EXHIBIT 10(MM)
UNITED RENTALS (NORTH AMERICA), INC.
(a Delaware corporation)
PURCHASE AGREEMENT
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August 7, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209]
Ladies and Gentlemen:
United Rentals (North America), Inc., a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ( the "Initial Purchaser"), with respect to
the issue and sale by the Company and the purchase by the Initial Purchaser of
the principal amount set forth in Schedule A of the Company's $205,000,000
aggregate principal amount of 8.80% Senior Subordinated Notes due 2008, Series A
(the "Securities"). The Securities are to be issued pursuant to an indenture to
be dated as of the Closing Time (as defined herein) (the "Indenture") between
the Company, the United States subsidiaries of the Company (the "Guarantors")
and State Street Bank and Trust Company, as trustee (the "Trustee"). The
Securities and the Exchange Notes (as defined below) issuable in exchange
therefor are collectively referred to herein as the "Notes." Pursuant to the
Indenture and certain guarantees (the "Guarantees"), the Guarantors have agreed
to guaranty the Company's payment and other obligations under the Indenture and
the Securities. Securities issued in book-entry form will be issued to Cede &
Co. as nominee of The Depository Trust Company ("DTC") pursuant to a letter
agreement, to be dated as of the Closing Time (as defined in Section 2(b)) (the
"DTC Agreement"), among the Company, the Trustee and DTC.
The Company understands that the Initial Purchaser proposes to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are
to be offered and sold through the Initial Purchaser without being registered
under the Securities
Act of 1933, as amended (the "1933 Act"), in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors that
acquire Securities may only resell or otherwise transfer such Securities if such
Securities are hereafter registered under the 1933 Act or if an exemption from
the registration requirements of the 1933 Act is available (including the
exemption afforded by Rule 144A ("Rule 144A")) of the rules and regulations
promulgated under the 1933 Act by the Securities and Exchange Commission (the
"Commission")).
Holders (including subsequent transferees) of the Securities will have the
registration rights set forth in the Notes Registration Rights Agreement (the
"Notes Registration Rights Agreement") to be dated as of the Closing Time among
the Company, the Guarantors and the Initial Purchaser and for so long as such
Securities constitute "Registrable Securities" (as defined in such agreement).
Pursuant to the Notes Registration Rights Agreement, the Company will agree to
file with the Commission, under the circumstances set forth therein, (i) a
registration statement under the 1933 Act (the "Exchange Offer Registration
Statement") relating to the Company's 8.80% Senior Subordinated Notes due 2008
Series B (the "Exchange Notes"), to be offered in exchange for the Securities
(such offer to exchange being referred to as the "Exchange Offer") and (ii) a
shelf registration statement pursuant to Rule 415 under the 1933 Act (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Notes Registration Statements") relating to the resale by
certain holders of the Securities and to use its best efforts to cause such
Notes Registration Statements to be declared and remain effective and usable for
the periods specified in the Notes Registration Rights Agreement and to
consummate the Exchange Offer.
The Company has prepared and delivered to the Initial Purchaser copies of a
preliminary offering memorandum dated August 3, 1998 (the "Preliminary Offering
Memorandum") and has prepared and will deliver to the Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated August 7, 1998 (the "Final Offering Memorandum"), each for use by the
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities. "Offering Memorandum" means, with respect to any
date or time referred to in this Agreement, the most recent offering memorandum
(whether the Preliminary Offering Memorandum or the Final Offering Memorandum,
or any amendment or supplement to either such document), including exhibits
thereto and any documents incorporated therein by reference, if any, which has
been prepared and delivered by the Company to the Initial Purchaser in
connection with the Initial Purchaser's solicitation of purchases of, or
offering of, the Securities.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum, if any; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Offering Memorandum.
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SECTION 1. Representations and Warranties .
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(a) Representations and Warranties by the Company. The Company
represents and warrants to the Initial Purchaser as of the date hereof (and
also agrees that each such representation and warranty will be deemed to be made
by the Company as of the Closing Time referred to in Section 2(b) hereof) and
agrees with the Initial Purchaser as follows:
(i) Similar Offerings. The Company has not, directly or indirectly,
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solicited any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, in the United States
or to any United States citizen or resident, any security which is or would
be integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not, and at
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the Closing Time will not, include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall
not apply to statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with information furnished to the
Company in writing by the Initial Purchaser expressly for use in the
Offering Memorandum.
(iii) Incorporated Documents. The documents incorporated or deemed
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to be incorporated by reference in the Offering Memorandum, if any, at the
time they were or hereafter are filed with the Commission complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission (the "1934 Act Regulations"),
and, when read together with the other information in the Offering
Memorandum, at the date of the Offering Memorandum and at the Closing Time,
do not and will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(iv) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Offering
Memorandum are independent certified public accountants with respect to the
Company and its Subsidiaries within the meaning of Regulation S-X under the
1933 Act.
(v) Financial Statements. Each of the historical financial
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statements included in the Offering Memorandum, together with related
schedules and notes, present fairly (on a consolidated basis where so
indicated) the financial condition of the entity or entities to which such
financial statement purports to relate (the "Reported Entity") at the
date(s) indicated and the statement of operations (or income or earnings as
indicated in the applicable financial statement) and cash flows and (in the
case of a Reported Entity for which a statement of stockholders' equity is
included) stockholders' equity (and partners' capital if so indicated in
the applicable financial statement) of the Reported Entity for the
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period(s) specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved (except as otherwise
indicated in such financial statements). Any supporting schedules included
in the Offering Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The selected historical
financial information and the summary historical financial information
included in the Offering Memorandum present fairly the information shown
therein and, in the case of historical financial data or information of the
Company, have been compiled on a basis consistent with that of the audited
financial statements included in the Offering Memorandum. The pro forma
financial statements and the related notes thereto included in the Offering
Memorandum present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(vi) No Manipulation of Market Prices. The Company has not taken or
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caused to be taken and will not take or cause to be taken, either directly
or indirectly, any action designed to cause or result in, or which action
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the market price of any security in
contravention of any applicable law, including but not limited to those
actions prohibited by Section 9(a) of the 1934 Act, the 1934 Act
Regulations and Regulation M promulgated by the Commission.
(vii) No Material Adverse Change in Business. Since the respective
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dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise (a "Material Adverse Effect"), whether or not
arising in the ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its Subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its Subsidiaries considered as one enterprise,
and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(viii) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
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(ix) Good Standing of Subsidiaries. Each subsidiary of the Company
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(each, a "Subsidiary") has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Offering Memorandum, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity
(except for any security interest or pledge contemplated by the First
Amendment to the Third Amended and Restated Credit Agreement dated July 10,
1998 between the Company, United Rentals of Canada, Inc. and Bank of
America National Trust and Savings Association ("B of A"), as U.S. Agent,
Bank of America Canada, as Canadian Agent, and various financial
institutions (the "Credit Agreement") and the Term Loan Agreement dated
July 10, 1998 between the Company, certain financial institutions and B of
A, as agent (the "Term Loan Agreement")); none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any security holder of such Subsidiary. The only
Subsidiaries of the Company (other than inactive Subsidiaries) are the
Subsidiaries listed in Schedule C hereto and each Subsidiary of the Company
which constitutes a "significant subsidiary" (as such term is defined in
Rule 1-02 of Regulation S-X under the 1933 Act); provided, however, that
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such determination shall be made by reference to the Company's pro forma
financial statements as permitted by Rule 3-05(b)(3) of Regulation S-X
(each, a "Significant Subsidiary"), is marked with a "*" in Schedule C
hereto.
(x) Capitalization. The authorized capital stock of the Company
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consists of 3,000 shares of common stock, par value $0.01 per share (the
"Common Stock"). As of the date hereof, there were 1,000 shares of Common
Stock outstanding. The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any security holder of the Company. All of the outstanding capital stock
of the Company is owned by United Rentals, Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware
("United Rentals"), free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity (except for any security
interest or pledge contemplated by the Credit Agreement or the Term Loan
Agreement).
(xi) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
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(xii) Authorization of the Indenture. The Indenture has been duly
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authorized by the Company and each Guarantor, and, at the Closing Time,
will have been duly executed and delivered by the Company and each such
Guarantor and will constitute a valid and binding agreement of the Company
and each such Guarantor, enforceable against the Company and each such
Guarantor in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws relating to or affecting enforcement of creditors'
rights generally, or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiii) Authorization of the Securities. The Securities have been
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duly authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and, subject to
the foregoing limitations, entitled to the benefits of, the Indenture. At
the Closing Time, the Securities will conform in all material respects to
the description thereof contained in the Offering Memorandum.
(xiv) Authorization of the Guarantees. Each Guaranty has been duly
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authorized by the applicable Guarantor under the laws of its state of
incorporation, and, at the Closing Time, each Guaranty relating to
Securities being issued as of Closing Time that appears on or is attached
to such Securities, will have been duly executed by such Guarantor and,
when issued in the manner provided for in the Indenture and delivered in
accordance with this Agreement, will constitute a valid and binding
obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and, subject to the foregoing limitations, entitled to the
benefits of, the Indenture. At the Closing Time, the Guarantees will
conform in all material respects to the description thereof contained in
the Offering Memorandum.
(xv) Authorization of the Exchange Notes. The Exchange Notes have
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been duly authorized by the Company. When the Exchange Notes are issued,
executed and authenticated in the manner provided for by the terms of the
Exchange Offer and the Indenture, the Exchange Notes will constitute valid
and binding obligations of the
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Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and, subject to
the foregoing limitations, entitled to the benefits of, the Indenture.
(xvi) Authorization of the Notes Registration Rights Agreement. The
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Notes Registration Rights Agreement has been duly authorized by the Company
and each Guarantor, and, at the Closing Time, will have been duly executed
and delivered by the Company and each Guarantor, and will constitute valid
and binding obligations of the Company and each Guarantor, enforceable
against the Company and each such Guarantor in accordance with its terms
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law). At the Closing Time, the Notes Registration Rights
Agreement will conform in all material respects to the description thereof
contained in the Offering Memorandum.
(xvii) Description of the Securities and the Indenture. The
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Securities, the Guarantees and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Offering Memorandum and will be in substantially the respective forms
previously delivered to the Initial Purchaser.
(xviii) Absence of Defaults and Conflicts. Neither the Company nor
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any of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets
of the Company or any of its Subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the Securities, the
Guarantees, the Notes Registration Rights Agreement, and any other
agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Offering Memorandum and the consummation of the
transactions contemplated herein and in the Offering Memorandum and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or a Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any of its Subsidiaries pursuant to, the Agreements and Instruments except
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for such conflicts, breaches or defaults or liens, charges or encumbrances
that, singly or in the aggregate, would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or
any of their assets or properties. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
Subsidiaries.
(xix) Absence of Labor Dispute. No labor dispute with the employees
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of the Company or any of its Subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
Subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xx) Absence of Proceedings. There is no action, suit, proceeding,
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inquiry or investigation before or by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any Subsidiary
thereof which is required to be disclosed in the Offering Memorandum (other
than as disclosed therein), or which might reasonably be expected to result
in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the consummation of this Agreement or the
performance by the Company of its obligations hereunder. The aggregate of
all pending legal or governmental proceedings to which the Company or any
Subsidiary thereof is a party or of which any of their respective property
or assets is the subject which are not described in the Offering
Memorandum, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xxi) Accuracy of Representations and Warranties. To the knowledge
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of the Company, the representations and warranties made by each of the
Acquired Companies (as defined in the Offering Memorandum) and the selling
stockholders in the respective agreements pursuant to which the Company
acquired the Acquired Companies did not as of the respective dates thereof
contain any inaccuracies that might, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(xxii) Description of Contracts. There are no contracts or documents
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which are required to be described in the Offering Memorandum which have
not been so described.
(xxiii) Possession of Intellectual Property. The Company and its
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Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
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trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its Subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xxiv) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, by the Company or any Guarantor in connection with
the offering, issuance or sale of the Securities and Guarantees hereunder
or the consummation of the transactions contemplated by this Agreement,
except (i) for filings and qualifications contemplated by the Notes
Registration Rights Agreement, (ii) such as may be required under foreign
or state securities or blue sky laws and (iii) such as may be required
after the Closing Date pursuant to the Company's periodic reporting
requirements on its Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K to be filed with the Commission under
Sections 13 and 15(d), respectively, of the 1934 Act.
(xxv) Possession of Licenses and Permits. The Company and its
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Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to so possess such Government Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its Subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have, singly or in the aggregate, a
Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxvi) Title to Property. The Company and its Subsidiaries have good
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and marketable title to all real property described in the Offering
Memorandum as owned by the Company and its Subsidiaries and good title to
all other properties described in the Offering Memorandum as owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are pursuant to the Credit Agreement and the Term Loan Agreement as
9
described in the Offering Memorandum or (b) do not, singly or in the
aggregate, materially interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries; and all of the
leases and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company or
any of its Subsidiaries holds properties described in the Offering
Memorandum, are in full force and effect, and neither the Company nor any
Subsidiary has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any Subsidiary
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease, which claim, if upheld, would result in a Material Adverse
Effect.
(xxvii) Investment Company Act. Neither the Company nor any
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Guarantor is, or upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as described
in the Offering Memorandum will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxviii) Environmental Laws. Except as described in the Offering
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Memorandum or except as would not, singly or in the aggregate, result in a
Material Adverse Effect: (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) neither the Company nor any of its Subsidiaries
is lacking any permits, authorizations and approvals required under any
applicable Environmental Laws or are in violation of the requirements of
such Environmental Laws, (C) there are no pending or, to the best knowledge
of the Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries and (D) to the knowledge of
the Company there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of its Subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(xxix) Statistical and Market Data. Nothing has come to the
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attention of the Company that has caused the Company to believe that the
statistical and market-related
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data included in the Offering Memorandum are not based on or derived from
sources that are reliable and accurate in all material respects.
(xxx) Taxes. The Company and each of its Subsidiaries have filed all
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necessary federal, state, local and foreign income, payroll, franchise and
other tax returns (after giving effect to extensions) and have paid all
taxes shown as due thereon (except where the failure to so file or pay
would not, singly or in the aggregate, have a Material Adverse Effect), and
there is no tax deficiency that has been, or to the knowledge of the
Company is likely to be, asserted against the Company, any of its
Subsidiaries or any of their properties or assets that would result in a
Material Adverse Effect, except for taxes that are being contested in good
faith by appropriate proceedings and with respect to which the Company has
established adequate reserves in accordance with GAAP.
(xxxi) Rule 144A Eligibility. The Securities are eligible for resale
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pursuant to Rule 144A and will not be, at the Closing Time, of the same
class as securities listed on a national securities exchange registered
under Section 6 of the 1934 Act, or quoted in a U.S. automated interdealer
quotation system.
(xxxii) No General Solicitation. None of the Company, its
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affiliates, as such term is defined in Rule 501(b) under the 1933 Act
("Affiliates"), or any person acting on its or any of their behalf (other
than the Initial Purchaser, as to whom the Company makes no representation)
has engaged or will engage, in connection with the offering of the
Securities, in any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the 1933 Act.
(xxxiii) No Registration Required. Assuming the accuracy of the
------------------------
representations and warranties of the Initial Purchaser set forth in
Section 2(c) hereof and compliance by the Initial Purchaser with the
provisions of Sections 6(a) and 6(c) hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers and to each Subsequent Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum to register the
Securities under the 1933 Act or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
(xxxiv) Personal Holding Company. Neither the Company, United
------------------------
Rentals nor any of its Subsidiaries is or has ever been a Personal Holding
Company within the meaning of Section 542 of the Internal Revenue Code of
1986, as amended.
(xxxv) Insurance. Neither the Company nor any Subsidiary has
---------
received notice from any insurer providing insurance coverage for the
Company and its Subsidiaries or agent of such insurer that capital
improvements or other expenditures will have to be made in order to
continue present insurance coverage, except such as could not reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect.
11
(xxxvi) Maintenance of Sufficient Internal Controls. The Company and
-------------------------------------------
its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxxvii) Fees. Other than pursuant to this Agreement, there are no
----
contracts, agreements or understandings between either the Company, United
Rentals or its Subsidiaries and any person that give rise to a valid claim
against the Company, United Rentals, any of its Subsidiaries or the Initial
Purchaser for a brokerage commission, finder's fee or other like payment
relating to the transactions contemplated hereby.
(xxxviii) No Agreement for Filing a Registration Statement. There
------------------------------------------------
are no persons with registration rights or other similar rights to have any
debt securities registered pursuant to any registration statement or
otherwise registered by the Company under the 1933 Act, except persons
having such rights pursuant to the Notes Registration Rights Agreement and
the Notes Registration Rights Agreement dated May 22, 1998 between the
Company, certain of the Subsidiaires and the initial purchasers named
therein.
(xxxix) Compliance with Federal Reserve System Regulations. Neither
--------------------------------------------------
the Company, any of its Subsidiaries or any agent thereof acting on the
behalf of any of them, has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Securities
to violate Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part
221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System.
(xl) Compliance with Rule 144A. Each of the Preliminary Offering
-------------------------
Memorandum and the Final Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the 1933 Act.
(xli) ERISA. Neither the Company nor any of its Subsidiaries has
-----
violated any provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate,
would not have a Material Adverse Effect. If any such plan is adopted, the
execution and delivery of this Agreement and the sale of the Securities
will not involve any non-exempt prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended. The representations made in the preceding sentence are
made in reliance upon and subject to the accuracy of, and compliance with,
the representations and covenants made or deemed made by the purchasers of
the Securities as set forth in the Offering Memorandum under "Notice to
Investors."
12
(xlii) Limitations on Dividends and other Payment Restrictions.
-------------------------------------------------------
There are, and as of the Closing Time, there will be no agreements
containing any limitation on dividends or any other payment restrictions of
the type referred to in clause (vii) of the covenant captioned "Description
of the Notes B Limitation on Dividends and other Payment Restrictions
Affecting Restricted Subsidiaries" contained in the Offering Memorandum.
(xliii) Agreements with Affiliates. Except as listed on Schedule D
--------------------------
attached hereto, there are, and as of the Closing Time, there will be no
agreements of the type referred to in clause (vi) of the second paragraph
of the covenant captioned "Description of the Notes B Limitation on
Transactions with Affiliates" contained in the Offering Memorandum.
(xliv) Permitted Indebtedness. To the best of the Company's
----------------------
knowledge and belief, except as listed on Schedule E attached hereto, there
are, and as of the Closing Time, there will be no agreements existing of
the type referred to in clause (c) of the definition of "Permitted
Indebtedness" under "Description of Notes B Certain Definitions" contained
in the Offering Memorandum. As of the Closing Time, but without giving
effect to the issuance of the Securities and the application of the net
proceeds therefrom, the aggregate outstanding Indebtedness (as defined in
the Offering Memorandum under "Description of Notes -- Certain
Definitions") of the Company and its Subsidiaries will not exceed
$475,000,000.
(xlv) Disclosure of Scheduled Information. All information contained
-----------------------------------
in the Schedules hereto which would be required to be disclosed in the
Offering Memorandum if the Offering Memorandum was a prospectus forming
part of a registration statement filed with the Commission under the 1933
Act, has been disclosed in the Offering Memorandum.
(b) Officer's Certificates . Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Initial Purchaser or to
counsel for the Initial Purchaser pursuant to this Agreement shall be deemed a
representation and warranty by the Company to the Initial Purchaser as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
-----------------------------------------------
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to the Initial Purchaser and the Initial Purchaser agrees
to purchase from the Company, at the price set forth in Schedule B, the
aggregate principal amount of Securities set forth in Schedule A opposite the
name of the Initial Purchaser.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Skadden, Arps,
Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022, or at
such other place as shall be agreed upon by the
13
Initial Purchaser and the Company, at 9:00 A.M. New York City time on the third
business day after the date hereof), or such other time not later than ten
business days after such date as shall be agreed upon by the Initial Purchaser
and the Company (such time and date of payment and delivery being herein called
the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the account of the Initial Purchaser of certificates for the Securities to be
purchased by it.
(c) Qualified Institutional Buyer. The Initial Purchaser represents
and warrants to, and agrees with, the Company that it is a "qualified
institutional buyer" within the meaning of Rule 144A under the 1933 Act (a
"Qualified Institutional Buyer") and an "accredited investor" within the meaning
of Rule 501(a) under the 1933 Act (an "Accredited Investor").
(d) Denominations, Registration. One or more Securities in definitive
global form, registered in the name of Cede & Co., as nominee of DTC, having an
aggregate amount corresponding to the aggregate amount of the Securities sold to
Subsequent Purchasers (collectively, the "Global Note"), shall be delivered by
the Company to the Initial Purchaser in each case with any transfer taxes
thereon duly paid by the Company, against payment by the Initial Purchaser of
the purchase price therefor in accordance with this Section 2. The Global Note
shall be made available for examination by the Initial Purchaser in The City of
New York not later than 10:00 a.m. on the business day prior to the Closing
Time.
SECTION 3. Covenants of the Companv. The Company covenants with the
Initial Purchase as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to the Initial Purchaser, without charge, such number of copies of the
Preliminary Offering vIemorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will immediately
notify the Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchaser as evidenced by a notice in
writing from the Initial Purchaser to the Company, any material changes in or
affecting the earnings, business affairs or business prospects of the Company
and its Subsidiaries which (i) make any statement in the Offering Memorandum
false or misleading or (ii) are not disclosed in the Offering Memorandum. In
such event or if during such time any event shall occur as a result of which it
is necessary, in the reasonable opinion of the Company, its counsel, the Initial
Purchaser or counsel for the Initial Purchaser, to amend or supplement the Final
Offering Memorandum in order that the Final Offering Memorandum not include any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in
14
the light of the circumstances then existing, the Company will forthwith amend
or supplement the Final Offering Memorandum by preparing and furnishing to the
Initial Purchaser an amendment or amendments of, or a supplement or supplements
to, the Final Offering Memorandum (in form and substance satisfactory in the
reasonable opinion of counsel for the Initial Purchaser) so that, as so amended
or supplemented, the Final Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a Subsequent Purchaser, not misleading. To the
extent permitted by applicable law, such amendment or supplement may incorporate
documents filed with the Commission under the 1934 Act.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise the Initial Purchaser promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or supplement without the
consent of the Initial Purchaser. Neither the consent of the Initial Purchaser,
nor the Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will
use its best efforts, in cooperation with the Initial Purchaser, to qualify the
Securities for offering and sale under the applicable securities laws of such
jurisdictions as the Initial Purchaser may designate and will maintain such
qualifications in effect as long as required for the sale of the Securities;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
(e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc. ("S&P"), and Moody's Investors Service, Inc. ("Moody's") to provide their
respective credit ratings of the Securities.
(f) DTC. The Company will cooperate with the Initial Purchaser and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(g) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During a period of 120 days from
the date of the Offering Memorandum, the Company will not, without the prior
written consent of the Initial Purchaser, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, any other debt securities of the Company comparable to the Securities or
securities of the Company that are convertible into, or exchangeable for, the
Securities or any such other debt securities (other than (i) the Exchange Notes,
(ii) the 9 1/2% Senior Subordinated
15
Notes due 2008, Series B of the Company, (iii) any debt securities convertible
into, or exchangeable for, equity securities of the Company and (iv) any debt
securities of another entity acquired by the Company or assumed by the Company
in connection with an acquisition of the assets of such entity, which debt
securities were (a) existing prior to such acquisition; and (b) were not issued
in connection with, or in contemplation of, such acquisition).
(i) Comply with Agreements. To comply and cause each Guarantor to
comply with all of its respective agreements set forth in the Notes Registration
Rights Agreement.
(j) Furnish Reports. So long as any Securities are outstanding, to
furnish to the Initial Purchaser as promptly as practicable after they are
available copies of all reports or other communications furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed and such other publicly available
information concerning the Company and/or its Subsidiaries as the Initial
Purchaser may reasonably request.
(k) PORTAL Registration. To use its best efforts to effect the
inclusion of the Securities in PORTAL and to maintain the listing of the
Securities on PORTAL for so long as any of such Securities are outstanding.
(1) Performance of Duties. To use its best efforts (i) to do and
perform all things required or necessary to be done and performed on its part
under this Agreement by it prior to the Closing Time and (ii) to the extent
within the Company's control, to satisfy all conditions precedent to the
delivery of the Securities.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and any filing of the Offering Memorandum (including financial statements and
any schedules or exhibits and any (document incorporated therein by reference,
if any) and of each amendment or supplement thereto, (ii) the preparation,
printing and delivery to the Initial Purchaser of this Agreement, the Indenture,
the Notes Registration Rights Agreement, and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Initial Purchaser, including any charges of DTC in
connection therewith; (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Initial Purchaser in connection therewith and in connection with the
preparation of the Blue Sky Survey, any supplement thereto and any Legal
Investment Survey, (vi) the fees and expenses of the Trustee, including the fees
and disbursements of counsel for the Trustee in connection with the Indenture
and the Notes, (viii) any fees payable to the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the initial and continued
designation of the Securities as PORTAL securities under the PORTAL Market Rules
pursuant to NASD Rule 5322, and (ix) all costs and expenses
16
of the Exchange Offer and any Registration Statement, as set forth in and
subject to the Notes Registration Rights Agreement.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section 1
0(a)(i) hereof, the Company shall reimburse the Initial Purchaser for all of its
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchaser, provided, however, that any reimbursement by
the Company pursuant to this Section 4(b) shall be limited to an aggregate of
$500,000.
SECTION 5. Conditions of Initial Purchaser's Obligations. The
---------------------------------------------
obligations of the Initial Purchaser hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
or in certificates of any officer of the Company or any of its Subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinions of Counsel for Company. At Closing Time, the Initial
Purchaser shall have received the favorable opinions, dated as of Closing Time,
of Ehrenreich Eilenberg Krause & Zivian LLP and Weil, Gotshal & Manges LLP,
counsel for the Company, in form and substance reasonably satisfactory to
counsel for the Initial Purchaser, to the effect set forth in Exhibits A-1 and
A-2, respectively, hereto and to such further effect as counsel to the Initial
Purchaser may reasonably request. In giving such opinions, such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York, the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
reasonably satisfactory to counsel to the Initial Purchaser. Such counsel may
also state that, insofar as such opinions involve factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its Subsidiaries and certificates of public officials.
(b) Opinion of Counsel for Initial Purchaser. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Initial Purchaser, with respect to the matters set forth in (i) through (vii),
inclusive, and (viii) (solely as to the information in the Offering Memorandum
under "Description of the Notes") and the penultimate paragraph of Exhibit A-2
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Initial Purchaser.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its Subsidiaries and certificates of public of
officials.
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered
17
as one enterprise, whether or not arising in the ordinary course of business,
and the Initial Purchaser shall have received a certificate of the Chief
Executive Officer or a Vice President of the Company and of the chief financial
or chief accounting officer of the Company, dated as of the Closing Time, to
the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time,
and (iii) the Company has complied in all material respects with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time.
(d) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchaser shall have received from each of Ernst & Young
LLP, Webster, Duke & Co. PA, KPMG Peat Marwick LLP, Grant Thornton, LLP, KPMG
(Canada), Battaglia, Andrews & Moag, P.C., Moss Adams LLP, Beene, Garter LLP,
Price Waterhouse Coopers LLP, Price Waterhouse Coopers, McGladrey & Pullen, LLP,
BDO Seidman, LLP, Altschuler, Melvoin and Glasser LLP and Schalleur & Surgent,
LLC, a letter dated such date, to the effect of Exhibit B and otherwise in form
and substance satisfactory to the Initial Purchaser, containing statements and
information of the type ordinarily included in accountants"'comfort letters" to
initial purchasers with respect to the financial statements and certain
financial information contained in the Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Initial
Purchaser shall have received from each of Ernst & Young LLP, Webster, Duke &
Co. PA, KPMG Peat Marwick LLP, Grant Thornton, LLP, KPMG Peat Marwick (Canada),
Battaglia, Andrews & Moag, P.C., Moss Adams LLP, Beene, Garter LLP, Price
Waterhouse Coopers, McGladrey & Pullen, LLP, BDO Seidman, LLP, Altschuler,
Melvoin and Glasser LLP and Schalleur & Surgent, LLC, a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(f) Maintenance of Rating. At the Closing Time, the Securities shall be
rated at least B2 by Moody's and BB- by S&P, and the Company shall have
delivered to the Initial Purchaser a letter dated the Closing Time, from each
such rating agency, or other evidence satisfactory to the Initial Purchaser,
confirming that the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other debt securities by any "nationally
recognized statistical rating agency" within the meaning of Rule 436(g)(2) of
the 1933 Act, and no such securities rating agency shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of the Securities or any of the Company's other debt securities.
(g) PORTAL. At the Closing Time, the Securities shall have been
designated for trading on PORTAL.
(h) Additional Documents. At the Closing Time, counsel for the Initial
Purchaser shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein
18
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Initial Purchaser and counsel for the Initial
Purchaser.
(i) Termination of Agreement If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
-----------------------------------------------
(a) Offer and Sale Procedures. The Initial Purchaser and the Company
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers. Offers
-------------------------------------------------------
and sales of the Securities will be made only by the Initial Purchaser or
Affiliates thereof qualified to do so in the jurisdictions in which such
offers or sales are made. Each such offer or sale shall only be made to
persons whom the offeror or seller reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the 1933 Act).
(ii) No General Solicitation. The Securities will be offered by
-----------------------
approaching prospective Subsequent Purchasers on an individual basis. No
general solicitation or general advertising (within the meaning of Rule
502(c) under the 1933 Act) will be used in the United States in connection
with the offering of the Securities.
(iii) Subsequent Purchaser Notification. The Initial Purchaser will
---------------------------------
take reasonable steps to inform, and cause each of its U.S. Affiliates to
take reasonable steps to inform, persons acquiring Securities from such
Initial Purchaser or affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under the
1933 Act, (B) are being sold to them without registration under the 1933 Act
in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be
offered, sold or otherwise transferred except (1) to the Company or (2) in
accordance with (x) Rule 144A to a person whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a Qualified
Institutional Buyer to whom notice is given that the offer, sale or transfer
is being made in reliance on Rule 144A or (y) the exemption from
registration under the 1933 Act provided by Rule 144, if available.
19
(iv) Restrictions on Transfer. The transfer restrictions and the
------------------------
other provisions set forth in Section 3.14 of the Indenture, including the
legend required thereby, shall apply to the Securities except as otherwise
agreed by the Company and the Initial Purchaser. Following the sale of the
Securities by the Initial Purchaser to Subsequent Purchasers pursuant to the
terms hereof, the Initial Purchaser shall not be liable or responsible to
the Company for any losses, damages or liabilities suffered or incurred by
the Company, including any losses, damages or liabilities under the 1933
Act, arising from or relating to any resale or transfer of any Security
(except that the foregoing disclaimer of liability and responsibility shall
not apply where the Company has complied with each of its representations,
warranties, covenants and agreements under this Agreement and any such loss,
damage or liability is solely attributable to the failure of the Initial
Purchaser to comply with its obligations under Sections 6(a) and 6(c) hereof
or the inaccuracy of the representations and warranties of the Initial
Purchaser set forth in Section 2(c) hereof).
(v) Delivery of Offering Memorandum. The Initial Purchaser will
-------------------------------
deliver to each purchaser of the Securities from the Initial Purchaser, in
connection with its original distribution of the Securities, a copy of the
Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of
-------------
the Securities, the Company agrees that, prior to any offer or resale of the
Securities by the Initial Purchaser, the Initial Purchaser and counsel for
the Initial Purchaser shall have the right to make reasonable inquiries into
the business of the Company and its Subsidiaries. The Company also agrees to
provide answers to each prospective Subsequent Purchaser of Securities who
so requests concerning the Company and its Subsidiaries (to the extent that
such information is available or can be acquired and made available to
prospective Subsequent Purchasers without unreasonable effort or expense and
to the extent the provision thereof is not prohibited by applicable law, and
so long as the Company (or its direct or indirect holding company) is a
"reporting issuer" subject to the periodic reporting requirements of Section
13 and 15(d) of the 1934 Act, it will not be required to disclose any
material non-public information not otherwise required to be disclosed under
applicable law and which has not at that time been disclosed) and the terms
and conditions of the offering of the Securities, as provided in the
Offering Memorandum.
(ii) Integration. The Company agrees that it will not and will
-----------
cause its Affiliates not to make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the 1933 Act, such offer or sale would render
invalid (for the purpose of (i) the sale of the Securities by the Company to
the Initial Purchaser, (ii) the resale of the Securities by the Initial
Purchaser to Subsequent Purchasers or (iii) the resale of the Securities by
such Subsequent
20
Purchasers to others) the exemption from the registration requirements of
the 1933 Act provided by Section 4(2) thereof or by Rule 144A thereunder or
otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
---------------------
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of two years
--------------------------
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted securities" (as such
term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise, unless, immediately upon any such purchase,
the Company or any Affiliate shall submit such Securities to the Trustee
for cancellation.
(c) Resale Pursuant to Rule 144A. The Initial Purchaser understands
that the Securities have not been and will not be registered under the 1933 Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Rule 144A under
the 1933 Act or pursuant to an exemption from the registration requirements of
the 1933 Act.
SECTION 7 Indemnification.
---------------
(a) Indemnification of Initial Purchaser. The Company agrees to
indemnify and hold harmless the Initial Purchaser and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of the
Company; and
21
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 7(c) hereof, the fees and disbursements of counsel
chosen by the Initial Purchaser), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
thereto). The foregoing indemnity with respect to any untrue statement
contained in or any omission from the Preliminary Offering Memorandum shall not
inure to the benefit of the Initial Purchaser (or any person controlling the
Initial Purchaser) from whom the person asserting such loss, liability, claim,
damage or expense purchased any of the Securities that are the subject thereof
if (i) the untrue statement or omission contained in the Preliminary Offering
Memorandum (excluding documents incorporated by reference, if any) was corrected
in the Final Offering Memorandum; (ii) such person was not sent or given a copy
of the Final Offering Memorandum (excluding documents incorporated by reference,
if any) which corrected the untrue statement or omission at or prior to the
written confirmation of the sale of such Securities to such person; and (iii)
the Company satisfied its obligation pursuant to Section 3(a) of this Agreement
to provide a sufficient number of copies of the Final Offering Memorandum to the
Initial Purchaser.
(b) Indemnification of Company, Directors and Officers. The Initial
Purchaser agrees to indemnify and hold harmless the Company, its directors, each
of its officers, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act (including,
without limitation, United Rentals) against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Offering
Memorandum in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser expressly for use in the Offering
Memorandum.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Initial Purchaser,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party
22
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel satisfactory to such indemnified party; provided, however,
-------- -------
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances; after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
provisos to the preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchaser in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. The indemnifying party will not be liable for
the costs and expenses of any settlement of such action effected by such
indemnified party without the consent of the indemnifying party.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 or Section 8 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such
23
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. Contribution. If the indemnification provided for in Section
------------
7 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchaser on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Initial Purchaser on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchaser, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial Purchaser
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the
24
Securities underwritten by it and distributed to the public as contemplated by
this Agreement exceeds the amount of any damages which the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such Initial
Purchaser, and each director of the Company, each officer of the Company, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act (including, without limitation,
United Rentals) shall have the same rights to contribution as the Company. .
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or
in certificates of officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchaser or controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Initial Purchaser.
SECTION 10. Termination of Agreement.
------------------------
(a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Initial Purchaser, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or on The Nasdaq National Market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
25
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 7 and 8 shall survive such termination and remain in full force and effect.
SECTION 11. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1201, attention of Michael Senft; notices to the Company
shall be directed to it at United Rentals (North America), Inc., Four Greenwich
Office Park, 3rd Floor, Greenwich, CT 06830 attention of Bradley S. Jacobs,
with copies to Oscar D. Folger, 521 Fifth Avenue, 24th Floor, New York, New York
10175 and Joseph Ehrenreich, Ehrenreich Eilenberg Krause & Zivian LLP, 11 East
44th Street, New York, New York 10017.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Initial Purchaser and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchaser and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Initial Purchaser shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
26
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
UNITED RENTALS (NORTH AMERICA), INC.
By: /s/ Michael J. Nolan
---------------------------------
Name: Michael J. Nolan
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Merrill Lynch, Pierce, Fenner & Smith Incorporated
--------------------------------------------------------
Authorized Signatory
SCHEDULE A
Principal
Amount of
Name of Initial Purchaser Securities
- ------------------------- --------------------
Merrill Lynch, Pierce, Fenner & Smith $205,000,000
Incorporated................
Total........................................ $205,000,000
- -------------------------------------------------------------------
Sch A-1
SCHEDULE B
UNITED RENTALS (NORTH AMERICA), INC.
$205,000 million aggregate principal amount of Senior Subordinated Notes
due 2008 of United Rentals (North America), Inc.
1. The initial offering price to investors of the Securities shall be
prevailing market prices at the time of resale to be determined by the Initial
Purchaser at the time of each sale.
2. The purchase price to be paid by the Initial Purchaser for the
aggregate principal amount of the Securities shall be $197,500,468, plus accrued
interest, if any, from the date of issuance.
3. The interest rate on the Securities shall be 8.80% per annum.
Sch B-1
SCHEDULE C
UNITED RENTALS (NORTH AMERICA), INC.
Those corporations which are indented represent Subsidiaries of the corporation
under which they are indented. Except as otherwise indicated, 100% of the voting
stock of each of the Subsidiaries listed below is owned by its parent.
SUBSIDIARY LIST
State of
--------
Name of Subsidiary Incorporation
------------------ -------------
1297334 Ontario Inc. Ontario
A&A Tool Rentals & Sales, Inc. California
Access Rentals, Inc.* New York
Action Rental, LLC Colorado
Adco Equipment, Inc. California
Adco Equipment Supply, Inc. California
ASC Equipment Company, Inc. North Carolina
Bear Associates, Inc. Delaware
BNR Equipment, Inc. New York
Contractors Supply & Equipment, Inc. Kentucky
Coran Enterprises, Incorporated California
Dealers Service Company New Jersey
Grand Valley Equipment Co. Michigan
High Reach, Inc.* Oregon
High Reach Co., Inc. Pennsylvania
Industrial Lift, Inc. New Jersey
J&J Rental Services Inc.* Texas
Kubota of Grand Rapids, Inc. Michigan
Lift Systems, Inc. Illinois
Madison Equipment Sales and Rental. Inc. Alabama
Mercer Equipment Company North Carolina
Mid-Mountain Machinery, Inc. Washington
Misco Rents, Inc. Indiana
Mission Valley Rentals, Inc. California
Nevada High Reach Equipment, Inc. Nevada
Palmer Equipment Company, Inc. Michigan
Paul E. Carlson, Inc. Minnesota
Power Rental Co., Inc.* Oregon
Rentals Unlimited, Incorporated Rhode Island
River City Machinery Co., Inc. Texas
Rylan, Inc. Delaware
San Leandro Equipment Rental Service California
Space Maker Systems of Va., Inc. Virginia
United Rentals of Colorado, Inc. (formerly Santa Fe Supply Colorado
& Rental, Inc.)
United Rentals of Kentucky, Inc. Kentucky
United Rentals of New England, Inc. (formerly Manchester Connecticut
Equipment Rental & Sales, Inc.)
United Rentals of New Jersey, Inc.* Delaware
United Rentals of New York, Inc. New York
United Rentals of Southern California, Inc. (d/b/a Able California
Equipment) (formerly Rental Equipment, Inc.)
Sch C-1
State of
--------
Name of Subsidiary Incorporation
------------------ -------------
United Rentals of Utah, Inc. Utah
United Rents Et. Al., Inc. California
Valley Rentals, Inc. Washington
West Main Rentals and Sales, Inc. Oregon
Yankee Equipment Corporation Connecticut
* Represents a "Significant Subsidiary" (as defined in Rule 1-02 of Regulation
S-X under the 1933 Act, provided, however, that this determination shall be
-------- -------
made by reference to the Company's pro forma financial statements as
permitted by Rule 3-05(b)(3) of Regulation S-X.
Sch D-1
SCHEDULE D
AGREEMENTS WITH AFFILIATES
1 . Private Placement Purchase Agreements entered into with each
officer of the Company in connection with the purchase by such officer of
securities of the Company (as described in the Offering Memorandum under
"Management-Capital Contributions by officers and directors"). The form of this
agreement is filed as an exhibit to the Company's Report on l0-K for the year
ended December 31, 1997.
2. Amendments to the agreements referred to in paragraph 1 above (the
form of which is filed as an Exhibit to the Company's Report on Form 10-Q for
the quarter ended March 31, 1998).
Sch D-1
SCHEDULE E
PERMITTED INDEBTEDNESS
1. The Company's Permitted Indebtedness as of the Closing Time consists of
the following:
a) Credit Facility $ 99,401,408
b) Equipment notes 9,117,052
c) Outstanding letter of credit 1,400,000
d) Due to seller obligations 3,374,866
e) Convertible note 275,000
f) 9 1/2% Notes 200,000,000
$ 313,568,326
=============
Sch E-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)
As to various questions of fact material to our opinion, we have relied
upon the certificates of officers and upon certificates of public officials.
With regard to the due incorporation of corporations (other than the Company)
and the good standing of corporations (other than the Company), we have (subject
to the next sentence) relied entirely upon certificates of public officials.
With regard to the tax good standing of certain corporations (other than the
Company), we have relied solely upon a certificate of an officer of such
corporation to the effect that the corporation has filed the most recent annual
report required by the law of such jurisdiction and that all franchise taxes
required to be paid under such law have been paid. We have also examined such
corporate documents and records and other certificates, and have made such
investigations of law, as we have deemed necessary in order to render the
opinion hereinafter set forth. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all documents
submitted to us as copies. We have also assumed that all documents examined by
us have been duly and validly authorized, executed and delivered by each of the
parties thereto other than the Company.
The opinions provided in Clause (viii) below, as they concern the
Significant Guarantors (other than those Significant Guarantors incorporated in
the State of New York), may be provided in reliance on the opinions of local
counsel reasonably satisfactory to the Initial Purchaser, provided that such
opinions of local counsel are also addressed to and may also be relied upon by
the Initial Purchaser. We have reviewed such opinions provided by local counsel
and, based upon such review, we believe that you are justified in relying
thereon.
In providing the opinions in Clause (ix) below with respect to
Guarantors (other than Significant Guarantors), such counsel may assume due
authorization, execution and delivery of the Guarantees to be provided by such
Guarantors (other than Significant Guarantors).
In this opinion, "Significant Guarantor" means any Significant
Subsidiary or any other Subsidiary incorporated in the State of New York.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by
A-1-1
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company consists of 3000 shares of Common Stock, $.01 par value $0.01 per share
(the "Common Stock"). As of the date hereof, there were 1000 shares of Common
Stock outstanding. The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of capital stock of the Company
was issued in violation of any preemptive or other similar rights of any
security holder of the Company arising by statute or the Company's certificate
of incorporation or by-laws or, to the best of our knowledge (after due
inquiry), any other preemptive or other similar rights of any security holder of
the Company. All of the outstanding capital stock of the Company is owned by
United Rentals, to the best of our knowledge (after due inquiry) free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity
(except for any security interest or pledge contemplated by the Credit Agreement
or the Term Loan Agreement).
(v) Each Significant Subsidiary is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Each Significant Subsidiary has been duly incorporated and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum. Except as
otherwise disclosed in the Offering Memorandum and other than as contemplated by
the Credit Agreement or the Term Loan Agreement, all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable and, to the
best of our knowledge, is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of capital stock of
any Significant Subsidiary was issued in violation of the preemptive or similar
rights of any security holder of such Significant Subsidiary arising pursuant to
statute or such Subsidiary's certificate of incorporation or by-laws or, to the
best of our knowledge, any other preemptive or other similar rights of any
security holder of such Significant Subsidiary.
(vii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The execution, delivery and performance of the Indenture, the
Registration Rights Agreement and the Guarantees, and the consummation of the
transactions contemplated thereby, have been duly authorized by all necessary
corporate action on the part of each Significant Guarantor. Each Significant
Guarantor has duly executed and delivered (i) the Indenture, (ii) the
Registration Rights Agreement and (iii) their respective Guarantees relating to
the Securities being issued on the date hereof that appear on or are attached to
such Securities.
A-1-2
(ix) The Notes Registration Rights Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding
agreement of the Company and each Guarantor, enforceable against the Company and
each Guarantor in accordance with its terms except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally, or by general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(x) If any documents are incorporated by reference in the Offering
Memorandum, such documents (other than the financial statements and supporting
schedules therein, as to which no opinion need be rendered), when they were
filed with the Commission, complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereof.
(xi) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any Subsidiary is a party, or to which the property or assets of the Company or
any Subsidiary thereof is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by the Offering
Memorandum;
(xii) The information in the Offering Memorandum under "Business--
Environmental Regulation," to the extent that it constitutes summaries of
matters of law, has been reviewed by us and is correct in all material respects.
Additionally, the information in the Offering Memorandum in the first sentence
of the third paragraph under the caption "Exchange Offer; Registration Rights"
is correct in all material respects. We have drawn your attention to the fact
that (i) the interpretations of the Commission described in such sentence are
contained solely in no-action letters issued by the Commission to various third
parties, (ii) the Company has not requested a no-action letter from the
Commission relating to the transactions contemplated by the Offering Memorandum
and (iii) the Commission is not precluded from changing the interpretations set
forth in such no-action letters or from not following such interpretations with
respect to the transactions contemplated by the Offering Memorandum. The
statements set forth in the Offering Memorandum under the caption "Exchange
Offer; Registration Rights," insofar as they purport to constitute a summary of
the terms of the Notes, the Guarantees, and the Notes Registration Rights
Agreement, are accurate summaries in all respects of such terms.
(xiii) To the best of our knowledge (after due inquiry), neither the
Company nor any Subsidiary is in violation of its charter or by-laws.
(xiv) To the best of our knowledge, neither United Rentals, the Company
nor any Subsidiary thereof is in default in the due performance or observance
of, or is in violation of, any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or
A-1-3
referred to in the Offering Memorandum or incorporated by reference therein
which violations or defaults are required to be described in the Offering
Memorandum and are not so described or would, individually or in the aggregate,
have a Material Adverse Effect or effect the validity of the Securities or the
Guarantees.
(xv) No filing (except for filings under the 1933 Act and 1939 Act
pursuant to the Notes Registration Rights Agreement), authorization, approval,
consent or order of any court or governmental authority or agency (other than
such as may be required under the applicable securities laws of the various
jurisdictions in which the Securities will be offered or sold, as to which we
need express no opinion) is required by the Company in connection with the due
authorization, execution and delivery of the Purchase Agreement or by the
Company or any Guarantor in connection with the due authorization, execution,
delivery or performance of the Indenture or the Notes Registration Rights
Agreement or in connection with the offering, issuance, sale or delivery of the
Securities and the Guarantees, as applicable, to the Initial Purchaser or the
resale thereof by the Initial Purchaser in accordance with the Purchase
Agreement.
(xvi) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser and to each Subsequent
Purchaser in the manner contemplated by the Purchase Agreement and the Offering
Memorandum to register the Securities under the 1933 Act or to qualify the
Indenture under the 1939 Act.
(xvii) The execution, delivery and performance of the Purchase
Agreement, the DTC Agreement, the Indenture, the Notes Registration Rights
Agreement, the Notes, the Guarantees and the consummation of the transactions
contemplated in the Purchase Agreement and in the Offering Memorandum and
compliance by the Company and each Guarantor, as applicable, with its
obligations under the Purchase Agreement, the Indenture, the Notes Registration
Rights Agreement, the Notes and the Guarantees, (A) after reasonable
investigation, do not and will not (subject to the next sentence), whether with
or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in Section 1
(a)(xvii) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary thereof pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any of its Subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any Subsidiary is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (except for such conflicts, breaches or
defaults, Repayment Events or liens, charges or encumbrances that would not have
a Material Adverse Effect), (B) result in any violation of the provisions of the
charter or by-laws of the Company or any Subsidiary, or (C) to the best of our
knowledge (after due inquiry), result in any violation of the provisions of any
applicable law, statute, rule or regulation of the United States of America or
included in the Delaware General Corporate Law (except we express no opinion as
to "blue sky" laws), judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties, assets or operations. No opinion is rendered pursuant to clause A of
the preceding sentence with respect to the Credit Agreement, the Term Loan
Agreement or the Indenture
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governing the Company's 9 1/2% Senior Subordinated Notes due 2008 (the 9 1/2%
Notes Indenture") contained in the Offering Memorandum) (or any agreement or
instrument entered into or executed by the Company or any Subsidiary pursuant to
the Credit Agreement, the Term Loan Agreement or the 9 1/2% Notes Indenture, or
as contemplated thereby).
(xviii) Neither the Company nor any Subsidiary which is a Guarantor is
an "investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
In addition, we have participated in conferences with officers and
representatives of the Company, counsel to the Initial Purchaser,
representatives of the independent accountants for the Company and the Initial
Purchaser at which the contents of the Offering Memorandum and related matters
were discussed. Although we have not undertaken, except as otherwise indicated
in this opinion, to investigate or verify independently, and do not assume
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum, on the basis of the information that we
gained in the course of the performance of such services and our representation
of the Company, we confirm to you that nothing that came to our attention in the
course of such review or representation has caused us to believe that (i) the
Offering Memorandum (except for financial statements and schedules and other
financial data included or incorporated by reference therein, if any, as to
which we make no statement), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Offering Memorandum or
any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference
therein, if any, as to which such counsel need make no statement), at the time
the Offering Memorandum was issued, at the time any such amended or supplemented
Offering Memorandum was issued or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) that there are
any franchise agreements, indentures, mortgages, loan agreements, notes, leases
or other contracts or instruments required to be described or referred to in the
Offering Memorandum that are not described or referred to in the Offering
Memorandum or that any descriptions of or references to any of the foregoing are
not correct in all material respects (except that we express no view with
respect to the descriptions of the Notes, the Indenture, the Credit Agreement,
the Term Loan Agreement or 9 1/2% Notes Indenture contained in the Offering
Memorandum).
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). Such counsel may in addition rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation Law
of the State of Delaware, upon the opinions of counsel reasonably satisfactory
to counsel to the Initial Purchaser.
A-1-5
Exhibit A-2
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as described in the Offering Memorandum and to enter into
and perform its obligations under the Purchase Agreement.
2. The Securities are in the form contemplated by the Indenture. The
Securities have been duly authorized by all necessary corporate action on the
part of the Company and, when executed by the Company, authenticated by the
Trustee, and issued and delivered in the manner provided in the Purchase
Agreement and the Indenture against payment of the consideration therefor, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and will be entitled
to the benefits of the Indenture.
3. The Guarantees are in the form contemplated by the Indenture.
Assuming the Guarantees have been duly authorized, executed and delivered on the
part of each Guarantor, the Guarantees will constitute a valid and binding
obligation of each such Guarantor, enforceable against each such Guarantor in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceablity, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and will be entitled to the benefits of the
Indenture.
4. The execution, delivery and performance of the Purchase Agreement by
the Company have been duly authorized by all necessary corporate action on the
part of the Company. The Purchase Agreement has been duly and validly executed
and delivered by the Company.
5. The execution, delivery and performance of the Indenture by the
Company has been duly authorized by all necessary corporate action on the part
of the Company. The Indenture has been duly and validly executed and delivered
by the Company. Assuming the due authorization, execution and delivery of the
Indenture by each Guarantor and assuming the due authorization, execution and
delivery thereof by the Trustee, the Indenture constitutes the legal, valid and
binding obligation of the Company and each such Guarantor, enforceable against
the Company and each such Guarantor in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of
A-2-1
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
6. The execution, delivery and performance of the Notes Registration
Rights Agreement by the Company has been duly authorized by all necessary
corporate action on the part of the Company. The Notes Registration Rights
Agreement has been duly and validly executed and delivered by the Company.
Assuming the due authorization, execution and delivery thereof by the
Guarantors, and assuming the due authorization, execution and delivery thereof
by the Initial Purchaser, the Notes Registration Statement constitutes the
legal, valid and binding obligation of the Company and each such Guarantor,
enforceable against the Company and each such Guarantor in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity) and except that rights to indemnification and contribution thereunder
may be limited by federal or state securities laws or public policy relating
thereto.
7. The Exchange Notes, when duly executed by the Company, authenticated
by the Trustee, and issued and delivered in accordance with and in the manner
provided in the Notes Registration Rights Agreement and the Indenture, will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and will be entitled
to the benefits of the Indenture.
8. The statements contained in the Offering Memorandum under the
captions "Offering Memorandum Summary - The Offering", "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources - Description of Credit Facility and Certain Indebtedness,"
"Certain Information Concerning Pending Merger - Certain Additional Information
Concerning the Merger," "Description of the Notes" and "Exchange Offer;
Registration Rights," insofar as they purport to describe provisions of the
Indenture, the Notes, the Guarantees, the Notes Registration Rights Agreement,
the Credit Agreement, the Term Loan Agreement, the 9 1/2% Notes Indenture, the
Merger Agreement for the Merger or matters of federal or New York or Delaware
corporate law, constitute a fair and accurate summary thereof in all material
respects. We have drawn your attention to the fact that (i) the interpretations
of the Commission described in such sentence are contained solely in no-action
letters issued by the Commission to various third parties, (ii) the Company has
not requested a no-action letter from the Commission relating to the
transactions contemplated by the Offering Memorandum and (iii) the Commission is
not precluded from changing the interpretations set forth in such no-action
letters or from not following such interpretations with respect to the
transactions contemplated by the Offering Memorandum.
9. No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Delaware corporate or federal
governmental authority is required in
A-2-2
connection with the execution and delivery by the Company of the Purchase
Agreement or the consummation by the Company or any Guarantor of the
transactions contemplated thereby, except for filings and other actions required
under or pursuant to the 1933 Act, the 1934 Act, the 1939 Act and other federal
or state securities or "blue sky" laws and the rules of the New York Stock
Exchange, as to which we express no opinion.
10. Assuming (a) the accuracy of the representations and warranties of
the Initial Purchaser contained in Sections 2(c), 6(a) and 6(c) of the Purchase
Agreement and (b) compliance by the Initial Purchaser with their covenants and
agreements set forth in the Purchase Agreement, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchaser pursuant to the Purchase Agreement or the initial resales of the
Securities by the Initial Purchaser in the manner contemplated by and in
accordance with the Purchase Agreement to register the Securities under the 1933
Act or to qualify the Indenture under the 1939 Act, it being understood that we
express no opinion as to any subsequent resale of the Securities.
11. The Company is not an "investment company" nor an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
12. The execution and delivery of the Purchase Agreement, the
Indenture, the Notes Registration Rights Agreement, the Notes and the
Guarantees, the consummation of the transactions contemplated thereby and
compliance by the Company and the Guarantors with the provisions thereof, do not
and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or a default or Repayment Event
(as defined in Section 1 (a) (xvii) of the Purchase Agreement) under or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary thereof pursuant to the
Credit Agreement, the Term Loan Agreement or the 9 l/2% Notes Indenture (or any
agreement or instrument entered into or executed by the Company or any
Subsidiary pursuant to the Credit Agreement, the Term Loan Agreement or the
9 l/2% Notes Indenture or as contemplated thereby).
We have participated in conferences with officers and other
representatives of the Company and representatives of the independent public
accountants for the Company in connection with the preparation of the Offering
Memorandum and although we have not independently verified and are not passing
upon and assume no responsibility for the accuracy, completeness or fairness of
the statements contained in the Offering Memorandum (except to the extent
specified in paragraph 8 above) no facts have come to our attention which lead
us to believe that the Offering Memorandum, at any time from the date thereof
through the Closing Time, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that we express no view with
respect to the financial statements and related notes and the other financial
and accounting data included in the Offering Memorandum).
In rendering this opinion, we have relied, as to all matters governed by the
laws of
A-2-3
jurisdictions other than the law of the State of New York, the federal law of
the United States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel reasonably satisfactory to counsel to the Initial
Purchaser.
A-2-4
Exhibit B
FORM OF ACCOUNTANTS' COMFORT LETTER
PURSUANT TO SECTION 5(d)
(i) We are independent public accountants with respect to the
Company/1/ within the meaning of the 1933 Act and the applicable published
1933 Act Regulations.
(ii) In our opinion, the financial statements audited by us and the
related financial statement schedules included in the Offering Memorandum
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations
thereunder.
(iii)/2/ On the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim financial statements of the Company for the
month periods ended , 1996 and , 1997,
------ ---------------- --------------
(collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim financial statements of the Company, a reading
of the minutes of all meetings of the stockholders and directors of the
Company and the and Committees of the Board of
------------- -------------
Directors of the Company since , 1997/3/, inquiries of certain
----
officials the Company responsible for financial and accounting matters, a
review of interim financial information in accordance with standards
established by the American Institute of Certified Public Accountants in
Statement on Auditing Standards No. 71, Interim Financial Information ("SAS
71"), with respect to the Quarterly Financials and such other inquiries and
procedures as may be specified in such letter, nothing came to our attention
that caused us to believe that:
(A) the Quarterly Financials included in the Offering Memorandum
do not comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations or
any material modifications should be made to the unaudited financial
statements included in the Offering Memorandum for them to be in
conformity with generally accepted accounting principles;
- ---------------------------
1 As used in this Annex A, the "Company" refers to United Rentals (North
America), Inc. or any of its Subsidiaries, the respective financial
statements of which have been prepared by the accounting firm rendering
the comfort letter.
2 Paragraph (iii) should be included for those comfort letters addressing
financial statements that include unaudited interim information.
3 Insert date that is one day after the end of the last audit period.
B-l
(B) at , 199_ /4/ and at a specified date not more than
--------
five days/5/ prior to the date of this Agreement, there was any change in
the shareholder's equity of the Company or any decrease in the assets of
the Company or any increase in the liabilities of the Company in each
case as compared with amounts shown in the latest balance sheet of the
Company included in the Offering Memorandum, except in each case for
changes, decreases or increases that the Offering Memorandum discloses
have occurred or may occur; or
(C) for the period from , 19 to , 19
--------- __ --------- __
and/6/ for the period from , 19 to a specified date not more
--------- --
than five days prior to the date of this Agreement, there was any
decrease in the cash and cash equivalents, net rental equipment, total
assets, debt or stockholders' equity in each case as compared with the
comparable period in the preceding year, except in each case for any
decreases that the Offering Memorandum discloses have occurred or may
occur.
(iv) Based upon the procedures set forth in clause (ii) above and a
reading of the Selected Financial Data included in the Offering Memorandum
and a reading of the financial statements from which such data were derived,
nothing came to our attention that caused us to believe that the Selected
Financial Data included in the Offering Memorandum do not comply as to form
in all material respects with the disclosure requirements of Item 301 of
Regulation S-K of the 1933 Act, that the amounts included in the Selected
Financial Data are not in agreement with the corresponding amounts in the
audited financial statements for the respective periods or that the
financial statements not included in the Offering Memorandum from which
certain of such data were derived are not in conformity with generally
accepted accounting principles.
[(v) We have compared the information in the Offering Memorandum
under selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified herein
nothing came to our attention that caused us to believe that this
information does not comply as to form in all material respects with the
disclosure requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K.]
- ----------------------------
4 Insert the date of most recent balance sheet of the Company, if those
statements are more recent than the unaudited interim financial
statements included in the Registration Statement.
5 The specified date should be five calendar days prior to the date of
the Underwriting Agreement.
6 Insert dates to describe the period from the date of the most recent
financial statements in the Registration Statement to the date of the
most recent unaudited interim financial statements of the Company, if
those dates are different. Regardless of whether this language is
inserted or not, the period including five days prior to the date of
the Underwriting Agreement should run from the date of the last
financial statement included in the Registration Statement, not from
the later one that is not included in the Registration Statement.
B-2
(vi) Based upon the procedures set forth in clause (iii) above, a
reading of the unaudited financial statements of the Company for the most
recent period that have not been included in the Prospectus and a review of
such financial statements in accordance with SAS 71, nothing came to our
attention that caused us to believe that the unaudited amounts for the most
recent period do not agree with the amounts set forth in the unaudited
financial statements for those periods or that such unaudited amounts were
not determined on a basis substantially consistent with that of the
corresponding amounts in the audited financial statements.
(vii) We are unable to and do not express any opinion on the Pro
Forma Consolidated Financial Statements (the "Pro Forma Statement")
included in the Offering Memorandum or on the pro forma adjustments applied
to the historical amounts included in the Pro Forma Statement; however, for
purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) performed an audit of the financial statements to which the pro
forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for
their determination of the pro forma adjustments and whether the Pro
Forma Statement complies as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma Statement;
and on the basis of such procedures and such other inquiries and
procedures as specified herein, nothing came to our attention that caused
us to believe that (i) the Pro Forma Statement included in the Offering
Memorandum does not comply as to form in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X or (ii) the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(viii) In addition to the procedures referred to in clause (iii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Offering Memorandum, which are specified
herein, and have compared certain of such items with, and have found such
items to be in agreement with, the accounting and financial records of the
Company.
B-3