in the United States, which we refer to throughout this annual report as “U.S. GAAP”. The consolidated statement of operations data for the years ended December 31, 2002 and 2003 and the consolidated balance sheet data as of December 31, 2002, 2003 and 2004 have been derived from our audited consolidated financial statements that are not included in this annual report.

	For the Years Ended December 31,
	2006		2005			2004		2003			2002
	(in thousands)
Statement of operations data:
Revenues
Rental revenues	$	275,397	$	229,802		$	192,880	$	172,745		$	165,853
Equipment sales	39,409		36,360			42,750		23,375			14,646
Parts and service	15,472		13,461			12,058		11,228			11,236
Total revenues	330,278		279,623			247,688		207,348			191,735
Cost of revenues
Cost of equipment sold	27,715		26,867			35,890		19,908			12,886
Depreciation of rental equipment	58,990		47,962			41,739		41,651			41,157
Maintenance of rental equipment	70,223		70,653			74,266		68,904			64,590
Cost of parts and service	9,677		8,093			7,236		6,664			7,540
Total cost of revenues	166,605		153,575			159,131		137,127			126,173
Gross profit	163,673		126,048			88,557		70,221			65,562
Other operating expenses
Selling, general and administrative expenses	74,897		67,871			58,403		55,456			54,832
Other depreciation and amortization	5,902		5,456			5,936		6,222			6,697
Recapitalization expenses	—		21,276			—		—			—
Other expense, net(1)	—		—			—		—			2,156
Total other operating expenses	80,799		94,603			64,339		61,678			63,685
Income from operations	82,874		31,445			24,218		8,543			1,877
Other expenses (income)
Interest expense(2)	50,730		32,963			17,313		20,504			24,264
Loss (gain) on debt extinguishment(3)	-—		4,830			—		(35,026		)	(12,296		)
Other non-operating expense, net(4)	2,087		6,692			876		2,659			5,936
Total other expenses (income)	52,817		44,485			18,189		(11,863		)	17,904
Income (loss) before income taxes and cumulative effect of change in accounting principle	30,057		(13,040		)	6,029		20,406			(16,027		)
Income tax benefit	5,091		—			—		—			370
Income (loss) before cumulative effect of change in accounting principle	35,148		(13,040		)	6,029		20,406			(15,657		)
Cumulative effect of change in accounting principle(5)	—		—			—		—			(82,296		)
Net income (loss)	$	35,148	$	(13,040	)	$	6,029	$	20,406		$	(97,953	)

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	For the Years Ended December 31,
	2006			2005			2004			2003			2002
	(dollars in thousands)
Other financial data:
Depreciation of rental equipment and property	$	64,892		$	53,418		$	47,675		$	47,873		$	47,854
Capital expenditures:
Non-rental	10,632			7,819			5,694			4,066			495
Rental	119,376			152,305			92,331			26,826			19,965
Sales of equipment	(39,409		)	(36,360		)	(42,750		)	(23,375		)	(14,646		)
Net capital expenditures(6)	90,599			123,764			55,275			7,517			5,814
Net cash provided by operating activities	73,749			55,806			59,867			25,737			23,232
Net cash used in investing activities	(106,679		)	(123,464		)	(55,275		)	(7,517		)	(5,814		)
Net cash provided by (used in) financing activities	33,055			67,610			(4,611		)	(18,152		)	(21,691		)
Ratio of earnings to fixed charges(7)	1.6		x	—			1.3		x	1.9		x	—

	As of December 31,
	2006			2005			2004			2003			2002
	( in thousands)
Balance Sheet data (at the end of period)
Cash and cash equivalents	$	158		$	33		$	81		$	100		$	32
Rental Equipment:
Rental Equipment at cost	492,476			435,075			350,976			344,125			368,023
Accumulated depreciation	(174,030		)	(156,315		)	(149,903		)	(157,753		)	(146,917		)
Rental Equipment, net	318,446			278,760			201,073			186,372			221,106
Goodwill(5)	8,726			—			—			—			—
Total assets	420,632			360,385			261,794			246,308			281,116
Total indebtedness(8)	485,688			450,868			228,642			230,224			282,060
Total capital (deficit)	(90,512		)	(128,100		)	306			(5,733		)	(26,184		)

(1)	During the year ended December 31, 2002, other expense, net represents (a) a non-cash charge of $3.2 million related to a write-down of assets that were held for sale; (b) a recovery of $1.8 million of costs related to efforts to sell the company that were expensed in a prior period and (c) $0.7 million of costs related to a branch closing initiated during the year.
(2)	Interest expense excludes the amortization of debt issue costs (see footnote 4 below).
(3)	Neff Corp. purchased $43.7 million and $81.1 million in aggregate principal amount of previously outstanding senior subordinated notes in the years ended December 31, 2002 and 2003, respectively. In each case, the previously outstanding senior subordinated notes were purchased at a market price less than face value, resulting in the gains reported in the table above for the respective periods. Loss on debt extinguishment for the year ended December 31, 2005 represents the write-off of deferred debt issuance costs and expenses incurred in connection with the defeasance of the previously outstanding senior subordinated notes and the write-off of deferred debt issue costs which occurred as part of the Recapitalization.
(4)	Other non-operating expense, net represents amortization of debt issue costs of $2.0 million, $2.7 million, $2.0 million, $6.7 million and $2.1 million for the years ended December 31, 2002, 2003, 2004, 2005 and 2006 respectively. Other non-operating expense, net also includes adjustments to gain on sale of business, of which (a) we recorded $3.9 million of costs in the year ended December 31, 2002 and (b) recovered $1.1 million in the year ended December 31, 2004.
(5)	We adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, as of January 1, 2002. As a result of the adoption of that standard, we recorded a charge of $82.3 million for the year ended December 31, 2002, which we recorded as a cumulative effect of change in accounting principle in that period. Under Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to annual impairment tests.

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(6)	Net capital expenditures are total capital expenditures net of equipment sales.
(7)	The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. Earnings include net income (loss) before taxes and fixed charges. Fixed charges include interest expense and amortization of debt issue costs. Our earnings were insufficient to cover our fixed charges by $98.3 million and $13.0 million for the years ended December 31, 2002 and 2005.
(8)	As of December 31, 2006, total indebtedness consisted of borrowings under the Credit Facility, the outstanding subordinated notes and the outstanding senior notes in an aggregate amount of $163.5 million, $77.2 million and $245.0 million, respectively.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The statements in this discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in ‘‘Risk Factors’’ and ‘‘Forward-Looking Statements.’’ Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the sections entitled ‘‘Risk Factors,’’ ‘‘Selected Financial Data’’ and the historical consolidated financial statements and the notes thereto included elsewhere in this prospectus.  References in this section to “us” or “we” refer to Neff Rental LLC (“Neff LLC”) and its wholly-owned subsidiaries.

The following discussion and analysis compares the year ended December 31, 2006 to the year ended December 31, 2005 and the year ended December 31, 2005 to the year ended December 31, 2004.

Overview

We are one of the largest equipment rental companies in the United States. We have 66 branches located primarily in the sunbelt states, and we rent a broad variety of construction and industrial equipment, including earthmoving, material handling, aerial, compaction and related equipment. In addition to our rental business, we sell our used rental equipment, new equipment, parts and other supplies and provide maintenance, repair and other services that supplement our rental activities.

Our revenues are affected primarily by the rental rates we can charge for our equipment, the amount of rental fleet we have available for rent and the general economic conditions in the geographic regions in which we operate, particularly conditions affecting the non-residential construction industry.

We divide our total revenues into the following three categories:

·Rental revenues.  This category includes rental revenues and related revenues such as the fees we charge for the pickup and delivery of equipment, damage waivers and other surcharges.

·Equipment sales.  This category includes revenues from the sale of our used rental equipment as well as sales of new equipment to our customers.

·Parts and service.  This category includes revenues from customers for fuel and the repair of damaged rental equipment as well as from the sale of complementary parts, supplies and merchandise to our customers in conjunction with our equipment rental and sales business.

Revenues

Our rental revenues are affected by several factors including the amount and quality of our equipment available for rent, rental rates, the mix and the amount of equipment. Our revenues are also affected by weather as well as general economic conditions, in particular, conditions affecting the non-residential construction industry.

Revenues from the sale of used and new equipment are affected by price, general economic conditions, the amount and type of equipment available in the marketplace and the condition and age of the equipment. Parts and service revenues are affected by the amount of rental activity, the prices we are able to charge, service volumes and general economic activity.

Dollar Utilization

One of the performance measures that we use to analyze our operating performance is “dollar utilization.” Dollar utilization for any period is the ratio, expressed as a percentage, of our “net rental revenues” generated from our rental fleet, divided by the “average monthly Original Cost” of our rental fleet, including both owned and leased equipment, during such period. Net rental revenues generated from our rental fleet are calculated as total rental revenues less rental revenues from the rental of equipment that we rent from third parties and then “re-rent” to our customers, which we refer to as “re-rent revenue.”

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Monthly Original Cost for each month is calculated as the average of the Original Cost of our rental fleet, including cost of equipment under lease, on the first and last day of that month.

Management uses dollar utilization to measure the interaction of changes in our rental rates, the mix of equipment on rent and the percentage of equipment on rent, each of which affects our equipment rental revenues. However, dollar utilization is a statistic that is not financial in nature or a measure of performance or liquidity in accordance with U.S. GAAP. Accordingly, while management believes dollar utilization provides useful additional information about our business, dollar utilization should not be considered in isolation or as a substitute for comparable U.S. GAAP financial measures. In addition, our presentation of dollar utilization may not be directly comparable to that of other companies in our industry.

As illustrated in the table below, dollar utilization for the years ended December 31, 2006, 2005 and 2004, was 52.5%, 51.2% and 44.8%, respectively:

	For the Years Ended December 31,
	2006			2005			2004
Total rental revenues	$	275,397		$	229,802		$	192,880
Re-rent revenues	(6,123		)	(6,305		)	(6,292		)
Net rental revenues	269,274			223,497			186,588
Average monthly Original Cost(a)(b)	513,202			436,300			416,600
Dollar utilization(c)	52.5		%	51.2		%	44.8		%

(a)Average monthly Original Cost includes the cost of equipment held in the rental fleet under operating leases.

(b)Average monthly Original Cost for each period is presented as the average of the monthly original cost computations for each of the months in the periods presented.

(c)Dollar utilization is calculated as net rental revenues divided by average monthly Original Cost.

Cost of Revenues

Our cost of revenues consist primarily of the following:

·depreciation expenses relating to our rental equipment;

·the cost of repairing and maintaining our rental equipment, including parts and supplies, outside repairs, operating lease payments, personnel costs and casualty insurance premiums and claims expense;

·the net book value of the items we sell, including new and used equipment; and

·the cost of fuel, parts and supplies to provide services.

Operating Expenses

Operating expenses include all selling, general and administrative expenses as well as other amortization and depreciation. Selling, general and administrative expenses include sales force compensation, managerial and administrative payroll, marketing costs, professional fees, telecommunication costs, facility costs and taxes. Other amortization and depreciation primarily consists of depreciation of non-rental fleet equipment such as delivery vehicles, sales vehicles, leasehold improvements and office equipment.

Business Cycles and Seasonality

Our operating results are subject to annual and seasonal fluctuations resulting from a variety of factors, including overall economic conditions and construction activity in the geographic regions we serve. These factors include increases in the competitive supply of rental equipment, the number of our significant competitors and seasonal rental patterns resulting in lower rental activity by our customers during the winter. Thus, the results of any period are not necessarily indicative of the results that may be expected from any other period.

Capital Expenditures and Fleet Age

Our business is capital intensive. We own a substantial percentage of the equipment we rent to our customers. In 2005, we significantly increased this percentage as we continued our program of replacing equipment that we lease with purchased

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equipment. We expect the amount of equipment we purchase to continue to be significant as we replace aging equipment and expand the amount of the rental fleet at our existing branch locations. Historically, we have financed our equipment primarily through cash from operations, net proceeds from the sale of our used rental equipment, operating leases and borrowings under our existing credit facilities and other long-term debt.

Current Business Environment and Outlook

We operate in a competitive and capital-intensive business environment. The participants in our industry consist of national, regional and local rental companies, national home improvement store chains, certain original equipment manufacturers and their dealers and national home improvement store chains. The equipment rental industry is highly cyclical and its revenues are closely tied to general economic conditions and to conditions in the non-residential construction industry in particular. According to the U.S. Department of Commerce, spending on private, non-residential construction declined approximately 20% from 2001 through the first half of 2003. During this period, the equipment rental industry contracted primarily due to declining rates for the rental of equipment due to an oversupply of rental equipment in the marketplace and to lower demand for rental equipment. Beginning in the second half of 2003 and continuing through the present, the non-residential construction market has begun to rebound which in turn has had a positive impact on the equipment rental industry. We believe that the rental industry will continue to benefit from improving macroeconomic and non-residential construction industry conditions. McGraw-Hill Construction predicts that total U.S. non-residential construction spending will grow by 5.8% in 2007. We believe that these trends should continue to support increased rental demand and will result in continued improvement in our business for the foreseeable future. However, these macroeconomic factors are outside of our control, and we cannot assure you that the improvement in our operating results that we have experienced will continue in future periods.

One of our responses to the contraction in the rental industry during the period from 2001 through the first half of 2003 was to reduce our capital investment in our rental fleet. However, as rental industry conditions and our operating results improved we increased our capital investment in our rental fleet. In 2004, our capital expenditures primarily related to the replacement of older equipment in our rental fleet with new equipment. In 2005, we significantly increased capital expenditures from 2004 levels. This increase was mainly attributable to three factors. First, we expanded the amount of the rental fleet in our existing branch locations to capitalize on additional demand for rental equipment. Second, we accelerated our program of replacing leased equipment with purchased equipment. Third, we purchased a significant amount of fleet for existing locations in our Central Region in response to increased demand for such fleet in the period after Hurricane Katrina, which struck the Louisiana coast on August 29, 2005. The impact of Hurricane Katrina also affected our business in other ways. See “Hurricane Impact.” In 2006, we continued to increase the amount of rental fleet in our existing branch locations but reduced our capital expenditures from the 2005 levels.  This decrease was due to the completion of the replacement of our leased equipment with purchased equipment as well as a relatively inactive 2006 hurricane season.

Overall, the rental industry has benefited from the above mentioned growth in non-residential construction and a decrease in excess available rental equipment. These factors, along with management initiatives focused on increasing rental rates, have led to year-over-year increases in rental rates and rental revenues for the past 15 quarters. A large proportion of our costs are fixed and, as a result, there is a strong correlation between an increase or decrease in our rental revenues and an increase or decrease in our profitability. Thus, the recent increases in rental revenues have led to a significant improvement in our income from operations. We believe that we will continue to benefit from the operating leverage afforded us by the fixed cost nature of our cost structure to the extent we are able to continue to grow our revenues due to anticipated increases in rental rates and the amount of equipment we are able to rent to customers.

Acquisition

On May 18, 2006, we acquired River City Connections, Inc., a rental equipment business with two locations in Sacramento, California, for $17.1 million after giving effect to post-closing purchase price adjustments. The purchase was funded through borrowings on the Credit Facility. The acquired company was immediately merged with and into Valley Rents and Ready Mix, Inc., a Delaware corporation, which remained as the surviving entity and a wholly-owned subsidiary of Neff Rental, Inc. Valley Rents and Ready Mix, Inc. subsequently became a co-guarantor of the Credit Facility, 11¼% Notes and 13% Notes.  On December 22, 2006 Valley Rents was merged into Neff Rental, Inc., with Neff Rental, Inc. remaining as the surviving entity.

The purchase price of $17.1 million was allocated to the assets acquired, mainly rental equipment, and liabilities assumed based on their estimated fair values at the date of acquisition.  The excess purchase price over the fair values of assets acquired and liabilities assumed of $8.7 million was allocated to goodwill.  In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” (“SFAS 142”) goodwill is no longer amortized, but is tested at least annually for impairment.  The allocation of the purchase price to the identifiable intangible assets acquired in these consolidated financial statements is preliminary until we obtain final information regarding their fair values.

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The results of operations of the acquired business have been included in our consolidated statements of operations since the acquisition date and did not have a material impact on our results of operations.  The pro forma results of operations, assuming the acquisition took place at the beginning of the periods presented, were not significantly different from our reported results of operations.

Hurricane Impact

Hurricane Katrina struck the Louisiana coast on August 29, 2005, and caused severe flood damage to New Orleans and large parts of the surrounding coastal area. The hurricane destroyed two of our satellite locations that were used to store equipment prior to deployment in the Gulf of Mexico for rental to oil field maintenance contractors.

Insurance covered the repair or replacement of our assets that suffered loss or damages. We worked closely with our insurance carriers and claims adjusters to ascertain the full amount of insurance proceeds due to us as a result of the damages and losses.

We recorded the following for the year ended December 31, 2005 as a result of this storm (in thousands):

Rental equipment damaged or destroyed	$	643
Repairs to facilities	407
Insurance recovery	(300		)
Net impact of hurricane recorded in selling, general and administrative expenses	$	750

In 2006 we received an additional insurance recovery in the amount of $1.1 million.

We recorded the following for the year ended December 31, 2006 as a result of this storm (in thousands):

Additional repairs to facilities	$	57
Insurance recovery	(1,057		)
Net impact of hurricane recorded in selling, general and administrative expenses	$	(1,000	)

Critical Accounting Policies

We prepare our financial statements in conformity with U.S. GAAP. Our critical accounting policies are those that are both most important to our financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may vary from these estimates. We believe that the following discussion represents our critical accounting policies.

Revenue Recognition

Rental contracts are structured as operating leases entered into at the time our customer takes delivery of the equipment and revenues are recognized as they are earned over the rental period. As a result of our billing and rental cycles, there are a certain number of rental contracts entered into during a reporting period that are not billed to customers by the end of such reporting period. We identify each rental contract that has not been billed at the end of such period and calculate and record the corresponding amount of revenue to the reporting period in which the contract was entered into.

Revenue from the sale of equipment and parts is recognized at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled. Service revenues are recognized at the time the services are provided.

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Useful Lives and Salvage Value of Rental Equipment

Rental equipment is stated at Original Cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful life of the related equipment (generally two to seven years with estimated 10-20% residual values). Routine repairs and maintenance are expensed as incurred; improvements are capitalized at cost.

We routinely review the assumptions utilized in computing rates of depreciation of our rental equipment. Changes to the assumptions (such as the length of service lives and/or the amount of residual values) are made when, in the opinion of management, such changes are necessary to more appropriately allocate asset costs to operations over the service life of the assets. Management utilizes, among other factors, historical experience and industry comparisons in determining the propriety of any such changes. We may be required to change these estimates based on changes in our industry, end-markets or other circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets.

Betterment of Assets

We charge ordinary maintenance and repair costs, such as repair costs related to equipment damage caused by a customer and preventive maintenance, to operations as incurred. Costs incurred to extend the useful life, increase efficiency or increase capacity of rental equipment are capitalized and include rebuilding tracks and undercarriages, filling pneumatic tires with foam, adding truck bodies to bare chassis and installing safety devices.

Valuation of Long-Lived Assets

We review the valuation of our long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Our asset impairment review assesses the fair value of the assets based on the future cash flows we believe the assets are expected to generate. An impairment loss is recognized when these estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. This approach uses our estimates of future market growth, revenue and costs, as well as the expected periods the assets will be utilized. These estimates and assumptions may prove to be inaccurate due to factors such as changes in economic conditions, our business prospects or other circumstances. If these estimates change in the future, we may be required to recognize write-downs of our long-lived assets.

Impairment of Goodwill

Goodwill is no longer amortized, but instead is reviewed for impairment annually or more frequently if events indicate a decline in fair value below its carrying value.  This means that we must determine whether the fair value of the goodwill, calculated in accordance with applicable accounting standards, is at least equal to the recorded value on our balance sheet. If the fair value of the goodwill is less than the recorded value, we are required to write-off the excess goodwill as an operating expense.

Determination of the amount of impairment is made at the reporting unit level and consists of two steps. First, we determine the fair value of a reporting unit and compare it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with the Financial Accounting Standards Board (“FASB”) SFAS No. 141, “Business Combinations.”

Income Taxes

As a limited liability company with a single owner that has not elected to be taxed as a corporation, the Company is treated as a disregarded entity for federal and state income tax reporting purposes. As a disregarded entity, the Company is not subject to income taxes. Rather, the Company’s income tax basis results of operations flow through and are included in the tax return of its member, Neff Corp. and income taxes are allocated to the Company on a separate return basis.

We account for income taxes under the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Developing our provision for income taxes requires significant judgment regarding the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets.

No tax provision was allocated for the years ending December 31, 2005 or 2004, due to the continuing net operating loss carryforwards of Neff Corp.  A tax benefit was recorded for the year ended December 31, 2006 due to the reduction of the

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Company’s valuation allowance for its net deferred tax asset.  In 2006, the Company reversed $17.1 million of its net deferred tax asset valuation allowance, which eliminated the remaining balance of the allowance. SFAS No. 109 “Accounting for Income Taxes” (“SFAS 109”), provides that a valuation allowance must be established for deferred tax assets when it is more likely than not that the assets will not be realized. SFAS 109 also provides that all positive and negative evidence must be evaluated in determining the need for a valuation allowance. For the year ended December 31, 2006, the Company had net income before income taxes of $30.1 million. In addition, the Company evaluated its forecast of pre-tax income based on historical cumulative positive pre-tax income before non-recurring items for the years ended December 31, 2006, 2005 and 2004, and a forecast of positive taxable income in the future.  As a result of that evaluation, the Company determined that it no longer requires a deferred tax asset valuation allowance. Under the guidelines of SFAS 109, the Company reversed the remaining component of this valuation allowance through current period earnings by a credit to the Company’s income tax (provision) benefit.

Valuation of Accounts Receivable

We evaluate the collectibility of our receivables based on a combination of factors. We regularly analyze our customer accounts. When we become aware of a specific customer’s inability to meet its financial obligations to us, such as in the case of bankruptcy or deterioration in the customer’s operating results or financial position, we record a specific reserve for bad debt to reduce the related receivable to the amount we reasonably believe is collectible. We also record reserves for bad debt for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and historical experience. If circumstances related to specific customers change, we may determine that an increase to the allowance is required. Additionally, if actual collections of accounts receivable differ from the estimates we used to determine our allowance, we will increase or decrease, as applicable, the allowance through charges or credits to selling, general and administrative expenses in the consolidated statement of operations for the period in which such changes in collection become known. If conditions change in future periods, additional allowances or reversals may be required.

Reserve for Claims

We are exposed to various claims relating to our business. These may include claims relating to motor vehicle accidents involving our delivery and service personnel, employment related claims and claims relating to personal injury or death caused by equipment rented or sold. We establish reserves for reported claims that are asserted against us and the claims that we believe have been incurred but not reported. These reserves reflect our estimates of the amounts that we will be required to pay in connection with these claims, net of insurance recoveries. Our estimate of reserves is based on an actuarial reserve analysis that takes into consideration the probability of losses and our historical payment experience related to claims settlements. These estimates may change based on, among other things, changes in our claims history or receipt of additional information relevant to assessing the claims. Accordingly, we may increase or decrease our reserves for claims, and such changes could be significant.

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Results of Operations

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

The following table illustrates our operating activity for the years ended December 31, 2006 and 2005.

	For the Years Ended December 31,
	2006		2005			Change
	(dollars in thousands)
Revenues
Rental revenues	$	275,397	$	229,802		19.8	%
Equipment sales	39,409		36,360			8.4
Parts and service	15,472		13,461			14.9
Total revenues	330,278		279,623			18.1
Cost of revenues
Cost of equipment sold	27,715		26,867			3.2
Depreciation of rental equipment	58,990		47,962			23.0
Maintenance of rental equipment	70,223		70,653			(0.6	)
Costs of parts and service	9,677		8,093			19.6
Total cost of revenues	166,605		153,575			8.5
Gross profit	163,673		126,048			29.8
Other operating expenses
Selling, general and administrative expenses	74,897		67,871			10.4
Other depreciation and amortization	5,902		5,456			8.2
Recapitalization expenses	—		21,276			n/m
Total other operating expenses	80,799		94,603			(14.6	)
Income from operations	82,874		31,445			163.6
Other expenses
Interest expense	50,730		32,963			53.9
Loss on debt extinguishment.	—		4,830			n/m
Other non-operating expense, net	2,087		6,692			(68.8	)
Total other expenses	52,817		44,485			18.7
Income (loss) before income taxes	30,057		(13,040		)	n/m
Income tax benefit	5,091		—			n/m
Net income (loss)	$	35,148	$	(13,040	)	n/m

n/m — means the percentage change is not meaningful

Total Revenues. Total revenues for the year ended December 31, 2006 increased 18.1% to $330.3 million from $279.6 million for the year ended December 31, 2005. The components of our revenues are discussed below:

Rental Revenues. Rental revenues for the year ended December 31, 2006 increased 19.8% to $275.4 million from $229.8 million for the year ended December 31, 2005. The increase in rental revenues was primarily due to an increase in rental rates and an increase in the size of the rental fleet, both of which also contributed to an increase in dollar utilization. For the year ended December 31, 2006, we estimate that our rental rates increased 7.0% compared with our rental rates for the year ended December 31, 2005 driven by improved conditions in the non-residential construction market. The increase in rates led to an increase in dollar utilization to 52.5% for the year ended December 31, 2006 from 51.2% for the year ended December 31, 2005. For the year ended December 31, 2006 the average monthly Original Cost, including cost of equipment under lease, of our rental fleet increased 17.6% to $513.2 million from $436.3 million at December 31, 2005, as a result of increased capital expenditures. Total

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rental revenues at locations open for more than one year increased 20.0% for the year ended December 31, 2006 compared with the year ended December 31, 2005.

Equipment Sales. Equipment sales revenues for the year ended December 31, 2006 increased 8.4% to $39.4 million from $36.4 million for the year ended December 31, 2005. The increase in equipment sales revenues was due to our decision to take advantage of the strong used equipment markets in order to sell some older equipment.

Parts and Service. Revenues from the sales of parts and service for the year ended December 31, 2006 increased 14.9% to $15.5 million from $13.5 million for the year ended December 31, 2005. The increase in these revenues in 2006 was primarily due to the general increase in rental activity in the current year.

Cost of Equipment Sold. Costs associated with the sale of rental equipment increased 3.2% to $27.7 million for the year ended December 31, 2006 from $26.9 million for the year ended December 31, 2005, primarily as a result of the increase in the amount of equipment sales.

Depreciation of Rental Equipment. Depreciation of rental equipment increased 23.0% to $59.0 million for the year ended December 31, 2006 from $48.0 million in the year ended December 31, 2005. The increased expense in depreciation of rental equipment is primarily due to the increase in size of our depreciable rental fleet.

Maintenance of Rental Equipment. Maintenance costs associated with our rental equipment decreased 0.6% to $70.2 million for the year ended December 31, 2006 from $70.7 million for the year ended December 31, 2005, primarily as a result of a decrease in operating lease expenses of $5.1 million due to our decision to replace certain of our rental fleet previously held under operating leases with owned fleet. This decrease was partially offset by an increase in payroll and payroll related expenses of $3.8 million due to increased headcount labor costs and increased fuel costs of $1.1 million.

Costs of Parts and Service. Costs associated with generating our parts and service revenues increased 19.6% to $9.7 million for the year ended December 31, 2006 from $8.1 million for the year ended December 31, 2005, primarily as a result of increased parts and service revenues.

Gross Profit. Gross profit for the year ended December 31, 2006 increased $37.6 million, or 29.8%, to $163.7 million from $126.1 million for the year ended December 31, 2005. The increase in gross profit was primarily due to an increase in rental revenue gross profit of $35.0 million or 31.5% as a result of increased rental revenue and increased margin on rental revenue. The increase in gross profit was also due to a $2.2 million or 23.2% increase in gain on sale of equipment as the margin on equipment sales increased as a result of the continued strength in market conditions for equipment sales. As a percentage of total revenues, gross profit increased to 49.6% in 2006 from 45.1% in 2005.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2006 increased 10.4% to $74.9 million from $67.9 million for the year ended December 31, 2005. The increase in selling, general and administrative expenses is primarily a result of an increase in payroll expenses as a result of increases in the number of employees, base salaries, incentive compensation and stock compensation and an increase in professional fees of $1.2 million. Stock compensation expense, a non-cash charge, was $2.4 million for the year ended December 31, 2006 as a result of the adoption of SFAS 123-R on January 1, 2006.  There were no stock compensation charges for the year ended December 31, 2005.  As a percentage of total revenue, selling, general and administrative expenses decreased to 22.7% of total revenues in 2006 from 24.3% of total revenues for 2005.

Other Depreciation and Amortization. Other depreciation and amortization expense (which relates to non-rental equipment) for the year ended December 31, 2006 increased 8.2% to $5.9 million or 1.8% of total revenues from $5.5 million or 2.0% of total revenues for the year ended December 31, 2005. This increase is primarily due to an increase in the amount of property and equipment.

Recapitalization Expenses. There were no recapitalization expenses for the year ended December 31, 2006. Recapitalization expenses for the year ended December 31, 2005 are comprised of $3.4 million of non-recurring compensation and $17.9 million of stock compensation expense incurred as a result of the Recapitalization during the second quarter of 2005.

Income from Operations. Income from operations for the year ended December 31, 2006 increased 163.6% to $82.9 million or 25.1% of total revenues from $31.4 million or 11.3% of total revenues for the year ended December 31, 2005, primarily as a result of the foregoing reasons.

Interest Expense. Interest expense for the year ended December 31, 2006 increased 53.9% to $50.7 million from $33.0 million for the year ended December 31, 2005. The increase was primarily attributable to increased borrowings to fund the Recapitalization, a full year of interest on those borrowings as well as increased borrowings for capital expenditures and the acquisition of Valley Rents and higher interest rates on borrowings under the Credit Facility.

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Loss on Debt Extinguishment. There was no loss on debt extinguishment for the year ended December 31, 2006. For the year ended December 31, 2005, we recognized a loss of $4.8 million on debt extinguishment resulting from the refinancing of substantially all of our debt during the second quarter of 2005 in connection with the Recapitalization.

Other Non-Operating Expense, Net. Other non-operating expense, net primarily represents amortization of debt issue costs. Other non-operating expense, net for the year ended December 31, 2006 decreased to $2.1 million from $6.7 million for the year ended December 31, 2005. As a result of the Recapitalization, we entered into a bridge loan in June 2005. The bridge loan was refinanced in July 2005 and as a result all of the deferred debt issuance costs related to the bridge loan, totaling $5.0 million, were expensed in 2005.

Income (Loss) before income taxes. For the reasons described above, we had income before income taxes of $30.1 million for the year ended December 31, 2006 compared to a loss before income taxes of $(13.0) million for the year ended December 31, 2005.

Income tax benefit.  For the year ended December 31, 2006, we reduced our deferred tax asset valuation allowance to zero which resulted in an income tax benefit of $5.1 million.

Net Income (Loss). For the reasons described above, we had net income of $35.1 million for the year ended December 31, 2006 compared to a net loss of $(13.0) million for the year ended December 31, 2005.

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Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

The following table illustrates our operating activity for the years ended December 31, 2005 and 2004.

	For the Years Ended December 31,
	2005			2004		Change
	(dollars in thousands)
Revenues
Rental revenues	$	229,802		$	192,880	19.1	%
Equipment sales	36,360			42,750		(14.9	)
Parts and service	13,461			12,058		11.6
Total revenues	279,623			247,688		12.9
Cost of revenues
Cost of equipment sold	26,867			35,890		(25.1	)
Depreciation of rental equipment	47,962			41,739		14.9
Maintenance of rental equipment	70,653			74,266		(4.9	)
Costs of parts and service	8,093			7,236		11.8
Total cost of revenues	153,575			159,131		(3.5	)
Gross profit	126,048			88,557		42.3
Other operating expenses
Selling, general and administrative expenses	67,871			58,403		16.2
Other depreciation and amortization	5,456			5,936		(8.1	)
Recapitalization expenses	21,276			—		n/m
Total other operating expenses	94,603			64,339		47.0
Income from operations	31,445			24,218		29.8
Other expenses
Interest expense	32,963			17,313		90.4
Loss on debt extinguishment	4,830			—		n/m
Other non-operating expense, net	6,692			876		664.0
Total other expenses	44,485			18,189		144.6
Net (loss) income	$	(13,040	)	$	6,029	n/m

n/m — means the percentage change is not meaningful

Total Revenues. Total revenues for the year ended December 31, 2005 increased 12.9% to $279.6 million from $247.7 million for the year ended December 31, 2004. The components of our revenues are discussed below:

Rental Revenues. Rental revenues for the year ended December 31, 2005 increased 19.1% to $229.8 million from $192.9 million for the year ended December 31, 2004. The increase in rental revenues was primarily due to an increase in rental rates and an increase in the size of the rental fleet, both of which also contributed to an increase in dollar utilization. For the year ended December 31, 2005, we estimate that our rental rates increased 11.1% compared with our rental rates for the year ended December 31, 2004 driven by improved conditions in the non-residential construction market. The increase in rates led to an increase in dollar utilization to 51.2% for the year ended December 31, 2005 from 44.8% for the year ended December 31, 2004. For the year ended December 31, 2005 the average monthly Original Cost, including cost of equipment under lease, of our rental fleet increased to $436.3 million from $416.6 at December 31, 2004, as a result of increased capital expenditures. Total rental revenues at locations open for more than one year increased 21.0% for the year ended December 31, 2005 compared with the year ended December 31, 2004.

Equipment Sales. Equipment sales revenues for the year ended December 31, 2005 decreased 14.9% to $36.4 million from $42.8 million for the year ended December 31, 2004. The decline in equipment sales revenues was due to our decision to reduce the amount of sales of used rental fleet in order to maximize the amount of equipment available for rent.

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Parts and Service. Revenues from the sales of parts and service for the year ended December 31, 2005 increased 11.6% to $13.5 million from $12.1 million for the year ended December 31, 2004. The increase in these revenues in 2005 was primarily due to the general increase in rental activity in the current year.

Cost of Equipment Sold. Costs associated with the sale of rental equipment decreased 25.1% to $26.9 million for the year ended December 31, 2005 from $35.9 million for the year ended December 31, 2004, primarily as a result of the decrease in the amount of equipment sales.

Depreciation of Rental Equipment. Depreciation of rental equipment increased 14.9% to $48.0 million for the year ended December 31, 2005 from $41.7 million in the year ended December 31, 2004. The increased expense in depreciation of rental equipment is primarily due to the increase in size of our depreciable rental fleet.

Maintenance of Rental Equipment. Maintenance costs associated with our rental equipment decreased 4.9% to $70.7 million for the year ended December 31, 2005 from $74.3 million for the year ended December 31, 2004, primarily as a result of a decrease in operating lease expenses of $6.3 million due to our decision to replace certain of our rental fleet previously held under operating leases with owned fleet. This decrease was partially offset by an increase in payroll and payroll related expenses of $1.9 million due to increased headcount labor costs, increased fuel costs of $1.2 million and increased operating lease expense on delivery vehicles of $0.5 million as we decided to finance certain delivery vehicles under operating leases.

Costs of Parts and Service. Costs associated with generating our parts and service revenues increased 11.8% to $8.1 million for the year ended December 31, 2005 from $7.2 million for the year ended December 31, 2004, primarily as a result of increased parts and service revenues.

Gross Profit. Gross profit for the year ended December 31, 2005 increased $37.5 million, or 42.3%, to $126.1 million from $88.6 million for the year ended December 31, 2004. The increase in gross profit was primarily due to an increase in rental revenue gross profit of $34.3 million or 44.6% as a result of increased rental revenue. The increase in gross profit was also due to a $2.6 million or 38.4% increase in gain on sale of equipment as the margin on equipment sales increased as a result of the improved market conditions for equipment sales. As a percentage of total revenues, gross profit increased to 45.1% in 2005 from 35.8% in 2004.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2005 increased 16.2% to $67.9 million from $58.4 million for the year ended December 31, 2004. The increase in selling, general and administrative expenses is primarily increased payroll expenses as a result of increases in the number of employees, base salaries and incentive compensation. As a percentage of total revenue, selling, general and administrative expenses increased to 24.3% of total revenues in 2005 from 23.6% of total revenues for 2004.

Other Depreciation and Amortization. Other depreciation and amortization expense (which relates to non-rental equipment) for the year ended December 31, 2005 decreased 8.1% to $5.5 million or 2.0% of total revenues from $5.9 million or 2.4% of total revenues for the year ended December 31, 2004. This decrease is primarily due to our decision to begin financing some of our delivery vehicles under operating leases. This financing of certain delivery vehicles with operating leases was offset by a decrease in owned delivery vehicles which has the effect of decreasing other depreciation and amortization while increasing maintenance of rental equipment and other rental expenses.

Recapitalization Expenses. Recapitalization expenses for the year ended December 31, 2005 are comprised of $3.4 million of non-recurring compensation and $17.9 million of stock compensation expense incurred as a result of the Recapitalization during the second quarter of 2005. There were no recapitalization expenses in 2004.

Income from Operations. Income from operations for the year ended December 31, 2005 increased 29.8% to $31.4 million or 11.2% of total revenues from $24.2 million or 9.8% of total revenues for the year ended December 31, 2004, primarily as a result of the foregoing reasons. Income from operations, excluding non-recurring Recapitalization expenses, increased 117.7% to $52.7 million, or 18.9% of total revenues in 2005 from $24.2 million, or 9.8% of total revenues, in 2004.

Interest Expense. Interest expense for the year ended December 31, 2005 increased 90.4% to $33.0 million from $17.3 million for the year ended December 31, 2004. The increase was primarily attributable to increased borrowings to fund the Recapitalization and higher interest rates on those borrowings.

Loss on Debt Extinguishment. For the year ended December 31, 2005, we recognized a loss of $4.8 million on debt extinguishment resulting from the refinancing of substantially all of our debt during the second quarter of 2005 in connection with the Recapitalization.

Other Non-Operating Expense, Net. Other non-operating expense, net primarily represent amortization of debt issue costs. Other non-operating expense, net for the year ended December 31, 2005 increased to $6.7 million from $0.9 million for the

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year ended December 31, 2004. As a result of the Recapitalization, we entered into a bridge loan in June 2005. The bridge loan was refinanced in July 2005 and as a result all of the deferred debt issuance costs related to the bridge loan, totaling $5.0 million, were expensed in 2005.

Net Income (Loss). For the reasons described above, we had a net loss for the year ended December 31, 2005 of $(13.0) million compared to net income of $6.0 million for the year ended December 31, 2004.

Liquidity and Capital Resources

During the year ended December 31, 2006, our operating activities provided net cash flow of $73.8 million as compared to $55.8 million for the year ended December 31, 2005. The increase is attributable to increased net income and changes in working capital.

Cash used in investing activities was $106.7 million for the year ended December 31, 2006 as compared to $123.5 million for the year ended December 31, 2005. The decrease in cash used in investing activities was primarily due to a reduction in the acquisition of rental fleet as planned fleet increases were met.  This decrease was slightly offset by the acquisition of Valley Rents for $17.1 million.  We also received cash proceeds from the sale of equipment assets of $39.4 million for the year ended December 31, 2006 and $36.4 million for the year ended December 31, 2005.

Net cash provided by financing activities was $33.1 million for the year ended December 31, 2006 as compared to $67.6 million for the year ended December 31, 2005. The change in cash from financing activities was primarily due to financing activity related to the Recapitalization and the additional borrowings for the purchase of rental fleet.

During 2005, our operating activities provided net cash flow of $55.8 million as compared to $59.9 million for 2004. This decrease is primarily attributable to decreased net income combined with changes in working capital as a result of our operations.

Net cash used in investing activities was $123.5 million for 2005 as compared to $55.3 million net cash used in investing activities for 2004. The change in cash used in investing activities was due primarily to increased purchases of rental equipment and reduced proceeds from sales of rental equipment in 2005 compared with 2004.

Net cash provided by financing activities was $67.6 million for 2005 as compared to net cash used of $4.6 million for 2004. The change in cash from financing activities is due primarily to the net borrowings related to the Recapitalization in 2005.

Our primary sources of liquidity continue to be cash flow from operations and borrowings under the Credit Facility. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources.

We incurred substantial indebtedness in connection with the Transactions. Our significant debt service obligations following the Transactions could, under certain circumstances, have material consequences to you. See “Risk Factors—Risks Relating to our Indebtedness.”

As part of the Transactions, Neff Corp. borrowed $245.0 million under the bridge facility (which amounts we repaid in full with the proceeds from the outstanding senior notes), issued $80.0 million in aggregate principal amount of the outstanding subordinated notes and entered into the Credit Facility, which provides for aggregate borrowings of up to $225.0 million, subject to a borrowing base availability formula. As of December 31, 2006, we had approximately $163.5 million of borrowings under the Credit Facility, and we may make additional borrowings under the Credit Facility depending upon our working capital needs. See “Risk Factors—Risks Relating to our Indebtedness—Our substantial indebtedness could adversely affect our financial health, our cash flow and our ability to operate our business, and prevent us from fulfilling our obligations under our indebtedness.” The Credit Facility will be available until 2010.

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The Credit Facility contains various restrictive covenants. It limits us from prepaying other indebtedness and it requires us to obtain rental equipment appraisals on a quarterly basis. In addition, the Credit Facility restricts our ability to incur indebtedness or liens, make investments or declare or pay any dividends. The indentures governing the exchange notes, among other things and subject to certain exceptions: (1) limit our ability and the ability of our subsidiary to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates and (2) place restrictions on our ability and the ability of our subsidiary to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets.

Contractual and Other Obligations

The following table reflects our contractual obligations, commercial commitments and long-term indebtedness as of December 31, 2006.

	Payments Due by Period
			Within 1						More than
	Total		Year(4)		1-3 years		4-5 years		5 years
Contractual obligations:
Operating leases	$	21,245	$	5,713	$	7,692	$	3,326	$	4,514
Long-term debt obligations:
Credit Facility(1)	$	204,838	$	12,099	$	24,198	$	168,541	$	—
Outstanding senior notes(2)	394,297		27,563		55,125		55,125		256,484
Outstanding subordinated notes(3)	146,733		10,400		20,800		20,800		94,733
Total long-term debt obligations	$	745,868	$	50,062	$	100,123	$	244,466	$	351,217

(1)    Includes interest rate of approximately 7.4%, calculated as of December 31, 2006, matures in June, 2010.

(2)    Includes interest rate of 11.25%, matures in June, 2012.

(3)    Includes interest rate of 13%, matures in June, 2013.

(4)    Long-term debt obligations includes interest for period from January 1, 2007 until December 31, 2007.

Off-Balance Sheet Transactions

In connection with the defeasance of our previously outstanding senior subordinated notes in July 2005, we entered into an irrevocable redemption deposit agreement with U.S. Bank National Association, the trustee and paying agent under the indentures governing those notes. We deposited into the trust an amount in cash sufficient to pay all principal on those notes, plus a redemption premium equal to 1.708%, plus all accrued and unpaid interest to, but not including, the redemption date. The funds held in trust were applied by the trustee to redeem the previously outstanding senior subordinated notes on July 5, 2005. The aggregate amount of funds we deposited in the trust was approximately $77.3 million.

In accordance with SFAS No. 140, ‘‘Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities’’, and other applicable accounting standards, indebtedness is considered extinguished if, among other things, the debtor (a) irrevocably places cash or other risk-free monetary assets in a trust solely for satisfying that indebtedness and (b) the debtor is legally released from being the primary obligor on the indebtedness. Following these guidelines, our release as primary obligor with respect to the previously outstanding senior subordinated notes and the irrevocable deposit of funds in the trust in a sufficient amount in cash to fully defease all of our obligations under the indentures becomes an asset that offsets our obligations in respect of the previously outstanding senior subordinated notes and, accordingly, both the asset and the liability are removed from our balance sheet.

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Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 123-R, “Share-Based Payment” (“SFAS 123-R”). The provisions of the standard went into effect for all interim or annual periods beginning after June 15, 2005. SFAS 123-R requires that compensation cost for all share-based employee payments be recognized in the statement of operations based on grant date fair values of the awards, adjusted to reflect estimated forfeitures and the outcome of certain other conditions. The fair value is generally not remeasured, except in limited circumstances, or if the award is subsequently modified. The statement requires us to estimate the fair value of stock-based awards and recognize expense in the statement of operations as the related services are provided. This changed current practice, as, upon adoption, we ceased using the “intrinsic value” method of accounting, permitted by Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) that resulted in no expense for all of Neff Corp.’s stock option awards.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29” (“SFAS 153”). The guidance in APB Opinion No. 29, “Accounting for Nonmonetary Transactions” (“APB 29”), is based on the principle that exchanges of nonmonetary assets should be measured based on the fair values of the assets exchanged. The guidance in APB 29, however, included certain exceptions to that principle. This statement amends APB 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary exchanges occurring during fiscal years beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on our results of operations, financial position or cash flows.

In March 2005, the United States Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 107 (“SAB 107”) which expresses views of the SEC staff regarding the application of SFAS 123-R. Among other things, SAB 107 provides interpretive guidance related to the interaction between SFAS 123-R and certain SEC rules and regulations, as well as provides the SEC staff’s views regarding the valuation of share-based payment arrangements for public companies. On April 14, 2005, the SEC announced the adoption of a new rule that amends the adoption dates of SFAS 123-R. The new rule allows companies to implement SFAS 123-R at the beginning of their first fiscal year that begins after June 15, 2005 or December 15, 2005 for small business issuers. We adopted the provisions of the statement as of the beginning of our fiscal year ending December 31, 2006 and for future periods. Implementation of the standard may have a material impact on the results of operations in future periods.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” (“FIN 48”).  FIN 48 provides guidance relative to the recognition, derecognition and measurement of tax positions for financial statement purposes.  The standard also requires expanded disclosures.  The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006.  We are currently assessing the impact, if any, that FIN 48 will have on our results of operations, financial position or cash flows.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. SFAS 157 requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy, as defined and companies may be required to provide additional disclosures based on that hierarchy. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. We are currently evaluating the impact adoption of SFAS 157 may have on our consolidated financial statements.

In September 2006, the SEC issued SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” (“SAB 108”) This SAB provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects on each of the company’s balance sheet and statement of operations financial statements and the related financial statement disclosures. The SAB permits existing public companies to record the cumulative effect of initially applying this approach in the first year ending after November 15, 2006 by recording the necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the opening balance of retained earnings. Additionally, the use of the cumulative effect transition method requires detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it arose. The adoption of SAB 108 did not have a material impact on our results of operations, financial position or cash flows.

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

The fair market value of long-term fixed interest rate debt is subject to interest rate risk.  Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates increase.  The fair value of the Credit Facility is assumed to be equal to its carrying value, as interest rates approximate market rates.  As of December 31, 2006,

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Item 8.Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Members of

Neff Rental LLC:

We have audited the accompanying consolidated balance sheets of Neff Rental LLC and subsidiaries (the ‘‘Company’’) as of December 31, 2006 and 2005, and the related consolidated statements of operations, capital deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated statements of operations, capital deficit and cash flows of the Company for the year ended December 31, 2004, were audited by other auditors whose report, dated March 9, 2005 (except for the 2004 supplemental condensed consolidating financial information included in Note 14, as to which the date is January 3, 2006 and the 2004 information included in Note 8, as to which the date is May 10, 2006), expressed an unqualified opinion on those statements.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Neff Rental LLC and subsidiaries at December 31, 2006 and 2005 and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, in 2006 the Company changed its method of accounting for stock-based compensation to conform to Statement of Financial Accounting Standards No. 123-R “Share-Based Payments.”

/s/ DELOITTE & TOUCHE LLP

Certified Public Accountants

Miami, Florida

March 23, 2007

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Report Of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Neff Corp.

We have audited the accompanying consolidated statements of operations, capital deficit and cash flows of Neff Corp. (predecessor of Neff Rental LLC) and subsidiary (the “Company”), for the year ended December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of Neff Corp. (predecessor of Neff Rental LLC) and subsidiary for the year ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

/s/ Kaufman, Rossin & Co., P.A.

Certified Public Accountants

Miami, Florida

March 9, 2005, except for the 2004 supplemental condensed consolidating financial information included in Note 14, as to which the date is January 3, 2006, and the 2004 information included in Note 8, as to which the date is May 10, 2006.

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NEFF RENTAL LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31,
	2006			2005
ASSETS
Cash and cash equivalents	$	158		$	33
Accounts receivable, net of allowance for doubtful accounts of $1,589 in 2006 and $1,734 in 2005	49,357			44,573
Inventories	1,617			1,901
Rental equipment, net	318,446			278,760
Property and equipment, net	21,391			17,187
Goodwill	8,726			—
Deferred tax asset, net	3,774			—
Prepaid expenses and other assets	17,163			17,931
Total assets	$	420,632		$	360,385
LIABILITIES AND CAPITAL DEFICIT
Liabilities
Accounts payable	$	4,498		$	10,382
Accrued expenses	20,958			27,235
Credit facility	163,500			128,935
11¼% second priority senior secured notes	245,000			245,000
13% senior subordinated notes, net of unamortized discount of $2,812 in 2006 and $3,067 in 2005 (including related party balances of $72,364 in 2006 and $72,125 in 2005)	77,188			76,933
Total liabilities	511,144			488,485
Commitments and contingencies
Members’ deficit	(90,512		)	(128,100		)
Total liabilities and capital deficit	$	420,632		$	360,385

The accompanying notes are an integral part of these consolidated financial statements.

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NEFF RENTAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

	For the Years Ended December 31,
	2006		2005			2004
Revenues
Rental revenues	$	275,397	$	229,802		$	192,880
Equipment sales	39,409		36,360			42,750
Parts and service	15,472		13,461			12,058
Total revenues	330,278		279,623			247,688
Cost of revenues
Cost of equipment sold	27,715		26,867			35,890
Depreciation of rental equipment	58,990		47,962			41,739
Maintenance of rental equipment	70,223		70,653			74,266
Cost of parts and service	9,677		8,093			7,236
Total cost of revenues	166,605		153,575			159,131
Gross profit	163,673		126,048			88,557
Other operating expenses
Selling, general and administrative expenses	74,897		67,871			58,403
Other depreciation and amortization	5,902		5,456			5,936
Recapitalization expenses	—		21,276			—
Total other operating expenses	80,799		94,603			64,339
Income from operations	82,874		31,445			24,218
Other expenses (income)
Interest expense (including related party interest of $9,989 in 2006 and $5,795 in 2005)	50,730		32,963			17,313
Adjustment to gain on sale of business	—		—			(1,074		)
Amortization of debt issuance costs	2,087		6,692			1,950
Loss on debt extinguishment	—		4,830			—
Total other expenses (income)	52,817		44,485			18,189
Income (loss) before income taxes	30,057		(13,040		)	6,029
Income tax benefit	5,091		—			—
Net income (loss)	$	35,148	$	(13,040	)	$	6,029

The accompanying notes are an integral part of these consolidated financial statements.

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NEFF RENTAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CAPITAL DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2006, 2005, AND 2004

(in thousands)

	Common Stock					Common Stock					Common Stock					Series A					Additional
	Class A					Class B					New Class A					Preferred Stock					Paid-in			Accumulated			Members'
	Shares		Amount			Shares		Amount			Shares		Amount			Shares		Amount			Capital			Deficit			Deficit			Total
BALANCE—December 31, 2003	16,565		$	166		5,100		$	51		—		$	—		—		$	—		$	135,397		$	(141,347	)	$	—		$	(5,733	)
Net income	—		—			—		—			—		—			—		—			—			6,029			—			6,029
Issuance of Series A Convertible Preferred Stock	—		—			—		—			—		—			100		1			9			—			—			10
BALANCE—December 31, 2004	16,565		166			5,100		51			—		—			100		1			135,406			(135,318		)	—			306
Repurchase of shares in connection with Recapitalization	(15,269	)	(152		)	(5,100	)	(51		)	—		—			(100	)	(1		)	(218,550		)	—			—			(218,754		)
Issuance of new Class A common stock in connection with Recapitalization	—		—			—		—			11,840		119			—		—			97,131			—			—			97,250
Costs in connection with Recapitalization	—		—			—		—			—		—			—		—			(5,459		)	—			—			(5,459		)
Conversion of Class A common stock for new Class A Common stock and rollover of management held stock options in connection with Recapitalization	(639	)	(7		)						639		7			—		—			8,617			—			—			8,617
Contribution to equity by selling stockholders	—		—			—		—			—		—			—		—			6,775			—			—			6,775
Exercise of stock options by former officer of the Company and repurchase of shares in connection with Recapitalization	(657	)	(7		)	—		—			—		—			—		—			(3,788		)	—			—			(3,795		)
Corporate reorganization	—		—			—		—			(12,479	)	(126		)	—		—			(20,132		)	135,318			(115,060		)	—
Net loss	—		—			—		—			—		—			—		—			—			—			(13,040		)	(13,040		)
BALANCE—December 31, 2005	—		—			—		—			—		—			—		—			—			—			(128,100		)	(128,100		)
Stock compensation	—		—			—		—			—		—			—		—			—			—			2,440			2,440
Net income	—		—			—		—			—		—			—		—			—			—			35,148			35,148
BALANCE—December 31, 2006	—		$	—		—		$	—		—		$	—		—		$	—		$	—		$	—		$	(90,512	)	$	(90,512	)

The accompanying notes are an integral part of these consolidated financial statements.

38

NEFF RENTAL LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the Years ended December 31,
	2006			2005			2004
Cash Flows from Operating Activities
Net income (loss)	$	35,148		$	(13,040	)	$	6,029
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	64,892			53,418			47,675
Amortization of debt issue costs	2,087			6,692			1,950
Gain on sale of equipment	(11,694		)	(9,493		)	(6,860		)
Provision for bad debt	1,369			2,484			1,766
Stock compensation expense	2,440			—			—
Stock compensation expense related to redemption of stock options	—			17,951			—
Loss on debt extinguishment	—			4,830			—
Adjustment to gain on sale of business	—			—			(1,074		)
Paid-in-kind interest on term loan	—			—			1,952
(Recovery) provision for hurricane losses	(1,000		)	750			—
Deferred income taxes	(5,337		)	—			—
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(4,925		)	(9,461		)	(4,476		)
Inventories and other assets	765			(2,984		)	801
Accounts payable and accrued expenses	(9,996		)	4,659			12,104
Net cash provided by operating activities	73,749			55,806			59,867
Cash Flows from Investing Activities
Purchases of rental equipment	(119,376		)	(152,305		)	(92,331		)
Proceeds from sale of equipment	39,409			36,360			42,750
Purchases of property and equipment	(10,632		)	(7,819		)	(5,694		)
Cash paid in connection with acquisitions, net of cash acquired	(17,137		)	—			—
Insurance proceeds for hurricane losses	1,057			300			—
Net cash used in investing activities	(106,679		)	(123,464		)	(55,275		)
Cash Flows from Financing Activities
Repayment under previously outstanding credit facility	—			(101,502		)	(3,699		)
Borrowings under credit facility	34,565			128,935			—
Repayment of term loan	—			(52,384		)	—
Borrowings under bridge loan	—			245,000			—
Repayment of bridge loan	—			(245,000		)	—
Issuance of 11¼% second priority senior secured notes	—			245,000			—
Issuance of 13% senior subordinated notes (including related party balance of $72,017 in 2005)	—			76,818			—
Redemption of 10¼% senior subordinated notes	—			(76,113		)	—
Redemption of common and preferred stock	—			(203,362		)	—
Redemption of stock options	—			(21,746		)	—
Issuance of Class A common stock	—			97,250			—
Issuance of Series A convertible preferred stock	—			—			10
Debt issue costs	(1,510		)	(19,827		)	(922		)
Costs in connection with Recapitalization	—			(5,459		)	—
Net cash provided by (used in) financing activities	33,055			67,610			(4,611		)
Net increase (decrease) in cash and cash equivalents	125			(48		)	(19		)
Cash and cash equivalents, beginning of year	33			81			100
Cash and cash equivalents, end of year	$	158		$	33		$	81

The accompanying notes are an integral part of these consolidated financial statements.

39

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—GENERAL

Description of Business

Neff Rental LLC and its wholly-owned subsidiaries (‘‘Neff LLC’’ or the ‘‘Company’’) own and operate equipment rental locations throughout the southern and western regions of the United States. The Company also sells used equipment, parts and merchandise and provides ongoing repair and maintenance services. The Company is a wholly-owned subsidiary of its parent, Neff Corp.

Basis of Presentation

On April 6, 2005, Neff Corp., the parent company of the Company, announced that it and Iron Merger Sub, Inc. (‘‘Iron’’), an affiliate of Odyssey Investment Partners, LLC (‘‘Odyssey’’), had entered into a recapitalization agreement (the ‘‘Recapitalization Agreement’’) pursuant to which Iron would be merged with and into Neff Corp., with Neff Corp. surviving the merger. On June 3, 2005, after shareholder approval of the Recapitalization Agreement, Iron merged with and into Neff Corp. (the ‘‘Recapitalization’’) with Neff Corp. as the surviving entity and a majority-owned subsidiary of Iron Merger Partnership (‘‘Holdings’’). Substantially all of Neff Corp.’s stockholders and holders of options to purchase stock received cash in exchange for their shares or for the cancellation of their options.

In connection with the Recapitalization, Holdings and certain co-investors contributed $97.3 million in cash to Neff Corp.’s equity capital. The net merger consideration paid to the selling stockholders and option holders was $225.1 million, net of contributions to equity by the selling stockholders of $6.8 million related to the Recapitalization and $8.6 million of retained equity described below, which reduced the consideration paid to the selling stockholders and option holders.  The Company also recorded approximately $21.3 million as recapitalization expenses in connection with the Recapitalization, consisting of $17.9 million of stock compensation expense related to the in-the-money value of stock options repurchased and $3.4 million of payroll compensation expense. The stock compensation expense of $17.9 million represented the excess of the fair value of the underlying common stock of $8.21 per share based on the amount paid to option holders in connection with the Recapitalization over the exercise price of the options purchased. Certain members of management retained a portion of Neff Corp. equity (in the form of common stock and options) held by them before the Recapitalization with an aggregate value of $8.6 million, and they did not receive consideration in the Recapitalization with respect to the equity retained. Following the Recapitalization, Holdings and certain co-investors owned 94.9% of Neff Corp.’s common stock and Neff Corp.’s CEO owned 5.1% of Neff Corp.’s common stock. In connection with the Recapitalization, 20.0 million shares of Neff Corp. new Class A common stock and 1.0 million shares of Preferred Stock were authorized of which 12.5 million and zero shares were issued, respectively. The Recapitalization was accounted for as a leveraged recapitalization with no change in the book basis of assets and liabilities.

The following tables present a reconciliation of the merger consideration paid to selling stockholders and option holders in connection with the Recapitalization to amounts recorded as changes in additional paid in capital in the accompanying statements of capital deficit and to amounts recorded in the accompanying statements of cash flows for the year ended December 31, 2005:

40

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1—GENERAL (Continued)

	For the Year Ended December 31, 2005
	(in millions)
Reconciliation of changes in additional paid in capital to net consideration paid to stockholders and option holders:
Repurchase of shares	$	218.8
Stock compensation expense related to redemption of stock options	17.9
Exercise of stock options by former officer of Neff Corp. and repurchase of shares	3.8
Total purchase price	240.5
Contributions to equity by selling stockholders	(6.8		)
Equity retained by certain members of management	(8.6		)
Merger consideration paid to stockholders and option holders	$	225.1
Reconciliation of cash flows to net consideration paid to stockholders and option holders:
Repurchase of common and preferred stock	$	203.4
Redemption of stock options	21.7
Merger consideration paid to stockholders and option holders	$	225.1

The merger consideration and repayment of previously outstanding indebtedness was funded with the investment by Holdings and certain co-investors of $97.3 million in the common equity capital of Neff Corp., borrowings by Neff Corp. of $78.7 million under a new senior secured credit facility, borrowings by Neff Corp. of $245.0 million under a new senior unsecured bridge loan (the ‘‘Bridge Loan’’) and the issuance by Neff Corp. of $80.0 million in aggregate principal amount of its 13% senior subordinated notes due 2013 (the ‘‘13% Notes’’). The Bridge Loan comprised temporary financing to facilitate the Recapitalization and was repaid in full on July 8, 2005.

Costs and fees totaling $18.8 million were incurred by Neff Corp. in conjunction with the Recapitalization for direct transaction costs and financing fees. Neff Corp. recorded $11.2 million of those costs as deferred debt costs during 2005 (of which $5.0 million related to the Bridge Loan), $5.5 million of those costs as a cost of capital (charged to additional paid-in-capital), and the remaining $2.1 million was expensed by Neff Corp. during June 2005.

In July 2005, Neff Corp. announced a change in its corporate organization and created Neff LLC, a 100% owned subsidiary of Neff Corp., and Neff Finance Corp. (‘‘Neff Finance’’), a 100% owned subsidiary of Neff LLC. Neff Finance was created solely to serve as a corporate co-obligor of Neff LLC and has nominal assets. The ownership interest in the Company consists solely of membership interests, all of which are held by Neff Corp; accordingly, no earnings per share or units of ownership are disclosed herein.

On July 8, 2005, Neff Corp. transferred substantially all of its assets (including all of the capital stock of the operating subsidiary Neff Rental, Inc.) and substantially all of its obligations (including its obligations under its guarantee of the credit facility, the Bridge Loan and the 13% Notes) to Neff LLC (the ‘‘Transfer’’). In addition, on July 8, 2005, Neff LLC issued $245.0 million of its 11¼% second priority senior secured notes due 2012 (the ‘‘11¼% Notes’’), the proceeds of which were used to repay the Bridge Loan in full. Deferred debt costs of $5.0 million related to the Bridge Loan were fully expensed. The Company recorded approximately $8.1 million in deferred debt costs in connection with the 11¼% Notes. Contemporaneously, Neff Finance became the co-obligor of all of Neff LLC’s obligations.

The Transfer resulted in a continuation of the existing operations with no change in the book basis of assets and liabilities. Accordingly, the accompanying consolidated financial statements include the accounts of Neff LLC and subsidiaries commencing July 8, 2005 and the accounts of Neff Corp. prior thereto.

41

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1—GENERAL (Continued)

All material intercompany transactions and balances have been eliminated in consolidation. For tax periods prior to July 8, 2005, Neff Corp. had significant net operating losses for which there was a valuation allowance recorded. During the periods Neff Corp. had book income, the valuation allowance was released up to the amount of total tax expense that would have been recorded without the release of the valuation allowance resulting in a zero tax provision. Effective July 8, 2005, as a limited liability company with a single owner that has not elected to be taxed as a corporation, the Company is treated as a disregarded entity for federal and state income tax reporting purposes. As a disregarded entity, the Company is not subject to income taxes. Rather, the Company’s income tax basis results of operations flow through and are included in the tax return of its sole member, Neff Corp. and income taxes are allocated to the Company on a separate return basis. No tax provision was allocated for the year ending December 31, 2005, due to the continuing net operating loss carryforwards of Neff Corp.  A tax benefit was recorded for the year ended December 31, 2006 due to the reduction of the Company’s valuation allowance for its net deferred tax asset.  See Note 8, Income Taxes, for further discussion.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (‘‘U.S. GAAP’’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company considers critical accounting policies to be those that require more significant judgments and estimates in the preparation of the consolidated financial statements including the valuation of rental equipment and other long-lived assets, the valuation of accounts receivable, and the valuation of deferred tax assets. Management relies on historical experience and other assumptions believed to be reasonable under the circumstances in making its judgments and estimates. Actual results could differ from those estimates.

Recognition of Revenue

The Company recognizes revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred, (iii) the price is fixed or determinable, and (iv) collectability is probable.

Rental revenues in the consolidated statements of operations include revenue earned on equipment rentals and rental equipment pick-up and delivery fees. Revenue earned on equipment rentals is recognized as earned over the contract period which may be daily, weekly or monthly. Revenue earned on rental equipment pick-up and delivery fees is recognized at the time the services are provided.

Revenue from the sale of equipment and parts is recognized at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled. Service revenues are recognized at the time the services are provided.

Delivery Costs

Depreciation of delivery vehicles is included in other operating expenses in the consolidated statements of operations and amounted to approximately $3.5 million, $3.2 million and $3.9 million for the years ended December 31, 2006, 2005 and 2004, respectively. All other delivery related costs are included in cost of revenues.

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories, which consist principally of parts and new equipment held for sale, are stated at the lower of cost or market, with cost determined on the first-in, first-out basis for parts and specific identification basis for equipment.

42

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets. Significant improvements are capitalized at cost. Repairs and maintenance are expensed as incurred.

The capitalized cost of equipment and vehicles under capital leases is amortized over the shorter of the lease term or the asset’s estimated useful life, and is included in other depreciation and amortization expense in the consolidated statements of operations.

Leasehold improvements are amortized using the straight-line method over their useful lives or the life of the lease, whichever is shorter. The Company assigns the following useful lives to these categories:

Category	Estimated Useful Lives
Buildings	30 years
Office equipment	2-7 years
Service equipment and vehicles	2-7 years
Shop equipment	7 years

Useful Lives and Salvage Value of Rental Equipment

Rental equipment is stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful life of the related equipment (generally two to seven years with estimated 10-20% residual values). Routine repairs and maintenance are expensed as incurred; improvements are capitalized at cost.

The Company routinely reviews the assumptions utilized in computing rates of depreciation of its rental equipment. Changes to the assumptions (such as the length of service lives and/or the amount of residual values) are made when, in the opinion of management, such changes are necessary to more appropriately allocate asset costs to operations over the service life of the assets. Management utilizes, among other factors, historical experience and industry comparisons in determining the propriety of any such changes. The Company may be required to change these estimates based on changes in its industry, end-markets or other circumstances. If these estimates change in the future, the Company may be required to recognize increased or decreased depreciation expense for these assets.

Accumulated depreciation at December 31, 2006 and 2005 for the Company’s rental fleet was approximately $174.0 million and $156.3 million, respectively.

Impairment of Long-lived Assets and Intangibles

Long-lived assets and intangibles are evaluated for impairment if circumstances suggest that assets may be impaired. An assessment of recoverability is performed prior to any write-down of assets. An impairment charge is recorded on those assets considered impaired for which the estimated fair value is below the carrying amount.

Goodwill

Goodwill is accounted for in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” (“SFAS 142”). Goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired.  Under SFAS 142, goodwill is no longer amortized, but instead is reviewed for impairment annually or more frequently if events indicate a decline in fair value below its carrying value.  This means that the Company must determine whether the fair value of the goodwill, calculated in accordance with applicable accounting standards, is at least equal to the recorded value on the Company’s balance sheet. If the fair value of the goodwill is less than the recorded value, the Company is required to write-off the excess goodwill as an operating expense.

43

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Determination of the amount of impairment is made at the segment level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with the SFAS No. 141, “Business Combinations.”

No impairment adjustment has been made to the Company’s $8.7 million goodwill balance at December 31, 2006.

Fleet Equipment Vendors

For the years ended December 31, 2006, 2005 and 2004, one vendor represented 12.1%, 11.1% and 13.3%, respectively, of the Company’s purchases of rental fleet equipment.  For the years ended December 31, 2006 and December 31, 2004, no other single vendor exceeded 10%. However for the year ended December 31, 2005 two additional vendors represented 10.9% and 10.2%. The next five most significant vendors collectively represented 41.5%, 28.6% and 36.6%, during 2006, 2005, and 2004 respectively.

Prepaid Expenses and Other Assets

Prepaid expenses and other assets primarily includes debt issue costs, prepaid expenses and deposits.  Debt issue costs are amortized over the term of the debt utilizing the effective interest method. Accumulated amortization at December 31, 2006 and 2005 for debt issue costs was $2.6 million and $0.5 million, respectively.

Insurance

The Company is insured against general liability claims, workers’ compensation claims and automobile liability claims up to specified limits per claim and in the aggregate subject to deductibles per occurrence of up to $0.3 million. Insured losses within these deductible amounts are accrued based upon the aggregate liability for reported claims incurred as well as an estimated liability for claims incurred but not reported. These liabilities are not discounted. The Company is self insured for group medical claims.

Advertising

Advertising costs are expensed as incurred. Advertising expense totaled approximately $0.5 million, $0.6 million and $0.8 million for the years ended December 31, 2006, 2005 and 2004 respectively.

Hurricane Impact

Hurricane Katrina struck the Louisiana coast on August 29, 2005, and caused severe flood damage to New Orleans and large parts of the surrounding coastal area. The hurricane destroyed two of the Company’s satellite locations that were used to store equipment prior to deployment in the Gulf of Mexico for rental to oil field maintenance contractors.

Insurance covered the repair or replacement of the Company’s assets that suffered loss or damages. The Company worked closely with its insurance carriers and claims adjusters to ascertain the full amount of insurance proceeds due to the Company as a result of the damages and losses.

The Company recorded the following for the year ended December 31, 2005 as a result of this storm (in thousands):

Rental equipment damaged or destroyed	$	643
Repairs to facilities	407
Insurance recovery	(300		)
Net impact of hurricane recorded in selling, general and administrative expenses	$	750

44

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In 2006, the Company received an additional insurance recovery in the amount of $1.1 million.

The Company recorded the following for the year ended December 31, 2006 as a result of this storm (in thousands):

Additional repairs to facilities	$	57
Insurance recovery	(1,057		)
Net impact of hurricane recorded in selling, general and administrative expenses	$	(1,000	)

Stock-based Compensation

Prior to January 1, 2006, Neff Corp. accounted for its stock-based compensation plans in accordance with Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and related Interpretations.  Compensation expense was not recognized for stock option grants if the exercise price of Neff Corp.’s stock option grants was at or above the fair market value of the underlying stock on the date of grant. Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123-R, “Share-Based Payment” (“SFAS 123-R”) using the modified-prospective transition method. Under this transition method, compensation cost recognized beginning in the first quarter of 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value used for pro forma disclosures and (b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123-R. Results for prior periods have not been restated.

As a result of adopting SFAS 123-R, the Company’s income before taxes for the year ended December 31, 2006, was approximately $2.4 million lower than if it had continued to account for share-based compensation under APB 25. Prior to January 1, 2006, the Company had adopted the pro forma disclosure features of SFAS No. 123, “Accounting for Stock- Based Compensation” (“SFAS 123”), as amended by SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure.”

The following table illustrates the effect on net income if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation for the periods shown below (in thousands):

	For the Years Ended December 31,
	2005			2004
Net (loss) income, as reported	$	(13,040	)	$	6,029
Add: Stock compensation expense recognized	17,951			—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects	(20,348		)	—
Pro forma net (loss) income	$	(15,437	)	$	6,029

The fair value of options at each grant date was estimated using the Black-Scholes multiple option model where each vesting increment is treated as a separate option with its own fair value. The following weighted average assumptions were used for 2006 and 2005, respectively: expected life of 6 and 10 years, risk free interest rate of 4.8% and 4.5%, volatility of 43% and 75% and no expected dividends.  The estimated per option fair value for options granted in 2006 and 2006 was $20.55 and $6.69, respectively. No options were granted by Neff Corp. during 2004. The risk free rate for periods within the contracted life of the options was based on the yield curve of a zero-coupon U.S. Treasury bond on the date the options were granted with a maturity equal to the expected term of the options granted. As Neff Corp.’s common stock is privately held and there has been no history of exercises and forfeitures, volatility and expected life of the options were based on management’s estimates at the grant date.

In December 1995, the Company granted its then Chief Executive Officer options to purchase shares of Class A Common Stock representing 3% (on a fully diluted basis) of the issued and outstanding common stock of the Company for an aggregate purchase price of $1.6 million. Upon completion of an initial public offering in 1998, the number of shares granted under this agreement was fixed at 657,220 shares. No further options can be granted under this agreement. The Company estimated compensation expense at each reporting date based upon the estimated market value of shares to be issued until the

45

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

number of shares was fixed.

These options became fully vested in December 1996 and were exercised during 2005 by the former officer in connection with the Recapitalization. Merger consideration paid to the former officer in connection with the exercise of options and concurrent repurchase of shares totaled $3.8 million.

Income Taxes

Income taxes are accounted for in accordance with SFAS No. 109, “Accounting for Income Taxes”, (“SFAS 109”). Under SFAS 109, deferred tax assets and liabilities are determined based on temporary differences between financial reporting carrying values and tax bases of assets and liabilities, and are measured by using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to reverse.

Segment Reporting

The Company’s operations consist of the rental and sale of equipment, and parts and services in five geographical operating segments. Each of the Company’s regions have been aggregated into one reportable segment because they offer similar products and services in similar markets and have similar economic characteristics. The Company operates primarily in the United States and had minimal international sales for any of the periods presented. No single customer accounted for more than 10% of the Company’s total revenues in any of the periods presented.

Fair Value of Financial Instruments

The fair market value of financial instruments held by the Company are based on a variety of factors and assumptions and may not necessarily be representative of the actual gains or losses that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement of such financial instruments.

Allowance for doubtful accounts

Allowances for doubtful accounts are based on estimates of probable losses related to accounts receivable balances. The establishment of allowances requires the use of judgment and assumptions regarding probable losses on accounts receivable balances.

New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS 123-R. The provisions of the standard went into effect for all interim or annual periods beginning after June 15, 2005. SFAS 123-R requires that compensation cost for all share-based employee payments be recognized in the statement of operations based on grant date fair values of the awards, adjusted to reflect estimated forfeitures and the outcome of certain other conditions. The fair value is generally not remeasured, except in limited circumstances, or if the award is subsequently modified. The statement requires the Company to estimate the fair value of stock-based awards and recognize expense in the statement of operations as the related services are provided. This changed current practice, as, upon adoption, the Company ceased using the “intrinsic value” method of accounting, permitted by APB 25 that resulted in no expense for all of Neff Corp.’s stock option awards.

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29” (“SFAS 153”). The guidance in APB Opinion No. 29, “Accounting for Nonmonetary Transactions (“APB 29”), is based on the principle that exchanges of nonmonetary assets should be measured based on the fair values of the assets exchanged. The guidance in APB 29, however, included certain exceptions to that principle. SFAS 153 amends APB 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for nonmonetary exchanges occurring during fiscal years beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on its results of operations, financial position or cash flows.

46

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107 (“SAB 107”) which expresses views of the SEC staff regarding the application of SFAS 123-R. Among other things, SAB 107 provides interpretive guidance related to the interaction between SFAS 123-R and certain SEC rules and regulations, as well as providing the SEC staff’s views regarding the valuation of share-based payment arrangements for public companies. On April 14, 2005, the SEC announced the adoption of a new rule that amends the adoption dates of SFAS 123-R. The new rule allowed companies to implement SFAS 123-R at the beginning of their first fiscal year that begins after June 15, 2005 or December 15, 2005 for small business issuers. The Company adopted the provisions of the statement as of the beginning of its fiscal year ending December 31, 2006 and for future periods. Implementation of the standard may have a material impact on the Company’s results of operations in future periods.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No. 109” (“FIN 48”).  FIN 48 provides guidance relative to the recognition, derecognition and measurement of tax positions for financial statement purposes.  The standard also requires expanded disclosures.  The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006.  The Company is currently assessing the impact, if any, that FIN 48 will have on its results of operations, financial position or cash flows.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. SFAS 157 requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy, as defined, and companies may be required to provide additional disclosures based on that hierarchy. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is currently evaluating the impact adoption may have on its results of operations, financial position or cash flows.

In September 2006, the SEC issued SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). This SAB provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects on each of the company’s balance sheet and statement of operations financial statements and the related financial statement disclosures. The SAB permits existing public companies to record the cumulative effect of initially applying this approach in the first year ending after November 15, 2006 by recording the necessary correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the opening balance of retained earnings. Additionally, the use of the cumulative effect transition method requires detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it arose. The adoption of SAB 108 did not have a material impact on its results of operations, financial position or cash flows.

NOTE 3—ACCOUNTS RECEIVABLE

The majority of the Company’s customers are engaged in the construction and industrial business throughout the southern and western regions of the United States. The Company extends credit to its customers and evaluates collectibility of accounts receivable based upon an evaluation of the customers’ financial condition and credit history. For leases of certain types of construction equipment, the Company’s policy is to secure its accounts receivable by obtaining liens on the customer’s projects and issuing notices thereof to the projects’ owners and general contractors. All other receivables are generally unsecured.

The following table summarizes activity for allowance for doubtful accounts (in thousands):

	For the Years Ended December 31,
	2006			2005			2004
Beginning balance at January 1	$	1,734		$	1,371		$	1,672
Provision for bad debt	1,369			2,484			1,766
Charge offs, net	(1,514		)	(2,121		)	(2,067		)
Ending balance at December 31	$	1,589		$	1,734		$	1,371

47

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 4—PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 2006 and 2005 (in thousands):

	December 31,
	2006			2005
Land	$	25		$	25
Buildings	137			104
Leasehold improvements	7,954			6,820
Office equipment	3,727			7,321
Service equipment and vehicles	38,332			34,226
Shop equipment	2,205			2,274
	52,380			50,770
Less accumulated depreciation	(30,989		)	(33,583		)
Property and equipment, net	$	21,391		$	17,187

Depreciation expense for property and equipment was $5.9 million, $5.5 million and $5.9 million for the years ended December 31, 2006, 2005 and 2004, respectively.

NOTE 5—NOTES PAYABLE AND DEBT

Notes payable and debt consist of the following as of December 31, 2006 and 2005 (in thousands, except percent data):

	December 31,
	2006		2005
$225 million Revolving Credit Facility with interest rates ranging from the Lender’s Prime Rate plus 0.5% to LIBOR plus up to 2.75% (7.4% at December 31, 2006) due June 2010.	$	163,500	$	128,935
11¼% Second Priority Senior Secured Notes due June 2012	245,000		245,000
13% Senior Subordinated Notes due June 2013, net of unamortized discount of $2,812 in 2006 and $3,067 in 2005	77,188		76,933
	$	485,688	$	450,868

As part of the Recapitalization, Neff Corp. refinanced all of its previously outstanding indebtedness with proceeds of the transactions.

Neff Corp. extinguished its then outstanding 10¼% senior subordinated notes, which were due in 2008, by placing into an irrevocable trust with an independent trustee the amount of $77.3 million in cash on June 3, 2005, at which time Neff Corp. was legally released as the primary obligor under the original terms of issuance of the notes. In connection with the extinguishment, Neff Corp. recorded a loss on extinguishment of debt of $3.3 million. The loss on debt extinguishment was comprised of $1.3 million in redemption premium, $0.5 million in unamortized discount, $0.8 million of unamortized deferred debt costs, and $0.7 million in defeasance costs.

Neff Corp. paid off its outstanding obligation under its previously existing credit facility and repaid all amounts due under its term loan. In connection with these repayments, Neff Corp. recorded a loss on extinguishment of debt of $1.5 million, which represented a write-off of unamortized deferred debt costs.

Neff Rental, Inc. entered into a new $225.0 million Revolving Credit Facility (the ‘‘Credit Facility’’) on June 3, 2005 which was guaranteed by Neff Corp. and secured by a first priority security interest in substantially all of Neff Corp.’s assets. The

48

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5—NOTES PAYABLE AND DEBT (Continued)

Credit Facility contains restrictive covenants. Interest on the Credit Facility is due monthly and the Credit Facility matures in June 2010.

On June 3, 2005, Neff Corp. also issued $80.0 million in aggregate principal amount of 13% Notes, due 2013. The 13% Notes were senior subordinated unsecured obligations of Neff Corp, guaranteed by Neff Rental, Inc., and interest is due semiannually on June 15th and December 15th.

On July 8, 2005, in connection with the Transfer, Neff LLC assumed substantially all of the obligations of Neff Corp. (including (i) Neff Corp.’s obligations under its guarantee of the Credit Facility and the Bridge Loan and (ii) Neff Corp.’s obligations as issuer of the 13% Notes, to which Neff Finance became co-obligor). In addition, on July 8, 2005, Neff LLC issued $245.0 million in aggregate principal amount of its 11¼% Notes, due 2012, the proceeds of which were used to repay the Bridge Loan in full. The 11¼% Notes are second priority, senior secured obligations of Neff LLC, guaranteed by Neff Rental, Inc., and interest is due semiannually on June 15th and December 15th. Neff LLC incurred debt issuance costs of $8.1 million in July 2005 in connection with the issuance of the 11¼% Notes. Contemporaneously with the Transfer and issuance of the 11¼% Notes, Neff Finance became the co-obligor of all of Neff LLC’s obligations.

In connection with the issuance of 11¼% Notes, Neff LLC agreed to effect an offer to exchange all outstanding, privately placed 11¼% Notes for an equal amount of a virtually identical series of 11¼% second priority senior secured notes due 2012 under the same indenture, which the Company registered with the SEC.

The Company’s Credit Facility and the indentures for its 13% Notes and 11¼% Notes contain certain covenants requiring the Company to maintain certain financial ratios, limiting the incurrence of additional indebtedness, capital expenditures and asset sales, and restricting the ability to pay dividends.  The Company was in compliance with all covenants under its Credit Facility, the 11¼% Notes and the 13% Notes, as of December 31, 2006.

NOTE 6—STOCK-BASED COMPENSATION

Effective June 3, 2005, Neff Corp.’s Board of Directors approved the 2005 Stock Option Plan (the “2005 Plan”). The 2005 Plan authorized the grant of options to award up to 1,433,000 shares of Neff Corp.’s common stock to employees, employees of subsidiaries, consultants, or independent members of Neff Corp.’s Board of Directors. Options granted may be Incentive Stock Options (“ISOs”) or nonqualified stock options; the options cannot be granted at exercise prices below estimated fair market value at the date of the grant and are exercisable over periods not in excess of 10 years. Payment of the exercise price may be made in the form of cash or, with the consent of the Compensation Committee of the Board of Directors, in the form of mature shares or, except for ISOs, in a cashless manner.

In connection with the Recapitalization, the majority of the options to acquire shares of Neff Corp. stock then outstanding were reacquired and retired by Neff Corp. Following the Recapitalization, previously outstanding and fully vested options of 410,800 of Neff Corp.’s common shares remain outstanding (the “Rollover Options”), exercisable at $0.09 per share, expiring in 2013.  The weighted average exercise price and the weighted average remaining contractual life of options outstanding for the Rollover Options as of December 31, 2006 is $0.09 and 7 years, respectively. The aggregate intrinsic value of the Rollover Options outstanding and exercisable as of December 31, 2006 is $21.3 million.

Effective June 3, 2005, Neff Corp. granted options to certain members of Neff Corp.’s management (whose employment was assigned to the Company in connection with the Transfer) to acquire 1,414,306 shares of Neff Corp.’s common stock (the “2005 Options”), exercisable at $8.214 per share (the estimated fair market value at the date of the grant), with 530,364 vesting ratably on December 31, 2005 through December 31, 2008, with the balance vesting ratably on December 31, 2005 through December 31, 2008 if certain earnings based targets are reached. If the earnings targets are not achieved, the options will not vest until 2013. As of December 31, 2006, 707,153 of the 2005 Options had vested.

Effective May 22, 2006, Neff granted additional options to certain members of Neff Corp.’s management and a Director to acquire 11,129 shares of Neff Corp’s common stock (the “2006 Options”), exercisable at $52.02 per share (the estimated fair market value at the date of the grant). Management was granted options to acquire 8,580 shares with 2,145 vesting ratably on December 31, 2006 through December 31, 2009, with the balance vesting ratably on December 31, 2006 through December 31, 2009 if certain earnings based targets are reached. If the earnings targets are not achieved, the options will not vest until 2014. The Director was granted options to acquire 2,549 shares which vested in their entirety at the grant date. As of December 31, 2006, 4,700 of the 2006 Options had vested.

The weighted average exercise price and the weighted average remaining contractual life of options outstanding under the 2005 Plan as of December 31, 2006 is $8.55 and 9 years, respectively. As of December 31, 2006, Neff Corp. had 1,836,235

49

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6—STOCK-BASED COMPENSATION (Continued)

options outstanding. None of the options have been exercised or forfeited. The aggregate intrinsic value of vested and exercisable options and expected to vest options outstanding under the 2005 Plan as of December 31, 2006 was $31.0 million.

As of December 31, 2006 and December 31, 2005, the total compensation cost related to nonvested awards for the 2005 Options not yet recognized totaled approximately $4.8 million and $7.2 million, respectively; that cost is expected to be recognized over a period of 2 years and 3 years, respectively.

As of December 31, 2006, the total compensation cost related to nonvested awards for the 2006 Options not yet recognized totaled approximately $0.2 million; that cost is expected to be recognized over a period of 3 years. No options have been exercised in 2006, 2005 or 2004, therefore no cash was received or tax benefit was realized in those years.

NOTE 7—RETIREMENT PLAN

In February 1996, Neff Corp. adopted a qualified 401(k) profit sharing plan (the ‘‘401(k) Plan’’).  The 401(k) Plan covers substantially all employees of the Company. Participating employees may contribute to the 401(k) Plan through salary deductions. The Company may contribute, at its discretion, matching contributions equal to 50% of the employee’s contribution not to exceed 3% of the employee’s annual salary. The Company contributed approximately, $0.8 million, $0.7 million and $0.6 million to the 401(k) Plan for the years ended December 31, 2006, 2005 and 2004, respectively.

NOTE 8—INCOME TAXES

The components of the benefit from income taxes is as follows (in thousands):

	For the Years Ended
	December 31,
	2006			2005			2004
Current	$	(246	)	$	—		$	—
Deferred	(11,730		)	5,071			(2,553		)
Change in valuation allowance	17,067			(5,071		)	2,553
Total	$	5,091		$	—		$	—

The following table summarizes the tax effects comprising the Company’s net deferred tax assets and liabilities (in thousands):

	December 31,
	2006			2005
Deferred Tax Assets
Net operating loss carryforwards	$	54,561		$	60,734
Alternative minimum tax credits	478			232
Intangible assets, allowance for bad debts and other	15,215			17,686
Total deferred tax assets	70,254			78,652
Valuation allowance	—			(17,067		)
Deferred Tax Liabilities
Prepaids	(466		)	(332		)
Depreciation	(66,014		)	(61,253		)
Net Deferred Tax Asset	$	3,774		$	—

The Company had recorded a net deferred tax asset of approximately $17.1 million at December 31, 2005, which was completely offset by a valuation allowance. Realization of the deferred tax asset is dependent on generating sufficient taxable income in the future. The amount of the deferred tax asset considered realizable is periodically reassessed and accordingly, is

50

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8—INCOME TAXES (Continued)

adjusted in the period when changes in estimates of future taxable income or realization of such assets are identified and those changes could be material.

During 2006, the Company reversed approximately $17.1 million of its net deferred tax asset valuation allowance, which eliminated the remaining balance of the allowance.   SFAS No. 109 provides that a valuation allowance must be established for deferred tax assets when it is more likely than not that the assets will not be realized. SFAS 109 also provides that all positive and negative evidence must be evaluated in determining the need for a valuation allowance. For the year ended December 31, 2006, the Company had net income before income taxes of $30.1 million. In addition, the Company evaluated its forecast of pre-tax income based on historical cumulative positive pre-tax income before non-recurring items for the years ended December 31, 2006, 2005 and 2004, and a forecast of positive taxable income in the future.  As a result of that evaluation, the Company determined that it no longer requires a deferred tax asset valuation allowance. Under the guidelines of SFAS 109, the Company reversed the remaining component of this valuation allowance through current period earnings by a credit to the Company’s income tax (provision) benefit.

As of December 31, 2006, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $136.4 million expiring through 2026.

These carryforwards expire as follows (in thousands):

Expiration Date
2019	$	2,377
2020	21,929
2021	35,514
2022	16,208
2024	29,483
2025	30,396
2026	496
Total	$	136,403

Ownership changes have occurred, as defined by IRC Section 382, which place limitations on the utilization of net operating losses. Following an ownership change, the limitation for any post-change year is generally an amount equal to the fair market value of the loss corporation multiplied by an IRS prescribed interest rate. However, based on the Company’s attributes (i.e. built-in gains existing as of the ownership change date) it does not expect the limitation to impede the use of the majority of its net operating loss carryforwards.

The following table summarizes the differences between the statutory federal income tax rate and the Company’s effective income tax rate (in thousands, except percent data):

	For the Years Ended December 31,
	2006					2005					2004
	Amt.			%		Amt.			%		Amt.			%
(Provision) benefit at statutory federal income tax rate	$	(10,520	)	(35.0	)	$	4,434		34.0		$	(2,050	)	(34.0	)
Change in valuation allowance	17,067			56.8		(5,071		)	(38.9	)	2,553			42.3
State tax (provision) benefit, net	(1,473		)	(4.9	)	639			4.9		(295		)	(4.9	)
Non-deductible expenses	(21		)	(0.1	)	(64		)	(0.5	)	(120		)	(2.0	)
Other	38			0.1		62			0.5		(88		)	(1.4	)
Total income tax benefit	$	5,091		16.9		$	—		—		$	—		—

51

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 8—INCOME TAXES (Continued)

The following table summarizes activity for the deferred tax valuation allowance (in thousands):

	For the Years Ended December 31,
	2006			2005		2004
Beginning balance at January 1,	$	17,067		$	11,996	$	14,549
Additions	—			5,071		—
Deductions	(17,067		)	—		(2,553		)
Ending Balance at December 31,	$	—		$	17,067	$	11,996

In 2006, the Company assumed deferred tax liabilities of approximately $1.6 million in connection with the allocation of the purchase price relating to the acquisition described in Note 12, Acquisition.

NOTE 9—FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair market value of financial instruments held by the Company at December 31, 2006 and 2005 is based on a variety of factors and assumptions and may not necessarily be representative of the actual gains or losses that will be realized in the future and do not include expenses that could be incurred in an actual sale or settlement of such financial instruments.

The fair value of the Company’s Credit Facility is assumed to be equal to its carrying value, as the interest rates approximate market rates. At December 31, 2006 and 2005 approximately $163.5 million and $128.9 million, respectively was outstanding under the Credit Facility.  As of December 31, 2006, the Company had 11¼% Notes with a face value of $245.0 million and an estimated fair value of $267.4 million, based on quoted market prices. The estimated fair value of the outstanding 13% subordinated notes at December 31, 2006 was $77.2 million, which approximates the carrying value.

NOTE 10—RELATED-PARTY TRANSACTIONS AND OTHER COMMITMENTS

For the years ended December 31, 2006, 2005 and 2004 revenues from affiliated companies amounted to approximately $1.1 million, $1.5 million and $1.6 million, respectively. Included in accounts receivable are amounts from various companies related by virtue of common ownership, which amounted to $0.4 million and $0.4 million at December 31, 2006 and 2005, respectively.

In addition, in connection with the Transactions, affiliates of New York Life Capital Partners II, L.P., DLJ Investment Partners II, L.P. and TCW Cresent/Mezzanine Partners III, L.P. own approximately 25% of Neff Corp.’s outstanding shares of Class A common stock and purchased approximately $75.0 million in aggregate principal amount of the 13% senior subordinated notes.

Stockholders Agreement

Holdings, all of Neff Corp.’s other stockholders and Neff Corp. entered into a stockholders agreement in connection with the Recapitalization. Pursuant to the stockholders agreement, each of the parties thereto agrees to vote their stock in favor of a number of designees of Odyssey that will enable Odyssey to designate the election of all of the members of Neff Corp.’s Board of Directors. Pursuant to the stockholders agreement, each of Neff Corp.’s stockholders (other than Holdings) are restricted from transferring its stock of Neff Corp. until the earlier of an initial public offering by Neff Corp. of its stock or June 3, 2010. Holdings also has a bring-along right under certain circumstances to require Neff Corp.’s other stockholders party to the stockholders agreement to sell their shares to a third party that is purchasing stock of Neff Corp. Neff Corp.’s other stockholders have a tag-along right under certain circumstances to sell their shares to a third party that is purchasing stock of Neff Corp. held by Holdings. In addition, under certain circumstances, the Company’s CEO also has a right to sell his stock back to Neff Corp. and, under certain circumstances, Neff Corp. has a right to purchase the stock held by the Company’s CEO. Furthermore, Neff Corp.’s stockholders party to the stockholders agreement each have the right under certain circumstances to purchase a pro rata portion of any future equity issuance by Neff Corp. The stockholders agreement also provides Neff Corp.’s stockholders party to the stockholders agreement have the right, under certain circumstances and subject to certain conditions, to require Neff Corp. to register under the Securities Act shares of its Class A common stock held by them.

52

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10—RELATED-PARTY TRANSACTIONS AND OTHER COMMITMENTS (Continued)

Management Stockholders Agreement

Holdings, our parent, Neff Corp., and all members of our management who have received options pursuant to the 2005 Stock Option Plan entered into a management stockholders agreement. The management stockholders agreement provides for customary restrictions on transfer, put and call rights, tag-along rights and bring-along rights which would apply to the shares of capital stock of Neff Corp.

Operating Leases

The Company leases real estate, rental equipment and other equipment under operating leases.  Certain real estate leases require the Company to pay maintenance, insurance, taxes and certain other expenses in addition to the stated rental amounts. For leases with step rent provisions, whereby the rental payments increased incrementally over the life of the lease, the Company recognizes the total minimum lease payments on a straight-line basis over the lease term, including renewal options. As of December 31, 2006, future minimum rental payments under non-cancelable operating lease arrangements are as follows for the years ending December 31 (in thousands):

2007	$	5,713
2008	4,570
2009	3,122
2010	1,940
2011	1,386
Thereafter	4,514
	$	21,245

During 2006, 2005 and 2004 rental expense under operating lease arrangements amounted to approximately $6.9 million, $12.7 million and $18.9 million, respectively.

Litigation Matters

The Company is party to legal proceedings and potential claims arising in the ordinary course of business. The Company’s management does not believe that these matters will have an adverse effect on the Company’s financial position, results of operations, or cash flows.

NOTE 11—SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	For the Years Ended
	December 31,
	2006			2005			2004
Supplemental Disclosures of Cash Flow Information
Cash paid for interest	$	50,484		$	32,631		$	15,011
Cash paid for rental equipment additions:
Total fleet additions	$	116,455		$	152,417		$	94,766
Less amounts included in accounts payable and accrued expenses at December 31,	(624		)	(3,545		)	(3,433		)
Add amounts included in accounts payable and accrued expenses at December 31 of prior year	3,545			3,433			998
Cash payments made for rental equipment additions	$	119,376		$	152,305		$	92,331

53

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12—ACQUISITION

On May 18, 2006, the Company acquired River City Connections, Inc., a rental equipment business with two locations in Sacramento, California, for $17.1 million after giving effect to post-closing purchase price adjustments. The purchase was funded through borrowings on the Credit Facility. The acquired company was immediately merged with and into Valley Rents and Ready Mix, Inc. (“Valley Rents”), a Delaware corporation, which remained as the surviving entity and a wholly-owned subsidiary of Neff Rental, Inc. Valley Rents subsequently became a co-guarantor of the Credit Facility, 11¼% Notes and 13% Notes.  On December 22, 2006 Valley Rents was merged into Neff Rental, Inc., with Neff Rental, Inc. remaining as the surviving entity.

The purchase price of $17.1 million was allocated to the assets acquired, mainly rental equipment, and liabilities assumed based on their estimated fair values at the date of acquisition.  The excess purchase price over the fair values of assets acquired and liabilities assumed of $8.7 million was allocated to goodwill.  In accordance with SFAS 142, goodwill is no longer amortized, but is tested at least annually for impairment.  The allocation of the purchase price to the identifiable intangible assets acquired in these consolidated financial statements is preliminary until the Company obtains final information regarding their fair values.

The results of operations of the acquired business have been included in the Company’s consolidated statements of operations since the acquisition date and did not have a material impact on the Company’s results of operations.  The pro forma results of operations, assuming the acquisition took place at the beginning of the periods presented, were not significantly different from the Company’s reported results of operations.

NOTE 13—SUMMARY OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

A summary of the quarterly operating results during 2006 and 2005 is as follows (in thousands):

	2006
	1st		2nd		3rd		4th
Revenues	$	77,660	$	83,826	$	85,319	$	83,473
Gross Profit	35,423		41,297		44,299		42,654
Income from operations	16,327		21,518		22,450		22,579
Net income	$	4,011	$	8,399	$	8,455	$	14,283

	2005
	1st		2nd			3rd		4th
Revenues	$	61,787	$	69,046		$	72,333	$	76,457
Gross profit	23,249		30,351			32,737		39,711
Income (loss) from operations	7,165		(7,516		)	14,233		17,563
Net income (loss)	$	2,481	$	(22,622	)	$	1,511	$	5,590

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On July 8, 2005, Neff LLC and its subsidiaries issued the 11¼% Notes, due 2012 and assumed the obligations of Neff Corp. as issuer of the 13% Notes, due 2013 (collectively, the ‘‘Securities’’). Neff Finance is a co-issuer of the Securities and Neff Rental, Inc. is a guarantor of the Securities. Both Neff Finance and Neff Rental, Inc. are direct, 100% owned subsidiaries of Neff LLC. The obligations of Neff Finance and Neff Rental, Inc. in respect of the Securities are full and unconditional. The

54

NEFF RENTAL LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

obligations of Neff Finance are joint and several with Neff LLC, and the obligations of Neff Rental, Inc. are joint and several with all future guarantors in respect of the Securities.

The Company conducts substantially all of its business through, and derives all of its income from, its operating subsidiary, Neff Rental, Inc. Therefore, the Company’s ability to make required principal and interest payments with respect to its indebtedness depends on the earnings of its subsidiaries and its ability to receive funds from its subsidiaries through dividend and other payments. Neff Rental, Inc. is subject to various financial and restrictive covenants under its Credit Facility that limit its ability to distribute cash to Neff LLC. However, the Credit Facility expressly allows distributions of cash in connection with regularly scheduled payments of principal and interest and certain other amounts in respect of the Securities.

Neff Finance has no operations, revenues, cash flows or assets other than its nominal capitalization of $1.00, and thus, the Company has not presented separate financial statements and other disclosures concerning Neff Finance.

In accordance with criteria established under Rule 3-10 of Regulation S-X under the Act, the following tables present condensed consolidating financial information of (a) Neff Corp., in its capacity as predecessor to Neff LLC, a co-issuer of the Securities (collectively, the ‘‘Parent’’), and (b) Neff Rental, Inc. (the ‘‘Guarantor Subsidiary’’), in its capacity as guarantor of the Securities:

55

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2006

(in thousands)

	Guarantor  Subsidiary			Parent			Eliminations			Condensed  Consolidated
ASSETS
Cash and cash equivalents	$	158		$	—		$	—		$	158
Accounts receivable, net	49,357			—			—			49,357
Inventories	1,617			—			—			1,617
Rental equipment, net	318,446			—			—			318,446
Property and equipment, net	21,391			—			—			21,391
Investment in subsidiaries	—			3,040			(3,040		)	—
Goodwill	8,726			—			—			8,726
Deferred tax asset, net	3,774			—			—			3,774
(Due to) from affiliates	(220,361		)	220,361			—			—
Prepaid expenses and other assets	7,203			9,960			—			17,163
Total assets	$	190,311		$	233,361		$	(3,040	)	$	420,632
LIABILITIES AND CAPITAL DEFICIT
Liabilities
Accounts payable	$	4,498		$	—		$	—		$	4,498
Accrued expenses	19,273			1,685			—			20,958
Credit facility	163,500			—			-—			163,500
11¼% second priority senior secured notes	—			245,000			—			245,000
13% senior subordinated notes	—			77,188			—			77,188
Total liabilities	187,271			323,873			—			511,144
Capital deficit
Members’ deficit	—			(90,512		)	—			(90,512		)
Additional paid-in capital	36,889			—			(36,889		)	—
Accumulated deficit	(33,849		)	—			33,849			—
Total capital deficit	3,040			(90,512		)	(3,040		)	(90,512		)
Total liabilities and capital deficit	$	190,311		$	233,361		$	(3,040	)	$	420,632

56

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2005

(in thousands)

	Guarantor  Subsidiary			Parent			Eliminations			Condensed  Consolidated
ASSETS
Cash and cash equivalents	$	33		$	—		$	—		$	33
Accounts receivable, net	44,573			—			—			44,573
Inventories	1,901			—			—			1,901
Rental equipment, net	278,760			—			—			278,760
Property and equipment, net	17,187			—			—			17,187
Investment in subsidiaries	—			(73,987		)	73,987			—
(Due to) from affiliates	(259,836		)	259,836			—			—
Prepaid expenses and other assets	8,260			9,671			—			17,931
Total assets	$	90,878		$	195,520		$	73,987		$	360,385
LIABILITIES AND CAPITAL DEFICIT
Liabilities
Accounts payable	$	10,382		$	—		$	—		$	10,382
Accrued expenses	25,548			1,687			—			27,235
Credit facility	128,935			—			—			128,935
11¼% second priority senior secured notes	—			245,000			—			245,000
13% senior subordinated notes	—			76,933			—			76,933
Total liabilities	164,865			323,620			—			488,485
Capital deficit							—
Members' deficit	—			(128,100		)	—			(128,100		)
Additional paid-in capital	34,448			—			(34,448		)	—
Accumulated deficit	(108,435		)	—			108,435			—
Total capital deficit	(73,987		)	(128,100		)	73,987			(128,100		)
Total liabilities and capital deficit	$	90,878		$	195,520		$	73,987		$	360,385

57

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

(in thousands)

	Guarantor Subsidiary		Parent			Eliminations			Condensed Consolidated
Revenues
Rental revenues	$	275,397	$	—		$	—		$	275,397
Equipment sales	39,409		—			—			39,409
Parts and service	15,472		—			—			15,472
Total revenues	330,278		—			—			330,278
Cost of revenues
Cost of equipment sold	27,715		—			—			27,715
Depreciation of rental equipment	58,990		—			—			58,990
Maintenance of rental equipment	70,223		—			—			70,223
Costs of parts and service	9,677		—			—			9,677
Total cost of revenues	166,605		—			—			166,605
Gross profit	163,673		—			—			163,673
Other operating expenses
Selling, general and administrative expenses	74,897		—			—			74,897
Other depreciation and amortization	5,902		—			—			5,902
Total other operating expenses	80,799		—			—			80,799
Income from operations	82,874		—			—			82,874
Other expenses
Interest expense	12,513		38,217			—			50,730
Amortization of debt issue costs	865		1,222			—			2,087
Total other expenses	13,378		39,439			—			52,817
Income (loss) before income taxes and equity earnings in subsidiaries	69,496		(39,439		)	—			30,057
Income tax benefit	5,091		—			—			5,091
Equity earnings in subsidiaries	—		74,587			(74,587		)	—
Net income (loss)	$	74,587	$	35,148		$	(74,587	)	$	35,148

58

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2005

(in thousands)

	Guarantor Subsidiary		Parent			Eliminations			Condensed Consolidated
Revenues
Rental revenues	$	229,802	$	—		$	—		$	229,802
Equipment sales	36,360		—			—			36,360
Parts and service	13,461		—			—			13,461
Total revenues	279,623		—			—			279,623
Cost of revenues
Cost of equipment sold	26,867		—			—			26,867
Depreciation of rental equipment	47,962		—			—			47,962
Maintenance of rental equipment	70,653		—			—			70,653
Costs of parts and service	8,093		—			—			8,093
Total cost of revenues	153,575		—			—			153,575
Gross profit	126,048		—			—			126,048
Other operating expenses
Selling, general and administrative expenses	67,871		—			—			67,871
Other depreciation and amortization	5,456		—			—			5,456
Recapitalization expenses	21,276		—			—			21,276
Total other operating expenses	94,603		—			—			94,603
Income from operations	31,445		—			—			31,445
Other expenses
Interest expense	9,414		23,549			—			32,963
Amortization of debt issue costs	1,273		5,419			—			6,692
Loss on debt extinguishment	842		3,988			—			4,830
Total other expenses	11,529		32,956			—			44,485
Income (loss) before equity earnings in subsidiaries	19,916		(32,956		)	—			(13,040		)
Equity earnings in subsidiaries	—		19,916			(19,916		)	—
Net income (loss)	$	19,916	$	(13,040	)	$	(19,916	)	$	(13,040	)

59

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2004

(in thousands)

	Guarantor Subsidiary		Parent			Eliminations			Condensed Consolidated
Revenues
Rental revenues	$	192,880	$	—		$	—		$	192,880
Equipment sales	42,750		—			—			42,750
Parts and service	12,058		—			—			12,058
Total revenues	247,688		—			—			247,688
Cost of revenues
Cost of equipment sold	35,890		—			—			35,890
Depreciation of rental equipment	41,739		—			—			41,739
Maintenance of rental equipment	74,266		—			—			74,266
Costs of parts and service	7,236		—			—			7,236
Total cost of revenues	159,131		—			—			159,131
Gross profit	88,557		—			—			88,557
Other operating expenses
Selling, general and administrative expenses	58,403		—			—			58,403
Other depreciation and amortization	5,936		—			—			5,936
Total other operating expenses	64,339		—			—			64,339
Income from operations	24,218		—			—			24,218
Other expenses (income)
Interest expense	5,296		12,017			—			17,313
Adjustment to gain on sale of business	—		(1,074		)	—			(1,074		)
Amortization of debt issue costs	1,695		255			—			1,950
Total other expenses (income)	6,991		11,198			—			18,189
Income (loss) before equity earnings in subsidiaries	17,227		(11,198		)	—			6,029
Equity earnings in subsidiaries	—		17,227			(17,227		)	—
Net income (loss)	$	17,227	$	6,029		$	(17,227	)	$	6,029

60

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2006

(in thousands)

	Guarantor Subsidiary			Parent			Eliminations			Condensed Consolidated
Cash Flows from Operating Activities
Net income (loss)	$	74,587		$	35,148		$	(74,587	)	$	35,148
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	64,892			—			—			64,892
Amortization of debt issue costs	865			1,222			—			2,087
Gain on sale of equipment	(11,694		)	—			—			(11,694		)
Provision for bad debt	1,369			—			—			1,369
Stock compensation expense	2,440			—			—			2,440
Equity earnings in subsidiaries	—			(74,587		)	74,587			-
Recovery for hurricane losses	(1,000		)	—			—			(1,000		)
Deferred income taxes	(5,337		)	—			—			(5,337		)
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable	(4,925		)	—			—			(4,925		)
Inventories and other assets	2,275			(1,510		)	—			765
Accounts payable and accrued expenses	(9,998		)	2			—			(9,996		)
Net cash provided by (used in) operating activities	113,474			(39,725		)	—			73,749
Cash Flows from Investing Activities
Purchases of rental equipment	(119,376		)	—			—			(119,376		)
Proceeds from sale of equipment	39,409			—			—			39,409
Purchases of property and equipment	(10,632		)	—			—			(10,632		)
Cash paid in connection with acquisition, net of cash acquired	(17,137		)	—			—			(17,137		)
Insurance proceeds for hurricane losses	1,057			—			—			1,057
Net cash used in investing activities	(106,679		)	—			—			(106,679		)
Cash Flows from Financing Activities
Borrowings under credit facility	34,565			—			—			34,565
Debt issue costs	—			(1,510		)	—			(1,510		)
Due to (from) affiliates	(41,235		)	41,235			—			—
Net cash (used in) provided by financing activities	(6,670		)	39,725			—			33,055
Net increase in cash and cash equivalents	125			—			—			125
Cash and cash equivalents, beginning of year	33			—			—			33
Cash and cash equivalents, end of year	$	158		$	—		$	—		$	158

61

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2005

(in thousands)

	Guarantor Subsidiary			Parent			Eliminations			Condensed Consolidated
Cash Flows from Operating Activities
Net income (loss)	$	19,916		$	(13,040	)	$	(19,916	)	$	(13,040	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	53,418			—			—			53,418
Amortization of debt issue costs	1,273			5,419			—			6,692
Gain on sale of equipment	(9,493		)	—			—			(9,493		)
Loss on debt extinguishment	842			3,988			—			4,830
Provision for bad debt	2,484			—			—			2,484
Stock compensation expense related to redemption of stock options	17,951			—			—			17,951
Provision for hurricane losses	750			—			—			750
Equity earnings in subsidiaries	—			(19,916		)	19,916			—
Changes in operating assets and liabilities:
Accounts receivable	(9,461		)	—			—			(9,461		)
Inventories and other assets	(13,125		)	10,141			—			(2,984		)
Accounts payable and accrued expenses	2,972			1,687			—			4,659
Net cash provided by (used in) operating activities	67,527			(11,721		)	—			55,806
Cash Flows from Investing Activities
Purchases of rental equipment	(152,305		)	—			—			(152,305		)
Proceeds from sale of equipment	36,360			—			—			36,360
Purchases of property and equipment	(7,819		)	—			—			(7,819		)
Insurance proceeds for hurricane losses	300			—			—			300
Net cash used in investing activities	(123,464		)	—			—			(123,464		)
Cash Flows from Financing Activities
Repayments under previously outstanding credit facility	(101,502		)	—			—			(101,502		)
Borrowings under credit facility	128,935			—			—			128,935
Repayments of term loan	—			(52,384		)	—			(52,384		)
Borrowings under bridge loan	—			245,000			—			245,000
Repayments of bridge loan	(245,000		)				—			(245,000		)
Issuance of 11¼% second priority senior secured notes	245,000						—			245,000
Issuance of 13% senior subordinated notes	—			76,818			—			76,818
Redemption of 10¼% senior subordinated notes	—			(76,113		)	—			(76,113		)
Redemption of common and preferred stock	—			(203,362		)	—			(203,362		)
Redemption of stock options	—			(21,746		)	—			(21,746		)
Issuance of Class A common stock	—			97,250			—			97,250
Debt issue costs	(9,686		)	(10,141		)	—			(19,827		)
Costs in connection with Recapitalization	—			(5,459		)	—			(5,459		)
Due to (from) affiliates	38,142			(38,142		)	—			—
Net cash provided by financing activities	55,889			11,721			—			67,610
Net decrease in cash and cash equivalents	(48		)	—			—			(48		)
Cash and cash equivalents, beginning of year	81			—			—			81
Cash and cash equivalents, end of year	$	33		$	—		$	—		$	33

62

NEFF RENTAL LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14—SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Continued)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2004

(in thousands)

	Guarantor Subsidiary			Parent			Eliminations			Condensed Consolidated
Cash Flows from Operating Activities
Net income (loss)	$	17,227		$	6,029		$	(17,227	)	$	6,029
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	47,675			—			—			47,675
Amortization of debt issue costs	1,695			255			—			1,950
Gain on sale of equipment	(6,860		)	—			—			(6,860		)
Adjustment to gain on sale of business	—			(1,074		)	—			(1,074		)
Provision for bad debt	1,766			—			—			1,766
Paid-in-kind interest on term loan	—			1,952			—			1,952
Equity earnings in subsidiaries	—			(17,227		)	17,227			—
Change in operating assets and liabilities:
Accounts receivable	(4,476		)	—			—			(4,476		)
Inventories and other assets	801			—			—			801
Accounts payable and accrued expenses	12,104			—			—			12,104
Net cash provided by (used in) operating activities	69,932			(10,065		)	—			59,867
Cash Flows from Investing Activities
Purchases of rental equipment	(92,331		)	—			—			(92,331		)
Proceeds from sale of equipment	42,750			—			—			42,750
Purchases of property and equipment	(5,694		)	—			—			(5,694		)
Net cash used in investing activities	(55,275		)	—			—			(55,275		)
Cash Flows from Financing Activities
Repayments under credit facility	(3,699		)	—			—			(3,699		)
Issuance of Series A convertible preferred stock	—			10						10
Debt issue costs	(922		)	—			—			(922		)
Due to (from) affiliates	(10,055		)	10,055			—			—
Net cash (used in) provided by financing activities	(14,676		)	10,065			—			(4,611		)
Net decrease in cash and cash equivalents	(19		)	—			—			(19		)
Cash and cash equivalents, beginning of year	100			—			—			100
Cash and cash equivalents, end of year	$	81		$	—		$	—		$	81

63

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, or the “Exchange Act”) that are designed to ensure that information required to be disclosed in Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2006. As of December 31, 2006 our disclosure controls and procedures were effective.

Our Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or our internal controls will prevent all error and all fraud. The design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be considered relative to their cost. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that we have detected all of our control issues and all instances of fraud, if any. The design of any system of controls also is based partly on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions.

There have been no changes in our internal control over financial reporting that occurred during our fiscal quarter ended December 31, 2006, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by the rules of the Securities and Exchange Commission for newly public companies.

Item 9B.Other Information

None.

64

PART III

Item 10.Directors and Executive Officers of the Registrant

The following table and discussion provides information regarding our executive officers and members of our Board of Managers (ages as of December 31, 2006):

Name	Age	Position(s)
J.C. Mas	40	Chief Executive Officer and Member of Board of Managers
Graham Hood	51	President and Chief Operating Officer
Mark Irion	40	Chief Financial Officer
Steven Settelmayer	47	Vice President—Sales & Marketing
Paula Papamarcos	49	Vice President—Operations Management
James Custer	58	Vice President—Product Support and Safety
John Anderson	51	Regional Vice President—Neff Rental, Inc.—Central
Westley Parks	44	Regional Vice President—Neff Rental, Inc.—Atlantic
Stephen Halliwell	48	Regional Vice President—Neff Rental, Inc.—Florida
Steve Michaels	48	Regional Vice President—Neff Rental, Inc.—Western
Henry Lawson	44	Regional Vice President—Neff Rental, Inc.—Southeastern
Muzzafar Mirza*	48	Member of Board of Managers
William Hopkins	43	Member of Board of Managers
Douglas Hitchner	45	Member of Board of Managers
James A. Flick, Jr.	72	Member of Board of Managers

*    Muzzafar Mirza, a member of our Board of Managers, our Audit Committee and Neff Corp.’s Compensation Committee, passed away on March 10, 2007. Mr. Mirza functioned in the capacities mentioned in the preceding sentence during the period covered by this report. We are grateful for Mr. Mirza’s leadership and are saddened by this loss.

J.C. Mas—Mr. Mas is our Chief Executive Officer and also serves as a member of our Board of Managers. Prior to joining us as President and CEO in 2002, Mr. Mas served in a variety of executive positions at MasTec Inc., including as President of MasTec International. Mr. Mas is also on the board of Miami Children’s Hospital.

Graham Hood—Mr. Hood is our President and has served as our Chief Operating Officer since 2003. Mr. Hood joined Neff in 1995 as a Regional Vice President for the Southeastern Region. Mr. Hood has 28 years of industry experience, 17 years of which were with Hertz Equipment Rental Corporation.

65

Mark Irion—Mr. Irion has served as our Chief Financial Officer since 1999. He joined Neff in 1998 after being employed as Chief Financial Officer of Markvision Holdings, Inc., a computer distribution company, from 1994 to 1998. Prior to 1994, Mr. Irion was employed by Deloitte & Touche LLP.

Steven Settelmayer—Mr. Settelmayer has served as Vice President, Sales and Marketing, of our subsidiary, Neff Rental, Inc., since 2002. Prior to joining our company, he worked for twelve years at Teletrac, which specializes in vehicle location systems. Prior to that he was in sales management in the office equipment industry.

Paula Papamarcos—Ms. Papamarcos has served as Vice President, Operations Management, of our subsidiary, Neff Rental, Inc., since 1999. Ms. Papamarcos joined Neff Rental, Inc. in 1996 and has 21 years of industry experience, 11 of which were with Hertz Equipment Rental Corporation.

James Custer—Mr. Custer has served as Vice President, Product Support and Safety, of our subsidiary, Neff Rental, Inc., since 1999. Mr. Custer has over 30 years of automotive equipment and fleet experience and over 20 years experience in loss control and safety. Prior to joining us, Mr. Custer held the position of Director of Maintenance for the Hertz Corporation where he was employed for 19 years.

John Anderson—Mr. Anderson has served as a Vice President of our subsidiary, Neff Rental, Inc., for the Central region since 2000. Mr. Anderson joined us in 1997 after 17 years of employment with Hertz Corporation, where he most recently served as Regional Vice President. Mr. Anderson has a total of 25 years of experience in the equipment rental industry.

Westley Parks—Mr. Parks has served as a Vice President of our subsidiary, Neff Rental, Inc., for the Atlantic region since 1998. Mr. Parks joined us in 1995 after eight years of employment with Hertz Corporation where he served as branch manager. Mr. Parks has a total of 22 years in the equipment rental industry.

Stephen Halliwell—Mr. Halliwell has served as a Vice President of our subsidiary, Neff Rental, Inc., for the Florida region since 1997. Mr. Halliwell joined us in 1990 after one year with Wacker as Territory Manager and two years with Hood Equipment as a sales representative. Mr. Halliwell has a total of 20 years of experience in the equipment rental industry.

Steve Michaels—Mr. Michaels has served as a Vice President of our subsidiary, Neff Rental, Inc., for the Western region since 2003. Mr. Michaels joined us in 1998 after 14 years of employment with Hertz Corporation where he most recently served as Vice President of Fleet Operations. Mr. Michaels has a total of 24 years of experience in the equipment rental industry.

Henry Lawson—Mr. Lawson has served as Vice President of our subsidiary, Neff Rental, Inc., for the Southeastern region since 2006. Mr. Lawson joined us in 1996 after four years with Sunbelt Rentals where he most recently served as a Regional Manager. Mr. Lawson has a total of 21 years of experience in the equipment rental industry.

William Hopkins—Mr. Hopkins is one of the founders of Odyssey Investment Partners, LLC and is currently a Managing Principal. Mr. Hopkins was a principal in the private equity investing group of Odyssey Partners from 1994 to 1997. Mr. Hopkins currently serves on the Board of Directors of Dayton Superior Corporation. Prior to joining Odyssey, Mr. Hopkins spent three years as a member of the merchant banking group at General Electric Capital Corporation.

Douglas Hitchner—Mr. Hitchner joined Odyssey Investment Partners, LLC as a principal in 1998 and is currently a Managing Principal. Mr. Hitchner currently serves on the Board of Directors of Wastequip, Inc. Prior to joining Odyssey Mr. Hitchner was a Vice President in Goldman Sachs & Co.’s Leveraged Finance Group for three years and a Senior Vice President in General Electric Capital Corporation’s leveraged lending business for seven years.

James A. Flick, Jr.—Mr. Flick, the Chairman of our Audit Committee, has been the President and Chief Executive Officer of Winnow, Inc., a consulting company, since 1994. Mr. Flick currently serves on the Board of Directors of Williams Scotsman International, Inc. In addition, Mr. Flick was the Chief Financial Officer of USF & G Corporation from 1988 to 1991 and has previously served on the Board of Directors of numerous public companies. Mr. Flick is a certified public accountant who was associated with the accounting firm of Ernst & Young LLP for 26 years.

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Board Structure

Neff LLC has a Board of Managers that is comprised of the same individual directors who serve on the Board of Directors of Neff Corp. The Board of Directors of Neff Corp. has an Audit Committee and Compensation Committee and Neff LLC has an Audit Committee. The duties and responsibilities of the Audit Committee include recommending the appointment or termination of the engagement of independent auditors, otherwise overseeing the independent auditor relationship and reviewing significant accounting policies and controls. Our Audit Committee consists of James A. Flick, Jr. (who is its chairman), William Hopkins and Douglas Hitchner. The duties and responsibilities of the Compensation Committee of Neff Corp., which administers our executive compensation program include reviewing and approving the compensation of officers and managers (except that the compensation of officers serving on any such committee will be determined by the full Board of Managers). Neff Corp.’s Compensation Committee consists of William Hopkins and Douglas Hitchner. During the period covered by this report, Muzzafar Mirza served on both our Audit Committee and the Compensation Committee of Neff Corp. See Item 10— “Directors and Executive Officers of the Registrant.” Odyssey Investment Partners, LLC and certain affiliated funds control approximately 68% of Neff Corp.’s common stock and, therefore, have the power to control our affairs and policies. Odyssey Investment Partners, LLC and affiliated funds also control the election of Neff Corp.’s directors and the appointment of our management and our Management Committee. A majority of the members of Neff Corp.’s Board of Directors and our Management Committee are representatives of Odyssey Investment Partners, LLC.

As of the date of this report, the Company has not adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The board of managers of the Company has initiated a process for the drafting, review and adoption of a code of ethics, but intends to coordinate that effort with a parallel process to be undertaken by our corporate parent. The Company intends to review and finalize the adoption of a code of ethics during the current year. Upon adoption, the Company will make an announcement on Form 8-K and file a copy of its code of ethics with the Securities and Exchange Commission as an exhibit to that announcement.

Procedures for Nominations by Stockholders

None.

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Item 11.Executive Compensation

COMPENSATION COMMITTEE REPORT

The Compensation Committee of Neff Corp. has reviewed and discussed this Compensation Discussion and Analysis with management. Based on the foregoing review and discussion and such other matters as the Compensation Committee deemed relevant and appropriate, the Compensation Committee recommended to our, Board of Managers and the Board of Directors of Neff Corp. that this Compensation Discussion and Analysis be included in this annual report.

Muzzafar Mirza (Chairman)*

William Hopkins

Douglas Hitchner

*See Item 10 — “Directors and Executive Offices of the Registrant.”

COMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation Philosophy

Our philosophy for compensating our Chief Executive Officer, J.C. Mas, our Chief Financial Officer, Mark Irion and our President and Chief Operating Officer, Graham Hood (who we refer to as our “named executive officers”) is based on the belief that a significant portion of executive compensation should be incentive-based and determined by both our and the executive’s performance objectives. For instance, the majority of the stock options issued to our named executive officers have performance vesting features that have accelerated vesting based on our achievement of certain financial performance targets, principally with respect to EBITDA, during the course of a fiscal year. Generally, we believe that:

·executives’ base salaries should be established at levels to be competitive in the marketplace in which we compete for executive talent;

·bonuses should be targeted to be competitive in the marketplace and should provide awards based on the Company’s performance and each individual’s performance;

·long-term stock option incentives should (i) be targeted to be competitive in the marketplace and (ii) provide capital accumulation linked directly to Company performance; and

·we should encourage stock ownership among our executive management team, in order to align the short-term and long-term interests of our executive officers with those of the stockholders of Neff Corp.

Objectives for the Company’s Executive Compensation Programs

Our executive compensation programs are designed to accomplish the following long-term objectives:

·create a strong performance alignment with stockholders of our parent Neff Corp., while encouraging good corporate practices;

·support our business strategy and business plan by clearly communicating what is expected of executives with respect to goals and results;

·reward achievement by basing the award of bonuses on our financial performance; and

·provide market-competitive compensation and benefits to enable us to recruit, retain and motivate the executive talent necessary to be successful.

Administration of Executive Compensation Programs

Neff LLC has a Board of Managers that is comprised of the same individual directors who serve on the Board of Directors of Neff Corp. The Board of Directors of Neff Corp. has a Compensation Committee which administers our executive compensation program. In 2006, the Compensation Committee consisted of Muzzafar Mirza, William Hopkins and Douglas Hitchner. Each of Mr. Hopkins and Mr. Hitchner is associated with Odyssey Investment Partners, LLC, affiliates of which control approximately 68% of Neff Corp.’s common stock. Odyssey Investment Partners, LLC and affiliated funds also control the election of Neff Corp.’s directors and the appointment of our management and our Board of Managers. A majority of the members of Neff Corp.’s Board of Directors and our Board of Managers are representatives of Odyssey Investment Partners, LLC. The duties and responsibilities of the Compensation Committee include reviewing, approving and, in certain cases, determining the compensation of officers and managers, including the bonuses of the named executive officers. This process is undertaken on a continuing basis with input from our management. The Compensation Committee takes into account prior compensation of our management and comparisons to the compensation of management of other companies in our industry only nominally in determining and approving the bonuses awarded to our management, preferring instead to focus on our financial performance and

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the individual performance of such executive. Bonus determinations for our named executive officers are made only after the conclusion of the preceding fiscal year, historically in February or March, after the Compensation Committee has been given adequate time to review our preliminary financial results and performance for the fiscal year then ended.

Elements of Executive Compensation

General

Our executive compensation program for our named executive officers consists of base salaries, annual bonuses, long-term equity-based incentives in Neff Corp. stock and certain other perquisites, such as annual allowances for an automobile and matching contributions to our defined contribution plan.

We chose these elements to remain competitive in attracting and retaining executive talent and to provide strong performance incentives with the potential for both current and long-term gains. We use base salary as the foundation for our executive compensation program. We believe that base salary provides a fixed level of competitive pay that reflects the named executive officer’s primary duties and responsibilities, as well as a foundation for incentive opportunities and benefit levels. The base salaries for each of our named executive officers are determined by employment agreements with each such officer, however, the Compensation Committee took action to raise the base salaries of Mr. Irion and Mr. Hood during 2006. See “—Employment Agreements and Post-Employment Benefits.” Our annual bonuses are designed to reward our named executive officers for the Company’s and their performance. Our equity incentive awards are designed to correspond an executive’s financial benefit with the benefits to stockholders of our parent, Neff Corp., as measured by long-term stock valuation.

Relative Size of Elements of Compensation

In setting executive compensation, the Compensation Committee considers the aggregate amount of compensation payable to an executive officer and the form of the compensation. The Compensation Committee seeks to achieve the appropriate balance between immediate cash rewards for the achievement of company and personal objectives and long-term incentives that align the interests of our executive officers with those of the stockholders. The size of each element is determined by the Compensation Committee by reviewing market practice, as well as company and individual performance. The Compensation Committee may also decide, as appropriate, to modify the relative mix of compensation elements to best fit an executive officer’s specific circumstances.

The level of incentive compensation typically increases in relation to each named executive officer’s responsibilities, with the level of incentive compensation for more senior executive officers being a greater percentage of total compensation than for less senior executive officers. The Compensation Committee believes that this structure is typical for other companies in our industry. It also provides flexibility in determining total compensation on an annual basis for named executive officers based on our financial performance, which the Compensation Committee believes results, at least in part, from the policy decisions and leadership of our named executive officers. The Compensation Committee also believes that making a significant portion of an executive officer’s incentive compensation contingent on long-term company performance more closely aligns the executive officer’s interests with those of the stockholders.

Method of Compensation

Base Salaries

Base salaries for the named executive officers are determined by the Compensation Committee and set forth in the named executive officers employment agreements. The employment agreements between the Company and each of the named executive officers are described below. The Compensation Committee has, in the past, including in 2006, raised the salaries of certain of our named executive officers above the amounts set forth in such named executive officer’s employment agreement. See “—Employment Agreements and Post-Employment Benefits.” Base salaries for each other management position are reviewed and approved by the Compensation Committee based on recommendations of our named executive officer’s. Base salaries are reviewed annually and may be adjusted to reflect promotions, the assignment of additional responsibilities, individual performance and/or the performance of the Company.

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Bonus

The annual bonuses awarded to our named executive officers are determined by the Compensation Committee. The annual bonuses, as they pertain to the named executive officers, are based upon the Compensation Committee’s review of the Company’s and management performance and are meant to reward management for achievement. Bonuses were paid to the named executive officers for 2006 performance in March 2007.

Pursuant to his employment agreement with the Company, Mr. J.C. Mas is guaranteed an annual bonus of at least $700,000. The Compensation Committee may, in its discretion, award Mr. Mas a bonus in excess of this amount, based on individual performance and/or the performance of the Company.

For more information on these bonuses, see the Compensation Table and its footnotes.

Long-term Incentive Option Awards

In connection with the Recapitalization, we adopted the 2005 Stock Option Plan. Under the 2005 Stock Option Plan, options to purchase shares of Neff Corp.’s common stock in the form of incentive or nonqualified stock options were granted to named executive officers.

 In the case of options granted to J.C. Mas, our Chief Executive Officer, 50% of the options granted are time vesting options that will become vested and exercisable in equal annual installments on each of the first four December 31 to occur following the date of grant, so long as he continues to provide services to us as of such December 31. The remaining 50% of Mr. Mas’ options are performance vesting options that will become vested and exercisable on the eighth anniversary of the date of grant, so long as he continues to provide services to us as of such date. However, an installment of 25% of each of Mr. Mas’ performance vesting options (i.e., 12.5% of the total shares subject to the stock option) will be eligible to become vested and exercisable with respect to the fiscal year in which a grant date occurs and each of the three fiscal years thereafter if we attain certain financial performance targets set forth in the option agreements. Mr. Mas’s options will be treated as incentive stock options to the extent permitted by applicable law. Mr. Mas did not exercise any vested options during 2006.

In the cases of Graham Hood, our President and Chief Operating Officer, and Mark Irion, our Chief Financial Officer, 25% of the options granted are time vesting options that will become vested and exercisable in equal annual installments on each of the first four December 31 to occur following the date of grant, so long as the optionee continues to provide services to us as of such December 31. Seventy-five percent of the options granted to Mr. Hood and Mr. Irion are performance vesting options that will become vested and exercisable on the eighth anniversary of the date of grant, so long as the optionee continues to provide services to us as of such date. However, an installment of 25% of each performance vesting option (i.e., 18.75% of the total shares subject to the stock option) will be eligible to become vested and exercisable with respect to the fiscal year in which a grant date occurs and each of the three fiscal years thereafter if we attain certain financial performance targets set forth in the option agreements All of the options granted under the 2005 Stock Option Plan may become vested and exercisable earlier than scheduled upon certain sales of our Neff Corp. capital stock. Mr. Hood or Mr. Irion did not exercise any vested options during 2006.

Except in the case of Mr. Mas, all stock option grants made under the 2005 Stock Option Plan are grants of nonqualified stock options. These option grants are also subject to accelerated vesting upon (1) the occurrence of certain liquidity events and (2) our attainment of certain investor rates of return as set forth in each of the individual stock option agreements.

Perquisites and Other Benefits

Perquisites

In 2006, we provided only minimal perquisites to our executive officers. Mr. Mas receives reimbursement for automobile allowance. Mr. Hood and Mr. Irion receive reimbursement for automobile allowance and employer matching payment for the Company’s 401k plan. Executives are eligible to receive liability insurance (liability coverage under Neff Corp.’s directors and officers liability insurance policies). For more information on perquisites, see the Summary Compensation Table and its footnotes.

Other Benefits

Our named executive officers are eligible for the same benefit plans provided to other employees, including insurance plans and supplemental plans chosen and paid for by employees who wish additional coverage.

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Employment Agreements and Post-Employment Benefits

Employment Agreement with J.C. Mas.    In connection with the Recapitalization, Mr. J.C. Mas and Neff Corp. entered into an employment agreement that became effective at the closing of the Transactions. Mr. Mas’ three-year employment agreement automatically renews annually for successive one-year periods, unless either party delivers notice within specified periods. The employment agreement provides for an annual base salary of $700,000 and an annual bonus equal to the amount of his annual base salary. In addition, Mr. Mas is entitled to the same benefits and indemnification available to other executives of Neff Corp. If Mr. Mas is terminated by Neff Corp. without cause, as defined in the agreement, or Mr. Mas terminates his employment for good reason, as defined in the agreement, he is entitled to a lump sum severance payment in the amount of 1.5 times his annual salary and annual bonus amount and to receive continued health, welfare and car allowance benefits for eighteen months. If employment had been terminated, as of December 31, 2006, Mr. Mas would have been entitled to $2.1 million in severance payments. In the event of a change in control combined with the existence of certain factors, Mr. Mas may voluntarily terminate his employment and be entitled to $2.1 million in severance payments. Mr. Mas is subject to certain restrictive covenants, including a covenant not to compete with us for a period of twelve months following the termination of his employment. As part of our corporate reorganization, Neff Corp. assigned this employment agreement to Neff LLC and Neff LLC, Neff Finance and Neff Rental, Inc. each became a party to this agreement and become jointly and severally liable for all obligations of Neff Corp. under the agreement.

Employment Agreement with Mark Irion.    Mark Irion, our Chief Financial Officer, has an employment agreement with Neff Corp. providing for an annual base salary of $225,000, which has subsequently been increased to $290,000. The employment agreement expired on February 28, 2006, but, by its terms, has been extended for additional one-year periods in each of 2006 and 2007 because notice of non-extension was not provided by either party. Mr. Irion is also entitled to receive bonuses in the discretion of Neff Corp.’s board of directors and to participate in our employee benefit plans and be indemnified to the same extent as other similarly situated executives. If his employment is terminated by Neff Corp. without cause, or by Mr. Irion for good reason, each as defined in the agreement, including under certain circumstances during the two-year period following the closing of the Transactions, Mr. Irion will be entitled to receive a lump-sum severance payment in the amount of 1.5 times his annual salary and bonus amount and to receive continued health, welfare and car allowance benefits for a period of eighteen months. If employment had been terminated, as of December 31, 2006, Mr. Irion would have been entitled to $1.6 million in severance payments. In the event of a change in control combined with the existence of certain factors, Mr. Irion may voluntarily terminate his employment and be entitled to $1.6 million in severance payments. Mr. Irion is subject to certain restrictive covenants, including a covenant not to compete with us for a period of twelve months following the termination of his employment. As part of our corporate reorganization, Neff Corp. assigned this employment agreement to Neff LLC and Neff LLC, Neff Finance and Neff Rental, Inc. each became a party to this agreement and become jointly and severally liable for all obligations of Neff Corp. under the agreement.

Employment Agreement with Graham Hood.    Graham Hood, President and Chief Operating Officer of Neff Rental, Inc., has an employment agreement with Neff Rental, Inc. providing for an annual base salary of $245,000 (adjusted annually for changes in the Consumer Price Index), which has subsequently been increased to $315,000. The employment agreement expired on January 26, 2006, but, by its terms, has been extended for additional one-year periods in each of 2006 and 2007 because notice of non-extension was not provided by either party. Mr. Hood is also entitled to receive bonuses in the discretion of Neff Rental, Inc.’s board of directors and to participate in our employee benefit plans. In addition, Neff Rental, Inc. will reimburse Mr. Hood for travel expenses to Atlanta, Georgia and back on three occasions each year. If his employment is terminated by Neff Rental, Inc. without cause, as defined in the agreement, Mr. Hood will be entitled to receive base salary and continued health and welfare benefits for twelve months. If his employment is terminated by Mr. Hood for good reason, as defined in the agreement, Mr. Hood will be entitled to receive base salary and benefits for eighteen months. If employment had been terminated by Neff Rental Inc. without cause, as of December 31, 2006, Mr. Hood would have been entitled to $0.3 million in severance payments. If employment had been terminated by Mr. Hood for good reason, as of December 31, 2006, Mr. Hood would have been entitled to $0.5 million in severance payments. In the event of a change in control combined with the existence of certain factors, Mr. Hood may voluntarily terminate his employment and be entitled to $0.5 million in severance payments. Mr. Hood is subject to certain restrictive covenants including a covenant not to compete with us for a period of twelve months following the termination of his employment.

Impact of Accounting and Tax Treatments

Accounting Treatment

Our financial statements include the expense for awards of Neff Corp. options to Neff Rental LLC employees and directors. We account for those awards in accordance with SFAS No. 123-R.

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Tax Treatment

Under Section 162(m) of the Internal Revenue Code, publicly held corporations may not take a tax deduction for compensation in excess of $1 million paid to the CEO or the other four most highly compensated executive officers unless that compensation meets the Internal Revenue Code’s definition of “performance-based” compensation. Section 162(m) allows a deduction for compensation to a specified executive that exceeds $1 million only if it is paid (1) solely upon attainment of one or more performance goals, (2) pursuant to a qualifying performance-based compensation plan adopted by the Compensation Committee, and (3) the material terms, including the performance goals, of such plan are approved by the company’s common stockholders before payment of the compensation. The Compensation Committee considers deductibility under Section 162(m) with respect to compensation arrangements for executive officers. The Compensation Committee believes that it is in our best interest of the Company for the committee to retain its flexibility and discretion to make compensation awards to foster achievement of performance goals established by the committee (which may include performance goals defined in the Internal Revenue Code) and other corporate goals the Committee deems important to our success, such as encouraging employee retention, rewarding achievement of nonquantifiable goals and achieving progress with specific projects. We believe that option grants qualify as performance-based compensation and are not subject to any deductibility limitations under Section 162(m).

EXECUTIVE COMPENSATION

The tables listed below, which appear in the following sections of this report, provide information required by the SEC regarding the compensation we paid for the year ended December 31, 2006 to our named executive officers. Except as noted below, we have used captions and heading in these tables in accordance with the SEC regulations requiring these disclosures. The footnotes to these tables provide important information to explain the values presented in the tables and are an important part of our disclosures related to our executive compensation for the year ended December 31, 2006.

·Summary Compensation Table

·Grants of Plan-Based Awards

·Outstanding Equity Awards

·Director Compensation

SUMMARY COMPENSATION TABLE

FOR FISCAL YEAR ENDED DECEMBER 31, 2006

The following table provides a summary of compensation paid for the year ended December 31, 2006.

Name and Principal Position	Year	Salary ($)	Bonus ($)(1)	All Other Compensation ($)(3)	Total ($)
J.C.Mas, CEO (2)	2006	$700,000	$900,000	$12,000	$1,612,000
Mark Irion, Chief Financial Officer	2006	$236,539	$290,000	$17,400	$543,939
Graham Hood, President and Chief Operating Officer	2006	$256,538	$315,000	$20,512	$592,050

Footnotes appear on the following page.

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(1)	Bonus amounts reported were paid in March 2007 with respect to 2006 performance.
(2)	Mr. Mas is not compensated for his services as a member of the Board of Managers.
(3)	The amounts reported in this column consist of the following for each officer (table below):

Name	Company Contribution to 401(k) Plan		Auto Allowance		Travel Allowance		TOTAL
J.C. Mas	$	—	$	12,000	$	—	$	12,000
Mark Irion	$	6,600	$	10,800	$	—	$	17,400
Graham Hood	$	6,600	$	12,000	$	1,912	$	20,512

__________________________________

GRANTS OF PLAN-BASED AWARDS
FOR FISCAL YEAR ENDED DECEMBER 31, 2006

There were no grants of plan-based awards to our executives in 2006.

OUTSTANDING EQUITY AWARDS
AT DECEMBER 31, 2006

The following table provides further information regarding our named executive officers’ unexercised stock options as of December 31, 2006.

Name	Number of  Securities Underlying  Unexercised Options (#)  Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option  Exercise Price ($)	Option Expiration Date
J.C. Mas	358,044	358,039	8.21	6/03/2015
	334,800	—	0.09	6/03/2013
Mark Irion	69,818	69,818	8.21	6/03/2015
	30,000	—	0.09	6/03/2013
Graham Hood	69,818	69,818	8.21	6/03/2015
	15,000	—	0.09	6/03/2013

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COMPENSATION OF DIRECTORS

DIRECTOR COMPENSATION

FOR FISCAL YEAR ENDED DECEMBER 31, 2006

The following table provides a summary of compensation paid for the year ended December 31, 2006, to the Board. The table shows amounts earned by such persons for services rendered to the Company in all capacities in which they served.

Name and Principal Position	Fees Earned or Paid in Cash ($)(1)			Option Awards ($)(3)			Non-Equity Incentive Plan Compensation ($)			All Other Compensation ($)			Total ($)
Muzzafar Mirza, William Hopkins, Douglas Hitchner Directors	(2		)	(2		)	(2		)	(2		)	(2)
James A. Flick, Jr. Director and Audit Committee Chairperson	$	42,593		$	52,382		$	—		$	—		$	94,975

(1)In addition to the fees paid according to the non-employee director compensation described below, the amounts disclosed in this column include reimbursement for expenses for transportation to and from Board meetings and lodging while attending meetings.

(2)Each of Mssrs. Mirza, Hopkins, and Hitchner are not compensated for his service as a director of Neff Rental, LLC. They are on the board as representatives of Odyssey Investment Partners, LLC , which owns a majority interest in Neff Corp., the Company’s parent.

(3)Represents the dollar amounts recognized by the Company for financial statement reporting purposes for the fiscal year ended December 31, 2006. Please see “Compensation Discussion and Analysis—Impact of Accounting and Tax Treatment—Accounting Treatment” above in this item for more information. Mssr. Flick was awarded a stock option grant on April 20, 2006.

During 2006, Mr. Flick received a retainer fee of $25,000 per year, plus $1,500 for each Board and committee meeting attended in person and $750 for each Board and committee meeting attended telephonically. Directors who serve as chairperson of a committee receive an additional $15,000 annually. Mr. Flick is also reimbursed for expenses of meeting attendance. Messrs. Mirza, Hopkins and Hitchner are employees of Odyssey Investment Partners, LLC and receive no compensation (other than reimbursement of expenses) for serving as directors of us or our parent.

We supplement the compensation paid Mr. Flick, our non-employee director who is not affiliated with Odyssey, with grants of stock options to purchase common stock of Neff Corp. We believe the grants of stock options increases the non-employee directors’ identification with the interests of the holders of our securities.  All of the options granted to Mr. Flick were vested and exercisable immediately upon issuance.

Compensation Committee Interlocks and Insider Participation

There are no compensation committee interlocks. None of Mr. Mirza, Mr. Hopkins or Mr. Hitchner has served as an officer or employee of the Company.

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Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Neff LLC is a wholly-owned direct subsidiary of Neff Corp. The following table sets forth certain information regarding the beneficial ownership of the common stock of Neff Corp. as of March 1, 2007 with respect to each person or group that is a beneficial owner of more than 5% of its outstanding common stock, each of its directors, each executive officer named in the summary compensation table, and all directors and executive officers as a group:

Name and Address of Owner	Number of  Shares of  Common  Stock(1)(2)	Percent of Class
Iron Merger Partnership(3)	8,522,036	62.6	%
New York Life Funds(4)	2,373,996	17.4
Juan Carlos Mas(5)(6)	1,331,992	9.8
Muzzafar Mirza(6)(7)+	—	—
William Hopkins(6)(7)	—	—
Douglas Hitchner(6)(7)	—	—
James A. Flick, Jr.(6)	2,549	*
Mark Irion(6)(8)	99,818	*
Graham Hood(6)(9)	84,818	*
All directors and officers as a group(6)	1,519,177	11.2

+Mr. Mirza, a member of our Board of Managers and our Audit Committee, passed away on March 10, 2007.

*Less than 1% beneficial ownership.

(1)The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one person may be deemed beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated in these footnotes, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock.

(2)For purposes of this table, the number of shares of common stock outstanding as of March 1, 2007 is calculated to be 13,615,015. For purposes of calculating the percentage beneficially owned by any person, shares of common stock issuable to such person upon the exercise of any options or warrants exercisable within 60 days of December 31, 2006 are also assumed to be outstanding.

(3)Shares shown as beneficially owned by Iron Merger Partnership are held directly by Odyssey Investment Partners Fund III, LP. Odyssey Investment Partners, LLC exercises investment discretion and control over the shares indirectly held by Odyssey Partners Fund III, LP. Odyssey Investment Partners, LLC is managed by a four-person managing board, and all board action related to the voting or disposition of these shares requires approval of a majority of the board. The members of the managing board are Stephen Berger, William Hopkins and Brian Kwait. The address for Odyssey Investment Partners, LLC is 280 Park Avenue, 38th Floor, New York, NY 10017.

(4)Amounts shown reflect the aggregate interests held by New York Life Capital Partners II, L.P. (“NYLCAP II”), New York Life Investment Management Mezzanine Partners, LP (“NYL Mezzanine”) and NYLIM Mezzanine Partners Parallel Fund, LP. (“NYL Mezzanine Parallel, and collectively, the “New York Life Funds”). Beneficial ownership information before the offering includes 2,313,124 shares held by NYLCAP II. New York Life Capital Partners II GenPar, L.L.C., the general partner of NYLCAP II (“NYLCAP II GP”) has the power to vote, direct the voting, dispose and direct the disposition of the securities held by NYLCAP II. NYLCAP II GP is whollyowned by NYLCAP Manager LLC (“NYLCAP Manager”) and is managed by an investment committee. NYLCAP Manager is managed by its managers. Beneficial ownership information before the offering also includes 41,649 shares held by NYL Mezzanine and 19,223 shares by NYL Mezzanine Parallel. NYLIM Mezzanine GenPar GP, LP (“NYLIM Mezzanine GenPar”) is the general partner of each of NYL Mezzanine and NYL Mezzanine Parallel. NYLIM Mezzanine GenPar has the power to vote, direct the voting, dispose and direct the disposition of the securities held by each of NYL Mezzanine and NYL Mezzanine Parallel. NYLIM Mezzanine GenPar is managed by an investment committee. NYLIM Mezzanine GenPar is wholly-owned by NYLIM Mezzanine GenPar GP, LLC, which in turn is wholly-owned by NYLCAP Manager. NYLCAP Manager is wholly-owned by New York Life Investment Management Holdings LLC, which in turn is wholly-owned by New York Life Insurance Company, a New York corporation. New York Life Insurance Company offers a wide range of insurance and investment products and services, including life and health insurance, long-term care, annuities, pension products, mutual funds and other investments and investment advisory services.. The address for each of the New York Life Funds is c/o NYLCAP Manager LLC, 51 Madison Avenue, 16th Floor, New York, NY 10010.

(5)Includes all shares owned by Juan Carlos Mas, our chief executive officer, both in his individual capacity and through Juan Carlos Mas Holdings I, L.P., a limited partnership which he controls.

(6)The address for these stockholders is c/o Neff Corp., 3750 N.W. 87th Avenue, Suite 400, Miami, FL 33178.

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(7)Each of Messrs. Mirza, Hopkins and Hitchner may be deemed a beneficial owner of interests in Iron Merger Partnership due to his status as an employee of Odyssey Investment Partners, LLC. Odyssey Investment Partners, LLC and each such person disclaims beneficial ownership of any such interest in which he does not have a pecuniary interest.

(8)Includes 99,818 shares that are issuable upon the exercise of options.

(9)Includes 84,818 shares that are issuable upon the exercise of options.

Item 13.Certain Relationships and Related Transactions

We currently sell and lease construction equipment to MasTec, Inc., an affiliate of ours of which 42% is owned by the Mas family. These sales and leases are at fair market rates and contain no unusual discounts or premiums. Revenues from these transactions amounted to approximately $1.6 million for the year ended December 31, 2004, $1.5 million for the year ended December 31, 2005 and $1.1 million for the year ended December 31, 2006.

Also, included in accounts receivable are amounts from MasTec, Inc. and its subsidiaries. The total amounts owed from MasTec, Inc. and its subsidiaries were $0.3 million, $0.4 million and $0.4 million at December 31, 2004, 2005 and 2006, respectively.

We entered into an employment agreement with Mr. J.C. Mas, and Mr. Mas also is eligible to participate in certain equity compensation arrangements, in each case as described in this annual report under the caption in Item 11, “Management—Employment Agreements” and “—Equity Compensation Arrangements.”

In addition, in connection with the Transactions, affiliates of New York Life Capital Partners II, L.P., DLJ Investment Partners II, L.P. and TCW Cresent/Mezzanine Partners III, L.P. own approximately 25% of Neff Corp.’s outstanding shares of Class A common stock and purchased approximately $75.0 million in aggregate principal amount of the 13% senior subordinated notes.

We and our Audit Committee have adopted written procedures regarding related party transactions. Pursuant to those procedures, any related party transaction that would materially impact our financial statements is required to be brought to the attention of the Audit Committee by our management.  For each related party transaction presented for approval, we will consider all relevant factors including whether the proposed transaction would be entered into in the ordinary course of our business on customary business terms, whether any related party has been or will be involved in the negotiation of the proposed transaction on our behalf, and whether the proposed transaction appears to have been negotiated on an arms-length basis without interference or influence on us by any related party. We may condition our approval on any restrictions we deem appropriate, including receiving assurances from any related party that he or she will refrain from participating in the negotiation of the proposed transaction on our behalf and in the ongoing management of the business relationship on our behalf should the proposed transaction be approved. If after a transaction has been completed we discover that it is a related party transaction, our management will promptly advise our Audit Committee. In that case, we may honor that contractual commitment if entered into in good faith by an authorized representative, but we may impose appropriate restrictions on the continued maintenance of the business relationship similar to those described above.

Management Services Agreement

Pursuant to a management services agreement entered into in connection with the Transactions, Odyssey and its affiliates provide us with management, advisory and other services in relation to our businesses, administration, policies and operations. Under this agreement, we pay Odyssey fees in the event that we retain Odyssey or any of its affiliates to participate in the negotiation and consummation of any acquisition. We have not paid any such fees to date. We also indemnify Odyssey and its affiliates and their respective directors, officers, employees, agents, partners and controlling persons from any losses to the extent they relate to Odyssey’s performance of the services contemplated by the management services agreement. In addition, we reimburse Odyssey and its affiliates for any expenses incurred to the extent these expenses relate to Odyssey’s performance of the services contemplated by the management services agreement. The management services agreement will remain in effect until the earlier of (1) a public offering or offerings resulting in at least 30% of Neff Corp.’s common stock being publicly traded, (2) the date that Odyssey and its affiliates or limited partners of its affiliates no longer retain ownership of at least 50% of Neff Corp.’s common stock or other equity interests or (3) termination of the management services agreement by us and Odyssey.

Stockholders Agreement

Holdings, all of Neff Corp.’s other stockholders and Neff Corp. entered into a stockholders agreement in connection with the Transactions. Pursuant to the stockholders agreement, each of the parties thereto agreed to vote their stock in favor of a number of designees of Odyssey that will enable Odyssey to designate the election of all of the members of Neff Corp.’s board of

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directors. Pursuant to the stockholders agreement, each of Neff Corp.’s stockholders (other than Holdings) are restricted from transferring their stock of Neff Corp. until the earlier of an initial public offering by Neff Corp. of its stock or June 3, 2010. Holdings also has a bring-along right under certain circumstances to require Neff Corp.’s other stockholders party to the stockholders agreement to sell their shares to a third party that is purchasing stock of Neff Corp. Neff Corp.’s other stockholders have a tag-along right under certain circumstances to sell their shares to a third party that is purchasing stock of Neff Corp. held by Holdings. In addition, under certain circumstances, Mr. Mas also has a right to sell his stock back to Neff Corp. and, under certain circumstances, Neff Corp. has a right to purchase the stock held by Mr. Mas. Furthermore, Neff Corp.’s stockholders party to the stockholders agreement each have the right under certain circumstances to purchase a pro rata portion of any future equity issuance by Neff Corp. The stockholders agreement also provides Neff Corp.’s stockholders party to the stockholders agreement have the right, under certain circumstances and subject to certain conditions, to require Neff Corp. to register under the Securities Act shares of its Class A common stock held by them.

Management Stockholders Agreement

Holdings, our parent, Neff Corp., and all members of our management who have received options pursuant to the 2005 Stock Option Plan entered into a management stockholders agreement. The management stockholders agreement provides for customary restrictions on transfer, put and call rights, tag-along rights and bring-along rights which would apply to the shares of capital stock of Neff Corp.

Item 14.Principal Accountant Fees and Services

The Company’s independent auditor fee pre-approval policy provides for an annual process through which the Audit Committee evaluates and pre-approves the nature, scope and fees associated with the annual audit of the Company’s financial statements and other audit related services. The Audit Committee pre-approves all other audit and permissible non-audit services provided by our independent auditors as required by the SEC. These services may include audit services, audit related services, tax services and other permissible services. None of the services described below under the captions “Audit-Related Fees” and “Tax Fees” were approved by the Audit Committee pursuant to the provisions of paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. Additionally, the Audit Committee may delegate either type of pre-approval authority to one or more of its members.

Aggregate fees billed to the Company for the fiscal years ended December 31, 2006 and December 31, 2005 by the Company’s principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates are as follows:

	2006		2005
Audit fees(1)	$	685,000	$	267,500
Audit-related fees(2)	223,753		25,000
Tax fees(3)	63,914		55,000
All other fees	—		—
Total fees	$	972,667	$	347,500

(1)Audit Fees for each of fiscal 2006 and 2005 consist of fees and expenses for professional services in connection with the audit of the annual financial statements, reviews of the Company’s quarterly reports filed on Form 10-Q and reviews of registration statements and other periodic filings with the Securities and Exchange Commission.

(2)Audit Related Fees for fiscal 2006 consist of fees for the audit of the annual financial statements, reviews of quarterly financial information and reviews of registration statements for our parent, Neff Corp.

(3)Tax fees include fees for preparation of property tax returns.

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PART IV

Item 15.Exhibits and Financial Statement Schedules

(a)           The following documents are being filed as part of this report.

1.Consolidated Financial Statements. Financial statements and supplementary data required by this Item 15 are set forth at the pages indicated in Item 8 above.

2.[Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, are inapplicable or not material, or the information called for thereby is otherwise included in the financial statements and therefore has been omitted.]

(a) 3 and (b) Exhibits

Exhibit no.	Description of exhibit
2.1	Recapitalization Agreement, dated April 6, 2005, between Iron Merger Sub, Inc. and Neff Corp. (1)
2.2	Stock Purchase Agreement, by and among Neff Rental Inc., River City Connections Inc. and Don Bates, Don Greene and Tony Pugh.
3.1	Certificate of Formation of Neff Rental LLC. (1)
3.2	Limited Liability Company Agreement of Neff Rental LLC. (1)
3.3	Amended and Restated Limited Liability Company Agreement of Neff Rental LLC. (1)
3.4	Certificate of Incorporation of Neff Finance Corp. (1)
3.5	Bylaws of Neff Finance Corp. (1)
3.6	Certificate of Merger of Iron Merger Sub, Inc. and Neff Corp., dated June 3, 2005. (1)
3.7	Certificate of Incorporation of Valley Rents and Ready Mix, Inc. (2)
3.8	Bylaws of Valley Rents and Ready Mix, Inc. (2)
4.1	111/4% Second Priority Senior Secured Note Indenture, dated July 8, 2005, between Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee. (1)
4.1a	First Supplemental Indenture, dated May 22, 2006, between Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as existing guarantor, Valley Rents and Ready Mix, Inc., as additional guarantor, and Wells Fargo Bank, National Association, as trustee. (2)
4.2	Form of 111/4% Senior Priority Senior Secured Note. (1)
4.3	Amended and Restated 13% Senior Subordinated Note Indenture, dated July 8, 2005, between Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as guarantor, and Wells Fargo Bank, National Association, as trustee. (1)
4.3a	First Supplemental Indenture, dated May 22, 2006, between Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as existing guarantor, Valley Rents and Ready Mix, Inc., as additional guarantor, and Wells Fargo Bank, National Association, as trustee. (2)
4.4	Form of 13% Senior Subordinated Note (included as Exhibit A to Exhibit 4.3). (1)
4.5	111/4% Senior Priority Senior Secured Note Registration Rights Agreement, dated July 8, 2005, between Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as guarantor, and Credit Suisse First Boston LLC, as initial purchaser. (1)
4.5a	Joinder Agreement, dated May 22, 2006, by Valley Rents and Ready Mix, Inc. (2)
4.6	13% Senior Subordinated Note Registration Rights Agreement, dated June 3, 2005, between Neff Corp., as issuer, Neff Rental, Inc., as guarantor, and DLJ Investment Partners, L.P., DLJ Investment Partners II, L.P., DLJIP II Holdings, L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine Partners III Netherlands, L.P., KKR Financial Corp., New York Life Investment Management Mezzanine Partners, LP and NYLIM Mezzanine Partners Parallel Fund, LP, as purchasers. (1)

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4.6a	Joinder Agreement, dated May 22, 2006, by Valley Rents and Ready Mix, Inc. (2)
4.7	Amendment/Assignment Agreement (regarding change of issuer for 13% senior subordinated notes), dated July 8, 2005, between Neff Corp., as parent, Neff Rental LLC and Neff Finance Corp., as issuers, Neff Rental, Inc., as guarantor, and DLJ Investment Partners, L.P., DLJ Investment Partners II, L.P., DLJIP II Holdings, L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine Partners III Netherlands, L.P., KKR Financial Corp., New York Life Investment Management Mezzanine Partners, LP and NYLIM Mezzanine Partners Parallel Fund, LP, as purchasers. (1)
4.8	Security Agreement, dated July 8, 2005 among Neff Rental, LLC, Neff Finance Corp., Neff Rental, Inc. and Wells Fargo Bank, National Association. (2)
4.8a	Joinder Agreement, dated May 22, 2006, by and among Valley Rents and Ready Mix, Inc., as new subsidiary, and Wells Fargo, National Association, as collateral agent. (2)
4.9	Pledge Agreement, dated July 8, 2005 among Neff Rental, LLC, Neff Finance Corp., Neff Rental, Inc. and Wells Fargo Bank, National Association. (2)
4.9a	Joinder Agreement, dated May 22, 2006, by and among Valley Rents and Ready Mix, Inc., as new subsidiary, and Wells Fargo, National Association, as collateral agent. (2)
4.9b	Pledge Amendment, dated May 22, 2006 by Neff Rental, Inc. (2)
4.10	Stockholders Agreement, dated June 3, 2005 among Neff Corp., Iron Merger Partnership, DLJ Investment Partners, L.P., DLJ Investment Partners II, L.P., DLJIP II Holdings, L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine Partners III Netherlands, L.P., KKR Financial Corp., New York Life Investment Management Mezzanine Partners, LP and NYLIM Mezzanine Partners Parallel Fund, LP. (2)
4.11	Management Stockholders Agreement, dated June 3, 2005 among Neff Corp., Iron Merger Partnership and the optionholders of Neff Corp.
10.1	Amended and Restated Credit Agreement, dated as of July 8, 2005 among Neff Rental, Inc., as borrower, Neff Rental LLC and Neff Finance Corp., as guarantors, General Electric Capital Corporation, as agent and a lender, the other lenders party thereto, Bank Of America, as syndication agent and L/C Issuer and GECC Capital Markets Group, Inc., as lead arranger. (1)
10.2	Amended and Restated Guaranty, dated as of July 8, 2005 among Neff Rental, Inc., Neff Rental LLC, Neff Finance Corp. and General Electric Capital Corporation. (1)
10.3	Intercreditor Agreement, dated July 8, 2005 among Neff Rental, Inc., Neff Rental LLC, Neff Finance Corp., the othere grantors party thereto, General Electric Capital Corporation, as credit agreement agent and priority lien collateral agent and Wells Fargo Bank, National Association, as trustee and parity junior lien collateral agent. (1)
10.3a	Intercreditor Agreement Joinder, dated May 22, 2006, by Valley Rents and Ready Mix, Inc. (2)
10.4	Security Agreement, dated July 8, 2005 among Neff Rental, Inc., Neff Rental LLC, Neff Finance Corp. and General Electric Capital Corporation. (1)
10.5	Pledge Agreement, dated July 8, 2005 among Neff Rental, Inc., Neff Rental LLC, Neff Finance Corp. and General Electric Capital Corporation. (1)
10.6	First Amendment to Employment Agreement, dated July 8, 2005 between Neff Corp., Neff Rental LLC, Neff Finance Corp. and Juan Carlos Mas. (1)
10.7	Second Amendment to Employment Agreement, dated July 8, 2005 between Neff Corp., Neff Rental LLC, Neff Finance Corp. and Mark Irion. (1)
10.8	Management Services Agreement, dated June 3, 2005 between Neff Corp., Neff Rental, Inc. and Odyssey Investment Partners, LLC. (1)

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10.9	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and Odyssey Investment Partners, LLC. (1)
10.10	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and NYLIM Mezzanine Partners Parallel Fund, LP, and amendment thereto, dated July 8, 2005. (1)
10.11	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and New York Life Investment Management Mezzanine Partners, L.P., and amendment thereto, dated July 8, 2005. (1)
10.12	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and New York Life Capital Partners II, L.P., and amendment thereto, dated July 8, 2005. (1)
10.13	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and DLJ Investment Partners II, L.P., and amendment thereto, dated July 8, 2005. (1)
10.14	Management Rights Agreement, dated June 3, 2005 between Neff Corp. and TCW/Crescent Mezzanine Partners III, L.P., and amendment thereto, dated July 8, 2005. (1)
10.15	2005 Stock Option Plan of Neff Corp. previously filed as Exhibit 10.15 to the registration statement on Form S-1 (File No. 333-134545) of Neff Corp. filed on May 26, 2006 and incorporated herein by reference.
12.1	Statement of Computation of Ratio of Earnings to Fixed Charges. (1)
21.1	Subsidiaries of the Registrants. (1)
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Section 1350 Certification of Annual Report by the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	(1) Previously filed as an exhibit to the Registration Statement on Form S-4 (File No.333-130841) of Neff Rental LLC and Neff Finance Corp., filed on January 3, 2006, and incorporated herein by reference.
	(2) Previously filed as an exhibit to Amendment No. 2 to the registration statement on Form S-4 (File No. 333-130841) of Neff Rental LLC and Neff Finance Corp., filed on July 6, 2006, and incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NEFF RENTAL LLC
Dated: March 26, 2007	By:	/s/ JUAN CARLOS MAS
		Juan Carlos Mas
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ JUAN CARLOS MAS	Chief Executive Officer and Director	March 26, 2007
Juan Carlos Mas	(Principal Executive Officer)
/s/ MARK IRION	Chief Financial Officer	March 26, 2007
Mark Irion	(Principal Accounting Officer)
/s/ WILLIAM HOPKINS	Director	March 26, 2007
William Hopkins
/s/ DOUGLAS HITCHER	Director	March 26, 2007
Douglas Hitchner
/s/ JAMES A. FLICK, Jr.	Director	March 26, 2007
James A. Flick, Jr.

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SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

The registrant has not sent to its sole security holder an annual report to security holders covering the registrant’s last fiscal year or any proxy statement, form of proxy or other proxy soliciting material with respect to any annual or other meeting of security holders.

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EX-2.2

Exhibit 2.2

STOCK PURCHASE AGREEMENT

Dated as of May 18, 2006, by and among

Neff Rental, Inc.
River City Connections, Inc.
and
Don Bates

Don Greene

Tony Pugh

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated as of May 18, 2006 (this “Agreement”), is entered into by and among Neff Rental, Inc., a Florida corporation (“Neff”), River City Connections, Inc., a California corporation (the “Corporation”), and Don Bates, Don Greene and Tony Pugh (collectively, the “Shareholders”).

WHEREAS, the Corporation is engaged in the equipment rental, sales and service business at locations in Roseville and Elk Grove, California;

WHEREAS, the Shareholders own all of the issued and outstanding capital stock of the Corporation (the “Corporation’s Stock”);

WHEREAS, Neff wishes to acquire from the Shareholders all of the Corporation’s Stock;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements, representations, warranties, provisions and covenants herein contained, the parties hereto, each intending to be bound hereby, agree as follows:

1.             PURCHASE OF CORPORATION’S STOCK

1.1         Shares to be Purchased. At the Closing (as hereinafter defined), the Shareholders shall sell and deliver to Neff all of the issued and outstanding shares of the Corporation’s Stock, being the aggregate number of shares of the Corporation set forth on Schedule 3.2 opposite the Shareholders’ names.  At the Closing, Neff shall purchase the Corporation’s Stock and in exchange therefore shall deliver to the Shareholders at the Closing or thereafter as provided by this Agreement cash in an aggregate amount equal to the purchase price described in Section 1.2 (the “Purchase Price”).

1.2         Purchase Price.  The Purchase Price is Fourteen Million Five Hundred  Thousand Dollars ($14,500,000.00) (the “Base Purchase Price”), subject to adjustment as provided in Section 1.3 and Section 1.4.  The Base Purchase Price, as adjusted by Sections 1.3(a), 1.3(b)(ii), 1.3(c)(ii) and 1.4(b) (excluding, for purposes of all Closing payments, the effect of any Post-Closing Equipment Condition Adjustment), less the Hold Back (as defined in Section 1.4(a)), shall be paid in cash at the Closing by wire transfer to the accounts of the Shareholders as set forth on Schedule 3.2.  Notwithstanding the foregoing, or anything else in this Agreement to the contrary, the amount payable at the Closing pursuant to this Section 1.2 shall be further reduced by Twenty Thousand Dollars ($20,000).  Following the Closing, the Corporation will purchase and install a clarifier at the Corporation’s Elk Grove location.  Upon completion of such installation, Neff shall pay to the Shareholders as an increase to the Purchase Price, pro rata based on the relative amounts payable at the Closing pursuant to this Section 1.2, an aggregate amount equal to (a) Twenty Thousand Dollars ($20,000) less (b) the total costs and expenses incurred by the Corporation and Neff to purchase and install such clarifier.

1.3         Adjustments to Purchase Price.  The Purchase Price shall be adjusted as follows:

(a)           The Funded Debt shall be subtracted from the Base Purchase Price for purposes of determining the Purchase Price.  The “Funded Debt” includes: (i) the amount of the aggregate debt (excluding capital leases and trade payables) of the Corporation outstanding immediately prior to Closing and all prepayment penalties incurred or to be incurred by Neff or the Corporation in connection with the repayment of any such debt including all interest accrued through and including the Closing Date; (ii) to the extent not included in clause (i) of this Section 1.3(a), any debt or other payment obligation incurred pursuant to “floor planning” arrangements entered into with vendors of equipment held for sale by the Corporation; and (iii) the aggregate unpaid amount of all capitalized lease obligations (determined in accordance with U.S. GAAP, as defined in Section 1.4(c)) of the Corporation.  The Funded Debt is set forth on Schedule 1.3(a).  Notwithstanding the foregoing, “Funded Debt” shall not include equipment rented by Corporation that is not a capitalized lease as described in clause (iii) of the immediately preceding sentence (“RPO Equipment”). The Corporation does not own the RPO Equipment, however, the Corporation may purchase such equipment pursuant to an agreement upon terms favorable to the Company (the rights to which will remain with Corporation at Closing).

(b)           (i) The amount by which the Closing Date Working Capital is greater than zero shall be added to the Purchase Price or the amount by which the Closing Date Working Capital is less than zero shall be subtracted from the Purchase Price (the “Working Capital Adjustment”). The “Closing Date Working Capital” shall be determined by subtracting the Closing Date Current Liabilities from the Closing Date Current Assets.  The “Closing Date Current Assets” consist of the amount of the aggregate cash (less the aggregate amount of all outstanding checks to the extent not included in accounts payable) of the Corporation as of the Closing Date plus the aggregate amount of accounts receivable and earned but not-yet-billed income (in each case, less an allowance for doubtful accounts), prepaid expenses, repair parts inventory, fuel inventory and deposits, but exclude prepaid interest, equipment inventory, the resale inventory of merchandise  and estimated income tax payments made for current year operations.  The “Closing Date Current Liabilities” consist of the amount of the aggregate current liabilities (excluding the current portion of Funded Debt) including accounts payable, accrued expenses, accrued income taxes and customer deposits.  Schedule 1.3(b)(i) sets forth an example of the calculation of the Closing Date Working Capital assuming that the Closing had occurred on December 31, 2005 and derived from the balance sheet of the Company dated as of December 31, 2005 included in Schedule 3.7.

(ii) The Corporation’s best good faith estimate of the Closing Date Working Capital, the Closing Date Current Assets and the Closing Date Current Liabilities are set forth on Schedule 1.3(b)(ii).  Such amounts shall be used to determine an estimate of Closing Date Working Capital.  The amount by which the estimate of the Closing Date Working Capital is greater than zero shall be added to the Base Purchase Price or the amount by which the estimate of the Closing Date Working Capital is less than zero shall be subtracted from the Base Purchase Price, in either case, for purpose of determining the amounts payable to the  Shareholders at the Closing pursuant to Section 1.2.

(c)           (i) The invoice value of any new rental equipment (other than any such equipment disposed of by the Corporation after January 31, 2006), which new rental equipment was not included in the January 31, 2006 Rental Asset Listing described in

2

Section 1.4(b) because it was acquired by the Corporation after January 31, 2006 and prior to the Closing Date shall be added to the Purchase Price.  The proceeds of all rental equipment, which rental equipment was included on the January 31, 2006 Rental Asset Listing but has been disposed of by the Corporation after the January 31, 2006 and prior to the Closing Date, shall be subtracted from the Purchase Price.  All such equipment which has been acquired or disposed of since January 31, 2006 is listed on Schedule 1.3(c).  The net adjustment described in this Section 1.3(c)(i) for acquisitions of new equipment and dispositions of existing equipment is referred to in this Agreement as the “Net Equipment Adjustment”.  Schedule 1.3(c)(i) sets forth an example of the calculation of the Net Equipment Adjustment assuming the Closing had occurred March 31, 2006.

(ii) The Corporation’s best good-faith estimate of (A) the invoice value of each such piece of rental equipment acquired by the Corporation after January 31, 2006 and prior to the Closing Date and of the total invoice value of all such new equipment and (B) the proceeds of all rental equipment disposed of after January 31, 2006 and prior to the Closing Date, are set forth on Schedule 1.3(c)(ii).  Such amounts shall be used to determine an estimate of the Net Equipment Adjustment.  The amount by which the estimate of the Net Equipment Adjustment is greater than zero shall be added to the Base Purchase Price or the amount by which the estimate of the Net Equipment Adjustment is less than zero shall be subtracted from the Base Purchase Price, in either case, for purposes of determining the amounts payable to the Shareholders at the Closing pursuant to Section 1.2.

1.4         Hold Back.

(a)           (i) Neff shall hold back an amount equal to Seven Hundred Fifty Thousand Dollars ($750,000.00) of the Purchase Price, subject to possible reduction pursuant to Section 1.4(b) (the “General Hold Back”), plus an amount equal to Two Hundred Thousand Dollars ($200,000.00) of the Purchase Price (the “Funded Debt Hold Back” and, together with the General Hold Back, the “Hold Back”).  The amount of the Hold Back shall be deposited by Neff with U.S. Bank National Association, Corporate Trust Group, a national banking association (the “Escrow Agent”), to be held pursuant to an Escrow Agreement in the form attached hereto as Exhibit A (the “Escrow Agreement”) for later distribution pending the determination of (A) the amount of the Post-Closing Equipment Condition Adjustment pursuant to Section 1.4(b), (B) the Working Capital Adjustment and the Net Equipment Adjustment pursuant to Sections 1.4(b) and 1.4(c), (C) the amount, if any, of Funded Debt not repaid at Closing determined pursuant to Section 1.4(a)(ii) and (D) the Shareholders’ indemnity obligations pursuant to Section 7; provided, however, that the Escrow Agreement will provide that any amounts remaining in the Hold Back that are not the subject of pending claims (for payment of the Purchase Price pursuant to Sections 1.4(b) and 1.4(c), to repay Funded Debt pursuant to Section 1.4(a)(ii) or pursuant to Section 7) shall be released to the Shareholders on July 18, 2006, with respect to the Funded Debt Hold Back, and November 6, 2006, with respect to the General Hold Back, in each case, pro rata based on their respective ownership of the Corporation’s Stock immediately prior to the Closing.  The parties hereby acknowledge and agree that the Hold Back shall be treated as an installment obligation for purposes of Section 453 of the Code, and no party shall take any action or filing position inconsistent with such characterization.

3

(ii) To the extent that any Payoff Letters or Termination Statements (each as defined in Section 5.2(h)) have not been delivered to Neff as of the Closing Date, the Shareholders shall use their reasonable best efforts to cause Payoff Letters and Termination Statements from all lenders of Funded Debt that have not been delivered to Neff as of the Closing Date to be delivered to Neff of the Corporation as soon as practicable.  If, following the Closing Date, it is determined that any Funded Debt was not included in the calculation of the Purchase Price, then, in addition to any other remedies available to Neff (but without duplication as to amounts payable pursuant to any such remedy), Neff shall have the right to cause the amounts required to repay such Funded Debt (including any interest accrued thereon and any prepayment or similar penalties and expenses associated with the prepayment of such indebtedness through the date of repayment) to be paid from the Hold Back.

(b)           Schedule 1.4(b) (the “Rental Asset Listing”) sets forth the asset description, make, model, date of acquisition, serial number, original cost and net book value of all equipment owned or leased by the Corporation for rent to customers as of January 31, 2006, other than the RPO Equipment.  As used herein, the term “Equipment” means all of the equipment listed on the Rental Asset Listing and Schedule 1.3(c).  Immediately prior to the Closing Date, Neff and the Shareholders jointly shall complete a physical inventory of each item of Equipment on the Rental Asset Listing and Schedule 1.3(c) (it being understood that Neff will complete such physical inventory no later than 60 days after the Closing with respect to any Equipment that is unavailable because it is on rent at the time of the pre-Closing physical inventory).  The Purchase Price shall be reduced (the “Equipment Condition Adjustment”) for each item of Equipment listed on the Rental Asset Listing or Schedule 1.3(c), in each case, which is not Rental Ready (as defined in this Section 1.4(b)), has been sold, is missing, or is otherwise not available for rent to customers by the Corporation.  The reduction in the Purchase Price shall be an aggregate amount equal to (i) the cost to bring Equipment that is not Rental Ready to Rental Ready condition, plus (ii) the fair market value (as determined by Neff and the Shareholders or pursuant to Section 10) of all missing or unavailable Equipment, plus (iii) to the extent not otherwise included as an adjustment pursuant to Section 1.3(c), the proceeds to the Corporation received from the sale of Equipment sold between the date of the Rental Asset Listing and the Closing Date.  In the event of a Purchase Price reduction due to an Equipment Condition Adjustment, Neff shall be entitled to retain a portion of the Hold Back equal to such reduction, and the amount of such reduction shall be subtracted from $750,000 for purposes of determining the amount of the Hold Back under Section 1.4(a); provided, however, that with respect to any such adjustment related to Equipment that is unavailable because it is on rent at the time of the pre-Closing physical inventory, the Shareholder Representative (as defined in Section 1.4(c)) shall instruct the Escrow Agent promptly to pay Neff, by wire transfer of immediately available funds to an account designated by Neff, an amount equal to the amount of such reduction (such amount, the “Post-Closing Equipment Condition Adjustment”).  For purposes of this Agreement, an item of Equipment is “Rental Ready” only if all reasonably required maintenance has been performed and it does not require any repairs before being rented to a customer. Notwithstanding the foregoing, Equipment will be in “rental ready” condition for any item with an original cost of less than five thousand ($5,000.00) dollars that requires no more than two hundred ($200.00) of repairs for any one item and for any item with an original cost greater than five thousand ($5,000.00) dollars that requires no more than four hundred ($400.00) dollars of repairs for any one item. Notwithstanding anything to the contrary provided

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herein, there will be a deduction from the Purchase Price, only to the extent that the aggregate original value of missing or inoperative equipment (including any such Equipment identified in either the pre-Closing physical inventory or the post-Closing physical inventory) exceeds one hundred twenty-five thousand ($125,000.00) dollars.   Any disputes as to the physical count, fair market value or Rental Readiness of any item of Equipment will, if possible, be resolved by Neff and the Shareholders while the physical inventory of such Equipment is being taken.  Any such disputes not so resolved will be resolved by arbitration in accordance with Section 10.

(c)           (i)           Neff shall pre­pare and deliver to Don Bates (the “Shareholder Representative”), not later than 90 days after the Closing, on a consolidated basis, (A) a statement setting forth a calculation of the Closing Date Working Capital as of the close of business on the Closing Date (the “Closing Working Capital Statement”) and (B) a statement setting forth (1) the invoice value of each piece of rental equipment acquired by the Corporation after January 31, 2006 and prior to the Closing Date and the total invoice value of all such new equipment, (2) the proceeds of all rental equipment disposed of after January 31, 2006 and prior to the Closing Date and (3) a calculation of the Net Equipment Adjustment (the “Net Equipment Adjustment Statement”).  The Closing Working Capital Statement shall be prepared in accordance with U.S. GAAP applied consistently with the financial statements set forth in Schedule 3.7 hereto (provided that in the event of a conflict between U.S. GAAP and consistency, U.S. GAAP shall control), and shall present fairly, in all material respects, the financial condition of the Corporation as of the Closing.  The Shareholders shall cooperate with Neff and its accountants in the preparation of the Closing Working Capital Statement and the Net Equipment Adjustment Statement.  For purposes of the foregoing, “U.S. GAAP” means accounting principles generally accepted in the United States of America, including generally accepted accounting principles as interpreted by the United States Securities and Exchange Commission.  For the avoidance of doubt, the term, “U.S. GAAP,” when used herein, shall mean the accounting prin­ciples generally accepted by the SEC as reflected in Regulation S-X promulgated under the Securi­ties Exchange Act as in effect from time to time.

(ii)           Neff will cooperate with the Shareholder Representative and will ensure that the Shareholder Representative and his auditor will be able to review the Closing Working Capital Statement and Net Equipment Adjustment Statement as soon as practicable after it is delivered to the Shareholder Representative.  Within 30 days following the Shareholder Representative’s receipt of the Closing Working Capital Statement and Net Equipment Adjustment Statement, the Shareholder Representative shall notify Neff in writing of any objections that the Shareholder Representative may have to the Closing Working Capital Statement or the Net Equipment Adjustment Statement, stating in reasonable detail the basis for any such objections (an “Objection Notice”); provided, that the only bases for objection shall be (A) non-compliance with the standards set forth in Section 1.4(c)(i) for the preparation of the Closing Working Capital Statement and (B) computational errors.  If the Shareholder Representative fails to deliver an Objection Notice to Neff within such 30-day period, the Shareholder Representative will be deemed to have concurred with the Closing Working Capital Statement and the Net Equipment Adjustment Statement.

(iii)          If the Shareholder Representative timely delivers an Objection Notice to Neff in accordance with 1.4(c)(ii), Neff and the Shareholder Representative shall, together with their respective independent certified public accountants, promptly consult

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with each other in good faith and exercise reason­able efforts to attempt to resolve differences in their respective analyses of the Closing Working Capital Statement and Net Equipment Adjustment Statement within ten days after the Shareholder Representative delivers the Objection Notice.  Any matter not specifically referenced in the Objection Notice shall be conclusively deemed to have been agreed upon by the parties.  If the parties are unable to resolve their differences within such ten-day period, the matter shall be resolved in accordance with Section 10.

(iv)          Each party shall bear the fees and expenses of its re­spec­tive independent certified public accountants incurred in performing services pursuant to this Section.

(v)           Subject to the terms and conditions of this Agreement, the following adjustments and payments shall be made:

(A)                If the Closing Date Working Capital as set forth on the Closing Working Capital Statement as concurred with by the Shareholder Representative or as finally resolved in the manner set forth above exceeds the estimate of the Closing Date Working Capital determined pursuant to Section 1.3(b)(ii) and used to determine the amounts paid to the Shareholders at the Closing pursuant to Section 1.2, the Purchase Price shall be increased by the amount of such excess.

(B)                 If the Closing Date Working Capital as set forth on the Closing Working Capital Statement as concurred with by the Shareholder Representative or as finally resolved in the manner set forth above is less than the estimate of the Closing Date Working Capital determined pursuant to Section 1.3(b)(ii) and used to determine the amounts paid to the Shareholders at the Closing pursuant to Section 1.2, the Purchase Price shall be reduced by the amount of such difference.

(C)                 If the Net Equipment Adjustment as set forth on the Net Equipment Adjustment Statement as concurred with by the Shareholder Representative or as finally resolved in the manner set forth above exceeds the estimate of the Net Equipment Adjustment determined pursuant to Section 1.3(c)(ii) and used to determine the amounts paid to the Shareholders at the Closing pursuant to Section 1.2, the Purchase Price shall be increased by the amount of such excess.

(D)                If the Net Equipment Adjustment as set forth on the Net Equipment Adjustment Statement as concurred with by the Shareholder Representative or as finally resolved in the manner set forth above is less than the estimate of the Net Equipment Adjustment determined pursuant to Section 1.3(c)(ii) and used to determine the amounts paid to the Shareholders at the Closing pursuant to Section 1.2, the Purchase Price shall be reduced by the amount of such difference.

(E)                 If the aggregate amount paid at the Closing by Neff (including with respect to the Hold Back) exceeded the final Purchase Price, as adjusted pursuant to this Section 1.4(c), the Shareholder Representative shall instruct the Escrow Agent promptly pay to Neff, by wire transfer of immediately available funds to an account designated by Neff, an

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amount equal to such excess.  If the aggregate amount paid at the Closing by Neff (including with respect to the Hold Back) was less than the final Purchase Price, as adjusted pursuant to this Section 1.4(c), Neff shall promptly pay to the Shareholder Representative an amount equal to the difference between such final Purchase Price and the aggregate amount so paid by Neff at the Closing.  Any payment made pursuant to this Section 1.4(c) shall be accompanied by the payment of interest on the amount so paid, from and including the date of the Closing to but excluding the date of the payment, calculated on a monthly basis at the prime, rate of interest announced in The Wall Street Journal from time to time during the period beginning on the date of the Closing and ending on the date of payment.

1.5         Excluded Assets.  The assets listed on Schedule 1.5 (the “Excluded Assets”) shall be transferred to the Shareholders prior to the Closing, and Neff shall acquire no interest in or claim to any of the Excluded Assets.  The transfer of Excluded Assets shall be deemed effective for all purposes prior to the Closing Date.

1.6           Withholding Rights.  Neff and the Escrow Agent shall be entitled to deduct and withhold from any amount otherwise payable pursuant to this Agreement to the Shareholders such amounts as Neff and the Escrow Agent are required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “Code”) or any provision of state, local or foreign Tax law.  To the extent that amounts are so withheld by Neff and the Escrow Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Shareholders.  The parties acknowledge that, in reliance upon the representations of the Shareholders pursuant to Section 6.5, no amounts are being withheld with respect to the payments being made to the Shareholders on the date hereof pursuant to Section 1.2.

2.             CLOSING TIME AND PLACE

The closing of the transactions contemplated herein (the “Closing”) shall take place on May 18, 2006 (the “Closing Date”).  The Closing shall take place at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, CA 90077. At the Closing, Neff and the Shareholders shall deliver to each other the documents, instruments and other items described in Section 5 of this Agreement.

3.             REPRESENTATIONS AND WARRANTIES OF THE CORPORATION AND THE SHAREHOLDERS

The Corporation and the Shareholders, jointly and severally, (i) represent and warrant that each of the following representations and warranties is true as of the Closing Date with respect to the Shareholders and the Corporation, as the case may be, and (ii) agree that such representations and warranties shall survive the Closing.

3.1         Organization, Standing and Qualification.  The Corporation is duly organized, validly existing and in good standing under the laws of the State of California.  The Corporation has full corporate power and authority to own and lease its properties and to carry on its business as now conducted.  The Corporation is not conducting business as a foreign

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corporation in any other state.

3.2         Capitalization.  Schedule 3.2 sets forth, as of the Closing Date, the authorized and outstanding capital stock of the Corporation, the name, addresses and social security numbers or taxpayer identification numbers of the record and beneficial owners thereof, and the number of shares so owned, and wire transfer instructions for each Shareholder relating to the bank account to which the portion of the Purchase Price payable to each of them on the Closing Date should be sent.  On the Closing Date, all of the issued and outstanding shares of the capital stock of the Corporation were owned of record and beneficially by the Shareholders, as set forth in Schedule 3.2, and were free and clear of all liens, security interests, encumbrances, charges or claims of every kind (collectively, “Liens”).  Each share of the capital stock of the Corporation is duly and validly authorized and issued, fully paid and nonassessable, and was not issued in violation of any preemptive rights of any past or present shareholder of the Corporation.  No option, warrant, call, conversion right, preemptive right, right of first offer or refusal or commitment of any kind (including any of the foregoing created in connection with any indebtedness of the Corporation) exists which obligates the Corporation to issue any of its authorized but unissued capital stock or other equity interest, or which obligates any Shareholder to transfer any of the Corporation’s Stock to any Person.  Schedule 1.3(a) sets forth a complete and accurate description of the Funded Debt.  For purposes of this Agreement, “Person” shall be deemed to mean an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity, including a Governmental Authority (as such term is defined in Section 3.14(c) herein).

3.3         All Stock Being Acquired.  The Corporation’s Stock being acquired by Neff hereunder constitutes all of the outstanding capital stock of the Corporation.

3.4         Authority for Agreement.  The Corporation and the Shareholders have full right, power and authority to enter into this Agreement and to perform its, his or her obligations hereunder.  The execution and delivery of this Agreement by the Corporation has been duly authorized by its Board of Directors.  This Agreement has been duly and validly executed and delivered by the Corporation and the Shareholders and, subject to the due authorization, execution and delivery by Neff, constitutes the legal, valid and binding obligation of the Corporation and the Shareholders enforceable against the Corporation and the Shareholders in accordance with its terms.

3.5         No Breach or Default.  Except as disclosed on Schedule 3.5, the execution and delivery by the Corporation and the Shareholders of this Agreement, and the consummation by the Shareholders of the transactions contemplated hereby, do not and will not:

(a)           result in the breach of any of the terms or conditions of, or constitute a default under, or allow for the acceleration or termination of, or in any manner release any party from any obligation under, or require any consent under, or result in the vesting of any right of payment or other right, or any lien, claim, or encumbrance on the Corporation’s Stock or the assets of the Corporation under, any mortgage, lease, note, bond, indenture, or material contract, agreement, license or other instrument or obligation of any kind or nature to which the Corporation or the Shareholders are a party, or by which the Corporation, the

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Shareholders or any of its or their assets, is or may be bound or affected; or

(b)           violate any law or any order, writ, injunction or decree of any court, administrative agency or governmental authority, or require the approval, consent or permission of any Governmental Authority; or

(c)           violate the Articles of Incorporation or Bylaws of the Corporation.

3.6         No Subsidiaries.  The Corporation has no subsidiaries, and there is no Person the equity or securities of which are held by the Corporation.

3.7         Financial Statements.  Schedule 3.7 includes copies of the following consolidated financial statements (“Financial Statements”) of the Corporation: balance sheets as of, and statements of income for the fiscal years ended, December 31, 2004 compiled by Mann, Urrutia, Nelson, CPAs & Assoc., LLP (the “CPA”) and balance sheets of, and statements of income for the fiscal years ended, December 31, 2005 (December 31, 2005 shall be referred to as the “Balance Sheet Date”) reviewed by the CPA, and an unaudited balance sheet as of, and unaudited statements of income for the three-month period ended, March 31, 2006.  The Financial Statements have been prepared in accordance with U.S. GAAP and are true and correct and fairly present (i) the financial position of the Corporation as of the respective dates of the balance sheets included in said statements, and (ii) the results of operations for the respective periods indicated.  The Financial Statements have been prepared consistently with prior periods.  Except to the extent reflected or reserved against in the Corporation’s balance sheet as of the Balance Sheet Date, or as disclosed on Schedule 3.7 or Schedule 3.8, the Corporation had as of the Balance Sheet Date, and has, as of the Closing Date, no liabilities of any nature, whether accrued, absolute, contingent or otherwise, including, without limitation, tax liabilities due.

3.8         Liabilities.  Schedules 3.8(a), (b), (c) and (d), are accurate lists and descriptions of all liabilities of the Corporation required to be described below in the format set forth below.

(a)           Schedule 3.8(a) lists, as of the Closing Date (other than trade payables, which are listed as of the Balance Sheet Date), all indebtedness for money borrowed and all other fixed and uncontested liabilities of any kind, character and description (excluding all real and personal property leasehold interests included in Schedule 3.8(d)) not included in Funded Debt, whether reflected or not reflected on the Financial Statements and whether accrued or absolute, and states as to each such liability the amount of such liability and to whom payable.  From the Balance Sheet Date through the Closing Date, trade payables have been incurred only in the ordinary course of business consistent with comparable prior periods.

(b)           Schedule 3.8(b) lists, as of the Closing Date, all claims, suits and proceedings which are pending against the Corporation, all contingent liabilities and, to the knowledge of the Corporation and the Shareholders, all claims, suits and proceedings threatened or anticipated against the Corporation.  Schedule 3.8(b) includes a summary description of each such liability, including, without limitation, (A) the name of each court, agency, bureau, board or body before which any such claim, suit or proceeding is pending, (B) the date such claim, suit or proceeding was instituted, (C) the parties to such claim, suit or proceeding, (D) a brief

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description of the factual basis alleged to underlie such claim, suit or proceeding, including the date or dates of all material occurrences, and (E) the amount claimed and other relief sought, together with copies of all material documents, reports and other records relating thereto to the extent that they are in the Corporation’s or the Shareholders’ possession or control.

(c)           Schedule 3.8(c) lists, as of the Closing Date and to the extent not otherwise included in Schedule 3.8(a), all liens, claims and encumbrances secured by or otherwise affecting any asset of the Corporation (including any Corporate Property (as defined in Section 3.12(a)), including a description of the nature of such lien, claim or encumbrance, the amount secured if it secures a liability, the nature of the obligation secured, and the party holding such lien, claim or encumbrance.

(d)           Schedule 3.8(d) lists, as of the Closing Date and to the extent not otherwise included in Schedules 3.8(a) and (c), all real and personal property leasehold interests to which the Corporation is a party as lessor or lessee (except for leases relating to Equipment in which the Corporation is the lessor) or, to the knowledge of the Corporation or the Shareholders, affecting or relating to any Corporate Property, and includes a description of the nature and principal terms of such leasehold interest, including, without limitation, the identity of the other party thereto, the term of such leasehold interest (including renewal options), the base rent and any additional rent owing thereunder (including any adjustments thereto), security deposits, rights of first offer or first refusal, purchase options, and restrictions on transfer.  All such leasehold interests (whether or not listed on Schedule 3.8(d)) are in full force and effect and binding on the parties thereto; neither the Corporation nor, to the knowledge of the Shareholders or the knowledge of the Corporation, any other party to any such Lease is in breach of any of the material provisions thereof; and to the knowledge of the Corporation and the knowledge of the Shareholders there exist no defaults or conditions that could lead to a default.

Except as described on Schedules 3.8(a), (b), (c) and (d), neither the Corporation nor any of the Shareholders has made any payment or committed to make any payment since the Balance Sheet Date on or with respect to any of the liabilities or obligations listed on Schedule 3.8(a), (b), (c) and (d) except, in the case of liabilities and obligations listed on Schedule 3.8(a), (c) and (d), periodic payments required to be made under the terms of the agreements or instruments governing such obligations or liabilities, or except as made in the ordinary course of business.

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3.9         Rental Asset Listing; Personal Property.

(a)           Schedule 1.3(c) and the Rental Asset Listing collectively list all of the Equipment owned or leased by the Corporation as of the date of this Agreement for lease or rent to customers, including, with respect to each such piece of Equipment, the initial cost, accumulated depreciation and net book value of such item as of March 31, 2006.  Except as described on Schedule 3.9(a), all of the Corporation’s rental equipment (whether listed on Schedule 1.3(c) and the Rental Asset Listing or not) (i) have been maintained in the ordinary course of business, (ii) are in operable condition, and (iii) are in material compliance with all applicable laws, rules and regulations.  All of the Corporation’s rental equipment (whether listed on Schedule 1.3(c) and the Rental Asset Listing or not) are in rental ready condition consistent with Section 1.4(b) .

(b)           Schedule 3.9(b) lists, as of the Closing Date, substantially all the personal property and fixed assets (other than real estate, and Equipment included on Schedule 1.3(c) or the Rental Asset Listing) of the Corporation, including, without limitation, identification of each vehicle by description and serial number, identification of machinery, equipment and general descriptions of parts, supplies and inventory.  The Excluded Assets are not assets of the Corporation and are not reflected on Schedule 3.9(b) or in any Financial Statements.  Attached to Schedule 3.9(b) are copies of all motor vehicle titles and current registrations.  Except as described on Schedule 3.9(b), all of the Corporation’s vehicles, machinery and equipment necessary for the operation of its business (other than the Equipment listed on Schedule 1.3(c) and the Rental Asset Listing) (collectively, the “Other Assets”) (i) have been maintained in the ordinary course of business, (ii) are in operable condition, and (iii) are in material compliance with all applicable laws, rules and regulations.    All leases of fixed assets are in full force and effect and binding upon the parties thereto and  neither the Corporation nor any other party to such leases is in breach of any of the material provisions thereof.

3.10       Permits and Licenses.

Schedule 3.10 is a full and complete list, and includes copies, of all material permits, licenses, titles, fuel permits, zoning and land use approvals and authorizations, including, without limitation, any environmental permits, conditional or special use approvals or zoning variances, occupancy permits, and any other similar documents constituting a material authorization or entitlement required for the ownership or the operation of the business of the Corporation (collectively the “Governmental Permits”).  Each such Governmental Permit has been duly obtained, is owned by, issued to, held by or otherwise benefiting the Corporation as of the Closing Date and is valid and held in full force and effect.  Any material conditions to the Governmental Permits and, if applicable, the expiration dates thereof, are also described in Schedule 3.10.  Except as set forth on Schedule 3.10, all of the Governmental Permits enumerated and listed on Schedule 3.10 are adequate for the operation of the business of the Corporation and of each Corporate Property as presently operated.  There are no proceedings pending or, to the knowledge of the Corporation or the knowledge of the Shareholders, threatened which may result in the revocation, cancellation, suspension or adverse modification of any of the same.

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3.11       Certain Receivables.

Schedule 3.11 is an accurate list as of the Closing Date of the accounts and notes receivable of the Corporation from, and advances to, employees, former employees, officers, directors, the Shareholders and Affiliates of the foregoing which have not been repaid.  For purposes of this Agreement, the term “Affiliate” means, with respect to any Person, any Person that directly or indirectly through one or more intermediaries controls or has an ownership interest in, or is controlled or owned in whole or in part by, or is under common control or ownership in whole or in part with such Person, and in the case of the Corporation includes directors and officers, in the case of individuals includes the individual’s spouse, father, mother, grandfather, grandmother, brothers, sisters, children and grandchildren and in the case of a trust includes the grantors, trustees and beneficiaries of the trust.

3.12       Real Property.

(a)           A list of each parcel of real property or facility owned or leased (or subleased) as of the Closing Date (collectively, the “Corporate Properties”), including the street addresses of the same, is set forth in Schedule 3.12(a), and the Corporation has provided to Neff true, correct and complete copies of all leases and subleases relating to real property leased from third-party landlords pursuant to which the Corporation leases Corporate Property from such third-party landlord.   All leases listed on Schedule 3.12(a) are in full force and effect and binding on the parties thereto; neither the Corporation nor, to the knowledge of the Corporation or the knowledge of the Shareholders, any other party to any such Lease is in breach of any of the material provisions thereof; to the knowledge of the Corporation or the knowledge of the Shareholders, the landlord’s interest in any such Lease has not been assigned to any third party nor has any such interest been mortgaged, pledged or hypothecated; and the Corporation has not assigned any such lease or sublet all or any part of the Corporate Property which is the subject of any such lease.  With regard to any sublease, the Corporation has provided to Neff true, correct and complete copies of each lease related to the property subject to such sublease, and to the knowledge of the Shareholders or the knowledge of the Corporation, all such leases are in full force and effect and binding on the parties thereto, and no party is in breach of any of the material terms thereof.

(b)           Except as otherwise disclosed on Schedule 3.12(b):

(i)            Each Corporate Property is fully licensed, permitted and authorized to carry on its current business under all applicable federal, state and local statutes, orders, approvals, zoning or land use requirements, rules and regulations, and covenants, conditions and restrictions applicable to the Corporate Property, and no Corporate Property or the current use thereof constitutes a non-conforming use or is otherwise subject to any restrictions regarding the operation, renovation or reconstruction thereof.

(ii)           All activities and operations at each Corporate Property are being and have been conducted in compliance in all material respects with the requirements, criteria, standards and conditions set forth in all applicable federal, state and local statutes, orders, approvals, permits, zoning or land use requirements and covenants, conditions,

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restrictions, variances, licenses, rules and regulations.

(iii)          To the knowledge of the Shareholders or the knowledge of the Corporation, there are no circumstances, conditions or reasons which are likely to be the basis for revocation or suspension of any Corporate Property’s material site assessments, permits, licenses, consents, authorizations, zoning or land use permits, variances or approvals relating to such Corporate Property that is leased to the Corporation, and there are no circumstances, conditions or reasons which are likely to be the basis for revocation or suspension of any material site assessment, permits, licenses, consents, authorizations, zoning or land use permits, variances or approvals relating to any Corporate Property.

(c)           No Corporate Property is the subject of, or would be affected by, any pending condemnation or eminent domain proceedings, and, to the knowledge of the Corporation or the knowledge of the Shareholders, no such proceedings are threatened.

(d)           The Corporate Properties include all the real property used by the Corporation in connection with the current business operation of the Corporation which is necessary for the operation of the Business of the Corporation as currently conducted.

3.13       Litigation.  There are no actions, suits, arbitrations, proceedings or investigations pending or, to the knowledge of the Shareholders or the knowledge of the Corporation, threatened against the Corporation, in or before any court, arbitration panel or other tribunal or before or by any Governmental Authority, except actions, suits, proceedings or investigations as disclosed in Schedule 3.13.  Except as set forth on Schedule 3.13, there is no outstanding judgment, order, writ, injunction or decree against the Corporation, the result of which could materially adversely affect the Corporation or its business or any of the Corporate Properties, nor has the Corporation been notified that any such judgment, order, writ, injunction or decree has been requested.

3.14       Contracts and Agreements.

(a)           Schedule 3.14(a) lists, as of the Closing Date, all material contracts and agreements (other than standard rental agreements with customers, leases included with Schedule 3.8(d) and other documents included with Schedule 3.12(a)) to which the Corporation is a party or by which it or any of its property is bound (including, but not limited to, dealership agreements, commission agreements, joint venture or partnership agreements, contracts with any labor organizations, promissory notes, loan agreements, bonds, mortgages, deeds of trust, liens, pledges, conditional sales contracts or other security agreements).  The Corporation has provided Neff with true, complete and correct  copies of all items listed or required to be listed on Schedule 3.14(a).  Except as disclosed on Schedule 3.14(a), all contracts and agreements required to be listed on Schedule 3.14(a) and all rental agreements with customers are in full force and effect and binding upon the parties thereto.  Except as set forth on Schedule 3.14(a), none of such contracts and agreements required to be listed on Schedule 3.14(a) and no rental agreement with any customer requires notice to, or consent or approval of, any third party of the transactions contemplated hereby.  Except as described or cross referenced on Schedule 3.14(a), neither the Corporation nor, to the knowledge of the Shareholders or the knowledge of the Corporation, any other parties to such contracts and agreements is in breach thereof, and none of

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the parties has threatened to breach any of the material provisions thereof or notified the Corporation or the Shareholders of a default thereunder, or exercised any options thereunder.

(b)           With regard to rental agreements with customers, (i) the Corporation has provided Neff with a true, complete and correct copy of the form of rental agreement used by the Corporation in connection with such agreements, (ii) each such rental agreement conforms in all material respects to the form of rental agreement provided to Neff, (iii) attached hereto as Schedule 13.4(b) is a schedule of all rental agreements with customers as of March 31, 2006 setting forth in each case the name of the customer, the equipment subject to the lease, the lease rate and the term of the lease.

(c)           The Corporation is not a party, directly or indirectly, to any prime contract, subcontract, basic ordering agreement, letter agreement, purchase order, delivery order, bid, change order or commitment, in each case, with (a) any Governmental Authority or (b) any prime contractor or subcontractor with respect to performance by the Corporation or any of its subsidiaries as subcontractor of any portion of the obligations of the prime contract with any Governmental Authority.   For purposes of this Agreement the term “Governmental Authority” means any government, governmental, statutory, regulatory or administrative authority, agency, body or commission, or any court, tribunal or judicial body, whether federal, state, local or foreign.

(d)           Without limiting the foregoing, the agreements described on Schedule 3.14(d) are not material to the Corporation, and the Corporation is not, directly or indirectly, subject to any material liability pursuant to any of the agreements described on Schedule 3.14(d).

3.15       Insurance.  Schedule 3.15 is a complete list and includes copies, as of the Closing Date, of all insurance policies in effect on the Closing Date or, with respect to “occurrence” policies that were in effect, carried by the Corporation in respect of the Corporate Properties or any other property used by the Corporation and Schedule 3.15 specifies, for each policy, the name of the insurer, the type of risks insured, the deductible and limits of coverage, and the annual premium therefore.  During the last two years, there has been no lapse in any material insurance coverage of the Corporation.  For each insurer providing coverage for any of the contingent or other liabilities, except to the extent otherwise set forth in Schedule 3.8(b), each such insurer, if required, has been properly and timely notified of such liability, no reservation of rights letters have been received by the Corporation and the insurer has assumed defense of each suit or legal proceeding.

3.16       Personnel.  Schedule 3.16 is a complete list, as of the Closing Date, of all officers, directors and employees (by type or classification) of the Corporation and their respective rates of compensation, including (i) the portions thereof attributable to bonuses, (ii) any other salary, bonus, stock option, equity participation, or other compensation arrangement made with or promised to any of them, and (iii) copies of all employment agreements with non-union officers, directors and employees.  Schedule 3.16 shall also list the driver’s license number for each driver of the Corporation’s motor vehicles who is required to have a commercial, chauffeur’s, or other special class of drivers license in order to operate commercial or heavy

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vehicles used in any of the Corporation’s business.

3.17       Benefit Plans and Union Contracts.

(a)           Schedule 3.17(a) is a complete list as of the Closing Date, and includes complete copies (or, in the case of oral arrangements, descriptions), of all “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) (whether or not subject to ERISA) and any other plans, policies, programs, practices, agreements, understandings or arrangements (written or oral) providing compensation or other benefits to any current or former director, officer, employee or independent contractor (or to any dependent or beneficiary thereof) of the Corporation or any ERISA Affiliate (as defined below), which are currently, or were within the past six years, maintained, sponsored or contributed to by the Corporation or any ERISA Affiliate, or under which the Corporation or any ERISA Affiliate has any obligation or liability, whether actual or contingent, including without limitation, all employment, retention, severance and change in control agreements, any agreements containing “golden parachute” provisions, stock purchase, stock option, stock appreciation, phantom stock, restricted stock or other stock-based compensation, incentive, bonus, retirement, welfare benefit, vacation, holiday, cafeteria, medical, disability and deferred compensation plans, policies, programs, practices, agreements, understandings or arrangements (each, a “Benefit Plan”), together with complete copies of such Benefit Plans, any summaries and summary plan descriptions thereof (including any summary of material modifications), any trust agreements, insurance contracts or other funding vehicles related thereto, and classifications of employees covered thereby as of the Closing Date. For purposes of this Section 3.17, “ERISA Affiliate” shall mean any entity (whether or not incorporated) other than the Corporation that, together with the Corporation, is considered under common control and treated as one employer under Section 414(b), (c), (m) or (o) of the Code. Except for the Benefit Plans described on Schedule 3.17(a), the Corporation has no other pension, retirement, welfare, profit sharing, deferred compensation, stock option, employee stock purchase or other employee benefit plans or arrangements with any party.  All Benefit Plans are fully funded and have been operated in compliance with all applicable federal, state and local statutes, ordinances and regulations, including ERISA and the Code. With respect to the Benefit Plans, no event has occurred and, to the Corporation’s or the Shareholder’s knowledge, there exists no condition or set of circumstances in connection with which the Corporation could be subject to any material liability (other than for routine benefit liabilities) under the terms of, or with respect to, such Benefit Plans, ERISA, the Code or any other applicable laws, rules and regulations. All such plans that are intended to qualify under Section 401(a) of the Code have been determined by the Internal Revenue Service to be so qualified, and copies of such determination letters are included as part of Schedule 3.17(a).  Except as disclosed on Schedule 3.17(a), all reports and other documents required to be filed with any governmental agency or distributed to plan participants or beneficiaries (including, but not limited to, annual reports (Form 5500 series), actuarial reports or other financial statements, audits or tax returns) have been timely filed or distributed, and copies thereof are included as part of Schedule 3.17(a).  All Benefit Plans have been in all material respects operated in accordance with the terms and provisions of the plan documents and all related documents and policies. No “reportable event” (within the meaning of Section 4043 of the Code) and no nonexempt “prohibited transaction” (within the meaning of Section 4975 of the Code) that could reasonably be expected to result in liability to the Corporation has occurred with respect to any Benefit Plan, and the

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Corporation has not otherwise incurred any liability for excise tax or penalty due to the Internal Revenue Service or U.S. Department of Labor nor any liability to the Pension Benefit Guaranty Corporation for any Benefit Plan, nor has the Corporation, nor any party-in-interest or disqualified Person, engaged in any transaction or other activity which would give rise to such liability. The Corporation has not at any time sponsored, contributed or been required to contribute to, and the Corporation does not otherwise have any liability (whether absolute or contingent) with respect to: (i) any plan subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA, including, without limitation, any “multiemployer plan” (within the meaning of Sections 3(37) or 4001(a)(3) of ERISA) or any “single-employer plan” (within the meaning of Section 4001(a)(15) of ERISA), (ii) any deferred compensation, excess benefit or other non-qualified retirement plan, program or other arrangement, or (iii) any plan, program or other arrangement that provides or promises to provide post-employment or post-retirement medical, disability or life insurance benefits (except as required by applicable laws, rules and regulations).  As of and including the Closing Date, the Corporation shall have made all contributions required to be made by it up to and including the Closing Date with respect to Benefit Plans.  All notices, filings and disclosures required by ERISA or the Code (including notices under Section 4980B of the Code) have been timely made with respect to each Benefit Plan.  The Corporation does not have any material liability, whether absolute or contingent, including any obligations under the Benefit Plans, with respect to any misclassification of a person performing services for the Corporation as an independent contractor rather than as an employee.

(b)           Schedule 3.17(b) is a complete list, as of the Closing Date, and includes complete copies of all union contracts and agreements between the Corporation and any collective bargaining group.  None of such agreements will expire or otherwise terminate within two years of the Closing Date.  The Corporation is in compliance in all material respects with all applicable federal and state laws respecting employment and employment practices, terms and conditions of employment, wages and hours, and nondiscrimination in employment, and is not engaged in any unfair labor practice.  There is no charge pending or, to the Corporation’s or the Shareholder’s knowledge, threatened, against the Corporation before any court or agency and alleging unlawful discrimination in employment practices and there is no charge of or proceeding with regard to any unfair labor practice against it pending before the National Labor Relations Board.  There is no labor strike, dispute, slow down or stoppage as of the Closing Date, existing or threatened against the Corporation; no union organizational activity exists respecting employees of the Corporation not currently subject to a collective bargaining agreement; the union contracts or other agreements delivered as part of Schedule 3.17(b) constitute all agreements with the unions or other collective bargaining groups, and there are no other arrangements or established practices relating to the employees covered by any collective bargaining agreement; and Schedule 3.17(b) will contain as of the date it is delivered a list of all arbitration or grievance proceedings that have occurred since the Balance Sheet Date.  No one has petitioned within the last five years, and no one is now petitioning, for union representation of any employees of the Corporation.  The Corporation has not experienced any labor strike, slow-down, work stoppage, labor difficulty or other job action during the last five years.

(c)           No payment made to any employee, officer, director or independent contractor (or to any dependent or beneficiary thereof), whether current, former or retired, of the Corporation (each, a “Recipient”) pursuant to any Benefit Plan or

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other arrangement (the “Golden Parachute Payment”) will be nondeductible by the Corporation because of the application of Sections 280G and 4999 of the Code to the Golden Parachute Payment, nor will the Corporation be required to compensate any Recipient because of the imposition of an excise tax (including any interest or penalties related thereto) on the Recipient by reason of Sections 280G and 4999 of the Code, nor could the execution of this Agreement nor the consummation of the transactions contemplated hereby (whether alone or in connection with other events) otherwise give rise to any liability under any Benefit Plan or accelerate the time of payment or vesting of, or increase the amount of, any payments, benefits or other rights due to any Recipient.  No Benefit Plan provides to any “service provider” (within the meaning of Section 409A of the Code) any compensation or benefits which could subject such service provider to gross income inclusion or tax pursuant to Section 409A(a)(1) of the Code.

3.18       Taxes.

Except as set forth on Schedule 3.18:

(a)           The Corporation has timely filed all requisite Tax Returns due for all fiscal periods ended on or before the Closing Date.  All such returns are accurate and complete and are reported on an accrual basis.  The Corporation is not the beneficiary of any extension of time within which to file any Tax Returns.  There are no open years, special assessments, examinations or audits in progress, extensions of any statute of limitations or claims against the Corporation relating to Taxes for any period or periods prior to and including the Closing Date and no notice of any claim for Taxes has been received.  Copies of (i) any Tax examinations, (ii) extensions of statutory limitations and (iii) the Tax Returns of the Corporation for its last two fiscal years are attached as part of Schedule 3.18.  All other Tax Returns for all prior years of the Corporation’s existence have been made available to Neff and are among the records of the Corporation which will accrue to Neff at the Closing.  The Corporation has not been contacted by any Taxing authority regarding a prospective examination, and the Corporation has not received notice from any governmental agency in a jurisdiction in which the Corporation does not file a Tax Return stating that the Corporation is or may be subject to taxation by that jurisdiction.  The Corporation has not entered into a closing agreement pursuant to Section 7121 of the Code during the prior five years.

(b)           The Corporation has duly paid all Taxes required to be paid prior to the Closing Date.  The reserves for Taxes contained in the Financial Statements of the Corporation are adequate to cover its Tax liability as of the Closing Date.  There are no Liens or encumbrances with respect to Taxes upon any of the assets of the Corporation, other than Permitted Liens.

(c)           The Corporation has withheld all required amounts from its employees for all pay periods in full and complete compliance with the withholding provisions of applicable federal, state and local laws.  All required Tax Returns with respect to income tax withholding, social security, and unemployment taxes have been duly filed by the Corporation for all periods for which such Tax Returns are due, all such Tax Returns are accurate and complete, and the amounts shown on all such Tax Returns to be due and payable have been paid

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in full.

(d)           The Corporation is not a party to or bound by any tax-indemnity, tax-sharing, or tax-allocation agreement, whether written or unwritten.

(e)           The Corporation has not been a member of an affiliated group of corporations, within the meaning of Section 1504 of the Code.

(f)            None of the assets of the Corporation is property required to be treated as being owned by any other Person pursuant to the “safe harbor lease” provisions of former Section 168(f)(8) of the Code.

(g)           None of the assets of the Corporation are “tax-exempt bond financed property” within the meaning of Section 168(g) of the Code.

(h)           None of the assets of the Corporation is “tax-exempt use property” within the meaning of Section 168(h) of the Code.

(i)            The Corporation has not filed a consent pursuant to Section 341(f) of the Code, or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f) of the Code) owned by it.

(j)            The Corporation has not agreed and is not required to make any adjustment pursuant to Section 481(a) of the Code by reason of a change in accounting method, and the Internal Revenue Service has not proposed any such adjustment or change in accounting method.

(k)           The Corporation will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, (ii) disposition made on or prior to the Closing Date, (iii) prepaid amount received on or prior to the Closing Date, (iv) intercompany transaction or (v) excess loss account.

(l)            The Corporation has not within the past three (3) years been a party to a transaction intended to qualify under Section 355 of the Code or under so much of Section 356 of the Code as relates to Section 355 of the Code.

(m)          The Corporation does not have any subsidiaries.

(n)           The Corporation does not own an equity interest in any entity treated for U.S. federal income tax purposes as a partnership or as a disregarded entity.

(o)           The Corporation is not, and has not been, a “personal holding company” within the meaning of Section 542 of the Code.

(p)           None of the indebtedness of the Corporation constitutes (i) “corporate acquisition indebtedness” (as defined in Section 279(b) of the Code) with respect to

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which any interest deductions may be disallowed under Section 279 of the Code or (ii) an “applicable high yield discount obligation” under Section 163(i) of the Code.

(q)           The Corporation has not entered into any transaction which is a “reportable transaction” (as defined in Treasury Regulation Section 1.6011-4).

(r)            The Corporation does not have a permanent establishment in any foreign country, as defined in any applicable Tax treaty or convention between the United States and such foreign country.

For purposes of this Agreement, the term “Taxes” means (i) all federal, state, local or foreign income, estimated income, business, gross receipts, windfall or excess profits, severance, property, production, sales, use, license, excise, franchise, employment, withholding, environmental, customs duty, capital stock, stamp, transfer or recording, payroll, unemployment, disability, excise, production, value added, occupancy or other taxes, duties, levies, imposts or assessments of any kind whatsoever, whether computed on a separate, consolidated, unitary, combined or any other basis, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties and (ii) any liability for amounts described in clause (i) under Treasury Regulation Section 1.1502-6, as a result of transferee liability, as a result of being a member of an affiliated, combined, consolidated or unitary group or as a result of any agreement, implied or express, to indemnify any Person for amounts described in clause (i); and the term “Tax Returns” means all federal, state, local or foreign tax returns, tax reports, information statements and declarations of estimated tax required to be filed by or on behalf of the Corporation.

3.19       Copies Complete; Required Consents.  Except as disclosed on Schedule 3.19, the copies of the Articles of Incorporation and Bylaws of the Corporation, both as amended to the Closing Date, if at all amended, and the copies of all standard form rental agreements, leases, instruments, agreements, licenses, permits, certificates or other documents that have been delivered to Neff in connection with the transactions contemplated hereby are complete and accurate as of the Closing Date and are true and correct copies of the originals thereof.  None of such leases, instruments, agreements, licenses, permits, site assessments, certificates or other documents requires notice to, or consent or approval of, any governmental agency or other third party to any of the transactions contemplated hereby.

3.20       Product Quality, Warranty Claims, Product Liability.  To the knowledge of the Shareholders or the knowledge of the Corporation, all products and services sold, rented, leased, provided or delivered by the Corporation to customers on or prior to the Closing Date conform in all material respects to applicable contractual commitments, express and implied warranties, product and service specifications and quality standards, and the Corporation has no liability (and there is no known basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against the Corporation which might give rise to any liability) for replacement or repair thereof or other damages in connection therewith.  No product or service sold, leased, rented, provided or delivered by the Corporation to customers on or prior to the Closing Date is subject to any guaranty, warranty or other indemnity beyond the applicable standard terms and conditions of sale, rent or lease.  Except as set forth on Schedule 3.20, the Corporation has no material liability (and there is no known basis for any

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present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against the Corporation which might give rise to any liability) arising out of any injury to a Person or property as a result of the ownership, possession, provision or use of any Equipment, product or service sold, rented, leased, provided or delivered by the Corporation on or prior to the Closing Date.

3.21       No Change With Respect to Corporation.  Except as set forth on Schedule 3.21, since the Balance Sheet Date, the business of the Corporation has been conducted only in the ordinary course and there has been no change in the condition (financial or otherwise) of the assets, liabilities or operations of the Corporation other than changes in the ordinary course of business, none of which, either singly or in the aggregate, has been materially adverse.  Specifically, and without limiting the generality of the foregoing, except as set forth on Schedule 3.21, with respect to the Corporation, since the Balance Sheet Date, there has not been:

(a)           any change in its financial condition, assets, liabilities (contingent or otherwise), income, operations or business which has had or would reasonably be expected to have a material adverse effect on the Corporation, taken as a whole;

(b)           any damage, destruction or loss (whether or not covered by insurance) adversely affecting any material portion of its properties or business;

(c)           any change in or agreement to change (i) its Shareholders, (ii) ownership of its authorized capital or outstanding securities, or (iii) its securities;

(d)           any declaration or payment of, or any agreement to declare or pay, any dividend or distribution in respect of its capital stock or any direct or indirect redemption, purchase or other acquisition of any of its capital stock;

(e)           any increase or bonus or promised increase or bonus in the compensation payable or to become payable by it, to any of its directors, officers, employees or agents, or any accrual or arrangement for or payment of any bonus or other special compensation to any employee or any severance or termination pay paid to any of its present or former officers or other key employees;

(f)            any labor dispute or any other event or condition of any character with respect to the Corporation’s employees, materially adversely affecting its business or future prospects;

(g)           any sale or transfer, or any agreement to sell or transfer, any of its material assets, property or rights to any other Person, including, without limitation, the Shareholders and their Affiliates, other than equipment in the ordinary course of business (provided that neither the aggregate proceeds nor the aggregate book value of all such sales exceeded $250,000);

(h)           any cancellation, or agreement to cancel, any material indebtedness or other material obligation owing to it, including, without limitation, any indebtedness or obligation of the Shareholders or any Affiliate thereof;

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(i)            any plan, agreement or arrangement granting any preferential rights to purchase or acquire any interest in any of its assets, property or rights or requiring consent of any party to the transfer and assignment of any such assets, property or rights;

(j)            any purchase or acquisition of, or any agreement, plan or arrangement to purchase or acquire, any property, rights or assets outside the ordinary course of its business;

(k)           any waiver of any of its material rights or claims;

(l)            any new or any amendment or termination of any existing material contract, agreement, license, lease, permit or other right to which it is a party;

(m)          any decline in the stockholders equity of the Corporation to an amount less than the stockholders equity of the Corporation as of the Balance Sheet Date;

(n)           any increase in the amount of indebtedness owed by the Shareholders or their Affiliates to any Person other than the Corporation and secured by one or more Corporate Properties;

(o)           any increase in the amount of aggregate indebtedness owed by the Shareholders or their Affiliates to the Corporation;

(p)           any making or rescinding of any election relating to Taxes, the settlement or compromise of any material claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or except as required by applicable law or GAAP, the making of any material change to any of the Corporation’s methods of accounting or methods of reporting income or deductions for Tax or accounting practice or policy from those employed in the preparation of its most recent federal income Tax Return; or

(q)           any other transaction outside the ordinary course of its business.

3.22       Funded Debt; Closing Date Current Assets and Closing Date Current Liabilities.  Schedule 1.3(a) accurately sets forth the Funded Debt of the Corporation.  Schedule 1.3(b) contains a reasonable estimate of the Closing Date Current Assets and Closing Date Current Liabilities of the Corporation.  Schedule 1.3(c) contains a reasonable estimate of the Net Equipment Adjustment.

3.23       Bank Accounts.

(a)           Schedule 3.23(a) is a complete and accurate list, as of the Closing Date, of:

(i)            the name of each bank in which the Corporation has accounts or safe deposit boxes;

(ii)           the name(s) in which the accounts or boxes are held;

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(iii)          the type of account; and

(iv)          the name of each Person authorized to draw thereon or have access thereto.

(b)           Schedule 3.23(b) is a complete and accurate list, as of the Closing Date, of:

(i)            each credit card or other charge account issued to the Corporation; and

(ii)           the name of each Person to whom such credit cards or other charge accounts have been issued.

3.24       Compliance With Laws.  The Corporation has complied in all material respects with, and the Corporation is presently in compliance with, federal, state and local laws, ordinances, codes, rules, regulations, Governmental Permits, orders, judgments, awards, decrees, consent judgments, consent orders and requirements applicable to it (collectively “Laws”), including, but not limited to, the Americans with Disabilities Act, the Federal Occupational Safety and Health Act, and Laws relating to the public health, safety or the preservation or protection of the environment (collectively, “Environmental Laws”).

3.25       Powers of Attorney.  The Corporation has not granted any power of attorney (except routine powers of attorney relating to representation before governmental agencies) or entered into any agency or similar agreement whereby a third party may bind or commit the Corporation in any manner.

3.26       Environmental Matters.

(a)           The Corporation has complied in all material respects with, and the Corporation is presently in compliance with, all applicable Environmental Laws other than as disclosed in the Phase I environmental reports of Gaia Tech, dated March 2006 (the “Phase I”), and there has been no assertion by any party that the Corporation is in violation of any Environmental Laws.

(b)           Schedule 3.10(a) lists all Governmental Permits required pursuant to Environmental Laws for the ownership or the operation of the business of the Corporation (“Environmental Permits”).  Each such Environmental Permit has been duly obtained, is owned by, issued to, held by or otherwise benefiting the Corporation as of the Closing Date and is valid and held in full force and effect.  Any material conditions to the Environmental Permits and, if applicable, the expiration dates thereof, are also described in Schedule 3.10(a).  Except as set forth on Schedule 3.10(a), all of the Environmental Permits enumerated and listed on Schedule 3.10(a) are adequate for the operation of the business of the Corporation and of each Corporate Property as presently operated.  There are no proceedings pending or, to the knowledge of the Corporation or the knowledge of the Shareholders, threatened which may result in the revocation, cancellation, suspension or adverse modification of any of the same and there are no circumstances, conditions or reasons which are likely to be the basis for any such revocation,

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cancellation, suspension or adverse modification.

(c)           Specifically and without limiting the generality of the foregoing paragraphs, except as disclosed on Schedule 3.26: (i) except as permitted under Environmental Law and as would not reasonably be expected to cause the Corporation to incur liability, the Corporation has not processed, handled, transferred, generated, treated, stored or disposed of or released any Hazardous Material (as defined in this Section 3.26); (ii) no Hazardous Material has been disposed of, or otherwise released on any Corporate Property by the Corporation or any other Person that would require remediation or otherwise cause the Corporation to incur liability; (iii) the Corporation has never been subject to or received any notice of any private, administrative or judicial action, or notice of any intended private, administrative or judicial action relating to the presence or alleged presence of Hazardous Material in, under, upon or emanating from any Corporate Property or any other real property (whether or not now or previously owned or leased by the Corporation);  (iv) there are no pending or, to the knowledge of the Corporation or the knowledge of the Shareholders, no threatened actions or proceedings from any governmental agency or other entity involving remediation of any condition of any of the Corporate Properties pursuant to the Environmental Laws; and (v) the Corporation is not a party or otherwise bound, directly or by operation of law, to any agreement, contact, obligation or instrument under which the Corporation is obligated by any representation, warranty, indemnification, covenant, restriction or other undertaking concerning compliance with or liability under any Environmental Laws.  As used in this Agreement, “Hazardous Material” shall mean the substances defined, listed or regulated as a hazardous or toxic substance, pollutant or contaminant under Environmental Laws, including those defined as “Hazardous Waste” in 40 CFR 261, or any comparable California statute or regulation, any substance the presence of which requires remediation pursuant to any Environmental Laws, and any petroleum, petroleum by-products, petroleum wastes, asbestos-containing materials, mold, PCBs and chlorofluorocarbons.

(d)           To the knowledge of the Corporation or to the knowledge of the Shareholders, there are no asbestos-containing materials at any of the Corporate Properties other than those that are non-friable and are being managed in compliance with Environmental Laws.

(e)           Except as set forth on Schedule 3.26, no underground storage tanks (“USTs”) containing petroleum products or wastes or other Hazardous Materials regulated by 40 CFR 280 or Environmental Laws are currently or have been located on any Corporate Property.  Except as set forth on Schedule 3.26, the Corporation has never owned or leased any real property not included in the Corporate Property having any USTs containing petroleum products or wastes or other Hazardous Materials regulated by 40 CFR 280 or Environmental Laws.  Except to the extent set forth on Schedule 3.26, the Corporation has complied with Environmental Laws regarding the installation, use, testing, monitoring, operation and closure of any UST described on Schedule 3.26 and the Corporation has removed from its Corporate Properties all soil which has been contaminated by any releases associated with the use or operation of such UST.  With respect to each UST described on Schedule 3.26, the Corporation has provided to Neff:

(i)            the location of the UST if known, information and material, including any drawings and photographs, showing the location, if available, and whether the

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Corporation currently owns or leases the property on which the UST is located (and if the Corporation does not currently own or lease such property, the dates on which it did and the current owner or lessee of such property);

(ii)           the date of installation and specific use or uses of the UST, if known;

(iii)          copies, if available, of tank and piping tightness tests and cathodic protection tests and similar studies or reports for each UST;

(iv)          a copy of each notice to or from a governmental body or agency relating to the UST;

(v)           other material records, if any, with regard to the UST, including, without limitation, repair records, financial assurance compliance records and records of ownership; and

(vi)          to the extent not otherwise set forth pursuant to the above, a summary description of instances, past or present, in which, to the knowledge of the Corporation or the knowledge of the Shareholders, the UST failed to meet applicable standards and regulations for tightness or otherwise and the extent of such failure, and any other operational or environmental problems with regard to the UST, including, without limitation, spills, including spills in connection with delivery of materials to the UST, releases from the UST and soil contamination.

3.27       Patents, Trademarks, Trade Names, etc.  Schedule 3.27 lists all patents, trade names, fictitious business names, trademarks, service marks, and copyrights owned by the Corporation or which it is licensed to use (other than licenses to use software for personal computer operating systems that were provided when the computer was purchased and licenses to use software for personal computers that are granted to retail purchasers of such software).  No patents, trade secrets, know-how, intellectual property, trademarks, trade names, assumed names, copyrights, or designations used by the Corporation in its business infringe on any patents, trademarks, or copyrights, or any other rights of any Person.  Neither the Corporation nor the Shareholders knows or has any reason to believe that there are any claims of third parties to the use of any such names or any similar name, or knows of or has any reason to believe that there exists any basis for any such claim or claims.

3.28       Title to Assets and Permitted Liens. The Corporation has good, valid and marketable title to, or is leasing under current, valid agreements in full force and effect, all Corporate Properties, Equipment, Other Assets, intellectual property listed on Schedule 3.27, Governmental Permits and other personal property actually used or necessary for the conduct of its business, free of any Liens except: (i) liens for current taxes not yet due; (ii) minor imperfections of title and encumbrances, if any, that are not substantial in amount, do not materially reduce the value or impair the use of the property subject thereto, do not materially impair the value of the Corporation, and have arisen only in the ordinary course of business and consistent with past practice; and (iii) the liens identified on Schedule 3.8(c) (collectively, the

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“Permitted Liens”).

3.29       Manufacturers, Suppliers and Customers. Schedule 3.29 sets forth a complete and accurate list of the 10 largest customers and 10 largest suppliers of the Corporation for the twelve-month period ended December 31, 2005.  To knowledge of the Shareholders or to the knowledge of the Corporation, the relations between the Corporation and its suppliers and customers are good.  Neither the Corporation nor the Shareholders have knowledge of any fact (other than general economic and industry conditions) which indicates that any of the manufacturers or suppliers supplying products, components or materials to the Corporation intends to cease providing such items to the Corporation, nor does the Corporation or the Shareholders have knowledge of any fact (other than general economic and industry conditions) which indicates that any of the customers of the Corporation intends to terminate, limit or reduce its business relations with the Corporation.

3.30       Absence of Certain Business Practices.  Neither the Corporation nor the Shareholders have directly or indirectly within the past three years given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the business of the Corporation in connection with any actual or proposed transaction which (a) might subject the  Corporation to any damage or penalty in any civil, criminal or governmental litigation or proceeding, (b) if not given in the past, might have had an adverse effect on the financial condition, business or results of operations of the Corporation, or (c) if not continued in the future, might adversely affect the financial condition, business or operations of the Corporation or which might subject the Corporation to suit or penalty in any private or governmental litigation or proceeding.

3.31       Related Party Transactions.  Except as disclosed in the Schedule 3.31, neither the Shareholders nor their respective Affiliates owns any direct or indirect interest of any kind in, or controls or is a director, officer, employee, shareholder or partner of, or consultant to or lender to or borrower from or has the right to participate in the profits of, any Person which is a competitor, supplier, customer, landlord, tenant, creditor or debtor of the Corporation.

3.32       Disclosure Schedules.  Any matter disclosed on any Schedule to this Agreement shall be deemed to have been disclosed on every other Schedule that refers to such Schedule by cross reference so long as the nature of the matter disclosed is obvious from a fair reading of the Schedule on which the matter is disclosed.

3.33       No Misleading Statements.  The representations and warranties of the Corporation and the Shareholders contained in this Agreement, the Exhibits and Schedules hereto and all other documents and information furnished to Neff and its representatives pursuant hereto are complete and accurate in all material respects and do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements made not misleading.

3.34       Accurate and Complete Records.  The corporate minute books, stock ledgers, books, ledgers, financial records and other records (including Governmental Permits and any environmental reports, studies or assessments) of the Corporation:

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(a)           have been made available to Neff and its agents at the Corporation’s offices or at the offices of Neff’s attorneys or the Corporation’s attorneys;

(b)           have been, in all material respects, maintained in accordance with all applicable laws, rules and regulations; and

(c)           are accurate and complete, reflect all material corporate transactions required to be authorized by the Boards of Directors and/or Shareholders of the Corporation and do not contain or reflect any material discrepancies.

3.35       Brokers; Finders.  Except for Hageman, Stansberry and Associates whose commission/fees are the sole responsibility the Shareholders, neither the Corporation nor any Shareholders have incurred any obligation for any finder’s or broker’s or agent’s fees or commissions or similar compensation in connection with the transactions contemplated hereby.

3.36       Affiliate Transactions.  Except as set forth on Schedule 3.36, no Shareholder, director or executive officer of the Corporation or member of any such person’s immediate family or corporation, partnership, trust or other entity controlled by any such person, is currently, or within the last two years has been, a party to any transaction with the Corporation including, without limitation, any contract (a) providing for the furnishing of services by, (b) providing for the lease or rental of real or personal property from, (c) providing for the borrowing or loaning of money or other property to or (d) otherwise requiring payments to (other than routine payment to officers and directors or employees of the Company or any of its Subsidiaries of remuneration, provision of benefits, reimbursement of business expenses and other matters typically incident to employment or service as a director), any person referred to in this sentence.  Each of the transactions required to be set forth on Schedule 3.36 was entered into on an arms-length basis on terms no less favorable to the Corporation than those that would apply in a transaction with an unaffiliated third party.

3.37       Assets.  The assets of the Corporation (which include, without limitation, owned assets and leasehold interests) include all assets necessary to conduct the business of the Corporation (consistent with past practices) as of the date hereof in all material respects. The assets of the Corporation (including, without limitation, the Rental Fleet, which is in rental ready condition) are in good operating condition and repair in all material respects consistent with industry practice (subject to normal wear and tear).

3.38       No Other Agreements to Sell the Assets or Stock of the Corporation.  Other than sales of obsolete inventory in the ordinary course of the Corporation’s businesses consistent with past practice, the Corporation has no obligation of any kind or nature, absolute or contingent, to any other Person to (a) sell or effect a sale of all or any of its assets, (b) effect any merger, consolidation or other reorganization of, or other business combination involving, the Corporation or (c) enter into any contract or cause the entering into a contract with respect to any of the foregoing.

4.             REPRESENTATIONS AND WARRANTIES OF NEFF

Neff represents and warrants to the Shareholders that each of the following

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representations and warranties is true as of the date of this Agreement and will be true as of the Closing Date, and agrees that such representations and warranties shall survive the Closing:

4.1         Existence and Good Standing.  Neff is a Corporation duly organized, validly existing and in good standing under the laws of the State of Florida.  Neff has full corporate power and authority to own and lease its properties and to carry on its business as now conducted.  Neff is not required to be qualified or licensed to conduct business as a foreign corporation in any jurisdiction where the failure to be so qualified would have a material adverse effect on its financial condition.

4.2         No Breach of Default.  The execution and delivery by Neff of this Agreement, and the consummation by Neff of the transactions contemplated hereby, do not, in a manner that would adversely affect Neff’s ability to perform its obligations hereunder:

(a)           result in the material breach of any of the terms or conditions of, or constitute a default under, or allow for the acceleration or termination of, in any manner release any party from any obligation under, require any consent under, or result in any lien, claim, or encumbrance on Neff’s assets under any mortgage, lease, note, bond, indenture, or contract, agreement, license or other instrument or obligation of any kind or nature to which Neff is a party, or by which Neff, or any of its assets, is or may be bound or affected; or

(b)           violate any law or any order, writ, injunction or decree of any court, administrative agency or governmental authority, known to Neff, or require the approval, consent or permission of any governmental or regulatory authority; or

(c)           violate the Certificate of Incorporation or Bylaws of Neff.

4.3         Authorization of Agreement.  This Agreement has been duly authorized, executed and delivered by Neff and, subject to the due authorization, execution and delivery by the Corporation and the Shareholders, constitutes a legal, valid and binding obligation of Neff.  Neff has full corporate power, legal right and corporate authority to enter into and perform its obligations under this Agreement and to carry on its business as presently conducted.  No consent of, approval by, filing with, or notice to any governmental authority or any other Person or entity is required for Neff to execute, deliver, and perform this Agreement.

4.4         No Misleading Statements.  The representations and warranties of Neff contained in this Agreement, the Exhibits and Schedules hereto are materially complete and accurate, and do not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements made and to be made not misleading as of the Closing Date.

4.5         Disclosure Schedules.  Any matter disclosed by Neff on any Schedule to this Agreement shall be deemed to have been disclosed on every other Schedule that refers to such Schedule by cross reference so long as the nature disclosed is obvious from a fair reading of the Schedule on which the matter is disclosed.

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5.             CLOSING DELIVERIES

At the Closing, the respective parties shall make the deliveries indicated:

5.1         Neff Deliveries.

(a)           Neff shall deliver to the Shareholders the portion of the Purchase Price required to be delivered on the Closing Date pursuant to Section 1.2.

(b)           Neff shall execute and deliver the Escrow Agreement and deliver the Hold Back to the Escrow Agent.

(c)           Intentionally omitted.

(d)           Neff or its parent shall execute and deliver employment agreements with each of the Shareholders on terms and conditions reasonably satisfactory to Neff.

5.2         Shareholders Deliveries.

(a)           The Shareholders shall deliver to Neff the certificates representing the outstanding Corporation’s Stock, free and clear of all Liens, accompanied by stock powers duly executed in blank.

(b)           The Shareholders shall deliver evidence reasonably satisfactory to Neff that all required third party consents to the transactions contemplated hereby, including without limitation all required consents of the landlords under all real estate leases to which the Corporation is a party, were obtained.

(c)           The Corporation shall deliver to Neff evidence satisfactory to Neff showing that all written employment contracts and all oral employment contracts other than those described in Section 5.1(d) and that are terminable “at will” without payment of severance  or other benefits with non-union employees of the Corporation (including, without limitation, stock options or other rights to obtain equity in the Corporation) have been terminated, effective on or before the Closing Date.

(d)           The Shareholders shall cause each officer and director of the Corporation to deliver  a resignation as an officer and/or director of the Corporation.

(e)           The Shareholder Representative shall execute and deliver the Escrow Agreement.

(f)            The Corporation shall deliver to Neff signature cards for all bank accounts set forth on Schedule 3.23(a), providing for the deletion of the names of the authorized signatories for such accounts immediately prior to the Closing and the addition of Neff’s designees immediately after the Closing.

(g)           The Shareholders shall execute and deliver employment agreements with Neff or its parent on terms and conditions reasonably satisfactory to Neff

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(h)           The Shareholders shall deliver to Neff: (i) payoff letters from each lender with respect to any Funded Debt, in form and substance reasonably satisfactory to Neff, evidencing the aggregate amount of such Funded Debt outstanding thereunder as of the Closing Date (including any interest accrued thereon and any prepayment or similar penalties and expenses associated with the prepayment of such indebtedness on the Closing Date), and an agreement that, if such aggregate amount so identified is paid to such lenders on the Closing Date, then such indebtedness shall be repaid in full (each a “Payoff Letter” and collectively the “Payoff Letters”); and (ii) subject to the proviso in this Clause (ii), UCC-3 termination statements or other appropriate documents in form and substance reasonably satisfactory to Neff that, when filed in the applicable jurisdictions, will ensure that all Liens affecting any real or personal property of the Company or any of its Subsidiaries will be released (each a “Termination Statement” and collectively, the “Termination Statements”); provided, that this covenant shall be deemed to have been satisfied, with respect to any such Payoff Letter and any such Lien, to the extent that the applicable Payoff Letter and Termination Statement are delivered in accordance with Section 1.4(a)(ii) on or prior to July 17, 2006; provided, that all Funded Debt was reflected in the calculation of the Purchase Price, or has been paid from the Funded Debt Hold Back prior to such date.

6.             ADDITIONAL COVENANTS AND AGREEMENTS OF NEFF, THE CORPORATION AND THE SHAREHOLDERS

6.1         Further Assurances and Additional Conveyances.  Following the Closing, the Shareholders and Neff shall each deliver or cause to be delivered at such times and places as shall be reasonably agreed upon such additional instruments as Neff or the Shareholders may reasonably request for the purpose of carrying out this Agreement.  The Shareholders will cooperate with Neff and/or the Corporation on and after the Closing Date in furnishing information, evidence, testimony and other assistance in connection with any actions, proceedings or disputes of any nature with respect to matters pertaining to all periods prior to the Closing Date.

6.2         Release of Guaranties.  After the Closing Date, Neff shall use commercially reasonable efforts to obtain the termination and release of the obligations of the Shareholders under personal guaranties that are either listed on Schedule 6.2 or which relate to indebtedness of the Corporation included in the Financial Statements as of the Balance Sheet Date; provided that Neff shall not be required to pay for any release of guarantee.  Neff shall defend and indemnify the Shareholders and hold them harmless from and against all losses, expenses or claims by third parties to enforce or collect indebtedness owed by the Corporation as of the Closing Date which is personally guaranteed by the Shareholders pursuant to such guaranties.  The Shareholders may notify the obligees under such guaranties that they have terminated their obligations under such guaranties.  The Shareholders shall cooperate with Neff in obtaining such releases.

6.3         Confidentiality.  Neither Neff, the Corporation nor the Shareholders shall disclose or make any public announcements of the transactions contemplated by this Agreement without the prior written consent of the other, unless required to make such disclosure or announcement by law, in which event the party making the disclosure or announcement shall notify the other as soon as practicable before such disclosure or announcement is expected to be

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made, and, in the case of Neff, unless required by the forms of any agreement related to the debt financing obligations of Neff or its affiliates.

6.4         Brokers and Finders Fees.  Each party shall pay and be responsible for any broker’s, finder’s or financial advisory fees incurred by it in connection with the transactions contemplated by this Agreement.

6.5         Tax Matters.           Immediately prior to the Closing the Corporation shall furnish to Neff a certification dated as of the Closing Date and in accordance with Treasury Regulation Section 1.1445-2(c), and otherwise in form and substance reasonably satisfactory to Neff, certifying that an interest in the Corporation is not a United States real property interest because the Corporation is not and has not been a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

7.             INDEMNIFICATION

7.1         Indemnity by the Shareholders.  The Shareholders jointly and severally covenant and agree that they will, subject to the limitations set forth in Section 7.2, indemnify and hold harmless Neff, the Corporation and their respective directors, officers and agents and their respective affiliates, successors and assigns from and after the date of this Agreement (the “Neff Indemnitees”) against any and all losses, damages, assessments, fines, penalties, adjustments, liabilities, claims, deficiencies, costs, expenses (including specifically, but without limitation, reasonable attorneys’ fees and expenses of investigation), expenditures, including, without limitation, any Environmental Site Losses (as defined in Section 7.1(b)) (collectively “Losses”) with respect to each of the following (all, the “Indemnity Events”):

(a)           Any misrepresentation, breach of warranty, or nonfulfillment of any agreement or covenant (including, if applicable, the Shareholders’ obligation to cause the Escrow Agent to make payments to Neff pursuant to Section 1.4 (b) or (c)) on the part of the Shareholders or the Corporation pursuant to the terms of this Agreement or any misrepresentation in or omission from any Exhibit, Schedule, list, certificate, or other instrument furnished or to be furnished to Neff pursuant to the terms of this Agreement regardless of whether, in the case of a breach of a representation or a warranty, Neff relied on the truth of such representation or warranty or, in the case of a breach of a representation, warranty or covenant, Neff had any knowledge of any breach thereof.  For purposes of this Section 7.1(a), the representations and warranties of the Shareholders or the Corporation contained in this Agreement shall be deemed to have been made without any qualification as to knowledge or materiality and, accordingly, all references in such representations and warranties to “material,” “materially,” “material adverse effect,” “knowledge of the Corporation or knowledge of the Shareholders” and similar terms and phrases (including, without limitation, references to the dollar thresholds therein) shall be deemed to be deleted therefrom.

(b)           “Environmental Site Losses,” which shall mean any and all losses, damages (including exemplary damages and penalties), liabilities, claims, deficiencies, costs, expenses, and expenditures (including, without limitation, expenses in connection with site evaluations, risk assessments and feasibility studies) arising out of or required by an interim or

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final judicial or administrative decree, judgment, injunction, mandate, interim or final permit condition or restriction, cease and desist order, abatement order, compliance order, consent order, clean-up order, exhumation order, reclamation order or any other remedial, response or corrective action that is required to be undertaken under federal, state or local law in respect of operating activities on or affecting any Corporate Property, any UST (whether the existence of the UST is known or not) or any other site used or operated by the Corporation at any time prior to the Closing Date, including, but not limited to (i) any actual or alleged violation of any law or regulation respecting the protection of the environment, or any other law or regulation respecting the protection of the air, water and land occurring prior to the Closing Date and (ii) any remedies or violations, whether by a private or public action, alleged or sought to be assessed as a consequence, directly or indirectly, of any Release of pollutants or Hazardous Materials from any Corporate Property, any UST or any other environmental site used or operated by the Corporation at any time prior to the Closing Date resulting from activities thereat occurring prior to the Closing Date, whether such Release is into the air, water (including groundwater) or land and whether such Release occurring before, during or after the Closing Date.  The term “Release” as used herein means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the ambient environment.

(c)           Any liability arising from the matters described on Schedule 3.8(b) or required to be described on Schedule 3.8(b) which are not so described.

(d)           All actions, suits, proceedings, demands, assessments, adjustments, costs and expenses (including specifically, but without limitation, reasonable attorneys’ fees and expenses of investigation) incident to any of the foregoing.

7.2         Limitations on Shareholders’ Indemnities.

(a)           The obligations of the Shareholders to indemnify the Neff Indemnitees as provided in Section 7.1 for matters other than Fundamental Obligations (with respect to which no threshold or deductible will apply) shall be equal to the amount by which the cumulative amount of all such Losses with respect to any or all Indemnity Events exceed two hundred fifty thousand dollars ($250,000.00) (the “General Deductible Amount”), inclusive of the Equipment basket at Section 1.4(b).  For purposes of this Agreement, the term “Fundamental Obligations” shall mean (i) the Shareholders’ obligation to cause the Escrow Agent to make the payments required by Section 1.4 (b) and (c), (ii) the representations and warranties in Sections 3.1 (Organization, Standing and Qualification), 3.2 (Capitalization), 3.3 (All Stock Being Acquired), 3.4 (Authority for Agreement) and the covenant in Section 5.2(a) (Shareholder Deliveries) (the matters identified in this clause (ii) are referred to herein as the “Title Matters”), (iii) the representations and warranties in Sections 3.18 (Taxes) and 3.26 (Environmental Matters), and (iv) the Environmental Site Losses.

(b)           The maximum amount which Neff can recover as a result of one or more Indemnity Events pursuant to the provisions hereof for Claims other than those related to Fundamental Obligations shall not in the aggregate exceed $750,000.  For the avoidance of doubt, the amount of any losses with respect to which the Neff Indemnities are not indemnified due to the inclusion of such Losses in the General Deductible Amount shall not be deemed to

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have been recovered by Neff for purposes of this Section 7.2(b).

(c)           The obligations of the Shareholders under Section 7.1 shall expire, unless a Claims Notice is given or litigation is commenced (i) on or prior to the date that is sixty (60) days after the last day of the statute of limitations on claims related to Sections 3.18 (Taxes) and 3.26 (Environmental Matters) and (ii) on or prior to twenty-four (24) months after Closing , with respect to all other Losses; provided, however, that the obligations of the Shareholders under Section 7.1 with respect to the Title Matters shall not expire, but instead shall survive indefinitely.

(d)           For the avoidance of doubt, the limits set forth in Section 7.2(a) and (b) shall not apply to the indemnity obligations set forth in Section 7.3 (Tax Indemnification).

7.3         Tax Indemnification.

(a)           The Shareholders covenant and agree that they will jointly and severally indemnify and hold harmless each of the Neff Indemnitees from and against all Taxes of the Corporation (i) with respect to all periods ending on or prior to the Closing Date (a “Pre-Closing Period”), (ii) with respect to any period beginning before the Closing Date and ending after the Closing Date (a “Straddle Period”), but only with respect to the portion of such period up to and including the Closing Date (for purposes of this Agreement, such portion is referred to as a “Pre-Closing Partial Period,” and the portion of such period that begins after the Closing Date is referred to as a “Post-Closing Partial Period”), or (iii) payable as a result of a breach of any representation or warranty set forth in Section 3.18, provided, however, that the Shareholders shall have no obligation to indemnify the Neff Indemnitees for any Taxes which are Closing Date Current Liabilities.

(b)           Any Taxes for a period including a Pre-Closing Partial Period and a Post-Closing Partial Period shall be apportioned between such Pre-Closing Partial Period and such Post-Closing Partial Period, based, in the case of real and personal property Taxes, on a per diem basis and, in the case of other Taxes, on the actual activities, taxable income or taxable loss of the Corporation during such Pre-Closing Partial Period and such Post-Closing Partial Period.

(c)           The Shareholders shall file or cause to be filed when due all Tax Returns that are required to be filed by or with respect to the Corporation on or prior to the Closing Date and shall remit or cause to be remitted any Taxes due in respect of such Tax Returns.  Neff shall file or cause to be filed when due all Tax Returns required to be filed after the Closing Date.  With respect to any Tax Returns required to be filed by Neff pursuant to this Section 7.3(c) for which the Shareholders have any liability for Taxes due (including pursuant to their indemnity obligations under Section 7.3(a)), any such Tax Returns shall be submitted by Neff to the Shareholders at least twenty days prior to the due date (including extensions) of such Tax Returns for the Shareholders’ consent, not to be unreasonably withheld.  The Shareholders’ consent to such Tax Returns shall be presumed if the Shareholders fail to respond to Neff within fifteen days following the submission of such Tax Returns to the Shareholders by Neff.  Prior to the due date (including extensions) of such Tax Returns, the Shareholders shall pay Neff their share of the Taxes shown to be dues on such returns.  If the Shareholders disagree with the

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computation of such amount, the Shareholders shall notify Neff of such disagreement in writing at the time of payment.  Neff and the Shareholders shall use their respective best efforts to resolve any such disagreement, and if no resolution is achieved within two months, Neff and the Shareholders shall mutually select an independent accounting firm, whose determination of the issue for which there is disagreement shall be final and binding on Neff and the Shareholders.  Upon resolution or determination of such issue, there shall be made a payment, if necessary, between Neff and the Shareholders in order to take into account the results of such resolution or determination.

(d)           Neff and the Shareholders shall reasonably cooperate, and shall cause their respective Affiliates, officers, directors, employees, and agents to cooperate, in preparing and filing all returns, reports and forms relating to Taxes, including maintaining and making available to each other all records necessary in connection with Taxes and in resolving all disputes and audits with respect to all taxable periods relating to Taxes.

(e)           The Shareholders, on the one hand, and Neff, on the other hand, agree to give prompt notice to each other of any proposed adjustment to Taxes of the Corporation for any Pre-Closing Period or any Pre-Closing Partial Period.  Neff shall control any Tax audits or other proceedings involving the Corporation, provided that the Shareholder Representative may participate in any such proceeding at the sole cost and expense of the Shareholders.  Neither Neff, on the one hand, nor the Shareholders, on the other hand, may settle or otherwise resolve any such audit or proceeding relating to any Pre-Closing Period or any Pre-Closing Partial Period without the consent of the other party, such consent not to be unreasonably withheld.

7.4         Notice of Indemnity Claim.

(a)           In the event that any claim (“Claim”) is hereafter asserted against or arises with respect to any Neff Indemnitee as to which such Neff Indemnitee may be entitled to indemnification hereunder, the Neff Indemnitee shall notify the Shareholder Representative (the “Indemnifying Party”) in writing thereof (the “Claims Notice”) within sixty (60) days after (i) receipt of written notice of commencement of any third party litigation against such Neff Indemnitee, (ii) receipt by such Neff Indemnitee of written notice of any third party claim pursuant to an invoice, notice of claim or assessment, against such Neff Indemnitee, or (iii) such Neff Indemnitee becomes aware of the existence of any other event in respect of which indemnification may be sought from the Indemnifying Party (including, without limitation, any inaccuracy of any representation or warranty or breach of any covenant).  The Claims Notice shall describe the Claim and the specific facts and circumstances in reasonable detail, and shall indicate the amount, if known, or an estimate, if possible, of the losses that have been or may be incurred or suffered by the Neff Indemnitee.  The failure to timely deliver a Claims Notice or otherwise notify the Indemnifying Party of the commencement of such actions in accordance with this Section 7.4 shall not relieve the Indemnifying Party from the obligation to indemnify hereunder except to the extent that the Indemnifying Party establishes by competent evidence that it has been prejudiced thereby.

(b)           The Indemnifying Party may elect to defend any Claim for money damages where the cumulative total of all Claims (including such Claims) does not exceed the

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limit set forth in Section 7.2(b) at the time the Claim is made, by the Indemnifying Party’s own counsel (which counsel shall be subject to the reasonable approval of Neff); provided, however, the Indemnifying Party may assume and undertake the defense of such a third party Claim only upon written agreement by the Indemnifying Party that the Indemnifying Party is obligated to fully indemnify the Neff Indemnitee with respect to such action.  The Neff Indemnitee may participate, at the Neff Indemnitee’s own expense, in the defense of any Claim assumed by the Indemnifying Party, subject to Section 7.4(e).  The Indemnifying Party shall not agree to any compromise or settlement of a Claim defended by the Indemnifying Party without the written approval of the Neff Indemnitee which, in the case of any proposed settlement involving solely the payment of monetary damages and no obligation, restriction on operations or adverse effect on any Neff Indemnitee, shall not be unreasonably withheld.

(c)           If, within thirty (30) days of the Indemnifying Party’s receipt of a Claims Notice, the Indemnifying Party shall not have provided the written agreement required by Section 7.4(b) and elected to defend the Claim, the Neff Indemnitee shall have the right to assume control of the defense and/or compromise of such Claim, and the costs and expenses of such defense, including reasonable attorneys’ fees, shall be added to the Claim.  The Indemnifying Party shall promptly, and in any event within thirty (30) days after demand therefor, reimburse the Neff Indemnitee for the costs of defending the Claim, including reasonable attorneys’ fees and expenses.

(d)           The party assuming the defense of any Claim shall keep the other party reasonably informed at all times of the progress and development of its or their defense of and compromise efforts with respect to such Claim and shall furnish the other party with copies of all relevant pleadings, correspondence and other papers.  In addition, the parties to this Agreement shall cooperate with each other and make available to each other and their representatives all available relevant records or other materials required by them for their use in defending, compromising or contesting any Claim.

(e)           In the event both the Neff Indemnitee and the Indemnifying Party are named as defendants in an action or proceeding initiated by a third party, they shall both be represented by the same counsel (on whom they shall agree), unless such counsel, the Neff Indemnitee, or the Indemnifying Party shall determine that such counsel has a conflict of interest in representing both the Neff Indemnitee and the Indemnifying Party in the same action or proceeding and the Neff Indemnitee and the Indemnifying Party do not waive such conflict to the satisfaction of such counsel, in which case each of the Neff Indemnitee and the Indemnifying Party shall have separate counsel and the reasonable fees and expenses of such counsel shall be paid by the Indemnifying Party.

7.5         Survival of Representations, Warranties and Agreements.  The representations and warranties of the Shareholders contained in this Agreement and in any certificate, Exhibit or Schedule delivered pursuant hereto, or in any other writing delivered pursuant to the provisions of this Agreement (the “Representations and Warranties”) and the liability of the party making such Representations and Warranties for breaches thereof shall survive the consummation of the transactions contemplated hereby.

7.6         Tax Treatment.  The parties agree, for all federal, state and local tax

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purposes, to treat all payments to the Neff Indemnitees pursuant to this Section 7 as an adjustment to, and reduction of, the Purchase Price.

7.7         No Right of Contribution.  After the Closing, neither Neff nor the Corporation shall have any liability to indemnify any Shareholder on account of the breach of any representation or warranty or the nonfulfillment of any covenant or agreement of the Shareholders or the Corporation; and no Shareholder shall have any right of contribution against the Corporation with respect to Claims by a Neff Indemnitee arising under this Agreement.

7.8         Exclusive Remedy.  The provisions of this Section 7 shall be the exclusive remedy of the Neff Indemnitees with respect to any breach of representation or warranty under this Agreement, other than for any fraudulent breach of a representation or warranty.

7.9         Hold Back.  Neff Indemnitees shall be entitled to recover, with respect to any indemnification claim under this Section 7, (a) first, from the Hold Back, as governed by the Escrow Agreement, to the extent that proceeds remain in the Escrow Account and are available to satisfy such claims, and (b) second, from the Shareholders (provided, that with respect to any Claim related to Funded Debt that was not included in the calculation of Purchase Price, Neff Indemnitees shall be entitled to recover first from the Funded Debt Hold Back and second from the Shareholders and the General Hold Back (without duplication)).

8.             OTHER POST-CLOSING COVENANTS OF THE SHAREHOLDERS AND NEFF

8.1         Restrictive Covenants.  The Corporation and the Shareholders acknowledge that (i) Neff, as the purchaser of the Corporation’s Stock, is and will be engaged in the same business as the Corporation (the “Business”); (ii) the Shareholders are intimately familiar with the Business; (iii) the Business is currently conducted in the State of California and Neff may continue the Business in California and may, by acquisition or otherwise, to expand the Business into other geographic areas of California where it is not presently conducted; (iv) the Shareholders have had access to trade secrets of, and confidential information concerning, the Business; (v) the agreements and covenants contained in this Section 8.1 are essential to protect the Business and the goodwill being acquired; and (vi) the Shareholders have the means to support themselves and their dependents other than by engaging in a business substantially similar to the Business and the provisions of this Section 8 will not impair such ability.  The Shareholders covenant and agree as set forth in (a), (b), (c), (d) and (e) below with respect to the Corporation:

(a)           Non-Compete.  For a period commencing on the Closing Date and terminating on the third anniversary of the later of the Closing Date or the last day of such Shareholders’ employment with the Corporation (the “Restricted Period”), no Shareholder  shall, anywhere in any county where Neff Corp., a Delaware corporation, or one of its direct or indirect subsidiaries (including the Corporation) owns or operates a construction or industrial equipment sales, rental or leasing business immediately following the Closing (the “Restricted Territory”), directly or indirectly, acting individually or as the owner, shareholder, partner, consultant or employee of any entity, (i) engage in the operation of any equipment rental, equipment sales or equipment leasing business; (ii) enter the employ of, or render any personal or consulting services to or for the benefit of, or assist in or facilitate the solicitation of customers

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for, or receive remuneration in the form of salary, commissions or otherwise from, any business engaged in such activities other than Neff; or (iii) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such business in any capacity, including, without limitation, as a sole proprietor, partner, shareholder, member, officer, director, principal, agent, trustee or lender of or to any such business engaged in the activities described in clause (i) of this Section 8.1(a) owned or pursued by any Person; provided, however, that the Shareholders may own, directly or indirectly, solely as an investment, securities of any business traded on any national securities exchange or NASDAQ, provided that the Shareholders are not a controlling Person of, or a member of a group which controls, such business and further provided that the Shareholders do not, in the aggregate, directly or indirectly, own 2% or more of any class of securities of such business.

(b)           Confidential Information.  During the Restricted Period and thereafter, the Shareholders shall keep secret and retain in strictest confidence, and shall not use for the benefit of themselves or others, all data and information relating to the Business (“Confidential Information”), including without limitation, know-how, trade secrets, customer lists, supplier lists, details of contracts, pricing policies, operational methods, marketing plans or strategies, bidding information, practices, policies or procedures, product development techniques or plans, and technical processes; provided, however, that the term “Confidential Information” shall not include information that (i) is or becomes generally available to the public other than as a result of disclosure by the Shareholders, or (ii) is general knowledge in the equipment rental, sales or leasing business and not specifically related to the Business.

(c)           Property of the Business.  All memoranda, notes, lists, records and other documents or papers (and all copies thereof) relating to the Business, including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of the Shareholders or the Corporation or made available to them relating to the Business, but excluding any materials (other than the minute books of the Corporation) maintained by any attorneys for the Corporation or the Shareholders prior to the Closing for the purpose of negotiating, executing and performing this Agreement, are and shall be the property of Neff and have been delivered or will be delivered or made available to Neff at the Closing.

(d)           Non-Solicitation.  During the Restricted Period, without the written consent of Neff, which may be granted or withheld by Neff in its discretion, the Shareholders shall not directly or indirectly solicit or encourage any employees of the Corporation to leave the employ of the Corporation and join the Shareholders in any business endeavor owned or pursued by the Shareholders.

(e)           No Disparagement.  From and after the Closing Date, the Shareholders shall not, in any way or to any Person or entity or governmental or regulatory body or agency, denigrate or derogate Neff or any of its direct or indirect subsidiaries or any officer, director or employee, or any product or service or procedure of any such company whether or not such denigrating or derogatory statements shall be true and are based on acts or omissions which are learned by the Shareholders from and after the date hereof or on acts or omissions which occur from and after the date hereof, or otherwise.  A statement shall be deemed denigrating or derogatory to any Person or entity if it adversely affects the regard or esteem in which such Person or entity is held by investors, lenders or licensing, rating, or regulatory

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entities.  Without limiting the generality of the foregoing, the Shareholders shall not, directly or indirectly in any way in respect of any such company or any such directors or officers, communicate with, or take any action which is adverse to the position of any such company with any Person, entity or governmental or regulatory body or agency who or which has dealings or prospective dealings with any such company or jurisdiction or prospective jurisdiction over any such company.  This paragraph does not apply to the extent that testimony is required by legal process; provided, that Neff has received not less than five (5) days’ prior written notice of such proposed testimony or such lesser notice as the Shareholder shall have received.

8.2         Rights and Remedies Upon Breach.  If the Shareholders or any of their Affiliates breaches, or threatens to commit a breach of, any of the provisions of Section 8.1 herein (the “Restrictive Covenants”), Neff shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to Neff at law or in equity:

(a)           Specific Performance.  The right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to Neff and that money damages would not provide an adequate remedy to Neff.  Accordingly, in addition to any other rights or remedies, Neff shall be entitled to injunctive relief to enforce the terms of the Restrictive Covenants and to restrain the Shareholders from any violation thereof.

(b)           Accounting.  The right and remedy to require the Shareholders to account for and pay over to Neff all compensation, profits, monies, accruals, increments or other benefits derived or received by the Shareholders as the result of any transactions constituting a breach of the Restrictive Covenants.

(c)           Severability of Covenants.  The Shareholders acknowledge and agree that the Restrictive Covenants are reasonable and valid in geographical and temporal scope and in all other respects.  If any court determines that any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the Restrictive Covenants shall not thereby be affected and shall be given full effect, without regard to the invalid portions.

(d)           Blue-Penciling.  If any court determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographic scope of such provision, such court shall reduce the duration or scope of such provision, as the case may be, to the extent necessary to render it enforceable and, in its reduced form, such provision shall then be enforced.

(e)           Enforceability in Jurisdiction.  Neff and the Shareholders intend to and hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts of any jurisdiction within the geographic scope of the Restrictive Covenants.  If the courts of any one or more of such jurisdictions hold the Restrictive Covenants unenforceable by reason of the breadth of such scope or otherwise, it is the intention of Neff and the Shareholders that such determination not bar or in any way affect Neff’s right to the relief provided above in the courts

37

of any other jurisdiction within the geographic scope of the Restrictive Covenants as to breaches of such covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants.

8.3           Shareholder Representative.

(a)           Except as provided in Section 8.3(b), each Shareholder by executing this Agreement hereby irrevocably constitutes and appoints Don Bates as the Shareholder Representative, with full power and authority to act in the name of and for and on behalf of such Shareholder with respect to all matters arising in connection with, or related to, this Agreement and the Escrow Agreement to which such Shareholder is a party and the transactions contemplated hereby and thereby.  Except as provided in Section 8.3(b), the Shareholder Representative is hereby appointed (i) the agent and true and lawful attorney-in-fact of each Shareholder, with full power of substitution, and with full capacity and authority in its sole discretion, to act in the name of and for and on behalf of each Shareholder in connection with all matters arising out of, resulting from, contemplated by or related or incident to this Agreement and the Escrow Agreement, if applicable, and (ii) the agent for service of process for each Shareholder, and the Shareholders hereby irrevocably consent to the service of any and all process in any action or proceeding arising out of or relating to this Agreement by the delivery of such process to the Shareholder Representative.  Without limiting the generality of the foregoing, the power of the Shareholder Representative shall include the power to represent each Shareholder with respect to all aspects of this Agreement, which power shall include, without limitation, the power to (i) waive any and all conditions of this Agreement, (ii) amend this Agreement and any agreement executed in connection herewith in any respect, (iii) bring, assert, defend, negotiate or settle any claims or actions pursuant to the terms hereof, (iv) retain legal counsel or accountants and be reimbursed by the Shareholders for all fees, expenses and other charges of such legal counsel or accountants, (v) receive notices or other communications, (vi) deliver any notices, certificates or other documents required and (vii) take all such other action and to do all such other things as the Shareholder Representative deems necessary, appropriate, desirable or advisable with respect to this Agreement or the Escrow Agreement; provided, however, that such authority shall not include the authority to receive any payment to be made to the Shareholders pursuant to this Agreement or the Escrow Agreement, which the parties acknowledge and agree shall be made on a pro rata basis based on the relative ownership by the Shareholders of the Corporation’s Stock immediately prior to the Closing as set forth on Schedule 3.2.  Neff and any Neff Indemnitee shall have the absolute right and authority to rely upon the acts taken or omitted to be taken by the Shareholder Representative on behalf of the Shareholders, and Neff and any Neff Indemnitee shall have no duty to inquire as to the acts and omissions of the Shareholder Representative.  Each Shareholder hereby acknowledges and agrees that (i) all deliveries by Neff (other than any payment made in accordance with the proviso at the end of the immediately preceding sentence) shall be deemed deliveries to the Shareholders, (ii) Neff shall not have any liability with respect to any aspect of the distribution or communication of such deliveries between the Shareholder Representative and any Shareholder and (iii) any disclosure made to the Shareholder Representative by or on behalf of Neff shall be deemed to be a disclosure made to each Shareholder.  In the event such Shareholder Representative refuses to, or is no longer capable of, serving as the Shareholder Representative hereunder, a majority of the Shareholders shall promptly appoint a successor Shareholder Representative who shall be reasonably acceptable to Neff and shall thereafter be a

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successor Shareholder Representative hereunder, and the Shareholder Representative shall serve until such successor is duly appointed and qualified to act hereunder.

(b)           Notwithstanding Section 8.3(a): (i) with the prior written consent of Neff, (A) any Shareholder may take any action with respect to any matter specified in such written consent and arising in connection with, or related to, this Agreement and the Escrow Agreement to which such Shareholder is a party and the transactions contemplated hereby and thereby and (B) the appointment of the Shareholder Representative as agent and attorney-in-fact for the purposes set forth in Section 8.3(a) shall be suspended to the extent (and only to the extent) and with respect to those matters (and only those matters) specified in such written consent; and (ii) the Neff Indemnitees may at any time with respect to any matter direct any instruction or request directly to any Shareholder in its capacity as such, and such instruction or request shall constitute the written consent of Neff with respect to such matter for purposes of Section 8.3(b)(i).  Any written consent delivered pursuant to this Section 8.3(b) may be withdrawn at any time, and upon any such withdrawal the provisions of Section 8.3(a) shall apply fully as though no written consent had been delivered (subject to the Neff’s continued right to deliver a written consent pursuant to this Section 8.3(b), including with respect to any matter that was the subject of a previous written consent).

9.             GENERAL

9.1         Assignment.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, the successors or assigns of Neff and the heirs, legal representatives or assigns of the Shareholders; provided, however, that any such assignment shall be subject to the terms of this Agreement and shall not relieve the assignor of its, his or her responsibilities under this Agreement.

9.2         Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

9.3         Notices.  All notices, requests, demands and other communications hereunder shall be deemed to have been duly given if in writing and either delivered personally, sent by facsimile transmission or by air courier service, or mailed by postage prepaid registered or certified U.S. mail, return receipt requested, to the addresses designated below or such other addresses as may be designated in writing by notice given hereunder, and shall be effective upon personal delivery or facsimile transmission thereof or upon delivery by registered or certified U.S. mail or one business day following deposit with an air courier service:

If to the Shareholders: At the address set forth on Schedule 3.2.

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With a copy to:	Leslie E. Chayo, Esq.
	8383 Wilshire Blvd.
	Suite 510
	Beverly Hills, CA 90211
	Fax: (310) 276-2912
If to Neff:	Juan Carlos Mas
	Chief Executive Officer
	Neff Corp.
	3750 N.W. 87th Avenue
	Suite 400
	Miami, FL 33178
	Fax: (305) 513-4155
and:	Doug Hitchner
	Managing Principal
	Odyssey Investment Partners, LLC
	38th Floor
	New York, NY 10017
	Fax: (212) 351-7920
With a copy to:	Robert F. Kennedy, Esq.
	885 Third Avenue
	Suite 1000
	New York, NY 10022
	Fax: (212) 751-4864

9.4         Attorneys’ Fees.  In the event of any dispute or controversy between Neff and/or the Corporation on the one hand and the Shareholders on the other hand relating to the interpretation of this Agreement or to the transactions contemplated hereby, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees and expenses incurred by the prevailing party.  Such award shall include post-judgment attorney’s fees and costs and attorney fees on appeal or any petition for review therefrom.

9.5         Applicable Law.  The Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws provisions.

9.6         Payment of Fees and Expenses.  Whether or not the transactions herein contemplated shall be consummated, each party hereto will pay its own fees, expenses and disbursements incurred in connection herewith and all other costs and expenses incurred in the performance and compliance with all conditions to be performed hereunder (including, in the case of the Shareholders, any such fees, expenses and disbursements paid or accrued by, or charged to, the Corporation).

9.7         Incorporation by Reference.  All Schedules and Exhibits attached hereto

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are incorporated herein by reference as though fully set forth at each point referred to in this Agreement.

9.8         Captions.  The captions in this Agreement are for convenience only and shall not be considered a part hereof or affect the construction or interpretation of any provisions of this Agreement.

9.9         Number and Gender of Words.  Whenever the singular number is used herein, the same shall include the plural where appropriate, and shall apply to all of such number, and to each of them, jointly and severally, and words of any gender shall include each other gender where appropriate.

9.10       Entire Agreement.  This Agreement (including the Schedules and Exhibits hereto) and the other documents delivered pursuant hereto constitute the entire agreement and understanding between the Corporation, the Shareholders and Neff and supersedes any prior agreement and understanding relating to the subject matter of this Agreement.  This Agreement may be modified or amended only by a written instrument executed by the Corporation, the Shareholders and Neff acting through its officers, thereunto duly authorized by its Board of Directors.

9.11       Waiver.  No waiver by any party hereto at any time of any breach of, or compliance with, any condition or provision of this Agreement to be performed by any other party hereto may be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

9.12       Construction.  The language in all parts of this Agreement must be in all cases construed simply according to its fair meaning and not strictly for or against any party. Wherever reference is made in this Agreement to the “knowledge” of the Shareholders, such term means the actual knowledge of the Shareholders.  Wherever reference is made in this Agreement to the “knowledge” of the Corporation, such term means the actual knowledge of any management employee, officer or director of the Corporation.  Unless expressly set forth otherwise, all references herein to a “day” are deemed to be a reference to a calendar day.  All references to “business day” mean any day of the year other than a Saturday, Sunday or a public or bank holiday in California.  Unless expressly stated otherwise, cross-references herein refer to provisions within this Agreement and are not references to the overall transaction or to any other document.

10.           ARBITRATION AND DISPUTE RESOLUTION.

The parties waive their right to seek remedies in court, including any right to a jury trial, with respect to any dispute concerning determination of the Adjustments to the Purchase Price under Sections 1.3 and 1.4 only.   The parties agree that in the event Neff and the Shareholders are unable to resolve a dispute concerning determination of the Adjustments to the Purchase Price, such dispute shall be resolved exclusively by arbitration to be conducted in Sacramento, California in accordance with the rules of the Judicial Arbitration and Mediation Service (“JAMS”) applying the laws of California.  The parties agree that such arbitration shall be conducted by a retired judge who is experienced in dispute resolution regarding business

41

acquisitions and accounting matters, that discovery shall not be permitted except as required by the rules of JAMS, that the arbitration award shall not include factual findings or conclusions of law, and that no punitive damages shall be awarded.  The parties understand that any party’s right to appeal or to seek modification of any ruling or award of the arbitrator is severely limited.  Any award rendered by the arbitrator shall be final and binding on the parties, and judgment may be entered on it in any court of competent jurisdiction as otherwise provided by law.  The preceding portion of this Section does not apply to any dispute relating to any other provision of the Agreement, or to any other aspect of the transactions contemplated herein, and such other disputes may be resolved by the parties by any means available, including without limitation court action and a jury trial.  The parties expressly do not waive any right to pursue any remedy available with respect to any dispute other than one concerning determination of the Adjustments to the Purchase Price under Sections 1.3 and 1.4, and expressly do not waive the right to trial with respect any other dispute.

[signatures pages follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons thereunto duly authorized as of the date first above written.

THE CORPORATION:	River City Connections, Inc. By: President
	By:
	President
THE SHAREHOLDERS:
	Don Bates
	Don Greene
	Tony Pugh
NEFF:	Neff Rental, Inc.
	By:

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EX-4.11

EXHIBIT 4.11

MANAGEMENT STOCKHOLDERS AGREEMENT

OF

NEFF CORP

This Management Stockholders Agreement (“Agreement”) is entered into as of June 3, 2005, by and among Neff Corp., a Delaware corporation (the “Company”), Iron Merger Partnership, a Delaware limited partnership (“Iron”) and each of the individual purchasers who become parties hereto from time to time in accordance with the terms hereof (each individually, a “Management Stockholder,” and collectively, the “Management Stockholders”).  These parties are sometimes referred to herein individually by name or as a “Party” and collectively as the “Parties.”

RECITALS:

WHEREAS, each of the Management Stockholders is an employee, executive officer, consultant or director of the Company or one or more subsidiaries of the Company;

WHEREAS, the Company has issued (or may hereafter issue) to each Management Stockholder shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), as a result of the exercise by such Management Stockholder of vested options to purchase Common Stock (“Vested Options”), which options were issued (or may hereafter be issued) to such Management Stockholder pursuant to the 2005 Stock Option Plan of Neff Corp. (the “Stock Option Plan”) or any other employee benefit, stock purchase or compensation plan adopted by the board of directors of the Company (the “Board”) prior to, on or after the date hereof;

WHEREAS, the Company, Iron and the Management Stockholders desire to enter into this Agreement to provide for certain matters with respect to the ownership and transfer by the Management Stockholders of all shares of Common Stock now held by or hereafter issued to or acquired by the Management Stockholders whether as a result of the exercise of Vested Options or otherwise (collectively, the “Restricted Shares”); and

WHEREAS, capitalized terms used herein without definition elsewhere in this Agreement are defined in Section 11.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth herein, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

Section 1.           Sales to Third Parties.

(a)           Each Management Stockholder hereby agrees that he or she shall not sell, assign, transfer, convey, pledge or otherwise dispose of (collectively, “Transfer”) any Restricted Shares without the prior written consent of the Company, which consent shall have been authorized by a majority of the members of the Board and which consent may be (i) withheld in

the sole discretion of the Board, or (ii) given subject to reasonable terms and conditions determined by the Board in its sole discretion.  Each Management Stockholder further agrees that in connection with any Transfer consented to by the Company, the Management Stockholder shall, if requested by the Company, deliver to the Company an opinion of counsel in form and substance reasonably satisfactory to the Company and counsel for the Company, to the effect that the Transfer is not in violation of this Agreement, the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state.  Any purported Transfer in violation of the provisions of this Section 1 shall be null and void and shall have no force or effect.

(b)           (i)            If a Management Stockholder (the “Offering Stockholder”) shall have received a bona fide offer or offers from a third party or parties to purchase any Restricted Shares, and the Transfer shall have been approved pursuant to Section 1(a), prior to selling any Restricted Shares to the third party or parties, the Offering Stockholder shall deliver to the Company and Iron a letter (the “Offer Notice”) signed by the Offering Stockholder setting forth: (A) the name of the third party or parties; (B) the prospective purchase price per share of the Restricted Shares; (C) all material terms and conditions contained in the offer of the third party or parties; and (D) the Offering Stockholder’s offer (irrevocable by its terms for 60 days following the later of (x) the date of the receipt of such offer or (y) the six month anniversary of the date such Restricted Shares were first purchased by the Management Stockholder (such 60-day period, the “Offer Period”)) to sell to the Company and Iron all (but not less than all) of the Restricted Shares covered by the offer of the third party or parties, for a purchase price per share and on other terms and conditions not less favorable to the Company and Iron than those contained in the offer of the third party or parties (an “Offer”).

(ii)           Upon receipt of such Offer Notice, the Company shall have an option to purchase any or all of the Restricted Shares described in the Offer Notice at the purchase price and upon the terms and conditions specified in the Offer.  If the Company desires to exercise the option set forth in the preceding sentence, it shall deliver a notice (an “Election Notice”) to the Offering Stockholder and Iron at any time during the first 45 days of the Offer Period (such 45-day period, the “Election Period”), which Election Notice shall specify the number of Restricted Shares subject to the Offer to be acquired.  In the event that the Company delivers an Election Notice for less than all of the Restricted Shares subject to the Offer, such Election Notice shall not be effective unless and until Iron delivers an Election Notice to purchase the remaining Restricted Shares subject to the Offer pursuant to Section 1(b)(iii) below.

(iii)          In the event the Company does not deliver an Election Notice before the end of the Election Period or any Election Notice so delivered does not relate to the purchase of all the Restricted Shares described in the Offer Notice, then Iron (or, in its discretion, any other Principal Stockholder(s) designated by Iron) shall have the option to purchase no less than all of the remaining Restricted Shares subject to the Offer at the purchase price and upon the terms and conditions specified in the Offer by delivering an Election Notice to the Offering Stockholder and the Company within 15 days after the first to occur of (A) the expiration of the Election Period or (B) receipt of an Election Notice from the Company which relates to less than all of the Restricted Shares described in the Offer Notice.  In the event Election Notices are delivered by both the Company and Iron (or any other applicable Principal Stockholder), and, as a result of miscalculation or similar error, the aggregate number of Restricted Shares described in such Election Notices exceeds the aggregate number of Restricted Shares specified in the Offer,

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the number of Restricted Shares to be purchased by Iron (or any other applicable Principal Stockholder) shall be reduced accordingly.

(iv)          If either the Company or Iron (or any other applicable Principal Stockholder) delivers an Election Notice, then it shall be obligated to purchase, and the Offering Stockholder shall be obligated to sell, the Restricted Shares described in such Election Notice at the purchase price per share and on other terms and conditions indicated in the Offer, except that the closing of such purchase and sale shall occur on a closing date selected by the Company or Iron (or any other applicable Principal Stockholder), as applicable; provided, however, that, (A) in the case of a sale to the Company, such closing date shall be not less than 45 days nor more than 90 days following the date of the Offer Notice and (B) in the case of a sale to Iron (or any other applicable Principal Stockholder), such closing date shall be not less than 60 days nor more than 90 days following the date of the Offer Notice.  Unless otherwise mutually agreed, the closing shall be consummated at the principal offices of the Company.

(v)           If neither the Company nor Iron (or any other applicable Principal Stockholder) delivers an Election Notice to the Offering Stockholder within the time periods described in Section 1(b)(ii) and 1(b)(iii), as applicable, or the Election Notices delivered in the aggregate relate to less than all of the Restricted Shares subject to the Offer, then the Offering Stockholder may, during the period beginning on the 61st day following the receipt of the Offer Notice by the Company and Iron and ending on the 90th day following the receipt of the Offer Notice by the Company and Iron, sell to the third party or parties all (but not less than all) of the Restricted Shares covered by the Offer, for the purchase price and on the other terms and conditions contained in the Offer.

(c)           Notwithstanding the foregoing but subject to Section 1(d) below, nothing in this Section 1 shall prevent the Transfer of any Restricted Shares by any Management Stockholder to (i) the Company or any Principal Stockholder; or (ii) (A) any member of a Management Stockholder’s immediate family (the “Permitted Family Members”), (B) trusts for the benefit of Permitted Family Members, and (C) upon a Management Stockholder’s death, the Management Stockholder’s executors, administrators, testamentary trustees, legatees and beneficiaries; provided that, in the case of subclause (A) and (B), the Management Stockholder retains the sole and exclusive right to vote or dispose of any Restricted Shares transferred to the Permitted Family Member (each such person and entity described in clause (ii) a “Permitted Transferee” and collectively, the “Permitted Transferees”).

(d)           In addition to the restrictions set forth elsewhere in this Agreement, any Transfer of Restricted Shares by a Management Stockholder to a transferee shall be permitted only if the transferee shall agree in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument of assumption reasonably satisfactory in form and substance to the Board.  Upon the execution of the instrument of assumption by such transferee, such transferee shall be deemed to be a Management Stockholder for all purposes of this Agreement except that, (A) in the case of a Transfer to a Permitted Transferee, all provisions that relate to termination of employment of a Management Stockholder and the effects thereof shall continue to apply to such Management Stockholder transferor and not to such Permitted Transferee and (B) in the case of a Transfer to a Person other than a Permitted Transferee made

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in compliance with this Agreement, Sections 2 and 3 of this Agreement shall cease to apply following such Transfer.

Section 2.           Company’s Rights to Repurchase Shares.

(a)           (i)            Except as otherwise set forth in Section 2(a)(ii), with respect to all Restricted Shares held by any Management Stockholder and his or her Permitted Transferees, during the period beginning on the date of the Management Stockholder’s Termination of Employment (as defined below) and ending on the nine month anniversary of the later of (A) the date of such Termination of Employment; or (B) the date of the exercise of any Vested Options held by the Management Stockholder as of the date of such Termination of Employment, the Company shall have the option to repurchase Restricted Shares held by the Management Stockholder or his or her Permitted Transferees (“Call Right”); provided, however, that, notwithstanding the foregoing, in no event shall the Company purchase any Restricted Shares pursuant to the Call Right prior to the day immediately following the six month anniversary of the date the Management Stockholder first purchased such Restricted Shares (whether pursuant to the exercise of Vested Options or otherwise).  The Call Right may be exercised more than once, but must be exercised with respect to all (but not less than all) of the Restricted Shares outstanding on the date of any Call Notice (as defined below).  Except as otherwise set forth in Section 2(a)(ii), the repurchase price payable by the Company upon exercise of the Call Right (“Call Repurchase Price”) shall be the Fair Market Value (as defined below) of the Restricted Shares subject to the Call Right on the date of the Call Notice; provided, however, that, notwithstanding the foregoing, in the event of the Management Stockholder’s Termination of Employment for Cause, the Call Repurchase Price shall be the lesser of (A) Fair Market Value of the Restricted Shares subject to the Call Right on the date of the Call Notice or (B) the Effective Date Price.  The Call Right shall be exercised by written notice (“Call Notice”) to the Management Stockholder given in accordance with Section 10(f) of this Agreement on or prior to the last date on which the Call Right may be exercised by the Company.

(ii)           Notwithstanding Section 2(a)(i), in the event of the Management Stockholder’s Termination of Employment on or prior to the eighth anniversary of the date hereof for any reason other than by the Company without Cause, by the Company for Cause, or due to death or Disability, the Company shall be required to exercise its Call Right with respect to all Restricted Shares then held by the Management Stockholder or his or her Permitted Transferees.  Subject to Section 2(c), the Company’s purchase of Restricted Shares pursuant to this Section 2(a)(ii) shall occur on such date as is set forth in the Call Notice, which date shall be as soon as reasonably practicable following the date of the Management Stockholder’s Termination of Employment; provided, however, that, notwithstanding the foregoing, in no event shall the Company purchase any Restricted Shares pursuant to the Call Right prior to the day immediately following the six month anniversary of the date the Management Stockholder first purchased such Restricted Shares (whether pursuant to the exercise of Vested Options or otherwise).  Except as may otherwise be specifically provided in any Employment Agreement or other written agreement entered into between the Company and any Management Stockholder, the Call Repurchase Price with respect to Restricted Shares purchased by the Company pursuant to this Section 2(a)(ii) shall be equal to the lesser of (A) the Fair Market Value of the Restricted Shares subject to the Call Right on the date of the Call Notice or (B) the Effective Date Price.

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(b)           In addition, the Company shall have a Call Right effective immediately prior to any Change in Control to occur following the date hereof; provided, however, that the Call Repurchase Price in such event shall be no less than the per share consideration for the Common Stock paid in connection with such Change in Control.

(c)           Subject to Section 5 below, the repurchase of Restricted Shares pursuant to the exercise of a Call Right shall take place on a date specified by the Company, but in no event following the later of (i) the 60th day following the date of the Call Notice or (ii) the 10th day following the receipt by the Company of all necessary governmental approvals.  On such date, the Management Stockholder and his or her Permitted Transferees shall transfer the Restricted Shares subject to the Call Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, and the Company shall pay to the Management Stockholder the Call Repurchase Price.  The Management Stockholder shall use all commercially reasonable efforts to assist the Company in order to expedite all proceedings described in this Section 2.

Section 3.            Management Stockholders’ Rights to Sell Shares.

(a)           With respect to all Restricted Shares held by any Management Stockholder and his or her Permitted Transferees, during the period beginning on the date of the Management Stockholder’s Termination of Employment by the Company without Cause or due to death or Disability and ending on the nine month anniversary of the later of (i) the date of such Termination of Employment; or (ii) the date of the exercise of any Vested Options held by any Management Stockholder as of the date of such Termination of Employment, the Management Stockholder (or his representative or estate, if applicable) shall have the right to require the Company to repurchase, in a single transaction, no less than all of the Restricted Shares held by the Management Stockholder and his or her Permitted Transferees (“Put Right”); provided, however, that, notwithstanding the foregoing, in no event shall the Company purchase any Restricted Shares pursuant to the Put Right prior to the day immediately following the six month anniversary of the date the Management Stockholder first purchased such Restricted Shares (whether pursuant to the exercise of Vested Options or otherwise).  The repurchase price payable by the Company upon exercise of the Put Right (“Put Repurchase Price”) shall be the Fair Market Value of the Restricted Shares subject to the Put Right on the date of the Put Notice.  The Put Right shall be exercised by written notice (“Put Notice”) to the Company given in accordance with Section 10(f) of this Agreement on or prior to the last date on which the Put Right may be exercised by the Management Stockholder.

(b)           Subject to Section 5 below, the repurchase of Restricted Shares pursuant to the exercise of a Put Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date of the Put Notice or the 10th day following the receipt by the Company of all necessary governmental approvals.  On such date, the Management Stockholder and his or her Permitted Transferees shall transfer the Restricted Shares subject to the Put Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, and the Company shall pay to the Management Stockholder the Put Repurchase Price.

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The Management Stockholder shall use all commercially reasonable efforts to assist the Company in order to expedite all proceedings described in this Section 3.

Section 4.           Involuntary Transfers.

(a)           In the case of any transfer of title or beneficial ownership of Restricted Shares upon default, foreclosure, forfeit, divorce, court order or otherwise, other than by a voluntary decision on the part of a Management Stockholder (each, an “Involuntary Transfer”), the Management Stockholder shall promptly (but in no event later than two days after the Involuntary Transfer) furnish written notice (the “Involuntary Transfer Notice”) to the Company indicating that the Involuntary Transfer has occurred, specifying the name of the person to whom the shares were transferred (the “Involuntary Transferee”), giving a detailed description of the circumstances giving rise to, and stating the legal basis for, the Involuntary Transfer.

(b)           Upon the receipt of the Involuntary Transfer Notice, and for 60 days thereafter, the Company shall have the right to repurchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the Restricted Shares acquired by the Involuntary Transferee for a repurchase price equal to the Fair Market Value of such shares of Common Stock as of the date of the Involuntary Transfer (the “Involuntary Transfer Repurchase Price” and such right, the “Involuntary Transfer Repurchase Right”).  The Involuntary Transfer Repurchase Right shall be exercised by written notice (the “Involuntary Transfer Repurchase Notice”) to the Involuntary Transferee given in accordance with Section 10(f) of this Agreement on or prior to the last date on which the Involuntary Transfer Repurchase Right may be exercised by the Company.

(c)           Subject to Section 5 below, the repurchase of Restricted Shares pursuant to the exercise of the Involuntary Transfer Repurchase Right shall take place on a date specified by the Company, but in no event following the later of the 60th day following the date of the date of the Involuntary Transfer Repurchase Notice or the 10th day following the receipt by the Company of all necessary governmental approvals.  On such date, the Involuntary Transferee shall transfer the Restricted Shares subject to the Involuntary Transfer Repurchase Notice to the Company, free and clear of all liens and encumbrances, by delivering to the Company the certificates representing the Restricted Shares to be purchased, duly endorsed for transfer to the Company or accompanied by a stock power duly executed in blank, and the Company shall pay to the Involuntary Transferee the Involuntary Transfer Repurchase Price.  The Involuntary Transferee shall use all commercially reasonable efforts to assist the Company in order to expedite all proceedings described in this Section 4.  If the Involuntary Transferee does transfer the Restricted Shares to the Company as required, the Company will cancel such Restricted Shares and deposit the funds in a non-interest bearing account and make payment upon delivery.

Section 5.           Repurchase Disability.

(a)           Notwithstanding anything to the contrary herein:

(i)            Except as otherwise provided by Section 5(c), the Company shall not be permitted to purchase any Restricted Shares held by any Management Stockholder or

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Involuntary Transferee upon exercise of the Call Right, the Put Right or the Involuntary Transfer Repurchase Right if the Board determines that:

(ii)           The purchase of Restricted Shares would render the Company or its subsidiaries unable to meet their obligations in the ordinary course of business taking into account any pending or proposed transactions, capital expenditures or other budgeted cash outlays by the Company, including, without limitation, any proposed acquisition of any other entity by the Company or any of its subsidiaries;

(iii)          The Company is prohibited from purchasing the Restricted Shares by applicable law restricting the purchase by a corporation of its own shares; or

(iv)          The purchase of Restricted Shares would constitute a breach of, default, or event of default under, or is otherwise prohibited by, the terms of any loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party (the “Financing Documents”) or the Company is not able to obtain the requisite consent of any of its senior lenders to the purchase of the Restricted Shares.

The events described in (i) through (iii) above each constitute a “Repurchase Disability.”

(b)           Except as otherwise provided by Section 5(c), in the event of a Repurchase Disability, the Company shall notify in writing the Management Stockholder or Involuntary Transferee who exercised the Put Right or with respect to whom the Call Right or the Involuntary Transfer Repurchase Right has been exercised (a “Disability Notice”).  The Disability Notice shall specify the nature of the Repurchase Disability.  The Company shall thereafter repurchase the Restricted Shares described in the Call Notice or Involuntary Transfer Repurchase Notice as soon as reasonably practicable after all Repurchase Disabilities cease to exist (or the Company may elect, but shall have no obligation, to cause its nominee to repurchase the Restricted Shares while any Repurchase Disabilities continue to exist).  In the event the Company suspends its obligations to repurchase the Restricted Shares pursuant to a Repurchase Disability, (i) the Company shall provide written notice to each applicable Management Stockholder or Involuntary Transferee as soon as practicable after all Repurchase Disabilities cease to exist (the “Reinstatement Notice”); (ii) the Fair Market Value of the Restricted Shares subject to the Call Notice, the Put Notice or Involuntary Transfer Repurchase Notice shall be determined as of the date the Reinstatement Notice is delivered to the Management Stockholder or Involuntary Transferee, which Fair Market Value shall be used to determine the Repurchase Price or Involuntary Transfer Repurchase Price in the manner described above; and (iii) the repurchase shall occur on a date specified by the Company within 10 days following the determination of the Fair Market Value of the Restricted Shares to be repurchased as provided in clause (ii) above.

(c)           Notwithstanding Section 5(a) and Section 5(c), in the event of a Repurchase Disability, then, the Company shall be required to purchase the Restricted Shares subject to the Call Right, Put Right or Involuntary Transfer Repurchase Right, as applicable, through the issuance of  a promissory note (in lieu of cash consideration) to such Management Stockholder in the amount of the Call Repurchase Price, Put Repurchase Price or Involuntary Transfer Purchase Price, as applicable; provided, however, that the terms of such promissory

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note shall be acceptable to the Company’s senior lenders and shall not result in a breach or violation of any of the Financing Documents; and provided, further, that in the event of a Repurchase Disability in connection with the Management Stockholder’s exercise of a Put Right, the Management Stockholder may elect to rescind his or her exercise of the Put Right.  The promissory note shall (i) bear simple interest at the prime rate as published in the Wall Street Journal on the date such payment is due and owing from such date to the date such payment is made and (ii) have such other reasonable terms and conditions as may be determined by the Company.  All payments of interest accrued under the promissory note shall be paid only at the date of payment by the Company of the principal amount of such promissory note.

Section 6.           Bring-Along Rights.

(a)           If a Principal Stockholder at any time, or from time to time, in one transaction or a series of related transactions, proposes to Transfer shares of Common Stock (or rights to acquire Common Stock) to one or more Persons (a “Third Party Purchaser”), then such Principal Stockholder shall have the right (a “Bring-Along Right”), but not the obligation, to require each Management Stockholder to tender for purchase to the Third Party Purchaser, on the same terms and conditions as apply to the Principal Stockholder, a number of Restricted Shares and Vested Options (including any options that vest as a result of the consummation of the Transfer to the Third Party Purchaser) that, in the aggregate, equal the lesser of (A) the number derived by multiplying (1) the total number of Restricted Shares owned by the Management Stockholder (including Restricted Shares issuable in respect of all Vested Options held by the Management Stockholder whether or not exercised and including any options that vest as a result of the consummation of the Transfer to the Third Party Purchaser); by (2) a fraction, the numerator of which is the total number of shares of Common Stock to be sold by the Principal Stockholder in connection with the transaction or series of related transactions and the denominator of which is the total number of the then outstanding shares of Common Stock (including shares issuable upon the exercise of rights to acquire Common Stock) held by the Principal Stockholder; or (B) the number of shares as the Principal Stockholder shall designate in the Bring-Along Notice (as defined below).

(b)           If a Principal Stockholder elects to exercise their Bring-Along Right under this Section 6 with respect to the Restricted Shares held by the Management Stockholders, such Principal Stockholder shall notify each Management Stockholder in writing (collectively, the “Bring-Along Notices”).  Each Bring-Along Notice shall set forth: (i) the proposed amount and form of consideration and terms and conditions of payment offered by the Third Party Purchaser(s) and a summary of any other material terms pertaining to the Transfer (“Third Party Terms”); and (ii) the number of Restricted Shares and Vested Options that the Principal Stockholder elects each Management Stockholder to sell in the Transfer.  The Bring-Along Notices shall be given at least five days before the closing of the proposed Transfer.

(c)           Upon the giving of a Bring-Along Notice, each Management Stockholder shall be obligated to sell the number of Restricted Shares and Vested Options set forth in each Management Stockholder’s Bring-Along Notice on the Third Party Terms; provided, that, if the exercise price of such Vested Option is less than the value of the per share consideration offered by the Third Party Purchaser(s), the Principal Stockholder may require a Management

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Stockholder to exercise such Vested Options, in whole or in part, prior to or simultaneously with the closing of the transaction or transactions described in Section 6(a).

(d)           At the closing of the Transfer to any Third Party Purchaser(s) pursuant to this Section 6, the Third Party Purchaser(s) shall remit to the Management Stockholder the consideration for the total sales price of the Common Stock and unexercised Vested Options held by the Management Stockholder sold pursuant hereto minus any consideration to be escrowed or otherwise held back in accordance with the Third Party Terms, and minus the aggregate exercise price of any unexercised Vested Options being Transferred by the Management Stockholder to the Third Party Purchaser(s), against delivery by the Management Stockholder of certificates for Common Stock, duly endorsed for Transfer or with duly executed stock powers and, as applicable, an instrument evidencing the transfer or the cancellation of the unexercised Vested Options subject to the Bring-Along Right reasonably acceptable to the Company, and the compliance by the Management Stockholder with any other conditions to closing generally applicable to the Principal Stockholder and all other holders of Common Stock selling shares in the transaction.

Section 7.           Tag-Along Rights.

(a)           If a Principal Stockholder at any time propose to Transfer shares of Common Stock (or rights to acquire Common Stock) to a Third Party Purchaser (other than a Principal Stockholder), in a single Transfer or a series of related Transfers constituting a Change in Control, then each Management Stockholder shall have the right (the “Tag-Along Right”) to require that the proposed Third Party Purchaser purchase from such Management Stockholder, on the same terms and conditions as apply to the Principal Stockholder, up to the number of Restricted Shares (including any Restricted Shares issuable upon the exercise of Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) equal to the number derived by multiplying (x) the total number of shares of Common Stock that the proposed Third Party Purchaser has agreed or committed to purchase, by (y) a fraction, the numerator of which is the total number of Restricted Shares (including any Restricted Shares issuable upon the exercise of Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) owned by the Management Stockholder, and the denominator of which is the aggregate number of shares of Common Stock owned by the Principal Stockholder (including shares issuable upon the exercise of rights to acquire Common Stock), the Management Stockholder and all other holders of Common Stock who have exercised a Tag-Along Right similar to the rights granted to the Management Stockholder in this Section 7 (including any Restricted Shares issuable upon the exercise of all Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)).  The intent of this computation is to accord to the Management Stockholder the right to sell the same percentage of his or her direct and indirect holdings of Common Stock as the Principal Stockholder is entitled to sell in such transaction.

(b)           A Principal Stockholder shall notify each Management Stockholder in writing in the event such Principal Stockholder proposes to make a Transfer or series of Transfers giving rise to a Tag-Along Right at least seven (7) business days prior to the date on which the Principal Stockholder expects to consummate such Transfer (the “Sale Notice”) which notice shall specify the number of shares of Common Stock which the Third Party Purchaser

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intends to purchase in such Transfer.  The Tag-Along Right may be exercised by any Management Stockholder by delivery of a written notice to the Principal Stockholder proposing to sell Restricted Shares (the “Tag-Along Notice”) within five business days following receipt of the Sale Notice from the Principal Stockholder.  The Tag-Along Notice shall state the number of Restricted Shares (including any Restricted Shares issuable upon the exercise of Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) that the Management Stockholder proposes to include in such Transfer to the proposed Third Party Purchaser (not to exceed the number as determined above); provided that, in the case of any Restricted Shares issuable upon the exercise of Vested Options, the Principal Stockholder may require a Management Stockholder to exercise such Vested Options, in whole or in part, prior to or simultaneously with the closing of the Transfer(s) described in Section 7(a).  In the event that the proposed Third Party Purchaser does not purchase the specified number of Restricted Shares (including any Restricted Shares issuable upon the exercise of Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) from the Management Stockholder on the same terms and conditions as specified in the Sale Notice, then the Principal Stockholder shall not be permitted to sell any shares of Common Stock to the proposed Third Party Purchaser unless the Principal Stockholder purchases from the Management Stockholder such specified number of Restricted Shares (including any Restricted Shares issuable upon the exercise of Vested Options (including options that vest as a result of the consummation of the Transfer to the Third Party Purchaser)) on the same terms and conditions as specified in such Sale Notice.

(c)           At the closing of the Transfer to any Third Party Purchaser pursuant to this Section 7, the Third Party Purchaser shall remit to each Management Stockholder who exercised his or her Tag-Along Right the consideration for the total sales price of the Common Stock and unexercised Vested Options held by the Management Stockholder sold pursuant hereto minus any such consideration to be escrowed or otherwise held back in accordance with the Third Party Terms, and minus the aggregate exercise price of any unexercised Vested Options being Transferred by the Management Stockholder to the Third Party Purchaser, against delivery by the Management Stockholder of certificates for Common Stock, duly endorsed for Transfer or with duly executed stock powers and an instrument evidencing the transfer or the cancellation of the Vested Options subject to the Tag-Along Right reasonably acceptable to the Company, and the compliance by the Management Stockholder with any other conditions to closing generally applicable to the Principal Stockholder and all other holders of Common Stock selling shares in the transaction.

Section 8.           Cooperation.

(a)           In the event of (i) the exercise of a Bring-Along Right pursuant to Section 6 or (ii) a Change in Control triggering a Tag-Along Right pursuant to Section 7, each Management Stockholder shall consent to and raise no objections against the transaction, and if the transaction is structured as a sale of stock, each Management Stockholder shall take all actions that the Board reasonably deems necessary or desirable in connection with the consummation of the transaction.  Without limiting the generality of the foregoing, each Management Stockholder agrees to (A) consent to and raise no objections against the transaction; (B) execute any Common Stock purchase agreement, merger agreement or other agreement entered into with the Third Party Purchaser with respect to the transaction setting

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forth the Third Party Terms and any ancillary agreement with respect thereto; (C) vote the Common Stock held by the Management Stockholder in favor of the transaction; and (D) refrain from the exercise of dissenters’ appraisal rights with respect to the transaction.

(b)           If the Company or the holders of the Company’s securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then in effect) promulgated under the Securities Act, may be available with respect to the negotiation or transaction (including a merger, consolidation, or other reorganization), each Management Stockholder shall, if requested by the Company, appoint a purchaser representative (as defined in Rule 501 of the Securities Act) reasonably acceptable to the Company.  If the purchaser representative is designated by the Company, the Company shall pay the fees of the purchaser representative, but if any Management Stockholder appoints another purchaser representative, the Management Stockholder shall be responsible for the fees of the purchaser representative so appointed.

(c)           Each Management Stockholder shall bear its pro-rata share of the costs of any transaction in which it sells Restricted Shares and/or Vested Options (based upon the net proceeds received by such Management Stockholder in such transaction) to the extent such costs are incurred for the benefit of all holders of Common Stock and Vested Options and are not otherwise paid by the Company or the acquiring party.

Section 9.               Termination.  This Agreement shall terminate on the first to occur of:

(a)           The date the Company consummates an underwritten public offering of Common Stock by the Company pursuant to an effective registration statement filed by the Company with the United States Securities and Exchange Commission (other than on Forms S-4 or S-8 or successors to such forms) under the Securities Act;

(b)           The complete liquidation of the Company or an agreement for the sale, lease or other disposition by the Company of all or substantially all of the Company’s assets; or

(c)           The execution of a resolution of the Board terminating this Agreement.

Section 10.             Miscellaneous.

(a)           Legends.  Each certificate representing the Restricted Shares shall bear the following legends:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND SAID LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.”

“THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN A STOCKHOLDERS

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AGREEMENT BETWEEN THE ISSUER AND THE INITIAL HOLDER HEREOF INITIALLY DATED AS OF NOVEMBER 20, 2003.  A COPY OF SUCH AGREEMENT SHALL BE FURNISHED WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

(b)           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective legal representatives, heirs, legatees, successors and assigns and shall also apply to any Restricted Shares acquired by any Management Stockholder after the date hereof.

(c)           Specific Performance.  Each Party, in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, shall be entitled to specific performance of the Party’s rights under this Agreement.  Each Party agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by the Party of the provisions of this Agreement and each Party hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

(d)           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the state of Delaware.

(e)           Interpretation.  The headings of the Sections contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not affect the meaning or interpretation of this Agreement.

(f)            Notices.  All notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed to have been duly given and received when delivered by overnight courier or hand delivery, when sent by telecopy, or five days after mailing if sent by registered or certified mail (return receipt requested) postage prepaid, to the Parties at the following addresses (or at such other address for any Party as shall be specified by like notices, provided that notices of a change of address shall be effective only upon receipt thereof).

(i)            If to the Company at:

Neff Corp.

c/o Odyssey Investment Partners, LLC

24550 Oxnard Street, Suite 570
Woodland Hills, CA  91367

Fax: (818) 737-1101           

Attention: William F. Hopkins

with copies to Iron at the address set forth below and:

Latham & Watkins LLP

885 Third Avenue

New York, New York
Fax:  (212) 751-4864

Attention: Bradd L. Williamson

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(ii)           If to Iron at:

Iron Merger Partnership

c/o Odyssey Investment Partners, LLC
21550 Oxnard Street, Suite 570
Woodland Hills, CA  91367

Fax: (818) 737-1101

Attention: William F. Hopkins

with a copy to Latham & Watkins LLP, at the address set forth above.

(iii)          If to a Management Stockholder, to the address set forth on the Management Stockholder’s signature page hereto.

(g)           Recapitalization, Exchange, Etc. Affecting the Company’s Stock.  The Company may elect to effect, and nothing in this Agreement shall prevent the Company from effecting, any recapitalization, corporate reorganization, “corporate inversion” involving the creation of one or more holding companies and/or holding company subsidiaries, or similar transaction.  The provisions of this Agreement shall apply, to the full extent set forth herein, with respect to any and all shares of Common Stock and all of the shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets, business combination or otherwise) that may be issued in respect of, in exchange for, or in substitution of such Common Stock and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations, and the like occurring after the date hereof.

(h)           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same agreement.

(i)            Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal, or unenforceable in any respect for any reason, the validity, legality, and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby.

(j)            Amendment.  This Agreement may be amended by resolution of the Board; provided that the amendment has been approved by the Principal Stockholders; and, provided, further, that any such amendment that would materially adversely affect the rights of any Management Stockholder shall not to that extent be effective without the written consent of  Management Stockholders who then hold 50% or more of the Restricted Shares (including

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Restricted Shares issuable upon the exercise of rights to acquire Common Stock).  At any time hereafter, additional Management Stockholders may be made parties hereto by executing a signature page in the form attached as Exhibit A hereto, which signature page shall be countersigned by the Company and shall be attached to this Agreement and become a part hereof without any further action of any other Party hereto.

(k)           Tax Withholding.  The Company shall be entitled to require payment in cash or deduction from other compensation payable to any Management Stockholder of any sums required by federal, state, or local tax law to be withheld with respect to the issuance, vesting, exercise, repurchase, or cancellation of any Restricted Share or any option to purchase Restricted Shares.

(l)            No Employment Rights.  Nothing contained in this Agreement (i) obligates the Company or any Affiliate of the Company to employ any Management Stockholder in any capacity whatsoever; or (ii) prohibits or restricts the Company or any Affiliate of the Company from terminating the employment, if any, of any Management Stockholder at any time or for any reason whatsoever and each Management Stockholder hereby acknowledges and agrees that, except as may otherwise be set forth in any written agreement between the Company and such Management Stockholder, neither the Company nor any other person has made any representations or promises whatsoever to such Management Stockholder concerning his or her employment or continued employment by the Company or any Affiliate of the Company.

(m)          Offsets.  The Company shall be permitted to offset and reduce from any amounts payable to a Management Stockholder the amount of any indebtedness or other obligation or payment owing to the Company by the Management Stockholder .

(n)           Entire Agreement.  This writing constitutes the entire agreement of the Parties with respect to the subject matter hereof.

(o)           Actions to Effectuate Agreement.  Each Management Stockholder agrees to take all actions within his or her power (including voting Restricted Shares) to give effect to the terms of this Agreement.  In the event of any inconsistency between this Agreement, on the one hand, and the Certificate of Incorporation or Bylaws of the Company, on the other hand, the provisions of this Agreement shall control, and each Management Stockholder shall vote his or Restricted Shares in such manner as to effectuate any and all amendments to the Certificate of Incorporation or Bylaws of the Company that may be necessary in order to bring the Certificate of Incorporation and Bylaws of the Company into conformity with the provisions of this Agreement.  The vote of any Management Stockholder in violation of the provisions of this Agreement shall be void and shall be ignored by the Company.  In connection therewith, each Management Stockholder hereby grants an irrevocable proxy of perpetual duration with full power of substitution to Odyssey for purposes of voting all Restricted Shares subject to this Agreement at any meeting of stockholders or in any action by written consent of stockholders in any manner necessary to give effect to the provisions of this Agreement, but not to amend this Agreement, it being acknowledged that such proxy is coupled with an interest under this Agreement.

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(p)           Lock-up Period.  If the Company proposes to register shares of any class of Restricted Shares under the Securities Act pursuant to a primary Underwritten Offering, each Management Stockholder hereby agrees that, if so requested by any representative of the underwriters (the “Managing Underwriter”), such Management Stockholder shall not Transfer (except for Transfers pursuant to Sections 6 and 7) any Restricted Shares of the class to be registered for such period as shall be determined by the Managing Underwriter, which period shall not last more than 180 days following the consummation of an Initial Public Offering (or 90 days following the consummation of any other Underwritten Offering that registers Restricted Shares); provided, that the Transfer restrictions described in this Section 10(p) shall only apply to the extent that the Principal Stockholders are subject to similar Transfer restrictions in connection with such offering, in each case to the extent such Principal Stockholder holds Restricted Shares to be registered as of the date of the consummation of such offering.

Section 11.             Defined Terms.

As used in this Agreement, the following terms shall have the meanings ascribed to them below:

(a)           “Affiliate” shall mean, with respect to any individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature (each, a “Person”), any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act; provided, that, in no event shall the Company, any of its subsidiaries or any Management Stockholder be considered an “Affiliate” of the Principal Stockholders.

(b)           “Cause” shall mean the Company or an Affiliate having “Cause” to terminate the Management Stockholder’s employment, as defined in any employment agreement between the Management Stockholder and the Company or an Affiliate; provided, that in the absence of an employment agreement containing such a definition, the Company or an Affiliate shall have “Cause” to terminate the Management Stockholder’s employment upon: (i) a determination by the Board that the Management Stockholder failed to substantially perform the Management Stockholder’s duties (other than any such failure resulting from the Management Stockholder’s Disability) which is not remedied within 30 days after receipt of written notice from the Company specifying such failure; (ii) the Management Stockholder’s conviction, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude; (iii) the Management Stockholder’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s premises or while performing the Management Stockholder’s duties and responsibilities; or (iv) the Management Stockholder’s commission of an act of fraud, embezzlement, misappropriation, willful misconduct, or breach of fiduciary duty against the Company.

(c)           “Change in Control” shall mean a change in beneficial ownership or control of the Company effected through a transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as

15

amended (the “Exchange Act”)) (other than the Company, Odyssey, or any of their respective Affiliates, or any employee benefit plan maintained by the Company or any of its subsidiaries), directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition.

(d)           “Disability” shall mean “Disability” as defined in any employment agreement between the Management Stockholder and the Company or an Affiliate; provided, that in the absence of an employment agreement containing such a definition, “Disability” shall mean the Management Stockholder’s inability to perform, with or without reasonable accommodation, the essential functions of the Management Stockholder’s position for a total of three months during any six month period as a result of incapacity due to mental or physical illness as determined by a physician selected by the Company or its insurers and acceptable to the Management Stockholder or the Management Stockholder’s legal representative, such agreement as to acceptability not to be unreasonably withheld or delayed.

(e)           The “Effective Date Price” of Restricted Shares shall be $8.214 per share (as shall be equitably adjusted to reflect any change in capitalization or extraordinary corporate transaction of the Company following the Effective Date).

(f)            The “Fair Market Value” of Restricted Shares, as of any date of determination, shall be determined by the Board as follows:

(i)            If the Common Stock is listed on one or more National Securities Exchanges (within the meaning of the Exchange Act), each share of Common Stock to be repurchased shall be valued at the average of the closing prices of a share of Common Stock on the principal exchange on which the shares are then trading for the period of ten consecutive trading days ending on the most recent trading day preceding such date of determination;

(ii)           If the Common Stock is not traded on a National Securities Exchange but is quoted on Nasdaq or a successor quotation system and the Common Stock is listed as a National Market Issue under the NASD National Market System, each share of Common Stock to be repurchased shall be valued at the average of the mean between the closing representative bid and asked prices for a share of Common Stock for the period of ten consecutive trading days ending on the most recent trading day preceding such date of determination as reported by Nasdaq or such successor quotation system; or

(iii)          If the Common Stock is not publicly traded on a National Securities Exchange and is not quoted on Nasdaq or a successor quotation system, the Fair Market Value of the Common Stock to be repurchased shall be determined in good faith by the Board in its sole discretion, with reference to the most recent valuation of the Common Stock  requested by the Board and performed by an independent valuation consultant or appraiser of nationally recognized standing (which may be the Company’s independent accounting firm) selected by the Board in consultation with the Company’s Chief Executive Officer and with such adjustment to the appraisal by said independent valuation consultant or appraiser to the date of the exercise of the Call Right, Put Right or Involuntary Transfer Repurchase Right, as applicable, as the Board, acting in good faith, in its sole discretion deems appropriate.

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(g)           “Initial Public Offering” shall mean the first underwritten public offering of Common Stock pursuant to an effective registration statement filed by the Company with the Commission (other than on Forms S-4 or S-8 or successors to such forms) under the Securities Act.

(h)           “Principal Stockholders” shall mean (i) Iron, (ii) any general or limited partner or member of Iron (an “Iron Partner”), (iii) any corporation, partnership, limited liability company or other entity that is an Affiliate of Iron or Iron Partner (including without limitation any applicable coinvest vehicle established following the date hereof) (collectively, the “Iron Affiliates”), (iv) any managing director, member, general partner, director, limited partner, officer or employee of (A) Iron, (B) any Iron Partner or (C) any Iron Affiliate, or the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any of the foregoing Persons referred to in this clause (iv) (collectively, the “Iron Associates”), (v) any trust, the beneficiaries of which, or corporation, limited liability company or partnership, the stockholders, members or general or limited partners of which, include only Iron Stockholders, Iron Partners, Odyssey Affiliates, Iron Associates, their spouses or their lineal descendants; and (vi) a voting trustee for one or more Iron Stockholders, Iron Affiliates, Iron Partners or Iron Associates; provided that in no event shall the Company or any subsidiary be considered an Iron Partner, Iron Affiliate, or Iron Associate and provided, further, that an underwriter or other similar intermediary engaged by the Company in an offering of the Company’s debt or equity securities or other instruments shall not be deemed a Principal Stockholder with respect to such engagement.

(i)            “Termination of Employment” shall mean the time when the employee-employer relationship between a Management Stockholder and the Company or one of its subsidiaries is terminated for any reason, with or without Cause, including, but not by way of limitation, a termination by resignation, discharge, Disability, death or retirement, but excluding a termination where there is a simultaneous reemployment by the Company or one of its subsidiaries.  The committee appointed to administer the Stock Option Plan (the “Committee”) or the Board shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, all questions of whether a particular leave of absence constitutes a Termination of Employment.

(j)            “Underwritten Offering” means a sale of shares of Common Stock to an underwriter for reoffering to the public pursuant to an effective registration statement filed by the Company with the Commission (other than on Form S-4 or S-8 or successors to each form) under the Securities Act.

[signature pages follow]

17

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first written above.

NEFF CORP.
By:
	Name:
	Title:
IRON MERGER PARTNERSHIP
By:		ODYSSEY INVESTMENT PARTNERS
FUND III, LP, Partner
By:	ODYSSEY INVESTMENT PARTNERS, LLC, its manager
By:
	Name:
	Title:
By:	ODYSSEY INVESTMENT PARTNERS, LLC, Partner
By:
	Name:
	Title:

Each Management Stockholder has agreed to be bound by the terms of this Agreement by execution and delivery of the signature page set forth as Exhibit A hereto.

EXHIBIT A

SIGNATURE PAGE
TO THE
MANAGEMENT STOCKHOLDERS AGREEMENT
OF
NEFF CORP.

By execution of this signature page,                             hereby agrees to become a party to, be bound by the obligations of, and receive the benefits of, that certain Management Stockholders Agreement of Neff Corp., dated as of June 3, 2005, by and among Neff Corp., Iron Merger Partnership and certain other parties named therein, as amended from time to time thereafter.

		[Name of Management Stockholder]
		Residence Address:
Accepted:
NEFF CORP.
By:
	Name:
	Title:
IRON MERGER PARTNERSHIP
By: ODYSSEY INVESTMENT PARTNERS FUND III, LP, Partner
By: ODYSSEY INVESTMENT PARTNERS, LLC, its manager
By:
	Name:
	Title:
By ODYSSEY INVESTMENT PARTNERS, LLC, Partner
By:
	Name:
	Title:

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Juan Carlos Mas, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2006, of Neff Rental LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accounting principles; and

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 26, 2007

/s/ JUAN CARLOS MAS

Juan Carlos Mas

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Mark Irion, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended December 31, 2006,  of Neff Rental LLC;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accounting principles; and

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  March 26, 2007

/s/ MARK IRION

Mark Irion

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. §1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In accordance with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Juan Carlos Mas, President and Chief Executive Officer of Neff Rental LLC (the “Registrant”) and Mark Irion, Chief Financial Officer of the Registrant, each hereby certifies that, to the best of his knowledge:

1.the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2006, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;

2.The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Registrant at the end of the period covered by the Periodic Report and results of operations of the Registrant for the periods covered by the Periodic Report.

	By:	/s/ JUAN CARLOS MAS
		Juan Carlos Mas
		Chief Executive Officer
	By:	/s/ MARK IRION
		Mark Irion
		Chief Financial Officer
Date: March 26, 2007