EXHIBIT 10(A)
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TERM LOAN AGREEMENT
dated as of June 9, 2000
among
UNITED RENTALS, INC.,
UNITED RENTALS (NORTH AMERICA), INC.,
VARIOUS FINANCIAL INSTITUTIONS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent,
and
BANK OF AMERICA, N.A.,
as Administrative Agent
GOLDMAN SACHS CREDIT PARTNERS L.P.,
Lead Arranger and Book Manager
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Page
SECTION 1 DEFINITIONS, ETC.................................................... 1
1.1 Definitions......................................................... 1
1.2 Other Interpretive Provisions....................................... 16
SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION PROCEDURES....... 17
2.1 Loans............................................................... 17
2.1.1 Initial Loans.............................................. 17
2.1.2 Additional Loans........................................... 17
2.1.3 Tranches of Loans.......................................... 17
2.2 Borrowing Procedure................................................. 17
2.3 Conversion and Continuation Procedures.............................. 18
2.4 Pro Rata Treatment.................................................. 19
SECTION 3 NOTES EVIDENCING LOANS.............................................. 19
SECTION 4 INTEREST............................................................ 19
4.1 Interest Rates...................................................... 19
4.2 Interest Payment Dates.............................................. 19
4.3 Setting and Notice of Certain Rates................................. 19
4.4 Computation of Interest............................................. 20
SECTION 5 FEES................................................................ 20
5.1 Closing Fees......................................................... 20
5.2 Arrangement and Agent's Fees........................................ 21
SECTION 6 PREPAYMENTS......................................................... 21
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES..................... 21
7.1 Making of Payments.................................................. 21
7.2 Due Date Extension.................................................. 22
7.3 Setoff.............................................................. 22
7.4 Proration of Payments............................................... 22
7.5 Taxes............................................................... 22
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES......... 23
8.1 Increased Costs..................................................... 23
8.2 Basis for Determining Interest Rate Inadequate or Unfair............ 25
8.3 Changes in Law Rendering Eurodollar Lending Unlawful................ 25
8.4 Funding Losses...................................................... 26
8.5 Right of Lenders to Fund through Other Offices...................... 26
8.6 Discretion of Lenders as to Manner of Funding....................... 26
8.7 Mitigation of Circumstances; Replacement of Affected Lender......... 26
8.8 Conclusiveness of Statements; Survival of Provisions................ 27
SECTION 9 WARRANTIES.......................................................... 27
9.1 Organization, etc................................................... 27
9.2 Authorization; No Conflict.......................................... 27
9.3 Validity and Binding Nature......................................... 28
9.4 Information......................................................... 28
9.5 No Material Adverse Change.......................................... 28
9.6 Litigation and Contingent Liabilities............................... 29
9.7 Ownership of Properties; Liens...................................... 29
9.8 Subsidiaries........................................................ 29
9.9 Pension and Welfare Plans........................................... 29
9.10 Investment Company Act............................................. 30
9.11 Public Utility Holding Company Act................................. 30
9.12 Regulation U....................................................... 30
9.13 Taxes.............................................................. 30
9.14 Solvency, etc...................................................... 30
9.15 Environmental Matters.............................................. 30
9.16 Year 2000 Problem.................................................. 30
9.17 Senior Debt........................................................ 31
SECTION 10 COVENANTS......................................................... 31
10.1 Reports, Certificates and Other Information........................ 31
10.1.1 Audit Report.............................................. 31
10.1.2 Quarterly Reports......................................... 31
10.1.3 Compliance Certificates................................... 31
10.1.4 Reports to SEC and to Shareholders........................ 32
10.1.5 Notice of Default, Litigation and ERISA Matters........... 32
10.1.6 Subsidiaries.............................................. 33
10.1.7 Management Reports........................................ 33
10.1.8 Projections............................................... 33
10.1.9 Other Information......................................... 33
10.2 Books, Records and Inspections..................................... 33
10.3 Insurance.......................................................... 33
10.4 Compliance with Laws; Payment of Taxes and Liabilities............. 34
10.5 Maintenance of Existence, etc...................................... 34
10.6 Financial Covenants................................................ 34
10.6.1 Maximum Leverage.......................................... 34
10.6.2 Minimum Interest Coverage Ratio........................... 34
10.6.3 Funded Debt to Cash Flow Ratio............................ 34
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10.6.4 Senior Debt to Tangible Assets............................ 34
10.6.5 Senior Debt to Cash Flow Ratio............................ 35
10.7 Limitations on Debt................................................ 35
10.8 Liens.............................................................. 36
10.9 Asset Sales........................................................ 37
10.10 Restricted Payments............................................... 37
10.11 Mergers, Consolidations, Amalgamations, Sales..................... 38
10.12 Modification of Certain Documents................................. 39
10.13 Use of Proceeds................................................... 39
10.14 Further Assurances................................................ 39
10.15 Transactions with Affiliates...................................... 40
10.16 Employee Benefit Plans............................................ 40
10.17 Environmental Laws................................................ 40
10.18 Unconditional Purchase Obligations................................ 40
10.19 Inconsistent Agreements........................................... 40
10.20 Business Activities............................................... 41
10.21 Advances and Other Investments.................................... 41
10.22 Location of Assets................................................ 42
10.23 QuIPS Documents................................................... 42
10.24 Limitations on Securitization Transactions........................ 42
SECTION 11 CONDITIONS OF LENDING.............................................. 42
11.1 Initial Loans...................................................... 42
11.1.1 Notes..................................................... 42
11.1.2 Resolutions............................................... 42
11.1.3 Consents, etc............................................. 43
11.1.4 Incumbency and Signature Certificates..................... 43
11.1.5 Opinions of Counsel for the Company....................... 43
11.1.6 Confirmation.............................................. 43
11.1.7 Confirmatory Certificate.................................. 43
11.1.8 Other..................................................... 43
11.2 Additional Loans................................................... 43
11.2.1 Notes..................................................... 44
11.2.2 Confirmatory Certificate.................................. 44
11.2.3 Other..................................................... 44
11.3 All Loans.......................................................... 44
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT................................. 44
12.1 Events of Default.................................................. 44
12.1.1 Non-Payment of the Loans, etc............................. 44
12.1.2 Non-Payment of Other Debt................................. 44
12.1.3 Other Material Obligations................................ 45
12.1.4 Bankruptcy, Insolvency, etc............................... 45
12.1.5 Non-Compliance with Provisions of This Agreement.......... 45
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12.1.6 Warranties................................................ 45
12.1.7 Pension Plans............................................. 45
12.1.8 Judgments................................................. 46
12.1.9 Invalidity of U.S. Guaranty, etc.......................... 46
12.1.10 Invalidity of Collateral Documents, etc................... 46
12.1.11 Change in Control......................................... 46
12.1.12 Invalidity of Parent Guaranty, etc........................ 46
12.2 Effect of Event of Default......................................... 47
SECTION 13 THE AGENT.......................................................... 47
13.1 Appointment and Authorization...................................... 47
13.2 Delegation of Duties............................................... 47
13.3 Liability of Agent................................................. 47
13.4 Reliance by Agents................................................. 48
13.5 Notice of Default.................................................. 48
13.6 Credit Decision.................................................... 48
13.7 Indemnification.................................................... 49
13.8 Agent in Individual Capacity....................................... 50
13.9 Successor Agent; Assignment of Agency.............................. 50
13.10 Withholding Tax.................................................... 51
SECTION 14 GENERAL............................................................ 53
14.1 Waiver; Amendments................................................. 53
14.2 Confirmations...................................................... 53
14.3 Notices............................................................ 53
14.4 Computations....................................................... 54
14.5 Regulation U....................................................... 54
14.6 Costs, Expenses and Taxes.......................................... 54
14.7 Judgment........................................................... 55
14.8 Captions........................................................... 55
14.9 Assignments; Participations........................................ 55
14.9.1 Assignments............................................... 55
14.9.2 Participations............................................ 56
14.10 Governing Law..................................................... 57
14.11 Counterparts...................................................... 57
14.12 Successors and Assigns............................................ 57
14.13 Indemnification by the Company.................................... 58
14.14 Forum Selection and Consent to Jurisdiction....................... 58
14.15 Waiver of Jury Trial.............................................. 59
14.16 Acknowledgments and Agreements regarding Intercreditor Agreement.. 59
14.17 Designated Senior Indebtedness.................................... 60
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SCHEDULE 1.1(A) Lenders and Percentages
SCHEDULE 9.6(a) Litigation and Contingent Liabilities
SCHEDULE 9.6(b) Contingent Payments
SCHEDULE 9.7 Properties
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7(g) Other Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11 Key Executives
SCHEDULE 14.3 Addresses for Notices
EXHIBIT A Form of Note (Section 1)
EXHIBIT B Form of Compliance Certificate (Section 10.1.3)
EXHIBIT C Copy of Restated U.S. Guaranty (Section 1)
EXHIBIT D Copy of Restated U.S. Security Agreement (Section 1)
EXHIBIT E Copy of Restated Company Pledge Agreement (Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement (Section 1)
EXHIBIT G Form of Subordination Language (Section 1)
EXHIBIT H Form of Assignment Agreement (Section 14.9.1)
EXHIBIT I Copy of Intercreditor Agreement (Section 1)
EXHIBIT J Form of Exemption Certificate (Section 13.10)
EXHIBIT K Copy of Parent Guaranty (Section 1)
EXHIBIT L Copy of Parent Pledge Agreement (Section 1)
EXHIBIT M Form of Confirmation (Section 11)
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TERM LOAN AGREEMENT
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This TERM LOAN AGREEMENT dated as of June 9, 2000 (this "Agreement") is
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entered into among UNITED RENTALS, INC. ("Parent"), UNITED RENTALS (NORTH
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AMERICA), INC., a Delaware corporation (the "Company"), the financial
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institutions that are or may from time to time become parties hereto (together
with their respective successors and assigns, the "Lenders"), and BANK OF
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AMERICA, N.A. (in its individual capacity, "BofA"), as administrative agent for
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the Lenders.
WHEREAS, the Lenders have agreed to extend certain term loans to the
Company and may from time to time extend additional loans to the Company.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the parties hereto agree as follows:
SECTION 1 DEFINITIONS, ETC.
1.1 Definitions. When used herein the following terms shall have the
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following meanings (such definitions to be applicable to both the singular and
plural forms of such terms):
Acquisition Subsidiary means a Subsidiary of Parent organized solely for
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the purpose of acquiring the stock or assets of a Person as permitted by Section
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10.11.
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Additional Loan - see Section 2.1.2.
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Affected Lender means any Lender that has given notice to the Company
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(which has not been rescinded) of (i) any obligation of the Company to pay any
amount pursuant to Section 7.5 or 8.1 or (ii) the occurrence of any
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circumstances of the nature described in Section 8.2 or 8.3.
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Affiliate of any Person means (i) any other Person which, directly or
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indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means BofA in its capacity as administrative agent for the Lenders
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hereunder and any successor thereto in such capacity.
Agent-Related Persons means the Agent and any successor thereto in such
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capacity hereunder, together with their respective Affiliates (including the
Arranger) and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
Agreement - see the Preamble.
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Arranger means Banc of America Securities LLC, a Delaware limited liability
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company.
Assignment Agreement - see Section 14.9.1.
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Base Rate means at any time the greater of (a) the Federal Funds Rate plus
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0.5% and (b) the Reference Rate.
Base Rate Tranche means any Tranche which bears interest at or by reference
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to the Base Rate.
BofA - see the Preamble.
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Business Day means any day on which BofA is open for commercial banking
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business in Charlotte, Chicago, New York and San Francisco and, in the case of a
Business Day which relates to a Eurodollar Tranche, on which dealings are
carried on in the applicable offshore U.S. Dollar interbank market.
Canadian Subsidiary means any Subsidiary of the Company which is organized
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under the federal or provincial laws of Canada and which carries on its business
primarily in Canada.
Capital Lease means, with respect to any Person, any lease of (or other
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agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
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maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a "Bank" under and as defined in the Credit
Agreement or a Lender or its holding company for such a "Bank" or a Lender (any
such Person a "Permitted Bank")) rated at least A-l by Standard & Poor's Ratings
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Group or P-l by Moody's Investors Service, Inc., (c) any certificate of deposit
(or time deposits represented by such certificates of deposit) or bankers
acceptance, maturing not more than one year after such time, or overnight
Federal Funds transactions that are issued or sold by any Permitted Bank or a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
U.S.$500,000,000, (d) any repurchase agreement entered into with any Permitted
Bank (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any
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obligation of the type described in any of clauses (a) through (c) and (ii) has
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a market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such Permitted Bank (or other
commercial banking institution) thereunder and (e) investments in short-term
asset management accounts offered by any Permitted Bank for the purpose of
investing in loans to any corporation (other than Parent or an Affiliate of
Parent), state or municipality, in each case organized under the laws of any
state of the United States or of the District of Columbia.
2
Cash Flow means, as of the last day of any Fiscal Quarter, Consolidated Net
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Income for the period of four Fiscal Quarters ending on such day plus, to the
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extent deducted in determining such Consolidated Net Income, Interest Expense,
income tax expense, depreciation and amortization for such period, all
calculated on a pro forma basis in accordance with Article 11 of Regulation S-X
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of the SEC.
Closing Date means June 9, 2000.
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Code means the Internal Revenue Code of 1986.
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Collateral Agent means BofA in its capacity as Collateral Agent under the
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Intercreditor Agreement and any successor thereto in such capacity.
Collateral Documents means the Company Pledge Agreement, each Subsidiary
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Pledge Agreement, the Parent Pledge Agreement, the U.S. Security Agreement, and
any other agreement pursuant to which the Company, Parent or any Subsidiary
grants a Lien on collateral to the Collateral Agent.
Company - see the Preamble.
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Company Pledge Agreement means the Second Restated Company Pledge Agreement
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dated as of September 29, 1998 between the Company and the Collateral Agent, a
copy of which is attached as Exhibit E.
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Computation Period means each period of four Fiscal Quarters ending on the
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last day of a Fiscal Quarter on or after the Closing Date.
Consolidated Net Income means, with respect to Parent and its Subsidiaries
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for any period, the net income (or loss) of Parent and its Subsidiaries for such
period, excluding any extraordinary gains during such period and any Pooling
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Charges booked during such period.
Contingent Payment means any payment that has been (or is required to be)
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made under any of the following circumstances:
(a) such payment is required to be made by Parent or any Subsidiary
in connection with the purchase of any asset or business, where the
obligation of Parent or the applicable Subsidiary to make such payment (or
the amount thereof) is contingent upon the financial or other performance
of such asset or business on an ongoing basis (e.g., based on revenues or
similar measures of performance);
(b) such payment is required to be made by Parent or any Subsidiary
in connection with the achievement of any particular business goal
(excluding employee compensation and bonuses in the ordinary course of
business);
3
(c) such payment is required to be made by Parent or any Subsidiary
under circumstances similar to those described in clause (a) or (b) or
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provides substantially the same economic incentive as would a payment
described in clause (a) or (b); or
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(d) such payment is required to be made by Parent or any Subsidiary
in connection with the purchase of any real estate, where the obligation to
make such payment is contingent on any event or condition (other than
customary closing conditions for a purchase of real estate).
Controlled Group means all members of a controlled group of corporations
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and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with Parent, are treated as a
single employer under Section 414 of the Code or Section 4001 of ERISA.
Credit Agreement means the Credit Agreement dated as of September 29, 1998
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among the Company, Parent, UR Canada, various financial institutions, Bank of
America Canada, as Canadian Agent, and BofA, as U.S. Agent, as amended or
restated from time to time (including any amendment or restatement increasing
the amount available thereunder) and any Successor Credit Agreement as defined
in the Intercreditor Agreement.
Debt of any Person means, without duplication, (a) all indebtedness of such
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Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (including Contingent Payments and
Holdbacks but excluding trade accounts payable in the ordinary course of
business), (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person
(it being understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face amount
of such indebtedness or the fair market value of all property of such Person
securing such indebtedness), (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account or upon the application of such
Person, (f) all Hedging Obligations of such Person, (g) all Suretyship
Liabilities of such Person and (h) all Synthetic Lease Obligations of such
Person.
Dollar Equivalent means, at any time, (a) as to any amount denominated in
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U.S. Dollars, the amount thereof at such time, and (b) as to any amount
denominated in any other currency, the equivalent amount in U.S. Dollars as
determined by the Agent at such time on the basis of the Spot Rate for the
purchase of U.S. Dollars with such currency.
Environmental Claims means all claims, however asserted, by any
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governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
4
Environmental Laws means all federal, state, provincial or local laws,
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statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to environmental, health, safety and land use matters.
Equipment Securitization Transaction means any sale, assignment, pledge or
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other transfer (a) by Parent or any Subsidiary of equipment or related assets,
(b) by any ES Special Purpose Subsidiary of leases or rental agreements between
Parent and/or any Subsidiary, as lessee, on the one hand, and such ES Special
Purpose Vehicle, as lessor, on the other hand, relating to such equipment or
related assets, and lease receivables arising under such leases and rental
agreements and (c) by Parent or any Subsidiary of any interest in any of the
foregoing, together in each case with (i) any and all proceeds thereof
(including all collections relating thereto, all payments and other rights under
insurance policies or warranties relating thereto, all disposition proceeds
received upon a sale thereof, and all rights under manufacturers' repurchase
programs or guaranteed depreciation programs relating thereto), (ii) any
collection or deposit account relating thereto, and (iii) any collateral,
guaranties, credit enhancement or other property or claims supporting or
securing payment on, or otherwise relating to, any such leases, rental
agreements or lease receivables.
ERISA means the Employee Retirement Income Security Act of 1974.
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ES Special Purpose Vehicle means a trust, bankruptcy remote entity or other
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special purpose entity which is a Subsidiary of Parent (or, if not a Subsidiary,
the common equity of which is wholly-owned, directly or indirectly, by Parent)
and which is formed for the purpose of, and engages in no material business
other than, acting as a lessor, issuer or depositor in an Equipment
Securitization Transaction (and, in connection therewith, owning the equipment,
leases, rental agreements, lease receivables, rights to payment and other
interests, rights and assets described in the definition of Equipment
Securitization Transaction, and pledging or transferring any of the foregoing or
interests therein).
Eurodollar Office means, with respect to any Lender, the office or offices
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of such Lender which shall be making or maintaining a Eurodollar Tranche of such
Lender hereunder or, in the case of any Reference Lender, such office or offices
through which such Reference Lender makes any determination for purposes of
calculating the Eurodollar Rate. A Eurodollar Office of any Lender may be, at
the option of such Lender, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Tranche for any
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Interest Period, the rate of interest per annum (rounded upward, if necessary,
to the next 1/100th of 1%) determined by the Agent as follows:
5
Eurodollar Rate = IBOR
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1.00 - Eurodollar Reserve Percentage
where,
Eurodollar Reserve Percentage means, for any day for any Interest
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Period, a percentage (expressed as a decimal, rounded upward, if
necessary, to an integral multiple of 1/100th of 1%) in effect on such
day under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
IBOR means the rate per annum determined by the Agent to be the
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arithmetic mean of the rates of interest per annum notified to the
Agent by each Reference Lender as the rate of interest at which
deposits in U.S. Dollars in immediately available funds are offered by
the Eurodollar Office of such Reference Lender two Business Days prior
to the beginning of such Interest Period to major banks in the
interbank eurodollar market as at or about 10:00 a.m., Chicago time,
for delivery on the first day of such Interest Period, for the number
of days comprised therein and in an amount equal or comparable to the
amount of the Eurodollar Loan of such Reference Lender for such
Interest Period.
Eurodollar Tranche means any Tranche which bears interest by reference to
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the Eurodollar Rate.
Event of Default means any of the events described in Section 12.1.
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Exchange Act means the Securities Exchange Act of 1934.
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Federal Funds Rate means, for any day, the rate set forth in the weekly
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statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of Parent and its Subsidiaries, which
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period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1998") refer to the Fiscal Year
6
ending on December 31 of such calendar year.
Floor Plan Financing Arrangement means any arrangement whereby Parent or a
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Subsidiary grants a Lien to an equipment manufacturer (or an affiliate thereof
which is in the financing business) on all equipment purchased from such
manufacturer and the proceeds thereof, including equipment which was not
financed by such manufacturer (or an affiliate thereof).
Foreign Subsidiary means each Subsidiary of Parent which is organized under
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the laws of any jurisdiction other than, and which is conducting the majority of
its business outside of, the United States or any state thereof.
FRB means the Board of Governors of the Federal Reserve System, and any
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governmental authority succeeding to any of its principal functions.
Funded Debt means (a) all Debt of Parent and its Subsidiaries and (b) to
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the extent not included in the definition of Debt, all outstanding
Securitization Obligations, but excluding (i) contingent obligations in respect
of undrawn letters of credit and Suretyship Liabilities (except to the extent
constituting contingent obligations or Suretyship Liabilities in respect of
Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging
Obligations, (iii) Debt of Parent to Subsidiaries and Debt of Subsidiaries to
Parent or to other Subsidiaries and (iv) Debt (including guaranties thereof) in
respect of the QuIPS Debentures and the QuIPS Preferred Securities.
Funded Debt to Cash Flow Ratio means, as of the last day of any Fiscal
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Quarter, the ratio of (i) Funded Debt as of such day to (ii) Cash Flow as of
such day.
GAAP means generally accepted accounting principles set forth from time to
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time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group means a group of Tranches of the same Type and, in the case of
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Eurodollar Tranches, which have the same Interest Period.
Hedging Obligations means, with respect to any Person, all liabilities of
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such Person under interest rate, currency, commodity and equity swap agreements,
cap agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates, commodity prices or equity prices.
Holdback means an unsecured, non-interest-bearing obligation of Parent or
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any Subsidiary to pay a portion of the purchase price for any purchase or other
acquisition permitted hereunder which matures within nine months of the date of
such purchase or other acquisition.
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Immaterial Law means any provision of any Environmental Law the violation
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of which will not (a) violate any judgment, decree or order which is binding
upon Parent or any Subsidiary, (b) result in or threaten any injury to public
health or the environment or any material damage to the property of any Person
or (c) result in any liability or expense (other than any de minimis liability
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or expense) for Parent or any Subsidiary; provided that no provision of any
Environmental Law shall be an Immaterial Law if the Agent has notified the
Company that the Required Lenders have determined in good faith that such
provision is material.
Intercreditor Agreement means the Intercreditor Agreement dated as of
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September 29, 1998 among BofA, as agent for the Lenders, the lenders under the
Term Loan C Agreement and the holders of the Permitted Senior Secured Debt,
BofA, as U.S. Agent for the banks under the Credit Agreement, BofA, as Agent for
the lenders under the Term Loan B Agreement, and BofA, as Collateral Agent, a
copy of which is attached as Exhibit I.
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Interest Coverage Ratio means the ratio of (a) Consolidated Net Income
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before deducting Interest Expense, income tax expense and Rentals for any
Computation Period to (b) Interest Expense plus (without duplication) Rentals
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for such Computation Period.
Interest Expense means for any period the sum, without duplication, of (a)
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the consolidated interest expense of Parent and its Subsidiaries for such period
(including, without duplication, interest paid on the QuIPS Debentures,
distributions on (but not redemptions of) the QuIPS Preferred Securities,
imputed interest on Capital Leases and Synthetic Leases and any interest which
is capitalized but excluding amortization of deferred financing costs) and (b)
consolidated yield or discount accrued during such period on the aggregate
investment or claim held by purchasers, assignees or other transferees of, or of
interests in, accounts receivable, lease receivables and other rights to payment
of Parent and its Subsidiaries in connection with any Securitization Transaction
(regardless of the accounting treatment of such Securitization Transaction).
Interest Period means, as to any Eurodollar Tranche, the period commencing
---------------
on the date such Tranche is borrowed or continued as, or converted into, a
Eurodollar Tranche and ending on the date one, two, three or six months
thereafter as selected by the Company pursuant to Section 2.2 or 2.3, as the
----------- ---
case may be; provided that:
--------
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period shall end on the last Business Day of the
calendar month at the end of such Interest Period; and
8
(iii) the Company may not select any Interest Period which would
extend beyond any date on which an installment of the Notes is
scheduled to be paid pursuant to Section 3 if, after giving effect to
---------
such selection, the aggregate principal amount of all Eurodollar
Tranches having Interest Periods ending after such date would exceed
the aggregate principal amount of the Notes scheduled to be
outstanding after payment of such installment.
Investment means, relative to any Person, (a) any loan or advance made by
----------
such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of Parent or any of its
Subsidiaries), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses (excluding deposits
placed in escrow pursuant to bona fide arrangements that provide for the return
of such deposits to Parent or the applicable Subsidiary in the event that the
related transaction is not consummated for any reason by a date certain).
Lender - see the Preamble.
------ --------
Lien means, with respect to any Person, any interest granted by such Person
----
in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge,
hypothecation or other security interest of any kind, whether arising by
contract, as a matter of law, by judicial process or otherwise.
Loan means, with respect to any Lender, such Lender's term loan to the
----
Company hereunder; and Loans means all of the term loans made hereunder.
-----
Loan Documents means this Agreement, the Notes, the U.S. Guaranty, the
--------------
Collateral Documents and the Parent Guaranty.
Loan Party means Parent, the Company and each Subsidiary of the Company
----------
which is a party to any Loan Document.
Margin Stock means any "margin stock" as defined in Regulation U of the
------------
FRB.
Material Adverse Effect means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of Parent and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against Parent, the Company or any Subsidiary
of the Company of any Loan Document.
9
Multiemployer Pension Plan means a multiemployer plan, as such term is
--------------------------
defined in Section 4001(a)(3) of ERISA, and to which Parent or any member of the
Controlled Group may have any liability.
Net Worth means the sum of (a) Parent's consolidated stockholders' equity
---------
(including preferred stock accounts) plus (b) to the extent, if any, not
included in such stockholders' equity, the outstanding amount of the QuIPS
Preferred Securities plus (c) the amount of the Pooling Charges.
Note - see Section 3.
---- ---------
Parent - see the Preamble.
------ --------
Parent Guaranty means the Restated Parent Guaranty dated as of September
---------------
29, 1998 executed by Parent, a copy of which is attached as Exhibit K.
---------
Parent Pledge Agreement means the Restated Parent Pledge Agreement dated as
-----------------------
of September 29, 1998 between Parent and the Collateral Agent, a copy of which
is attached as Exhibit L.
---------
PBGC means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which Parent or any member of the Controlled Group may
have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any Lender, the percentage specified
----------
opposite such Lender's name on Schedule 1.1(A), reduced (or increased) by
---------------
assignments pursuant to Section 14.9.1, adjusted from time to time concurrently
--------------
with the making of any Additional Loans and, if any Post 9/30 Loans are made,
adjusted from time to time prior to March 31, 2001 concurrently with any payment
(including any prepayment) of the Loans.
Permitted Holders means (a) the executive managers of the Company as of the
-----------------
Closing Date and their respective estates, their respective spouses and former
spouses, their lineal descendants, the legal representatives of any of the
foregoing, the trustees of any bona fide trusts of which any of the foregoing
are the sole beneficiaries, and any Person of which any of the foregoing
"beneficially owns" (within the meaning of Rule 13d-3 under the Exchange Act) at
least 51% of each class of equity interests of such Person; and (b) Richard D.
Colburn and any of his estate, his spouse or any former spouse, his lineal
descendants, the legal representatives of any of the foregoing, the trustees of
any bona fide trusts of which any of the foregoing and/or
10
one or more charitable organizations (as defined below) are the sole
beneficiaries, any Person of which any of the foregoing "beneficially owns"
(within the meaning of Rule 13d-3 under the Exchange Act) at least 51% of each
class of the equity interests of such Person and any charitable organization to
which any of the foregoing transfers 20% or more of the outstanding shares of
common stock of Parent. For purposes of the foregoing, a "charitable
organization" is an organization to which a contribution is deductible for
income tax purposes under the Code.
Permitted Senior Secured Debt means any Debt arising under any term loan
-----------------------------
agreement among Parent, the Company, various financial institutions and BofA, as
agent (other than this Agreement, the Term Loan B Agreement, and the Term Loan C
Agreement); provided that (i) such term loan agreement shall contain covenants
--------
and defaults which are no more restrictive for Parent and its Subsidiaries than
the covenants and defaults contained in this Agreement, (ii) any such Debt shall
be issued on or prior to December 31, 2000, shall mature no earlier than June
30, 2006 and shall have amortization of no more than 20% of the principal amount
thereof prior to July 15, 2005, (iii) any such Debt shall constitute "Senior
Indebtedness" as defined in each Subordinated Note Indenture and (iv) no such
Debt shall have interest rate spreads greater than the then-applicable interest
rate spreads hereunder.
Person means any natural person, corporation, partnership, trust, limited
------
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Pooling Charges means pooling charges and extraordinary items related to
---------------
acquisitions booked by Parent in the third fiscal quarter of 1998 (including
pooling charges and extraordinary items related to the U.S. Rentals
Acquisition), but not more than U.S. $80,000,000.
Post 9/30 Loan - see Section 3.
-------------- ---------
QuIPS Debentures means the 6 1/2% convertible subordinated debentures
----------------
issued by Parent to the QuIPS Trust pursuant to the QuIPS Indenture.
QuIPS Guarantees means (i) the Guarantee Agreement dated as of August 5,
----------------
1998 issued by Parent (then known as United Rentals Holdings, Inc.) relating to
the common securities of the QuIPS Trust and (ii) the Guarantee Agreement dated
as of August 5, 1998 between Parent (then known as United Rentals Holdings,
Inc.) and The Bank of New York, as Trustee, relating to the QuIPS Preferred
Securities.
QuIPS Indenture means the Indenture dated as of August 5, 1998 between
---------------
Parent (then known as United Rentals Holdings, Inc.) and The Bank of New York,
as Trustee.
QuIPS Preferred Securities means the 6 1/2% convertible quarterly income
--------------------------
preferred securities issued by the QuIPS Trust pursuant to the QuIPS Purchase
Agreement.
11
QuIPS Purchase Agreement means the Purchase Agreement dated as of July 30,
------------------------
1998 among the QuIPS Trust, Parent (then known as United Rentals Holdings,
Inc.), the Company (then known as United Rentals, Inc.) and the purchasers named
therein.
QuIPS Trust means United Rentals Trust I, a special purpose Delaware
-----------
business trust established pursuant to the Amended and Restated Trust Agreement
dated as of August 5, 1998 among Parent (then known as United Rentals Holdings,
Inc.), The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and the administrative trustees named therein.
Receivables Securitization Transaction means any sale, assignment or other
--------------------------------------
transfer by Parent or any Subsidiary of accounts receivable, lease receivables
or other payment obligations owing to Parent or such Subsidiary or any interest
in any of the foregoing, together in each case with any collections and other
proceeds thereof, any collection or deposit account related thereto, and any
collateral, guaranties or other property or claims supporting or securing
payment by the obligor thereon of, or otherwise related to, or subject to leases
giving rise to, any such receivables.
Reference Lenders means BofA and any other Lender designated by the Company
-----------------
and the Agent (which shall promptly notify each Lender of such designation) as a
"Reference Lender".
Reference Rate means, for any day, the rate of interest in effect for such
--------------
day as publicly announced from time to time by BofA in Charlotte, North Carolina
(or such other office in the United States of America as BofA shall specify from
time to time), as its "prime rate." (The "prime rate" is a rate set by BofA
based upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the prime rate announced by BofA shall take effect at the
opening of business on the day specified in the public announcement of such
change.
Related Fund means, with respect to any Lender which is a fund that invests
------------
in bank loans, any other fund that invests in bank loans and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
Rentals means the aggregate fixed amounts payable by Parent or any
-------
Subsidiary under any lease of (or other agreement conveying the right to use)
any real or personal property by Parent or any Subsidiary, as lessee, other than
(i) any Capital Lease or (ii) any lease with a remaining term of six months or
less which is not renewable solely at the option of the lessee.
Required Lenders means Lenders having Percentages aggregating 51% or more.
----------------
RS Special Purpose Vehicle means a trust, bankruptcy remote entity or other
--------------------------
special purpose entity which is a Subsidiary of Parent (or, if not a Subsidiary,
the common equity of
12
which is wholly-owned, directly or indirectly, by Parent) and which is formed
for the purpose of, and engages in no material business other than, acting as an
issuer or a depositor in a Receivables Securitization Transaction (and, in
connection therewith, owning accounts receivable, lease receivables, other
rights to payment, leases and related assets and pledging or transferring any of
the foregoing or interests therein).
SEC means the Securities and Exchange Commission.
---
Securitization Obligations means, with respect to any Securitization
--------------------------
Transaction, the aggregate investment or claim held at any time by all
purchasers, assignees or transferees of (or of interests in) or holders of
obligations that are supported or secured by (i) in the case of an Equipment
Securitization Transaction, equipment or related assets (and leases, rental
agreements, lease receivables, rights to payment and other interests, rights and
assets described in the definition of Equipment Securitization Transaction) in
connection with such Equipment Securitization Transaction, and (ii) in the case
of a Receivables Securitization Transaction, accounts receivable, lease
receivables and other rights to payment in connection with such Receivables
Securitization Transaction.
Securitization Transaction means an Equipment Securitization Transaction or
--------------------------
a Receivables Securitization Transaction.
Seller Subordinated Debt means unsecured indebtedness of the Company that:
------------------------
(a) is subordinated, substantially upon the terms set forth in
Exhibit G or other terms that are more favorable to the Agent and the
---------
Lenders, in right of payment to the payment in full in cash of the Loans
and all other amounts owed under the Loan Documents (whether or not matured
or due and payable); and
(b) represents all or part of the purchase price payable by the
Company in connection with a transaction described in Section 10.11(c).
----------------
Senior Debt means all Funded Debt of Parent and its Subsidiaries other than
-----------
Subordinated Debt.
Special Purpose Vehicle means an ES Special Purpose Vehicle or an RS
-----------------------
Special Purpose Vehicle.
Spot Rate for a currency means the rate quoted by BofA as the spot rate for
---------
the purchase by BofA of such currency with another currency in accordance with
its customary procedures at approximately 10:00 a.m. (Chicago time) on the date
on which the foreign exchange computation is made.
Subordinated Debt means (a) the U.S.$200,000,000 of 9.50% unsecured senior
-----------------
subordinated notes due 2008 issued by the Company (then known as United Rentals,
Inc.) on
13
May 22, 1998 and the unsecured subordinated guarantees thereof provided for in
the applicable Subordinated Note Indenture, (b) the U.S.$205,000,000 of 8.80%
unsecured senior subordinated notes due 2008 issued by the Company on August 12,
1998 and the unsecured subordinated guarantees thereof provided for in the
applicable Subordinated Note Indenture, (c) the U.S.$300,000,000 of 9.25%
unsecured senior subordinated notes due 2009 issued by the Company on December
15, 1998 and the unsecured subordinated guarantees thereof provided for in the
applicable Subordinated Note Indenture, (d) the U.S.$250,000,000 of 9.0%
unsecured senior subordinated notes due 2009 issued by the Company on March 23,
1999 and the unsecured subordinated guarantees thereof provided for in the
applicable Subordinated Note Indenture, (e) Seller Subordinated Debt and (f) any
other unsecured Debt of the Company and unsecured guarantees thereof by any
Subsidiary of the Company which (i) is owed to Persons other than officers,
employees, directors or Affiliates of the Company, (ii) has no amortization
prior to December 31, 2006 and (iii) has subordination terms (including
subordination terms with respect to guarantees) which are not less favorable to
the Lenders than those set forth in the Subordinated Note Indentures or are
otherwise approved by the Required Lenders, such approval not to be unreasonably
withheld.
Subordinated Note Indenture means each of (a) the Indenture dated as of May
---------------------------
22, 1998 among the Company (then known as United Rentals, Inc.), various
Subsidiaries of the Company and State Street Bank and Trust Company, as Trustee,
pursuant to which the Company issued U.S.$200,000,000 of Subordinated Debt, (b)
the Indenture dated as August 12, 1998 among the Company, various Subsidiaries
of the Company and State Street Bank and Trust Company, as Trustee, pursuant to
which the Company issued U.S.$205,000,000 of Subordinated Debt, (c) the
Indenture dated as of December 15, 1998 among the Company, various Subsidiaries
of the Company and State Street Bank and Trust Company, as Trustee, pursuant to
which the Company issued U.S.$300,000,000 of Subordinated Debt, and (d) the
Indenture dated as of March 23, 1999 among the Company, various Subsidiaries of
the Company and The Bank of New York, as Trustee, pursuant to which the Company
issued U.S.$250,000,000 of Subordinated Debt.
Subsidiary means, with respect to any Person, a corporation, limited
----------
liability company, partnership or other entity of which such Person and/or its
other Subsidiaries own, directly or indirectly, more than 50% of the voting
stock, membership interests or similar equity interests. Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of Parent.
Subsidiary Pledge Agreement means each pledge agreement substantially in
---------------------------
the form of Exhibit F issued by any Subsidiary.
---------
Suretyship Liability means, with respect to any Person, any liability of
--------------------
such Person with respect to any agreement, undertaking or arrangement by which
such Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to or otherwise to invest in a debtor, or otherwise
to assure a creditor against loss) any indebtedness, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of
14
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation in respect
of any Suretyship Liability shall (subject to any limitation set forth therein)
be deemed to be the principal amount of the debt, obligation or other liability
supported thereby.
Synthetic Lease means a lease transaction under which the parties intend
---------------
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
Synthetic Lease Obligations means, with respect to any Person, the sum of
---------------------------
(a) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (b) all
rental and purchase price payment obligations of such Person under Synthetic
Leases assuming such Person exercises the option to purchase the leased property
at the end of the lease term.
Tangible Assets means at any time all assets of Parent and its Subsidiaries
---------------
excluding all Intangible Assets. For purposes of the foregoing, "Intangible
- --------- ----------
Assets" means goodwill, patents, trade names, trademarks, copyrights,
- ------
franchises, experimental expense, organization expense and any other assets that
are properly classified as intangible assets in accordance with GAAP.
Term Loan B Agreement means the Amended and Restated Term Loan Agreement
---------------------
dated as of May 12, 2000 among Parent, the Company, various financial
institutions and BofA, as Agent, which amends and restates the Term Loan
Agreement dated as of July 10, 1998.
Term Loan C Agreement means the Amended and Restated Term Loan Agreement
---------------------
dated as of May 12, 2000 among Parent, the Company, various financial
institutions and BofA, as Agent, which amends and restates the Term Loan
Agreement dated as of July [15], 1999.
Tranche refers to a portion of a Loan bearing interest at a particular
-------
interest rate and, in the case of a portion bearing interest based on the
Eurodollar Rate, having a particular Interest Period.
Type of Tranche refers to the interest rate basis for a Tranche. The
---------------
"Types" of Tranches are Base Rate Tranches and Eurodollar Tranches.
Unmatured Event of Default means any event that, if it continues uncured,
--------------------------
will, with lapse of time or notice or both, constitute an Event of Default.
UR Canada means United Rentals of Canada, Inc., an Ontario corporation.
---------
U.S. Dollar and the sign "U.S.$" mean lawful money of the United States of
----------- -----
America.
15
U.S. Guaranty means the Second Restated U.S. Guaranty dated as of September
-------------
29, 1998 executed by various Subsidiaries of the Company, a copy of which is
attached as Exhibit C.
---------
U.S. Rentals means U.S. Rentals, Inc., a Delaware corporation.
------------
U.S. Rentals Acquisition means the acquisition of U.S. Rentals by Parent
------------------------
pursuant to the terms of the USR Merger Agreement.
USR Merger Agreement means the Amended and Restated Agreement and Plan of
--------------------
Merger among U.S. Rentals, Parent and UR Acquisition Corporation dated as of
August 31, 1998.
U.S. Security Agreement means the Second Restated U.S. Security Agreement
-----------------------
dated as of September 29, 1998 among Parent, the Company, various Subsidiaries
of the Company and the Collateral Agent, a copy of which is attached as Exhibit
-------
D.
- -
U.S. Subsidiary means any Subsidiary of the Company other than a Foreign
---------------
Subsidiary.
Vendor Financing Arrangement means any financing arrangement provided by a
----------------------------
Person (other than Parent or any Affiliate thereof) to any purchaser of
equipment sold by Parent or any Subsidiary in the ordinary course of business,
the terms of which provide for recourse against Parent and/or the applicable
Subsidiary in the event of default by the purchaser.
Welfare Plan means a "welfare plan", as such term is defined in Section
------------
3(1) of ERISA.
1.2 Other Interpretive Provisions.
-----------------------------
(a) Section, Schedule and Exhibit references are to this Agreement
------- -------- -------
unless otherwise specified.
(b) (i) The term "including" is not limiting and means "including
without limitation."
(ii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.
16
(d) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(e) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Lenders and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Lenders merely
because of the Agent's or Lenders' involvement in their preparation.
SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION PROCEDURES.
2.1 Loans.
-----
2.1.1 Initial Loans. On and subject to the terms and conditions of this
-------------
Agreement, each of the Lenders which is a party hereto on the Closing Date,
severally and for itself alone, agrees to make a term loan to the Company on the
Closing Date in such Lender's Percentage of U.S.$100,000,000.
2.1.2 Additional Loans. The Company may, from time to time prior to
----------------
December 31, 2000, by means of a letter addressed to the Agent substantially in
the form of Exhibit M, request that additional term loans ("Additional Loans")
--------- ----------------
be made hereunder by any existing Lender or, with the prior written consent of
the Agent, any other commercial bank or other Person; provided that (a) the
--------
aggregate amount of Additional Loans made on any day shall not be less than
$5,000,000 and shall be an integral multiple of $1,000,000 and (b) in no event
shall the aggregate principal amount of all Loans made hereunder (whether or not
then outstanding) exceed $250,000,000 without the written consent of all
Lenders. The Agent shall promptly notify the Company and the Lenders of the
making of any Additional Loans and of the aggregate amount of the Loans and the
Percentage of each Lender after giving effect thereto. The Company acknowledges
that, in order to comply with Section 2.4, prepayment of all or portions of
-----------
certain Loans may be required on the date of the making of any Additional Loan
(and any such prepayment shall be subject to the provisions of Section 8.4).
-----------
2.1.3 Tranches of Loans. Each Loan may be divided into Tranches from time
-----------------
to time, provided that (i) not more than eight different Groups of Eurodollar
--------
Tranches shall be outstanding at any one time and (ii) the aggregate principal
amount of each Group of Eurodollar Tranches shall at all times (including after
giving effect to any conversion or continuation) be at least U.S.$500,000.
2.2 Borrowing Procedure. The Company shall give written notice to the
-------------------
Agent of any proposed borrowing not later than 10:00 A.M., Chicago time, two
Business Days prior to the proposed date of such borrowing (or such later time
and date as the Agent and all applicable
17
Lenders may agree). Such notice shall be effective upon receipt by the Agent and
shall specify the date (which shall be a Business Day) of borrowing and, if
applicable, the amount of and the initial Interest Period for each Group of
Eurodollar Tranches to be outstanding after giving effect to such borrowing.
Promptly upon receipt of such notice, the Agent shall advise each Lender
thereof. Not later than 1:00 p.m., Chicago time, on the date of the proposed
borrowing, each applicable Lender shall provide the Agent at the office
specified by the Agent with immediately available funds in the amount of such
Lender's pro rata share of such borrowing and, subject to the satisfaction of
the applicable conditions precedent set forth in Section 11, the Agent shall pay
----------
over the proceeds of such borrowing to the Company on such date.
2.3 Conversion and Continuation Procedures. (a) Subject to Section 2.2,
-------------------------------------- -----------
the Company may, upon irrevocable written notice to the Agent in accordance with
clause (b) below:
- ----------
(i) elect, as of any Business Day, to convert any Group of
Tranches (or any part thereof in an aggregate amount not less than
U.S.$500,000) into Tranches of the other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Group of Eurodollar Tranches having Interest
Periods expiring on such day (or any part thereof in an aggregate
amount not less than U.S.$500,000) for a new Interest Period.
(b) The Company shall give written or telephonic (followed
immediately by written confirmation thereof) notice to the Agent of each
proposed conversion or continuation not later than (i) in the case of
conversion into Base Rate Tranches, 10:00 A.M., Chicago time, on the
proposed date of such conversion; and (ii) in the case of conversion into
or continuation of Eurodollar Tranches, 9:00 A.M., Chicago time, at least
two Business Days prior to the proposed date of such conversion or
continuation, specifying in each case:
(1) the proposed date of conversion or continuation;
(2) the aggregate amount of the Tranches to be converted or
continued;
(3) the Type of Tranches resulting from the proposed conversion
or continuation; and
(4) in the case of conversion into, or continuation of,
Eurodollar Tranches, the duration of the requested Interest Period
therefor.
(c) If upon the expiration of any Interest Period applicable to any
Eurodollar Tranche, the Company has failed to select timely a new Interest
Period to be applicable to such Eurodollar Tranche, the Company shall be
deemed to have elected to convert
18
such Eurodollar Tranche into a Base Rate Tranche effective on the last day
of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
notice of conversion or continuation pursuant to this Section 2.3 or, if no
-----------
timely notice is provided by the Company, of the details of any automatic
conversion.
(e) Unless the Required Lenders otherwise consent, during the
existence of an Event of Default or Unmatured Event of Default, the Company
may not elect to have any portion of a Loan converted into or continued as
a Eurodollar Tranche.
2.4 Pro Rata Treatment. Except as otherwise expressly provided herein,
------------------
after giving effect to any borrowing, conversion, continuation or repayment,
each Lender will have a pro rata share (according to either (i) its Percentage
or (ii) if any Post 9/30 Loans are made, then during the period from the date of
the first Post 9/30 Loan to March 31, 2001, according a percentage equal to the
sum of (i) the percentage which all of such Lender's Loans made on or prior to
September 30, 2000 is of all Loans of all Lenders made on or prior to such date
and (ii) the percentage which all of such Lender's Post 9/30 Loans is of all
Post 9/30 Loans of all Lenders) of all Types and Groups of Tranches.
SECTION 3 NOTES EVIDENCING LOANS. Each Lender's Loan shall be evidenced
by a promissory note (each a "Note") substantially in the form set forth in
----
Exhibit A, with appropriate insertions, payable to the order of such Lender in
quarterly installments on the last day of each calendar quarter beginning on
September 30, 2000 (or, in the case of any additional Loan made after September
30, 2000 (a "Post 9/30 Loan), on December 31, 2000) and continuing through June
--------------
30, 2006, with the first 23 installments each in an amount equal to 0.25% of the
original principal amount of such Lender's Loan (provided that, in the case of
--------
any Post 9/30 Loan, the installment payable on March 31, 2001 shall be in an
amount equal to 0.50% of the original principal amount of such Loan) and the
final installment in an amount equal to 94.25% of the original principal amount
of such Lender's Loan.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
--------------
principal amount of each Tranche of each Loan, as follows:
(a) at all times while such Tranche is a Base Rate Tranche, at a rate
per annum equal to the sum of the Base Rate from time to time in effect
plus 0.625%; and
(b) at all times while such Tranche is a Eurodollar Tranche, at a
rate per annum equal to the sum of the Eurodollar Rate applicable to each
Interest Period for such Tranche plus 2.5%;
19
provided, however, that at any time an Event of Default exists, the interest
- -------- -------
rate applicable to each Tranche shall be increased by 2%.
4.2 Interest Payment Dates. Accrued interest on each Base Rate Tranche
----------------------
shall be payable in arrears on the last day of each calendar month and at
maturity. Accrued interest on each Eurodollar Tranche shall be payable on the
last day of each Interest Period for such Tranche (and, in the case of a
Eurodollar Tranche with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. After
maturity, accrued interest on all Tranches shall be payable on demand.
4.3 Setting and Notice of Certain Rates. The applicable Eurodollar Rate
-----------------------------------
for each Interest Period shall be determined by the Agent, and notice thereof
shall be given by the Agent promptly to the Company and the Lenders. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Lender, deliver to the
Company or such Lender a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate.
4.4 Computation of Interest.
-----------------------
(a) All computations of interest on Base Rate Tranches when the
Base Rate is determined by the Reference Rate shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of interest shall be made on the basis of a 360-day year and actual
days elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest shall accrue during each period during which
interest is computed from the first day thereof to the last day thereof.
(b) If for any reason whatsoever a Reference Lender ceases to be a
Lender hereunder, such Reference Lender shall thereupon cease to be a Reference
Lender, and the Eurodollar Rate shall be determined on the basis of the rates as
notified by the remaining Reference Lender(s).
(c) Each of the Reference Lenders shall use its best efforts to
furnish quotations of rates to the Agent as contemplated hereby. If any
Reference Lender fails to supply such rates to the Agent upon its request, the
Eurodollar Rate shall be determined on the basis of the quotations of the
remaining Reference Lender(s).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period for
which interest is computed hereunder to the extent (but only to the extent) that
contracting for or receiving such payment by such Lender would be contrary to
the provisions of any law applicable to such Lender limiting the highest rate of
interest that may be lawfully contracted for, charged or received by such
Lender, and in
20
such event the Company shall pay such Lender interest at the highest rate
permitted by applicable law.
(e) The applicable interest rate for each Base Rate Tranche shall
change simultaneously with each change in the Base Rate.
SECTION 5 FEES.
5.1 Closing Fees. On the Closing Date, the Company shall pay to the Agent
------------
for the account of each Lender which is a party hereto on such date a closing
fee in the amount previously agreed to by the Company and such Lender. In
addition, on the date of the making of any Additional Loan, the Company shall
pay to each Lender which is increasing the amount of its Loan or becoming a
party hereto a closing fee in the amount agreed to by the Company and such
Lender.
5.2 Arrangement and Agent's Fees'. The Company agrees to pay to the
-----------------------------
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company, the Arranger and the Agent.
SECTION 6 PREPAYMENTS. The Company may from time to time prepay the
Loans, in whole or in part, without penalty. The Company shall give the Agent
(which shall promptly advise each Lender) notice of any prepayment not later
than 10:00 A.M., Chicago time, on the day of such prepayment, specifying the
Tranches to be prepaid and the date and amount of prepayment. Each partial
prepayment of Loans shall be in a principal amount of at least U.S.$500,000.
Any prepayment of a Eurodollar Tranche on a day other than the last day of an
Interest Period therefor shall be subject to Section 8.4. All prepayments shall
-----------
be applied pro rata to the then-remaining installments of the Notes.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. (a) All payments of principal of or interest on
------------------
the Notes shall be made by the Company to the Agent in immediately available
funds at the office specified by the Agent not later than noon, Chicago time, on
the date due; and funds received after that hour shall be deemed to have been
received by the Agent on the next following Business Day. The Company hereby
authorizes and instructs the Agent to charge any demand deposit account of the
Company maintained with BofA for the amount of any such payment on the due date
therefor, and (subject to there being a sufficient balance in such account for
such purpose) the Agent agrees to do so, provided that the Agent's failure to so
--------
charge any such account shall in no way affect the obligation of the Company to
make any such payment. The Agent shall promptly remit to each Lender its share
of all such payments received in collected funds by the Agent for the account of
such Lender.
(b) All payments under Section 8.1 shall be made by the Company
-----------
directly to the Lender entitled thereto.
21
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Lenders that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Company has not made such
payment in full to the Agent, each Lender shall repay to the Agent on demand the
amount distributed to such Lender, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such Lender
until the date repaid.
7.2 Due Date Extension. If any payment of principal or interest with
------------------
respect to any of the Loans falls due on a day which is not a Business Day, then
such due date shall be extended to the immediately following Business Day
(unless, in the case of a Eurodollar Tranche, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.
7.3 Setoff. The Company agrees that the Agent and each Lender have all
------
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time (a) any payment or other amount
owing by the Company under this Agreement is then due to the Agent or any Lender
or (b) any Unmatured Event of Default under Section 12.1.4 with respect to the
--------------
Company or any Event of Default exists, the Agent and each Lender may apply to
the payment of such payment or other amount (or, in the case of clause (b), to
----------
any obligations of the Company hereunder, whether or not then due) any and all
balances, credits, deposits, accounts or moneys of the Company then or
thereafter with the Agent or such Lender.
7.4 Proration of Payments. If any Lender shall obtain any payment or
---------------------
other recovery (whether voluntary, involuntary, by application of offset or
otherwise, but excluding any payment pursuant to Section 8.7 or 14.9) on account
----------- ----
of principal of or interest on any Note in excess of its pro rata share of
payments and other recoveries obtained by all Lenders on account of principal of
and interest on the applicable Notes then held by them, such Lender shall
purchase from the other Lenders such participation in the applicable Notes held
by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
-------- -------
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery (but without interest).
7.5 Taxes. (a) All payments of principal of, and interest on, the Loans
-----
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Lender's net income or receipts (all non-
excluded items being called "Taxes"). If any withholding or deduction from
-----
22
any payment to be made by the Company hereunder (including any additional amount
or amounts to be paid under this Section 7.5) is required in respect of any
-----------
Taxes pursuant to any applicable law, rule or regulation, then the Company will:
(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(iii) pay to the Agent for the account of the Lenders such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
(b) If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
applicable Lender, the required receipts or other required documentary evidence,
the Company shall indemnify such Lender for any incremental Taxes, interest or
penalties that may become payable by any such Lender as a result of any such
failure. For purposes of this Section 7.5, a distribution hereunder by the
-----------
Agent to or for the account of any Lender shall be deemed a payment by the
Company.
(c) Upon the request from time to time of the Company or the Agent, each
Lender that is organized under the laws of a jurisdiction other than the United
States of America or any state thereof shall execute and deliver to the Company
and the Agent one or more (as the Company or the Agent may reasonably request)
United States Internal Revenue Service Forms 4224 or Forms 1001 or any
applicable successor form (including Form W-8ECI or W-8BEN) or such other forms
or documents, appropriately completed, as may be applicable to establish the
extent, if any, to which a payment by the Company to such Lender is exempt from
withholding or deduction of Taxes.
(e) The obligations of the Company under this Section 7.5 (i) are subject
-----------
to the limitations set out in Section 14.9.1 and (ii) shall survive repayment of
--------------
the Loans, cancellation of the Notes and any termination of this Agreement.
23
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES.
8.1 Increased Costs.
---------------
(a) If, after the date hereof, the adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any Eurodollar Office of such Lender) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency
(A) shall subject any Lender (or any Eurodollar Office of such
Lender) to any tax, duty or other charge with respect to its Eurodollar
Tranches, its Note or its obligation to maintain Eurodollar Tranches, or
shall change the basis of taxation of payments to any Lender of the
principal of or interest on its Eurodollar Tranches or any other amounts
due under this Agreement in respect of its Eurodollar Tranches or its
obligation to maintain Eurodollar Tranches (except for changes in the rate
of tax on the overall net income of such Lender or its Eurodollar Office
imposed by the jurisdiction in which such Lender's principal executive
office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve (including
any reserve imposed by the FRB, but excluding any reserve included in the
determination of interest rates pursuant to Section 4), special deposit or
---------
similar requirement against assets of, deposits with or for the account of,
or credit extended by any Lender (or any Eurodollar Office of such Lender);
or
(C) shall impose on any Lender (or its Eurodollar Office) any other
condition affecting its Eurodollar Tranches, its Note or its obligation to
maintain Eurodollar Tranches;
and the result of any of the foregoing is to increase the cost to (or, in the
case of Regulation D of the FRB, to impose a cost on) such Lender (or any
Eurodollar Office of such Lender) of making, maintaining or participating in any
Eurodollar Tranche, or to reduce the amount of any sum received or receivable by
such Lender (or its Eurodollar Office) under this Agreement or under its Note
with respect thereto, then within 10 days after demand by such Lender (which
demand shall be accompanied by a statement setting forth the basis for such
demand, a copy of which shall be furnished to the Agent), the Company shall pay
directly to such Lender such additional amount as will compensate such Lender
for such increased cost or such reduction.
(b) If any Lender shall reasonably determine that the adoption or phase-in
of or any change in any applicable law, rule or regulation regarding capital
adequacy, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
24
any Lender or any Person controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's or such controlling Person's
capital as a consequence of such Lender's obligations hereunder to a level below
that which such Lender or such controlling Person could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Lender or such controlling Person to be material, then
from time to time, within 10 days after demand by such Lender (which demand
shall be accompanied by a statement setting forth the basis for such demand, a
copy of which shall be furnished to the Agent), the Company shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
--------------------------------------------------------
respect to any Interest Period:
(a) none of the Reference Lenders are being offered deposits in U.S.
Dollars (in the applicable amounts) in the interbank Eurodollar market for
such Interest Period, or the Agent otherwise reasonably determines (which
determination shall be binding and conclusive on the Company) that by
reason of circumstances affecting the interbank Eurodollar market adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate; or
(b) Lenders having an aggregate Percentage of 30% or more advise the
Agent that the Eurodollar Rate, as determined by the Agent, will not
adequately and fairly reflect the cost to such Lenders of maintaining or
funding their Eurodollar Tranches for such Interest Period (taking into
account any amount to which such Lenders may be entitled under Section 8.1)
-----------
or that the maintaining or funding of Eurodollar Tranches has become
impracticable as a result of an event occurring after the date of this
Agreement which in the opinion of such Lenders materially affects such
Tranches;
then the Agent shall promptly notify the Company and the Lenders thereof and, so
- ----
long as such circumstances shall continue, (i) no Lender shall be under any
obligation to convert into Eurodollar Tranches and (ii) on the last day of the
current Interest Period for each Eurodollar Tranche, such Tranche shall, unless
then repaid in full, automatically convert to a Base Rate Tranche.
8.3 Changes in Law Rendering Eurodollar Lending Unlawful. If any change
----------------------------------------------------
in (including the adoption of any new) applicable laws or regulations, or any
change in the interpretation of applicable laws or regulations by any
governmental or other regulatory body charged with the administration thereof,
should make it (or in the good faith judgment of any Lender cause a substantial
question as to whether it is) unlawful for any Lender to make, maintain or fund
any Eurodollar Tranche, then such Lender shall promptly notify the Company and
the Agent and, so long as such circumstances shall continue, (a) such Lender
shall have no
25
obligation to make or convert into Eurodollar Tranches (but shall make or
maintain Base Rate Tranches concurrently with the making of or conversion into
Eurodollar Tranches by the Lenders which are not so affected, in each case in an
amount equal to such Lender's pro rata share of all Eurodollar Tranches which
would be made or converted into at such time in the absence of such
circumstances) and (b) on the last day of the current Interest Period for each
Eurodollar Tranche of such Lender (or, in any event, on such earlier date as may
be required by the relevant law, regulation or interpretation), such Eurodollar
Tranche shall, unless then repaid in full, automatically convert to a Base Rate
Tranche. Each Base Rate Tranche maintained by a Lender which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Tranche
(an "Affected Tranche") shall remain outstanding for the same period as the
----------------
Group of Eurodollar Tranches of which such Affected Tranche would be a part
absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
--------------
Lender (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Lender against any net loss or expense which
such Lender may sustain or incur (including any net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain any Eurodollar Tranche), as reasonably
determined by such Lender, as a result of (a) any payment, prepayment or
conversion of any Eurodollar Tranche of such Lender on a date other than the
last day of an Interest Period for such Tranche (including any conversion
pursuant to Section 8.3) or (b) any failure of the Company to borrow, convert
-----------
into, continue or prepay any Eurodollar Tranche on a date specified therefor in
a notice of borrowing, conversion, continuation or prepayment pursuant to this
Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if
----------------------------------------------
it so elects, fulfill its commitment as to any Eurodollar Tranche by causing a
foreign branch or affiliate of such Lender to maintain or fund such Tranche,
provided that in such event for the purposes of this Agreement such Tranche
- --------
shall be deemed to have been maintained and funded by such Lender and the
obligation of the Company to repay such Lender's Loan shall nevertheless be to
such Lender and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or affiliate.
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
---------------------------------------------
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loan in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each Eurodollar Tranche during each Interest Period for such
Tranche through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the IBOR (as defined in
the definition of Eurodollar Rate) for such Interest Period.
26
8.7 Mitigation of Circumstances; Replacement of Affected Lender.
-----------------------------------------------------------
(a) Each Lender shall promptly notify the Company and the Agent of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's good faith
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation of the Company to pay any amount pursuant to Section 7.5 or 8.1
----------- ---
or (ii) the occurrence of any circumstances of the nature described in Section
-------
8.2 or 8.3, and, if any Lender has given notice of any event described in clause
- --- --- ------
(i) or (ii) above and thereafter such event ceases to exist, such Lender shall
- --- ----
promptly so notify the Company and the Agent. Without limiting the foregoing,
each Lender will designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described in clause (i)
----------
or (ii) of the preceding sentence and such designation will not, in such
----
Lender's sole judgment, be otherwise disadvantageous to such Lender.
(b) At any time any Lender is an Affected Lender, the Company may replace
such Affected Lender as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Agent (and upon
notice from the Company such Affected Lender shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Loan, its Note and
all of its other rights and obligations hereunder to such replacement bank(s) or
other financial institution(s) for a purchase price equal to the sum of the
principal amount of the Loan so assigned, all accrued and unpaid interest
thereon, any amounts payable under Section 8.4 as a result of such Lender
-----------
receiving payment of any Eurodollar Tranche prior to the end of an Interest
Period therefor and all other obligations owed to such Affected Lender
hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
----------------------------------------------------
and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
----------- --- --- ---
conclusive absent demonstrable error. Lenders may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
------------ ---
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to make the Loans hereunder, Parent and the Company warrant
to the Agent and the Lenders that:
9.1 Organization, etc. Each of Parent and the Company is a corporation
------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware; each other Subsidiary is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization; and
each of Parent, the Company and each other Subsidiary is duly qualified to do
business in each jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the failure to be
qualified or in good
27
standing does not have a Material Adverse Effect) and has full power and
authority to own its property and conduct its business as presently conducted by
it.
9.2 Authorization; No Conflict. The execution and delivery by Parent and
--------------------------
the Company of this Agreement and each other Loan Document to which it is a
party, the borrowings hereunder, the execution and delivery by each other Loan
Party of each Loan Document to which it is a party and the performance by
Parent, the Company and each other Loan Party of its obligations under each Loan
Document to which it is a party are within the corporate powers of Parent, the
Company and each other Loan Party, have been duly authorized by all necessary
corporate action (including any necessary shareholder action) on the part of
Parent, the Company and each other Loan Party, have received all necessary
governmental approval (if any shall be required), and do not and will not (a)
violate any provision of law or any order, decree or judgment of any court or
other government agency which is binding on Parent, the Company, any other Loan
Party or any other Subsidiary, (b) contravene or conflict with, or result in a
breach of, any provision of the Certificate or Articles of Incorporation, By-
Laws or other organizational documents of Parent, the Company, any other Loan
Party or any other Subsidiary or of any agreement, indenture, instrument or
other document which is binding on Parent, the Company, any other Loan Party or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of Parent, the Company, any other Loan Party or any
other Subsidiary (other than Liens arising under the Loan Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other
---------------------------
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and each Loan Document to which any other Loan Party is a party is,
or upon the execution and delivery thereof by such Loan Party will be, the
legal, valid and binding obligation of such Loan Party, enforceable against such
Loan Party in accordance with its terms.
9.4 Information. All information heretofore or contemporaneously herewith
-----------
furnished in writing by Parent or any Subsidiary to any Lender for purposes of
or in connection with this Agreement and the transactions contemplated hereby
is, and all written information hereafter furnished by or on behalf of Parent or
any Subsidiary to any Lender pursuant hereto or in connection herewith will be,
true and accurate in every material respect on the date as of which such
information is dated or certified, and none of such information is or will be
incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it
being recognized by the Agent and the Lenders that any projections and forecasts
provided by Parent or any Subsidiary are based on good faith estimates and
assumptions believed by Parent or such Subsidiary to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results).
9.5 No Material Adverse Change.
--------------------------
28
(a) The audited consolidated financial statements of the Company and its
Subsidiaries at December 31, 1999 and the unaudited consolidated financial
statements of the Company and its Subsidiaries at March 31, 2000, copies of each
of which have been delivered to each Lender, have been prepared in accordance
with generally accepted accounting principles (subject, in the case of the
unaudited statements, to the absence of footnotes and to normal year-end
adjustments) and present fairly the consolidated financial condition of the
Company and its Subsidiaries taken as a whole as at such dates and the results
of their operations for the periods then ended.
(b) Since December 31, 1999, there has been no material adverse change in
the financial condition, operations, assets, business, properties or prospects
of the Company and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities.
-------------------------------------
(a) No litigation (including derivative actions), arbitration proceeding,
labor controversy or governmental investigation or proceeding is pending or, to
Parent's knowledge, threatened against Parent or any Subsidiary which might
reasonably be expected to have a Material Adverse Effect, except as set forth in
Schedule 9.6(a). Other than any liability incident to such litigation or
- ---------------
proceedings, neither Parent nor any Subsidiary has any material contingent
liabilities not listed in Schedule 9.6(a) or 9.6(b).
--------------- ------
(b) Schedule 9.6(b) sets out descriptions of all arrangements existing on
---------------
the Closing Date pursuant to which the Company or any Subsidiary may be required
to pay any Contingent Payment.
9.7 Ownership of Properties; Liens. Except as set forth on Schedule 9.7,
------------------------------ ------------
as of the Closing Date each of Parent and each Subsidiary owns good and
marketable title to all of its properties and assets, real and personal,
tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and material claims (including material infringement claims with
respect to patents, trademarks, copyrights and the like) except as permitted
pursuant to Section 10.8.
------------
9.8 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries
------------
except those listed in Schedule 9.8.
------------
9.9 Pension and Welfare Plans.
-------------------------
(a) During the twelve-consecutive-month period prior to the date of the
execution and delivery of this Agreement, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by Parent of
any material liability, fine or penalty. Parent has no contingent liability
with respect to any post-retirement
29
benefit under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Subtitle B of Title I of ERISA.
(b) All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by Parent or any other member of the
Controlled Group under the terms of such Multiemployer Pension Plan or of any
collective bargaining agreement or by applicable law; neither Parent nor any
member of the Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Pension Plan, incurred any withdrawal liability with respect to
any Multiemployer Pension Plan, or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any Multiemployer
Pension Plan, and no condition has occurred which, if continued, might result in
a withdrawal or partial withdrawal from any Multiemployer Pension Plan; and
neither Parent nor any member of the Controlled Group has received any notice
that any Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any Multiemployer Pension Plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
Multiemployer Pension Plan is or may be terminated, or that any Multiemployer
Pension Plan is or may become insolvent.
(c) All contributions required under applicable law have been made in
respect of all pension plans of UR Canada and each of its Subsidiaries and each
such pension plan is fully funded on an ongoing and termination basis.
9.10 Investment Company Act. Neither Parent nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither Parent nor any
----------------------------------
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
------------
its important activities, in the business of purchasing or carrying Margin Stock
or extending credit for the purpose of purchasing or carrying Margin Stock.
9.13 Taxes. Each of Parent and each Subsidiary has filed all tax returns
-----
and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
9.14 Solvency, etc. On the Closing Date (or, in the case of any Person
--------------
which becomes a Loan Party after the Closing Date, on the date such Person
becomes a Loan Party), (a) each of the Company's and each other Loan Party's
assets will exceed its liabilities and (b) each of the
30
Company and each other Loan Party will be solvent, will be able to pay its debts
as they mature, will own property with fair saleable value greater than the
amount required to pay its debts and will have capital sufficient to carry on
its business as then constituted.
9.15 Environmental Matters. Parent conducts in the ordinary course of
---------------------
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof Parent has reasonably concluded that, except as specifically disclosed
in Schedule 9.15, such Environmental Laws and Environmental Claims could not,
-------------
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.16 Year 2000 Problem. Parent and its Subsidiaries have reviewed the
-----------------
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by Parent
and its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999). Based on such review and program, Parent reasonably believes that
the "Year 2000 Problem" will not have a Material Adverse Effect.
9.17 Senior Debt. The obligations of the Company hereunder constitute
-----------
"Senior Indebtedness" as such term is defined in each Subordinated Note
Indenture.
SECTION 10 COVENANTS.
Until all obligations of the Company hereunder or in connection herewith
are paid in full, Parent agrees that, unless at any time the Required Lenders
shall otherwise expressly consent in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent
-------------------------------------------
and each Lender:
10.1.1 Audit Report. Promptly when available and in any event within 90
------------
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of Parent and its Subsidiaries for such Fiscal Year, including therein a
consolidated balance sheet of Parent and its Subsidiaries as of the end of such
Fiscal Year and consolidated statements of earnings and cash flow of Parent and
its Subsidiaries for such Fiscal Year certified without qualification by Ernst &
Young or other independent auditors of recognized standing selected by Parent
and reasonably acceptable to the Required Lenders, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants, they
have not become aware of any Event of Default or Unmatured Event of Default that
has occurred and is continuing or, if they have become aware of any such event,
describing it in reasonable detail; (b) consolidating balance sheets of Parent
and its Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings for Parent and its Subsidiaries for such Fiscal Year,
certified by the Chief Financial Officer or the Vice President, Finance of
Parent; and (c) commencing with Fiscal Year 1999, a copy of an annual agreed-
upon
31
procedures report on the equipment fleet of the Company and its Subsidiaries for
such Fiscal Year as performed by the Company's independent auditors.
10.1.2 Quarterly Reports. Promptly when available and in any event within
-----------------
45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of
each Fiscal Year, a consolidated balance sheet of Parent and its Subsidiaries as
of the end of such Fiscal Quarter, together with consolidated statements of
earnings and cash flow for such Fiscal Quarter and for the period beginning with
the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer or the Vice President, Finance
of Parent.
10.1.3 Compliance Certificates. Contemporaneously with the furnishing of
-----------------------
a copy of each annual audit report pursuant to Section 10.1.1 and of each set of
--------------
quarterly statements pursuant to Section 10.1.2, (a) a duly completed compliance
--------------
certificate in the form of Exhibit B, with appropriate insertions, dated the
---------
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer or the Vice President, Finance of Parent, containing a
computation of each of the financial ratios and restrictions set forth in
Section 10.6 and to the effect that such officer has not become aware of any
- ------------
Event of Default or Unmatured Event of Default that has occurred and is
continuing or, if there is any such event, describing it and the steps, if any,
being taken to cure it; and (b) an updated organizational chart listing all
Subsidiaries and the locations of their businesses.
10.1.4 Reports to SEC and to Shareholders. Promptly upon the filing or
----------------------------------
sending thereof, copies of all regular, periodic or special reports of Parent or
any Subsidiary filed with the SEC (excluding exhibits thereto, provided that
Parent shall promptly deliver any such exhibit to the Agent or any Lender upon
request therefor); copies of all registration statements of Parent or any
Subsidiary filed with the SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally concerning
material developments in the business of Parent or any Subsidiary.
10.1.5 Notice of Default, Litigation and ERISA Matters. Immediately upon
-----------------------------------------------
becoming aware of any of the following, written notice describing the same and
the steps being taken by Parent or the Subsidiary affected thereby with respect
thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by Parent to the Lenders which has been
instituted or, to the knowledge of Parent, is threatened against Parent or
any Subsidiary or to which any of the properties of any thereof is subject
which, if adversely determined, might reasonably be expected to have a
Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled
Group or any other Person to terminate any Pension Plan, or the failure of
any member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is
32
sufficient to give rise to a Lien under Section 302(f) of ERISA) or to any
Multiemployer Pension Plan, or the taking of any action with respect to a
Pension Plan which could result in the requirement that Parent furnish a
bond or other security to the PBGC or such Pension Plan, or the occurrence
of any event with respect to any Pension Plan or Multiemployer Pension Plan
which could result in the incurrence by any member of the Controlled Group
of any material liability, fine or penalty (including any claim or demand
for withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent liability of
Parent with respect to any post-retirement Welfare Plan benefit, or any
notice that any Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan
benefits or the imposition of an excise tax, that any such plan is or has
been funded at a rate less than that required under Section 412 of the
Code, that any such plan is or may be terminated, or that any such plan is
or may become insolvent;
(d) any cancellation (without replacement) or material change in any
insurance maintained by Parent or any Subsidiary;
(e) any event (including any violation of any Environmental Law or
the assertion of any Environmental Claim) which might reasonably be
expected to have a Material Adverse Effect; or
(f) any setoff, claims (including Environmental Claims), withholdings
or other defenses to which any of the collateral granted under any
Collateral Document, or the Lenders' rights with respect to any such
collateral, are subject.
10.1.6 Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
10.1.7 Management Reports. Promptly upon the request of the Agent or any
------------------
Lender, copies of all detailed financial and management reports submitted to
Parent by independent auditors in connection with each annual or interim audit
made by such auditors of the books of Parent.
10.1.8 Projections. As soon as practicable and in any event within 60
-----------
days after the commencement of each Fiscal Year, financial projections for
Parent and its Subsidiaries for such Fiscal Year prepared in a manner consistent
with those projections delivered by the Company to the Lenders prior to the
Closing Date or otherwise in a manner satisfactory to the Agent.
10.1.9 Other Information. From time to time such other information
-----------------
concerning Parent and its Subsidiaries as any Lender or the Agent may reasonably
request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
------------------------------
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary
33
to permit, any Lender or the Agent or any representative thereof to inspect the
properties and operations of Parent and of such Subsidiary; and permit, and
cause each Subsidiary to permit, at any reasonable time and with reasonable
notice (or at any time without notice if an Event of Default exists), any Lender
or the Agent or any representative thereof to visit any or all of its offices,
to discuss its financial matters with its officers and its independent auditors
(and Parent hereby authorizes such independent auditors to discuss such
financial matters with any Lender or the Agent or any representative thereof
whether or not any representative of Parent or any Subsidiary is present), and
to examine (and, at the expense of Parent or the applicable Subsidiary,
photocopy extracts from) any of its books or other corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
---------
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon request of the
Agent or any Lender, furnish to the Agent or such Lender a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by
Parent and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
------------------------------------------------------
and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
-------- -------
shall not require Parent or any Subsidiary to pay any such tax or charge so long
as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
------------------------------
to Section 10.11) cause each Subsidiary to maintain and preserve, (a) its
-------------
existence and good standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary (except in
those instances in which the failure to be qualified or in good standing does
not have a Material Adverse Effect).
10.6 Financial Covenants.
-------------------
10.6.1 Maximum Leverage. Not permit the ratio of (i) Funded Debt to (ii)
----------------
Funded Debt plus Net Worth to exceed 0.675 to 1.0 at any time.
----
10.6.2 Minimum Interest Coverage Ratio. Not permit the Interest Coverage
-------------------------------
Ratio for any Computation Period to be less than the applicable ratio set forth
below:
Computation Interest
34
Period Ending: Coverage Ratio
------------- --------------
Prior to 9/30/01 1.75 to 1.0
9/30/01 and thereafter 2.00 to 1.0.
10.6.3 Funded Debt to Cash Flow Ratio. Not permit the Funded Debt to Cash
------------------------------
Flow Ratio as of the last day of any Fiscal Quarter to exceed 4.5 to 1.0.
10.6.4 Senior Debt to Tangible Assets. Not permit the ratio of (i) Senior
------------------------------
Debt minus all Securitization Obligations to (ii) Tangible Assets minus, to the
extent included in Tangible Assets, all assets which are owned by or subject to
a Lien in favor of a Special Purpose Vehicle to exceed 1.0 to 1.0 at any time.
10.6.5 Senior Debt to Cash Flow Ratio. Not permit the ratio of (i) Senior
------------------------------
Debt to (ii) Cash Flow as of the last day of any Fiscal Quarter to exceed 2.75
to 1.0.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
-------------------
incur, assume or suffer to exist any Debt, except:
(a) obligations hereunder, under the other Loan Documents, under the
Credit Agreement, under the Term Loan B Agreement, under the Term Loan C
Agreement and under the other "Loan Documents" as defined in each of the
Credit Agreement, the Term Loan B Agreement and the Term the Loan C
Agreement;
(b) unsecured Debt of Parent, the Company and Subsidiaries of the Company
(excluding Contingent Payments and Seller Subordinated Debt); provided that
--------
no Subsidiary of the Company shall incur any such Debt if, after giving
effect thereto, the aggregate amount of all then-outstanding Debt of
Subsidiaries of the Company permitted solely by this clause (b) would
----------
exceed 10% of Net Worth;
(c) Debt of Parent or any Subsidiary in respect of Capital Leases or
arising in connection with the acquisition of equipment (including Debt
assumed in connection with an asset purchase permitted by Section 10.11, or
-------------
incurred pursuant to a Capital Lease or in connection with the acquisition
of equipment by a Person before it became a Subsidiary in connection with a
stock purchase permitted by Section 10.11, in each case so long as such
-------------
Debt is not incurred in contemplation of such purchase), and refinancings
of any such Debt so long as the terms applicable to such refinanced Debt
are no less favorable to Parent or the applicable Subsidiary than the terms
in effect immediately prior to such refinancing, provided that the
--------
aggregate amount of all such Debt at any time outstanding shall not exceed
a Dollar Equivalent amount equal to U.S.$150,000,000, and provided,
--------
further, that the aggregate amount of all such Debt arising in connection
-------
with Floor Plan Financing Arrangements shall not exceed U.S. $30,000,000;
35
(d) Debt of Subsidiaries owed to the Company or Parent; provided that the
--------
aggregate amount of all such Debt of Foreign Subsidiaries owed to the
Company and Parent shall not at any time exceed 15% of the consolidated
assets of Parent and its Subsidiaries;
(e) unsecured Debt of any Special Purpose Vehicle to any Subsidiary of the
Company;
(f) Subordinated Debt; provided that (i) the aggregate principal amount of
--------
all Seller Subordinated Debt at any time outstanding shall not exceed a
Dollar Equivalent amount of U.S.$50,000,000 and (ii) the Company shall not
issue or incur any Debt described in clause (f) of the definition of
----------
Subordinated Debt (x) at any time that an Event of Default or Unmatured
Event of Default exists or would result therefrom and (y) unless the
Company has delivered to the Agent (which shall promptly deliver a copy
thereof to each Lender) a certificate in reasonable detail demonstrating
that, after giving effect to such issuance or incurrence, Parent will be in
pro forma compliance with all financial covenants set forth in this Section
-------
10;
--
(g) other Debt of the Company or any Subsidiary, not of a type described
in clause (c), outstanding on the Closing Date and listed in Schedule
---------- --------
10.7(g);
--------
(h) Contingent Payments, provided that Parent shall not, and shall not
--------
permit any Subsidiary to, incur any obligation to make Contingent Payments
the maximum possible amount of which exceeds a Dollar Equivalent amount of
U.S.$50,000,000 in the aggregate for all Contingent Payments at any time
outstanding;
(i) the QuIPS Debentures, the QuIPS Preferred Securities and the QuIPS
Guarantees;
(j) Permitted Senior Secured Debt and guarantees thereof, provided that
--------
the sum of the principal of all Loans plus the aggregate principal amount
of all "Loans" under and as defined in the Term Loan C Agreement plus the
aggregate principal amount of all Permitted Senior Secured Debt shall not
at any time exceed U.S.$1,000,000,000;
(k) Synthetic Lease Obligations, provided that the aggregate amount of all
Synthetic Lease Obligations plus (without duplication) the aggregate amount
of all Securitization Obligations arising under Equipment Securitization
Transactions shall not at any time exceed the greater of U.S. $500,000,000
or 15% of Tangible Assets;
(l) unsecured recourse obligations of Parent or any Subsidiary in respect
of Vendor Financing Arrangements;
(m) Hedging Obligations incurred for purposes of protection from price,
interest rate or currency fluctuations posed by bona fide debt, contract or
purchase order obligations or from changes in the price of Parent's stock;
and
36
(n) Debt in connection with Securitization Transactions.
For purposes of clause (h) above, a Contingent Payment shall be deemed to
----------
be "outstanding" from the time that Parent or any Subsidiary enters into the
agreement containing the obligation to make such Contingent Payment until such
time as either such Contingent Payment has been made in full or it has become
certain that such Contingent Payment will never have to be made.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
-----
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens of
carriers, warehousemen, mechanics and materialmen and other similar Liens
imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds,
bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price
of property or services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified in Schedule 10.8;
-------------
(d) Liens securing Debt permitted by clause (c) of Section 10.7 (and
---------- ------------
attaching only to the property (i) being leased (in the case of Capital
Leases), (ii) purchased from the relevant manufacturer (in the case of
Floor Plan Financing Arrangements) or (iii) the purchase price for which
was or is being financed by such Debt (in the case of other Debt) and, in
each case, the proceeds (including insurance proceeds) of any disposition
or loss of such property);
(e) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding a Dollar Equivalent amount of U.S.$1,000,000 arising in
connection with court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Company
or any Subsidiary;
37
(g) Liens in favor of the Collateral Agent arising under the Loan
Documents and Liens securing Debt permitted by clauses (a), (j) and (k) of
----------- --- ---
Section 10.7; and
------------
(h) Liens arising in connection with Securitization Transactions.
10.9 Asset Sales. Not make, or permit any Subsidiary to make, any sale or
-----------
other disposition of assets which would require the Company to make, or offer to
make, or give any notice of, any prepayment of Subordinated Debt (other than
Seller Subordinated Debt).
10.10 Restricted Payments. Not, and not permit any Subsidiary to, (a)
-------------------
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt, (e) make any payment of principal of or interest on, or
acquire, redeem or otherwise retire, or make any other distribution in respect
of, any of the QuIPS Debentures or the QuIPS Preferred Securities or (f) set
aside funds for any of the foregoing; provided that (i) any Subsidiary of the
--------
Company may declare and pay dividends to the Company or to any other wholly-
owned Subsidiary of the Company; (ii) the Company may declare and pay dividends
to Parent; (iii) the QuIPS Trust may make a distribution of Parent's common
stock pursuant to the terms of the QuIPS Preferred Securities or the QuIPS
Debentures; (iv) so long as no Event of Default or Unmatured Event of Default
exists or would result therefrom, Parent may make payments on the QuIPS
Debentures and permit the QuIPS Trust to make corresponding distributions on the
QuIPS Preferred Securities in accordance with the terms of the QuIPS Indenture;
(v) so long as (x) no Event of Default or Unmatured Event of Default exists or
would result therefrom and (y) the aggregate amount of all purchases made by
Parent since April 30, 2000 (excluding purchases permitted by clause (vi) below)
-----------
does not exceed U.S.$200,000,000, Parent may repurchase its capital stock; and
(vi) so long as (x) no Event of Default or Unmatured Event of Default exists or
would result therefrom and (y) the aggregate amount of all purchases of stock,
warrants or units made by Parent (or, prior to August 5, 1998, the Company)
since October 1, 1997 (excluding purchases permitted by clause (v) above) does
----------
not exceed U.S.$12,000,000, Parent may purchase its common stock or warrants, or
units issued in respect thereof, from time to time on terms consistent with
those set forth under the heading "Certain Agreements Relating to the
Outstanding Securities" in the Company's Private Placement Memorandum dated
September 12, 1997; provided, further, that any stock of Parent, or warrants or
-------- -------
units relating thereto, purchased by Parent pursuant to clause (v) or (vi) above
---------- ----
shall be immediately retired. Nothing in this Section 10.10 shall prohibit
-------------
Parent from permitting the cashless exercise of any options or warrants for
stock of Parent.
10.11 Mergers, Consolidations, Amalgamations, Sales. Not, and not permit
---------------------------------------------
any Subsidiary to, be a party to any merger, consolidation or amalgamation, or
purchase or otherwise acquire all or substantially all of the assets or any
stock of any class of, or any partnership or joint venture interest in, any
other Person, or, except in the ordinary course of its business (including sales
or exchanges of equipment consistent with industry practice), sell, transfer,
convey or lease all or any substantial part of its assets, or sell or assign
with or without recourse
38
any receivables, except for (a) any such merger or consolidation, amalgamation,
sale, transfer, conveyance, lease or assignment of or by any wholly-owned
Subsidiary of the Company into the Company or into, with or to any other wholly-
owned Subsidiary of the Company; (b) any such purchase or other acquisition by
the Company or any wholly-owned Subsidiary of the Company of the assets or stock
of any wholly-owned Subsidiary of the Company; (c) any such purchase or other
acquisition (including pursuant to a merger or an asset exchange of like-kind
property) by Parent, an Acquisition Subsidiary, the Company or any wholly-owned
Subsidiary of the Company of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in the equipment rental and
related businesses; (2) immediately before and after giving effect to such
purchase or acquisition, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (3) the board of directors of such Person has
not announced that it will oppose such acquisition and has not commenced any
litigation which alleges that such acquisition violates or will violate any
requirement of law or any contractual obligation of such Person; and (4) in the
case of any such purchase or other acquisition by Parent or any Acquisition
Subsidiary, Parent immediately contributes the acquired stock or assets to the
Company or merges the acquired company or the Acquisition Subsidiary into the
Company or with or into any wholly-owned Subsidiary of the Company; (d) the
sale, assignment or other transfer of accounts receivable, lease receivables or
other rights to payment pursuant to any Receivables Securitization Transaction
or of equipment and related assets (and leases, rental agreements, lease
receivables, rights to payment and other interests, rights and assets described
in the definition of Equipment Securitization Transaction) pursuant to any
Equipment Securitization Transaction, provided that the aggregate amount of all
--------
equipment and related assets (and leases, rental agreements, lease receivables,
rights to payment and other interests, rights and assets described in the
definition of Equipment Securitization Transaction) sold, assigned or otherwise
transferred pursuant to all Equipment Securitization Transactions in any Fiscal
Year (in addition to any such assets which are permitted to be sold in such
Fiscal Year pursuant to clause (e)) shall not exceed U.S. $25,000,000; and (e)
-----------
sales and dispositions of assets (including the stock of Subsidiaries and asset
exchanges of like-kind property), in addition to sales and other dispositions in
the ordinary course of business or permitted by clause (d), so long as the net
----------
book value of (i) all assets disposed of in like-kind exchanges in any Fiscal
Year does not exceed 5% of the net book value of the consolidated assets of
Parent and its Subsidiaries as of the last day of the preceding Fiscal Year and
(ii) all other assets sold or otherwise disposed of in any Fiscal Year does not
exceed 5% of the net book value of the consolidated assets of Parent and its
Subsidiaries as of the last day of the preceding Fiscal Year.
10.12 Modification of Certain Documents. Not permit the Certificate or
---------------------------------
Articles of Incorporation, By-Laws or other organizational documents of Parent
or any Subsidiary, or any Subordinated Note Indenture or any other document
evidencing or setting forth the terms applicable to any Subordinated Debt, to be
amended or modified in any way which might reasonably be expected to materially
adversely affect the interests of the Lenders.
10.13 Use of Proceeds. Use the proceeds of the Loans solely to finance
---------------
the Company's working capital, for acquisitions permitted by Section 10.11, for
-------------
capital expenditures and for
39
other general corporate purposes (including repayment of existing Debt); and not
use or permit any proceeds of any Loan to be used, either directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
"purchasing or carrying" any Margin Stock, except in compliance with the
applicable provisions of the FRB and this Agreement.
10.14 Further Assurances. Take, and cause each Subsidiary to take, such
------------------
actions as are necessary or as the Agent or the Required Lenders may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets (other than real property and the Company's interest in any Special
Purpose Vehicle) of the Company and guaranteed by Parent by execution of the
Parent Guaranty and by all of the U.S. Subsidiaries (including, promptly upon
the acquisition or creation thereof, any U.S. Subsidiary acquired or created
after the date hereof) by execution of a counterpart of the U.S. Guaranty
(provided that neither the QuIPS Trust nor any Special Purpose Vehicle shall
have any obligation to execute the U.S. Guaranty), (ii) the obligations of
Parent under the Parent Guaranty are secured by substantially all of the assets
of Parent (other than real property and Parent's interest in the QuIPS Trust or
any Special Purpose Vehicle), and (iii) the obligations of each U.S. Subsidiary
(other than the QuIPS Trust and any Special Purpose Vehicle) under the U.S.
Guaranty are secured by substantially all of the assets (other than real
property and such U.S. Subsidiary's interest in any Special Purpose Vehicle) of
such U.S. Subsidiary. In addition, upon the occurrence of any Event of Default
or Unmatured Event of Default and the request of Lenders having Percentages
aggregating 80% or more, the Company will cause each Canadian Subsidiary to
guaranty all of the obligations of the Company hereunder and to take all actions
necessary so that the obligations of such Canadian Subsidiary under such
guaranty are secured by substantially all of the assets (other than real
property) of such Canadian Subsidiary (it being understood that, at the request
of the Company at any time thereafter when no Event of Default or Unmatured
Event of Default exists, such guaranties and collateral security shall be
released).
10.15 Transactions with Affiliates. Not, and not permit any Subsidiary
----------------------------
to, enter into, or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates (other than Parent, the Company and
Subsidiaries of the Company) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates; provided that
Parent may enter into transactions with Acquisition Subsidiaries or the QuIPS
Trust, and Parent or any Subsidiary may enter into transactions with any Special
Purpose Vehicle in connection with any Securitization Transaction, to the extent
permitted by the terms of this Agreement.
10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to
----------------------
maintain, each Pension Plan and each Canadian pension plan in substantial
compliance with all applicable requirements of law and regulations.
40
10.17 Environmental Laws. Conduct, and cause each Subsidiary to conduct,
------------------
its operations and keep and maintain its property in compliance with all
Environmental Laws (other than Immaterial Laws).
10.18 Unconditional Purchase Obligations. Not, and not permit any
----------------------------------
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit Parent or any Subsidiary from entering into options
for the purchase of particular assets or businesses.
10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to,
-----------------------
enter into any agreement containing any provision which (a) would be violated or
breached by the performance by Parent or any Subsidiary of any of its
obligations hereunder or under any other Loan Document or (b) would prohibit
Parent, the Company or any Subsidiary of the Company (other than any Special
Purpose Vehicle) from granting to the Collateral Agent, for the benefit of the
Lenders, a Lien on any of its assets.
10.20 Business Activities. Not, and not permit any Subsidiary (other than
-------------------
the QuIPS Trust and any Special Purpose Vehicle) to, engage in any line of
business other than the equipment rental business and businesses reasonably
related thereto.
10.21 Advances and Other Investments. Not, and not permit any Subsidiary
------------------------------
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) equity Investments existing on the Closing Date in wholly-owned
Subsidiaries of the Company identified in Schedule 9.8;
------------
(b) equity Investments in Subsidiaries of the Company acquired after the
Closing Date in transactions permitted as acquisitions of stock or assets
pursuant to Section 10.11;
-------------
(c) in the ordinary course of business, contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in
Parent or in any Subsidiary of the Company or by any of the Subsidiaries
of the Company in Parent, the Company or any other Subsidiary of the
Company, by way of intercompany loans, advances or guaranties, all to the
extent permitted by Section 10.7;
------------
(e) Suretyship Liabilities permitted by Section 10.7;
------------
41
(f) good faith deposits made in connection with prospective acquisitions
of stock or assets permitted by Section 10.11;
-------------
(g) loans to officers and employees not exceeding (i) a Dollar Equivalent
amount of U.S.$100,000 in the aggregate to any single individual or (ii) a
Dollar Equivalent amount of U.S.$300,000 in the aggregate for all such
individuals;
(h) Investments by Parent in the Company, in Subsidiaries of the Company
and, subject to the provisions of Section 10.11, in Acquisition
-------------
Subsidiaries;
(i) Investments by Parent in the QuIPS Trust existing on the Closing Date;
(j) Cash Equivalent Investments; and
(k) Investments by Parent or any Subsidiary in any Special Purpose
Vehicle; provided that the aggregate amount of all such Investments made in
cash shall not exceed U.S. $10,000,000;
provided that (x) any Investment which when made complies with the requirements
- --------
of the definition of the term "Cash Equivalent Investment" may continue to be
--------------------------
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (b),
----------
(c), (d), (e), (f), (g) or (k) shall be permitted to be made if, immediately
- --- --- --- --- ---
before or after giving effect thereto, any Event of Default or Unmatured Event
of Default shall have occurred and be continuing; and (z) the aggregate
principal amount of Investments by the Company in Foreign Subsidiaries pursuant
to clauses (b), (c), (d), (e), and (f) plus, without duplication, the aggregate
----------- --- --- --- ---
amount of all "Canadian Loans" under and as defined in the Credit Agreement
shall not at any time exceed 15% of the consolidated assets of Parent and its
Subsidiaries.
10.22 Location of Assets. Not permit at any time more than 15% of the
------------------
consolidated assets of Parent and its Subsidiaries to be owned by Foreign
Subsidiaries.
10.23 QuIPS Documents. Not permit any amendment to or modification of the
---------------
QuIPS Debentures, the QuIPS Preferred Securities, either QuIPS Guarantee or the
QuIPS Indenture which, in any such case, is adverse to the interests of the
Lenders.
10.24 Limitations on Securitization Transactions. Not at any time permit
------------------------------------------
the aggregate amount of all Securitization Obligations to exceed (a) in the case
of Receivables Securitization Transactions, U.S. $150,000,000; and (b) in the
case of Equipment Securitization Transactions, the remainder of (i) the greater
of (x) U.S. $500,000,000 and (y) 15% of Tangible Assets minus (ii) the aggregate
-----
amount of all Synthetic Lease Obligations (excluding, to prevent double-
counting, Synthetic Lease Obligations which also are Securitization Obligations
arising under Equipment Securitization Transactions) of Parent and its
Subsidiaries.
42
SECTION 11 CONDITIONS OF LENDING.
11.1 Initial Loans. The obligation of the Lenders to make the initial
-------------
Loans is (in addition to the conditions precedent set forth in Section 11.3)
------------
subject to the conditions precedent that the Agent shall have received (a) all
amounts which are then due and payable pursuant to Section 5 and (to the extent
---------
billed) Section 14.6 and (b) all of the following, each duly executed and dated
------------
the Closing Date (or such earlier date as shall be satisfactory to the Agent),
in form and substance satisfactory to the Agent, and each (except for the Notes,
of which only the originals shall be signed) in sufficient number of signed
counterparts to provide one for each Lender:
11.1.1 Notes. A Note for each Lender which is a party hereto on the
-----
Closing Date.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
-----------
Directors of each of Parent and the Company authorizing or ratifying the
execution, delivery and performance by such entity of this Agreement and, in the
case of the Company, the Notes.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
--------------
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by Parent and the Company
of the documents referred to in this Section 11, as applicable.
----------
11.1.4 Incumbency and Signature Certificates. A certificate of the
-------------------------------------
Secretary or an Assistant Secretary of each of Parent and the Company certifying
the names of the officer or officers of such entity authorized to sign this
Agreement and, in the case of the Company, the Notes, together with a sample of
the true signature of each such officer (it being understood that the Agent and
each Lender may conclusively rely on each such certificate until formally
advised by a like certificate of any changes therein).
11.1.5 Opinions of Counsel for the Company. The opinions of (a) Weil,
-----------------------------------
Gotshal & Manges LLP, special counsel to Parent and the Company, and (b) Oscar
D. Folger, counsel to Parent and the Company.
11.1.6 Confirmation. A Confirmation, substantially in the form of Exhibit
------------ -------
M, signed by Parent, the Company and each other Loan Party confirming the
- -
effectiveness of the U.S. Guaranty, the Parent Guaranty and each Collateral
Document and that the Agent and the Lenders are entitled to the benefits of such
documents.
11.1.7 Confirmatory Certificate. A certificate of a duly-authorized
------------------------
officer of Parent as to the matters set forth in Section 11.3.
------------
11.1.8 Other. Such other documents as the Agent or any Lender may
-----
reasonably request.
43
11.2 Additional Loans. The right of the Company to borrow any Additional
----------------
Loan is (in addition to the conditions precedent set forth in Section 11.3)
------------
subject to the conditions precedent that the Agent shall have received all of
the following, each duly executed and dated the date of such Additional Loans
(or such earlier date as shall be satisfactory to the Agent), in form and
substance satisfactory to the Agent, and each (except for any Note, of which
only the original shall be signed) in sufficient number of signed counterparts
to provide one for each Lender which is increasing the amount of its Loan or
becoming a party hereto:
11.2.1 Notes. A Note for each new Lender and a replacement Note for each
-----
existing Lender which is making an Additional Loan.
11.2.2 Confirmatory Certificate. A certificate of a duly-authorized
------------------------
officer of Parent as to the matters set forth in Section 11.3.
------------
11.2.3 Other. Such other documents as the Agent or any Lender may
-----
reasonably request (including copies or updates of any of the documents referred
to in Section 11.1.2, 11.1.3, 11.1.4, 11.1.5, or 11.1.8).
-------------- ------ ------ ------ ------
11.3 All Loans. The obligation of the Lenders to make the initial Loans
---------
and the right of the Company to borrow any Additional Loans is (in addition to
the conditions precedent set forth in Section 11.1.1 or 11.1.2, as applicable)
-------------- ------
subject to the conditions precedent that (a) the representations and warranties
of Parent, the Company and each other Subsidiary set forth in this Agreement and
the other Loan Documents shall be true and correct in all material respects with
the same effect as if then made; and (b) no Event of Default or Unmatured Event
of Default shall have then occurred and be continuing.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
-----------------
of Default:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
------------------------------
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest or other amount payable by the Company
hereunder or under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the terms
-------------------------
applicable to any Debt of Parent or any Subsidiary (excluding Holdbacks) in an
aggregate amount (for all such Debt so affected) exceeding a Dollar Equivalent
amount of U.S.$15,000,000 and such default shall (a) consist of the failure to
pay such Debt when due (subject to any applicable grace period), whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to its expressed
maturity; or any default of the type referred to in clause (a) or (b) above
---------- ---
shall occur under the terms of any Holdback owed by Parent or any Subsidiary in
an aggregate amount (for all Holdbacks so affected) exceeding a Dollar
Equivalent amount of U.S.$15,000,000, provided that no amount payable in respect
--------
of any
44
Holdback shall be deemed to be in default to the extent that the obligation to
pay such amount is being contested by Parent or the applicable Subsidiary in
good faith and by appropriate proceedings and appropriate reserves have been set
aside in respect of such amount; or any event of default, default, liquidation
event or similar event shall occur or exist relating to any Securitization
Transaction if the effect of such event is to cause or permit (subject to any
applicable grace period) an aggregate cash amount exceeding a Dollar Equivalent
amount of U.S. $15,000,000 to become immediately due and payable by Parent or
any Subsidiary under such Securitization Transaction.
12.1.3 Other Material Obligations. Default in the payment when due, or in
--------------------------
the performance or observance of, any material obligation of, or condition
agreed to by, Parent or any Subsidiary with respect to any material purchase or
lease of goods or services where such default, singly or in the aggregate with
other such defaults might reasonably be expected to have a Material Adverse
Effect (except only to the extent that the existence of any such default is
being contested by Parent or such Subsidiary in good faith and by appropriate
proceedings and appropriate reserves have been made in respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. Parent or any Subsidiary becomes
----------------------------
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or Parent or any Subsidiary applies
for, consents to, or acquiesces in the appointment of a trustee, receiver or
other custodian for Parent or such Subsidiary or any property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for Parent or any Subsidiary or for a substantial part of the property
of any thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of any Subsidiary of the Company), is commenced in respect of Parent or any
Subsidiary, and if such case or proceeding is not commenced by Parent or such
Subsidiary, an order for relief is entered, it is consented to or acquiesced in
by Parent or such Subsidiary, or remains for 60 days undismissed; or Parent or
any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by
------------------------------------------------
Parent to comply with or to perform any covenant set forth in Sections 10.5
-------------
through 10.13, 10.15, 10.16 or 10.24; or (b) failure by Parent or the Company to
----- ----- ----- -----
comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
- ---------- ----------
days (or, in the case of Section 10.14, five Business Days) after notice thereof
-------------
to the Company from the Agent or any Lender.
12.1.6 Warranties. Any warranty made or deemed made by the Company herein
----------
is breached or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
Parent or the Company to the Agent or
45
any Lender in connection herewith is false or misleading in any material respect
on the date as of which the facts therein set forth are (or are deemed) stated
or certified.
12.1.7 Pension Plans. (i) Institution of any steps by Parent or any other
-------------
Person to terminate a Pension Plan if as a result of such termination Parent
could be required to make a contribution to such Pension Plan, or could incur a
liability or obligation to such Pension Plan, in excess of U.S.$15,000,000; (ii)
a contribution failure occurs with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that Parent and the Controlled Group have incurred on the date of such
withdrawal) exceeds U.S.$15,000,000.
12.1.8 Judgments. Final judgments which exceed an aggregate Dollar
---------
Equivalent amount of U.S.$15,000,000 shall be rendered against Parent or any
Subsidiary and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 30 days after entry or filing of such
judgments.
12.1.9 Invalidity of U.S. Guaranty, etc. The U.S. Guaranty shall cease to
---------------------------------
be in full force and effect with respect to any applicable Subsidiary, any
applicable Subsidiary shall fail (subject to any applicable grace period) to
comply with or to perform any applicable provision of the U.S. Guaranty, or any
applicable Subsidiary (or any Person by, through or on behalf of such
Subsidiary) shall contest in any manner the validity, binding nature or
enforceability of the U.S. Guaranty with respect to such Subsidiary.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
----------------------------------------
shall cease to be in full force and effect with respect to Parent, the Company
or any applicable Subsidiary, Parent, the Company or any applicable Subsidiary
shall fail (subject to any applicable grace period) to comply with or to perform
any applicable provision of any Collateral Document to which such entity is a
party, or Parent, the Company or any applicable Subsidiary (or any Person by,
through or on behalf of Parent, the Company or such Subsidiary) shall contest in
any manner the validity, binding nature or enforceability of any Collateral
Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within the
-----------------
meaning of Section 13 or 14 of the Exchange Act, but excluding Permitted
Holders) shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of the outstanding shares of
common stock of Parent; (b) during any 24-month period, individuals who at the
beginning of such period constituted Parent's Board of Directors (together with
any new directors whose election by Parent's Board of Directors or whose
nomination for election by Parent's shareholders was approved by a vote of at
least two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of Parent; (c) a
period of 30 consecutive days shall have elapsed during which any two of the
individuals named in Schedule 12.1.11 shall have ceased to hold executive
----------------
offices with Parent at
46
least equal in seniority to their present offices, as set out in such Schedule
--------
12.1.11, excluding any such individual who has been replaced by another
- -------
individual or individuals reasonably satisfactory to the Required Lenders (it
being understood that any such replacement individual shall be deemed added to
Schedule 12.1.11 on the date of approval thereof by the Required Lenders); (d)
- ----------------
any "Change of Control" shall occur under, and as defined in, any Subordinated
Note Indenture or any document evidencing or governing any Permitted Senior
Secured Debt; or (e) the Company shall cease to be a direct, wholly-owned
Subsidiary of Parent.
12.1.12 Invalidity of Parent Guaranty, etc. The Parent Guaranty shall
----------------------------------
cease to be in full force and effect, Parent shall fail (subject to any
applicable grace period) to comply with or to perform any provision of the
Parent Guaranty, or Parent (or any Person by, through or on behalf of Parent)
shall contest in any manner the validity, binding nature or enforceability of
the Parent Guaranty.
12.2 Effect of Event of Default. If any Event of Default described in
--------------------------
Section 12.1.4 shall occur, the Notes and all other obligations hereunder shall
- --------------
become immediately due and payable, all without presentment, demand, protest or
notice of any kind; and, if any other Event of Default shall occur and be
continuing, the Agent (upon written request of the Required Lenders) shall
declare all Notes and all other obligations hereunder to be due and payable,
whereupon the Notes and all other obligations hereunder shall become
immediately due and payable, all without presentment, demand, protest or notice
of any kind. The Agent shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default
of any event described in Section 12.1.1 or Section 12.1.4 may be waived by the
-------------- --------------
written concurrence of all of the Lenders, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
----------
concurrence of the Required Lenders.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. Each Lender hereby irrevocably
-----------------------------
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
------------
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
13.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The
47
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agents. The Agent shall be entitled to rely, and shall
------------------
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if required, all Lenders) as
it deems appropriate and, if it so requests, confirmation from the Lenders of
their obligation to indemnify the Agent against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or, if required,
all Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest or
fees required to be paid to the Agent for the account of the Lenders, unless the
Agent shall have received written notice from a Lender or the Company referring
to this Agreement, describing such Event of Default or Unmatured Event of
Default and stating that such notice is a "notice of default." If the Agent
receives such a notice, the Agent will promptly notify the Lenders of its
receipt thereof. The Agent shall take such action with respect to such Event of
Default or Unmatured Event of Default as may be requested by the Required
Lenders (or, if required, all Lenders) in accordance with Section 12; provided,
---------- --------
48
however, that unless and until the Agent has received any such request, the
- -------
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Lenders.
13.6 Credit Decision. Each Lender acknowledges that none of the Agent-
---------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereafter taken, including any review of the affairs of the Company
or any Subsidiary or Affiliate of the Company, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company or any Subsidiary or Affiliate of the Company,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Company hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial or other condition or creditworthiness of the Company or any
Subsidiary or Affiliate of the Company which may come into the possession of any
of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated hereby
---------------
are consummated, the Lenders shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Lender shall be
-------- -------
liable for any payment to any Agent-Related Person of any portion of the
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing (but subject to the proviso to
the foregoing sentence), each Lender shall reimburse the Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including reasonable
fees of attorneys for the Agent (including the allocable costs of internal legal
services and all disbursements of internal counsel)) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive repayment of the Loans, cancellation of the Notes,
any foreclosure under,
49
or any modification, release or discharge of, any or all of the Collateral
Documents, any termination of this Agreement and the resignation or replacement
of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities" shall
------------ -----------------------
mean: any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or the replacement of any Lender) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or any other Loan Document, whether or not
any Agent-Related Person, any Lender or any of their respective officers,
directors, employees, counsel, agents or attorneys-in-fact is a party thereto.
13.8 Agent in Individual Capacity. BofA and its Affiliates may make loans
----------------------------
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, and without
notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to
such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Affiliate) and
acknowledge that BofA and its Affiliates shall be under no obligation to provide
such information to them. With respect to its Loans (if any), BofA and its
Affiliates shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though BofA were not the Agent, and
the term "Lender" includes BofA and its Affiliates, to the extent applicable, in
their individual capacities.
13.9 Successor Agent; Assignment of Agency. The Agent may, and at the
-------------------------------------
request of the Required Lenders shall, resign as Agent upon 30 days' notice to
the Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall, with (so long as no Event of Default exists) the consent of the Company
(which shall not be unreasonably withheld or delayed), appoint from among the
Lenders a successor Agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Company, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall
50
succeed to all the rights, powers and duties of the retiring Agent and the term
"Agent" shall mean such successor agent, and the retiring Agent's appointment,
powers and duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 13 and Sections
---------- --------
14.6 and 14.13 shall inure to its benefit as to any actions taken or omitted to
- ---- -----
be taken by it while it was the Agent under this Agreement. If no successor
agent has accepted appointment as the Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
13.10 Withholding Tax.
---------------
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption
from, or a reduction of, U.S. withholding tax under Section 1441 or
1442 of the Code, such Lender agrees to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed Internal Revenue Service ("IRS") Forms 1001 and W-8 or any
---
applicable successor form (including Form W-8BEN) before the payment
of any interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224
or any applicable successor form (including Form W-8ECI) before the
payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement, and IRS Form W-9;
(iii) if such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either IRS Form
1001 or 4224 or any applicable successor form (including Form W-8BEN
or W-8ECI), (A) a certificate substantially in the form of Exhibit J
---------
and (B) two properly completed and signed copies of IRS Form W-8
certifying that such Lender is entitled to an exemption from United
States withholding tax with respect to payments of interest to be
made under this Agreement; and
(iv) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
51
Any such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 or any
applicable successor form (including Form W-8BEN) and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of
the obligations of the Company to such Lender, such Lender agrees to notify
the Agent of the percentage amount in which it is no longer the beneficial
owner of such obligations of the Company hereunder. To the extent of such
percentage amount, the Agent will treat such Lender's IRS Form 1001 (or
applicable successor form) as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 or any applicable successor form (including
Form W-8ECI) with the Agent grants a participation in all or part of the
obligations of the Company to such Lender hereunder, such Lender agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
--------------
Agent may withhold from any interest payment to such Lender not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because such Lender failed to notify the Agent of a change in
circumstances which rendered an exemption from, or reduction of,
withholding tax ineffective), such Lender shall indemnify the Agent fully
for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on any amount payable to the Agent under this
Section, together with all costs and expenses (including reasonable fees of
attorneys for the Agent (including the allocable costs of internal legal
services and all disbursements of internal counsel)). The obligations of
the Lenders under this subsection shall survive the repayment of the Loans,
cancellation of the Notes, any termination of this Agreement and the
resignation or replacement of the Agent.
52
(f) If any Lender claims exemption from, or reduction of, withholding
tax under the Code by providing IRS Form W-8 and a certificate in the form
of Exhibit J and such Lender sells, assigns, grants a participation in, or
---------
otherwise transfers all or part of the obligations of the Company to such
Lender, such Lender agrees to notify the Agent and the Company of the
percentage amount in which it is no longer the beneficial owner of
obligations of the Company to such Lender. To the extent of such
percentage amount, the Agent and the Company will treat such Lender's IRS
Form W-8 and certificate in the form of Exhibit J as no longer valid.
---------
13.11 Other Agents. None of the Lenders identified on the signature pages
------------
of this Agreement or otherwise herein, or in any amendment hereof or other
document related hereto, as being the "Syndication Agent", the "Documentation
Agent" or a "Co-Agent" (collectively, the "Other Agents") shall have any right,
------------
power, obligation, liability, responsibility or duty under this Agreement in
such capacity other than those applicable to all Lenders. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Other
Agents in deciding to enter into this Agreement or in taking or refraining from
taking any action hereunder or pursuant hereto.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent or any Lender
------------------
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Notes shall in
any event be effective unless the same shall be in writing and signed and
delivered by Lenders having an aggregate Percentage of not less than the
aggregate Percentage expressly designated herein with respect thereto or, in the
absence of such designation as to any provision of this Agreement or the Notes,
by the Required Lenders, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent shall
change the Percentage of any Lender without the consent of such Lender. No
amendment, modification, waiver or consent shall (i) extend the date for payment
of any principal of or interest on the Loans or any fees payable hereunder, (ii)
reduce the principal amount of any Loan, the rate of interest thereon or any
fees payable hereunder, (iii) release the U.S. Guaranty (other than with respect
to a Person which ceases to be a Subsidiary as a result of a transaction
permitted hereunder) or the Parent Guaranty or all or substantially all of the
collateral granted under the Collateral Documents or (iv) reduce the aggregate
Percentage required to effect an amendment, modification, waiver or consent
without, in each case, the consent of all Lenders. No provision of Section 13
----------
or any other provision of this Agreement affecting the Agent in its capacity as
such shall be amended, modified or waived without the written consent of the
Agent.
14.2 Confirmations. The Company and each Lender agree from time to time,
-------------
upon written request received by it from the other, to confirm to the other in
writing (with a copy of
53
each such confirmation to the Agent) the aggregate unpaid principal amount of
the Loan then outstanding under the applicable Note.
14.3 Notices. Except as otherwise provided in Section 2.3, all notices
------- -----------
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 14.3 or at such
-------------
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Section 2.3, the Agent shall be entitled
-----------
to rely on telephonic instructions from any person that the Agent in good faith
believes is an authorized officer or employee of the Company, and the Company
shall hold the Agent and each other Lender harmless from any loss, cost or
expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
------------
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if Parent notifies
--------
the Agent that Parent wishes to amend any covenant in Section 10 to eliminate or
----------
to take into account the effect of any change in GAAP on the operation of such
covenant (or if the Agent notifies Parent that the Required Lenders wish to
amend Section 10 for such purpose), then Parent's compliance with such covenant
----------
shall be determined on the basis of GAAP as in effect immediately before the
relevant change in GAAP became effective until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to Parent and the Required
Lenders.
14.5 Regulation U. Each Lender represents that it in good faith is not
------------
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
-------------------------
reasonable out-of-pocket costs and expenses of the Agent (including the
reasonable fees and charges of counsel for the Agent and of local counsel, if
any, who may be retained by said counsel) in connection with the preparation,
execution, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (including any amendment,
supplement or waiver to any Loan Document), and all reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees, court costs and other
legal expenses and allocated costs of staff counsel) incurred by the Agent and
each Lender after an Event of Default in connection with the enforcement of this
Agreement, the other Loan Documents or any such other documents. In addition,
the Company agrees to pay, and to save the Agent and the Lenders harmless from
all liability for, (a) any stamp or other taxes (excluding income taxes and
franchise taxes based on
54
net income) which may be payable in connection with the execution and delivery
of this Agreement, the borrowings hereunder, the issuance of the Notes or the
execution and delivery of any other Loan Document or any other document provided
for herein or delivered or to be delivered hereunder or in connection herewith
and (b) any fees of Parent's auditors in connection with any reasonable exercise
by the Agent and the Lenders of their rights pursuant to Section 10.2. All
------------
obligations provided for in this Section 14.6 shall survive repayment of the
------------
Loans, cancellation of the Notes and any termination of this Agreement.
14.7 Judgment. If, for the purposes of obtaining judgment in any court, it
--------
is necessary to convert a sum due hereunder or under any other Loan Document in
one currency into another currency, the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent could purchase the
first currency with such other currency on the Business Day preceding that on
which final judgment is given. The obligation of the Company in respect of any
such sum due from it to the Agent or any Lender hereunder or under any other
Loan Document shall, notwithstanding any judgment in a currency (the "Judgment
--------
Currency") other than that in which such sum is denominated in accordance with
- --------
the applicable provisions of this Agreement (the "Agreement Currency"), be
------------------
discharged only to the extent that on the Business Day following receipt by the
Agent or such Lender of any sum adjudged to be so due in the Judgment Currency,
the Agent or such Lender may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Agent or such Lender in the Agreement Currency, the Company agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Agent or such Lender against such loss. If the amount of the Agreement Currency
so purchased is greater than the sum originally due to the Agent or such Lender
in such currency, the Agent or such Lender agrees to return the amount of any
excess to the Company (or to any other Person who may be entitled thereto under
applicable law).
14.8 Captions. Section captions used in this Agreement are for convenience
--------
only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
---------------------------
14.9.1 Assignments. Any Lender may, with the prior written consents of
-----------
the Company and the Agent (which consents shall not be unreasonably delayed or
withheld and shall not be required for any assignment and delegation to (a)
another Lender or (B) a Related Fund), at any time assign and delegate to one or
more Related Funds, commercial banks or other Persons (any Person to whom such
an assignment and delegation is to be made being herein called an "Assignee")
--------
all or any fraction of such Lender's Loan in a minimum aggregate amount equal to
the lesser of (i) the amount of the assigning Lender's Loan and (ii)
U.S.$1,000,000; provided, however, that (a) no assignment and delegation may be
-------- -------
made to any Person if, at the time of such assignment and delegation, the
Company would be obligated to pay any greater amount under Section 7.5 or
-----------
Section 8 to the Assignee than the Company is then obligated to pay to the
- ---------
assigning Lender under such Sections (and if any assignment is made in violation
of the
55
foregoing, the Company will not be required to pay the incremental amounts); and
(b) the Company and the Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned and
delegated to an Assignee until the date when all of the following conditions
shall have been met:
(x) five Business Days (or such lesser period of time as the Agent
and the assigning Lender shall agree) shall have passed after written
notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit H (an "Assignment Agreement"),
--------- --------------------
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) the assigning Lender or the Assignee shall have paid the Agent a
processing fee of U.S.$3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder, and (y) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations hereunder. Within five Business Days after the effectiveness of
any assignment and delegation, the Company shall execute and deliver to the
Agent (for delivery to the Assignee and the Assignor, as applicable) a new Note
in the amount of the Assignee's Loan and, if the assigning Lender continues to
have a Loan hereunder, a replacement Note in the amount of the assigning
Lender's Loan. Each such Note shall be dated the effective date of such
assignment. The assigning Lender shall mark the predecessor Note "exchanged"
and deliver such Note to the Company. Any attempted assignment and delegation
not made in accordance with this Section 14.9.1 shall be null and void.
--------------
The Company designates the Agent as its agent for maintaining a book entry
record of ownership identifying the Lenders, their respective addresses and the
amount of the respective Loans and Notes which they own. The foregoing
provisions are intended to comply with the registration requirements in Treasury
Regulation Section 5f.103-1 so that the Loans and Notes are considered to be in
"registered form" pursuant to such regulation.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
--------------
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loan and its Note to
56
a Federal Reserve Bank (but no such assignment shall release any Lender from any
of its obligations hereunder).
14.9.2 Participations. Any Lender may at any time sell to one or more
--------------
commercial banks or other Persons participating interests in such Lender's Loan,
the Note held by such Lender or any other interest of such Lender hereunder (any
Person purchasing any such participating interest being called a "Participant").
-----------
In the event of a sale by a Lender of a participating interest to a Participant,
(x) such Lender shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect
voting rights hereunder except with respect to any of the events described in
the fourth sentence of Section 14.1. Each Lender agrees to incorporate the
------------
requirements of the preceding sentence into each participation agreement which
such Lender enters into with any Participant. The Company agrees that if
amounts outstanding under this Agreement and the Notes are due and payable (as a
result of acceleration or otherwise), each Participant shall be deemed to have
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or such Note; provided that such right of setoff shall be subject to
--------
the obligation of each Participant to share with the Lenders, and the Lenders
agree to share with each Participant, as provided in Section 7.4. The Company
-----------
also agrees that each Participant shall be entitled to the benefits of Section
-------
7.5 and Section 8 as if it were a Lender (provided that no Participant shall
- --- ---------
receive any greater compensation pursuant to Section 7.5 or Section 8 than would
----------- ---------
have been paid to the participating Lender if no participation had been sold).
Each Lender which sells a participation will maintain a book entry record of
ownership identifying the Participant and the amount of such participation owned
by such Participant. Such book entry record of ownership shall be maintained by
the Lender as agent for the Company and the Agent. This provision is intended
to comply with the registration requirements in Treasury Regulation Section
5f.103-1 so that the Loans and Notes are considered to be in "registered form"
pursuant to such regulation.
14.10 Governing Law. This Agreement and each Note shall be a contract
-------------
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the
Lenders expressed herein or in any other Loan Document shall be in addition to
and not in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be
57
deemed to be an original, but all such counterparts shall together constitute
but one and the same agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company, the Lenders and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders and the Agent and the
successors and assigns of the Lenders and the Agent. The Company may not assign
its rights or obligations hereunder without the prior written consent of all
Lenders.
14.13 Indemnification by the Company.
------------------------------
(a) In consideration of the execution and delivery of this Agreement by the
Agent and the Lenders and the agreement to make the Loans hereunder, the Company
hereby agrees to indemnify and exonerate the Agent, each Lender and each of the
officers, directors, investment advisors, trustees, employees, Affiliates and
agents of the Agent and each Lender (each a "Lender Party") against, and hold
------------
each Lender Party free and harmless from, any and all actions, causes of action,
suits, losses, liabilities, damages and expenses, including reasonable
attorneys' fees and charges and allocated costs of staff counsel (collectively,
for purposes of this Section 14.13, called the "Indemnified Liabilities"),
------------- -----------------------
incurred by the Lender Parties or any of them as a result of, or arising out of,
or relating to (i) any tender offer, merger, amalgamation purchase of stock,
purchase of assets or other similar transaction financed or proposed to be
financed in whole or in part, directly or indirectly, with the proceeds of the
Loans, (ii) the use, handling, release, emission, discharge, transportation,
storage, treatment or disposal of any hazardous substance at any property owned
or leased by the Company or any Subsidiary, (iii) any violation of any
Environmental Laws with respect to conditions at any property owned or leased by
the Company or any Subsidiary or the operations conducted thereon, (iv) the
investigation, cleanup or remediation of offsite locations at which the Company
or any Subsidiary or their respective predecessors are alleged to have directly
or indirectly disposed of hazardous substances or (v) the execution, delivery,
performance or enforcement of this Agreement or any other Loan Document by any
of the Lender Parties, except for any such Indemnified Liabilities arising on
account of any such Lender Party's gross negligence or willful misconduct. If
and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Nothing set forth above shall be construed to
relieve any Lender Party from any obligation it may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
-------------
repayment of the Loans, cancellation of the Notes, any foreclosure under, or
any modification, release or discharge of, any or all of the Collateral
Documents and any termination of this Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
-------------------------------------------
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR
58
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS;
PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
- -------- -------
OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE COMPANY
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 Waiver of Jury Trial. THE COMPANY, THE AGENT AND EACH LENDER HEREBY
--------------------
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
14.16 Acknowledgments and Agreements regarding Intercreditor Agreement.
----------------------------------------------------------------
Each Lender hereby acknowledges that (a) in addition to acting as Agent
hereunder, BofA acts as "U.S. Agent" under the Credit Agreement, as "Agent"
under the Term Loan B Agreement, as Agent under the Term Loan C Agreement and as
"Collateral Agent" under the Intercreditor Agreement; and (b) this Agreement
constitutes a "Permitted Senior Secured Debt Agreement" as defined in the
Intercreditor Agreement, the obligations hereunder constitute "Permitted Senior
Secured Debt Obligations" as defined in the Intercreditor Agreement and each of
the Lenders constitutes a "Permitted Creditor" as defined in the Intercreditor
Agreement. Each of the
59
Lenders agrees that (i) the Agent may act on its behalf under the Intercreditor
Agreement and may grant any consent, or take or omit to take any other action,
thereunder on behalf of the Lenders at the direction or with the consent of the
Required Lenders (unless, pursuant to the express terms of this Agreement or the
Intercreditor Agreement, such consent, action or inaction may only be granted or
taken the direction or consent of all Lenders) and (ii) the Collateral Agent may
act on behalf of such Lender as set forth in the Intercreditor Agreement.
Without limiting clause (ii) of the foregoing sentence, the Lenders irrevocably
-----------
authorize the Collateral Agent, at its option and in its discretion, to take any
action permitted under subsection 3(f) of the Intercreditor Agreement.
14.17 Designated Senior Indebtedness. The Company hereby designates the
------------------------------
Loans and all other obligations of the Company hereunder and under the Notes as
Designated Senior Indebtedness for purposes of, and as defined in, each
Subordinated Note Debenture.
60
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By_______________________________
Chief Financial Officer
UNITED RENTALS (NORTH AMERICA), INC.
By_______________________________
Chief Financial Officer
BANK OF AMERICA, N.A.,
as Administrative Agent
By_______________________________
Title____________________________
GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Syndication Agent, Lead Arranger and Book
Manager and as a Lender
By_______________________________
Title____________________________
S-1
SCHEDULE 1.1(A)
Lender Amount of Loan Percentage
------ -------------- ----------
Goldman Sachs Credit Partners L.P. $100,000,000 100%
SCHEDULE 12.1.11
KEY EXECUTIVES
Name Current Office(s)
- ---- -----------------
Bradley S. Jacobs Chairman, Chief Executive Officer and Director
John N. Milne Vice Chairman, Secretary, Director and Chief
Acquisition Officer
Michael J. Nolan Chief Financial Officer
Robert P. Miner Vice President, Finance
SCHEDULE 14.3
ADDRESSES FOR NOTICES
UNITED RENTALS, INC.
- --------------------
Four Greenwich Office Park
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Telephone: 203/622-3131
Facsimile: 203/622-6080
UNITED RENTALS (NORTH AMERICA), INC.
- ------------------------------------
Four Greenwich Office Park
Greenwich, Connecticut 06830
Attention: Chief Financial Officer
Telephone: 203/622-3131
Facsimile: 203/622-6080
BANK OF AMERICA, N.A., as Agent
- -------------------------------
Agency Management Services
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Sean Grimes
Telephone: 312/828-4900
Facsimile: 312/974-9102
GOLDMAN SACHS CREDIT PARTNERS, L.P.
- -----------------------------------
85 Broad Street
New York, New York 10004
Attention: Ellen Jane Erbstein
Telephone: 212/357-7874
Facsimile: 212/357-8068
EXHIBIT M
CONFIRMATION
Dated as of June 9, 2000
TO: Bank of America, N.A., as Agent for the Lenders party to the Term Loan D
Agreement referred to below and as Collateral Agent under the Intercreditor
Agreement referred to below; and the Lenders party to the Term Loan D
Agreement
Reference is made to (a) the Term Loan Agreement dated as of June 9, 2000
(the "Term Loan D Agreement") among United Rentals (North America), Inc. (the
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"Company"), United Rentals, Inc. ("Parent"), various financial institutions (the
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"Lenders") and Bank of America, N.A., as Agent, (b) the Second Restated U.S.
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Guaranty dated as of September 29, 1998 executed by various Subsidiaries of the
Company, (c) the Second Restated U.S. Security Agreement dated as of September
29, 1998 (the "Security Agreement") among the Company, Parent, various
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Subsidiaries of the Company and Bank of America, N.A., as Collateral Agent (in
such capacity, the "Collateral Agent"), (d) the Second Restated Company Pledge
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Agreement dated as of September 29, 1998 between the Company and the Collateral
Agent, (e) the Restated Parent Guaranty dated as of September 29, 1998 executed
by Parent, (f) the Restated Parent Pledge Agreement dated as of September 29,
1998 between Parent and the Collateral Agent, and (g) the Intercreditor
Agreement dated as of September 29, 1998 (the "Intercreditor Agreement") among
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Bank of America, N.A., as U.S. Agent for the financial institutions which are
parties to the Credit Agreement, Bank of America, N.A., as agent for the Term
Loan B Agreement, Bank of America, N.A., as agent for the financial institutions
which are parties to the Term Loan C Agreement and the Lenders, and the
Collateral Agent. Each document referred to in items (b) through (f) above is
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called a "Credit Document". Capitalized terms used but not defined herein shall
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have the meanings set forth in the Term Loan D Agreement.
Each of the undersigned (a) confirms to each of the addressees that (i)
each Credit Document to which such undersigned is a party continues in full
force and effect on and after the date hereof, and is the legal, valid and
binding obligation of such undersigned, enforceable against such undersigned in
accordance with its terms; and (ii) the obligations and liabilities guaranteed
or secured (as applicable) under each Credit Document include, without
limitation, all obligations and liabilities of the Company and Parent under the
Term Loan D Agreement; and (b) agrees that each reference in each Credit
Document to "Permitted Senior Secured Debt" shall include all Debt under the
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Term Loan D Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to
be executed and delivered by its duly authorized officer as of the date first
written above.
UNITED RENTALS (NORTH AMERICA), INC.
By:____________________________________
Title: Chief Financial Officer
UNITED RENTALS, INC.
By:____________________________________
Title:_________________________________
ADVANCE BARRICADES AND SIGNING, INC.
COAST LINE MARKING, INC.
FLASHER BARRICADES, INC.
FLASHER COMPANY OF OKLAHOMA, INC.
JADCO SIGNING, INC.
LECTRIC LIGHTS COMPANY
LIDDELL BROS., INC.
LIDDELL MANAGEMENT CO., INC.
PRECISION PAVEMENT MARKING, INC.
SAFETY LIGHTS SALES AND LEASING, INC.
OF TEXAS
STATE BARRICADING, INC.
TRAFFIC SAFETY SERVICES, INC.
TWO WAY TRAFFIC, INC.
UNITED RENTALS GULF, INC.
UNITED RENTALS NORTHWEST, INC.
UNITED RENTALS SOUTHEAST, INC.
UNITED RENTALS OF CANADA, INC.
WARNING LITES OF MINNESOTA, INC.
WARNING SAFETY LIGHTS, INC.
WARNING SAFETY LIGHTS OF GEORGIA, INC.
WLI INDUSTRIES, INC.
WARNING LITES OF INDIANA, INC.
WARNING LITES OF IOWA, INC.
SAFE-T-FLARE SERVICES, INC.
WORK ZONE SAFETY, INC.
WOUDENBERG ENTERPRISES, INC.
WYNNE SYSTEMS, INC.
By:________________________________
Title:_____________________________
UNITED EQUIPMENT RENTALS GULF, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:_________________________________
Title:______________________________
UNITED RENTALS SOUTHEAST, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:_________________________________
Title:______________________________
Accepted and Agreed to this
9th day of June, 2000
BANK OF AMERICA, N.A. (formerly Bank of America
National Trust and Savings Association), as Collateral Agent
for the Benefited Parties
By:_____________________________________
Title:__________________________________
Agency Officer
Amendment to Intercreditor Agreement