EXHIBIT 10.A
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
April 20, 2001
among
UNITED RENTALS, INC.,
UNITED RENTALS (NORTH AMERICA), INC.,
as U.S. Borrower,
UNITED RENTALS OF CANADA, INC.,
as Canadian Borrower,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK,
as U.S. Administrative Agent,
and
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Administrative Agent,
___________________________
JPMORGAN, A DIVISION OF CHASE SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC,
as Joint Arrangers
and
BANK OF AMERICA, N.A.,
as Syndication Agent
and
CREDIT SUISSE FIRST BOSTON
and
CITICORP NORTH AMERICA, INC.
and
FLEET NATIONAL BANK,
as Documentation Agents
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms............................................... 1
SECTION 1.02. Classification of Loans and Borrowings...................... 44
SECTION 1.03. Terms Generally............................................. 44
SECTION 1.04. Accounting Terms; GAAP...................................... 44
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments................................................. 45
SECTION 2.02. Loans and Borrowings........................................ 47
SECTION 2.03. Requests for Borrowings..................................... 49
SECTION 2.04. Swingline Loans............................................. 51
SECTION 2.05. Letters of Credit........................................... 52
SECTION 2.06. Funding of Borrowings....................................... 59
SECTION 2.07. Interest Elections.......................................... 60
SECTION 2.08. Termination and Reduction of Commitments.................... 62
SECTION 2.09. Repayment of Loans; Evidence of Debt........................ 63
SECTION 2.10. Amortization of Term Loans.................................. 65
SECTION 2.11. Prepayment of Loans......................................... 66
SECTION 2.12. Fees........................................................ 68
SECTION 2.13. Interest.................................................... 70
SECTION 2.14. Alternate Rate of Interest.................................. 72
SECTION 2.15. Increased Costs............................................. 73
SECTION 2.16. Break Funding Payments...................................... 75
SECTION 2.17. Taxes....................................................... 76
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.. 78
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.............. 81
SECTION 2.20. Incremental Facility........................................ 82
SECTION 2.21. Bankers' Acceptances........................................ 84
SECTION 2.22. Spot Exchange Rate Calculations............................. 87
SECTION 2.23. Reallocation................................................ 87
ii
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Organization; Powers........................................ 92
SECTION 3.02. Authorization; Enforceability............................... 92
SECTION 3.03. Governmental Approvals; No Conflicts........................ 92
SECTION 3.04. Financial Condition; No Material Adverse Change............. 93
SECTION 3.05. Properties.................................................. 93
SECTION 3.06. Litigation and Environmental Matters........................ 94
SECTION 3.07. Compliance with Laws and Agreements......................... 94
SECTION 3.08. Investment and Holding Company Status....................... 95
SECTION 3.09. Taxes....................................................... 95
SECTION 3.10. ERISA....................................................... 95
SECTION 3.11. Disclosure.................................................. 95
SECTION 3.12. Subsidiaries................................................ 96
SECTION 3.13. Insurance................................................... 96
SECTION 3.14. Labor Matters............................................... 96
SECTION 3.15. Solvency.................................................... 97
SECTION 3.16. Senior Debt................................................. 97
SECTION 3.17. Security Interests.......................................... 97
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date.............................................. 99
SECTION 4.02. Each Credit Event........................................... 103
ARTICLE V
Affirmative Covenants
---------------------
SECTION 5.01. Financial Statements and Other Information.................. 104
SECTION 5.02. Notices of Material Events.................................. 106
SECTION 5.03. Information Regarding Collateral............................ 106
SECTION 5.04. Existence; Conduct of Business.............................. 107
SECTION 5.05. Payment of Obligations...................................... 107
SECTION 5.06. Maintenance of Properties................................... 108
SECTION 5.07. Insurance................................................... 108
SECTION 5.08. Casualty and Condemnation................................... 108
SECTION 5.09. Books and Records; Inspection and Audit Rights.............. 109
SECTION 5.10. Compliance with Laws........................................ 109
SECTION 5.11. Use of Proceeds and Letters of Credit....................... 109
SECTION 5.12. Additional Subsidiaries..................................... 110
SECTION 5.13. Further Assurances.......................................... 110
iii
SECTION 5.14. Interest Rate Protection.................................... 110
ARTICLE VI
Negative Covenants
------------------
SECTION 6.01. Financial Covenants......................................... 111
SECTION 6.02. Limitations on Debt......................................... 111
SECTION 6.03. Liens....................................................... 114
SECTION 6.04. Restricted Payments......................................... 116
SECTION 6.05. Mergers, Consolidations, Amalgamations, Sales............... 117
SECTION 6.06. Modification of Certain Documents........................... 119
SECTION 6.07. Transactions with Affiliates................................ 119
SECTION 6.08. Inconsistent Agreements..................................... 120
SECTION 6.09. Business Activities......................................... 120
SECTION 6.10. Advances and Other Investments.............................. 120
SECTION 6.11. Location of Assets.......................................... 122
SECTION 6.12. QuIPS Documents............................................. 122
SECTION 6.13. Securitization Obligations.................................. 122
ARTICLE VII
Events of Default
-----------------
ARTICLE VIII
The Administrative Agents and the Collateral Agents
---------------------------------------------------
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices..................................................... 132
SECTION 9.02. Waivers; Amendments......................................... 133
SECTION 9.03. Expenses; Indemnity; Damage Waiver.......................... 136
SECTION 9.04. Successors and Assigns...................................... 138
SECTION 9.05. Survival.................................................... 143
SECTION 9.06. Counterparts; Integration; Effectiveness.................... 143
SECTION 9.07. Severability................................................ 144
SECTION 9.08. Right of Setoff............................................. 144
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.. 144
SECTION 9.10. WAIVER OF JURY TRIAL........................................ 145
iv
SECTION 9.11. Headings.................................................... 146
SECTION 9.12. Confidentiality............................................. 146
SECTION 9.13. Interest Rate Limitation.................................... 147
SECTION 9.14. Designated Senior Indebtedness.............................. 147
SECTION 9.15. Judgment Currency........................................... 147
SECTION 9.16. Limitation on Liability..................................... 148
ARTICLE X
Collection Allocation Mechanism
-------------------------------
SECTION 10.01. Implementation of CAM...................................... 149
SECTION 10.02. Letters of Credit.......................................... 150
SECTION 10.03. Conversion................................................. 152
ARTICLE XI
Guaranty by the U.S. Borrower
-----------------------------
SECTION 11.01. Guaranty................................................... 152
SECTION 11.02. Guaranty Unconditional..................................... 153
SECTION 11.03. Discharge only upon Payment in Full:
Reinstatement in Certain Circumstances.................... 154
SECTION 11.04. Waiver by the U.S. Borrower................................ 154
SECTION 11.05. Subrogation................................................ 154
SECTION 11.06. Stay of Acceleration....................................... 154
SCHEDULES:
---------
Schedule 2.01 -- Commitments
Schedule 2.05 -- Existing Letters of Credit
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 3.14 -- Labor Matters
Schedule 6.02(g) -- Existing Debt
Schedule 6.03 -- Existing Liens
EXHIBITS:
--------
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of U.S. Guaranty
Exhibit C -- Form of U.S. Pledge Agreement
Exhibit D -- Form of U.S. Security Agreement
Exhibit E -- Form of Canadian Subsidiary Guarantee Agreement
v
Exhibit F -- Form of Canadian Security Agreement
Exhibit G -- Form of Canadian Pledge Agreement
Exhibit H-1 -- Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP
Exhibit H-2 -- Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Exhibit H-3 -- Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Exhibit I -- Form of Perfection Certificate
Exhibit J -- Form of Subordination Language
Exhibit K -- Form of B/A Equivalent Note
AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 20,
2001, among UNITED RENTALS, INC., UNITED RENTALS (NORTH AMERICA),
INC., UNITED RENTALS OF CANADA, INC., the LENDERS party hereto,
THE CHASE MANHATTAN BANK, as U.S. Administrative Agent, and THE
CHASE MANHATTAN BANK OF CANADA, a Canadian chartered bank, as
Canadian Administrative Agent,
The parties hereto desire to consolidate, amend and restate the
Existing Credit Agreements (as defined herein) pursuant to and in accordance
with this Agreement. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the
--------------
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
---
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acceptance Fee" means a fee payable in Canadian Dollars by the
--------------
Canadian Borrower to a C $ Revolving Lender with respect to the acceptance of a
B/A or the purchase of a B/A Equivalent Note, calculated on the face amount of
the B/A or the B/A Equivalent Note at the rate per annum equal to the B/A Spread
on the basis of the number of days in the applicable Contract Period and a year
of 365 days (or 366 days in a leap year) (it being agreed that the B/A Spread in
respect of a B/A Equivalent Note is equivalent to the B/A Spread otherwise
applicable to the B/A Borrowing which has been replaced by the purchase of such
B/A Equivalent Note pursuant to Section 2.21(g)).
"Acquisition Subsidiary" means a Subsidiary organized solely for the
----------------------
purpose of acquiring the Equity Interests or assets of a Person as permitted by
Section 6.05.
"Additional Lender" has the meaning assigned to such term in Section
-----------------
2.20.
2
"Additional Revolving Availability Period" means the period from and
----------------------------------------
including July 1, 2001, to but excluding the earlier of (a) the Revolving
Maturity Date and (b) the date of termination of the Additional Revolving
Commitments and the C $ Revolving Commitments.
"Additional Revolving Borrowing" means a Borrowing comprised of
------------------------------
Additional Revolving Loans.
"Additional Revolving Commitment" means, with respect to any Lender,
-------------------------------
the commitment, if any, of such Lender to make Additional Revolving Loans during
the Additional Revolving Availability Period, expressed as an amount
representing the maximum potential aggregate principal amount of such Lender's
Additional Revolving Loans hereunder, as such commitment may be (a) temporarily
or permanently reduced from time to time pursuant to Sections 2.08 and 2.23 and
(b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 2.19 or 9.04. The initial aggregate amount of the
Additional Revolving Lenders' Additional Revolving Commitments is $0.
"Additional Revolving Exposure" means, with respect to any Additional
-----------------------------
Revolving Lender at any time, the sum of the aggregate principal amount at such
time of all outstanding Additional Revolving Loans of such Lender.
"Additional Revolving Lender" means each C $ Revolving Lender, lending
---------------------------
through a U.S. office (or, if any C $ Revolving Lender is not a Canadian
Schedule I chartered bank, the Affiliate designated by such C $ Revolving Lender
that is a U.S. chartered bank or other financial institution (each, a
"Designated U.S. Affiliate")) with an Additional Revolving Commitment or, if the
-------------------------
Additional Revolving Commitment shall equal zero, a Lender (individually or
together with its Designated U.S. Affiliate) that may be required, pursuant to
Section 2.23, to make Additional Revolving Loans.
"Additional Revolving Loan" means any loan made by an Additional
-------------------------
Revolving Lender pursuant to its Additional Revolving Commitment.
"Adjusted IBO Rate" means, with respect to any Eurodollar Borrowing
-----------------
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the IBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
3
"Administrative Agents" means the U.S. Administrative Agent and the
---------------------
Canadian Administrative Agent.
"Administrative Questionnaire" means an Administrative Questionnaire
----------------------------
in a form supplied by the U.S. Administrative Agent or Canadian Administrative
Agent, as applicable.
"Affiliate" means, with respect to a specified Person, another Person
---------
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means the Administrative Agents and the Collateral Agents.
------
"Alternate Base Rate" means, for any day, a rate per annum equal to
-------------------
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any (a) U.S. $
---------------------
Revolving Lender, the percentage of the Total U.S. $ Revolving Commitment
represented by such Lender's U.S. $ Revolving Commitment, (b) C $ Revolving
Lender, the percentage of the Total C $ Revolving Commitment represented by such
Lender's C $ Revolving Commitment and (c) Additional Revolving Lender, the
percentage of the Total Additional Revolving Commitment represented by such
Lender's Additional Revolving Commitment. In the event any Revolving
Commitments or Additional Revolving Commitments shall have expired or been
terminated, the Applicable Percentages shall be determined on the basis of the
relevant Revolving Commitments or Additional Revolving Commitments most recently
in effect, but giving effect to any assignments pursuant to Section 9.04.
"Applicable Rate" means, (a) for any day with respect to any Term Loan
---------------
that is an ABR Loan, 2.00%, or a Eurodollar Loan, 3.00%, (b) for any day with
respect to any ABR Loan or Eurodollar Loan that is a U.S. $ Revolving Loan or
Additional Revolving Loan, as the case may be, the applicable rate per annum set
forth below under the caption "ABR Spread" or "Eurodollar Spread", as the case
may be, based upon the Funded Debt to Cash Flow Ratio as of the most recent
determination date and (c) for any day with respect to any Canadian Prime Rate
Loan or B/A Borrowing, as the
4
case may be, the applicable rate per annum set forth below under the caption
"Canadian Prime Rate--C $ Revolving Loan" or "B/A Spread--C $ Revolving Loan",
as the case may be, based upon the Funded Debt to Cash Flow Ratio as of the most
recent determination date; provided that until the date that is six months after
--------
the Effective Date the "Applicable Rate" shall not be less than (i) with respect
to any U.S. $ Revolving Loan or Additional Revolving Loan that is an ABR Loan,
1.00%, or a Eurodollar Loan, 2.00%, and (ii) with respect to any C $ Revolving
Loan that is a Canadian Prime Rate Loan, 1.00%, or a B/A Loan, 2.00%:
========================================================================
U.S. $ Revolving
Loans/Additional C $
Revolving Loans Revolving Loans
--------------- ---------------
Funded Debt to Euro- ABR B/A Canadian
-------------- ----- --- --- --------
Cash Flow dollar Spread Spread Prime
--------- ------ ------ ------ -----
Ratio: Spread Rate
------ ------ ----
------------------------------------------------------------------------
Category 1
----------
Greater than 2.75% 1.75% 2.75% 1.75%
or equal to
4.00 to 1.00
------------------------------------------------------------------------
Category 2
----------
Less than 4.00 2.50% 1.50% 2.50% 1.50%
to 1.00
but greater
than or equal
to 3.50 to
1.00
------------------------------------------------------------------------
Category 3
----------
Less than 3.50 2.25% 1.25% 2.25% 1.25%
to 1.00
but greater
than or equal
to 3.00 to
1.00
------------------------------------------------------------------------
Category 4
----------
Less than 3.00 2.00% 1.00% 2.00% 1.00%
to 1.00 but
greater than
or equal to
2.50 to 1.00
------------------------------------------------------------------------
Category 5
----------
Less than 2.50 1.75% 0.75% 1.75% 0.75%
to 1.00
========================================================================
For purposes of the foregoing, (a) the Funded Debt to Cash Flow Ratio
shall be determined as of the last day of each Fiscal Quarter based upon
Holdings's consolidated financial statements delivered pursuant to Section
5.01(a)
5
or (b) and (b) each change in the Applicable Rate resulting from a change in the
Funded Debt to Cash Flow Ratio shall be effective during the period commencing
on and including the date that is three days after the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change; provided that the Funded Debt to Cash Flow Ratio shall be
--------
deemed to be in Category 1 (A) at any time that an Event of Default has occurred
and is continuing or (B) at the option of the Administrative Agent or at the
request of the Required Lenders if Holdings fails to deliver the consolidated
financial statements required to be delivered by it pursuant to Section 5.01(a)
or (b), during the period from the expiration of the time for delivery thereof
until such consolidated financial statements are delivered.
"Assigned Debt" means the principal amount of any Debt outstanding
-------------
under any Existing Credit Agreement on the Effective Date immediately prior to
consummation of the transactions contemplated hereby, to the extent that (i)
such Debt is held at such time by a lender under such Existing Credit Agreement
that is not a party to this Agreement as a Lender and (ii) such Debt is
requested to be assigned to the Lenders hereunder on the Effective Date pursuant
to the Assignment Agreement.
"Assigned Dollar Value" means in respect of any C $ Revolving
---------------------
Borrowing, the Dollar Equivalent of the amount set forth in the initial
Borrowing Request with respect thereto or, in the case of a B/A Borrowing, the
Dollar Equivalent of the face amount of the Bankers' Acceptances or B/A
Equivalent Notes relating thereto. Thereafter, Assigned Dollar Value shall
mean, in respect of any C $ Revolving Borrowing, the Dollar Equivalent of the
principal amount of the Loans relating to such Borrowing (or the face amounts of
the Bankers' Acceptances or B/A Equivalent Notes relating thereto) as determined
on the most recent Reset Date based on the Spot Exchange Rate.
"Assignment Agreement" means an agreement entered into by one or more
--------------------
holders of Assigned Debt with the U.S. Administrative Agent, Holdings and the
U.S. Borrower, pursuant to which such holder or holders of Assigned Debt shall
have agreed to assign the principal amount of such Assigned Debt to the Lenders
on the Effective Date in consideration of the payment to such holder or holders
(a) by the Term Lenders, of an amount equal to the principal amount of the
Assigned Debt so assigned to them, and (b) by the U.S. Borrower, of all other
amounts accrued and owing to
6
such holder or holders under the Existing Credit Agreements as of the Effective
Date.
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the U.S. Administrative Agent (and,
in the case of an assignment of C $ Revolving Commitments, C $ Revolving Loans,
Additional Revolving Commitments or Additional Revolving Loans, accepted by the
Canadian Administrative Agent), substantially in the form of Exhibit A or any
other form approved by the applicable Administrative Agent.
"B/A Borrowing" means a Borrowing by the Canadian Borrower comprised
-------------
of a Bankers' Acceptance or, as applicable, a B/A Equivalent Note.
"B/A Equivalent Note" has the meaning set forth in Section 2.21(g).
-------------------
"B/A Spread" means, for any day, with respect to any B/A Borrowing,
----------
the Applicable Rate that would apply to such Borrowing on such day.
"Bankers' Acceptance" and "B/A" means either a depository ▇▇▇▇ within
------------------- ---
the meaning of the Depository Bills and Notes Act or a ▇▇▇▇ of exchange within
the meaning of the Bills of Exchange Act denominated in Canadian Dollars, drawn
by the Canadian Borrower and accepted by a C $ Revolving Lender in accordance
with this Agreement; provided that with respect to a C $ Revolving Lender that
--------
has notified the Canadian Administrative Agent that it is not willing or is
otherwise unable to accept such bills of exchange, it shall mean a B/A
Equivalent Note.
"Board" means the Board of Governors of the Federal Reserve System of
-----
the United States of America.
"Borrowers" means the U.S. Borrower and the Canadian Borrower.
---------
"Borrowing" means (a) Loans of the same Class and Type, made,
---------
converted or continued on the same date and, in the case of Eurodollar Loans or
B/A Rate Loans, as to which a single Interest Period or Contract Period, as
applicable, is in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by either of the Borrowers for a
-----------------
Borrowing in accordance with Section 2.03.
7
"Business Day" means any day that is not a Saturday, Sunday or other
------------
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, (a) when used in connection with a Eurodollar
--------
Loan, "Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the Eurodollar lending offices where the U.S.
Administrative Agent's foreign currency and exchange operations and Eurodollar
funding operations are customarily conducted in the international interbank
market and (b) when used in connection with a C $ Revolving Loan, the term
"Business Day" shall also exclude any day on which banks are required or
permitted to be closed in the city of Toronto.
"C $ Revolving Availability Period" means the period from and
---------------------------------
including the Effective Date to but excluding the earlier of (a) the Revolving
Maturity Date and (b) the date of termination of the C $ Revolving Commitments.
"C $ Revolving Borrowing" means a Borrowing by the Canadian Borrower
-----------------------
comprised of C $ Revolving Loans.
"C $ Revolving Commitment" means, with respect to any C $ Revolving
------------------------
Lender at any time, the commitment, if any, of such Lender to make C $ Revolving
Loans and accept Bankers' Acceptances during the C $ Revolving Availability
Period, expressed as an amount representing the maximum potential aggregate
amount of such Lender's C $ Revolving Exposure hereunder, as such commitment may
be (a) temporarily or permanently reduced or increased from time to time
pursuant to Section 2.24 or Sections 2.08 and 2.23 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 2.19 or 9.04. The initial amount of each C $ Revolving Lender's C $
Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its C $ Revolving
Commitment, as applicable.
"C $ Revolving Exposure" means, with respect to any Lender at any
----------------------
time, the sum of the Assigned Dollar Value at such time of all outstanding C $
Revolving Loans of such Lender.
"C $ Revolving Lender" means a Lender, which on the date such Person
--------------------
becomes a Lender shall be a Canadian chartered bank or other Canadian financial
institution, with a C $ Revolving Commitment or, if the C $ Revolving Commitment
shall equal zero, a Lender that may be required, pursuant to Section 2.23, to
make C $ Revolving Loans.
8
"C $ Revolving Loan" means any loan made by a Lender, and any Bankers'
------------------
Acceptance accepted by a Lender, pursuant to its C $ Revolving Commitment.
"Calculation Date" means (a) the last Business Days of each March,
----------------
June, September and December and (b) in respect of C $ Revolving Loans at any
time when the aggregate C $ Revolving Exposure exceeds 85% of the Total C $
Revolving Commitments, any other date the Canadian Administrative Agent may
determine (upon at least three Business Days' prior notice to the U.S. Borrower)
in its discretion to be a Calculation Date (but not more than one date during
any calendar week).
"CAM" means the mechanism for the allocation and exchange of interests
---
in the Credit Facilities and collections thereunder established under Article X.
"CAM Exchange" means the exchange of the Lenders' interests provided
------------
for in Section 10.01.
"CAM Exchange Date" means the first date after the Effective Date on
-----------------
which there shall occur (a) any event described in paragraph (i) or (j) of
Article VII with respect to Holdings or either Borrower or (b) an acceleration
of the maturity of Loans pursuant to Article VII.
"CAM Percentage" means, as to each Lender, a fraction, expressed as a
--------------
decimal, of which (a) the numerator shall be the sum of (i) the aggregate
Designated Obligations owed to such Lender, (ii) the LC Exposure, if any, of
such Lender and (iii) the Swingline Exposure, if any, of such Lender, in each
case immediately prior to the CAM Exchange Date, and (b) the denominator shall
be the sum of (i) the aggregate Designated Obligations owed to all the Lenders
and (ii) the aggregate LC Exposure of all the Lenders, in each case immediately
prior to such CAM Exchange Date; provided that, for purposes of clause (a)
--------
above, the Designated Obligations owed to the Swingline Lender will be deemed
not to include any Swingline Loans except to the extent provided in clause
(a)(iii) above. For purposes of computing each Lender's CAM Percentage, all
Designated Obligations that are denominated in Canadian Dollars shall be
translated into Dollars at the Spot Exchange Rate in effect on the CAM Exchange
Date.
"Canadian Administrative Agent" means The Chase Manhattan Bank of
-----------------------------
Canada, in its capacity as administrative agent for the C $ Revolving Lenders
hereunder, and any successor appointed in accordance with Article VIII.
9
"Canadian Borrower" means United Rentals of Canada, Inc., a
-----------------
corporation organized and existing under the laws of Canada.
"Canadian Collateral Agent" means the "Canadian Collateral Agent", as
-------------------------
defined in the Canadian Security Agreement and the Canadian Subsidiary Guarantee
Agreement, and any successor appointed in accordance with Article VIII.
"Canadian Commitment Fee" has the meaning set forth in Section
-----------------------
2.12(a).
"Canadian Dollars" or "C $" means lawful money of Canada.
-------------------------
"Canadian Pledge Agreement" means the Amended and Restated Canadian
-------------------------
Pledge Agreement, substantially in the form of Exhibit G, among the Canadian
Subsidiary Loan Parties and the Canadian Collateral Agent for the benefit of the
Canadian Secured Parties.
"Canadian Prime Rate" means, on any day, the annual rate of interest
-------------------
(rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the greater
of:
(a) the annual rate of interest determined by the Canadian
Administrative Agent from time to time as its prime rate in effect
at its principal office in Toronto on such day for determining
interest rates on Canadian Dollar denominated commercial loans in
Canada; and
(b) the annual rate of interest equal to the sum of (i) the CDOR Rate
in effect on such day and (ii) 1%.
"Canadian Prime Rate Borrowing" means a Borrowing by the Canadian
-----------------------------
Borrower comprised of Canadian Prime Rate Loans.
"Canadian Prime Rate Loan" means a Loan denominated in Canadian
------------------------
Dollars that bears interest at a rate based upon the Canadian Prime Rate.
"Canadian Secured Parties" has the meaning assigned to such term in
------------------------
the Canadian Security Agreement.
"Canadian Security Agreement" means the Amended and Restated Security
---------------------------
Agreement, substantially in the Form of Exhibit F, among the Canadian Borrower,
the Canadian
10
Subsidiary Loan Parties and the Canadian Collateral Agent for the benefit of the
Canadian Secured Parties.
"Canadian Security Documents" means the Canadian Security Agreement,
---------------------------
the Canadian Pledge Agreement and such other agreements as may from time to time
be executed by the Canadian Borrower or a Canadian Subsidiary pursuant to
Sections 5.12 and 5.13.
"Canadian Subsidiary" means any Subsidiary that is organized under the
-------------------
federal or provincial laws of Canada.
"Canadian Subsidiary Guarantee Agreement" means the Amended and
---------------------------------------
Restated Subsidiary Guarantee Agreement, substantially in the form of Exhibit E,
made by the Canadian Subsidiary Loan Parties in favor of the Canadian Collateral
Agent for the benefit of the Canadian Secured Parties.
"Canadian Subsidiary Loan Party" means each Subsidiary Loan Party
------------------------------
(including the Canadian Borrower) that is a Canadian Subsidiary other than a
Subsidiary which has been wound up and has no assets (so long as such Subsidiary
continues to have no assets).
"Capital Lease" means, with respect to any Person, any lease of (or
-------------
other agreement conveying the right to use) any real or personal property by
such Person that, in conformity with GAAP, is required to be accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligations" of any Person means the obligations of
-------------------------
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Equivalent Investment" means, at any time, (a) any evidence of
--------------------------
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than one year from the date of issue, or corporate demand
notes, in each case (unless issued by a Lender or its holding company (any such
Person a "Permitted Bank")) rated at least A-1 by S&P or P-1 by ▇▇▇▇▇'▇, (c) any
--------------
certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers acceptance, maturing not more than one year after such time,
or overnight Federal
11
Funds transactions that are issued or sold by any Permitted Bank or a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with any Permitted Bank
(or other commercial banking institution of the stature referred to in clause
(c)) which (i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c) and (ii) has
a market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such Permitted Bank (or other
commercial banking institution) thereunder and (e) investments in short-term
asset management accounts offered by any Permitted Bank which are invested in
debt of any state or municipality of the United States or of the District of
Columbia and which are rated under one of the two highest ratings then
obtainable from S&P's or ▇▇▇▇▇'▇ or investments of the types described in
clauses (a) through (d) above.
"Cash Flow" means, as of the last day of any Fiscal Quarter,
---------
Consolidated Net Income for the Computation Period ending on such day plus, to
the extent deducted in determining such Consolidated Net Income, Interest
Expense (and, to the extent not included in Interest Expense, all interest and
rental payments and purchase price obligations under Synthetic Leases), income
tax expense, depreciation and amortization for such period, all calculated on a
pro forma basis in accordance with Article 11 of Regulation S-X of the
Securities and Exchange Commission to reflect any business combination or
disposition that has been consummated subsequent to the commencement of such
Computation Period.
"CDOR Rate" means, on any date, the annual rate of interest that is
---------
the rate based on an average rate applicable to C $ bankers' acceptances for a
term of 30 days appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swaps and Derivatives Association, Inc. definitions, as modified
and amended from time to time) at approximately 10:00 a.m. (Toronto time), on
such date, or if such date is not a Business Day, then on the immediately
preceding Business Day; provided that if such rate does not appear on the
--------
Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date shall
be calculated as the rate for the term referred to above applicable to C $
bankers' acceptances quoted by the Canadian Administrative Agent as of 10:00
a.m. (Toronto time) on such date or, if such date is not a Business Day, then on
the immediately preceding Business Day.
12
"Change in Control" means (a) any Person or group of Persons (within
-----------------
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding Permitted Holders) shall acquire beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of
35% or more of the ordinary voting power represented by the outstanding Equity
Interests of Holdings having ordinary voting power; (b) during any 24-month
period, individuals who at the beginning of such period constituted Holdings's
Board of Directors (together with any new directors whose election by Holdings's
Board of Directors or whose nomination for election by Holdings's shareholders
was approved by a vote of at least two-thirds of the directors who either were
directors at beginning of such period or whose election or nomination was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Holdings; (c) any "Change of Control" or similar event,
however denominated, shall occur under, and as defined in, any Subordinated Note
Indenture, the Senior Note Documents or any document evidencing or governing any
other Subordinated Debt; or (d) the U.S. Borrower shall cease to be a direct,
wholly owned Subsidiary of Holdings or the Canadian Borrower shall cease to be a
direct or indirect, wholly owned Subsidiary of the U.S. Borrower.
"Change in Law" means (a) the adoption of any law, rule or regulation
-------------
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any, with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
-----
whether such Loan, or the Loans comprising such Borrowing, are U.S. $ Revolving
Loans, C $ Revolving Loans, Additional Revolving Loans, Term Loans, Incremental
Term Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a U.S. $ Revolving Commitment, C $
Revolving Commitment, Additional Revolving Commitment or Term Loan Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
13
"Collateral" means any and all "Collateral", as defined in any
----------
applicable Security Document.
"Collateral Agents" means the U.S. Collateral Agent and the Canadian
-----------------
Collateral Agent, and any successor appointed in accordance with Article VIII.
"Collateral and Guarantee Requirement" means the requirement that:
------------------------------------
(a) the U.S. Collateral Agent shall have received from each U.S. Loan
Party either (i) a counterpart of each of the U.S. Guaranty, the U.S.
Pledge Agreement and the U.S. Security Agreement, in each case duly
executed and delivered on behalf of such U.S. Loan Party, or (ii) in the
case of any Person that becomes a U.S. Loan Party after the Effective Date,
a supplement to each of the foregoing agreements, in each case in the form
specified therein, duly executed and delivered on behalf of such U.S. Loan
Party;
(b) the Canadian Collateral Agent shall have received from each
Canadian Subsidiary Loan Party either (i) a counterpart of each of the
Canadian Subsidiary Guarantee Agreement, the Canadian Pledge Agreement and
the Canadian Security Agreement, in each case duly executed and delivered
on behalf of such Canadian Subsidiary Loan Party, or (ii) in the case of
any Person that becomes a Canadian Subsidiary Loan Party after the
Effective Date, a counterpart of each of the agreements referred to in
clause (i), duly executed and delivered on behalf of such Canadian Loan
Party;
(c) all outstanding Equity Interests of each Subsidiary (other than an
Excluded Subsidiary) owned by or on behalf of any Loan Party shall have
been pledged pursuant to the applicable Canadian Security Document, if such
Loan Party is a Canadian Loan Party, or applicable U.S. Security Document,
if such Loan Party is a U.S. Loan Party (except that the Loan Parties shall
not be required to pledge more than 65% of the outstanding voting Equity
Interests of any Foreign Subsidiary (which, for purposes of this paragraph
(c), shall include, as to the U.S. Loan Parties, any Subsidiary that is
organized under the laws of a jurisdiction other than the United States of
America, or any state thereof, or the District of Columbia) pursuant to the
applicable Security Document to the extent that the pledge of any greater
percentage could result in adverse tax consequences to Holdings or any
14
Subsidiary) and the Collateral Agent shall have received certificates or
other instruments representing all such Equity Interests, together with
stock powers or other instruments of transfer with respect thereto endorsed
in blank; provided that it is understood and agreed that, for purposes of
--------
this paragraph, any Equity Interests directly owned by a Subsidiary shall
be deemed not to be owned by Holdings or any other Subsidiary of which such
first Subsidiary is a subsidiary;
(d) all Debt of Holdings and each Subsidiary that is owing to any Loan
Party and is evidenced by a promissory note shall have been pledged
pursuant to the applicable Security Document and the applicable Collateral
Agent shall have received all such promissory notes, together with
instruments of transfer with respect thereto endorsed in blank;
(e) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
applicable Collateral Agent or the applicable Administrative Agent to be
filed, registered or recorded to (i) create the Liens intended to be
created by the applicable Security Agreement and the applicable Pledge
Agreement and (ii) perfect such Liens to the extent required by, and with
the priority required by, the applicable Security Agreement and the
applicable Pledge Agreement, shall have been filed, registered or recorded
or delivered to the applicable Collateral Agent for filing, registration or
recording; and
(f) each Loan Party shall have obtained all consents and approvals
required to be obtained by it in connection with the execution and delivery
of all Security Documents to which it is a party, the performance of its
obligations thereunder and the granting by it of the Liens thereunder.
"Commitment" means a U.S. $ Revolving Commitment, C $ Revolving
----------
Commitment, Additional Revolving Commitment or Term Loan Commitment, or any
combination thereof (as the context requires).
"Computation Period" means each period of four Fiscal Quarters ending
------------------
on the last day of a Fiscal Quarter on or after the Effective Date.
"Consolidated Net Income" means, with respect to Holdings and its
-----------------------
Subsidiaries for any period, the net income
15
(or loss) of Holdings and its Subsidiaries for such period, excluding (a) any
---------
extraordinary gains during such period and (b) if such period includes the
Fiscal Quarter ending June 30, 2001, (i) up to $27,000,000 of financing fees
incurred and written-off in such Fiscal Quarter as a result of the Transactions
and (ii) up to $40,000,000 of charges taken in such Fiscal Quarter related to
store closings and work force reductions.
"Contingent Payment" means any payment that has been (or is required
------------------
to be) made under any of the following circumstances:
(a) such payment is required to be made by Holdings or any Subsidiary
in connection with the purchase of any asset or business, where the
obligation of Holdings or the applicable Subsidiary to make such payment
(or the amount thereof) is contingent upon the financial or other
performance of such asset or business on an ongoing basis (e.g., based on
----
revenues or similar measures of performance);
(b) such payment is required to be made by Holdings or any Subsidiary
in connection with the achievement of any particular business goal
(excluding employee compensation and bonuses in the ordinary course of
business);
(c) such payment is required to be made by Holdings or any Subsidiary
under circumstances similar to those described in clause (a) or (b) or
provides substantially the same economic incentive as would a payment
described in clause (a) or (b); or
(d) such payment is required to be made by Holdings or any Subsidiary
in connection with the purchase of any real estate, where the obligation to
make such payment is contingent on any event or condition (other than
customary closing conditions for a purchase of real estate).
"Contract Period" means the term of a B/A or B/A Equivalent Note
---------------
selected by the Canadian Borrower in accordance with Section 2.21, commencing on
the date of such Borrowing or any rollover date, as applicable, of such B/A or
B/A Equivalent Note (which shall be a Business Day) and expiring on a Business
Day that shall be either 30 days, 60 days, 90 days or (subject to availability
from all the C $ Revolving Lenders) 180 days thereafter, as the Canadian
Borrower may elect; provided that no Contract Period shall extend beyond the
--------
Revolving Maturity Date. Notwithstanding
16
the foregoing, whenever the last day of any Contract Period would otherwise
occur on a day that is not a Business Day, the last day of such Contract Period
shall occur on the next succeeding Business Day and such extension of time shall
in such case be included in computing the Acceptance Fee in respect of the
relevant B/A unless such next succeeding Business Day would fall in the next
calendar month, in which case such Contract Period shall end on the next
preceding Business Day.
"Control" means the possession, directly or indirectly, of the power
-------
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
----------- ----------
"Controlled Group" means all members of a controlled group of
----------------
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with
Holdings, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.
"Credit Facility" means a category of Commitments and extensions of
---------------
credit thereunder. For purposes hereof, each of the following comprises a
separate Credit Facility: (a) the U.S. $ Revolving Commitments, the U.S. $
Revolving Loans, the Swingline Exposure and the LC Exposure; (b) the C $
Revolving Commitments and the C $ Revolving Loans; (c) the Additional Revolving
Commitments and the Additional Revolving Loans; (d) the Term Loans; and (e) the
Incremental Term Loans.
"Debt" of any Person means, without duplication, (a) all obligations
----
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all Capital Lease Obligations of
such Person as lessee under Capital Leases, (c) all obligations of such Person
to pay the deferred purchase price of property or services (including Contingent
Payments and Holdbacks but excluding trade accounts payable in the ordinary
course of business), (d) all Debt secured by a Lien on the property of such
Person, whether or not such Debt shall have been assumed by such Person (it
being understood that if such Person has not assumed or otherwise become
personally liable for any such Debt, the amount of the Debt of such Person in
connection therewith shall be limited to the lesser of the face amount of such
Debt or the fair market value of all property of such Person securing such
Debt), (e) all obligations, contingent or otherwise, with
17
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account or upon the application of such
Person, (f) all Hedging Obligations of such Person, (g) all Suretyship
Liabilities of such Person and (h) all Synthetic Lease Obligations of such
Person.
"Default" means any event or condition which constitutes an Event of
-------
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Denomination Date" means, in relation to any Canadian Dollar
-----------------
Borrowing, the date that is three Business Days before the date such Borrowing
is made.
"Designated Obligations" means all Obligations of the Loan Parties in
----------------------
respect of (a) principal of and interest on the Loans (including B/As, B/A
Equivalent Notes and Acceptance Fees with respect thereto) and (b) fees, whether
or not the same shall at the time of any determination be due and payable under
the terms of the Loan Documents.
"Designated U.S. Affiliate" has the meaning set forth in the
-------------------------
definition of the term "Additional Revolving Lender".
"Disclosed Matters" means the actions, suits and proceedings and the
-----------------
environmental matters disclosed in Schedule 3.06.
"Discount Proceeds" means, for any B/A (or, as applicable, any B/A
-----------------
Equivalent Note), an amount (rounded to the nearest whole cent, and with one-
half of one cent being rounded upwards) calculated on the applicable date of the
Borrowing of which such B/A or B/A Equivalent Note is a part or any rollover
date for such Borrowing by multiplying:
(a) the face amount of the B/A (or, as applicable, the B/A Equivalent
Note); by
(b) the quotient of one divided by the sum of one plus the product
of:
(i) the Discount Rate (expressed as a decimal) applicable to
such B/A (or as applicable, such B/A Equivalent Note), and
(ii) a fraction, the numerator of which is the Contract Period of
the B/A (or, as
18
applicable, the B/A Equivalent Note) and the denominator of
which is the number of days in the applicable calendar year,
with such quotient being rounded up or down to the fifth decimal
place, and .000005 being rounded up.
"Discount Rate" means:
-------------
(a) with respect to any C $ Revolving Lender that is a Schedule I
chartered bank under the Bank Act (Canada), as applicable to a B/A (or, as
applicable, a B/A Equivalent Note) being purchased by such Lender on any
day, the average (as determined by the Canadian Administrative Agent) of
the respective percentage discount rates (expressed to two decimal places
and rounded upward, if necessary, to the nearest 0.01%) quoted by the
Schedule I Reference Banks as the percentage discount rate at which the
Schedule I Reference Banks would, in accordance with their normal
practices, at or about 10:00 a.m., Toronto time, on such date, be prepared
to purchase bankers' acceptances accepted by the Schedule I Reference Banks
having a face amount and term comparable to the face amount and term of
such B/A or B/A Equivalent Note; and
(b) with respect to any C $ Revolving Lender that is not a Schedule I
chartered bank under the Bank Act (Canada), as applicable to a B/A (or, as
applicable, a B/A Equivalent Note) being purchased by such Lender on any
day, the average (as determined by the Canadian Administrative Agent) of
the respective percentage discount rates (expressed to two decimal places
and rounded upward, if necessary, to the nearest 0.01%) quoted by the
Schedule II and/or Schedule III Reference Banks as the percentage discount
rates at which the Schedule II and/or Schedule III Reference Banks would,
in accordance with their normal practices, at or about 10:00 a.m., Toronto
time, on such date, be prepared to purchase bankers' acceptances accepted
by the Schedule II and/or Schedule III Reference Banks having a face amount
and term comparable to the face amount and term of such B/A; provided,
--------
however, that no Discount Rate calculated pursuant to this clause (b) shall
-------
exceed the Discount Rate calculated pursuant to clause (a) above in respect
of the same issue of Bankers' Acceptances plus 7 basis points (0.07%) per
annum.
"Disqualified Equity Interests" means any class or series of Equity
-----------------------------
Interests that, either by its terms, by the
19
terms of any security into which it is convertible or exchangeable or by
contract or otherwise, is or upon the happening of an event or passage of time
would be, required to be redeemed prior to the Term Loan Maturity Date or is
redeemable at the option of the holder thereof at any time prior to the Term
Loan Maturity Date, or is convertible into or exchangeable for debt securities
at any time prior to the Term Loan Maturity Date, or any class or series of
Equity Interests that is otherwise redeemable on terms more favorable to the
holder thereof than the redemption terms relating to Holdings's Series A
Perpetual Convertible Preferred Stock, issued on January 7, 1999, or Series B
Perpetual Convertible Preferred Stock, issued on September 30, 1999; provided,
--------
however, that Equity Interests will not constitute Disqualified Equity Interests
-------
solely because the holders thereof have the right to require the issuer thereof
to repurchase or redeem such Equity Interests upon the occurrence of a Change in
Control; provided further that any Equity Interests that are redeemable on terms
-------- -------
no more favorable to the holder thereof than the redemption terms relating to
Holdings's Series A Perpetual Convertible Preferred Stock, issued on January 7,
1999, or Series B Perpetual Convertible Preferred Stock, issued on September 30,
1999, shall not constitute "Disqualified Equity Interests".
"Dollar Equivalent" means, with respect to any amount of Canadian
-----------------
Dollars on any date, the amount of Dollars that may be purchased with such
amount of Canadian Dollars at the Spot Exchange Rate on such date.
"Dollars" or "$" refers to lawful money of the United States of
------- -
America.
"Effective Date" means the date on which the conditions specified in
--------------
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all applicable laws, rules, regulations,
------------------
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, presence, release or threatened release
of any Hazardous Materials or to health and safety matters, as those matters
relate to environmental protection.
"Environmental Liability" means any liability, contingent or otherwise
-----------------------
(including any liability for
20
damages, costs of environmental remediation, fines, penalties or indemnities),
of Holdings or any Subsidiary resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equipment Securitization Transaction" means any sale, assignment,
------------------------------------
pledge or other transfer (or series of related sales, assignments, pledges or
other transfers) (a) by Holdings or any Subsidiary of rental fleet equipment or
related assets to facilitate any financing transaction entered into by an ES
Special Purpose Vehicle that is permitted hereunder, (b) by any ES Special
Purpose Vehicle of leases or rental agreements between Holdings and/or any
Subsidiary, as lessee, on the one hand, and such ES Special Purpose Vehicle, as
lessor, on the other hand, relating to such equipment or related assets and
lease receivables arising under such leases and rental agreements and (c) by
Holdings or any Subsidiary of any interest in any of the foregoing, together in
each case with (i) any and all proceeds thereof (including all collections
relating thereto, all payments and other rights under insurance policies or
warranties relating thereto, all disposition proceeds received upon a sale
thereof, and all rights under manufacturers' repurchase programs or guaranteed
depreciation programs relating thereto), (ii) any collection or deposit account
relating thereto and (iii) any collateral, guaranties, credit enhancement or
other property or claims supporting or securing payment on, or otherwise
relating to, any such leases, rental agreements or lease receivables.
"Equity Interests" means shares of capital stock, partnership
----------------
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) that, together with Holdings, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of
21
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
-----------
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Holdings or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by Holdings or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
Holdings or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by Holdings or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from Holdings or any ERISA Affiliate, of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"ES Special Purpose Vehicle" means a trust, bankruptcy remote entity
--------------------------
or other special purpose entity which is a Subsidiary (or, if not a Subsidiary,
the common equity of which is wholly owned, directly or indirectly, by Holdings)
and which is formed for the purpose of, and engages in no material business
other than, acting as a lessor, issuer or depositor in an Equipment
Securitization Transaction (and, in connection therewith, owning the equipment,
leases, rental agreements, lease receivables, rights to payment and other
interests, rights and assets described in the definition of Equipment
Securitization Transaction, and pledging or transferring any of the foregoing or
interests therein).
"Eurodollar", when used in reference to any Loan or Borrowing, refers
----------
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted IBO Rate.
"Event of Default" has the meaning assigned to such term in Article
----------------
VII.
22
"Excess Synthetic Lease Collateral" means specified assets with a fair
---------------------------------
market value not exceeding 35% of the Synthetic Lease Obligations secured
thereby.
"Excluded Subsidiaries" means (a) any Special Purpose Vehicle (if and
---------------------
so long as, and to the extent that, satisfaction of the Collateral and Guarantee
Requirement by such Special Purpose Vehicle would violate the terms of the
Securitization Transaction(s) entered into by such Special Purpose Vehicle), (b)
any Acquisition Subsidiary (unless and until such Acquisition Subsidiary
acquires any Equity Interests or assets), (c) the QuIPS Trust and (d) any
Subsidiary if (i) any Equity Interests in such Subsidiary (other than directors'
qualifying shares or similar Equity Interests) are owned by any Person or
Persons other than Holdings or a Subsidiary (except any Excluded Subsidiary),
(ii) the consent of such Person or Persons is required in order for the
Collateral and Guarantee Requirement to be satisfied with respect to such
Subsidiary, (iii) such consent has not been obtained and (iv) such Subsidiary
has not incurred any Suretyship Liability in respect of, or Lien on any of its
assets securing, any other Debt of any Loan Party.
"Excluded Taxes" means, with respect to the Agents, any Lender, the
--------------
Issuing Bank or any other recipient (including a Participant) of any payment to
be made by or on account of any obligation of either Borrower hereunder or under
any other Loan Document, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction described in clause (a)
above and (c) in the case of a Foreign Lender (or a Participant that would be a
Foreign Lender if it were a Lender) or any other recipient of any payment to be
made by or on account of any obligation of either Borrower hereunder or under
any other Loan Document (other than an assignee pursuant to a request by such
Borrower under Section 2.19(b)), any withholding tax that (i) is in effect and
would apply to amounts payable to such Foreign Lender (or a Participant that
would be a Foreign Lender if it were a Lender) or any other recipient of any
payment to be made by or on account of any obligation of either Borrower
hereunder or under any other Loan Document at the time such Foreign Lender (or a
Participant that would be a Foreign Lender if it were a Lender) or any other
recipient of any payment to be made by or on account of any obligation of
23
such Borrower hereunder or under any other Loan Document becomes a party (or
becomes entitled to any payment with respect) to this Agreement or any other
Loan Document (or designates a new lending office), except to the extent that
(A) such Foreign Lender (or a Participant that would be a Foreign Lender if it
were a Lender) or any other recipient of any payment to be made by or on account
of any obligation of either Borrower hereunder or under any other Loan Document
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from such Borrower
with respect to any withholding tax pursuant to Section 2.17(a), (B) such
withholding Tax is attributable to the designation of a Subsidiary after the
date upon which such Foreign Lender (or a Participant that would be a Foreign
Lender if it were a Lender) or any other recipient of any payment to be made by
or on account of any obligation of either Borrower hereunder or under any other
Loan Document becomes a party to this Agreement or (C) such withholding tax is
imposed on payments made (x) to a Foreign Lender (or a Participant that would be
a Foreign Lender if it were a Lender) or any other recipient of any payment to
be made by or on account of any obligations of either Borrower hereunder or
under any other Loan Document following a CAM Exchange or (ii) is attributable
to the failure of such Foreign Lender (or a Participant that would be a Foreign
Lender if it were a Lender) or any other recipient of any payment to be made by
or on account of any obligation of either Borrower hereunder or under any other
Loan Document to comply with Section 2.17(e).
"Excluded Transfers" has the meaning assigned to such term in Section
------------------
6.05(d).
"Existing Credit Agreements" means the Existing Revolving Credit
--------------------------
Agreement and the Existing Term Loan Credit Agreements.
"Existing Letter of Credit" means each letter of credit previously
-------------------------
issued for the account of, or guaranteed by, Holdings or any Subsidiary that (a)
is outstanding on the Effective Date and (b) is listed on Schedule 2.05.
"Existing Revolving Credit Agreement" means the Credit Agreement dated
-----------------------------------
as of September 29, 1998, among the U.S. Borrower, Holdings, the Canadian
Borrower, various financial institutions, Bank of America Canada, as Canadian
administrative agent, and Bank of America, N.A., as administrative agent, as
amended or restated from time to time (including any amendment or restatement
increasing the amount available thereunder).
24
"Existing Synthetic Leases" means (a) the $98,500,000 of Synthetic
-------------------------
Lease Obligations of the U.S. Borrower outstanding on the date hereof under the
Master Lease Agreement dated as of December 17, 1999, as amended, between UR
(NA) 1999 Trust and the U.S. Borrower and (b) the $246,500,000 of Synthetic
Lease Obligations of the U.S. Borrower outstanding on the date hereof under the
Master Lease Agreement dated as of June 30, 2000, as amended, between UR (NA)
2000 Trust and the U.S. Borrower.
"Existing Term Loan B Credit Agreement" means the Amended and Restated
-------------------------------------
Term Loan Agreement dated as of May 12, 2000, among Holdings, the U.S. Borrower,
various financial institutions and Bank of America, N.A., as agent, which amends
and restates the Term Loan Agreement dated as of July 10, 1998.
"Existing Term Loan C Credit Agreement" means the Amended and Restated
-------------------------------------
Term Loan Agreement dated as of May 12, 2000, among Holdings, the U.S. Borrower,
various financial institutions and Bank of America, N.A., as agent, which amends
and restates the Term Loan Agreement dated as of July 15, 1999.
"Existing Term Loan Credit Agreements" means, collectively, the
------------------------------------
Existing Term Loan B Credit Agreement, the Existing Term Loan C Credit Agreement
and the Existing Term Loan D Credit Agreement.
"Existing Term Loan D Credit Agreement" means the Term Loan Agreement
-------------------------------------
dated as of June 9, 2000, among Holdings, the U.S. Borrower and Bank of America,
N.A., as agent.
"Existing Term Loans" has the meaning assigned to such term in Section
-------------------
2.01(b).
"Federal Funds Effective Rate" means, for any day, the weighted
----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the U.S. Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
25
"Financial Officer" means the chief financial officer, principal
-----------------
accounting officer, treasurer or controller of Holdings.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
--------------
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries,
-----------
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 2001") refer to the Fiscal Year ending on December 31 of
----
such calendar year.
"Floor Plan Financing Arrangement" means any arrangement whereby
--------------------------------
Holdings or a Subsidiary grants a Lien to an equipment manufacturer (or an
affiliate thereof which is in the financing business) on all equipment purchased
from such manufacturer and the proceeds thereof, including equipment which was
not financed by such manufacturer (or an affiliate thereof).
"Foreign Lender" means any Lender that is organized under the laws of
--------------
a jurisdiction other than that in which the applicable Borrower is located. For
purposes of this definition, the United States of America, each state thereof
and the District of Columbia shall be deemed to constitute a single jurisdiction
and Canada and each province and territory thereof shall be deemed to constitute
a single other jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
------------------
laws of a jurisdiction other than, and which is conducting the majority of its
business outside of, (i) the United States of America or any state thereof or
the District of Columbia and (ii) Canada or any province or territory thereof.
"Funded Debt" means (a) all Debt of Holdings and its Subsidiaries and
-----------
(b) to the extent not included in the definition of Debt, without duplication,
all outstanding Securitization Obligations, but excluding (i) contingent
obligations in respect of undrawn letters of credit and Suretyship Liabilities
(except to the extent constituting contingent obligations or Suretyship
Liabilities in respect of Funded Debt of a Person other than Holdings or any
Subsidiary), (ii) Hedging Obligations, (iii) Debt of Holdings to Subsidiaries
and Debt of Subsidiaries to Holdings or to other Subsidiaries and (iv) Debt
(including guaranties thereof) in respect of the QuIPS Debentures and the QuIPS
Preferred Securities.
26
"Funded Debt to Cash Flow Ratio" means, as of the last day of any
------------------------------
Fiscal Quarter, the ratio of (i) Funded Debt as of such day to (ii) Cash Flow as
of such day.
"GAAP" means generally accepted accounting principles in the United
----
States of America.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee Agreements" means the U.S. Guaranty and the Canadian
--------------------
Subsidiary Guarantee Agreement.
"Hazardous Materials" means all explosive or radioactive substances
-------------------
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
-----------------
foreign currency exchange agreement, equity swap agreement, commodity price
protection agreement or other interest or currency exchange rate, equity price
or commodity price hedging arrangement.
"Hedging Obligations" means, with respect to any Person, all
-------------------
liabilities of such Person under any Hedging Agreement.
"Holdback" means an unsecured, non-interest-bearing obligation of
--------
Holdings or any Subsidiary to pay a portion of the purchase price for any
purchase or other acquisition permitted hereunder which matures within nine
months of the date of such purchase or other acquisition.
"Holdings" means United Rentals, Inc., a Delaware corporation.
--------
"IBO Rate" means, with respect to any Eurodollar Borrowing for any
--------
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) equal to the interest rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered in immediately available funds
27
to the U.S. Administrative Agent at the Eurodollar lending offices where its
foreign currency and exchange operations and Eurodollar funding operations are
customarily conducted in the international interbank market at approximately
10:00 a.m., New York City time, two Business Days prior to the commencement of
such Interest Period. In the event that such rate is not available at such time
for any reason, then the "IBO Rate" with respect to such Eurodollar Borrowing
--------
for such Interest Period shall be the rate at which Dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the Eurodollar lending offices where the U.S. Administrative Agent's foreign
currency and exchange operations and Eurodollar funding operations are
customarily conducted in the international interbank market at approximately
11:00 a.m., New York City time, two Business Days prior to the commencement of
such Interest Period.
"Incremental Term Lender" means a Lender with an outstanding
-----------------------
Incremental Term Loan.
"Incremental Term Loans" has the meaning assigned to such term in
----------------------
Section 2.20.
"Incremental Facility Amendment" has the meaning assigned to such term
------------------------------
in Section 2.20.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Information Memorandum" means the Confidential Information Memorandum
----------------------
dated March 2001, relating to Holdings, the U.S. Borrower and the Transactions.
"Interest Coverage Ratio" means, for any Computation Period, the ratio
-----------------------
of (a) Consolidated Net Income before deducting Interest Expense, income tax
expense, amortization (but not depreciation) and Rentals for such Computation
Period to (b) Interest Expense plus (without duplication) Rentals (excluding
----
Rentals relating to the principal component under Synthetic Leases) for such
Computation Period.
"Interest Election Request" means a request by the U.S. Borrower or
-------------------------
the Canadian Borrower, as applicable, to convert or continue a U.S. $ Revolving
Borrowing, C $ Revolving Borrowing, Additional Revolving Borrowing or Term
Borrowing in accordance with Section 2.07.
"Interest Expense" means for any period the sum, without duplication,
----------------
of (a) the consolidated interest
28
expense of Holdings and its Subsidiaries for such period (including, without
duplication, interest paid on the QuIPS Debentures, distributions on (but not
redemptions of) the QuIPS Preferred Securities, imputed interest on Capital
Leases and Synthetic Leases and any interest which is capitalized but excluding
amortization of deferred financing costs) and (b) consolidated yield or discount
accrued during such period on the aggregate investment or claim held by
purchasers, assignees or other transferees of, or of interests in, accounts
receivable, lease receivables and other rights to payment of Holdings and its
Subsidiaries in connection with any Securitization Transaction (regardless of
the accounting treatment of such Securitization Transaction).
"Interest Payment Date" means (a) with respect to any ABR Loan,
---------------------
Canadian Prime Rate Loan or Swingline Loan, the last day of each March, June,
September and December and (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of each Lender participating in such Borrowing, nine or
twelve months) thereafter or the day one or two weeks thereafter, as the U.S.
Borrower may elect; provided that (a) if any Interest Period would end on a day
--------
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, and (b) any Interest Period (other than a one or
two-week Interest Period) that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
29
"Investment" means, relative to any Person, (a) any loan or advance
----------
made by such Person to any other Person (excluding any commission, travel or
similar advances made to directors, officers and employees of Holdings or any
Subsidiary), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses (excluding deposits
placed in escrow pursuant to bona fide arrangements that provide for the return
of such deposits to Holdings or the applicable Subsidiary in the event that the
related transaction is not consummated for any reason by a date certain).
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
------------
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i) and solely in respect of any Existing Letter of
Credit, the issuer of such Existing Letter of Credit. The Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"Judgment Currency" has the meaning set forth in Section 9.15.
-----------------
"Judgment Currency Conversion Date" has the meaning set forth in
---------------------------------
Section 9.15.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
---------------
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
-----------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the U.S. Borrower at such time. The LC Exposure of any U.S. $ Revolving
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
"LC Reserve Account" has the meaning set forth in Section 10.02(a).
------------------
"Lender Affiliate" means (a) with respect to any Lender, (i) an
----------------
Affiliate of such Lender or (ii) any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or
30
managed by a Lender or an Affiliate of such Lender, and (b) with respect to any
Lender that is a fund that invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and that is managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"Lenders" means the Persons listed on Schedule 2.01 and any other
-------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance or an Incremental Facility Amendment or pursuant to Section 2.24,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
----------------
Agreement and each Existing Letter of Credit.
"Lien" means, with respect to any Person, any interest granted by such
----
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge,
hypothecation or other security interest of any kind, whether arising by
contract, as a matter of law, by judicial process or otherwise.
"Loan Documents" means this Agreement, the Guarantee Agreements, the
--------------
Incremental Facility Amendment and the Security Documents.
"Loan Parties" means Holdings, the Borrowers and the Subsidiary Loan
------------
Parties.
"Loan" means any loan made by any Lender to either Borrower pursuant
----
to this Agreement, which shall include any B/A or B/A Equivalent Note accepted
by any C $ Revolving Lender pursuant to this Agreement.
"Majority Lenders" means, with respect to any Credit Facility on any
----------------
date, Lenders having Loans (excluding Swingline Loans) and unused Commitments
(excluding commitments to issue Letters of Credit or make Swingline Loans)
representing more than 50% of the sum of all Loans (excluding Swingline Loans)
and unused Commitments (excluding commitments to issue Letters of Credit or make
Swingline Loans) under such Credit Facility on such date. For purposes of
determining the Majority Lenders, any amounts denominated in Canadian Dollars
shall be translated
31
into Dollars at the Spot Exchange Rates in effect on the Effective Date.
"Margin Stock" means any "margin stock" as defined in Regulation U of
------------
the Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of Holdings and the Subsidiaries, taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
Collateral or upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document.
"Material Debt" means Debt (other than the Loans and Letters of
-------------
Credit) of any one or more of Holdings and the Subsidiaries in an aggregate
principal amount exceeding $15,000,000 (or its equivalent in any other
currency). For purposes of determining Material Debt, the "principal amount" of
any Hedging Obligation of Holdings or any Subsidiary at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that Holdings
or such Subsidiary would be required to pay if the related Hedging Agreement
were terminated at such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
------------
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by Holdings and the Subsidiaries
to third parties (other than Affiliates) in connection with such event, (ii) in
the case of a sale, transfer or other disposition of an asset (including
pursuant to a sale and leaseback transaction or a casualty or a condemnation or
similar proceeding), the amount of all payments required to be made by Holdings
and the Subsidiaries as a result of such event to repay Debt (other than Loans)
secured by such asset or otherwise subject to mandatory prepayment as a result
of such event, and (iii) the amount of all taxes paid (or reasonably estimated
to be payable) by Holdings and the Subsidiaries, and the amount of any reserves
established by Holdings and the
32
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of Holdings).
"Net Worth" means, at any time, the sum of (a) Holdings's consolidated
---------
stockholders' equity (including preferred stock accounts but determined by
excluding the effects of the write-offs and charges referred to in clause (b) of
the definition of Consolidated Net Income) at such time plus (b) to the extent,
if any, not included in such stockholders' equity, the outstanding amount of the
QuIPS Preferred Securities at such time.
"Obligation Currency" has the meaning set forth in Section 9.15.
-------------------
"Obligations" means any and all "Liabilities", as defined in any
-----------
applicable Security Document or the Guarantee Agreements.
"Other Taxes" means any and all present or future recording, stamp,
-----------
documentary, excise, transfer, sales, property or similar taxes, charges or
levies, other than Excluded Taxes, arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.
"Participant" has the meaning set forth in Section 9.04(e).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Exhibit I
----------------------
or any other form approved by the U.S. Collateral Agent.
"Permitted Holders" means (a) the executive managers of the U.S.
-----------------
Borrower as of the Effective Date and their respective estates, their respective
spouses and former spouses, their lineal descendants, the legal representatives
of any of the foregoing, the trustees of any bona fide trusts of which any of
the foregoing are the sole beneficiaries, and any Person of which any of the
foregoing "beneficially owns" (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) at least 51% of each class of Equity Interests
of such Person; and (b) ▇▇▇▇▇▇▇ ▇.
33
▇▇▇▇▇▇▇ and any of his estate, his spouse or any former spouse, his lineal
descendants, the legal representatives of any of the foregoing, the trustees of
any bona fide trusts of which any of the foregoing and/or one or more charitable
organizations (as defined below) are the sole beneficiaries, any Person of which
any of the foregoing "beneficially owns" (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934) at least 51 % of each class of the Equity
Interests of such Person and any charitable organization to which any of the
foregoing transfers 20% or more of the outstanding shares of common stock of
Holdings. For purposes of the foregoing, a "charitable organization" is an
organization to which a contribution is deductible for income tax purposes under
the Code.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which Holdings or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreements" means the U.S. Pledge Agreement and the Canadian
-----------------
Pledge Agreement.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"QuIPS Debentures" means the 6-1/2% convertible subordinated
----------------
debentures issued by Holdings to the QuIPS Trust pursuant to the QuIPS
Indenture.
"QuIPS Guarantees" means (i) the Guarantee Agreement dated as of
----------------
August 5, 1998, issued by Holdings (then known as United Rentals Holdings, Inc.)
relating to the common securities of the QuIPS Trust and (ii) the Guarantee
Agreement dated as of August 5, 1998, between Holdings (then known as United
Rentals Holdings, Inc.) and The Bank of New York, as Trustee, relating to the
QuIPS Preferred Securities.
34
"QuIPS Indenture" means the Indenture dated as of August 5, 1998,
---------------
between Holdings (then known as United Rentals Holdings, Inc.) and The Bank of
New York, as Trustee.
"QuIPS Preferred Securities" means the 6-1/2% convertible quarterly
--------------------------
income preferred securities issued by the QuIPS Trust pursuant to the QuIPS
Purchase Agreement.
"QuIPS Purchase Agreement" means the Purchase Agreement dated as of
------------------------
July 30, 1998, among the QUIPS Trust, Holdings (then known as United Rentals
Holdings, Inc.), the U.S. Borrower (then known as United Rentals, Inc.) and the
purchasers named therein.
"QuIPS Trust" means United Rentals Trust I, a special purpose Delaware
-----------
business trust established pursuant to the Amended and Restated Trust Agreement
dated as of August 5, 1998, among Holdings (then known as United Rentals
Holdings, Inc.), The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and the administrative trustees named therein.
"Reallocation Notice" has the meaning set forth in Section 2.23.
-------------------
"Receivables Securitization Transaction" means any sale, assignment or
--------------------------------------
other transfer (or series of related sales, assignments or other transfers) by
Holdings or any Subsidiary of accounts receivable, lease receivables or other
payment obligations owing to Holdings or such Subsidiary or any interest in any
of the foregoing, together in each case with any collections and other proceeds
thereof, any collection or deposit account related thereto, and any collateral,
guaranties or other property or claims supporting or securing payment by the
obligor thereon of, or otherwise related to, or subject to leases giving rise
to, any such receivables.
"Register" has the meaning set forth in Section 9.04.
--------
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Rentals" means the aggregate fixed amounts payable by Holdings or any
-------
Subsidiary under any lease of (or other agreement conveying the right to use)
any real or personal property by Holdings or any Subsidiary, as lessee,
35
other than (i) any Capital Lease or (ii) any lease with a remaining term of six
months or less which is not renewable solely at the option of the lessee.
"Required Lenders" means, at any time, Lenders having Revolving
----------------
Exposures, Term Loans, Incremental Term Loans and unused Commitments
representing more than 50% of the sum of the total Revolving Exposures,
outstanding Term Loans, Incremental Term Loans and unused Commitments at such
time. For purposes of determining the Required Lenders, any amounts denominated
in Canadian Dollars shall be translated into Dollars at the Spot Exchange Rate
in effect on the Effective Date.
"Reset Date" has the meaning set forth in Section 2.22(a)(ii).
----------
"Revolving Commitments" means the U.S. $ Revolving Commitments and the
---------------------
C $ Revolving Commitments.
"Revolving Exposures" means the U.S. $ Revolving Exposures, the
-------------------
Additional Revolving Exposures and the C $ Revolving Exposures.
"Revolving Lenders" means the U.S. $ Revolving Lenders and the C $
-----------------
Revolving Lenders.
"Revolving Loans" means the U.S. $ Revolving Loans and C $ Revolving
---------------
Loans.
"Revolving Maturity Date" means October 20, 2006.
-----------------------
"RS Special Purpose Vehicle" means a trust, bankruptcy remote entity
--------------------------
or other special purpose entity which is a Subsidiary (or, if not a Subsidiary,
the common equity of which is wholly owned, directly or indirectly, by Holdings)
and which is formed for the purpose of, and engages in no material business
other than, acting as an issuer or a depositor in a Receivables Securitization
Transaction (and, in connection therewith, owning accounts receivable, lease
receivables, other rights to payment, leases and related assets and pledging or
transferring any of the foregoing or interests therein).
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
---
Companies.
"Schedule I Reference Banks" means such Schedule I chartered banks
--------------------------
under the Bank Act (Canada) as are mutually agreed upon by the Canadian
Administrative Agent and the Canadian Borrower.
36
"Schedule II and/or Schedule III Reference Banks" means such Schedule
-----------------------------------------------
II and/or Schedule III banks under the Bank Act (Canada) as are mutually agreed
upon by the Canadian Administrative Agent and the Canadian Borrower.
"Secured Parties" has the meaning assigned to such term in the U.S.
---------------
Security Agreement.
"Securitization Obligations" means, with respect to any Securitization
--------------------------
Transaction, the aggregate investment or claim held at any time by all
purchasers, assignees or transferees of (or of interests in) or holders of
obligations that are supported or secured by (i) in the case of an Equipment
Securitization Transaction, equipment or related assets (and leases, rental
agreements, lease receivables, rights to payment and other interests, rights and
assets described in the definition of Equipment Securitization Transaction) in
connection with such Equipment Securitization Transaction, and (ii) in the case
of a Receivables Securitization Transaction, accounts receivable, lease
receivables and other rights to payment in connection with such Receivables
Securitization Transaction.
"Securitization Transaction" means an Equipment Securitization
--------------------------
Transaction or a Receivables Securitization Transaction.
"Security Agreements" means the U.S. Security Agreement and the
-------------------
Canadian Security Agreement.
"Security Documents" means the Security Agreements, the Pledge
------------------
Agreements and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the
Obligations.
"Seller Subordinated Debt" means unsecured Debt of either Borrower
------------------------
that:
(a) is subordinated, substantially upon the terms set forth in Exhibit
J or other terms that are more favorable to the Lenders, in right of
payment to the payment in full in cash of the Loans and all other amounts
owed under the Loan Documents (whether or not matured or due and payable);
and
(b) represents all or part of the purchase price payable by either
Borrower in connection with a transaction described in Section 6.05(c).
37
"Senior Debt" means all Funded Debt of Holdings and its Subsidiaries
-----------
other than Subordinated Debt.
"Senior Debt to Cash Flow Ratio" means, as of the last day of any
------------------------------
Fiscal Quarter, the ratio of (i) Senior Debt as of such day to (ii) Cash Flow as
of such day.
"Senior Note Documents" means the Senior Notes Indenture and all other
---------------------
instruments, agreements and other documents evidencing or governing the Senior
Notes or providing for any Suretyship Liability or other right in respect
thereof.
"Senior Notes" means the senior unsecured notes to be issued by the
------------
U.S. Borrower on or prior to the Effective Date in an aggregate principal amount
not less than $300,000,000 and the Debt represented thereby and by the
guarantees thereof.
"Senior Notes Indenture" means the indenture under which the Senior
----------------------
Notes are issued.
"Special Purpose Vehicle" means an ES Special Purpose Vehicle or an RS
-----------------------
Special Purpose Vehicle.
"Spot Exchange Rate" means, on any day, with respect to Canadian
------------------
Dollars, the spot rate at which Dollars are offered on such day by the Canadian
Administrative Agent in Toronto for Canadian Dollars at approximately 11:00 a.m.
(Toronto time). For purposes of determining the Spot Exchange Rate in
connection with a Canadian Dollar Borrowing, such Spot Exchange Rate shall be
determined as of the Denomination Date for such Borrowing.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
----------------------
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the U.S. Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be
38
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Debt" means (a) the $200,000,000 of 9.50% unsecured
-----------------
senior subordinated notes due 2008 issued by the U.S. Borrower (then known as
United Rentals, Inc.) on May 22, 1998, and the unsecured subordinated guarantees
thereof provided for in the applicable Subordinated Note Indenture, (b) the
$205,000,000 of 8.80% unsecured senior subordinated notes due 2008 issued by the
U.S. Borrower on August 12, 1998, and the unsecured subordinated guarantees
thereof provided for in the applicable Subordinated Note Indenture, (c) the
$300,000,000 of 9.25% unsecured senior subordinated notes due 2009 issued by the
U.S. Borrower on December 15, 1998, and the unsecured subordinated guarantees
thereof provided for in the applicable Subordinated Note Indenture, (d) the
$250,000,000 of 9.0% unsecured senior subordinated notes due 2009 issued by the
U.S. Borrower on March 23, 1999, and the unsecured subordinated guarantees
thereof provided for in the applicable Subordinated Note Indenture, (e) Seller
Subordinated Debt and (f) any other unsecured Debt of either Borrower and
unsecured guarantees thereof by Holdings and/or any Subsidiary of the U.S.
Borrower which (i) is owed to Persons other than officers, employees, directors
or Affiliates of either Borrower, (ii) has no amortization prior to the date
that is six months after the Term Loan Maturity Date and (iii) has subordination
terms (including subordination terms with respect to guarantees), covenants,
events of default and redemption provisions which are not less favorable to the
Lenders than those set forth in the Subordinated Note Indentures or are
otherwise approved by the Required Lenders, such approval not to be unreasonably
withheld.
"Subordinated Note Indentures" means each of (a) the Indenture dated
----------------------------
as of May 22, 1998, among the U.S. Borrower (then known as United Rentals,
Inc.), various Subsidiaries of the U.S. Borrower and State Street Bank and Trust
Company, as Trustee, pursuant to which the U.S. Borrower issued $200,000,000 of
Subordinated Debt, (b) the Indenture dated as August 12, 1998, among the U.S.
Borrower, various Subsidiaries of the U.S. Borrower and State Street Bank and
Trust Company, as Trustee, pursuant to which the U.S. Borrower issued
$205,000,000 of Subordinated Debt, (c) the Indenture dated as of December 15,
1998, among the U.S. Borrower, various Subsidiaries of the U.S. Borrower and
State Street Bank and Trust Company, as Trustee, pursuant to which the U.S.
Borrower issued $300,000,000 of Subordinated Debt and (d) the Indenture dated as
of March 23, 1999, among the U.S. Borrower, various Subsidiaries of the U.S.
Borrower and The Bank of New York,
39
as Trustee, pursuant to which the U.S. Borrower issued $250,000,000 of
Subordinated Debt.
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, unlimited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent's consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited liability company,
unlimited liability company, partnership, association or other entity of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned
by the parent or one or more subsidiaries of the parent or by the parent and one
or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of Holdings (including the
----------
Borrowers).
"Subsidiary Loan Party" means any Subsidiary (including the Borrowers)
---------------------
other than a Foreign Subsidiary or an Excluded Subsidiary.
"Suretyship Liability" means, with respect to any Person, any
--------------------
liability of such Person with respect to any agreement, undertaking or
arrangement by which such Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to or otherwise to
invest in a debtor, or otherwise to assure a creditor against loss) any Debt
(or, other than for purposes of the definition of Debt, any other obligation or
other liability) of any other Person (other than by endorsements of instruments
in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
"Swingline Exposure" means, at any time, the aggregate principal
------------------
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
40
"Swingline Lender" means The Chase Manhattan Bank, in its capacity as
----------------
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
--------------
"Synthetic Lease" means a lease transaction under which the parties
---------------
intend that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" means, with respect to any Person, the
---------------------------
sum of (a) all remaining rental obligations of such Person as lessee under
Synthetic Leases which are attributable to principal and, without duplication,
(b) all rental and purchase price payment obligations of such Person under
Synthetic Leases assuming such Person exercises the option to purchase the
leased property at the end of the lease term.
"Tangible Assets" means at any time all assets of Holdings and its
---------------
Subsidiaries excluding all Intangible Assets. For purposes of the foregoing,
---------
"Intangible Assets" means goodwill, patents, trade names, trademarks,
-----------------
copyrights, franchises, experimental expense, organization expense and any other
assets that are properly classified as intangible assets in accordance with
GAAP.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loan" means a Loan made (and Existing Term Loans and Assigned
---------
Debt purchased by the Lenders) pursuant to clause (a) of Section 2.01.
"Term Loan Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make a Term Loan hereunder (or to purchase
Existing Term Loans and Assigned Debt that become Term Loans hereunder) on the
Effective Date, expressed as an amount representing the maximum principal amount
of the Term Loan to be made by such Lender hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Term Loan
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant
41
to which such Lender shall have assumed its Term Loan Commitment, as applicable.
The initial aggregate amount of the Lenders' Term Loan Commitments is
$750,000,000.
"Term Loan Lender" means a Lender with a Term Loan Commitment or an
----------------
outstanding Term Loan.
"Term Loan Maturity Date" means August 31, 2007.
-----------------------
"Total Additional Revolving Commitment" means, at any time, the
-------------------------------------
aggregate amount of the Additional Revolving Commitments, as in effect at such
time, but not to exceed
$75,000,000. The Total Additional Revolving Commitment on the Effective Date is
$0.
"Total C $ Revolving Commitment" means, at any time, the aggregate
------------------------------
amount of the C $ Revolving Commitments, as in effect at such time, but not to
exceed $75,000,000. The Total C $ Revolving Commitment on the Effective Date is
U.S. $40,000,000.
"Total U.S. $ Revolving Commitment" means, at any time, the aggregate
---------------------------------
amount of the U.S. $ Revolving Commitments, as in effect at such time. The
Total U.S. $ Revolving Commitment on the Effective Date is $710,000,000.
"Transactions" means (a) the repayment by the U.S. Borrower and its
------------
Subsidiaries of all amounts outstanding under the Existing Credit Agreements
(other than the principal amount of any loans outstanding thereunder on the
Effective Date that are held by, or assigned to, the Lenders hereunder and are
to remain outstanding hereunder as provided in Section 2.01(b) and the Existing
Letters of Credit deemed issued hereunder as provided in Section 2.05(a)) and
the amendment and restatement of the Existing Credit Agreements as provided in
this Agreement; (b) the execution, delivery and performance by each Loan Party
of the Loan Documents to which it is to be a party (including the granting of
Liens pursuant to the Security Documents), the borrowing of Loans, the use of
the proceeds thereof and the issuance of Letters of Credit hereunder; and (c)
the execution, delivery and performance by the U.S. Borrower of the Senior Note
Documents to which it is to be a party, the issuance of the Senior Notes and the
use of the proceeds thereof.
"Type", when used in respect of any Loan or Borrowing, shall refer to
----
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term
42
"Rate" shall include the Adjusted IBO Rate, the Alternate Base Rate, the
----
Canadian Prime Rate and the Discount Rate applicable to B/As or B/A Equivalent
Notes.
"U.S. $ Commitment Fee" has the meaning set forth in Section 2.12(a).
---------------------
"U.S. $ Revolving Availability Period" means the period from and
------------------------------------
including the Effective Date to but excluding the earlier of (a) the Revolving
Maturity Date and (b) the date of termination of the U.S. $ Revolving
Commitments.
"U.S. $ Revolving Borrowing" means a Borrowing comprised of U.S. $
--------------------------
Revolving Loans.
"U.S. $ Revolving Commitment" means, with respect to any Lender, the
---------------------------
commitment, if any, of such Lender to make U.S. $ Revolving Loans during the
U.S. $ Revolving Availability Period and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum potential aggregate amount of such Lender's U.S. $ Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 or 2.24 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 2.19 or 9.04. The initial
amount of each U.S. $ Revolving Lender's U.S. $ Revolving Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its U.S. $ Revolving Commitment, as applicable.
"U.S. $ Revolving Exposure" means, with respect to any U.S. $
-------------------------
Revolving Lender at any time, the sum of (a) the aggregate principal amount at
such time of all outstanding U.S. $ Revolving Loans of such Lender, plus (b) the
aggregate amount at such time of such Lender's LC Exposure, plus (c) the
aggregate amount at such time of such Lender's Swingline Exposure.
"U.S. $ Revolving Lender" means a Lender with a U.S. $ Revolving
-----------------------
Commitment.
"U.S. $ Revolving Loan" means any loan made by a U.S. $ Revolving
---------------------
Lender pursuant to its U.S. $ Revolving Commitment.
"U.S. Administrative Agent" means The Chase Manhattan Bank, in its
-------------------------
capacity as administrative agent for
43
the Lenders hereunder, and any successor appointed in accordance with Article
VIII.
"U.S. Borrower" means United Rentals (North America), Inc., a Delaware
-------------
corporation.
"U.S. Collateral Agent" means Bank of America, N.A., in its capacity
---------------------
as collateral agent for the Secured Parties under the U.S. Security Documents
and the U.S. Guaranty, and any successor appointed in accordance with Article
VIII.
"U.S. Guaranty" means the Third Restated U.S. Guaranty, substantially
-------------
in the form of Exhibit B, made by Holdings and the U.S. Subsidiary Loan Parties
(other than the U.S. Borrower) in favor of the U.S. Collateral Agent for the
benefit of the Secured Parties.
"U.S. Loan Parties" means Holdings, the U.S. Borrower and any
-----------------
Subsidiary party to the U.S. Guaranty.
"U.S. Pledge Agreement" means the Consolidated Restated U.S. Pledge
---------------------
Agreement, substantially in the form of Exhibit C, among Holdings, the U.S.
Borrower, the U.S. Subsidiary Loan Parties and the U.S. Collateral Agent for the
benefit of the Secured Parties.
"U.S. Security Agreement" means the Third Restated U.S. Security
-----------------------
Agreement, substantially in the form of Exhibit D, among Holdings, the U.S.
Borrower, the U.S. Subsidiary Loan Parties and the U.S. Collateral Agent for the
benefit of the Secured Parties.
"U.S. Security Documents" means the U.S. Security Agreement, the U.S.
-----------------------
Pledge Agreement and each other security agreement or other instrument or
document executed and delivered by any U.S. Loan Party pursuant to Section 5.12
and 5.13 to secure any of the Obligations.
"U.S. Subsidiary Loan Party" means each Subsidiary Loan Party that is
--------------------------
not a Canadian Subsidiary Loan Party.
"Vendor Financing Arrangement" means any financing arrangement
----------------------------
provided by a Person (other than Holdings or any Affiliate thereof) to any
purchaser of equipment sold by Holdings or any Subsidiary in the ordinary course
of business, the terms of which provide for recourse against Holdings and/or the
applicable Subsidiary in the event of default by the purchaser.
44
"Welfare Plan" means a "welfare plan", as such term is defined in
------------
Section 3(1) of ERISA.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
---------------------------------------
of this Agreement, Loans may be classified and referred to by Class (e.g., a
----
"Term Loan"), by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
---- ----
"Eurodollar Term Loan"). Borrowings also may be classified and referred to by
Class (e.g., a "Term Borrowing"), by Type (e.g., a "Eurodollar Borrowing") or by
---- ----
Class and Type (e.g., a "Eurodollar Term Borrowing").
----
SECTION 1.03. Terms Generally. The definitions of terms herein shall
----------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
-----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if Holdings notifies the U.S. Administrative Agent that Holdings requests
an amendment to any provision
45
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
U.S. Administrative Agent notifies Holdings that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. (a) Subject to the terms and conditions
------------
set forth herein, (i) each Term Loan Lender agrees to make a Term Loan to the
U.S. Borrower (or to purchase Existing Term Loans or Assigned Debt (or, to the
extent agreed to by the U.S. Borrower and the Agents in accordance with Section
2.01(b), to retain Existing Term Loans) that shall thereupon be deemed to
constitute Term Loans) on the Effective Date in a principal amount equal to its
Term Loan Commitment, (ii) each U.S. $ Revolving Lender agrees to make U.S. $
Revolving Loans to the U.S. Borrower from time to time during the U.S. $
Revolving Availability Period, in Dollars, in an aggregate principal amount that
will not result in such Lender's U.S. $ Revolving Exposure exceeding such
Lender's U.S. $ Revolving Commitment, (iii) each C $ Revolving Lender agrees to
make C $ Revolving Loans, including by means of a B/A or B/A Equivalent Note, to
the Canadian Borrower from time to time during the C $ Revolving Availability
Period, in Canadian Dollars, in an aggregate principal amount that will not
result in such Lender's C $ Revolving Exposure exceeding such Lender's C $
Revolving Commitment and (iv) each Additional Revolving Lender agrees to make
Additional Revolving Loans to the U.S. Borrower from time to time during the
Additional Revolving Availability Period, in Dollars, in an aggregate principal
amount that will not result in the aggregate principal amount of such Lender's
Additional Revolving Loans exceeding such Lender's Additional Revolving
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans
and Additional Revolving Loans; provided that the aggregate principal amount of
--------
U.S. $ Revolving Loans, Additional Revolving Loans and C $ Revolving Loans made
on the Effective Date shall not exceed the positive
46
difference between (a) the aggregate payments to be made pursuant to clauses (i)
and (ii) of Section 5.11(a) and (b) the sum of the net proceeds on the Effective
Date of the issuance of the Senior Notes and the aggregate principal amount of
the Term Loans. Amounts repaid in respect of Term Loans may not be reborrowed.
(b) It is the purpose and intent of this Agreement that, after giving
effect to the amendment and restatement of the Existing Credit Agreements and
the fundings hereunder on the Effective Date, each Term Lender will hold
outstanding Term Loans in an aggregate principal amount equal to its Term Loan
Commitment set forth opposite its name on Schedule 2.01, each U.S. $ Revolving
Lender will have a U.S. $ Revolving Commitment as set forth opposite its name on
Schedule 2.01, each C $ Revolving Lender will have a C $ Revolving Commitment as
set forth opposite its name on Schedule 2.01 and each Additional Revolving
Lender will have an Additional Revolving Commitment as set forth opposite its
name on Schedule 2.01 (and any extensions of credit hereunder will be made
ratably in accordance with the applicable Commitments). In order to give effect
to the foregoing, on and as of the Effective Date (i) each Lender that holds any
"Loans" then outstanding under and as defined in the Existing Term Loan Credit
Agreements ("Existing Term Loans") shall be deemed to have assigned (and hereby
-------------------
assigns, effective on the Effective Date) the outstanding principal of its
Existing Term Loans (or, in the case of any such Lender agreed to by the Agents
and the U.S. Borrower, a portion, which may be none, of the outstanding
principal of such Lender's Existing Term Loans agreed to by the Agents and the
U.S. Borrower) to the Term Lenders hereunder, (ii) each Term Lender shall fund
to the U.S. Administrative Agent, in accordance with this Agreement, the full
amount of its Term Loan Commitment (less the aggregate principal amount of such
Lender's Existing Term Loans (if any) that is not assigned by such Lender
pursuant to clause (i) above), with such funding being treated as the purchase
of Existing Term Loans under clause (i) above, the purchase of Assigned Debt
and/or the advance of additional Term Loans, as appropriate, (iii) Existing Term
Loans and Assigned Debt purchased as provided above and additional Term Loans
made hereunder shall be allocated among the Term Lenders to achieve the result
specified in the first sentence of this paragraph, (iv) the U.S. Administrative
Agent will apply the proceeds of the fundings described in clause (ii) above,
first, to pay the purchase price of the Existing Term Loans and Assigned Debt
(in an amount equal to 100% of the principal amount thereof) and, second, as
specified by the U.S. Borrower in accordance with the applicable provisions of
this Agreement, (v) the U.S. Borrower will pay all
47
accrued interest and other amounts owing in respect of the Existing Term Loans
and Assigned Debt (other than outstanding principal so assigned and purchased or
outstanding principal not so assigned and purchased by virtue of the operation
of the final parenthetical to clause (i) above, with such assignments, in the
case of assignments of Debt under the Existing Credit Agreements, being treated
as prepayments for purposes of (A) Section 8.4 of the Existing Revolving Credit
Agreement and the Existing Term Loan D Credit Agreement and (B) paragraph D of
Article VIII of the Existing Term Loan B Credit Agreement and the Existing Term
Loan C Credit Agreement), (vi) the Borrowers will pay all other amounts then
outstanding or accrued and owing under the Existing Credit Agreements (including
outstanding "Loans" (as defined in the Existing Revolving Credit Agreement)
under the Existing Revolving Credit Agreement but excluding reimbursement
obligations relating to Existing Letters of Credit to the extent such Existing
Letters of Credit have not yet been drawn), but without prejudice to each
Borrower's right to borrow Revolving Loans, Additional Revolving Loans and
Swingline Loans hereunder in accordance with this Agreement, (vii) all
"Percentages", as defined in the Existing Credit Agreements, shall be
reallocated as Commitments as provided in Schedule 2.01 and, to the extent
inconsistent with such Schedule, shall be terminated, (viii) the "Interest
Period", as defined in the Existing Credit Agreements, of all Existing Term
Loans and Assigned Debt shall terminate and the initial Interest Period of the
Term Loans hereunder resulting from the purchase of such Existing Term Loans and
Assigned Debt shall be determined based upon the U.S. Borrower's initial notice
under Section 2.03 and (ix) the Existing Credit Agreements shall be amended and
restated in their entirety into a single replacement agreement in the form of
this Agreement. On the Effective Date, the Existing Credit Agreements shall be
deemed amended and restated in their entirety as set forth herein and all
Existing Term Loans and Assigned Debt shall continue to remain outstanding as
Term Loans hereunder, without extinguishing such Debt. The amendment and
restatement of the Existing Credit Agreements shall not affect the Borrowers'
liability in respect of their respective obligations accrued thereunder.
However, unless and until the Effective Date occurs as provided herein, the
Existing Credit Agreements shall remain in effect and shall not be affected by
this Agreement.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a
---------------------
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
48
respective Commitments of the applicable Class. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
--------
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each (i) U.S. Revolving Borrowing,
Additional Revolving Borrowing and Term Borrowing shall be comprised entirely of
ABR Loans or Eurodollar Loans as the U.S. Borrower may request in accordance
herewith and (ii) each C $ Revolving Borrowing shall be comprised entirely of
B/A Borrowings or Canadian Prime Rate Borrowings as the Canadian Borrower may
request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
--------
exercise of such option shall not affect the obligation of the U.S. Borrower to
repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $5,000,000. At the time that (i) each
ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $500,000 and not less than $5,000,000 and (ii)
each Canadian Prime Rate Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of C $500,000 and not less than C
$5,000,000; provided that an ABR U.S. $ Revolving Borrowing, an ABR Additional
--------
Revolving Borrowing or a Canadian Prime Rate Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total U.S. $ Revolving
Commitments, Additional Revolving Commitments or C $ Revolving Commitments, as
applicable, or (in the case of an ABR U.S. $ Revolving Borrowing) that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). The Loans comprising any B/A Borrowing shall, subject to
Section 2.21, be in an aggregate principal amount that is an integral multiple
of C $100,000 and not less than C $1,000,000. The Loans comprising each
Canadian Dollar Borrowing shall be made in the amount specified in the
applicable Borrowing Request for such Borrowing. Each Swingline Loan shall be
in an amount that is an integral multiple of $100,000 and not less than
$100,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
--------
eight Eurodollar
49
Borrowings or eight B/A Borrowings of any Class outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period or Contract Period (in the case of a B/A
Borrowing) requested with respect thereto would end after the Revolving Maturity
Date or Term Loan Maturity Date, as applicable.
(e) (i) The U.S. Administrative Agent shall notify the U.S. Borrower
and the U.S. $ Revolving Lenders of the amount of the aggregate U.S. $ Revolving
Exposure, (ii) the Canadian Administrative Agent shall notify the Canadian
Borrower and the C $ Revolving Lenders of the amount of the aggregate C $
Revolving Exposure and (iii) the U.S. Administrative Agent shall notify the U.S.
Borrower and the Additional Revolving Lenders of the amount of the aggregate
Additional Revolving Loans, in each case promptly following the last day of each
March, June, September and December.
SECTION 2.03. Requests for Borrowings. To request a U.S. $ Revolving
------------------------
Borrowing, Additional Revolving Borrowing or Term Borrowing, the U.S. Borrower
shall notify the U.S. Administrative Agent, and to request a C $ Revolving
Borrowing, the Canadian Borrower shall notify the Canadian Administrative Agent,
of such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, two Business Days before the date of
the proposed Borrowing, (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, on the date of the proposed Borrowing, (c) in
the case of a B/A Borrowing, not later than 10:00 a.m., Toronto time, three
Business Days before the date of such proposed Borrowing and (d) in the case of
a Canadian Prime Rate Borrowing, not later than 11:00 a.m., Toronto time, one
Business Day before the date of such proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the U.S. Administrative Agent or the Canadian
Administrative Agent, as applicable, of a written Borrowing Request in a form
approved by the applicable Administrative Agent and signed by the applicable
Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrower requesting such Borrowing;
50
(ii) whether the requested Borrowing is to be a U.S. $ Revolving
Borrowing, Additional Revolving Borrowing, C $ Revolving Borrowing or Term
Borrowing;
(iii) the aggregate amount of such Borrowing (which shall be
expressed in Dollars, except when such Borrowing is a Canadian Dollar
Borrowing) or, in the case of a B/A Borrowing, the face amount of the
Bankers' Acceptance being requested;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) whether such Borrowing is to be an ABR Borrowing, a Eurodollar
Borrowing, a B/A Borrowing or a Canadian Prime Rate Borrowing;
(vi) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period";
(vii) if such Borrowing is to be a B/A Borrowing, the Contract Period
and maturity date thereof, which shall be a period contemplated by the
definition of the term "Contract Period";
(viii) the location and number of the applicable Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06; and
(ix) the currency of such Borrowing (which (A) shall be Dollars, in
the case of any Term Borrowing, U.S. $ Revolving Borrowing or Additional
Revolving Borrowing and (B) shall be Canadian Dollars, in the case of any C
$ Revolving Borrowing).
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing if a U.S. $ Revolving Borrowing, Additional
Revolving Borrowing or Term Borrowing and a Canadian Prime Rate Borrowing if a C
$ Revolving Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the U.S. Borrower shall be deemed
to have selected an Interest Period of one month's duration. If no Contract
Period is specified with respect to any requested B/A Borrowing, then the
Canadian Borrower shall be deemed to have selected a Contract Period of 30 days'
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the applicable Administrative
51
Agent shall advise each applicable Lender participating in the Borrowing of the
details thereof and of the amount of such Lender's Loan to be made as part of
the requested Borrowing and, in the case of a C $ Revolving Borrowing, of the
Canadian Dollar amount of such Borrowing and the Spot Exchange Rate utilized to
determine such amount.
The U.S. Borrower shall include in its initial notice under this
Section all information with respect to amounts to be funded to purchase
Existing Term Loans and Assigned Debt, as provided in Section 2.01.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
----------------
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the U.S. Borrower from time to time during the U.S. $ Revolving Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $25,000,000 or (ii) the sum of the aggregate U.S. $ Revolving
Exposures exceeding the Total U.S. $ Revolving Commitment; provided that the
--------
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the U.S. Borrower may borrow, prepay and
reborrow Swingline Loans.
(b) To request a Swingline Loan, the U.S. Borrower shall notify the
U.S. Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline Loan.
The U.S. Administrative Agent will promptly advise the Swingline Lender of any
such notice received from the U.S. Borrower. The Swingline Lender shall make
each Swingline Loan available to the U.S. Borrower by means of a credit to the
general deposit account of the U.S. Borrower with the Swingline Lender (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the U.S.
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the U.S. $ Revolving Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans
52
outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which such U.S. $ Revolving Lenders will participate. Promptly upon receipt
of such notice, the U.S. Administrative Agent will give notice thereof to each
U.S. $ Revolving Lender, specifying in such notice such U.S. $ Revolving
Lender's Applicable Percentage of such Swingline Loan or Loans. Each U.S. $
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the U.S. Administrative Agent, for the
account of the Swingline Lender, such U.S. $ Revolving Lender's Applicable
Percentage of such Swingline Loan or Loans. Each U.S. $ Revolving Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each U.S. $ Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.06 with respect to Loans made by
such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
------- --------
obligations of the U.S. $ Revolving Lenders), and the U.S. Administrative Agent
shall promptly pay to the Swingline Lender the amounts so received by it from
the U.S. $ Revolving Lenders. The U.S. Administrative Agent shall notify the
U.S. Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the U.S. Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from the U.S. Borrower (or other party
on behalf of the U.S. Borrower) in respect of a Swingline Loan after receipt by
the Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the U.S. Administrative Agent; any such amounts received
by the U.S. Administrative Agent shall be promptly remitted by the U.S.
Administrative Agent to the U.S. $ Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the U.S. Borrower of any default in
the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Upon the Effective
------------------ --------
Date, the Existing Letters of Credit will automatically, without any action on
the part of any Person, be deemed to be Letters of Credit issued hereunder for
the account of the U.S. Borrower for all purposes of this
53
Agreement and the other Loan Documents. In addition, subject to the terms and
conditions set forth herein, the U.S. Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
U.S. Administrative Agent and the Issuing Bank, at any time and from time to
time during the U.S. $ Revolving Availability Period and prior to the date that
is five Business Days prior to the Revolving Maturity Date. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the U.S. Borrower to, or entered into by the U.S. Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control. All Letters of Credit shall be denominated in
Dollars.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
----------------------------------------------------------
Conditions. To request the issuance of a Letter of Credit (or the amendment,
-----------
renewal or extension of an outstanding Letter of Credit), the U.S. Borrower
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the U.S. Administrative Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice requesting the
issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the U.S. Borrower also shall submit a letter of credit application on the
Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of each Letter of Credit
the U.S. Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure
shall not exceed $100,000,000 and (ii) the aggregate U.S. $ Revolving Exposures
shall not exceed the aggregate U.S. $ Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
----------------
to the close of business on the earlier of (i) the date one year after the date
of the issuance of
54
such Letter of Credit (or, in the case of any Existing Letter of Credit having a
later expiration date, such expiration date) or, in the case of any renewal or
extension thereof, one year after such renewal or extension, and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
---------------
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the U.S. $ Revolving Lenders,
the Issuing Bank hereby grants to each U.S. $ Revolving Lender, and each U.S. $
Revolving Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit (including each Existing Letter of Credit) equal to such U.S. $
Revolving Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each U.S. $ Revolving Lender hereby absolutely and unconditionally
agrees to pay to the U.S. Administrative Agent, for the account of the Issuing
Bank, such U.S. $ Revolving Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the U.S. Borrower on
the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the U.S. Borrower for any
reason. Each U.S. $ Revolving Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the U.S. $ Revolving Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
--------------
Disbursement in respect of a Letter of Credit, the U.S. Borrower shall reimburse
such LC Disbursement by paying to the U.S. Administrative Agent an amount equal
to such LC Disbursement not later than 12:00 noon, New York City time, on the
date that such LC Disbursement is made, if the U.S. Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such
date, or, if such notice has not been received by the U.S. Borrower prior to
such time on such date, then not later than 12:00 noon, New York City time, on
(i) the Business Day that the U.S. Borrower receives such notice, if such notice
is received prior to 10:00 a.m., New York City time, on the day of receipt, or
(ii) the Business Day
55
immediately following the day that the U.S. Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt; provided
--------
that, if such LC Disbursement is not less than $1,000,000, the U.S. Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 or 2.04 that such payment be financed with an ABR
U.S. $ Revolving Borrowing or Swingline Loan in an equivalent amount and, to the
extent so financed, the U.S. Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR U.S. $ Revolving Borrowing or
Swingline Loan. If the U.S. Borrower fails to make such payment when due, the
U.S. Administrative Agent shall notify each U.S. $ Revolving Lender of the
applicable LC Disbursement, the payment then due from the U.S. Borrower in
respect thereof and such U.S. $ Revolving Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each U.S. $ Revolving Lender
shall pay to the U.S. Administrative Agent its Applicable Percentage of the
payment then due from the U.S. Borrower, in the same manner as provided in
Section 2.06 with respect to Loans made by such U.S. $ Revolving Lender (and
Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the
------- --------
U.S. $ Revolving Lenders), and the U.S. Administrative Agent shall promptly pay
to the Issuing Bank the amounts so received by it from the U.S. $ Revolving
Lenders. Promptly following receipt by the U.S. Administrative Agent of any
payment from the U.S. Borrower pursuant to this paragraph, the U.S.
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that U.S. $ Revolving Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such U.S. $ Lenders and the
Issuing Bank as their interests may appear. Any payment made by a U.S. $
Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for
any LC Disbursement (other than the funding of ABR U.S. $ Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the U.S. Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The U.S. Borrower's obligation to
--------------------
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid
56
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the U.S. Borrower's obligations hereunder.
Neither the U.S. Administrative Agent, the Lenders nor the Issuing Bank, nor any
of their Related Parties, shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
--------
Issuing Bank from liability to the U.S. Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the U.S. Borrower to the extent permitted by applicable law)
suffered by the U.S. Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
-----------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify
57
the U.S. Administrative Agent and the U.S. Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
--------
delay in giving such notice shall not relieve the U.S. Borrower of its
obligation to reimburse the Issuing Bank and the U.S. $ Revolving Lenders with
respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
----------------
Disbursement, then, unless the U.S. Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the U.S. Borrower reimburses
such LC Disbursement, at the rate per annum then applicable to ABR U.S. $
Revolving Loans; provided that, if the U.S. Borrower fails to reimburse such LC
--------
Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.13(e) shall apply. Interest accrued pursuant to this paragraph shall be for
the account of the Issuing Bank, except that interest accrued on and after the
date of payment by any U.S. $ Revolving Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such U.S. $
Revolving Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
-------------------------------
replaced at any time by written agreement among the U.S. Borrower, the U.S.
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The U.S. Administrative Agent shall notify the U.S. $ Revolving Lenders of any
such replacement of the Issuing Bank. At the time any such replacement shall
become effective, the U.S. Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.12(b). From and
after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement of an
Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.
58
(j) Cash Collateralization. If any Event of Default shall occur and
----------------------
be continuing, on the Business Day that the U.S. Borrower receives notice from
the U.S. Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, U.S. $ Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, the U.S. Borrower shall deposit in
an account with the U.S. Administrative Agent, in the name of the U.S.
Administrative Agent and for the benefit of the U.S. $ Revolving Lenders, an
amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
--------
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the U.S. Borrower
described in clause (i) or (j) of Article VII. Each such deposit pursuant to
this paragraph or Section 2.11(b) shall be held by the U.S. Administrative Agent
as collateral for the payment and performance of the obligations of the U.S.
Borrower under this Agreement. The U.S. Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the U.S. Administrative Agent and at the U.S. Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the U.S. Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the U.S. Borrower for the LC Exposure at such time or, if the maturity of the
Loans has been accelerated (but subject to the consent of U.S. $ Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the U.S. Borrower under
this Agreement. If the U.S. Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the U.S.
Borrower within three Business Days after all Events of Default have been cured
or waived. If the U.S. Borrower is required to provide an amount of cash
collateral hereunder pursuant to Section 2.11(b), such amount (to the extent not
applied as aforesaid) shall be returned to the U.S. Borrower as and to the
extent that, after giving effect to such return, the U.S. Borrower would
59
remain in compliance with Section 2.11(b) and no Default shall have occurred and
be continuing.
SECTION 2.06. Funding of Borrowings. (a) Each Term Loan Lender,
---------------------
U.S. $ Revolving Lender and Additional Revolving Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the U.S. Administrative Agent most recently designated by the U.S.
Administrative Agent for such purpose by notice to the Term Loan Lenders, the
U.S. $ Revolving Lenders and the Additional Revolving Lenders, as applicable;
provided that Swingline Loans shall be made as provided in Section 2.04. The
--------
U.S. Administrative Agent will make such Term Loans, U.S. $ Revolving Loans and
Additional Revolving Loans available to the U.S. Borrower by promptly crediting
the amounts so received, in like funds, to an account of the U.S. Borrower
maintained with the U.S. Administrative Agent in New York City and designated by
the U.S. Borrower in the applicable Borrowing Request; provided that ABR U.S. $
--------
Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the U.S. Administrative Agent
to the Issuing Bank. Each C $ Revolving Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, Toronto time, to the account of the Canadian
Administrative Agent most recently designated by the Canadian Administrative
Agent for such purposes by notice to the C $ Revolving Lenders. The Canadian
Administrative Agent will make such Loans available to the Canadian Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Canadian Borrower designated in the applicable Borrowing Request (or, in the
case of a Loan made in the form of a B/A Borrowing, in accordance with Section
2.21).
(b) Unless the applicable Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to such Administrative Agent such Lender's share
of such Borrowing, such Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount in the required currency. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to such Administrative Agent, then the applicable Lender and the
applicable Borrower severally agree to pay to such Administrative Agent
forthwith on demand such
60
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the applicable Borrower to but excluding
the date of payment to such U.S. Administrative Agent, at (i) (A) in the case of
any such Term Loan Lender, U.S. $ Revolving Lender, Additional Revolving Lender
or Swingline Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the U.S. Administrative Agent in accordance with banking industry
rules on interbank compensation or (B) in the case of any such C $ Revolving
Lender, at a rate determined by the Canadian Administrative Agent to represent
its cost of overnight or short-term funds (which determination shall be
conclusive absent manifest error) or (ii) (A) in the case of the U.S. Borrower,
the interest rate applicable to ABR Loans of the applicable Class or (B) in the
case of the Canadian Borrower, the interest rate applicable to Canadian Prime
Rate Loans. If such Lender pays such amount to the applicable Administrative
Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing.
SECTION 2.07. Interest Elections. (a) Each U.S. $ Revolving
------------------
Borrowing, C $ Revolving Borrowing, Additional Revolving Borrowing and Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request and, in the case of a B/A
Borrowing, shall have a Contract Period and maturity date as specified in such
Borrowing Request. Thereafter, the applicable Borrower may from time to time
elect to convert or continue the Type of, or the duration of the Interest Period
(or issue replacement B/As for a further Contract Period) applicable to, the
Loans included in any Borrowing, all as provided in this Section. The
applicable Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, which may not
be converted or continued.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the applicable Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section
2.03 if such Borrower were requesting a U.S. $ Revolving Borrowing, C $
Revolving Borrowing or Additional Revolving Borrowing, as applicable, of the
Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest
61
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the applicable Administrative Agent of a written
Interest Election Request in a form approved by the applicable Administrative
Agent and signed by the applicable Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02 and paragraph
(f) of this Section:
(i) the Borrower making such Interest Election Request;
(ii) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iv) and (v) below shall be specified for each resulting
Borrowing);
(iii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iv) whether the resulting Borrowing is to be an ABR Borrowing, a
Eurodollar Borrowing, a Canadian Prime Rate Borrowing or a B/A Borrowing;
(v) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period"; and
(vi) if the resulting Borrowing is a B/A Borrowing, the Contract
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term "Contract
Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the U.S. Borrower shall be deemed to have
selected an Interest Period of one month's duration. If any such Interest
Election Request requests a B/A Borrowing but does not specify a maturity date
or Contract Period, then the Canadian Borrower shall be deemed to have selected
a maturity date that is 30 days following the date of such B/A Borrowing.
62
(d) Promptly following receipt of an Interest Election Request, the
applicable Administrative Agent shall advise each applicable Lender of the
details thereof and of such Lender's portion of each resulting Borrowing.
(e) If the U.S. Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. If the Canadian Borrower fails to deliver a timely Interest
Election Request with respect to a B/A Borrowing prior to the maturity date
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Contract Period such Borrowing shall be converted to a Canadian
Prime Rate Borrowing.
(f) Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the U.S. Administrative Agent, at the
request of the Required Lenders, so notifies the Borrowers, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing or a B/A Borrowing, (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto and (iii) each outstanding B/A Borrowing
shall be converted or continued as a Canadian Prime Rate Loan on its maturity
date and any additional C $ Revolving Loans shall be made as Canadian Prime Rate
Loans.
(g) A Borrowing of any Class may not be converted to or continued as
a Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
----------------------------------------
previously terminated, (i) the Term Loan Commitments shall terminate at 5:00
p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments and the Additional Revolving Commitments shall terminate on the
Revolving Maturity Date.
63
(b) The U.S. Borrower or the Canadian Borrower, as applicable, may at
any time terminate, or from time to time reduce, the Commitments of any Class;
provided that (i) each reduction of the Commitments of any Class shall be in an
--------
amount that is an integral multiple of $500,000 and not less than $5,000,000,
(ii) the Total U.S. $ Revolving Commitment shall not be reduced to an amount
that is less than the aggregate U.S. $ Revolving Exposure of the U.S. $
Revolving Lenders at the time, (iii) the Total C $ Revolving Commitment shall
not be reduced to an amount that is less than the aggregate C $ Revolving
Exposure of the C $ Revolving Lenders at the time and (iv) the Total Additional
Revolving Commitment shall not be reduced to an amount that is less than the
aggregate principal amount of Additional Revolving Loans outstanding at such
time.
(c) The Revolving Commitments and Additional Revolving Commitments
shall be reduced as and to the extent required by Section 2.11(c).
(d) The applicable Borrower shall notify the applicable
Administrative Agent of any election to terminate or reduce the Commitments of
any Class under paragraph (b) of this Section, or any required reduction of the
Revolving Commitments under Section 2.11(c), at least three Business Days prior
to the effective date of such termination or reduction, specifying such election
and the effective date thereof. Promptly following receipt of any such notice,
the applicable Administrative Agent shall advise the relevant Lenders of the
contents thereof. Each notice delivered by either of the Borrowers pursuant to
this Section shall be irrevocable; provided that a notice of termination with
--------
respect to any Revolving Commitment or Additional Revolving Commitment delivered
by the applicable Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by such Borrower (by notice to the applicable Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class pursuant to this
Section shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The U.S.
------------------------------------
Borrower hereby unconditionally promises to pay to the U.S. Administrative Agent
(i) for the account of each U.S. $ Revolving Lender the then unpaid principal
amount of each U.S. $ Revolving Loan of such Lender on the earlier of the date
of termination of the
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U.S. $ Revolving Commitments and the Revolving Maturity Date, (ii) for the
account of each Additional Revolving Lender the then unpaid principal amount of
each Additional Revolving Loan of such Lender on the earlier of the date of
termination of the Additional Revolving Commitments and the Revolving Maturity
Date, (iii) for the account of each Term Loan Lender the then unpaid principal
amount of each Term Loan of such Lender as provided in Section 2.10 and (iv) for
the account of the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earliest of (A) the date of termination of the U.S. $
Revolving Commitments, (B) the Revolving Maturity Date, and (C) the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made;
provided that (x) on each date that a U.S. $ Revolving Borrowing is made and (y)
--------
if requested by the Swingline Lender, on the last day of March, June, September
and December of each year, the U.S. Borrower shall repay all Swingline Loans
then outstanding. The Canadian Borrower hereby unconditionally promises to pay
to the Canadian Administrative Agent for the account of each C $ Revolving
Lender the then unpaid principal amount of each C $ Revolving Loan of such
Lender on the earlier of the date of termination of the C $ Revolving
Commitments and the Revolving Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Debt of the applicable Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The applicable Administrative Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made and the Credit Facility
under which each Loan is made hereunder, (ii) the Class and Type thereof and the
Interest Period (if a Eurodollar Borrowing) or maturity date and Contract Period
(if a B/A Borrowing) applicable thereto, (iii) with respect to each C $
Revolving Loan, (A) the Denomination Date for such Loan, (B) the Assigned Dollar
Value for such Loan and (C) the Spot Exchange Rate used to calculate such
Assigned Dollar Value, (iv) the amount of any principal or interest due and
payable or to become due and payable from the applicable Borrower to each Lender
hereunder and (v) the amount of any sum received by such Administrative Agent
hereunder for the account of the Lenders from the applicable Borrower and each
Lender's share thereof.
65
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
----- -----
amounts of the obligations recorded therein; provided that the failure of any
--------
Lender or the Administrative Agents to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the applicable Administrative
Agent. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.10. Amortization of Term Loans. (a) Subject to
--------------------------
adjustment pursuant to paragraph (c) of this Section, the U.S. Borrower shall
repay Term Borrowings on each March 31, June 30, September 30 and December 31 of
each year, commencing with June 30, 2001, and ending with the Term Loan Maturity
Date, in an aggregate principal amount equal to (i) $1,875,000 on each such date
prior to December 31, 2006, and (ii) $177,187,500 on each of December 31, 2006,
March 31, 2007, June 30, 2007, and the Term Loan Maturity Date.
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Loan Maturity Date.
(c) Any prepayment of a Term Borrowing shall be applied to reduce the
subsequent scheduled repayments of the Term Borrowings to be made pursuant to
this Section ratably; provided that the U.S. Borrower may elect, by notice to
--------
the U.S. Administrative Agent on or prior to the date of any such prepayment
that is an optional prepayment pursuant to Section 2.11(a), that such prepayment
be applied to reduce such subsequent scheduled payments in the order of
maturity.
(d) Prior to any repayment of any Term Borrowings hereunder, the U.S.
Borrower shall select the Borrowing or Borrowings to be repaid and shall notify
the U.S. Administrative Agent by telephone (confirmed by telecopy) of
66
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such repayment. Each repayment of a Borrowing
shall be applied ratably to the Loans included in the repaid Borrowing.
Repayments of Term Borrowings shall be accompanied by accrued interest on the
amount repaid.
SECTION 2.11. Prepayment of Loans. (a) Each Borrower shall have the
-------------------
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on each occasion that the sum of the U.S. $
Revolving Exposures exceeds the Total U.S. $ Revolving Commitment, the U.S.
Borrower shall prepay Revolving Borrowings or Swingline Borrowings (or, if no
such Borrowings are outstanding, deposit cash collateral in an account with the
U.S. Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount
equal to such excess. In the event and on each occasion that the aggregate
principal amount of the outstanding Additional Revolving Loans exceeds the Total
Additional Revolving Commitment, the U.S. Borrower shall prepay Additional
Revolving Loans in an aggregate amount equal to such excess. In the event and on
each occasion that the sum of the C $ Revolving Exposures exceeds the Total C $
Revolving Commitment, the Canadian Borrower shall prepay C $ Revolving Loans in
an aggregate Dollar Equivalent amount equal to such excess.
(c) If Holding or any Subsidiary shall sell, transfer or otherwise
dispose of any assets and, as a result thereof, the U.S. Borrower (or any other
Loan Party) would be required to make, or offer to make, any redemption or
prepayment of any Subordinated Debt, QuIPS Debentures or Senior Notes, then the
applicable Borrower shall prepay Loans as and to the extent necessary to
eliminate or avoid any such requirement to make, or offer to make, any such
redemption or prepayment; provided that the foregoing shall not be construed to
--------
require any prepayment of the Loans if the requirement to make, or offer to
make, such redemption or prepayment is eliminated or avoided by reason of other
actions taken in compliance with the Loan Documents. Any prepayment required to
be made pursuant to this paragraph (c) shall be made in respect of Term Loans,
until all Term Loans have been prepaid, and then in respect of U.S. $ Revolving
Loans and Additional Revolving Loans. The U.S. $ Revolving Commitments and,
after all the U.S. $ Revolving Commitments have been terminated, the Additional
Revolving Commitments shall be reduced in accordance with Section 2.08 to the
extent that any Revolving Loans or
67
Additional Revolving Loans are required to be prepaid pursuant to the preceding
sentence (regardless of whether such Revolving Loans or Additional Revolving
Loans are so prepaid or are outstanding).
(d) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the applicable Borrower shall, subject to the requirements of Section
2.11(c), select the Borrowing or Borrowings to be prepaid and shall specify such
selection in the notice of such prepayment pursuant to paragraph (e) of this
Section 2.11.
(e) The applicable Borrower shall notify the applicable
Administrative Agent (and, in the case of prepayment of Swingline Loans, the
Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, two Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, on the date of prepayment, (iii) in the case of
prepayment of a Canadian Prime Rate Borrowing, not later than 11:00 a.m.,
Toronto time, three Business Days before the date of prepayment, or (iv) in the
case of prepayment of Swingline Loans, not later than 2:00 p.m., New York City
time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment; provided that,
--------
if a notice of optional prepayment is given in connection with a conditional
notice of termination of the U.S. $ Revolving Commitments, C $ Revolving
Commitments or Additional Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the applicable
Administrative Agent shall advise the relevant Lenders of the contents thereof.
Each partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
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(f) If, on any Reset Date, the aggregate C $ Revolving Exposure
(expressed in Dollars) exceeds an amount equal to 105% of the Total C $
Revolving Commitment, then (A) the Canadian Administrative Agent shall give
notice thereof to the C $ Revolving Lenders and the Borrowers and (B) the U.S.
Borrower shall cause the Canadian Borrower to, on the next succeeding Business
Day, apply an amount equal to such excess to repay or prepay outstanding C $
Revolving Borrowings (or cash collateralize Bankers' Acceptances in accordance
with paragraph (g) below).
(g) All repayments or prepayments of C $ Revolving Borrowings under
this Section 2.11 shall be applied first, to repay or prepay outstanding C $
Revolving Loans that are Canadian Prime Rate Loans, and second, to cash
collateralize outstanding Bankers' Acceptances and B/A Equivalent Notes, on
terms and subject to documentation satisfactory to the Canadian Administrative
Agent as security for the Canadian Borrower's obligations under such Bankers'
Acceptances and B/A Equivalent Notes until the maturity and repayment of such
Bankers' Acceptances and B/A Equivalent Notes. Notwithstanding anything herein
to the contrary, no Bankers' Acceptance or B/A Equivalent Note may be prepaid
prior to the maturity date thereof, except as provided in Article VII.
SECTION 2.12. Fees. (a) The U.S. Borrower agrees to pay to the U.S.
-----
Administrative Agent for the account of each U.S. $ Revolving Lender and
Additional Revolving Lender a commitment fee (a "U.S. $ Commitment Fee"), which
---------------------
shall accrue at the rate of 0.50% per annum on the average daily unused amount
of the U.S. $ Revolving Commitment and Additional Revolving Commitment of such
Lender during the period from and including the Effective Date (or, in the case
of the Additional Revolving Commitment, the first day that a reallocation of
Commitments pursuant to Section 2.23 shall become effective) to but excluding
the date on which such U.S. $ Revolving Commitment or Additional Revolving
Commitment terminates and (b) the Canadian Borrower agrees to pay to the
Canadian Administrative Agent for the account of each C $ Revolving Lender a
commitment fee (the "Canadian Commitment Fee" and, together with the U.S. $
-----------------------
Commitment Fee, the "Commitment Fees"), which shall accrue at the rate of 0.50%
---------------
per annum on the average daily unused amount of the C $ Revolving Commitment of
such Lender during the period from and including the Effective Date to but
excluding the date on which such C $ Revolving Commitment terminates. Accrued
Commitment Fees shall be payable in arrears on the last Business Day of March,
June, September and December of each year and on the date on which the U.S. $
Revolving
69
Commitments, the C $ Revolving Commitments or Additional Revolving Commitments,
as applicable, terminate, commencing on the first such date to occur after the
date hereof. All Commitment Fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). For purposes of computing the Commitment
Fees, (i) a U.S. $ Revolving Commitment of a U.S. $ Revolving Lender shall be
deemed to be used to the extent of the outstanding U.S. $ Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose), and (ii) a C $ Revolving Commitment of a C $
Revolving Lender shall be deemed to be used to the extent of the Dollar
Equivalent of the outstanding C $ Revolving Loans of such Lender (or, in the
case of outstanding C $ Revolving Loans that are in the form of B/As, the Dollar
Equivalent of the face amount of such B/As).
(b) The U.S. Borrower agrees to pay (i) to the U.S. Administrative
Agent for the account of each U.S. $ Revolving Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Rate as interest on Eurodollar Revolving Loans on the average
daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's U.S. $ Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate of 0.250% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the U.S.
$ Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank's standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through
and including the last day of March, June, September and December of each year
shall be payable in arrears on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided
--------
that all such fees shall be payable on the date on which the U.S. $ Revolving
Commitments terminate and any such fees accruing after the date on which the
U.S. $ Revolving Commitments terminate shall be payable on demand. Any other
fees payable to the Issuing Bank pursuant to this paragraph shall be payable
70
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) The U.S. Borrower agrees to pay to the U.S. Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between Holdings and the U.S. Administrative Agent (and/or its
Affiliates).
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the applicable Administrative Agent (or to the
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto. All
fees payable to the U.S. Administrative Agent, the Issuing Bank, the Swingline
Lender, the Term Lenders, the U.S. $ Revolving Lenders and the Additional
Revolving Lenders shall be payable in Dollars, and all fees payable to the
Canadian Administrative Agent and the C $ Revolving Lenders shall be payable in
Canadian Dollars. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
--------
(excluding each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate. Each Swingline Loan shall bear interest at an annual
rate separately agreed upon by the U.S. Borrower and the Swingline Lender.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted IBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) The Loans comprising any Canadian Prime Rate Borrowing shall bear
interest at the Canadian Prime Rate plus the Applicable Rate.
(d) Each B/A Borrowing shall be subject to an Acceptance Fee
calculated and payable at a rate per annum equal to the applicable B/A Spread
from time to time in effect and payable as set forth in Section 2.21.
(e) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or
71
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in
the preceding paragraphs of this Section or (ii) in the case of any other
amount, 2.00% plus the rate applicable to ABR U.S. $ Revolving Loans as provided
in paragraph (a) of this Section.
(f) Accrued interest on each Loan (other than pursuant to a B/A
Borrowing) shall be payable in arrears on each Interest Payment Date for such
Loan and, in the case of U.S. $ Revolving Loans, C $ Revolving Loans and
Additional Revolving Loans, upon termination of the U.S. $ Revolving
Commitments, the C $ Revolving Commitments or the Additional Revolving
Commitments, as the case may be; provided that (i) interest accrued pursuant to
--------
paragraph (e) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR U.S.
$ Revolving Loan or Additional Revolving Loan, as the case may be, prior to the
end of the U.S. $ Revolving Availability Period or the Additional Revolving Loan
Availability Period, as the case may be), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(g) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to (i) the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate and
(ii) the Canadian Prime Rate and the B/A Spread shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate or Canadian Prime
Rate for each day, or Adjusted IBO Rate for each Interest Period or Discount
Rate for each Contract Period, shall be determined by the U.S. Administrative
Agent or the Canadian Administrative Agent (in the case of Canadian Dollar
Borrowings), and such determination shall be conclusive absent manifest error.
The applicable Administrative Agent shall give the applicable Borrower prompt
notice of each such determination.
(h) For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever interest or a fee to be
72
paid hereunder or in connection herewith is to be calculated on the basis of a
year of 360 days or any other period of time that is less than a calendar year,
the yearly rate of interest or fee to which the rate determined pursuant to such
calculation is equivalent is the rate so determined (expressed as a percentage)
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by either 360 or such other period of time, as
the case may be. The rates of interest under this Agreement are nominal rates,
and not effective rates or yields. The principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement.
SECTION 2.14. Alternate Rate of Interest. If prior to the
--------------------------
commencement of any Interest Period for a Eurodollar Borrowing or the Contract
Period for a B/A Borrowing:
(a) the U.S. Administrative Agent (in the case of a Term Loan, U.S. $
Revolving Loan or Additional Revolving Loan) or the Canadian Administrative
Agent (in the case of a C $ Revolving Loan) determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted IBO Rate for such Interest Period or
Discount Rate for such Contract Period, as applicable; or
(b) the applicable Administrate Agent is advised by a majority in
interest of the Lenders participating in such Borrowing that deposits in the
principal amounts of the Loans comprising such Borrowing and in the currency in
which such Loans are to be denominated are not generally available in the
international interbank market or there is not an adequate Canadian market for
bankers' acceptances, as applicable, or that the rates at which such deposits
are being offered or B/As are purchased will not adequately and fairly reflect
the cost to the Majority Lenders in respect of the affected Credit Facility of
making or maintaining its Eurodollar Loan during such Interest Period or its B/A
Borrowing or B/A Equivalent Note during such Contract Period, as applicable,
such Administrative Agent shall, as soon as practicable thereafter, give written
or telecopy notice of such determination to the applicable Borrower and the
applicable Lenders. In the event of any such determination, until the
applicable Administrative Agent shall have advised the applicable Borrower and
the applicable Lenders that the circumstances giving rise to such notice no
longer exist, any request by the applicable Borrower for a Eurodollar Borrowing
or a B/A Borrowing, as applicable, pursuant to Section 2.03 or 2.07 shall be
deemed
73
to be a request for an ABR Borrowing (if a Eurodollar Borrowing has been
requested) or a Canadian Prime Rate Loan (if a B/A Borrowing has been
requested). Each determination by the Administrative Agents hereunder shall be
conclusive absent manifest error.
In making any determination under this Section 2.14, the
Administrative Agents and each Lender will use good faith efforts to treat the
Borrowers in substantially the same manner as the Administrative Agent or such
Lender, as the case may be, treats other similarly situated borrowers under
similar circumstances.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
---------------
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted IBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market or any other relevant market any other condition affecting this
Agreement or Eurodollar Loans or any C $ Revolving Loans made by such
Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or any C $ Revolving Loan
(or of maintaining its obligation to make any such Loan) or to increase the cost
to such Lender or the Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the U.S. Borrower will pay (or cause the Canadian Borrower to
pay in respect of the C $ Revolving Loans) to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or
74
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time the U.S. Borrower will pay (or cause the Canadian Borrower to pay in
respect of the C $ Revolving Loans) to such Lender or the Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company for any
such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth (and
showing in reasonable detail the calculation of) the amount or amounts necessary
to compensate such Lender or the Issuing Bank or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this Section shall be
delivered to the U.S. Borrower and shall be conclusive absent manifest error.
The U.S. Borrower shall pay (or cause the Canadian Borrower to pay in respect of
the C $ Revolving Loans) such Lender or the Issuing Bank, as the case may be,
the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
--------
that neither the U.S. Borrower nor the Canadian Borrower shall be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date that
such Lender or the Issuing Bank, as the case may be, notifies the U.S. Borrower
of the Change in Law giving rise to such increased costs or reductions and of
such Lender's or the Issuing Bank's intention to claim compensation therefor;
provided, further, that if the Change in Law giving rise to such increased costs
-------- -------
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
(e) In requesting any compensation pursuant to this Section, each
Lender and the Issuing Bank will use good faith efforts to treat the Borrowers
in substantially the same manner as such Lender or the Issuing Bank, as the case
75
may be, treats other similarly situated borrowers under similar circumstances.
SECTION 2.16. Break Funding Payments. In the event of (a) the
----------------------
payment of any principal of any Eurodollar Loan or Bankers' Acceptance other
than on the last day of an Interest Period or Contract Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of, or the
exchange pursuant to Article X of, any Eurodollar Loan or Bankers' Acceptance
other than on the last day of the Interest Period or Contract Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.11(e) and is
revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan or
Bankers' Acceptance other than on the last day of the Interest Period or
Contract Period applicable thereto as a result of a request by the applicable
Borrower pursuant to Section 2.19, then, in any such event, the applicable
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan or Bankers'
Acceptance, such loss, cost or expense to any Lender shall be deemed to include
an amount determined by such Lender to be the excess, if any, of (i) the amount
of interest that would have accrued on the principal amount of such Loan had
such event not occurred, at the Adjusted IBO Rate or the Discount Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period or Contract Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period or Contract Period for such
Loan), over (ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate that such Lender would bid were it
to bid at the commencement of such period, for deposits or bankers' acceptances
of a comparable amount and period and in the same currency from other banks in
the eurodollar market or the Canadian market, as applicable. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the applicable Borrower
and shall be conclusive absent manifest error. The applicable Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof. Nothing in this Section 2.16 shall be construed to
permit a voluntary prepayment of a B/A Borrowing other than on the last day of a
Contract Period.
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SECTION 2.17. Taxes. (a) Any and all payments by or on account of
-----
any obligation of either Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if either Borrower shall be required to deduct any
--------
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the applicable Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the applicable Borrower shall make such deductions
and (iii) the applicable Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the applicable Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The applicable Borrower shall indemnify each Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by such Agent, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of the applicable Borrower hereunder or under any
other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
applicable Borrower by a Lender or the Issuing Bank, or by the applicable
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by either Borrower to a Governmental Authority, such Borrower shall
deliver to the U.S. Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the U.S. Administrative Agent.
77
(e) Any Foreign Lender (or Participant that would be a Foreign Lender
if it were a Lender) or any other recipient of any payment to be made by or on
account of any obligation of either Borrower hereunder or under any other Loan
Document that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which a Borrower is located, or any treaty
to which such jurisdiction is a party, with respect to payments by or on account
of any obligation of the applicable Borrower hereunder or under any other Loan
Document shall deliver to the applicable Borrower (with a copy to the applicable
Administrative Agent), at the time or times prescribed by applicable law,
Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (or any successor
form), or such properly completed and executed documentation prescribed by
applicable law or reasonably requested by applicable Borrower as will permit
such payments to be made without withholding or at a reduced rate.
(f) If any Lender, Participant, the Issuing Bank or any Agent or any
other recipient of any payment to be made by or on account of any obligation of
the U.S. Borrower or the Canadian Borrower hereunder or under any other Loan
Document shall become aware that it is entitled to receive a refund, reduction
or credit in respect of amounts paid by the U.S. Borrower or the Canadian
Borrower pursuant to this Section 2.17, which refund, reduction or credit in the
good faith judgment of such Lender, Participant, Issuing Bank or any Agent or
any other recipient of any payment to be made by or on account of any obligation
of the U.S. Borrower or the Canadian Borrower hereunder or under any other Loan
Document is allocable to such payment, it shall promptly notify such Borrower of
the availability of such refund, reduction or credit and shall, within 30 days
after the receipt of a request by such Borrower, apply for such refund,
reduction or credit. If any Lender, Participant, the Issuing Bank or any Agent
or any other recipient of any payment to be made by or on account of any
obligation of the U.S. Borrower or the Canadian Borrower hereunder or under any
other Loan Document receives a refund, reduction or credit in respect of any
amounts paid by either Borrower pursuant to this Section 2.17, which refund,
reduction or credit in the good faith judgment of such Lender, Participant,
Issuing Bank or any Agent or any other recipient of any payment to be made by or
on account of any obligation of the U.S. Borrower or the Canadian Borrower
hereunder or under any other Loan Document is allocable to such payment, it
shall promptly notify such Borrower of such refund, reduction or credit and
shall, within 15 days after receipt, repay such refund or the amount of such
reduction or credit to such Borrower net of all out-of-pocket expenses
78
of such Lender, Participant, Issuing Bank or any Agent or any other recipient of
any payment to be made by or on account of any obligation of the U.S. Borrower
hereunder or the Canadian Borrower hereunder or under any other Loan Document;
provided, however, that such Borrower, upon the request of such Lender,
-------- -------
Participant, Issuing Bank or any Agent or any other recipient of any payment to
be made by or on account of any obligation of the U.S. Borrower or the Canadian
Borrower hereunder or under any other Loan Document, agrees to repay the amount
paid over to such Borrower to such Lender, Participant, Issuing Bank or any
Agent or any other recipient of any payment to be made by or on account of any
obligation of the U.S. Borrower or the Canadian Borrower or under any other Loan
Document in the event such Lender, Participant, Issuing Bank or any Agent or any
other recipient of any payment to be made by or on account of any obligation of
the U.S. Borrower or the Canadian Borrower hereunder or under any other Loan
Document is required to repay such refund, reduction or credit, which repayment
shall in no event be made fewer than five days prior to the date on which such
Lender, Participant, Issuing Bank or any Agent or any other recipient of any
payment to be made by or on account of any obligation of the U.S. Borrower or
the Canadian Borrower hereunder or under any other Loan Document is required to
repay such refund, reduction or credit.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
--------------------------------------------------
Setoffs. (a) Each Borrower shall make each payment required to be made by it
--------
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without setoff or counterclaim. Any
amounts received after such time on any date may, in the discretion of the U.S.
Administrative Agent or the Canadian Administrative Agent, as applicable, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All payments to the U.S. Administrative Agent
79
shall be made to it at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and payments pursuant to Sections 2.15, 2.16, 2.17 and
9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein.
All payments to the Canadian Administrative Agent shall be made to it at c/o
Royal Bank of Canada, Correspondent Banking Division, Financial Institution
Account Services, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The applicable
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.
(b) If at any time insufficient funds are received by and available
to (i) the U.S. Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due with respect to the
U.S. $ Revolving Commitments and the U.S. $ Revolving Loans hereunder, such
funds shall be applied (A) first, towards payment of interest and fees then due
hereunder with respect thereto, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(B) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties,
(ii) the Canadian Administrative Agent to pay fully all amounts of principal,
interest and fees then due with respect to the C $ Revolving Commitments and the
C $ Revolving Loans hereunder, such funds shall be applied (A) first, towards
payment of interest and fees then due hereunder with respect thereto, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (B) second, towards payment of principal
then due with respect to the C $ Revolving Commitments and C $ Revolving Loans
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties and (iii) the U.S. Administrative
Agent to pay fully all amounts of principal, interest and fees then due with
respect to the Additional Revolving Commitments and Additional Revolving Loans
hereunder, such funds shall be applied (A) first, towards payment of interest
and fees then due hereunder with respect thereto, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to
such parties and (B) second, towards payment of principal then
80
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its U.S. $ Revolving Loans, C $ Revolving Loans, Additional
Revolving Loans, Term Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its U.S. $ Revolving Loans, C $ Revolving Loans, Additional
Revolving Loans, Term Loans, participations in LC Disbursements and
participations in Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans, C $ Revolving Loans, Additional Revolving Loans, Term Loans,
participations in LC Disbursements and participations in Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective U.S. $ Revolving Loans,
C $ Revolving Loans, Additional Revolving Loans, Term Loans, participations in
LC Disbursements and participations in Swingline Loans; provided that (i) if any
--------
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by either Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrowers or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against such Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.
(d) Unless the applicable Administrative Agent shall have received
notice from the applicable Borrower
81
prior to the date on which any payment is due to such Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the applicable
Borrower will not make such payment, the applicable Administrative Agent may
assume that such Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the relevant
Lenders or the Issuing Bank, as applicable, the amount due. In such event, if
the applicable Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as applicable, severally agrees to repay to the
applicable Administrative Agent forthwith on demand the amount so distributed to
such Lender or the Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the applicable Administrative Agent, (i) in the case of payments to
the U.S. Administrative Agent, at the greater of the Federal Funds Effective
Rate and a rate determined by the U.S. Administrative Agent in accordance with
banking industry rules on interbank compensation and (ii) in the case of
payments to the Canadian Administrative Agent, the greater of a rate determined
by the Canadian Administrative Agent to represent its cost of overnight or
short-term funds and a rate in accordance with applicable banking industry rules
on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c),
then the applicable Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by such
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)
-----------------------------------------------
If any Lender requests compensation under Section 2.15, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. Each Borrower
82
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section 2.15, (ii)
either Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17 or
(iii) any Lender defaults in its obligation to fund Loans hereunder, then the
applicable Borrower may, at its sole expense and effort, upon notice to such
Lender and the applicable Administrative Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (A) the applicable Borrower shall have received the
--------
prior written consent of the applicable Administrative Agent (and, if a U.S. $
Revolving Commitment is being assigned, the Issuing Bank and Swingline Lender),
which consent, in each case, shall not unreasonably be withheld, (B) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the applicable Borrower (in the case of all other
amounts), and (C) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the applicable Borrower to
require such assignment and delegation cease to apply.
SECTION 2.20. Incremental Facility. At any time prior to the sixth
---------------------
anniversary of the Effective Date, the U.S. Borrower may, by notice to the U.S.
Administrative Agent (which shall promptly deliver a copy to each of the
Lenders), request the addition of a new tranche of term loans (the "Incremental
-----------
Term Loans"); provided that both at the time of any such request and upon the
---------- --------
effectiveness of the Incremental Facility Amendment referred to below, no
Default shall exist and at the time that any such Incremental Term Loans are
made (and after giving effect thereto) no Default shall exist and Holdings and
the Borrowers shall be in compliance with Section 6.01,
83
determined on a pro forma basis as if such Incremental Term Loans had been
incurred at the beginning of the most recent period for testing compliance
therewith. The Incremental Term Loans (i) shall be in an aggregate principal
amount not exceeding (in the aggregate) $250,000,000, (ii) shall rank pari passu
---- -----
in right of payment and of security with the Revolving Loans and the Term Loans,
(iii) shall not mature earlier than the Term Loan Maturity Date (but may,
subject to clause (iv) below, have amortization and commitment reductions prior
to such date), (iv) shall not have a weighted average life that is shorter than
that of the Term Loans, (v) shall not accrue interest at a rate or rates in
excess of the interest rates applicable to the Term Loans and (vi) shall
otherwise be treated no more favorably than the Term Loans (in each case,
including with respect to mandatory and voluntary prepayments); provided that
--------
the terms and conditions applicable to the Incremental Term Loans may provide
for additional or different financial or other covenants applicable only during
periods after the Term Loan Maturity Date. Such notice shall set forth the
requested amount of Incremental Term Loans. In the event that existing Lenders
provide commitments in an aggregate amount less than the total amount of the
Incremental Term Loans requested by the U.S. Borrower (but the U.S. Borrower
shall not have any obligation to request any Lender to provide any amount of the
Incremental Term Loans), the U.S. Borrower may arrange for one or more banks or
other financial institutions (any such bank or other financial institution being
called an "Additional Lender") to extend commitments to provide Incremental Term
-----------------
Loans in an aggregate amount equal to the unsubscribed amount. Commitments in
respect of Incremental Term Loans shall become Commitments under this Agreement
pursuant to an amendment (an "Incremental Facility Amendment") to this Agreement
------------------------------
and, as appropriate, the other Loan Documents, executed by Holdings, the U.S.
Borrower, each Lender agreeing to provide such Commitment, if any, each
Additional Lender, if any, and the U.S. Administrative Agent. The Incremental
Facility Amendment may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the opinion of the U.S. Administrative Agent, to effect the
provisions of this Section. The effectiveness of any Incremental Facility
Amendment shall be subject to the satisfaction on the date thereof of each of
the conditions set forth in Section 4.02 (it being understood that all
references to "the date of such Borrowing" in such Section 4.02 shall be deemed
to refer to the effective date of such Incremental Facility Amendment). No
Lender shall be obligated to provide any Incremental Term Loans unless it so
agrees.
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SECTION 2.21. Bankers' Acceptances. (a) Subject to the terms and
---------------------
conditions of this Agreement, the Canadian Borrower may request a C $ Revolving
Borrowing by presenting drafts for acceptance and purchase as B/As by the C $
Revolving Lenders.
(b) To facilitate B/A Borrowings, the Canadian Borrower hereby
appoints each C $ Revolving Lender as its attorney to sign and endorse on its
behalf, in handwriting or by facsimile or mechanical signature as and when
deemed necessary by such Lender, blank forms of B/As in the form requested by
such Lender. In this respect, it is each C $ Revolving Lender's responsibility
to maintain an adequate supply of blank forms of B/As for acceptance under this
Agreement. The Canadian Borrower recognizes and agrees that all B/As signed
and/or endorsed on its behalf by a C $ Revolving Lender shall bind the Canadian
Borrower as fully and effectually as if signed in the handwriting of and duly
issued by the proper signing officers of the Canadian Borrower. Each C $
Revolving Lender is hereby authorized to issue such B/As endorsed in blank in
such face amounts as may be determined by such Lender; provided that the
--------
aggregate amount thereof is equal to the aggregate amount of B/As required to be
accepted and purchased by such Lender. No C $ Revolving Lender shall be liable
for any damage, loss or other claim arising by reason of any loss or improper
use of any such instrument except the gross negligence or wilful misconduct of
such Lender or its officers, employees, agents or representatives. Each C $
Revolving Lender shall maintain a record with respect to B/As (i) received by it
in blank hereunder, (ii) voided by it for any reason, (iii) accepted and
purchased by it hereunder and (iv) canceled at their respective maturities.
Each C $ Revolving Lender further agrees to retain such records in the manner
and for the statutory periods provided in the various provincial or federal
statutes and regulations that apply to such Lender. Each C $ Revolving Lender
agrees to provide a copy of such records to the Canadian Borrower at the
Canadian Borrower's expense upon request. On request by or on behalf of the
Canadian Borrower, a C $ Revolving Lender shall cancel all forms of B/A that
have been pre-signed or pre-endorsed on behalf of the Canadian Borrower and that
are held by such Lender and are not required to be issued in accordance with the
Canadian Borrower's irrevocable notice.
(c) Drafts of the Canadian Borrower to be accepted as B/As hereunder
shall be signed as set forth in this Section 2.21. Notwithstanding that any
person whose signature appears on any B/A may no longer be an authorized
signatory for any C $ Revolving Lender or the Canadian
85
Borrower at the date of issuance of a B/A, such signature shall nevertheless be
valid and sufficient for all purposes as if such authority had remained in force
at the time of such issuance and any such B/A so signed shall be binding on the
Canadian Borrower.
(d) Promptly following receipt of a Borrowing Request or notice of
rollover pursuant to Section 2.03 by way of B/As, the Canadian Administrative
Agent shall so advise the C $ Revolving Lenders and shall advise each C $
Revolving Lender of the aggregate face amount of the B/As to be accepted by it
and the applicable Contract Period (which shall be identical for all C $
Revolving Lenders). The aggregate face amount of the B/As to be accepted by a C
$ Revolving Lender shall be a whole multiple of C $100,000, and such face amount
shall be in the C $ Revolving Lenders' pro rata portions of such C $ Revolving
Borrowing; provided that the Canadian Administrative Agent may in its sole
--------
discretion increase or reduce any C $ Revolving Lender's portion of such B/A
Borrowing to the nearest C $100,000.
(e) Upon acceptance of a B/A by a C $ Revolving Lender, such Lender
shall purchase, or arrange the purchase of, each B/A from the Canadian Borrower
at the Discount Rate for such Lender applicable to such B/A accepted by it and
provide to the Canadian Administrative Agent the Discount Proceeds for the
account of the Canadian Borrower. The Canadian Borrower will, upon acceptance
of a B/A by a C $ Revolving Lender, be obligated to pay to the Canadian
Administrative Agent on behalf of the C $ Revolving Lender that accepted the B/A
an Acceptance Fee in respect of such B/A. The Acceptance Fee payable by the
Canadian Borrower to a C $ Revolving Lender under this Section 2.21(e) in
respect of each B/A accepted by such Lender shall be set off against the
Discount Proceeds payable by such Lender under this Section 2.21(e).
(f) Each C $ Revolving Lender may at any time and from time to time
hold, sell, rediscount or otherwise dispose of any or all B/As accepted and
purchased by it.
(g) If a C $ Revolving Lender notifies the Canadian Administrative
Agent in writing that it is unable or unwilling to accept Bankers' Acceptances,
such Lender will, instead of accepting and purchasing Bankers' Acceptances,
purchase from the Canadian Borrower a note that does not bear interest during
the Contract Period (a "B/A Equivalent Note"), in the form of Exhibit K, issued
-------------------
by the Canadian Borrower in the amount and for the same term as the draft that
such Lender would otherwise have been required to accept and purchase hereunder,
at a purchase price
86
calculated on the same basis as Bankers' Acceptances are discounted pursuant to
this Agreement. Each such Lender will provide to the Canadian Administrative
Agent the proceeds of such purchase for the account of the Canadian Borrower.
The Canadian Borrower will, upon purchase of a B/A Equivalent Note, pay to the
Canadian Administrative Agent on behalf of the C $ Revolving Lender that
purchased from the Canadian Borrower the B/A Equivalent Note an Acceptance Fee
in respect of such B/A Equivalent Note. The Acceptance Fee payable by the
Canadian Borrower to a C $ Revolving Lender under this Section 2.21(g) in
respect of each B/A Equivalent Note purchased by such Lender shall be set off
against the Discount Proceeds payable by such Lender under this Section 2.21(g).
(h) With respect to each B/A Borrowing, at or before 10:00 a.m.,
Toronto time, two Business Days before the maturity date of such B/As, the
Canadian Borrower shall notify the Canadian Administrative Agent at the Canadian
Administrative Agent's address set forth in Section 9.01 by irrevocable
telephone notice, followed by a notice of rollover on the same day, if the
Canadian Borrower intends to issue B/As on such maturity date to provide for the
payment of such maturing B/As. If the Canadian Borrower fails to notify the
Canadian Administrative Agent of its intention to issue B/As on such maturity
date, the Canadian Borrower shall provide payment to the Canadian Administrative
Agent on behalf of the C $ Revolving Lenders of an amount equal to the aggregate
face amount of such B/As on the maturity date of such B/As. If the Canadian
Borrower fails to make such payment, such maturing B/As shall, subject to
satisfaction of the conditions set forth in Section 4.02, be deemed to have been
converted on their maturity date into a Canadian Prime Rate Loan in an amount
equal to the face amount of such B/A as provided in Section 2.07 and the
Canadian Borrower shall on demand pay any losses, costs or penalties that may
have been incurred by the Canadian Administrative Agent or any C $ Revolving
Lender due to the failure of the Canadian Borrower to make such payment.
(i) The Canadian Borrower waives presentment for payment and any
other defense, in respect of a B/A accepted and purchased by it pursuant to this
Agreement, that might exist solely by reason of such B/A being held, at the
maturity thereof, by such Lender in its own right and the Canadian Borrower
agrees not to claim any days of grace if such Lender as holder sues the Canadian
Borrower on the B/A for payment of the amount payable by the Canadian Borrower
thereunder. On the specified maturity date of a B/A, or such earlier date as
may be required or permitted pursuant
87
to the provisions of this Agreement, the Canadian Borrower shall pay, through
the Canadian Administrative Agent, the C $ Revolving Lender that has accepted
and purchased such B/A the full face amount of such B/A and after such payment,
the Canadian Borrower shall have no further liability in respect of such B/A and
such Lender shall be entitled to all benefits of, and be responsible for all
payments due to third parties under, such B/A.
(j) If a C $ Revolving Lender grants a participation in a portion
of its rights under this Agreement to a participant under Section 9.04(f), then
in respect of any B/A Borrowing, a portion thereof may, at the option of such
Lender, be by way of Bankers' Acceptance accepted by such participant. In such
event, the Canadian Borrower shall upon request of the Canadian Administrative
Agent or the C $ Revolving Lender granting the participation execute and deliver
a form of Bankers' Acceptance undertaking in favor of such participant for
delivery to such participant.
SECTION 2.22. Spot Exchange Rate Calculations. (a)(i) Not later than
--------------------------------
2:00 p.m., Toronto time, on each Calculation Date, the Canadian Administrative
Agent shall (A) determine the Spot Exchange Rate as of such Calculation Date
with respect to Canadian Dollars if at such time C $ Revolving Loans are then
outstanding and (B) give notice thereof to the Canadian Borrower and the C $
Revolving Lenders.
(ii) The Spot Exchange Rates determined pursuant to this Section
2.22(a) shall become effective on the second Business Day immediately following
the relevant Calculation Date (a "Reset Date") and shall remain effective until
----------
the next succeeding Reset Date.
(b) Not later than 2:00 p.m., Toronto time, on the Business Day
immediately following the delivery of any notice pursuant to Section 2.08(d) or
2.11(f) in connection with the repayment of C $ Revolving Loans, the Canadian
Administrative Agent shall (i) determine as of such date the Assigned Dollar
Value, based on the Spot Exchange Rate then in effect, of each C $ Revolving
Loan then outstanding (after giving effect to any C $ Revolving Loan repaid in
connection therewith) and (ii) notify the Canadian Borrower and the C $
Revolving Lenders of the results of such determination.
SECTION 2.23. Reallocation. (a) Subject to Section 2.23(b), the
-------------
Borrowers may, from time to time (but no more than once in any calendar
quarter), from and after July 1, 2001, until the earlier of (i) the Revolving
88
Maturity Date and (ii) the termination of the C $ Revolving Commitments and the
Additional Revolving Commitments, upon giving an irrevocable joint written
notice (each, a "Reallocation Notice") to the Canadian Administrative Agent and
-------------------
the U.S. Administrative Agent at least ten Business Days prior to the beginning
of the next Fiscal Quarter (including, with respect to any reallocation to be
effective as of July 1, 2001, the Fiscal Quarter ended June 30, 2001),
temporarily reduce (but not below zero), in whole or in part, the C $ Revolving
Commitments or the Additional Revolving Commitments, as applicable. Each
reduction in the C $ Revolving Commitments shall result in an automatic
corresponding increase in the Additional Revolving Commitments, and each
reduction in the Additional Revolving Commitments shall result in an automatic
and corresponding increase in the C $ Revolving Commitments. Any amount of C $
Revolving Commitments reallocated under this Section 2.23(a) to Additional
Revolving Commitments will not be available to the Canadian Borrower, and any
amount of Additional Revolving Commitments reallocated under this Section
2.23(a) to C $ Revolving Commitments will not be available to the U.S. Borrower,
in each case unless and until such amounts are reallocated back to the C $
Revolving Commitments or the Additional Revolving Commitments, as applicable, in
accordance with the terms and subject to the conditions of this Section 2.23.
(b) The Borrowers shall be permitted to reallocate the C $ Revolving
Commitments and the Additional Revolving Commitments in accordance with this
Section 2.23 subject to the conditions that (i) any such reallocation shall only
be made on, and be effective as of, the first day of a Fiscal Quarter, (ii) each
partial reallocation shall be in an integral multiple of $1,000,000 (or, if
less, the remaining amount of the applicable Commitments being reduced), (iii)
the Total C $ Revolving Commitment shall not be reduced to an amount that is
less than the aggregate C $ Revolving Exposures of the C $ Revolving Lenders at
such time, (iv) the Total Additional Revolving Commitment shall not be reduced
to an amount that is less than the aggregate principal amount of Additional
Revolving Loans outstanding at such time and (v) on the date of any reduction of
the Additional Revolving Commitments (and a corresponding increase in the C $
Revolving Commitments), (A) the representations and warranties set forth in each
Loan Document shall be true and correct in all material respects with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, and (B)
immediately after giving effect to such reduction and corresponding
89
increase no Default or Event of Default shall have occurred and be continuing.
(c) Each Reallocation Notice shall specify the amount (expressed in
Dollars) of any (i) reduction in the C $ Revolving Commitments and the
corresponding increase in the Additional Revolving Commitments or (ii) reduction
in the Additional Revolving Commitments and the corresponding increase in the C
$ Revolving Commitments. Each reduction in the C $ Revolving Commitments and
each increase in the C $ Revolving Commitments (if the C $ Revolving Commitments
at such time are greater than zero) shall be made ratably among the C $
Revolving Lenders based on their respective C $ Revolving Commitments. Each
increase in the C $ Revolving Commitments (if the C $ Revolving Commitments at
such time are equal to zero) shall be made ratably among the C $ Revolving
Lenders based on their respective Additional Revolving Commitments; provided
--------
that, for this purpose, the Additional Revolving Commitment of any C $ Revolving
Lender that makes Additional Revolving Loans through its Designated U.S.
Affiliate shall be deemed to be equal to the Additional Revolving Commitment of
such Designated U.S. Affiliate. Each reduction in the Additional Revolving
Commitments and each increase in the Additional Revolving Commitments (if the
Additional Revolving Commitments at such time are greater than zero) shall be
made ratably among the Additional Revolving Lenders based on their respective
Additional Revolving Commitments. Each increase in the Additional Revolving
Commitments (if the Additional Revolving Commitments at such time are equal to
zero) shall be made ratably among the Additional Revolving Lenders based on
their respective C $ Revolving Commitments; provided that, for this purpose, the
--------
C $ Revolving Commitment of any Additional Revolving Lender that is a Designated
U.S. Affiliate shall be deemed to be equal to the C $ Revolving Commitment of
its Affiliate that is a C $ Revolving Lender. Promptly after receiving a
Reallocation Notice, the Canadian Administrative Agent or the U.S.
Administrative Agent, as applicable, shall notify each C $ Revolving Lender and
Additional Revolving Lender, as applicable, of the amount of its C $ Revolving
Commitment or Additional Revolving Commitment, as applicable, to be reallocated
pursuant to this Section 2.23 and the date of such reallocation.
(d) Notwithstanding anything to the contrary contained in this
Agreement, (i) the Additional Revolving Commitments shall be available to the
U.S. Borrower in addition to the U.S. $ Revolving Commitments, (ii) Swingline
Loans and Letters of Credit are not available under the Additional Revolving
Commitments and (iii) the Additional Revolving Lenders shall be entitled to the
same rights and
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subject to the same obligations with respect to the Additional Revolving
Commitments as are the U.S. $ Revolving Lenders with respect to the U.S. $
Revolving Commitments.
Section 2.24. Increases in C $ Revolving Commitments. (a)
--------------------------------------
Notwithstanding anything to the contrary in this Agreement, the Canadian
Borrower may, from time to time (but no more than once in any Fiscal Quarter),
from and after July 1, 2001, until the Revolving Maturity Date, upon giving an
irrevocable written notice (each, a "C $ Commitment Increase Notice") to the
------------------------------
Canadian Administrative Agent and the U.S. Administrative Agent at least ten
Business Days prior to the beginning of the next Fiscal Quarter (including, with
respect to any increase to be effective as of July 1, 2001, the Fiscal Quarter
ended June 30, 2001), obtain an increase in the C $ Revolving Commitments in
accordance with paragraphs (b) through (f) below, subject to the conditions that
(i) any such increase shall be in an integral multiple of $1,000,000, (ii) on
the date of each such increase, (A) the representations and warranties set forth
in each Loan Document shall be true and correct in all material respects with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date, and (B)
immediately after giving effect to each such increase no Default or Event of
Default shall have occurred and be continuing and (iii) after giving effect to
each such increase, the Total Additional Revolving Commitment plus the Total C $
Revolving Commitment shall not exceed $75,000,000.
(b) Each increase in the C $ Revolving Commitments pursuant to this
Section 2.24 shall be effected by the execution and delivery by the Borrowers
and by a Lender or other Person satisfactory to the Administrative Agents (in
either case, that satisfies the definition of C $ Revolving Lender) of a
supplement to this Agreement, in form and substance satisfactory to the
Administrative Agents, pursuant to which such Lender or other Person agrees (i)
to provide a C $ Revolving Commitment or, if such Lender is at the time already
a C $ Revolving Lender, to increase its C $ Revolving Commitment and (ii) if
such Person is not at the time already a Lender, to become a party to this
Agreement as a Lender and to have all the obligations of a Lender hereunder with
respect to its C $ Revolving Commitment. Any supplement so executed and
delivered in accordance with this Section 2.24 shall be effective to increase
the C $ Revolving Commitments as provided therein (and correspondingly decrease
the U.S. $ Revolving Commitments as provided herein) without the consent of any
other Lenders.
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(c) Each increase in the C $ Revolving Commitments pursuant to this
Section 2.24 shall result in an automatic corresponding decrease in the U.S. $
Revolving Commitments, which corresponding decrease shall (i) if neither (A) the
Person providing such increase in the C $ Revolving Commitments nor (B) an
Affiliate of such Person designated by such Person and agreed to by the
Borrowers and the Administrative Agents is already a U.S. $ Revolving Lender at
the time, be made ratably among the U.S. $ Revolving Lenders based on their
respective U.S. $ Revolving Commitments or (ii) if either (A) the Person
providing such increase in the C $ Revolving Commitments or (B) an Affiliate of
such Person designated by such Person and agreed to by the Borrowers and the
Administrative Agents is already a U.S. $ Revolving Lender at the time, be
allocated first to reduce such Person's (or, with the consent of the Borrowers
and the Administrative Agents, such Affiliate's) U.S. $ Revolving Commitment
and, after such Person's or Affiliate's U.S. $ Revolving Commitment has been
reduced to zero, be made ratably among the remaining U.S. $ Revolving Lenders
based on their respective remaining U.S. $ Revolving Commitments.
(d) Any increase in the C $ Revolving Commitments pursuant to this
Section 2.24 (and any corresponding reduction in the U.S. $ Revolving
Commitments referred to in paragraph (c) above) shall only be made on, and be
effective as of, the first day of a Fiscal Quarter.
(e) If, immediately prior to the effectiveness of any increase in the
C $ Revolving Commitments pursuant to this Section 2.24, (i) there are any Loans
outstanding under the C $ Revolving Commitments, then all such Loans shall be
repaid immediately prior to or concurrently with the effectiveness of such
increase or (ii) there are any Loans outstanding under the U.S. $ Revolving
Commitments and clause (ii) of paragraph (c) of this Section 2.24 is applicable
to such increase, then all such Loans shall be repaid immediately prior to or
concurrently with the effectiveness of such increase.
(f) Each C $ Commitment Increase Notice shall specify the amount
(expressed in Dollars) of any increase in the C $ Revolving Commitments and the
corresponding decrease in the U.S. $ Revolving Commitments.
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ARTICLE III
Representations and Warranties
------------------------------
Each of Holdings and the Borrowers represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of Holdings and the
---------------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions to be
------------------------------
entered into by each Loan Party are within such Loan Party's powers and have
been duly authorized by all necessary corporate and, if required, stockholder
action. This Agreement has been duly executed and delivered by each of Holdings
and the Borrowers and constitutes, and each other Loan Document to which any
Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of Holdings, the
Borrowers or such Loan Party (as the case may be), enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
-------------------------------------
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except filings necessary
to perfect Liens created under the Loan Documents, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of Holdings or any Subsidiary or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon Holdings or any Subsidiary or its
assets that is material to Holdings and its Subsidiaries, taken as a whole, or
give rise to a right thereunder to require any payment to be made by Holdings or
any Subsidiary and (d) will not result in the creation or imposition of any
93
Lien on any asset of Holdings or any Subsidiary, except Liens created under the
Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
------------------------------------------------
Holdings has heretofore furnished to the Lenders the consolidated balance sheet
and statements of income, stockholders' equity and cash flows of Holdings and
its Subsidiaries as of and for the Fiscal Year ended December 31, 2000, reported
on by Ernst & Young LLP, independent public accountants. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of Holdings and the Subsidiaries as of such
date and for such period in accordance with GAAP.
(b) Holdings has heretofore furnished to the Lenders Holdings's pro
forma consolidated balance sheet as of December 31, 2000, prepared giving effect
to the Transactions as if the Transactions had occurred on such date. Such pro
forma consolidated balance sheet (i) has been prepared in good faith based on
the same assumptions used to prepare the pro forma financial statements included
in the Information Memorandum (which assumptions are believed by Holdings and
the U.S. Borrower as of the Effective Date to be reasonable), (ii) is based on
the best information available to Holdings and the U.S. Borrower as of the
Effective Date after due inquiry, (iii) accurately reflects all adjustments
necessary to give effect to the Transactions and (iv) presents fairly, in all
material respects, the pro forma financial position of Holdings and its
consolidated Subsidiaries as of December 31, 2000, as if the Transactions had
occurred on such date.
(c) Except as disclosed in the financial statements referred to above
or the notes thereto or in the Information Memorandum and except for the
Disclosed Matters, after giving effect to the Transactions, none of Holdings or
the Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses.
(d) Since December 31, 2000, there has been no material adverse
change in the financial condition, operations, assets, business, properties or
prospects of Holdings and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of Holdings and the Subsidiaries
-----------
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as
94
currently conducted or to utilize such properties for their intended purposes.
(b) Each of Holdings and the Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by Holdings and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property that
is owned or leased by Holdings or any Subsidiary as of the Effective Date.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
-------------------------------------
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the U.S. Borrower,
threatened against or affecting Holdings or any Subsidiary (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
deter mined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither Holdings nor any
Subsidiary (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings
------------------------------------
and the Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding
95
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
--------------------------------------
Holdings nor any Subsidiary is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of Holdings and the Subsidiaries has
------
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) any Taxes that are being contested in good faith by
appropriate proceedings and for which Holdings or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
------
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not in the aggregate,
as of the date of the most recent financial statements reflecting such amounts,
exceed the fair market value of the assets of such Plan by an amount which could
reasonably be expected to result in a Material Adverse Effect, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not in the aggregate, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans by an amount which could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Disclosure. Holdings and the Borrowers have disclosed
-----------
to the Lenders all agreements, instruments and corporate or other restrictions
to which Holdings or any Subsidiary is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a
96
Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to any Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being recognized by the Agents
and the Lenders that any projections and forecasts provided by Holdings or any
Subsidiary are based on good faith estimates and assumptions believed by
Holdings or such Subsidiary to be reasonable as of the date of the applicable
projections or assumptions and that actual results during the period or periods
covered by any such projections and forecasts may differ from projected or
forecasted results and no representation whatsoever is made with respect to
reports or projections that are included or referred to in or attached to the
Information Memorandum and identified therein as having been provided by Persons
other than Holdings or one of its Affiliates).
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name and
-------------
jurisdiction of organization of, and the ownership interest of Holdings in, each
Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Effective Date. The Canadian Borrower is a wholly owned
subsidiary of the U.S. Borrower.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of
----------
all insurance maintained by or on behalf of Holdings and the Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid.
SECTION 3.14. Labor Matters. Except as set forth in Schedule 3.14,
--------------
as of the Effective Date, there are no strikes, lockouts or slowdowns against
Holdings or any Subsidiary pending or, to the knowledge of Holdings or the
Borrower, threatened. The hours worked by and payments made to employees of
Holdings and the Subsidiaries have been in compliance with the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters except where the failure to comply could not
reasonably be expected to result in a Material Adverse Effect. All payments due
from Holdings or any Subsidiary, or for which any claim may be made against
Holdings or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or
97
accrued as a liability on the books of Holdings or such Subsidiary except to the
extent that a failure to comply could not reasonably be expected to result in a
Material Adverse Effect. Except as set forth in Schedule 3.14, the consummation
of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Holdings or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of the
---------
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans (and taking into account all rights of
contribution arising by operation of law or otherwise to which any Loan Party
may be entitled and other credit support available to any Subsidiary from
Holdings or any of the other Subsidiaries), (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise, (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured, (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. Senior Debt. The Obligations constitute "Senior
------------
Indebtedness" under and as defined in each Subordinated Note Indenture and the
documents evidencing or governing all Subordinated Debt referred to in clauses
(e) and (f) of the definition of "Subordinated Debt".
SECTION 3.17. Security Interests. (a) When executed and delivered,
-------------------
the Pledge Agreements (and/or, as applicable, in the case of the Canadian
Borrower or the Canadian Subsidiary Loan Parties, the making of requisite
filings or registrations) will be effective to create in favor of the applicable
Collateral Agent, for the ratable benefit of the applicable Secured Parties or
Canadian Secured Parties, a legal, valid and enforceable security interest in
the Collateral (as defined in the applicable Pledge Agreement) and, when the
portion of the Collateral constituting certificated securities (as defined in
the
98
Uniform Commercial Code or such other local law as may apply) is delivered to
the applicable Collateral Agent (and/or, as applicable, in the case of the
Canadian Borrower or the Canadian Subsidiary Loan Parties, the requisite filings
or registrations are made), the Pledge Agreements shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgor thereunder in such Collateral, in each case prior and
superior in right to any other Person.
(b) The Security Agreements are effective to create in favor of the
applicable Collateral Agent, for the ratable benefit of the applicable Secured
Parties or Canadian Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the applicable Security Agreement)
and, when financing statements or such other filings required by local law in
appropriate form are filed in the appropriate filing offices (which, for the
U.S. Subsidiary Loan Parties as of the Effective Date, are the offices specified
on Schedule 6 to the Perfection Certificate), the Security Agreements shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such Collateral to the extent
perfection can be obtained by filing, recording or registering a security
agreement, financing statement or analogous document in the United States or
Canada (other than under vehicle certificate of title statutes), in each case
prior and superior in right to any other Person other than with respect to the
rights of Persons pursuant to Liens expressly permitted by Section 6.03.
(c) When the U.S. Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the security
interest created thereunder shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the U.S. Security Agreement) in which a
security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office, as
applicable, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Liens expressly permitted
by Section 6.03 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a Lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
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ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The consolidation, amendment and
---------------
restatement of the Existing Credit Agreements as provided herein and the
obligations of the Lenders to make Loans (including the obligations of the Term
Lenders to purchase Existing Term Loans and Assigned Debt) and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective until the
date on which each of the following conditions is satisfied (or waived in
accordance with Section 9.02):
(a) The U.S. Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
U.S. Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The U.S. Administrative Agent shall have received a favorable
written opinion (addressed to the Agents and the Lenders and dated the
Effective Date) of each of (i) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the
Loan Parties, substantially in the form of Exhibit H-1, (ii) ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq., counsel for the Loan Parties, substantially in the form of
Exhibit H-2, and (iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇, counsel for the Canadian Subsidiary
Loan Parties, substantially in the form of Exhibit H-3 and, in the case of
each such opinion required by this paragraph, covering such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as the
Agents or the Required Lenders shall reasonably request. Each of Holdings
and the Borrowers hereby request such counsel to deliver such opinions.
(c) The U.S. Administrative Agent shall have received such documents
and certificates as the U.S. Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of Holdings, the Borrowers and such other Loan Parties as to which
documents and certificates are reasonably requested by the U.S.
Administrative Agent or its counsel, the authorization of the Transactions
and any other legal matters relating to the Loan Parties, the Loan
Documents or the Transactions, all in
100
form and substance satisfactory to the U.S. Administrative Agent and its
counsel.
(d) The U.S. Administrative Agent shall have received a certificate,
in a form reasonably acceptable to the U.S. Administrative Agent, dated the
Effective Date and signed by the Chief Executive Officer, the President, a
Vice President or a Financial Officer of Holdings and the U.S. Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and
(b) of Section 4.02.
(e) The Agents shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses (including
fees, charges and disbursements of counsel) required to be reimbursed or
paid by any Loan Party hereunder or under any other Loan Document.
(f) The Collateral and Guarantee Requirement shall have been
satisfied and the Agents shall have received a completed Perfection
Certificate dated the Effective Date and signed by an officer of Holdings
and the U.S. Borrower, together with all attachments contemplated thereby,
including (i) the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the
jurisdictions agreed upon by the Agents and the U.S. Borrower, (ii) copies
of the financing statements (or similar documents) disclosed by such
search, (iii) evidence reasonably satisfactory to the Agents that the Liens
indicated by such financing statements (or similar documents) are permitted
by Section 6.02 or have been released (other than with respect to such
Liens that are in the process of being released, as separately agreed upon
between Holdings and the applicable Administrative Agent), (iv) to the
extent requested by the Agents, copies of all documents required to effect
security under the Bank Act (Canada), (v) to the extent requested by the
Agents, a copy of the hypothec on movables entered into by the Canadian
Borrower with respect to security granted in the province of Quebec, (vi)
to the extent requested by the Agents, acknowledgments from each person
named as a secured party in any financing statement or other security
registration in respect of the Canadian Borrower or any Canadian Subsidiary
(A) disclosing the scope of the security interest perfected by such
financing statement or other registration; (B) establishing that such
security interest is permitted
101
by Section 6.02; and (C) providing that such secured party cannot rely upon
such financing statement or other registration to perfect a security
interest other than as permitted by Section 6.02 and (vii) to the extent
requested by the Agents, acknowledgments from GE Capital Canada Leasing
Services Inc., ABN Amro Leasing (a division of ABN Amro Bank Canada) and
Corporation Alter Moneta/Alter Moneta Corporation in favor of the Canadian
Collateral Agent that they continue to be bound by the existing
intercreditor agreements entered into by them with Bank of America (Canada)
notwithstanding the amendment and restatement of the credit agreement and
the security agreement.
(g) The U.S. Administrative Agent shall have received evidence that
the insurance required by Section 5.07 and the Security Documents is in
effect.
(h) The Agents shall be reasonably satisfied as to the amount and
nature of any environmental and employee health and safety exposures to
which Holdings and the Subsidiaries may be subject after giving effect to
the Transactions and the other transactions contemplated hereby, and with
the plans of Holdings or such Subsidiaries with respect thereto.
(i) All amounts accrued and owing under the Existing Credit
Agreements shall be paid (other than Existing Term Loans, Assigned Debt and
reimbursement obligations in respect of Existing Letters of Credit to the
extent such Existing Letters of Credit have not yet been drawn) prior to or
concurrently with the initial Borrowing hereunder on the Effective Date,
and the U.S. Administrative Agent shall have received satisfactory evidence
of the foregoing.
(j) The Lenders shall be satisfied that the aggregate amount of fees
and expenses incurred by Holdings and the Subsidiaries in connection with
the Loan Documents shall not exceed $15,000,000.
(k) The U.S. Borrower shall have received gross cash proceeds of not
less than $300,000,000 (before deducting the initial purchasers' discount)
from the issuance of the Senior Notes in a public offering or in a private
placement to one or more holders satisfactory to the U.S. Administrative
Agent. The terms and conditions of the Senior Notes and the provisions of
the Senior Note Documents shall be satisfactory in all respects to the
Lenders. The U.S. Administrative Agent shall have received copies of the
Senior Note
102
Documents, certified by the chief financial officer of the U.S. Borrower as
complete and correct.
(l) All material consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Transactions and the other transactions contemplated hereby shall have been
obtained, and all applicable waiting periods and appeal periods shall have
expired, in each case without the imposition of any burdensome conditions
on the Transactions or the other transactions contemplated hereby and there
shall be no governmental or judicial action, actual or threatened, that
could reasonably be expected to restrain, prevent or impose burdensome
conditions on the Transactions or the other transactions contemplated
hereby.
(m) The U.S. Administrative Agent shall have received a pro forma
consolidated balance sheet of Holdings as of a recent date, giving effect
to the Transactions.
(n) After giving effect to the Transactions and the other
transactions contemplated hereby, neither Holdings nor any Subsidiary shall
have outstanding any shares of preferred stock or any Debt, other than (i)
Debt incurred under the Loan Documents, (ii) the Senior Notes, (iii) Debt
pursuant to a Securitization Transaction permitted hereunder, (iv) the
Existing Synthetic Leases, (v) the Subordinated Debt, (vi) QuIPS
Debentures, (vii) QuIPS Preferred Securities, (viii) Holdings's Series A
Perpetual Convertible Preferred Stock, issued on January 7, 1999, (ix)
Holdings's Series B Perpetual Convertible Preferred Stock, issued on
September 30, 1999, and (x) other Debt and preferred stock existing on the
date hereof and set forth in Schedule 6.02. The terms and conditions of
all Debt set forth in Schedule 6.02 shall be satisfactory in all respects
to the Lenders.
(o) The U.S. Administrative Agent shall have received a solvency
certificate from the chief financial officer of Holdings, in form and
substance satisfactory to the U.S. Administrative Agent, together with such
other evidence reasonably requested by the Lenders, confirming the solvency
of Holdings and the Subsidiaries on a consolidated basis after giving
effect to the Transactions and the other transactions contemplated hereby.
103
The U.S. Administrative Agent shall notify the Borrowers, the Canadian
Administrative Agent, the Collateral Agents and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, consolidation, amendment and restatement of the Existing Credit
Agreements as provided herein and the obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on April
30, 2001 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
------------------
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct in all material respects on
and as of the date of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable (other than
representations and warranties that relate to a specific earlier date, so
long as such representations and warranties were true and correct in all
material respects as of such earlier date).
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Borrower on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
104
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Holdings and the
Borrowers covenants and agrees with the Lenders and the Issuing Bank that:
SECTION 5.01. Financial Statements and Other Information. The U.S.
-------------------------------------------
Borrower will furnish to the U.S. Administrative Agent (for delivery to the
Lenders):
(a) within 90 days after the end of each Fiscal Year of Holdings, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows (and its unaudited consolidating
balance sheet and related statements of operations) as of the end of and
for such year, setting forth in each case in comparative form the figures
for the previous Fiscal Year, all reported on (in the case of such audited
consolidated statements) by Ernst & Young LLP or other independent public
accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception
as to the scope of such audit), together with a certificate from the chief
financial officer of Holdings to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Holdings and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of Holdings, its consolidated balance sheet
and related statements of operations, stockholders' equity and cash flows
as of the end of and for such Fiscal Quarter and the then elapsed portion
of the Fiscal Year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous Fiscal Year, all certified by
a Financial Officer as presenting fairly in all material respects the
financial condition and results of operations of Holdings and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently
105
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, (i) a certificate of a Financial Officer (A)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (B) setting forth reasonably detailed
calculations demonstrating compliance with Section 6.01 and (C) stating
whether any change in GAAP or in the application thereof that has a
material effect on the financial statements referred to in clause (a) or
(b) above has occurred since the date of the audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate and (ii) an updated organizational chart
listing all Subsidiaries and the locations of their businesses;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(e) as soon as practicable and in any event within 60 days after the
commencement of each Fiscal Year, financial projections for Holdings and
the Subsidiaries for such Fiscal Year prepared in a manner consistent with
those projections delivered by the U.S. Borrower to the Lenders prior to
the Effective Date or otherwise in a manner satisfactory to the U.S.
Administrative Agent;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials (other
than on Form S-8) filed by Holdings or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national securities
exchange, or distributed by Holdings to its shareholders generally, as the
case may be; provided that the filing of such reports, proxy statements and
--------
other materials with the Securities and Exchange Commission
106
through ▇▇▇▇▇ shall be deemed to satisfy the requirements of this paragraph
(f); and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs, financial condition and
prospects of Holdings or any Subsidiary, or compliance with the terms of
any Loan Document, as any Agent or any Lender (through an Agent) may
reasonably request.
SECTION 5.02. Notices of Material Events. Holdings and the U.S.
---------------------------
Borrower will furnish to the Agents (for delivery to the Lenders) prompt written
notice of the following upon becoming aware thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting
Holdings, the Borrowers or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(d) any other development that results in, or any other developments
(other than a change in general market or industry conditions) that could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 5.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of Holdings or the
U.S. Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) Holdings and the
---------------------------------
U.S. Borrower will furnish to the U.S. Administrative Agent prompt written
notice of any change (i) in any Loan Party's corporate name or in any trade name
used to identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
owned by it is located (including the
107
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. Holdings and the Borrowers agree not to effect or permit
any change referred to in the preceding sentence unless all filings under the
Uniform Commercial Code or otherwise that are required in order for the U.S.
Collateral Agent or the Canadian Collateral Agent, as applicable, to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral for the benefit of the Secured Parties have been
(or, within the period required by the Uniform Commercial Code or other
applicable law, are subsequently) made. Holdings and the Borrowers also agree
promptly to notify the U.S. Administrative Agent if any material portion of the
Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding Fiscal Year pursuant to clause (a) of Section
5.01, the U.S. Borrower shall deliver to the U.S. Administrative Agent a
certificate signed by an officer of the U.S. Borrower setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section.
SECTION 5.04. Existence; Conduct of Business. Holdings will, and will
-------------------------------
cause each Subsidiary to, do or cause to be done all things necessary to
preserve, renew or replace and keep in full force and effect its legal existence
and the rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of the business of Holdings
and the Subsidiaries, taken as a whole; provided that the foregoing shall not
--------
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.05.
SECTION 5.05. Payment of Obligations. Holdings will, and will cause
-----------------------
each Subsidiary to, pay its Debt and other obligations, including liabilities in
respect of Taxes, before the same shall become delinquent or in default, except
where (a)(i) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (ii) Holdings or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, (iii) such
contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (iv) the failure to make
108
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect or (b) the aggregate uninsured and unpaid amount is less
than $5,000,000 and does not include Taxes and the failure to make payment could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. Holdings will, and will,
--------------------------
subject to Section 6.05, cause each Subsidiary to, keep and maintain all
property material to the conduct of the business of Holdings and its
Subsidiaries, taken as a whole, in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.07. Insurance. Holdings will, and will cause each
----------
Subsidiary to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. Each Borrower will furnish to the Lenders, upon
reasonable request by the applicable Administrative Agent, the requested
information in reasonable detail as to the insurance so maintained. Each
Borrower shall deliver to the applicable Administrative Agent, prior to the
cancelation, modification or nonrenewal of any material such policy of
insurance, a copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the applicable Administrative Agent)
together with evidence satisfactory to the applicable Administrative Agent of
payment of the premium therefor. All insurance policies or certificates (or
certified copies thereof) with respect to such insurance shall be endorsed to
the applicable Administrative Agent's reasonable satisfaction for the benefit of
the Lenders (including by naming the applicable Administrative Agent or
Collateral Agent, as appropriate, as loss payee or additional insured, as
appropriate).
SECTION 5.08. Casualty and Condemnation. The Borrowers (a) will
--------------------------
furnish to the Agents and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any material portion
of any Collateral under power of eminent domain or by condemnation or similar
proceeding and (b) will ensure that the Net Proceeds of any such event with
respect to any Collateral (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected
109
and applied in accordance with the applicable provisions of this Agreement and
the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit Rights.
-----------------------------------------------
Holdings will, and will cause each Subsidiary to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. Holdings will, and
will cause each Subsidiary to, permit any representatives designated by the
Agents or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. Holdings will, and will cause
---------------------
each Subsidiary to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. (a) On the
--------------------------------------
Effective Date, the proceeds of the Term Loans, together with (a) the Net
Proceeds of the issuance of the Senior Notes and (b) proceeds of the U.S. $
Revolving Loans made on the Effective Date, will be used solely for (i) the
repayment (or, in the case of Existing Term Loans and Assigned Debt, the
purchase, as provided in Section 2.01(b)) of all amounts accrued and owing under
the Existing Credit Agreements and all amounts owing on the Effective Date under
a Synthetic Lease transaction with Deutsche Bank and (ii) the payment of the
fees and expenses incurred in connection with the Loan Documents in an aggregate
amount not to exceed $15,000,000.
(b) The proceeds of U.S. $ Revolving Loans (to the extent not used
pursuant to paragraph (a) above) and Additional Revolving Loans and Swingline
Loans will be used by the U.S. Borrower, and the proceeds of the C $ Revolving
Loans will be used by the Canadian Borrower, for general corporate purposes,
including repayment of indebtedness, acquisitions, investments, loans, purchases
of Equity Interests and other payments permitted under this Agreement.
(c) Letters of credit will be used by the U.S. Borrower for general
corporate purposes.
110
(d) No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.
SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary
------------------------
is formed or acquired (or any Excluded Subsidiary ceases to be an Excluded
Subsidiary or any Canadian Subsidiary becomes a Canadian Subsidiary Loan Party)
after the Effective Date, Holdings will promptly (a) notify the applicable
Administrative Agent thereof and (b) cause the Collateral and Guarantee
Requirement to be satisfied with respect to such Subsidiary (if it is a
Subsidiary Loan Party) and with respect to any Equity Interest in or Debt of
such Subsidiary owned by or on behalf of any Loan Party.
SECTION 5.13. Further Assurances. (a) Holdings will, and will cause
-------------------
each Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings and
other documents), that may be required under any applicable law, or that the
applicable Collateral Agent or the Required Lenders may reasonably request, to
cause the Collateral and Guarantee Requirement to be and remain satisfied, all
at the expense of the Loan Parties. Holdings will, and will cause each
Subsidiary Loan Party to, take all actions reasonably requested by the Agents in
order to terminate any Liens referred to in the last parenthetical of Section
4.01(f)(iii).
(b) If any material assets (other than real property) are acquired by
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under either Security Agreement that become subject to
the Lien of such Security Agreement upon acquisition thereof), Holdings will
notify the applicable Agents thereof, and, if requested by such Agents or the
Required Lenders, Holdings will, unless otherwise not required to hereunder or
under any Security Document, cause such assets to be subjected to a Lien
securing the relevant Obligations and will take, and cause such Subsidiary Loan
Party to take, such actions as shall be necessary or reasonably requested by
such Agents to grant and perfect such Liens, including actions described in
paragraph (a) of this Section 5.13, all at the expense of the Loan Parties.
SECTION 5.14. Interest Rate Protection. As promptly as practicable,
-------------------------
and in any event within 180 days after the Effective Date, the Borrowers will
enter into, and
111
thereafter for a period of not less than two and one-half years will maintain in
effect, one or more interest rate protection agreements as and to the extent
necessary to achieve interest rate hedging reasonably satisfactory to the
Administrative Agent and on such terms and with such parties as shall be
reasonably satisfactory to the Administrative Agent.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of Holdings and the
Borrowers covenants and agrees with the Lenders and the Issuing Bank that:
SECTION 6.01. Financial Covenants.
--------------------
(a) Minimum Interest Coverage Ratio. Holdings will not permit the
--------------------------------
Interest Coverage Ratio for any Computation Period to be less than 1.75 to
1.0.
(b) Funded Debt to Cash Flow Ratio. Holdings will not permit the
-------------------------------
Funded Debt to Cash Flow Ratio as of the last day of any Fiscal Quarter to
exceed 4.25 to 1.0.
(c) Senior Debt to Tangible Assets. Holdings will not permit the
-------------------------------
ratio of (i) Senior Debt (excluding Securitization Obligations) to (ii)
Tangible Assets (excluding, to the extent included in Tangible Assets, (A)
all assets which are owned by a Special Purpose Vehicle or subject to a
Lien in connection with a Securitization Transaction and (B) Excess
Synthetic Lease Collateral (other than Excess Synthetic Lease Collateral
securing the Existing Synthetic Leases)) to exceed 1.0 to 1.0 at any time.
(d) Senior Debt to Cash Flow Ratio. Holdings will not permit the
-------------------------------
Senior Debt to Cash Flow Ratio as of the last day of any Fiscal Quarter to
exceed 2.75 to 1.0.
SECTION 6.02. Limitations on Debt. Holdings will not, and will not
--------------------
permit any Subsidiary to, create, incur,
112
assume or suffer to exist any Debt, except (without duplication):
(a) Debt hereunder (including Incremental Term Loans incurred in
compliance with Section 2.20) and under the other Loan Documents;
(b) unsecured Debt of Holdings or any Subsidiary (excluding Contingent
Payments and Seller Subordinated Debt); provided that (i) no Subsidiary of
--------
the U.S. Borrower shall incur any such Debt if, after giving effect
thereto, the aggregate amount of all then-outstanding Debt of the
Subsidiaries of the U.S. Borrower permitted solely by this clause (b) would
exceed 25% of Net Worth, (ii) Holdings or such Subsidiary shall not incur
any such Debt if Holdings is not in compliance with all covenants set forth
in this Article VI (including compliance with Section 6.01, determined on a
pro forma basis as if any such incurrence of Debt had occurred at the
beginning of the most recent period for testing compliance therewith) and
(iii) the aggregate principal amount of Debt permitted solely by this
clause (b) plus the aggregate principal amount of Incremental Term Loans
then outstanding shall not at any time exceed $500,000,000;
(c) Debt of Holdings or any Subsidiary in respect of Capital Leases or
arising in connection with the acquisition of equipment (including Debt
assumed in connection with an asset purchase permitted by Section 6.05, or
incurred pursuant to a Capital Lease or in connection with the acquisition
of equipment by a Person before it became a Subsidiary in connection with a
stock purchase permitted by Section 6.05, in each case so long as such Debt
is not incurred in contemplation of such purchase), and refinancings of any
such Debt so long as the terms applicable to such refinanced Debt are not
materially less favorable to Holdings or the applicable Subsidiary than the
terms in effect immediately prior to such refinancing; provided that the
--------
aggregate amount of all such Debt at any time outstanding shall not exceed
$150,000,000 (or its equivalent in any other currency); provided, further,
-------- -------
that the aggregate amount of all such Debt arising in connection with Floor
Plan Financing Arrangements shall not exceed $30,000,000;
(d) Debt of Subsidiaries owed to Holdings or any Subsidiary; provided
--------
that the aggregate amount of all such Debt of Subsidiaries that are not
U.S. Loan
113
Parties owed to U.S. Loan Parties shall not cause a violation of clause
(z) of the proviso to Section 6.10;
(e) unsecured Debt of any Special Purpose Vehicle to Holdings, the
U.S. Borrower or any Subsidiary Loan Party;
(f) Subordinated Debt; provided that (i) the aggregate principal
--------
amount of all Seller Subordinated Debt at any time outstanding shall not
exceed $50,000,000 (or its equivalent in any other currency) and (ii) the
Borrowers shall not issue or incur any Debt described in clause (f) of the
definition of Subordinated Debt (x) at any time that a Default exists or
would result therefrom and (y) unless the U.S. Borrower has delivered to
the U.S. Administrative Agent (which shall promptly deliver a copy thereof
to each Lender) a certificate in reasonable detail demonstrating that,
after giving effect to such issuance or incurrence, Holdings will be in pro
forma compliance with all financial covenants set forth in this Article VI;
(g) other Debt, not of a type described in clause (c), outstanding on
the Effective Date and listed in Schedule 6.02(g), and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof;
(h) Contingent Payments; provided that Holdings shall not, and shall
--------
not permit any Subsidiary to, incur any obligation to make Contingent
Payments the maximum possible amount of which exceeds $50,000,000 (or its
equivalent in any other currency) in the aggregate for all Contingent
Payments at any time outstanding;
(i) the QuIPS Debentures, the QuIPS Preferred Securities and the QuIPS
Guarantees;
(j) Synthetic Lease Obligations; provided that the aggregate amount of
--------
all Synthetic Lease Obligations shall not at any time exceed $500,000,000;
(k) Suretyship Liabilities incurred by Holdings with respect to the
obligations of any Subsidiary;
(l) unsecured recourse obligations of Holdings or any Subsidiary in
respect of Vendor Financing Arrangements;
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(m) Hedging Obligations incurred for purposes of protection from
price, interest rate or currency fluctuations posed by bona fide debt,
contract or purchase order obligations or from changes in the price of
Holdings's stock;
(n) Debt in connection with Securitization Transactions permitted
pursuant to Section 6.13;
(o) the Senior Notes; provided that no Subsidiary will guarantee the
--------
U.S. Borrower's obligations in respect of the Senior Notes if such
Subsidiary is not a guarantor under the U.S. Subsidiary Guarantee
Agreement; and
(p) Debt of any Foreign Subsidiary or any Subsidiary referred to in
clause (d) of the definition of Excluded Subsidiaries; provided that the
--------
aggregate principal amount of all such Debt at any time outstanding
permitted by this clause (p) shall not exceed $20,000,000 (or its
equivalent in any other currency).
For purposes of clause (h) above, a Contingent Payment shall be deemed
to be "outstanding" from the time that Holdings or any Subsidiary enters into
the agreement containing the obligation to make such Contingent Payment until
such time as either such Contingent Payment has been made in full or it has
become certain that such Contingent Payment will never have to be made.
SECTION 6.03. Liens. Holdings will not, and will not permit any
------
Subsidiary to, create or permit to exist any Lien on any of its real or personal
properties, assets or rights of whatsoever nature (whether now owned or
hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety
bonds, bids, performance bonds and similar obligations)
115
for sums not overdue or being contested in good faith by appropriate
proceedings and not involving any deposits or advances or borrowed money or
the deferred purchase price of property or services, and, in each case, for
which it maintains adequate reserves;
(c) Liens identified in Schedule 6.03;
(d) Liens securing Debt permitted by clause (c) of Section 6.02 (and
attaching only to the property (i) being leased (in the case of Capital
Leases), (ii) purchased from the relevant manufacturer (in the case of
Floor Plan Financing Arrangements) or (iii) the purchase price for which
was or is being financed by such Debt (in the case of other Debt) and, in
each case, the proceeds (including insurance proceeds) of any disposition
or loss of such property);
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $15,000,000 (or its equivalent in any other currency),
arising in connection with court proceedings, provided the execution or
other enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of Holdings or
any Subsidiary;
(g) Liens in favor of the Collateral Agents arising under the Loan
Documents;
(h) Liens arising in connection with Securitization Transactions
permitted under this Agreement;
(i) Liens securing Synthetic Lease Obligations; provided that such
--------
Liens attach only to (i) the assets that are subject to the related
Synthetic Lease and (ii) Excess Synthetic Lease Collateral; and
(j) Liens securing Debt permitted by paragraph (p) of Section 6.02;
provided that such Liens attach only to the assets of Subsidiaries
--------
permitted to incur Debt under paragraph (p) of Section 6.02.
116
SECTION 6.04. Restricted Payments. Holdings will not, and will not
--------------------
permit any Subsidiary to, (a) declare or pay any dividends on any of its Equity
Interests (other than dividends payable solely by issuance of its Equity
Interests), (b) purchase or redeem any such Equity Interests or any warrants,
units, options or other rights in respect of such Equity Interests (other than
for consideration consisting of Equity Interests having terms not less favorable
to the Lenders than the terms of the Equity Interests so purchased or redeemed),
(c) make any other distribution to shareholders, (d) prepay, purchase, defease
or redeem any Subordinated Debt or Senior Notes, (e) make any payment of
principal of or interest on, or acquire, redeem or otherwise retire, or make any
other distribution in respect of, any of the QuIPS Debentures or the QuIPS
Preferred Securities or (f) set aside funds for any of the foregoing; provided
--------
that (i) any Subsidiary may declare and pay dividends to Holdings or to any
direct or indirect wholly owned Subsidiary; (ii) the U.S. Borrower may declare
and pay dividends to Holdings; (iii) any Excluded Subsidiary may declare and pay
dividends ratably with respect to its Equity Interests; (iv) the QuIPS Trust may
make a distribution of Holdings's common stock pursuant to the terms of the
QuIPS Preferred Securities or the QuIPS Debentures; (v) so long as no Default
exists or would result therefrom, Holdings may make payments on the QuIPS
Debentures and permit the QuIPS Trust to make corresponding distributions on the
QuIPS Preferred Securities in accordance with the terms of the QuIPS Indenture;
(vi) Holdings and any Subsidiary may prepay, purchase, defease or redeem, as
applicable, any such Equity Interests, Subordinated Debt or Senior Notes so long
as (x) no Default exists or would result therefrom and (y) the amount of all
such prepayments, purchases, defeasance and redemptions (excluding purchases
permitted by clause (vii) below) does not, together with the aggregate amount of
Investments made pursuant to Section 6.10(m) since the Effective Date, exceed
$250,000,000 in the aggregate since the Effective Date; and (vii) so long as (x)
no Default exists or would result therefrom and (y) the aggregate amount of all
purchases of Equity Interests, warrants or units made by Holdings (or, prior to
August 5, 1998, the U.S. Borrower) since October 1, 1997 (excluding purchases
permitted by clause (vi) above) does not exceed $12,000,000, Holdings may
purchase its common stock or warrants, or units issued in respect thereof, from
time to time on terms consistent with those set forth under the heading "Certain
Agreements Relating to the Outstanding Securities" in the U.S. Borrower's
Private Placement Memorandum dated September 12, 1997. Nothing in this Section
6.04 shall prohibit Holdings from permitting
117
the cashless exercise of any options or warrants for stock of Holdings.
SECTION 6.05. Mergers, Consolidations, Amalgamations, Sales.
----------------------------------------------
Holdings will not, and will not permit any Subsidiary to, be a party to any
merger, consolidation or amalgamation, or purchase or otherwise acquire all or
substantially all of the assets or any Equity Interests of any class of, or any
partnership or joint venture interest in, any other Person, or, except in the
ordinary course of its business (including sales or exchanges of equipment
consistent with industry practice), sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any
receivables, except for:
(a) any such merger or consolidation, amalgamation, sale, transfer,
conveyance, lease or assignment of or by any direct or indirect wholly
owned Subsidiary into Holdings or the U.S. Borrower or into, with or to any
other direct or indirect wholly owned Subsidiary; provided that (i) no
--------
Subsidiary (other than a Special Purpose Vehicle) may merge, consolidate or
amalgamate with and into a Special Purpose Vehicle such that the Special
Purpose Vehicle is the surviving entity and (ii) all sales and other
dispositions by any Subsidiary (other than a Special Purpose Vehicle) to a
Special Purpose Vehicle shall be subject to the limitations set forth in
clauses (d) and (e) below);
(b) any such purchase or other acquisition by Holdings or any direct
or indirect wholly owned Subsidiary of the assets or Equity Interests of
any direct or indirect wholly owned Subsidiary; provided that (i) purchases
--------
or acquisitions by a Special Purpose Vehicle from any Subsidiary (other
than a Special Purpose Vehicle) shall be subject to the limitations set
forth in clauses (d) and (e) below and (ii) no Special Purpose Vehicle may
purchase the Equity Interests of any Subsidiary other than another Special
Purpose Vehicle;
(c) any such purchase or other acquisition (including pursuant to a
merger or an asset exchange of like-kind property) by Holdings or any
direct or indirect wholly owned Subsidiary of the assets or the Equity
Interests of any other Person (if, in the case of Equity Interests, after
giving effect to such purchase or other acquisition, Holdings and such
Subsidiaries own 100% of the Equity Interests of such Person (other than
directors' qualifying shares or
118
similar Equity Interests)) where (1) such assets (in the case of an asset
purchase) are for use, or such Person (in the case of a purchase of Equity
Interests) is engaged, solely in the equipment rental and related
businesses, (2) immediately before and after giving effect to such purchase
or acquisition, no Default shall have occurred and be continuing, (3) such
proposed purchase or other acquisition, giving pro forma effect to the same
(as well as any related incurrence of Debt), does not cause the Funded Debt
to Cash Flow Ratio to exceed 3.75 to 1.0 and (4) the board of directors of
such Person has not announced that it will oppose such acquisition and has
not commenced any litigation which alleges that such acquisition violates
or will violate any requirement of law or any contractual obligation of
such Person;
(d) the sale, assignment or other transfer of (i) accounts receivable,
lease receivables or other rights to payment pursuant to Receivables
Securitization Transactions in an aggregate amount not to exceed
$500,000,000 at any time outstanding (determined by reference to the amount
of such receivables and other rights to payment that are outstanding at any
time) or (ii) equipment and related assets (including leases, rental
agreements, lease receivables, rights to payment and similar interests, and
other rights and assets described in the definition of Equipment
Securitization Transaction) pursuant to Equipment Securitization
Transactions; provided that (A) at the time of and after giving effect to
--------
any such sale, assignment or other transfer pursuant to clause (i) or (ii)
above (other than any such sale, assignment or other transfer ("Excluded
--------
Transfers") (1) made solely to effect a replacement or substitution of
---------
assets of equivalent value under an Equipment Securitization or (2) made at
any time if, immediately after giving effect thereto, the aggregate
Securitization Obligations outstanding under the applicable Securitization
Transaction would not exceed the largest aggregate amount of Securitization
Obligations outstanding under such Securitization Transaction at any one
time since the later of the Effective Date and the date of the then- most
recent reduction (if any) in the maximum Securitization Obligations that
may be incurred under such Securitization Transaction) Holdings and the
Borrowers shall be in compliance with the Loan Documents (including
compliance with Section 6.01, determined on a pro forma basis as if such
sale, assignment or transfer had occurred at the beginning of the most
119
recent period for testing compliance therewith) and (B) at the time of each
such sale, assignment or other transfer pursuant to clause (ii) above
(other than any Excluded Transfer) and after giving effect thereto,
Holdings and the Subsidiaries would be permitted to incur at least
$500,000,000 of additional Senior Debt (other than Securitization
Obligations) pursuant to Section 6.01(c) (without in any way limiting the
obligations of Holdings and the Borrowers to comply with the other Sections
of this Agreement);
(e) sales and dispositions of assets (including all the stock then
held by Holdings and the Subsidiaries of Subsidiaries, sales pursuant to
sale and leaseback transactions and asset exchanges of like-kind property),
in addition to sales and other dispositions in the ordinary course of
business or permitted by clause (d), so long as the net book value of (i)
all assets disposed of by Holdings and any Subsidiary (other than any ES
Special Purpose Vehicle) in like-kind exchanges in any Fiscal Year does not
exceed 5% of the net book value of the consolidated assets of Holdings and
its Subsidiaries (excluding ES Special Purpose Vehicles) as of the last day
of the preceding Fiscal Year and (ii) all other assets sold or otherwise
disposed of by Holdings and any Subsidiary (other than any ES Special
Purpose Vehicle) in any Fiscal Year does not exceed 5% of the net book
value of the consolidated assets of Holdings and its Subsidiaries
(excluding ES Special Purpose Vehicles) as of the last day of the preceding
Fiscal Year; and
(f) any such purchase or other acquisition permitted by Section
6.10(m).
SECTION 6.06. Modification of Certain Documents. Holdings will not
----------------------------------
permit the Certificate or Articles of Incorporation, By-Laws or other
organizational documents of Holdings or any Subsidiary, or any Senior Note
Document, any Subordinated Note Indenture or any other document evidencing or
setting forth the terms applicable to any Subordinated Debt, to be amended or
modified in any way which might reasonably be expected to materially adversely
affect the interests of the Lenders. The Borrower will not designate any Debt
(including the Senior Notes) as "Designated Senior Indebtedness" for purposes
of, and as defined in, any Subordinated Note Indenture, except pursuant to
Section 9.14.
SECTION 6.07. Transactions with Affiliates. Holdings will not, and
-----------------------------
will not permit any Subsidiary to,
120
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than Holdings and the
Subsidiaries) which is on terms which are less favorable than are obtainable
from any Person which is not one of its Affiliates; provided that (a) Holdings
--------
may enter into transactions with Acquisition Subsidiaries or the QuIPS Trust,
and (b) Holdings or any Subsidiary may enter into (i) employment contracts,
consulting arrangements, indemnification and reimbursement arrangements,
incentive and other compensation arrangements (including benefit plans) and
similar arrangements entered into with employees, officers and directors of
Holdings or any of the Subsidiaries, in each case in the ordinary course of
business, (ii) transactions with any Special Purpose Vehicle in connection with
any Securitization Transaction, to the extent permitted by the terms of this
Agreement and (iii) transactions permitted under clauses (i) through (v) and
(vii) of the first proviso to Section 6.04 and under 6.10(g).
SECTION 6.08. Inconsistent Agreements. Holdings will not, and will
------------------------
not permit any Subsidiary to, enter into any agreement containing any provision
which (a) would be violated or breached by the performance by Holdings or any
Subsidiary of any of its obligations hereunder or under any other Loan Document
or (b) would prohibit Holdings or any Subsidiary (other than any Excluded
Subsidiary (other than an Acquisition Subsidiary)) from granting to the
Collateral Agent, for the benefit of the Lenders, a Lien on any of its assets.
SECTION 6.09. Business Activities. Holdings will not, and will not
--------------------
permit any Subsidiary (other than the QuIPS Trust and any Special Purpose
Vehicle) to, engage in any line of business other than the equipment rental
business and businesses reasonably related thereto.
SECTION 6.10. Advances and Other Investments. Holdings will not, and
-------------------------------
will not permit any Subsidiary to, make, incur, assume or suffer to exist any
Investment in any other Person, except (without duplication) the following:
(a) Investments existing on the Effective Date in Equity Interests of
wholly owned Subsidiaries identified in Schedule 3.12;
(b) Investments in Equity Interests acquired after the Effective Date
in transactions permitted as acquisitions of Equity Interests or assets
pursuant to Section 6.05;
121
(c) in the ordinary course of business, contributions by Holdings to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the U.S.
Borrower in Holdings or in any Subsidiary or by any Subsidiary in Holdings,
the U.S. Borrower or any other Subsidiary, by way of intercompany loans,
advances or guaranties, all to the extent permitted by Section 6.02;
(e) Suretyship Liabilities permitted by Section 6.02;
(f) good faith deposits made in connection with prospective
acquisitions of Equity Interests or assets permitted by Section 6.05;
(g) loans (and Suretyship Liabilities in respect of loans) to officers
and employees not exceeding (i) $1,000,000 in the aggregate to any single
individual or (ii) $10,000,000 in the aggregate for all such individuals at
any one time outstanding;
(h) Investments by Holdings or the U.S. Borrower in Subsidiaries
(other than Special Purpose Vehicles);
(i) Investments by Holdings in the QuIPS Trust existing on the
Effective Date;
(j) Cash Equivalent Investments;
(k) Investments by Holdings or any Subsidiary in any Special Purpose
Vehicle; provided that the aggregate amount of all such Investments made in
--------
cash shall not exceed $50,000,000;
(l) purchases or redemptions by Holdings and wholly owned Subsidiaries
(other than Excluded Subsidiaries) of minority Equity Interests in Excluded
Subsidiaries that are effected pursuant to clause (vi) of the first proviso
to Section 6.04;
(m) Investments in Equity Interests of non-wholly owned Subsidiaries;
provided that the amount of such Investments, together with the aggregate
--------
amount of any prepayments, purchases, defeasances or redemptions made
pursuant to clause (vi) of the first proviso to Section 6.04, does not
exceed $250,000,000 in the aggregate since the Effective Date;
122
(n) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
and
(o) Investments to the extent made with Equity Interests (other than
Disqualified Equity Interests) of Holdings; provided that after giving
--------
effect to any such Investment, Holdings and the Subsidiaries are in
compliance with all covenants set forth in this Article VI (including
compliance with Section 6.01 determined on a pro forma basis as if such
Investment had occurred at the beginning of the most recent period for
testing compliance therewith);
provided that (x) any Investment which when made complies with the requirements
--------
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; and (y) no Investment otherwise permitted by clause (b),
(e), (f), (g) or (k) shall be permitted to be made if, immediately before or
after giving effect thereto, any Default shall have occurred and be continuing;
and (z) the aggregate amount of Investments by U.S. Loan Parties in Subsidiaries
(other than Special Purpose Vehicles) that are not U.S. Loan Parties shall not
at any time exceed 20% of the consolidated assets of Holdings and its
Subsidiaries.
SECTION 6.11. Location of Assets. Holdings will not permit at any
-------------------
time more than 20% of the consolidated assets of Holdings and its Subsidiaries
to be owned by Subsidiaries (other than Special Purpose Vehicles) that are not
U.S. Loan Parties.
SECTION 6.12. QuIPS Documents. Holdings will not permit any
----------------
amendment to or modification of the QuIPS Debentures, the QuIPS Preferred
Securities, either QuIPS Guarantee or the QuIPS Indenture which, in any such
case, is adverse to the interests of the Lenders.
SECTION 6.13. Securitization Obligations. Holdings will not permit
---------------------------
any Securitization Obligation to be incurred or any sale, assignment or other
transfer of assets to be made pursuant to any Securitization Transaction if (and
to the extent that) at the time thereof and after giving effect thereto (a) in
the case of a Receivables Securitization Transaction, the aggregate amount of
accounts receivable, lease receivables and other rights to payment subject to
all Receivables Securitization Transactions would
123
exceed $500,000,000 (determined by reference to the outstanding amount thereof
at the time); (b) in the case of an Equipment Securitization Transaction (unless
the incurrence of such Securitization Obligation or the making of such sale,
assignment or other transfer relates solely to (or constitutes only) an Excluded
Transfer), Holdings and the Subsidiaries would not be permitted to incur at
least $500,000,000 of additional Senior Debt (other than Securitization
Obligations) pursuant to Section 6.01(c) (without in any way limiting the
obligation of Holdings and the Borrowers to comply with the other Sections of
this Agreement); or (c) after giving effect to any such Securitization
Transaction, Holdings and the Subsidiaries would not be in compliance with all
covenants set forth in this Article VI (including compliance with Section 6.01
(unless the incurrence of such Securitization Obligation or the making of such
sale, assignment or other transfer relates solely to (or constitutes only) an
Excluded Transfer), determined on a pro forma basis as if such Securitization
Transaction had occurred at the beginning of the most recent period for testing
compliance therewith).
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) either Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) either Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article VII) payable under this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on behalf
of Holdings or any Subsidiary in or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, or in any
report, certificate, financial statement or other document furnished
pursuant to or in
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connection with any Loan Document or any amendment or modification thereof
or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;
(d) Holdings or either Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of Holdings or either Borrower) or 5.11 or in
Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article VII), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the applicable Administrative Agent to Holdings (which notice will be given
at the request of any Lender);
(f) Holdings or any Subsidiary (other than a Special Purpose Vehicle)
shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Debt (excluding
Holdbacks), when and as the same shall become due and payable (subject to
the expiration of any applicable grace period); or any failure of payment
of the type referred to above shall occur under the terms of any Holdback
owed by Holdings or any Subsidiary (other than a Special Purpose Vehicle)
that in the aggregate (for all Holdbacks so affected) constitute Material
Debt; provided that no amount payable in respect of any Holdback shall be
--------
deemed to be in default to the extent that the obligation to pay such
amount is being contested by Holdings or the applicable Subsidiary in good
faith and by appropriate proceedings and appropriate reserves have been set
aside in respect of such amount;
(g) any event or condition occurs that results in any Material Debt
(excluding Holdbacks and other than the Material Debt of a Special Purpose
Vehicle) becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both)
the holder or holders of any Material Debt (excluding Holdbacks and other
than the Material Debt of a Special Purpose Vehicle) or any trustee or
agent on its or their behalf to cause any Material Debt (excluding
Holdbacks and other than the Material Debt of a Special Purpose Vehicle) to
become due, or to require the prepayment,
125
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Debt
--------
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Debt; or any event or condition of the
type referred to above shall occur under the terms of any Holdback owed by
Holdings or any Subsidiary (other than a Special Purpose Vehicle) that in
the aggregate (for all Holdbacks so affected) constitute Material Debt;
provided that no amount payable in respect of any Holdback shall be deemed
--------
to be in default to the extent that the obligation to pay such amount is
being contested by Holdings or the applicable Subsidiary in good faith and
by appropriate proceedings and appropriate reserves have been set aside in
respect of such amount; or Holdings or any Subsidiary (other than a Special
Purpose Vehicle) shall be required to purchase, or any Person shall be
entitled (with or without the giving of notice, the lapse of time or both)
to require Holdings or any such Subsidiary to purchase, any assets for a
purchase price exceeding $15,000,000 previously sold by Holdings or any
Subsidiary pursuant to a Securitization Transaction;
(h) default in the payment when due, or in the performance or
observance of, any material obligation of, or condition agreed to by,
Holdings or any Subsidiary (other than a Special Purpose Vehicle) with
respect to any material purchase or lease of goods or services where such
default, singly or in the aggregate with other such defaults might
reasonably be expected to have a Material Adverse Effect (except only to
the extent that the existence of any such default is being contested by
Holdings or such Subsidiary in good faith and by appropriate proceedings
and appropriate reserves have been made in respect of such default);
(i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Holdings or any Subsidiary (other than a Special
Purpose Vehicle) or its debts, or of a substantial part of its assets,
under any federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for Holdings or any Subsidiary (other than a Special Purpose Vehicle) or
for a substantial part of its assets, and, in any such case, such
proceeding or
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petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(j) Holdings or any Subsidiary (other than a Special Purpose Vehicle)
shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (i) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings or any Subsidiary (other than a Special Purpose
Vehicle) or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(k) Holdings or any Subsidiary (other than a Special Purpose Vehicle)
shall become unable, admit in writing its inability or fail generally to
pay its debts as they become due;
(l) one or more final judgments for the payment of money in an
aggregate amount in excess of $15,000,000 (or its equivalent in any other
currency) shall be rendered against Holdings, any of its Subsidiaries
(other than a Special Purpose Vehicle) or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of
Holdings or any Subsidiary (other than a Special Purpose Vehicle) to
enforce any such judgment;
(m) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
(n) any Security Document or Guarantee Agreement, or any material
provision of any Security Document or Guarantee Agreement, shall cease to
be in full force or effect (other than pursuant to the terms hereof or
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thereof or as a result of acts or omissions of the Agents or any Lender) or
any Loan Party shall deny or disaffirm in writing such Loan Party's
Obligations under any Security Document or Guarantee Agreement;
(o) any Lien purported to be created under any of the Security
Documents shall cease to be, or shall be asserted by any Loan Party not to
be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document and within the time period
specified in the applicable Security Document, except (i) as a result of
the sale or other disposition of the applicable Collateral in a transaction
permitted under the applicable Loan Documents or (ii) as a result of the
applicable Collateral Agent's failure to maintain possession of any stock
certificates, promissory notes, certificates of title or other instruments
delivered to it under any Loan Document;
(p) a Change in Control shall occur; or
(q) any event or condition described in clause (f), (g), (h), (i),
(j), (k) or (l) occurs with respect to any Subsidiary that is a Special
Purpose Vehicle that would constitute an Event of Default under such clause
if Special Purpose Vehicles were not excluded therefrom, unless (i) such
Special Purpose Vehicle is an "Unrestricted Subsidiary" as defined in the
Subordinated Note Indentures and the U.S. Borrower is in compliance with
the last paragraph of Section 10.18(a) of the Subordinated Note Indentures
(other than any non-compliance solely as a result of the existence of this
clause (q)) and (ii) neither Holdings nor any other Subsidiary (other than
a Special Purpose Vehicle) is liable for any Material Debt of such Special
Purpose Vehicle;
then, and in every such event (other than an event with respect to either
Borrower described in clause (i) or (j) of this Article VII), and at any time
thereafter during the continuance of such event, the U.S. Administrative Agent
may, and at the request of the Required Lenders shall, by notice to the U.S.
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans (including the face amount of
B/As and B/A Equivalent Notes) then outstanding to be due and payable in whole
(or in part, in which case any principal not so declared to be due and payable
may thereafter be declared to be due and payable),
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and thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers; and in case of any event with respect to either
Borrower described in clause (i) or (j) of this Article VII, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
ARTICLE VIII
The Administrative Agents and the Collateral Agents
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Each of the Lenders and the Issuing Bank hereby irrevocably appoints
each Agent as its agent and authorizes each Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The Canadian Collateral Agent hereby agrees to act as the
fonde de pouvoir (i.e., holder of the power of attorney) of the Canadian Secured
----
Parties to the extent necessary or desirable for the purposes of creating,
maintaining or enforcing any security interest created or established or to be
created or established under any of the Canadian Security Documents including
entering into the Canadian Security Documents and exercising all or any of the
rights, powers, trusts or duties conferred upon the Canadian Collateral Agent
therein or conferred upon the Canadian Collateral Agent hereunder with respect
to such security interest, and each Canadian Secured Party by executing this
Credit Agreement accepts the Canadian Collateral Agent as the fonde de pouvoir
of such Canadian Secured Party for such purposes.
Each bank serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
Holdings, the Borrowers or any Subsidiary or other Affiliate thereof as if it
were not an Agent hereunder.
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The Agents shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agents shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agents shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agents are required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) and (c) except as expressly set forth in the Loan Documents, the
Agents shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Holdings, either Borrower or
any of the Subsidiaries that is communicated to or obtained by such Agent or any
of its Affiliates in any capacity. No Agent shall be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or wilful misconduct. No Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given to
such Agent by Holdings, either Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for
either Borrower), independent accountants and
130
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.
Either Collateral Agent may (and shall at the request of any Loan
Party), without the approval of any other Secured Party, (a) release any
Collateral under any Security Document which is permitted to be sold or disposed
of or otherwise released pursuant to this Agreement and execute and deliver such
releases as may be necessary to terminate of record such Collateral Agent's
security interest in such Collateral, (b) release any Loan Party from its
obligations under the applicable Guarantee Agreement if such Loan Party ceases
to be a Subsidiary pursuant to a transaction which is permitted under this
Agreement and (c) subordinate the interest of such Collateral Agent in any
Collateral to the holder of any Lien on such Collateral which is permitted by
clause (d), (h) or (i) of Section 6.03. In determining whether any such release
or subordination is permitted under this Agreement, each Collateral Agent (i)
may rely, as to factual matters, on a certificate from either Borrower and (ii)
may (but shall not be obligated to) seek (and, if obtained, rely upon)
instructions from the Required Lenders. In addition, the Collateral Agents may
release all Collateral upon receipt of written notice from the Administrative
Agents that all obligations of the Loan Parties hereunder and under the other
Loan Documents have been paid in full (other than contingent obligations (A) in
respect of Letters of Credit which have been cash collateralized or otherwise
provided for to the satisfaction of the Issuing Bank and (B) arising under
provisions of this Agreement which by their terms survive termination hereof)
and all Commitments have been terminated.
Each Agent may perform any of and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by such
Agent. Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such sub-
agent and to the Related Parties of each Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as an Agent.
Any Agent may resign at any time upon 30 days' notice to the Lenders,
the Issuing Bank and the Borrowers. Upon any such resignation, the Required
Lenders shall, with (so long as no Default exists) the consent of the U.S.
131
Borrower (which consent shall not be unreasonably withheld or delayed), have the
right to appoint a successor; provided that, in the case of the resignation of
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the Canadian Administrative Agent or the Canadian Collateral Agent, Lenders
holding a majority of the C $ Revolving Loans shall, with (so long as no Default
exists) the consent of the Canadian Borrower (which consent shall not be
unreasonably withheld or delayed), have such right. If no successor shall have
been so appointed by the Required Lenders (or the C $ Revolving Lenders, in the
case of the Canadian Administrative Agent or the Canadian Collateral Agent) and
shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank having a
combined capital and surplus of at least $500,000,000 (or in the case of a
successor to the Canadian Administrative Agent or the Canadian Collateral Agent,
a Canadian bank with an office in Toronto having a combined capital and surplus
of at least $500,000,000). Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the applicable Borrower to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
applicable Borrower and such successor. After the applicable Agent's resignation
hereunder, the provisions of this Article VIII and Section 9.03 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as an Agent. If no successor Agent has
accepted appointment as the applicable Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders (or,
in the case of the Canadian Administrative Agent and the Canadian Collateral
Agent, the C $ Revolving Lenders) shall perform all of the duties of such Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
Agent as provided for above.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without
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reliance upon any Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices. Except in the case of notices and other
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communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Holdings, the U.S. Borrower or the Canadian Borrower, to it
at c/o United Rentals, Inc., Five ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention of Chief Financial Officer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the U.S. Administrative Agent, to The Chase Manhattan Bank,
Loan and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (Telecopy No. (212) 552-
5662), with a copy to The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to either Collateral Agent, to Bank of America, N.A., Agency
Management, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(d) if to the Canadian Administrative Agent, to The Chase Manhattan
Bank of Canada, 1 First Canadian Place, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ M5X 1A4, and with respect to any funding and/or
repayment-related notice, Attention of Funding Officer (Telecopy No. (416)
216-4162), and with respect to any other notice, Attention of Vice
President, Portfolio Management (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
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(e) if to the Issuing Bank, to The Chase Manhattan Bank, 55 Water
Street, 17th Floor, Room 1708, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of
Standby LC Department (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇-▇▇▇▇);
(f) if to the Swingline Lender, to The Chase Manhattan Bank, Loan and
Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(g) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by any
--------------------
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of any Agent, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
any Agent, any Lender or the Issuing Bank may have had notice or knowledge of
such Default at the time.
(b) Except as provided in Section 2.20 with respect to an Incremental
Facility Amendment or Section 2.24 with respect to an increase in the C $
Revolving Commitments, neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived,
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amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by Holdings, the Borrowers and
the Required Lenders or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the applicable Agent, and the
Loan Party or Loan Parties that are parties thereto, in each case with the
consent of the Required Lenders; provided that no such agreement shall (i)
--------
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) or 2.11(e) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
9.02(b) or the definition of "Required Lenders", "Majority Lenders" or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) release any Loan Party from its guarantee under the applicable
Guarantee Agreement (except as expressly provided therein) or release the U.S.
Borrower from its Guaranty set forth in Article XI, or limit such Loan Party's
or the U.S. Borrower's liability in respect of such Guarantee Agreement or
Guaranty, as the case may be, without the written consent of each Lender, (vii)
release all or substantially all of the Collateral from the Liens of the
Security Documents (except as expressly provided therein), without the written
consent of each Lender, (viii) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments due
to Lenders holding Loans of any Class differently than those holding Loans of
any other Class, without the written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each affected Class,
or (ix) change Section 2.10(c), or change Section 2.11(c) in a manner that would
alter the order of the application of the payments contemplated by the second
sentence thereof, without the written consent of Lenders holding a majority in
interest of Term Loans; provided, further, that (A) no such agreement
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135
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agents, the Issuing Bank or the Swingline Lender without the
prior written consent of the applicable Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the U.S. $ Revolving Lenders (but not the Term Loan
Lenders, the Incremental Term Lenders, the C $ Revolving Lenders and the
Additional Revolving Lenders), the C $ Revolving Lenders and Additional
Revolving Lenders (including any change in the identity of the Canadian
Borrower)(but not the U.S. $ Revolving Lenders, the Term Loan Lenders and the
Incremental Term Lenders), the Term Loan Lenders (but not the Revolving Lenders,
the Additional Revolving Lenders, the C $ Revolving Lenders or the Incremental
Term Lenders) or the Incremental Term Lenders (but not the Revolving Lenders,
the Additional Revolving Lenders, the C $ Revolving Lenders or the Term Loan
Lenders) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrowers and the requisite percentage in interest of the
affected Class of Lenders. Notwithstanding the foregoing, any provision of this
Agreement may be amended by an agreement in writing entered into by Holdings,
the Borrowers, the Required Lenders and each Agent (and, if their rights or
obligations are affected thereby, the Issuing Bank and the Swingline Lender) if
(i) by the terms of such agreement the Commitment of each Lender not consenting
to the amendment provided for therein shall terminate (but such Lender shall
continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03)
upon the effectiveness of such amendment and (ii) at the time such amendment
becomes effective, each Lender not consenting thereto receives payment in full
of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement and is
released from its obligations hereunder. In connection with any proposed
amendment, modification, waiver or termination (a "Proposed Change") requiring
---------------
the consent of all affected Lenders, if the consent of the Required Lenders to
such Proposed Change is obtained, but the consent to such Proposed Change of
other Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.02(b) being referred to
as a "Non-Consenting Lender"), then, so long as the Lender that is acting as the
---------------------
U.S. Administrative Agent is not a Non-Consenting Lender, at the Borrower's
request, the U.S. Administrative Agent or another assignee that is acceptable to
the U.S. Administrative Agent shall have the right with the U.S. Administrative
Agent's consent and in the U.S. Administrative Agent's sole discretion (but
shall have no
136
obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting
Lender agrees that it shall, upon the U.S. Administrative Agent's request, sell
and assign to the Lender that is acting as the Administrative Agent or such
other assignee, all of the Commitments, Term Loans and Revolving Exposures of
such Non-Consenting Lender for an amount equal to the principal balance of all
Term Loans and Revolving Loans (and funded participations in Swingline Loans and
unreimbursed LC Disbursements) held by the Non-Consenting Lender and all accrued
interest and fees with respect thereto through the date of sale, such purchase
and sale to be consummated pursuant to an executed Assignment and Acceptance in
accordance with Section 9.04(b).
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
-----------------------------------
shall pay (i) all reasonable out-of-pocket expenses incurred by each Agent and
its Affiliates, including the reasonable fees, charges and disbursements of one
counsel in each relevant jurisdiction (unless the U.S. Borrower consents to more
than one counsel) for each of (A) the Administrative Agents and (B) the
Collateral Agents, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out-of-pocket expenses incurred
by any Agent, the Issuing Bank or any Lender, including the reasonable fees,
charges and disbursements of counsel for each Agent, the Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section
9.03, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrowers shall indemnify the Agents, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
----------
from, any and all losses, claims, damages, liabilities and related expenses,
including the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Loan
Document or any other agreement or
137
instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by Holdings or any Subsidiary, or any Environmental Liability
related in any way to Holdings or any Subsidiary, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
--------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that either Borrower fails to pay any amount
required to be paid by it to any Agent, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section 9.03, each Lender severally agrees to
pay to such Agent, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender's pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
--------
liability or related expense, as the case may be, was incurred by or asserted
against such Agent, the Issuing Bank or the Swingline Lender in its capacity as
such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures, outstanding
Term Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Holdings nor
the Borrowers shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
138
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
(f) Notwithstanding the foregoing, the Canadian Borrower shall not
have any liability pursuant to this Section 9.03 other than to the Canadian
Administrative Agent, the Canadian Collateral Agent and the C $ Revolving
Lenders (and assignees thereof pursuant to Section 9.04 or 10.01)
SECTION 9.04. Successors and Assigns. (a) The provisions of this
-----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that
neither Holdings nor the Borrowers may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by Holdings or either Borrower without
such consent shall be null and void)(except as contemplated by the second
parenthetical in clause (B) of the second proviso to Section 9.02(b)). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it); provided that (i)
--------
except in the case of an assignment to a Lender or a Lender Affiliate of any
Lender, each of the U.S. Borrower and, if applicable, the Canadian Borrower, and
either the U.S. Administrative Agent or the Canadian Administrative Agent (and,
in the case of an assignment of all or a portion of a U.S. $ Revolving
Commitment or any Lender's obligations in respect of its LC Exposure or
Swingline Exposure, the Issuing Bank and the Swingline Lender) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment to a
Lender or a Lender Affiliate of any Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment or Loans, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the
139
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than (A) $1,000,000, in the case of an
assignment of Term Loans or Term Loan Commitments, or (B) $5,000,000, in the
case of an assignment of Revolving Loans or Revolving Commitments, in each case
unless each of the U.S. Borrower and the U.S. Administrative Agent, or the
Canadian Borrower and the Canadian Administrative Agent, as applicable,
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, except that, subject to clause (vi), this clause (iii)
shall not be construed to prohibit the assignment of a proportionate part of all
the assigning Lender's rights and obligations in respect of one Class of
Commitments or Loans, (iv) the parties to each assignment shall execute and
deliver to the applicable Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, (v) the assignee, if
it shall not be a Lender, shall deliver to the applicable Administrative Agent
an Administrative Questionnaire and (vi) each assignment by a C $ Revolving
Lender (or, in the case of a C $ Revolving Lender that is not a Canadian
Schedule I chartered bank, its Designated U.S. Affiliate) shall be (A) to an
assignee that is able to comply with the reallocation mechanism set forth in
Section 2.23 after giving effect to such assignment, (B) to an assignee that
agrees to make (individually or together with a U.S. Affiliate) C $ Revolving
Loans and Additional Revolving Loans as required pursuant to Section 2.23 (and,
if such assignee is not a Canadian Schedule I chartered bank, such assignee must
designate in the applicable Assignment and Acceptance a U.S. Affiliate for
purposes of making Additional Revolving Loans) and (C) comprised of all or a pro
rata portion of such Lender's C $ Revolving Commitments and Additional Revolving
Commitments; provided, further, that any consent of the Borrowers otherwise
-------- -------
required under this paragraph shall not be required if an Event of Default under
Article VII has occurred and is continuing. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to
140
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) Each of the U.S. Administrative Agent and the Canadian
Administrative Agent, acting for this purpose as an agent of the applicable
Borrower, shall maintain at its address referred to in Section 9.01 a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (each, a "Register"). The
--------
entries in a Register shall be conclusive, and Holdings, the Borrowers, the
Administrative Agents, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in a Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. Each Register shall be available for inspection by the Borrowers, the
Collateral Agents, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 9.04 and any written consent to such assignment required by
paragraph (b) of this Section 9.04, the applicable Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without notice to or the consent of any party,
sell participations to one or more banks or other entities (a "Participant") in
-----------
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
--------
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations
141
and (iii) Holdings, the Borrowers, the Administrative Agents, the Issuing Bank,
the Swingline Lender and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
--------
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
applicable Borrower's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the applicable Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of such
Borrower, to comply with Section 2.17(e) and Section 2.17(f) as though it were a
Lender.
(g) In the event that S&P or ▇▇▇▇▇'▇ shall, after the date that any
Lender becomes a Revolving Lender, downgrade the long-term certificate of
deposit ratings of such Revolving Lender, and the resulting ratings shall be
BBB+ or lower, in the case of S&P, or Baa1 or lower, in the case of ▇▇▇▇▇'▇,
then the Issuing Bank shall have the right, but not the obligation, at its own
expense, upon notice to such Lender and the U.S. Administrative Agent, to
replace (or to request the U.S. Borrower to use its reasonable efforts to
replace) such Lender with an assignee (in accordance with and subject to the
restrictions contained in paragraph (b) above), and such Lender hereby agrees to
transfer and assign without representation, warranty or
142
recourse (in accordance with and subject to the restrictions contained in
paragraph (b) above) all its interests, rights and obligations in respect of its
Revolving Commitment to such assignee; provided, however, that (i) no such
-------- -------
assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the Issuing Bank or such assignee, as the case
may be, shall pay to such Lender in immediately available funds on the date of
such assignment the principal of and interest accrued to the date of payment on
the Revolving Loans made by such Lender hereunder and all other amounts accrued
for such Lender's account or owed to it hereunder (in its capacity as a
Revolving Lender).
(h) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
--------
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained in this
Section 9.04, any Lender (a "Granting Lender") may grant to a special purpose
---------------
funding vehicle (an "SPV"), identified as such in writing from time to time by
---
the Granting Lender to each Agent and the Borrowers, the option to provide to
the Borrowers all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrowers pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPV to
--------
make any Loan and (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPV hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPV shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior Debt of any SPV, it will not
institute against, or join any other person in instituting against, such SPV any
143
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States of America or any State thereof. In
addition, notwithstanding anything to the contrary in this Section 9.04, any SPV
may (i) with notice to, but without the prior written consent of, the Borrowers
or any Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Loans to the Granting Lender or to any financial
institutions (consented to by the Borrowers and each Agent) providing liquidity
and/or credit support to or for the account of such SPV to support the funding
or maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPV. As this Section 9.04(h) applies to any particular SPV, this Section may
not be amended without the written consent of such SPV.
SECTION 9.05. Survival. All covenants, agreements, representations
---------
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
-----------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents
144
and any separate letter agreements with respect to fees payable to any Agents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agents and when the U.S. Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to
-------------
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
----------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
applicable Borrower against any of and all the obligations of such Borrower now
or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have. Notwithstanding anything to the contrary
contained in any of the Loan Documents, no proceeds of the exercise of any such
lien, setoff or similar right against the Canadian Borrower or its subsidiaries
shall be applied to the payment of any amounts other than amounts owing by the
Canadian Borrower hereunder in respect of C $ Revolving Borrowings.
145
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process. (a) This Agreement shall be construed in accordance with and governed
--------
by the law of the State of New York.
(b) Each of Holdings and the Borrowers hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Agents, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against Holdings, the Borrowers or their properties in the courts
of any jurisdiction.
(c) Each of Holdings and the Borrowers hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section 9.09. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
---------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
146
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
---------
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents, the Issuing Bank
----------------
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below) and use the information only in connection with the
administration of this Agreement and the other Loan Documents or in connection
with any other extension of credit or proposed extension of credit to Holdings
or a Subsidiary by the Agents, the Issuing Bank or the Lenders, as applicable,
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors in connection with the administration of this Agreement and
the other Loan Documents, and to any direct or indirect contractual counterparty
in swap agreements or to such contractual counterparty's professional advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority or by the National Association of Insurance Commissioners, (c) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 9.12, to any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, (g) with the consent of
Holdings, (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the
147
Agents, the Issuing Bank or any Lender on a nonconfidential basis from a source
other than Holdings or the Borrowers or (i) on a confidential basis, to any
rating agency for purposes of obtaining a rating of a Lender or its obligations.
For the purposes of this Section, "Information" means all information received
-----------
from Holdings or the Borrowers relating to Holdings or either Borrower or its
business, other than any such information that is available to the Agents, the
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
Holdings or the Borrowers; provided that, in the case of information received
--------
from Holdings or the Borrowers after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section 9.12
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
-------------------------
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively, the "Charges"), shall exceed
-------
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
------------
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate (or, in the
case of amounts owed to C $ Revolving Lenders, the Canadian Prime Rate) to the
date of repayment, shall have been received by such Lender.
SECTION 9.14. Designated Senior Indebtedness. The U.S. Borrower
------------------------------
hereby designates the Loans and all other Obligations of the U.S. Borrower
hereunder and under the other Loan Documents as "Designated Senior Indebtedness"
for purposes of, and as defined in, each Subordinated Note Indenture.
148
SECTION 9.15. Judgment Currency. (a) The Borrowers' obligations
------------------
hereunder and under the other Loan Documents to make payments in Dollars or in
Canadian Dollars (the "Obligation Currency") shall not be discharged or
-------------------
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agents, the Collateral Agents or a Lender of the full amount of
the Obligation Currency expressed to be payable to such Administrative Agent,
Collateral Agent or Lender under this Agreement or the other Loan Documents. If,
for the purpose of obtaining or enforcing judgment against either of the
Borrowers or any other Loan Party in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
--------
Currency") an amount due in the Obligation Currency, the conversion shall be
--------
made, at the Dollar Equivalent of such amount, in the case of any Canadian
Dollars, and, in the case of other currencies, the rate of exchange (as quoted
by the U.S. Administrative Agent or, if the U.S. Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the U.S. Administrative Agent) determined, in each case, as of the
date immediately preceding the day on which the judgment is given (such Business
Day being hereinafter referred to as the "Judgment Currency Conversion Date").
---------------------------------
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrowers covenant and agree to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Dollar Equivalent or rate of
exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.
SECTION 9.16. Limitation on Liability. Notwithstanding anything to
------------------------
the contrary in this Agreement, the Canadian Borrower shall not have any
liability to any
149
party with respect to any representation or warranty made pursuant hereto or the
breach of any covenant set forth herein other than to the Canadian
Administrative Agent, the Canadian Collateral Agent and the C $ Revolving
Lenders (and assignees thereof pursuant to Section 9.04 or Section 10.01).
ARTICLE X
Collection Allocation Mechanism
-------------------------------
SECTION 10.01. Implementation of CAM. (a) On the CAM Exchange Date,
----------------------
(i) the Commitments shall automatically and without further act be terminated as
provided in Article VII, (ii) each U.S. $ Revolving Lender shall immediately be
deemed to have acquired (and shall promptly make payment therefor to the U.S.
Administrative Agent in accordance with Section 2.04(c)) participations in the
Swingline Loans in an amount equal to such U.S. $ Revolving Lender's Applicable
Percentage of each Swingline Loan outstanding on such date and (iii) the Lenders
shall automatically and without further act (and without regard to the
provisions of Section 9.04) be deemed to have exchanged interests in the Credit
Facilities such that in lieu of the interest of each Lender in each Credit
Facility in which it shall participate as of such date (including such Lender's
interest in the Designated Obligations of each Loan Party in respect of each
such Credit Facility), such Lender shall hold an interest in every one of the
Credit Facilities (including the Designated Obligations (including Swingline
Exposure) of each Loan Party in respect of each such Credit Facility and each LC
Reserve Account established pursuant to Section 10.02 below), whether or not
such Lender shall previously have participated therein, equal to such Lender's
CAM Percentage thereof. Each Lender and each Loan Party hereby consents and
agrees to the CAM Exchange, and each Lender agrees that the CAM Exchange shall
be binding upon its successors and assigns and any Person that acquires a
participation in its interests in any Credit Facility. Each Loan Party agrees
from time to time to execute and deliver to the U.S. Administrative Agent all
such notes and other instruments and documents as the U.S. Administrative Agent
shall reasonably request to evidence and confirm the respective interests of the
Lenders after giving effect to the CAM Exchange, and each Lender agrees to
surrender any notes originally received by it in connection with its Loans
hereunder to the U.S. Administrative Agent against delivery of new notes
evidencing its interests in the Credit Facilities; provided, however, that the
-------- -------
failure of any Loan Party to execute or deliver or of any Lender to accept any
150
such note, instrument or document shall not affect the validity or effectiveness
of the CAM Exchange.
(b) As a result of the CAM Exchange, upon and after the CAM Exchange
Date, each payment received by the Administrative Agents or the Collateral
Agents pursuant to any Loan Document in respect of the Designated Obligations,
and each distribution made by the Collateral Agents pursuant to any Security
Documents in respect of the Designated Obligations, shall be distributed to the
Lenders pro rata in accordance with their respective CAM Percentages. Any
direct payment received by a Lender upon or after the CAM Exchange Date,
including by way of setoff, in respect of a Designated Obligation shall be paid
over to the U.S. Administrative Agent or the Canadian Administrative Agent, as
applicable, for distribution to the Lenders in accordance herewith.
SECTION 10.02. Letters of Credit. (a) In the event that on the CAM
------------------
Exchange Date any Letter of Credit shall be outstanding and undrawn in whole or
in part, or any amount drawn under a Letter of Credit shall not have been
reimbursed either by the U.S. Borrower, or with the proceeds of a U.S. $
Revolving Borrowing, each U.S. $ Revolving Lender shall promptly pay over to the
U.S. Administrative Agent, in immediately available funds, an amount equal to
such U.S. $ Revolving Lender's Applicable Percentage (as notified to such Lender
by the U.S. Administrative Agent) of such Letter of Credit undrawn face amount
or (to the extent it has not already done so) such Letter of Credit unreimbursed
drawing, together with interest thereon from the CAM Exchange Date to the date
on which such amount shall be paid to the U.S. Administrative Agent at the rate
that would be applicable at the time to an ABR U.S. $ Revolving Loan in a
principal amount equal to such amount, as the case may be. The U.S.
Administrative Agent shall establish a separate account or accounts for each
Lender (each, an "LC Reserve Account") for the amounts received with respect to
------------------
each such Letter of Credit pursuant to the preceding sentence. The U.S.
Administrative Agent shall deposit in each Lender's LC Reserve Account such
Lender's CAM Percentage of the amounts received from the U.S. $ Revolving
Lenders as provided above. The U.S. Administrative Agent shall have sole
dominion and control over each LC Reserve Account, and the amounts deposited in
each LC Reserve Account shall be held in such LC Reserve Account until withdrawn
as provided in paragraph (b), (c), (d) or (e) below. The U.S. Administrative
Agent shall maintain records enabling it to determine the amounts paid over to
it and deposited in the LC Reserve Accounts in respect of
151
each Letter of Credit and the amounts on deposit in respect of each Letter of
Credit attributable to each Lender's CAM Percentage. The amounts held in each
Lender's LC Reserve Account shall be held as a reserve against the LC Exposure,
shall be the property of such Lender, shall not constitute Loans to or give rise
to any claim of or against any Loan Party and shall not give rise to any
obligation on the part of any Borrower to pay interest to such Lender, it being
agreed that the reimbursement obligations in respect of Letters of Credit shall
arise only at such times as drawings are made thereunder, as provided in Section
2.05.
(b) In the event that after the CAM Exchange Date any drawing shall
be made in respect of a Letter of Credit, the U.S. Administrative Agent shall,
at the request of the Issuing Bank, withdraw from the LC Reserve Account of each
Lender any amounts, up to the amount of such Lender's CAM Percentage of such
drawing, deposited in respect of such Letter of Credit and remaining on deposit
and deliver such amounts to the Issuing Bank, as applicable, in satisfaction of
the reimbursement obligations of the U.S. $ Revolving Lenders under Section
2.05(e) (but not of the U.S. Borrower under Section 2.05(f)). In the event any
U.S. $ Revolving Lender shall default on its obligation to pay over any amount
to the U.S. Administrative Agent in respect of any Letter of Credit as provided
in this Section 10.02, the applicable Issuing Bank shall, in the event of a
drawing thereunder, have a claim against such U.S. $ Revolving Lender to the
same extent as if such Lender had defaulted on its obligations under Section
2.05(e), but shall have no claim against any other Lender in respect of such
defaulted amount, notwithstanding the exchange of interests in the U.S.
Borrower's reimbursement obligations pursuant to Section 10.01. Each other
Lender shall have a claim against such defaulting U.S. $ Revolving Lender for
any damages sustained by it as a result of such default, including, in the event
such Letter of Credit shall expire undrawn, its CAM Percentage of the defaulted
amount.
(c) In the event that after the CAM Exchange Date any Letter of
Credit shall expire undrawn, the U.S. Administrative Agent shall withdraw from
the LC Reserve Account of each Lender the amount remaining on deposit therein in
respect of such Letter of Credit and distribute such amount to such Lender.
(d) With the prior written approval of the U.S. Administrative Agent
and the applicable Issuing Bank (not to be unreasonably withheld), any Lender
may withdraw the amount held in its LC Reserve Account in respect of the undrawn
amount of any Letter of Credit. Any Lender making such a withdrawal shall be
unconditionally obligated, in the
152
event there shall subsequently be a drawing under such Letter of Credit, to pay
over to the U.S. Administrative Agent, for the account of the Issuing Bank, on
demand, its CAM Percentage of such drawing.
(e) Pending the withdrawal by any Lender of any amounts from its LC
Reserve Account as contemplated by the above paragraphs, the U.S. Administrative
Agent will, at the direction of such Lender and subject to such rules as the
U.S. Administrative Agent may prescribe for the avoidance of inconvenience,
invest such amounts in Cash Equivalent Investments. Each Lender that has not
withdrawn its CAM Percentage of amounts in its LC Reserve Account as provided in
paragraph (d) above shall have the right, at intervals reasonably specified by
the U.S. Administrative Agent, to withdraw the earnings on investments so made
by the U.S. Administrative Agent with amounts in its LC Reserve Account and to
retain such earnings for its own account.
SECTION 10.03. Conversion. In the event the CAM Exchange Date shall
-----------
occur, Obligations owed by the Loan Parties denominated in Canadian Dollars
shall, automatically and with no further act required, be converted to
obligations of the same Loan Parties denominated in Dollars. Such conversion
shall be effected based upon the Spot Exchange Rate in effect with respect to
Canadian Dollars on the CAM Exchange Date. On and after any such conversion,
all amounts accruing and owed to any Lender in respect of its Obligations shall
accrue and be payable in Dollars at the rates otherwise applicable hereunder
(and, in the case of interest on Loans, at the default rate applicable to ABR
Loans hereunder). Notwithstanding the foregoing provisions of this Section
10.03, any Lender may, by notice to the U.S. Borrower and the U.S.
Administrative Agent prior to the CAM Exchange Date, elect not to have the
provisions of this Section 10.03 apply with respect to all Obligations owed to
such Lender immediately following the CAM Exchange Date, and, if such notice is
given, all Obligations owed to such Lender immediately following the CAM
Exchange Date shall remain designated in Canadian Dollars.
ARTICLE XI
Guaranty by the U.S. Borrower
-----------------------------
SECTION 11.01. Guaranty. The U.S. Borrower hereby absolutely,
---------
unconditionally and irrevocably guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of the principal of
and interest on each Loan made to and each promissory
153
note issued by the Canadian Borrower, and the full and punctual payment of all
other amounts payable by the Canadian Borrower under this Agreement. Upon
failure by the Canadian Borrower to pay punctually any such amount, the U.S.
Borrower shall forthwith on demand pay the amount not so paid at the place, in
the currency and in the manner specified in this Agreement. In addition (and
without limiting the foregoing), upon any Loan to the Canadian Borrower being
declared or otherwise becoming immediately due and payable pursuant to Article
VII, the U.S. Borrower shall forthwith on demand pay all amounts payable in
respect of such Loan at the place, in the currency and in the manner specified
in this Agreement.
SECTION 11.02. Guaranty Unconditional. The obligations of the U.S.
-----------------------
Borrower under this Section shall be absolute, unconditional and irrevocable
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Canadian Borrower under this Agreement
or any promissory note issued hereunder, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any promissory note issued hereunder;
(c) any release, impairment, non-perfection or invalidity of any other
guaranty or of any direct or indirect security for any obligation of the
Canadian Borrower under this Agreement or any promissory note issued
hereunder;
(d) any change in the corporate existence, structure or ownership of
the Canadian Borrower or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Canadian Borrower or the Canadian
Borrower's assets or any resulting release or discharge of any obligation
of the Canadian Borrower contained in this Agreement or any promissory note
issued hereunder;
(e) the existence of any claim, set-off or other right which the U.S.
Borrower may have at any time against the Canadian Borrower, any Agent, any
Lender or any other Person, whether in connection herewith or any unrelated
transaction; provided that nothing herein
--------
154
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the
Canadian Borrower for any reason of this Agreement or any promissory note
issued hereunder, or any provision of applicable law or regulation
purporting to prohibit the payment by the Canadian Borrower of the
principal of or interest on any Loan or promissory note issued hereunder or
any other amount payable by the Canadian Borrower under this Agreement; or
(g) any other act or omission to act or delay of any kind by the
Canadian Borrower, any Agent, any Lender or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Canadian
Borrower's obligations hereunder.
SECTION 11.03. Discharge only upon Payment in Full: Reinstatement in
-----------------------------------------------------
Certain Circumstances. The U.S. Borrower's obligations as guarantor hereunder
----------------------
shall remain in full force and effect until the Commitments shall have
terminated and all obligations of the Canadian Borrower under this Agreement and
each promissory note issued hereunder shall have been paid in full. If at any
time any payment of principal, interest or any other amount payable by the
Canadian Borrower under this Agreement or any promissory note issued hereunder
is rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Canadian Borrower or otherwise, the Canadian
Borrower's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 11.04. Waiver by the U.S. Borrower. The U.S. Borrower
----------------------------
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Canadian Borrower or any other Person.
SECTION 11.05. Subrogation. Notwithstanding any payment made by or
------------
for the account of the Canadian Borrower pursuant to this Section, the U.S.
Borrower shall not be subrogated to any right of any Agent or any Lender until
such time as the Agents and the Lenders shall have received final payment in
cash of the full amount of all obligations of the Canadian Borrower hereunder.
155
SECTION 11.06. Stay of Acceleration. If acceleration of the time for
---------------------
payment of any amount payable by the Canadian Borrower under this Agreement or
any promissory note issued hereunder is stayed upon the insolvency, bankruptcy
or reorganization of the Canadian Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement shall nonetheless be payable
by the U.S. Borrower hereunder forthwith on demand by the U.S. Administrative
Agent made at the request of the Required Lenders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
UNITED RENTALS, INC.,
by
_________________________
Name:
Title:
UNITED RENTALS (NORTH AMERICA), INC.,
by
_________________________
Name:
Title:
UNITED RENTALS OF CANADA, INC.,
by
_________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
U.S. Administrative Agent,
by
_________________________
Name:
Title:
BANK OF AMERICA, N.A., individually
and as U.S. Collateral Agent,
by
_________________________
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA,
individually and as Canadian
Administrative Agent,
by
_________________________
Name:
Title:
BANK OF AMERICA CANADA,
individually and as Canadian
Collateral Agent,
by
_________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON,
individually and as Documentation
Agent,
by
_________________________
Name:
Title:
by
_________________________
Name:
Title:
FLEET NATIONAL BANK,
individually and as Documentation
Agent,
by
_________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
individually and as Documentation
Agent,
by
_________________________
Name:
Title:
Name of Institution:
______________________________
by
______________________________
Name:
Title:
EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to Amended and Restated Credit Agreement
dated as of April 20, 2001 (as amended and in effect from time to time, the
"Credit Agreement"), among United Rentals, Inc. ("Holdings"), United Rentals
---------------- --------
(North America), Inc. (the "U.S. Borrower"), United Rentals of Canada, Inc., the
------------
Lenders party thereto, The Chase Manhattan Bank, as U.S. administrative agent
(the "U.S. Administrative Agent") and The Chase Manhattan Bank of Canada, a
--------------------------
Canadian chartered bank, as Canadian Administrative Agent (the "Canadian
--------
Administrative Agent"). Each term used but not defined herein has the meaning
--------------------
assigned to such term in the Credit Agreement.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned Interest")
-----------------
in the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the percentages and amounts set forth on the reverse hereof
of (a) the Commitments of the Assignor on the Effective Date, (b) the Loans
owing to the Assignor that are outstanding on the Effective Date and (c)
participations in Letters of Credit acquired from the Issuing Bank that are
outstanding on the Effective Date. Each of the Assignor and the Assignee hereby
makes and agrees to be bound by all the representations, warranties and
agreements set forth in Section 9.04(b) of the Credit Agreement, a copy of which
has been received by each such party. The Assignor represents and warrants that
the Assignor has legal and beneficial ownership of the Assigned Interest
assigned by it hereunder and that such Assigned Interest has not been sold or
transferred and is not subject to any participating interest, lien or
encumbrance (except for participating interests, liens or encumbrances that will
terminate upon the assignment provided for herein). From and after the Effective
Date, (a) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests assigned by this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and under
the Loan Documents and (b) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement (and in the event that
this Assignment and Acceptance covers all or the remaining portion of the
Assignor's rights and obligations under the Credit Agreement, the Assignor shall
cease to be a party thereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03 thereof, as well as to any fees accrued for
its account and not yet paid).
2. This Assignment and Acceptance is being delivered to the
U.S. Administrative Agent and, if this Assignment and Acceptance is in respect
of C $ Revolving Credit Commitments or C $ Revolving Credit Loans, the Canadian
Administrative Agent, together with (a) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the applicable forms specified
in Section 2.17(e) of the Credit Agreement, duly completed and executed by such
Assignee and (b) if the Assignee is not already a Lender under the Credit
Agreement, an Administrative Questionnaire.
3. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment:
2
Percentage Assigned of facility and
Commitment thereunder (set forth, to
at least eight decimals, as a
percentage of the facility and the
Principal Amount aggregate Commitments of
Commitment Assigned all Lenders thereunder)
--------------------------- ------------------- -------------------------------------
Term Loans- %
Term Loan Commitments- %
Revolving Loans:
U.S. $ Revolving Loans- %
Additional Revolving Loans- %
C $ Revolving Loans- %
Revolving Commitments:
U.S. $ Revolving - %
Commitments
Additional Revolving %
Commitments-
C $ Revolving Commitments- %
[L/C Disbursements- %
Letters of Credit- %
Letter of Credit Commitments- %
Participations in Swingline %
Loans-]
3
The terms set forth above are hereby agreed to:
As Assignee,
------------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
As Assignor,
-------------------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
4
[Consented to by:
UNITED RENTALS, INC.,
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
UNITED RENTALS (NORTH AMERICA),
INC.,
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[UNITED RENTALS OF CANADA, INC.,
By:
-----------------------------
Name:
---------------------------
Title: ]1/
--------------------------
THE CHASE MANHATTAN BANK, as U.S.
Administrative Agent,
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[THE CHASE MANHATTAN BANK OF
CANADA, as Canadian
Administrative Agent,
By:
-----------------------------
Name:
---------------------------
Title: ]1/]2/
--------------------------
-----------------------
1/To be completed only if C $ Revolving Loans or C $ Revolving Commitments
are being assigned.
2/To be completed only if consents are required under Section 9.04(b) of
the Credit Agreement.
EXHIBIT B
THIRD RESTATED U.S. GUARANTY
THIS THIRD RESTATED U.S. GUARANTY dated as of April __, 2001 is executed in
favor of BANK OF AMERICA, N.A.("Bank of America"), individually and as U.S.
---------------
Collateral Agent (as defined below), and the other Secured Parties (as defined
below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, United Rentals (North America), Inc. (the "Borrower"), United
--------
Rentals, Inc. ("Holdings"), United Rentals of Canada, Inc., various financial
---------
institutions (the "Lenders"), The Chase Manhattan Bank, as U.S. Administrative
-------
Agent, and The Chase Manhattan Bank of Canada, as Canadian Administrative Agent,
have entered into an Amended and Restated Credit Agreement dated as of April __,
2001 (as amended, restated or otherwise modified from time to time, the "Credit
------
Agreement");
---------
WHEREAS, pursuant to the Credit Agreement, Bank of America has been
appointed as U.S. Collateral Agent (in such capacity, together with any
successor in such capacity, the "U.S. Collateral Agent") to act on behalf of the
---------------------
Secured Parties with respect to this Guaranty and certain Security Documents (as
defined in the Credit Agreement);
WHEREAS, each of the initial signatories hereto has previously guaranteed
all obligations of the Borrower under the Existing Credit Agreements (as defined
in the Credit Agreement) pursuant to a Second Restated U.S. Guaranty dated as of
September 29, 1998 or, in the case of Holdings, pursuant to the Restated Parent
Guaranty dated as of September 29, 1998 (collectively, the "Existing
--------
Guaranties");
----------
WHEREAS, each of the original signatories hereto has agreed with the U.S.
Collateral Agent that the Existing Guaranties shall be amended and restated
pursuant to this Guaranty; and
WHEREAS, each of the undersigned will benefit from the making of loans and
the issuance of letters of credit pursuant to the Credit Agreement and is
willing to guaranty the Liabilities (as defined below) as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the undersigned hereto
agrees as follows:
1. Definitions. (a) Capitalized terms used but not defined herein have the
-----------
respective meanings assigned to such terms in the Credit Agreement.
(b) As used herein, the term "Secured Party" means the U.S. Collateral
-------------
Agent, each other Agent, each Affiliate of an Agent providing treasury,
depositary or cash management services, each Lender, each Indemnitee (as defined
in Section 9.03(b) of the Credit Agreement) and each Affiliate of a Lender which
is a party to a Hedging Agreement with the Borrower.
2. Guaranty. Each of the undersigned hereby jointly and severally
--------
unconditionally, as primary obligor and not merely as surety, guarantees the
full and prompt payment when due, whether by acceleration or otherwise, and at
all times thereafter, of (i) all obligations of the Borrower under or in
connection with the Credit Agreement (including Article XI thereof) or any other
Loan Document, (ii) all Hedging Obligations of the Borrower to any Secured Party
and (iii) all obligations of the Borrower to any Agent or Affiliate of an Agent
in respect of overdrafts and related liabilities or arising from treasury,
depositary or cash management services (including in connection with any
automated clearing house transfer of funds), in each case howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, plus all costs and expenses paid or
incurred by the U.S. Collateral Agent or any other Secured Party in enforcing
this Guaranty against such undersigned (all such obligations, costs and expenses
being herein collectively called the "Liabilities"); provided, however, that the
----------- -------- -------
liability of each of the undersigned hereunder shall be limited to the maximum
amount of the Liabilities which such undersigned may guaranty without violating
any fraudulent conveyance or fraudulent transfer law.
Each of the undersigned agrees that upon the occurrence of any Event of
Default under clause (i) or (j) of Article VII of the Credit Agreement, and if
such event shall occur at a time when any of the Liabilities may not then be due
and payable, such undersigned will pay to the U.S. Collateral Agent for the
account of the Secured Parties forthwith the full amount which would be payable
hereunder by such undersigned if all Liabilities were then due and payable.
To secure all obligations of each of the undersigned hereunder, the U.S.
Collateral Agent and each other Secured Party shall have a lien on and security
interest in (and may, without demand or notice of any kind, at any time and from
time to time when any amount shall be due and payable by such undersigned
hereunder, appropriate and apply toward the payment of such amount, in such
order of application as the U.S. Collateral Agent or the other Secured Parties
may elect, in accordance with the Credit Agreement) any and all balances,
credits, deposits, accounts or moneys of or in the name of such undersigned now
or hereafter with the U.S. Collateral Agent or such other Secured Party and any
and all property of every kind or description of or
2
in the name of such undersigned now or hereafter, for any reason or purpose
whatsoever, in the possession or control of, or in transit to, the U.S.
Collateral Agent or such other Secured Party or any agent or bailee for the U.S.
Collateral Agent or such other Secured Party.
This Guaranty shall in all respects be a continuing, irrevocable, absolute
and unconditional guaranty of payment and performance and not only
collectibility, and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of any of the undersigned, that at any time
or from time to time no Liabilities are outstanding or any other circumstance)
until all Commitments have terminated and all Liabilities have been paid in full
(subject to reinstatement as provided in the immediately following paragraph).
The undersigned further agree that if at any time all or any part of any
payment theretofore applied by the U.S. Collateral Agent or any other Secured
Party to any of the Liabilities is or must be rescinded or returned by the U.S.
Collateral Agent or such other Secured Party for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Borrower or any of the undersigned), such Liabilities shall, for the
purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by the U.S. Collateral Agent or such other Secured Party, and
(notwithstanding anything herein to the contrary) this Guaranty shall continue
to be effective or be reinstated, as the case may be, as to such Liabilities,
all as though such application by the U.S. Collateral Agent or such other
Secured Party had not been made.
The U.S. Collateral Agent or any other Secured Party may, from time to
time, at its sole discretion and without notice to the undersigned (or any of
them), take any or all of the following actions: (a) retain or obtain a security
interest in any property to secure any of the Liabilities or any obligation
hereunder, (b) retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to the undersigned, with respect to any of the
Liabilities, (c) extend or renew any of the Liabilities for one or more periods
(whether or not longer than the original period), alter or exchange any of the
Liabilities, or release or compromise any obligation of any of the undersigned
hereunder or any obligation of any nature of any other obligor with respect to
any of the Liabilities, (d) release its security interest in, or surrender,
release or permit any substitution or exchange for, all or any part of any
property securing any of the Liabilities or any obligation hereunder, or extend
or renew for one or more periods (whether or not longer than the original
period) or release, compromise, alter or
3
exchange any obligations of any nature of any obligor with respect to any such
property, and (e) resort to the undersigned (or any of them) for payment of any
of the Liabilities when due, whether or not the U.S. Collateral Agent or such
other Secured Party shall have resorted to any property securing any of the
Liabilities or any obligation hereunder or shall have proceeded against any
other of the undersigned or any other obligor primarily or secondarily obligated
with respect to any of the Liabilities.
Any amounts received by the U.S. Collateral Agent or any other Secured
Party from whatever source on account of the Liabilities may be applied by it
toward the payment of the Liabilities in accordance with the Credit Agreement;
and, notwithstanding any payments made by or for the account of any of the
undersigned pursuant to this Guaranty, the undersigned shall not be subrogated
to any rights of the U.S. Collateral Agent or any other Secured Party until such
time as this Guaranty shall have been discontinued as to all of the undersigned
and the U.S. Collateral Agent and the other Secured Parties shall have received
payment of the full amount of all Liabilities of the undersigned hereunder.
The undersigned hereby expressly waive: (a) notice of the acceptance by the
U.S. Collateral Agent or any other Secured Party of this Guaranty, (b) notice of
the existence or creation or non-payment of all or any of the Liabilities, (c)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever, and (d) all diligence in collection or protection of or realization
upon any Liabilities or any security for or guaranty of any Liabilities.
Each of the undersigned further agrees to pay all expenses (including
reasonable attorneys' fees and legal expenses) paid or incurred by the U.S.
Collateral Agent or any other Secured Party in endeavoring to collect the
Liabilities of such undersigned, or any part thereof, and in enforcing this
Guaranty against such undersigned.
The creation or existence from time to time of additional Liabilities to
the U.S. Collateral Agent or the other Secured Parties or any of them is hereby
authorized, without notice to the undersigned (or any of them), and shall in no
way affect or impair the rights of the U.S. Collateral Agent or the other
Secured Parties or the obligations of the undersigned under this Guaranty.
The U.S. Collateral Agent and any other Secured Party may from time to
time, without notice to the undersigned (or any of them), assign or transfer any
or all of the Liabilities or any interest therein; and, notwithstanding any such
assignment or
4
transfer or any subsequent assignment or transfer thereof, such Liabilities
shall be and remain Liabilities for the purposes of this Guaranty, and each and
every immediate and successive assignee or transferee of any of the Liabilities
or of any interest therein shall, to the extent of the interest of such assignee
or transferee in the Liabilities, be entitled to the benefits of this Guaranty
to the same extent as if such assignee or transferee were a Secured Party.
No delay on the part of the U.S. Collateral Agent or any other Secured
Party in the exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by the U.S. Collateral Agent or any other
Secured Party of any right or remedy shall preclude any other or further
exercise thereof or the exercise of any other right or remedy; nor shall any
modification or waiver of any provision of this Guaranty be binding upon the
U.S. Collateral Agent or any other Secured Party except as expressly set forth
in a writing duly signed and delivered on behalf of the U.S. Collateral Agent
(or, if at any time there is no U.S. Collateral Agent, the Required Lenders). No
action of the U.S. Collateral Agent or any other Secured Party permitted
hereunder shall in any way affect or impair the rights of the U.S. Collateral
Agent or any other Secured Party or the obligations of the undersigned under
this Guaranty. For purposes of this Guaranty, Liabilities shall include all
obligations of the Borrower to the U.S. Collateral Agent or any other Secured
Party arising under or in connection with any Loan Document, notwithstanding any
right or power of the Borrower or anyone else to assert any claim or defense as
to the invalidity or unenforceability of any obligation, and no such claim or
defense shall affect or impair the obligations of the undersigned hereunder.
Pursuant to the Credit Agreement, (a) this Guaranty has been delivered to
the U.S. Collateral Agent and (b) the U.S. Collateral Agent has been authorized
to enforce this Guaranty on behalf of itself and each of the other Secured
Parties. All payments by the undersigned pursuant to this Guaranty shall be made
to the U.S. Collateral Agent for application as set forth in the Credit
Agreement or, if there is no U.S. Collateral Agent, to the Secured Parties for
their ratable benefit.
This Guaranty shall be binding upon the undersigned and the successors and
assigns of the undersigned; and to the extent that the Borrower or any of the
undersigned is a partnership, corporation, limited liability company or other
entity, all references herein to the Borrower and to the undersigned,
respectively, shall be deemed to include any successor or successors, whether
immediate or remote, to such partnership, corporation, limited liability company
or other entity. The term "undersigned" as used herein shall mean all parties
executing
5
this Guaranty and each of them, and all such parties shall be jointly and
severally obligated hereunder.
This Guaranty shall be construed in accordance with and governed by the law
of the State of New York. Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original but all such counterparts shall together
constitute one and the same Guaranty. At any time after the date of this
Guaranty, one or more additional persons or entities may become parties hereto
by executing and delivering to the U.S. Collateral Agent a counterpart of this
Guaranty. Immediately upon such execution and delivery (and without any further
action), each such additional person or entity will become a party to, and will
be bound by all of the terms of, this Guaranty.
This Guaranty is secured pursuant to a Third Restated U.S. Security
Agreement dated as of even date herewith (as amended or otherwise modified from
time to time) and may be secured by one or more other agreements (including,
without limitation, one or more pledge agreements, mortgages, deeds of trust or
other similar documents).
This Guaranty amends and restates in its entirety the Existing Guaranty
which, after the effectiveness hereof, shall no longer be effective (except for
any provisions thereof which by their terms survive, or may be reinstated, after
terminations thereof).
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
-------- -------
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE U.S. COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF THE
UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH OF THE UNDERSIGNED FURTHER
6
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO FIVE ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (OR SUCH
OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE U.S. COLLATERAL AGENT
AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK. EACH OF THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY OF THE UNDERSIGNED HAS
OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH UNDERSIGNED HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
EACH OF THE UNDERSIGNED, AND (BY ACCEPTING THE BENEFITS HEREOF) EACH OF THE
U.S. COLLATERAL AGENT AND EACH OTHER SECURED PARTY, HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
7
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered as
of the day and year first above written.
UNITED RENTALS, INC.
By:
----------------------------
Title:
------------------------
Signature Page:
Third Restated U.S. Guaranty
ADVANCE BARRICADES AND SIGNING, INC.
ALL CITIES TRAILER EXCHANGE, INC.
ARROW EQUIPMENT COMPANY
A.S.C. PAVEMENT MARKINGS, INC.
BNR EQUIPMENT, INC.
BAKERSFIELD COMPACTION EQUIPMENT
COAST LINE MARKING, INC.
DEALER SERVICES COMPANY
EQUIPMENT LEASING SERVICES, INC.
FLASHER CO. OF KANSAS, INC.
FLASHER COMPANY OF OKLAHOMA, INC.
FRONTENAC EQUIPMENT, INC.
HIGHWAY RENTALS, INC.
HIGHWAY SUPPLY COMPANY
HIGHWAY SAFETY SERVICE COMPANY
JADCO SIGNING, INC.
LECTRIC SAFETY LIGHTS CO.
LIDDELL MANAGEMENT CO., INC.
PAIGE BARRICADES, INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, INC.
RENTALS UNLIMITED, INCORPORATED
ROCKY MOUNTAIN SAFETY SERVICE, INC.
▇▇▇▇ ENTERPRISES, INC.
SHORING AND SUPPLY COMPANY, INC.
STATE BARRICADING, INC.
SAFE-T-FLARE SERVICES, INC.
THOESEN EQUIPMENT, INC.
TRAFFIC MARKINGS SOUTH, INC.
TRAFFIC SAFETY SERVICES, INC.
TRI-MAC, CORPORATION
UNITED RENTALS GULF, INC.
UNITED RENTALS HIGHWAY TECHNOLOGIES, INC.
UNITED RENTALS HIGHWAY
TECHNOLOGIES GULF, INC.
UNITED RENTALS NORTHWEST, INC.
UNITED RENTALS SOUTHEAST, INC.
▇▇▇▇▇▇▇▇▇ RENTS, INCORPORATED
WARNING LITES OF INDIANA, INC.
WARNING LITES OF IOWA, INC.
WARNING LITES OF MINNESOTA, INC.
By:
----------------------------
Title:
-------------------------
Signature Page:
Third Restated U.S. Guaranty
WARNING SAFETY LIGHTS, INC.
WARNING SAFETY LIGHTS OF GEORGIA, INC.
WEST-CO RENTAL & SALES
WLI INDUSTRIES, INC.
WORK SIGNS, INC.
WORK ZONE, INC.
WORK ZONE SAFETY, INC.
▇▇▇▇▇▇▇▇▇▇ ENTERPRISES, INC.
▇▇▇▇▇ SYSTEMS, INC.
By:
----------------------------
Title:
-------------------------
UNITED EQUIPMENT RENTALS GULF, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
----------------------------
Title:
-------------------------
UNITED RENTALS HIGHWAY TECHNOLOGIES, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
----------------------------
Title:
-------------------------
UNITED RENTALS SOUTHEAST, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
----------------------------
Title:
-------------------------
Signature Page:
Third Restated U.S. Guaranty
ADDITIONAL SIGNATURE PAGE to the Third
Restated U.S. Guaranty dated as of April __,
2001 issued by United Rentals, Inc. and
various subsidiaries of United Rentals (North
America), Inc.
The undersigned is executing a counterpart
hereof for purposes of becoming a party
hereto:
[ ]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Signature Page:
Third Restated U.S. Guaranty
EXHIBIT C
CONSOLIDATED RESTATED U.S. PLEDGE AGREEMENT
THIS CONSOLIDATED RESTATED U.S. PLEDGE AGREEMENT (this "Agreement") dated
---------
as of April __, 2001 is among UNITED RENTALS, INC. ("Holdings"), UNITED RENTALS
--------
(NORTH AMERICA), INC., (the "Borrower"), each subsidiary of the Borrower listed
--------
on the signature pages hereto (collectively, including Holdings and the
Borrower, the "Pledgors" and each individually a "Pledgor"), and BANK OF
-------- -------
AMERICA, N.A. ("Bank of America"), as U.S. Collateral Agent (as defined below)
---------------
for the Secured Parties (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, Holdings, United Rentals of Canada, Inc., various
financial institutions (the "Lenders"), The Chase Manhattan Bank, as U.S.
-------
Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian
Administrative Agent, have entered into an Amended and Restated Credit Agreement
dated as of April ___, 2001 (as amended, restated or otherwise modified from
time to time, the "Credit Agreement");
----------------
WHEREAS, pursuant to the Credit Agreement, Bank of America has been
appointed as U.S. Collateral Agent (in such capacity, together with any
successor in such capacity, the "U.S. Collateral Agent") to act on behalf of the
---------------------
Secured Parties with respect to the U.S. Guaranty (as defined in the Credit
Agreement) and certain other Security Documents (as defined in the Credit
Agreement);
WHEREAS, each of the initial signatories hereto has previously provided
security for the obligations of the Borrower under the Existing Credit
Agreements (as defined in the Credit Agreement) pursuant to (i) in the case of
the Borrower, a Second Restated Pledge Agreement dated as of September 29, 1998,
(ii) in the case of Holdings, a Restated Parent Pledge Agreement dated as of
September 29, 1998, and (iii) in the case of the other initial signatories
hereto, various Subsidiary Pledge Agreements (all of the foregoing,
collectively, the "Existing Pledge Agreements"); and
--------------------------
WHEREAS, each of the original signatories hereto has agreed with the U.S.
Collateral Agent that the Existing Pledge Agreements shall be amended and
restated pursuant to this Agreement;
NOW, THEREFORE, for and in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. When used herein, (a) capitalized terms used but not
-----------
defined herein have the respective meanings assigned to such terms in the Credit
Agreement and (b) the following terms have the following meanings (such meanings
to be applicable to both the singular and plural forms of such terms):
Agreement - see the introductory paragraph.
---------
Bank of America - see the introductory paragraph.
---------------
Borrower - see the introductory paragraph.
--------
Collateral - see Section 2.
----------
Credit Agreement - see the recitals.
----------------
Default means the occurrence of any of the following events: (i) any
-------
Default with respect to the Borrower under clause (i) or (j) of Article VII
of the Credit Agreement, (ii) any Event of Default or (iii) any warranty of
any Pledgor herein is untrue or misleading in any material respect and, as
a result thereof, the U.S. Collateral Agent's security interest for the
benefit of the Secured Parties in any material portion of the Collateral is
not perfected or the U.S. Collateral Agent's rights and remedies with
respect to any material portion of the Collateral is materially impaired or
otherwise materially adversely affected.
Existing Pledge Agreements - see the recitals.
--------------------------
Holdings - see the introductory paragraph.
--------
Foreign Issuer means each Issuer designated as a "Foreign Issuer" on
--------------
Schedule I hereto and any other Issuer which is organized under the laws of
any jurisdiction other than, and conducts substantially all of its business
outside of, any state or territory of the United States.
Issuer means the issuer of any of the shares of stock or other
------
securities representing all or any of the Collateral.
Lenders - see the recitals.
-------
Liabilities means (a) with respect to the Borrower, (i) all
-----------
obligations of the Borrower, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due, which arise out of or in connection with
the Credit Agreement or any other Loan Document (including, without
limitation, with respect to Letters of Credit), as the same may be amended,
modified, extended or renewed from time to time, (ii) all Hedging
Obligations of the Borrower to
2
any Secured Party and (iii) all obligations of the Borrower to any Agent or
Affiliate of an Agent in respect of overdrafts and related liabilities or
arising from treasury, depositary or cash management services (including in
connection with any automated clearing house transfer of funds); and (b)
with respect to each other Pledgor, all obligations of such Pledgor under
the U.S. Guaranty or any other Loan Document.
Pledgor - see the introductory paragraph.
-------
Secured Party means the U.S. Collateral Agent, each other Agent, each
-------------
Affiliate of an Agent providing treasury, depositary or cash management
services, each Lender, each Indemnitee (as defined in Section 9.03(b) of
the Credit Agreement) and each Affiliate of a Lender which is a party to a
Hedging Agreement with the Borrower.
U.S. Collateral Agent - see the recitals.
---------------------
2. Pledge. As security for the payment of all Liabilities, each Pledgor
------
hereby pledges to the U.S. Collateral Agent for the benefit of the Secured
Parties, and grants to the U.S. Collateral Agent for the benefit of the Secured
Parties a continuing security interest in, all of the following:
A. All of the shares of stock and other securities set forth under
such Pledgor's name on Schedule I hereto, all of the certificates and/or
----------
instruments representing such shares of stock and other securities, and all
cash, securities, dividends, rights and other property at any time and from
time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares or other securities;
B. All additional shares of stock of any of the Issuers listed in
Schedule I hereto at any time and from time to time acquired by such
----------
Pledgor in any manner, all of the certificates representing such additional
shares, and all cash, securities, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares;
C. All other property hereafter delivered by such Pledgor to the U.S.
Collateral Agent in substitution for or in addition to any of the
foregoing, all certificates and instruments representing or evidencing such
property, and all cash, securities, interest, dividends, rights and other
property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all thereof;
and
D. All products and proceeds of all of the foregoing.
All of the foregoing are herein collectively called the "Collateral".
Notwithstanding the foregoing, the Collateral shall not include, and no Pledgor
shall be required to pledge hereunder, more than
3
65% of the stock of any class of any Foreign Issuer to the extent that the
pledge of any greater percentage could result in adverse tax consequences to
Holdings or any Subsidiary.
Each Pledgor agrees to deliver to the U.S. Collateral Agent, promptly upon
receipt and in due form for transfer (i.e., endorsed in blank or accompanied by
undated stock or bond powers executed in blank), any Collateral (other than
dividends which such Pledgor is entitled to receive and retain pursuant to
Section 5 hereof) which may at any time or from time to time be in or come into
---------
the possession or control of such Pledgor, and prior to the delivery thereof to
the U.S. Collateral Agent, such Collateral shall be held by such Pledgor
separate and apart from its other property and in express trust for the U.S.
Collateral Agent for the benefit of the Secured Parties.
3. Warranties; Further Assurances. Each Pledgor warrants to the U.S.
------------------------------
Collateral Agent for the benefit of each Secured Party that: (a) such Pledgor is
(or at the time of any future delivery, pledge, assignment or transfer thereof
will be) the legal and equitable owner of such Pledgor's Collateral free and
clear of all liens, security interests and encumbrances of every description
whatsoever other than the security interest created hereunder; (b) the pledge
and delivery of such Pledgor's Collateral pursuant to this Agreement will create
a valid perfected security interest in such Pledgor's Collateral in favor of the
U.S. Collateral Agent for the benefit of the Secured Parties; (c) all shares of
stock referred to in Schedule I hereto are duly authorized, validly issued,
----------
fully paid and non-assessable; (d) as to each Issuer whose name appears in
Schedule I hereto, such Pledgor's Collateral represents on the date hereof not
----------
less than the applicable percentage (as shown in Schedule I hereto) of the total
----------
shares of capital stock issued and outstanding of such Issuer; and (e) the
information contained on Schedule I hereto with respect to such Pledgor is true
----------
and accurate in all respects.
So long as any of the Liabilities shall be outstanding or any commitment
shall exist on the part of any Secured Party with respect to the creation of any
Liabilities, each Pledgor (i) shall not, except as permitted by the Credit
Agreement or with the express prior written consent of the U.S. Collateral
Agent, sell, assign, exchange, pledge, encumber or otherwise transfer, or grant
any option, warrant or other right to purchase, the stock of any Issuer which is
pledged hereunder, or otherwise diminish or impair any of its rights in, to or
under any of such Pledgor's Collateral; (ii) shall execute such Uniform
Commercial Code financing statements and other documents (and pay the costs of
filing and recording or re-filing and re-recording the same in all public
offices reasonably deemed necessary or appropriate by the U.S. Collateral Agent)
and do such other acts and things, all as the U.S. Collateral Agent may from
time to time reasonably request, to establish and maintain a valid, perfected
security interest in such Pledgor's Collateral (free of all other liens, claims
and rights of third parties whatsoever) to secure the performance and payment of
the Liabilities; (iii) will execute and deliver to the U.S. Collateral Agent
such stock powers and similar documents relating to such Pledgor's Collateral,
satisfactory in form and substance to the U.S. Collateral Agent, as the U.S.
Collateral Agent may reasonably request; and (iv) will furnish the U.S.
Collateral Agent or any Secured Party such information concerning such Pledgor's
Collateral as the U.S. Collateral Agent or such Secured Party may from time to
time reasonably request, and will permit the U.S. Collateral Agent or any other
Secured Party or any designee of the U.S.
4
Collateral Agent or any other Secured Party, from time to time at reasonable
times and on reasonable notice (or at any time without notice during the
existence of a Default), to inspect, audit and make copies of and extracts from
all records and all other papers in the possession of such Pledgor which pertain
to such Pledgor's Collateral, and will, upon request of the U.S. Collateral
Agent at any time when a Default has occurred and is continuing, deliver to the
U.S. Collateral Agent all of such records and papers.
4. Holding in Name of U.S. Collateral Agent, etc. The U.S. Collateral
---------------------------------------------
Agent may from time to time after the occurrence and during the continuance of a
Default, without notice to any Pledgor, take all or any of the following
actions: (a) transfer all or any part of the Collateral into the name of the
U.S. Collateral Agent or any nominee or sub-agent for the U.S. Collateral Agent,
with or without disclosing that such Collateral is subject to the lien and
security interest hereunder, (b) appoint one or more sub-agents or nominees for
the purpose of retaining physical possession of the Collateral, (c) notify the
parties obligated on any of the Collateral to make payment to the U.S.
Collateral Agent of any amount due or to become due thereunder, (d) endorse any
checks, drafts or other writings in the name of the applicable Pledgor to allow
collection of the Collateral, (e) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or any part thereof,
or compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto, and (f)
take control of any proceeds of the Collateral.
5. Voting Rights, Dividends, etc. (a) Notwithstanding certain provisions
-----------------------------
of Section 4 hereof, so long as the U.S. Collateral Agent has not given the
notice referred to in paragraph (b) below:
A. The Pledgors shall be entitled to exercise any and all voting or
consensual rights and powers and stock purchase or subscription rights
relating or pertaining to the Collateral or any part thereof for any
purpose; provided, however, that each Pledgor agrees that it will not
-------- -------
exercise any such right or power in any manner which would have a material
adverse effect on the value of the Collateral.
B. The Pledgors shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Collateral which are paid in
cash by any Issuer if such dividends are permitted by the Credit Agreement,
but all dividends and distributions in respect of the Collateral or any
part thereof made in shares of stock or securities or other property or
representing any return of capital, whether resulting from a subdivision,
combination or reclassification of Collateral or any part thereof or
received in exchange for Collateral or any part thereof or as a result of
any merger, consolidation, acquisition or other exchange of assets to which
any Issuer may be a party or otherwise or as a result of any exercise of
any stock purchase or subscription right, shall be and become part of the
Collateral hereunder and, if received by any Pledgor, shall be forthwith
delivered to the U.S. Collateral Agent in due form for transfer (i.e.,
endorsed in blank or accompanied by
5
undated stock or bond powers executed in blank) to be held for the purposes
of this Agreement.
C. The U.S. Collateral Agent shall execute and deliver, or cause to be
executed and delivered, to the Pledgors all proxies, powers of attorney,
dividend orders and other instruments as any Pledgor may request for the
purpose of enabling such Pledgor to exercise the rights and powers which it
is entitled to exercise pursuant to clause (A) above and to receive the
----------
dividends which it is authorized to retain pursuant to clause (B) above.
----------
(b) Upon notice from the U.S. Collateral Agent during the existence of a
Default, and so long as the same shall be continuing, all rights and powers
which the Pledgors are entitled to exercise pursuant to Section 5(a)(A) hereof,
---------------
and all rights of the Pledgors to receive and retain dividends pursuant to
Section 5(a)(B) hereof, shall forthwith cease, and all such rights and powers
---------------
shall thereupon become vested in the U.S. Collateral Agent which shall have,
during the continuance of such Default, the sole and exclusive authority to
exercise such rights and powers and to receive such dividends. Any and all money
and other property paid over to or received by the U.S. Collateral Agent
pursuant to this paragraph (b) shall be retained by the U.S. Collateral Agent as
-------------
additional Collateral hereunder and applied in accordance with the provisions
hereof.
6. Remedies. Whenever a Default shall exist, the U.S. Collateral Agent may
--------
exercise from time to time any rights and remedies available to it under the
Uniform Commercial Code as in effect in New York or otherwise available to it.
Without limiting the foregoing, whenever a Default shall exist the U.S.
Collateral Agent (a) may, to the fullest extent permitted by applicable law,
without notice, advertisement, hearing or process of law of any kind, (i) sell
any or all of the Collateral, free of all rights and claims of any Pledgor
therein and thereto, at any public or private sale or brokers' board and (ii)
bid for and purchase any or all of the Collateral at any such public sale and
(b) shall have the right, for and in the name, place and stead of the applicable
Pledgor, to execute endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of the
Collateral. Each Pledgor hereby expressly waives, to the fullest extent
permitted by applicable law, any and all notices, advertisements, hearings or
process of law in connection with the exercise by the U.S. Collateral Agent of
any of its rights and remedies during the continuance of a Default. Any
notification of intended disposition of any of the Collateral shall be deemed
reasonably and properly given if given at least ten (10) days before such
disposition. Any proceeds of any of the Collateral may be applied by the U.S.
Collateral Agent to the payment of expenses in connection with the Collateral,
including, without limitation, reasonable attorneys' fees and legal expenses,
and any balance of such proceeds may be applied by the U.S. Collateral Agent
toward the ratable payment of the Liabilities (and, after payment in full of all
Liabilities, any excess shall be delivered to the applicable Pledgor or as a
court of competent jurisdiction shall direct).
The U.S. Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with any sale of Collateral as it may be
advised by counsel is necessary in order to (a) avoid any violation of
applicable law (including, without limitation, compliance with such
6
procedures as may restrict the number of prospective bidders and purchasers
and/or further restrict such prospective bidders or purchasers to persons or
entities who will represent and agree that they are purchasing for their own
account for investment and not with a view to the distribution or resale of such
Collateral) or (b) obtain any required approval of the sale or of the purchase
by any governmental regulatory authority or official, and each Pledgor agrees
that such compliance shall not result in such sale being considered or deemed
not to have been made in a commercially reasonable manner and that the U.S.
Collateral Agent shall not be liable or accountable to any Pledgor for any
discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
7. General. The U.S. Collateral Agent shall be deemed to have exercised
-------
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as the applicable Pledgor shall request in writing,
but failure of the U.S. Collateral Agent to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
the U.S. Collateral Agent to preserve or protect any rights with respect to the
Collateral against prior parties, or to do any act with respect to preservation
of the Collateral not so requested by the such Pledgor, shall be deemed a
failure to exercise reasonable care in the custody or preservation of any
Collateral.
No delay on the part of the U.S. Collateral Agent in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the U.S. Collateral Agent, and then such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
All obligations of the Pledgors and all rights, powers and remedies of the
U.S. Collateral Agent and the other Secured Parties expressed herein are in
addition to all other rights, powers and remedies possessed by them, including,
without limitation, those provided by applicable law or in any other written
instrument or agreement relating to any of the Liabilities or any security
therefor.
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York. Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
This Agreement shall be binding upon the Pledgors and the U.S. Collateral
Agent and their respective successors and assigns, and shall inure to the
benefit of the Pledgors and the U.S. Collateral Agent and the successors and
assigns of the U.S. Collateral Agent.
7
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed an original but all such counterparts shall together constitute
but one and the same Agreement.
This Agreement amends and restates in its entirety the Existing Pledge
Agreements which, after the effectiveness hereof, shall no longer be effective
(except for any provisions thereof which by their terms survive, or may be
reinstated, after terminations thereof).
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT
--------
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE U.S. COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS OF SUCH PLEDGOR SPECIFIED IN, OR PURSUANT TO, THE LOAN
DOCUMENTS, AS APPLICABLE, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
NEW YORK. EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT A PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PLEDGOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER FINANCING AGREEMENTS.
EACH PLEDGOR, THE U.S. COLLATERAL AGENT AND (BY ACCEPTING THE BENEFITS
HEREOF) EACH OTHER SECURED PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR
ANY OTHER FINANCING AGREEMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT
8
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
9
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first written above.
UNITED RENTALS (NORTH AMERICA),
INC.
Address:
Five Greenwich Office Park By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------
Attention: Chief Financial Title:
Officer ------------------------
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
UNITED RENTALS, INC.
Address:
Five Greenwich Office Park By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------
Attention: Chief Financial Title:
Officer ------------------------
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
UNITED RENTALS GULF, INC.
Address:
Five Greenwich Office Park By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------
Attention: Chief Financial Title:
Officer ------------------------
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
WLI INDUSTRIES, INC.
Address:
Five Greenwich Office Park By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------
Attention: Chief Financial Title:
------------------------
Signature Page:
Consolidated Restated U.S.
Pledge Agreement
Officer
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ENTERPRISES, INC.
Address:
Five Greenwich Office Park By:
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------------------------
Attention: Chief Financial Title:
Officer ------------------------
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A., as U.S.
Collateral Agent
By:
---------------------------
Title:
------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Service Industries
Group
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
12804202 97403190 Signature Page:
Consolidated Restated U.S. Pledge Agreement
ADDITIONAL SIGNATURE PAGE to the Consolidated Restated U.S. Pledge Agreement
dated as of April __, 2001 among United Rentals (North America), Inc. (the
"Borrower"), United Rentals, Inc. and various subsidiaries of the Borrower.
The undersigned is executing a counterpart hereof for purposes of
becoming a party hereto (and attached hereto is a supplement to
Schedule I to such Pledge Agreement setting forth information
regarding certain shares of stock and other securities pledged by the
undersigned in connection with such Pledge Agreement):
[ ]
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Signature Page:
Consolidated Restated U.S. Pledge Agreement
Schedule 1
----------
EXHIBIT D
THIRD RESTATED U.S. SECURITY AGREEMENT
THIS THIRD RESTATED U.S. SECURITY AGREEMENT (this "Agreement") dated as of
---------
April __, 2001 is among UNITED RENTALS (NORTH AMERICA), INC. (the "Borrower"),
--------
UNITED RENTALS, INC. ("Holdings"), each subsidiary of the Borrower listed on the
--------
signature pages hereof, each other person or entity which from time to time
becomes a party hereto (collectively, including the Borrower and Holdings, the
"Debtors" and individually each a "Debtor") and BANK OF AMERICA, N.A. ("Bank of
------- ------ ---------------
America"), in its capacity as U.S. Collateral Agent (as defined below) for the
other Secured Parties (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, Holdings, United Rentals of Canada, Inc., various
financial institutions (the "Lenders"), The Chase Manhattan Bank, as U.S.
-------
Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian
Administrative Agent, have entered into an Amended and Restated Credit Agreement
dated as of April __, 2001 (as amended, restated or otherwise modified from time
to time, the "Credit Agreement");
----------------
WHEREAS, pursuant to the Credit Agreement, Bank of America has been
appointed as U.S. Collateral Agent (in such capacity, together with any
successor in such capacity, the "U.S. Collateral Agent") to act on behalf of the
---------------------
Secured Parties with respect to this Agreement and certain other Security
Documents(as defined in the Credit Agreement);
WHEREAS, each of the initial signatories hereto has previously provided
security for the obligations of the Borrower under the Existing Credit
Agreements (as defined in the Credit Agreement) pursuant to a Second Restated
U.S. Security Agreement dated as of September 29, 1998 (the "Existing Security
-----------------
Agreement"); and
---------
WHEREAS, each of the original signatories hereto has agreed with the U.S.
Collateral Agent that the Existing Security Agreement shall be amended and
restated pursuant to this Agreement;
NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. When used herein, (a) the terms Certificated Security,
----------- ---------------------
Commodity Account, Commodity Contract, Chattel Paper, Deposit Account,
----------------- ------------------ ------------- ---------------
Document,
--------
Equipment, Fixture, Goods, Inventory, Investment Property, Instrument,
--------- ------- ----- --------- ------------------- ----------
Security, Security Entitlement, Securities Account and Uncertificated
-------- -------------------- ------------------ --------------
Security shall have the respective meanings assigned to such terms in the
--------
Uniform Commercial Code (as defined below), (b) capitalized terms used but
not defined herein have the meanings assigned to such terms in the Credit
Agreement and (c) the following terms have the following meanings (such
definitions to be applicable to both the singular and plural forms of such
terms):
Account Debtor means, with respect to any Debtor, any party who is
--------------
obligated on or under any Account Receivable, Contract Right or General
Intangible of such Debtor.
Account Receivable means, with respect to any Debtor, any right of such
------------------
Debtor to payment for goods sold or leased or for services rendered.
Agreement - see the introductory paragraph.
---------
Assignee Deposit Account - see Section 4.
------------------------ ---------
Bank of America - see the introductory paragraph.
---------------
Borrower - see the introductory paragraph.
--------
Collateral means, with respect to any Debtor, all property and rights of
----------
such Debtor in which a security interest is granted hereunder.
Computer Hardware and Software means, with respect to any Debtor, (i) all
------------------------------
computer and other electronic data processing hardware, whether now or hereafter
owned, licensed or leased by such Debtor, including, without limitation, all
integrated computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape drives,
hard and soft disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and peripheral devices and other related computer
hardware; (ii) all software programs, whether now or hereafter owned, licensed
or leased by such Debtor, designed for use on the computers and electronic data
processing hardware described in clause (i) above, including, without
----------
limitation, all operating system software, utilities and application programs in
whatsoever form (source code and object code in magnetic tape, disk or hard copy
format or any other listings whatsoever); (iii) all firmware associated
therewith, whether now or hereafter owned, licensed or leased by such Debtor;
and (iv) all documentation for such hardware, software and firmware described in
the preceding clauses (i), (ii) and (iii), whether now or hereafter owned,
----------- ---- -----
2
licensed or leased by such Debtor, including, without limitation, flow charts,
logic diagrams, manuals, specifications, training materials, charts and pseudo
codes.
Contract Right means, with respect to any Debtor, any right of such Debtor
--------------
to payment under a contract for the sale or lease of goods or the rendering of
services, which right is at the time not yet earned by performance.
Credit Agreement - see the recitals.
----------------
Debtor - see the introductory paragraph.
------
Default means the occurrence of any of the following events: (i) any
-------
Default with respect to the Borrower under clause (i) or (j) of Article VII of
the Credit Agreement, (ii) any Event of Default or (iii) any warranty of any
Debtor herein is untrue or misleading in any material respect and, as a result
thereof, the U.S. Collateral Agent's security interest for the benefit of the
Secured Parties in any material portion of the Collateral (of all Debtors taken
as a whole) is not perfected or the U.S. Collateral Agent's rights and remedies
with respect to any material portion of the Collateral of all Debtors (taken as
a whole) is materially impaired or otherwise materially adversely affected.
Existing Security Agreement - see the recitals.
---------------------------
General Intangibles means, with respect to any Debtor, all of such Debtor's
-------------------
"general intangibles" as defined in the Uniform Commercial Code and, in any
event, includes (without limitation) all of such Debtor's trademarks, trade
names, patents, copyrights, trade secrets, customer lists, inventions, designs,
software programs, mask works, goodwill, registrations, licenses, franchises,
tax refund claims, guarantee claims, security interests and rights to
indemnification.
Holdings - see the introductory paragraph.
--------
Intellectual Property means all past, present and future: trade secrets and
---------------------
other proprietary information; trademarks, service marks, business names,
designs, logos, indicia, and/or other source and/or business identifiers and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including, without limitation, copyrights for
computer programs) and copyright registrations or applications for registrations
which have heretofore been or may hereafter be issued throughout the world and
all tangible property embodying the copyrights; unpatented inventions (whether
or not patentable); patent applications and patents; industrial designs,
3
industrial design applications and registered industrial designs; license
agreements related to any of the foregoing set forth in this definition and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, source codes, object codes and other physical
manifestations, embodiments or incorporations of any of the foregoing set forth
in this definition; the right to ▇▇▇ for all past, present and future
infringements of any of the foregoing set forth in this definition; and all
common law and other rights throughout the world in and to all of the foregoing
set forth in this definition.
Lenders - see the recitals.
-------
Liabilities means (a) with respect to the Borrower, (i) all obligations of
-----------
the Borrower, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due, which arise out of or in connection with the Credit Agreement or any other
Loan Document (including, without limitation, with respect to Letters of
Credit), as the same may be amended, modified, extended or renewed from time to
time, (ii) all Hedging Obligations of the Borrower to any Secured Party and
(iii) all obligations of the Borrower to any Agent or Affiliate of an Agent in
respect of overdraft and related liabilities or arising from treasury,
depositary or cash management services (including in connection with any
automated clearing house transfer of funds); and (b) with respect to each other
Debtor, all obligations of such Debtor under the U.S. Guaranty or any other Loan
Document.
Non-Tangible Collateral means, with respect to any Debtor, collectively,
-----------------------
such Debtor's Accounts Receivable, Contract Rights and General Intangibles.
Permitted Liens - see Section 3.
--------------- ---------
Secured Party means the U.S. Collateral Agent, each other Agent, each
-------------
Affiliate of an Agent providing treasury, depositary or cash management
services, each Lender, each Indemnitee (as defined in Section 9.03(b) of the
Credit Agreement) and each Affiliate of a Lender which is a party to a Hedging
Agreement with the Borrower.
Uniform Commercial Code means the Uniform Commercial Code as in effect in
-----------------------
the State of New York on the date of this Agreement; provided that, as used in
--------
Section 8 hereof, "Uniform Commercial Code" shall mean the Uniform Commercial
---------
Code as in effect from time to time in the applicable jurisdiction.
U.S. Collateral Agent - see the recitals.
---------------------
4
2. Grant of Security Interest. As security for the payment of all Liabilities,
--------------------------
each Debtor hereby assigns to the U.S. Collateral Agent for the benefit of the
Secured Parties, and grants to the U.S. Collateral Agent for the benefit of the
Secured Parties a continuing security interest in, the following, whether now or
hereafter existing or acquired:
All of such Debtor's:
(i) Accounts Receivable;
(ii) Certificated Securities;
(iii) Chattel Paper;
(iv) Computer Hardware and Software and all rights with respect
thereto, including, without limitation, any and all licenses,
options, warranties, service contracts, program services, test
rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications, and any substitutions,
replacements, additions or model conversions of any of the
foregoing;
(v) Contract Rights;
(vi) Deposit Accounts;
(vii) Documents;
(viii) General Intangibles;
(ix) Goods (including, without limitation, all its Equipment,
Fixtures and Inventory), together with all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefor;
(x) Instruments;
(xi) Intellectual Property;
(xii) money (of every jurisdiction whatsoever);
(xiii) Commodity Accounts, Commodity Contracts, Investment
Property, Security Entitlements and Security Accounts;
(xiv) Uncertificated Securities;
5
(xv) to the extent not included in the foregoing, maps, surveys
and similar items used or useful in such Debtor's business; and
(xvi) to the extent not included in the foregoing, other
personal property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to any of the foregoing, and all proceeds, products,
offspring, rents, issues, profits and returns of and from any of the foregoing;
provided that to the extent that the provisions of any lease or license
--------
expressly prohibit (which prohibition is enforceable under applicable law) the
grant of a security interest therein, such Debtor's rights in such lease or
license shall be excluded from the foregoing grant for so long as such
prohibition continues, it being understood that upon request of the U.S.
-- ----- ----------
Collateral Agent, such Debtor will in good faith use reasonable efforts to
obtain consent for the creation of a security interest in favor of the U.S.
Collateral Agent in such Debtor's rights under such lease or license.
3. Warranties. Each Debtor warrants that: (i) no financing
----------
statement (other than any which may have been filed on behalf of the U.S.
Collateral Agent for the benefit of the Secured Parties) covering any of the
Collateral is on file in any public office, other than financing statements
perfecting liens and claims expressly permitted by the Credit Agreement
("Permitted Liens") and financing statements filed by lessors under operating
---------------
leases; (ii) such Debtor is and will be the lawful owner of all Collateral, free
of all liens and claims whatsoever, other than the security interest hereunder
and Permitted Liens, with full power and authority to execute and deliver this
Agreement and perform such Debtor's obligations hereunder, and to subject the
Collateral to the security interest hereunder; (iii) all information with
respect to Collateral and Account Debtors set forth in any schedule, certificate
or other writing at any time heretofore or hereafter furnished by such Debtor to
the U.S. Collateral Agent or any other Secured Party and all other written
information heretofore or hereafter furnished by such Debtor to the U.S.
Collateral Agent or any other Secured Party in connection with the Credit
Agreement is and will be true and correct in all material respects as of the
date furnished; (iv) such Debtor's true legal name as registered in the
jurisdiction in which such debtor is organized or incorporated, state of
organization or incorporation, organization number as designated by the state of
its incorporation or organization, chief executive office and principal place of
business are as set forth on Schedule I hereto (and such Debtor has not
----------
maintained its chief executive office
6
and principal place of business at any other location at any time after November
1, 2000); (v) each other location where such Debtor maintains a place of
business or locates Goods (other than Goods which are leased to customers or in
transit to or from customer locations) is set forth on Schedule II hereto; (vi)
-----------
except as previously disclosed to the Collateral Agent, such Debtor is not now
known and during the five years preceding the date hereof has not previously
been known by any trade name; (vii) except as previously disclosed to the
Collateral Agent, during the five years preceding the date hereof such Debtor
has not been known by any legal name different from the one set forth on the
signature page of this Agreement nor has such Debtor been the subject of any
merger or other corporate reorganization; and (viii) Schedule III hereto
------------
contains a complete listing of all of such Debtor's Intellectual Property which
has been registered under any registration statute.
4. Collections, etc. Until such time during the existence of a
----------------
Default as the U.S. Collateral Agent shall notify such Debtor of the revocation
of such power and authority, each Debtor (a) may, in the ordinary course of its
business, at its own expense, sell, lease or furnish under contracts of service
any of the Inventory normally held by such Debtor for such purpose, use and
consume, in the ordinary course of its business, any raw materials, work in
process or materials normally held by such Debtor for such purpose, and use, in
the ordinary course of its business (but subject to the terms of the Credit
Agreement), the cash proceeds of Collateral and other money which constitutes
Collateral, (b) will, at its own expense, use commercially reasonable efforts to
collect, as and when due, all amounts due under any of the Non-Tangible
Collateral, including the taking of such action with respect to such collection
as the U.S. Collateral Agent may reasonably request or, in the absence of such
request, as such Debtor may deem advisable, and (c) may grant, in the ordinary
course of business, to any party obligated on any of the Non-Tangible
Collateral, any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of Goods, the sale
or lease of which shall have given rise to such Non-Tangible Collateral. The
U.S. Collateral Agent, however, may, at any time that a Default exists, whether
before or after any revocation of such power and authority or the maturity of
any of the Liabilities, notify any parties obligated on any of the Non-Tangible
Collateral to make payment to the U.S. Collateral Agent of any amounts due or to
become due thereunder and enforce collection of any of the Non-Tangible
Collateral by suit or otherwise and surrender, release or exchange all or any
part thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder or evidenced
thereby. Upon request of the U.S. Collateral Agent during the existence of a
Default, each Debtor
7
will, at its own expense, notify any parties obligated on any of the
Non-Tangible Collateral to make payment to the U.S. Collateral Agent of any
amounts due or to become due thereunder.
Upon request by the U.S. Collateral Agent during the existence of a
Default, each Debtor will forthwith, upon receipt, transmit and deliver to the
U.S. Collateral Agent, in the form received, all cash, checks, drafts and other
instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by the U.S. Collateral Agent)
which may be received by such Debtor at any time in full or partial payment or
otherwise as proceeds of any of the Collateral. Except as the U.S. Collateral
Agent may otherwise consent in writing, any such items which may be so received
by any Debtor during the existence of a Default will not be commingled with any
other of its funds or property, but will be held separate and apart from its own
funds or property and upon express trust for the U.S. Collateral Agent for the
benefit of the Secured Parties until delivery is made to the U.S. Collateral
Agent. Each Debtor will comply with the terms and conditions of any consent
given by the U.S. Collateral Agent pursuant to the foregoing sentence.
During the existence of a Default, all items or amounts which are delivered
by any Debtor to the U.S. Collateral Agent on account of partial or full payment
or otherwise as proceeds of any of the Collateral shall be deposited to the
credit of a deposit account of such Debtor under which the U.S. Collateral Agent
is the depositary bank (each an "Assignee Deposit Account"), as security for
payment of the Liabilities. No Debtor shall have any right to withdraw any funds
deposited in the applicable Assignee Deposit Account. The U.S. Collateral Agent
may, from time to time, in its discretion, and shall upon request of the
applicable Debtor made not more than once in any week, apply all or any of the
then balance, representing collected funds, in the Assignee Deposit Account,
toward payment of the Liabilities, whether or not then due, in such order of
application as the U.S. Collateral Agent may determine, and the U.S. Collateral
Agent may, from time to time, in its discretion, release all or any of such
balance to the applicable Debtor.
If and to the extent that a perfected security interest hereunder in any
Collateral shall cease to be perfected for any reason whatsoever (including,
without limitation, release of all or any balance in any Assignee Deposit
Account or use or disposition by any Debtor of any proceeds of Collateral), then
such Collateral (referred to in this paragraph as "released Collateral") shall
be deemed thereby released from the security interest hereunder in exchange, as
of the time of such release, for any other Collateral of equivalent value in
which a perfected security interest hereunder is being obtained
contemporaneously
8
or has been most recently obtained, but only to the extent such other Collateral
does not represent either (a) Collateral in exchange for which any previously
released Collateral shall have been deemed released, or (b) Collateral of
equivalent value to any loan or advance (otherwise than by renewal or extension)
from the U.S. Collateral Agent to the Borrower in which Collateral a perfected
security interest hereunder shall have been obtained contemporaneously with or
most recently prior to such loan or advance.
During the existence of a Default, the U.S. Collateral Agent is authorized
to endorse, in the name of the applicable Debtor, any item, howsoever received
by the U.S. Collateral Agent, representing any payment on or other proceeds of
any of the Collateral.
5. Certificates, Schedules and Reports. Each Debtor will from time to
-----------------------------------
time deliver to the U.S. Collateral Agent such schedules, certificates and
reports respecting all or any of the Collateral at the time subject to the
security interest hereunder, and the items or amounts received by such Debtor in
full or partial payment of any of the Collateral, as the U.S. Collateral Agent
may reasonably request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of such Debtor and shall be in such form
and detail as the U.S. Collateral Agent may specify. Each Debtor shall
immediately notify the U.S. Collateral Agent of the occurrence of any event
causing any loss of its Inventory or other Goods which is material to Holdings
and its Subsidiaries taken as a whole, and such notice shall specify the amount
of such loss.
6. Agreements of the Debtors. Each Debtor (a) will, upon request of
-------------------------
the U.S. Collateral Agent, execute such financing statements and other documents
(and pay the cost of filing or recording the same in all public offices
reasonably deemed appropriate by the U.S. Collateral Agent) and do such other
acts and things (including, without limitation, delivery to the U.S. Collateral
Agent of any Instruments or Certificated Securities which constitute
Collateral), all as the U.S. Collateral Agent may from time to time reasonably
request, to establish and maintain a valid security interest in the Collateral
(free of all other liens, claims and rights of third parties whatsoever, other
than Permitted Liens) to secure the payment of the Liabilities; (b) hereby
authorizes the U.S. Collateral Agent to file such financing statements and other
documents without its signature (to the extent allowed by applicable law); (c)
will keep all its Inventory (other than Inventory which is leased to customers
or in transit to or from customer locations), Equipment and other Goods at, and
will not maintain any place of business at any location other than, its
address(es) shown on Schedules I and II hereto or at such other addresses of
----------- --
which such Debtor shall have
9
given the U.S. Collateral Agent not less than 10 days' prior written notice; (d)
shall not change its state of organization or incorporation or its name,
identity or corporate structure such that any financing statement filed to
perfect the U.S. Collateral Agent's interests under this Agreement would become
seriously misleading, unless the Debtor shall have given the U.S. Collateral
Agent not less than 10 days' prior notice of such change (provided that this
Section 6(d) shall not be deemed to authorize any change or transaction
prohibited under the Credit Agreement); (e) will keep its records concerning the
Non-Tangible Collateral in such a manner as will enable the U.S. Collateral
Agent or its designees to determine at any time the status of the Non-Tangible
Collateral; (f) will furnish the U.S. Collateral Agent such information
concerning such Debtor, the Collateral and the Account Debtors as the U.S.
Collateral Agent may from time to time reasonably request; (g) will permit the
U.S. Collateral Agent and its designees, from time to time, on reasonable notice
and at reasonable times and intervals during normal business hours (or at any
time without notice during the existence of a Default) to inspect such Debtor's
Inventory and other Goods, and to inspect, audit and make copies of and extracts
from all records and all other papers in the possession of such Debtor
pertaining to the Collateral and the Account Debtors, and will, upon request of
the U.S. Collateral Agent during the existence of a Default, deliver to the U.S.
Collateral Agent all of such records and papers; (h) will, upon request of the
U.S. Collateral Agent, stamp on its records concerning the Collateral and add on
all Chattel Paper constituting a portion of the Collateral, a notation, in form
satisfactory to the U.S. Collateral Agent, of the security interest of the U.S.
Collateral Agent hereunder; (i) except for the sale or lease of Inventory in the
ordinary course of its business and sales of Equipment which is no longer useful
in its business or which is being replaced by similar Equipment or as otherwise
permitted by the Credit Agreement, will not create or permit to exist any lien
on or security interest in any Collateral other than Permitted Liens and liens
and security interests in favor of the U.S. Collateral Agent for the benefit of
the Secured Parties; (j) will at all times keep all its Inventory and other
Goods insured under policies maintained with reputable, financially sound
insurance companies against loss, damage, theft and other risks to such extent
as is customarily maintained by companies similarly situated, and cause all such
policies to provide that loss thereunder shall be payable to the U.S. Collateral
Agent as its interest may appear (it being understood that (A) so long as no
Default shall be existing, the U.S. Collateral Agent shall deliver any proceeds
of such insurance which may be received by it to such Debtor and (B) whenever a
Default shall be existing, the U.S. Collateral Agent may apply any proceeds of
such insurance which may be received by it toward the ratable payment of the
Liabilities, whether or not due), and such policies or certificates thereof
shall, if the
U.S. Collateral Agent so requests, be deposited with or furnished to the U.S.
Collateral Agent; (k) will, upon request of the U.S. Collateral Agent, (i) cause
to be noted on the applicable certificate, in the event any of its Equipment is
covered by a certificate of title, the security interest of the U.S. Collateral
Agent in the Equipment covered thereby and (ii) deliver all such certificates to
the U.S. Collateral Agent or its designees; (l) will take all steps reasonably
necessary to protect, preserve and maintain all of its rights in the Collateral;
(m) will keep all of the tangible Collateral and Deposit Accounts in the
continental United States or, in the case of any Debtor, any province in Canada
of which such Debtor has given the U.S. Collateral Agent not less than 10 days
prior written notice; and (n) will reimburse the U.S. Collateral Agent for all
expenses, including reasonable attorneys' fees and legal expenses, incurred by
the U.S. Collateral Agent in seeking to collect or enforce any rights in respect
of such Debtor's Collateral.
Any expenses incurred in protecting, preserving and maintaining any
Collateral shall be borne by the applicable Debtor. Whenever a Default shall be
existing, the U.S. Collateral Agent shall have the right to bring suit to
enforce any or all of the Intellectual Property or licenses thereunder, in which
event the applicable Debtor shall at the request of the U.S. Collateral Agent do
any and all lawful acts and execute any and all proper documents required by the
U.S. Collateral Agent in aid of such enforcement and such Debtor shall promptly,
upon demand, reimburse and indemnify the U.S. Collateral Agent for all
reasonable costs and expenses incurred by the U.S. Collateral Agent in the
exercise of its rights under this Section 6, except to the extent any of the
---------
foregoing result from the gross negligence or willful misconduct of the U.S.
Collateral Agent. Notwithstanding the foregoing, the U.S. Collateral Agent shall
have no obligations or liabilities regarding the Collateral or any thereof by
reason of, or arising out of, this Agreement.
7. Default. Whenever a Default shall be existing, the U.S. Collateral
-------
Agent may exercise from time to time any and all rights and remedies available
to it under the UCC or any other applicable law, in addition to those described
in this section below.
(a) Each Debtor agrees, in case of Default, (i) to assemble, at its
expense, all its Inventory and other Goods (other than Fixtures) at a convenient
place or places acceptable to the U.S. Collateral Agent, and (ii) at the U.S.
Collateral Agent's request, to execute all such documents and do all such other
things which may be necessary or desirable in order to enable the U.S.
Collateral Agent or its nominee to be registered
11
as owner of the Intellectual Property with any competent registration authority.
(b) Notice of the intended disposition of any of the Collateral may be
given by first-class mail, hand-delivery (through a delivery service or
otherwise), facsimile or E-mail, and shall be deemed to have been "sent" upon
deposit in the U.S. Mails with adequate postage properly affixed, upon delivery
to an express delivery service or upon the electronic submission through
telephonic or Internet services, as applicable. Each Debtor hereby agrees and
acknowledges that (i) with respect to Collateral that is: (A) perishable or
threatens to decline speedily in value or (B) is of a type customarily sold on a
recognized market (including but not limited to, Investment Property), no notice
of disposition need be given; and (ii) with respect to Collateral not described
in clause (i) of this Section 7(b), notification sent after default and ten days
before any proposed disposition provides notice within a reasonable time before
disposition.
(c) Each Debtor hereby agrees and acknowledges that a commercially
reasonable disposition of Inventory, Equipment, Computer Hardware and Software
or Intellectual Property may be by lease or license of, in addition to the sale
of, such Collateral. Each Debtor further agrees and acknowledges that a
disposition (i) made in the usual manner on any recognized market, (ii) a
disposition at the price current in any recognized market at the time of
disposition or (iii) a disposition in conformity with reasonable commercial
practices among dealers in the type of property subject to the disposition
shall, in each case, be deemed commercially reasonable.
(d) Any cash proceeds of any disposition by the U.S. Collateral Agent of
any of the Collateral shall be applied by the U.S. Collateral Agent to payment
of expenses in connection with the Collateral, including reasonable attorneys'
fees and legal expenses, and thereafter to the ratable payment of the
Liabilities, and thereafter any surplus will be paid to the applicable Debtor.
The U.S. Collateral Agent need not apply or pay over for application noncash
proceeds of collection and enforcement unless (i) the failure to do so would be
commercially unreasonable and (ii) the affected Debtor has provided the U.S.
Collateral Agent with a written demand to apply or pay over such noncash
proceeds on such basis.
8. General. The U.S. Collateral Agent shall be deemed to have exercised
-------
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action
12
for that purpose as any applicable Debtor requests in writing, but failure of
the U.S. Collateral Agent to comply with any such request shall not of itself be
deemed a failure to exercise reasonable care, and no failure of the U.S.
Collateral Agent to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by any Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral.
All notices and requests hereunder shall be in writing (including facsimile
transmission) and shall be sent to the applicable party at its address shown on
Schedule I hereto or at such other address as such party may, by written notice
----------
received by the U.S. Collateral Agent, have designated as its address for such
purpose. Notices sent by facsimile transmission shall be deemed to have been
given when sent; notices sent by mail shall be deemed to have been given three
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery or overnight courier shall be deemed
to have been given when received.
Each of the Debtors agrees to pay all expenses (including reasonable
attorney's fees and legal expenses) paid or incurred by the U.S. Collateral
Agent or any other Secured Party in endeavoring to collect the Liabilities of
such Debtor, or any part thereof, and in enforcing this Agreement against such
Debtor, and such obligations will themselves be Liabilities.
No delay on the part of the U.S. Collateral Agent in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the U.S. Collateral Agent of any right or remedy shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
This Security Agreement shall remain in full force and effect until all
Liabilities have been paid in full and all Commitments have terminated. If at
any time all or any part of any payment theretofore applied by the U.S.
Collateral Agent or any other Secured Party to any of the Liabilities is or must
be rescinded or returned by the U.S. Collateral Agent or such other Secured
Party for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of any Debtor), such Liabilities shall, for the
purposes of this Agreement, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by the U.S. Collateral Agent or such other Secured Party, and
this Agreement shall continue to be effective or be reinstated, as the case may
be, as to such Liabilities, all as though such application by the U.S.
Collateral Agent or such other Secured Party had not been made.
13
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York(except to the extent that perfection, the effect
of perfection or nonperfection, or the priority of the security interest granted
hereunder may be determined in accordance with the Uniform Commercial Code of a
different jurisdiction in accordance with New York law). Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
The rights and privileges of the U.S. Collateral Agent hereunder shall
inure to the benefit of its successors and assigns.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional persons or entities may become parties hereto
by executing and delivering to the U.S. Collateral Agent a counterpart of this
Agreement (including supplements to the Schedules hereto). Immediately upon such
execution and delivery (and without any further action), each such additional
person or entity will become a party to, and will be bound by all the terms of,
this Agreement.
This Agreement amends and restates in its entirety the Existing Security
Agreement which, after the effectiveness hereof, shall no longer be effective
(except for any provisions thereof which by their terms survive, or may be
reinstated, after terminations thereof).
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
-------- -------
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE U.S. COLLATERAL AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH DEBTOR
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
EACH DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, TO THE ADDRESS SET
14
FORTH ON SCHEDULE I HERETO (OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN
----------
WRITING TO THE U.S. COLLATERAL AGENT AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH DEBTOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY DEBTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH DEBTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
EACH OF EACH DEBTOR, THE U.S. COLLATERAL AGENT AND (BY ACCEPTING THE
BENEFITS HEREOF) EACH OTHER SECURED PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN
CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
15
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
UNITED RENTALS (NORTH AMERICA), INC.
By:
---------------------------
Title:
------------------------
UNITED RENTALS, INC.
By:
---------------------------
Title:
------------------------
BANK OF AMERICA, N.A.,
as U.S. Collateral Agent for the
Secured Parties
By:
---------------------------
Title:
------------------------
12804199 97403190 Signature Page:
Third Restated U.S. Security Agreement
ADVANCE BARRICADES AND SIGNING, INC.
ALL CITIES TRAILER EXCHANGE, INC.
ARROW EQUIPMENT COMPANY
A.S.C. PAVEMENT MARKINGS, INC.
BAKERSFIELD COMPACTION EQUIPMENT
BNR EQUIPMENT, INC.
COAST LINE MARKING, INC.
DEALER SERVICES COMPANY
EQUIPMENT LEASING SERVICES, INC.
FLASHER CO. OF KANSAS, INC.
FLASHER COMPANY OF OKLAHOMA, INC.
FRONTENAC EQUIPMENT, INC.
HIGHWAY RENTALS, INC.
HIGHWAY SUPPLY COMPANY
HIGHWAY SAFETY SERVICE COMPANY
JADCO SIGNING, INC.
LECTRIC SAFETY LIGHTS CO.
LIDDELL MANAGEMENT CO., INC.
PAIGE BARRICADES, INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, INC.
RENTALS UNLIMITED, INCORPORATED
ROCKY MOUNTAIN SAFETY SERVICE, INC.
▇▇▇▇ ENTERPRISES, INC.
SHORING AND SUPPLY COMPANY, INC.
STATE BARRICADING, INC.
SAFE-T-FLARE SERVICES, INC.
THOESEN EQUIPMENT, INC.
TRAFFIC MARKINGS SOUTH, INC.
TRAFFIC SAFETY SERVICES, INC.
TRI-MAC, CORPORATION
UNITED RENTALS GULF, INC.
UNITED RENTALS HIGHWAY TECHNOLOGIES, INC.
UNITED RENTALS HIGHWAY
TECHNOLOGIES GULF, INC.
By:
------------------------------
Title:
---------------------------
UNITED RENTALS NORTHWEST, INC.
UNITED RENTALS SOUTHEAST, INC.
▇▇▇▇▇▇▇▇▇ RENTS, INCORPORATED
12804199 97403190 Signature Page:
Third Restated U.S. Security Agreement
WARNING LITES OF INDIANA, INC.
WARNING LITES OF IOWA, INC.
WARNING LITES OF MINNESOTA, INC.
WARNING SAFETY LIGHTS, INC.
WARNING SAFETY LIGHTS OF GEORGIA, INC.
WEST-CO RENTAL & SALES
WLI INDUSTRIES, INC.
WORK SIGNS, INC. WORK ZONE, INC.
WORK ZONE SAFETY, INC.
▇▇▇▇▇▇▇▇▇▇ ENTERPRISES, INC.
▇▇▇▇▇ SYSTEMS, INC.
By:
------------------------------
Title:
---------------------------
UNITED EQUIPMENT RENTALS GULF, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
------------------------------
Title:
---------------------------
UNITED RENTALS HIGHWAY
TECHNOLOGIES, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
------------------------------
Title:
---------------------------
UNITED RENTALS SOUTHEAST, L.P.
By: United Rentals (North America), Inc.
Its: General Partner
By:
------------------------------
Title:
---------------------------
12804199 97403190 Signature Page:
Third Restated U.S. Security Agreement
ADDITIONAL SIGNATURE PAGE to the Third Restated U.S. Security
Agreement dated as of April __, 2001 among United Rentals
(North America), Inc. (the "Borrower"), United Rentals, Inc.,
Bank of America, N.A., as U.S. Collateral Agent, and various
U.S. Subsidiaries of the Borrower.
The undersigned is executing a counterpart hereof for purposes
of becoming a party hereto (and attached hereto is a
supplement to Schedules I, II and III of such Security
Agreement setting forth the information required thereby with
respect to the undersigned for purposes of such Security
Agreement):
[ ]
By:________________________________
Name:______________________________
Title:_____________________________
12804199 97403190 Signature Page:
Third Restated U.S. Security Agreement
SCHEDULE I
TO SECURITY AGREEMENT
CHIEF EXECUTIVE OFFICES
-----------------------
SCHEDULE II
TO SECURITY AGREEMENT
ADDRESSES OF OTHER LOCATIONS
----------------------------
SCHEDULE III
TO SECURITY AGREEMENT
LIST OF INTELLECTUAL PROPERTY
-----------------------------
EXHIBIT "E"
FORM OF CANADIAN GUARANTEE
Guarantee dated as of [X], made by [Name of Guarantor] (the
"Guarantor") to and in favour of the Canadian Collateral Agent (as defined
herein) and the other Canadian Secured Parties (as defined herein).
WHEREAS:
A. The Chase Manhattan Bank of Canada, as Canadian administrative agent, and
such other financial institutions (collectively, the "Lenders") as may from time
to time be parties to the Credit Agreement (as hereinafter defined) have made
certain credit facilities available to United Rentals of Canada, Inc. (the
"Borrower") upon the terms and conditions contained in an amended and restated
credit agreement dated as of April ____, 2001, among United Rentals (North
America), Inc., United Rentals, Inc., the Borrower, The Chase Manhattan Bank as
U.S. administrative agent and the Lenders (as amended, modified, extended,
renewed, replaced, restated, supplemented or refinanced from time to time and
including any agreement extending the maturity of, or refinancing or
restructuring (including the inclusion of additional borrowers thereunder or any
increase in the amount borrowed) all or any portion of, the indebtedness under
such agreement or any successor agreements, whether or not with the same agents,
co-agents or lenders, the "Credit Agreement");
B. One of the conditions of the Lenders agreeing to make credit facilities
available to United Rentals (North America), Inc. and the Borrower under the
Credit Agreement was that the Guarantor execute and deliver this guarantee, to
and in favour of Bank of America Canada, as Canadian collateral agent (in such
capacity, the "Canadian Collateral Agent") and the C $ Revolving Lenders (as
defined in the Credit Agreement) (collectively, the "Canadian Secured Parties"),
guaranteeing the payment and performance of all present and future debts,
liabilities and obligations, direct or indirect, absolute or contingent, of the
Borrower to the Canadian Collateral Agent and the other Canadian Secured Parties
arising under, in connection with or pursuant to the Credit Agreement and the
other Loan Documents (as defined in the Credit Agreement); and
C. The Guarantor is a subsidiary (as construed in accordance with the Business
Corporations Act ([Name of Jurisdiction])) of the Borrower and the Guarantor has
determined that it is in the best interests of the Guarantor to enter into this
guarantee;
NOW THEREFORE in consideration of the foregoing, the sum of $10.00 now paid
by the Canadian Collateral Agent and the other Canadian Secured Parties to
- 2 -
the Guarantor and such other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Guarantor agrees as follows:
ARTICLE 1
GUARANTEE
Section 1.1 Guarantee.
The Guarantor absolutely, irrevocably and unconditionally guarantees the
due and punctual payment to the Canadian Secured Parties, whether at stated
maturity, by acceleration or otherwise, of all present and future debts,
liabilities and obligations, direct or indirect, absolute or contingent, of the
Borrower to the Canadian Secured Parties or any of them arising pursuant to, or
in respect of, the Credit Agreement and the other Loan Documents (as defined in
the Credit Agreement) or any other document executed and delivered by the
Borrower in connection with the Credit Agreement and all Hedging Obligations (as
defined in the Credit Agreement) of the Borrower to the Canadian Secured Parties
(all such obligations, the "Guaranteed Obligations") and promises to pay, on
demand, any and all out-of-pocket expenses (including reasonable counsel fees
and disbursements) incurred by or on behalf of the Canadian Secured Parties in
enforcing any of their respective rights under this guarantee.
Section 1.2 Absolute Liability.
The Guarantor guarantees that the Guaranteed Obligations will be paid to
the Canadian Collateral Agent and the other Canadian Secured Parties strictly in
accordance with their terms and conditions, that the Guarantor shall be liable
as principal debtor and not solely as surety with respect to the payment of the
Guaranteed Obligations and that the liability of the Guarantor under this
guarantee shall be absolute, irrevocable and unconditional irrespective of:
(a) the lack of validity or enforceability of any terms of any of the Loan
Documents;
(b) any contest by the Borrower, United Rentals (North America), Inc. or
any other Person as to the amount of the Guaranteed Obligations, the
validity or enforceability of any terms of the Loan Documents or the
priority of any security granted to the Canadian Collateral Agent or
the other Canadian Secured Parties;
(c) any defence, counter-claim or right of set-off available to the
Borrower;
(d) any extension of the time or times for payment of the Guaranteed
Obligations or any other indulgences which the Canadian Secured
Parties may grant to the Borrower, United Rentals (North America),
- 3 -
Inc. or any other Person or any amendment to, or alteration or renewal
of, any of the Loan Documents or the Guaranteed Obligations;
(e) any dealings with the security which the Canadian Secured Parties hold
or may hold pursuant to the terms and conditions of the Loan
Documents, including the taking, giving up or exchange of securities,
their variation or realization, the accepting of compositions and the
granting of releases and discharges, and any release of any other
guarantor of the Guaranteed Obligations;
(f) the assignment of all or any part of the benefits of this guarantee;
(g) any invalidity, non-perfection or unenforceability of any security
held by the Canadian Secured Parties or any irregularity or defect in
the manner or procedure by which the Canadian Collateral Agent and the
other Canadian Secured Parties realize on such security; and
(h) any other circumstances which might otherwise constitute a defence
available to, or a discharge of, the Guarantor, the Borrower, United
Rentals (North America), Inc. or any other Person in respect of the
Guaranteed Obligations or this guarantee.
ARTICLE 2
ENFORCEMENT
Section 2.1 Remedies.
The Canadian Secured Parties shall not be bound to exhaust their recourse
against the Borrower, United Rentals (North America), Inc. or any other Person
or realize on any security they may hold in respect of the Guaranteed
Obligations before being entitled to payment under this guarantee and the
Guarantor renounces all benefits of discussion and division.
Section 2.2 Impairment of Security.
Any loss of, or loss of value of, any security granted to any of the
Canadian Secured Parties by the Borrower, United Rentals (North America), Inc.
or any other Person shall not discharge pro tanto or limit or lessen the
liability of the Guarantor under this guarantee.
Section 2.3 Amount of Guaranteed Obligations.
Any account settled or stated by or between the Canadian Collateral Agent
and the Borrower, or if any such account has not been settled or stated
immediately before demand for payment under this guarantee, any account stated
by the Canadian Collateral Agent shall, in the absence of manifest mathematical
error, be
- 4 -
accepted by the Guarantor as conclusive evidence of the amount of the Guaranteed
Obligations which is due by the Borrower to the Canadian Secured Parties or
remains unpaid by the Borrower to the Canadian Secured Parties.
Section 2.4 Payment on Demand.
The obligation of the Guarantor to pay the amount of the Guaranteed
Obligations and all other amounts payable by it to the Canadian Secured Parties
under this guarantee shall arise, and the Guarantor shall make such payments,
immediately after demand for same is made in writing to it. The liability of the
Guarantor shall bear interest from the date of such demand at the rate or rates
of interest then applicable to the Guaranteed Obligations under and calculated
in the manner provided in the Loan Documents (including any adjustment to give
effect to the provisions of the Interest Act (Canada)).
Section 2.5 Assignment and Postponement.
(1) All obligations, liabilities and indebtedness of the Borrower, United
Rentals, Inc. and each of their respective Subsidiaries to the Guarantor of
any nature whatsoever and all security therefor (the "Intercorporate
Indebtedness") are assigned and transferred to the Canadian Collateral
Agent for the benefit of the Canadian Collateral Agent and the other
Canadian Secured Parties as continuing and collateral security for the
Guarantor's obligations under this guarantee. Subject to Section 2.5(2) and
Section 2.5(3), until notice by the Canadian Collateral Agent to the
Guarantor that the Guaranteed Obligations have become due and payable, the
Guarantor may receive payments in respect of the Intercorporate
Indebtedness in accordance with their terms. The Guarantor shall not,
except with the written consent of the Canadian Collateral Agent and the
other Canadian Secured Parties, assign all or any part of the
Intercorporate Indebtedness to any Person other than the Canadian
Collateral Agent or the other Canadian Secured Parties.
(2) Upon the occurrence and during the continuance of an Event of Default under
and as defined in the Credit Agreement, all Intercorporate Indebtedness
shall be held in trust for the Canadian Secured Parties and shall be
collected, enforced or proved subject to, and for the purpose of, this
guarantee and any payments received by the Guarantor in respect of the
Intercorporate Indebtedness shall be segregated from other funds and
property held by the Guarantor and immediately paid to the Canadian
Collateral Agent on account of the Guaranteed Obligations.
(3) Upon the occurrence and during the continuance of an Event of Default under
and as defined in the Credit Agreement, the Canadian Secured Parties shall
be entitled to receive payment of the Guaranteed Obligations in full before
the Guarantor receives any payment on account of the Intercorporate
- 5 -
Indebtedness. In such case, the Intercorporate Indebtedness shall not be
released or withdrawn by the Guarantor unless the Canadian Collateral
Agent's written consent to the release or withdrawal is first obtained. The
Guarantor shall not permit the prescription of the Intercorporate
Indebtedness by any statute of limitations or ask for or obtain any
security or negotiable paper for, or other evidence of, the Intercorporate
Indebtedness except for the purpose of delivering the same to the Canadian
Collateral Agent.
Section 2.6 Suspension of Guarantor Rights.
The Guarantor irrevocably waives any rights which it may at any time have
by reason of the performance of any of its obligations under this guarantee (i)
to be indemnified by the Borrower, (ii) to claim contribution from any other
guarantor of the debts, liabilities or obligations of the Borrower, or (iii)
subject to Section 2.8, to take the benefit (in whole or in part and whether by
way of subrogation or otherwise) of any rights of the Canadian Secured Parties
under any of the Loan Documents.
Section 2.7 No Prejudice to Canadian Secured Parties or Canadian Collateral
Agent.
The Canadian Secured Parties shall not be prejudiced in any way in the
right to enforce any provision of this guarantee by any act or failure to act on
the part of the Borrower, United Rentals (North America), Inc., United Rentals,
Inc., the Canadian Collateral Agent or the other Canadian Secured Parties. The
Canadian Collateral Agent and the other Canadian Secured Parties may, at any
time and from time to time, in such manner as any of them may determine is
expedient, without any consent of, or notice to, the Guarantor and without
impairing or releasing the obligations of the Guarantor (i) change the manner,
place, time or terms of payment of, or renew or alter, the Guaranteed
Obligations, (ii) renew, increase or otherwise vary any credit or credit
facilities to, or the terms or conditions of any transaction with, the Borrower,
United Rentals (North America), Inc. or any other Person, (iii) release,
compound or vary the liability of the Borrower, United Rentals (North America),
Inc. or any other Person liable in any manner under or in respect of the
Guaranteed Obligations, (iv) exercise or enforce or refrain from exercising or
enforcing any right or security against the Borrower, United Rentals (North
America), Inc., the Guarantor or any other Person, and (v) apply any sums from
time to time received to the Guaranteed Obligations. In their dealings with the
Borrower and United Rentals (North America), Inc., the Canadian Collateral Agent
and the other Canadian Secured Parties need not enquire into the authority or
power of any Person purporting to act for or on behalf of the Borrower or United
Rentals (North America), Inc.
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Section 2.8 No Subrogation.
The Guarantor irrevocably waives any claim, remedy or other right which it
may now have or hereafter acquire against the Borrower that arises from the
existence, payment, performance or enforcement of the Guarantor's obligations
under this guarantee, including any right of subrogation, reimbursement,
exoneration or indemnification or any right to participate in any claim or
remedy of the Canadian Secured Parties against the Borrower or any collateral
which the Canadian Secured Parties now have or hereafter acquire, whether or not
such claim, remedy or other right is reduced to judgment or is liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured, and whether or not such claim, remedy or other right
arises in equity or under contract, statute or common law. The Guarantor further
agrees that the Borrower shall be an intended third party beneficiary of the
Guarantor's waiver contained in this Section 2.8. If any amount is paid to the
Guarantor in violation of this section and, at such time, the Canadian Secured
Parties' claims against the Borrower in respect of the Guaranteed Obligations
shall not have been paid in full, any amount paid to the Guarantor shall be
deemed to have been paid to the Guarantor for the benefit of, and held in trust
for, the Canadian Secured Parties, and shall immediately be paid to the Canadian
Collateral Agent to be credited and applied upon such Guaranteed Obligations.
The Guarantor acknowledges that it will receive direct and indirect benefits
from the transactions contemplated by this guarantee and that the waiver in this
Section 2.8 is knowingly made in contemplation of such benefits.
Section 2.9 No Set-off.
To the fullest extent permitted by law, the Guarantor shall make all
payments under this guarantee without regard to any defence, counter-claim or
right of set-off available to it.
Section 2.10 Successors of the Borrower.
Any change or changes in the name of, or reorganization (whether by way of
reconstruction, consolidation, amalgamation, merger, transfer, sale, lease or
otherwise) of, the Borrower or its business shall not affect or in any way limit
or lessen the liability of the Guarantor under this guarantee or under any of
the Guarantor Security Agreements (as defined below). This guarantee and the
Guarantor Security Agreements shall extend to any person, firm or corporation
acquiring or from time to time carrying on the business of the Borrower.
Section 2.11 Continuing Guarantee.
This guarantee is a continuing guarantee. It extends to all present and
future Guaranteed Obligations, applies to and secures the ultimate balance of
the Guaranteed Obligations due or remaining due to the Canadian Collateral Agent
and the other Canadian Secured Parties and shall be binding as a continuing
obligation
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of the Guarantor until the Canadian Collateral Agent and the other Canadian
Secured Parties release the Guarantor. This guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Guaranteed Obligations is rescinded or must otherwise be returned by
the Canadian Secured Parties upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, all as though the payment had not been made.
Section 2.12 Supplemental Security.
This guarantee is in addition and without prejudice to and supplemental to
all other guarantees and securities held or which may hereafter be held by the
Canadian Secured Parties.
Section 2.13 Security for Guarantee.
The Guarantor acknowledges that this guarantee is intended to secure
payment of the Guaranteed Obligations and that the payment of the Guaranteed
Obligations and the other obligations of the Guarantor under this guarantee are
secured pursuant to the terms and provisions of those agreements described in
Schedule "A" (collectively, the "Guarantor Security Agreements").
Section 2.14 Right of Set-off.
Upon the occurrence and during the continuance of any Event of Default
under and as defined in the Credit Agreement, the Canadian Collateral Agent and
each of the other Canadian Secured Parties are authorized by the Guarantor at
any time and from time to time and may, to the fullest extent permitted by law,
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Canadian Collateral Agent or the other Canadian Secured Parties to or for
the credit or the account of the Guarantor against any and all of the
obligations of the Guarantor now or hereafter existing irrespective of whether
or not (i) the Canadian Secured Parties have made any demand under this
guarantee, or (ii) any of the obligations comprising the Guaranteed Obligations
are contingent or unmatured. The rights of the Canadian Collateral Agent and the
other Canadian Secured Parties under this Section 2.14 are in addition and
without prejudice to and supplemental to other rights and remedies which the
Canadian Collateral Agent and the other Canadian Secured Parties may have.
Section 2.15 Interest Act (Canada).
The Guarantor acknowledges that certain of the rates of interest applicable
to the Guaranteed Obligations may be computed on the basis of a year of 360 days
or 365 days, as the case may be and paid for the actual number of days elapsed.
For purposes of the Interest Act (Canada), whenever any interest is calculated
using a rate based on a year of 360 days or 365 days, as the case may be, such
rate
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determined pursuant to such calculation, when expressed as an annual rate is
equivalent to (i) the applicable rate based on a year of 360 days or 365 days,
as the case may be, (ii) multiplied by the actual number of days in the calendar
year in which the period for such interest is payable (or compounded) ends, and
(iii) divided by 360 or 365, as the case may be.
Section 2.16 Taxes and Other Taxes.
(1) All payments to the Canadian Collateral Agent or the other Canadian Secured
Parties by the Guarantor under this guarantee or under any of the Guarantor
Security Agreements shall be made free and clear of and without deduction
or withholding for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by any Lender's net income or
receipts (all non-excluded items being called "Taxes"). If any withholding
or deduction from any payment to be made by the Guarantor hereunder
(including any additional amount or amounts to be paid under this Section
2.16) is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Guarantor will:
(a) pay directly to the relevant authority the full amount required to be
so withheld or deducted;
(b) promptly forward to the Canadian Collateral Agent an official receipt
or other documentation satisfactory to the Canadian Collateral Agent
evidencing such payment to such authority; and
(c) pay to the Canadian Collateral Agent for the account of the Canadian
Secured Parties such additional amount or amounts as is necessary to
ensure that the net amount actually received by each Canadian Secured
Parties will equal the full amount such Canadian Secured Parties would
have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Canadian
Collateral Agent or any other Canadian Secured Party with respect to any
payment received by the Canadian Collateral Agent or such other Canadian
Secured Party hereunder, the Canadian Collateral Agent or such other
Canadian Secured Party may pay such Taxes and the Guarantor will promptly
pay such additional amounts (including any penalty, interest and expense)
as is necessary in order that the net amount received by such Person after
the payment of such Taxes (including any Taxes on such additional amount)
- 9 -
shall equal the amount such Person would have received had such Taxes not
been asserted.
(2) If the Guarantor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Canadian Collateral Agent, for the
account of the applicable Canadian Secured Parties, the required receipts
or other required documentary evidence, the Guarantor shall indemnify such
Canadian Secured Parties for any incremental Taxes, interest or penalties
that may become payable by any such Canadian Secured Party as a result of
any such failure. For purposes of this Section 2.16, a distribution
hereunder by the Canadian Collateral Agent or any Canadian Secured Party to
or for the account of any Canadian Secured Party shall be deemed a payment
by the Guarantor.
(3) The provisions of this Section 2.16 shall survive the termination of this
guarantee.
Section 2.17 Judgment Currency.
(1) If for the purposes of obtaining judgment in any court it is necessary to
convert all or any part of the Guaranteed Obligations or any other amount
due to a Canadian Secured Party in respect of the Guarantor's obligations
under this guarantee in any currency (the "Original Currency") into another
currency (the "Other Currency"), the Guarantor, to the fullest extent that
it may effectively do so, agrees that the rate of exchange used shall be
that at which, in accordance with normal banking procedures, such Canadian
Secured Party, as the case may be, could purchase the Original Currency
with the Other Currency on the Business Day preceding that on which final
judgment is paid or satisfied.
(2) The obligations of the Guarantor in respect of any sum due in the Original
Currency from it to any Canadian Secured Party shall, notwithstanding any
judgment in any Other Currency, be discharged only to the extent that on
the Business Day following receipt by such Canadian Secured Party of any
sum adjudged to be so due in such Other Currency such Canadian Secured
Party may, in accordance with its normal banking procedures, purchase the
Original Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due to such Canadian
Secured Party in the Original Currency, the Guarantor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such
Canadian Secured Party against such loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due to such Canadian
Secured Party in the Original Currency, such Canadian Secured Party agrees
to remit such excess to the Guarantor.
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ARTICLE 3
GENERAL
Section 3.1 Notices, etc.
Any notice, direction or other communication to be given under this
guarantee shall, except as otherwise permitted, be in writing and given by
delivering it or sending it by telecopy or other similar form of recorded
communication addressed:
(a) if to the Guarantor, to it at:
c/o United Rentals, Inc.
Four ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Canadian Collateral Agent or the other Canadian Secured
Parties, to the Canadian Collateral Agent at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ Sales ▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any such communication shall be deemed to have been validly and effectively
given (i) if personally delivered, on the date of such delivery if such date is
a Business Day and such delivery was made prior to 4:00 p.m. (Toronto time),
otherwise on the next Business Day, and (ii) if transmitted by facsimile or
similar means of recorded communication, on the Business Day following the date
of transmission. Any party may change its address for service from time to time
by notice given in accordance with the foregoing and any subsequent notice shall
be sent to the party at its changed address.
- 11 -
Section 3.2 Defined Terms.
Capitalized terms used in this guarantee and not otherwise defined have the
meanings specified in the Credit Agreement.
Section 3.3 Gender and Number.
Any reference in this guarantee to gender shall include all genders and
words importing the singular number only shall include the plural and vice
versa.
Section 3.4 Headings, etc.
The division of this guarantee into Articles and Sections and the insertion
of headings are for convenient reference only and are not to affect the
interpretation of this guarantee.
Section 3.5 Currency.
All references in this guarantee to dollars, unless otherwise specifically
indicated, are expressed in Canadian currency.
Section 3.6 Successors and Assigns.
This guarantee shall be binding upon the Guarantor, its successors and
assigns, and shall enure to the benefit of the Canadian Secured Parties and
their respective successors and assigns. All rights of the Canadian Collateral
Agent and the other Canadian Secured Parties shall be assignable and in any
action brought by an assignee to enforce any such right, the Guarantor shall not
assert against the assignee any claim or defence which the Guarantor now has or
hereafter may have against the Canadian Collateral Agent or any of the other
Canadian Secured Parties.
Section 3.7 Severability.
If any provision of this guarantee is deemed by any court of competent
jurisdiction to be invalid or void, the remaining provisions shall remain in
full force and effect.
Section 3.8 Governing Law.
This guarantee shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
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IN WITNESS WHEREOF the Guarantor has caused this Guarantee to be executed
by its duly authorized officer as of the date first above written.
GUARANTOR
By:
--------------------------
Authorized Signing Officer
SCHEDULE "A"
GUARANTOR SECURITY
1. Security agreement dated as of the date hereof made by the Guarantor to and
in favour of the Canadian Collateral Agent
EXHIBIT "F"
FORM OF CANADIAN SECURITY AGREEMENT
Security agreement dated as of [x] made by [Canadian Subsidiary] (the
"Obligor") to and in favour of the Canadian Collateral Agent (as defined
herein).
WHEREAS:
A. The Chase Manhattan Bank of Canada and such other financial institutions
(collectively, the "Lenders") as may from time to time be parties to the Credit
Agreement (as hereinafter defined) have made certain credit facilities available
to United Rentals of Canada, Inc. (the "Borrower") upon the terms and conditions
contained in an amended and restated credit agreement dated as of April ____,
2001, among United Rentals (North America), Inc., the Borrower , The Chase
Manhattan Bank of Canada, as Canadian administrative agent (in such capacity,
the "Canadian Administrative Agent"), the Chase Manhattan Bank, as U.S.
administrative agent and the Lenders (as amended, modified, extended, renewed,
replaced, restated, supplemented or refinanced from time to time and including
any agreement extending the maturity of, or refinancing or restructuring
(including the inclusion of additional borrowers thereunder or any increase in
the amount borrowed) all or any portion of, the indebtedness under such
agreement or any successor agreements, whether or not with the same agents,
co-agents or lenders, the "Credit Agreement");
B. Pursuant to the Credit Agreement, Bank of America Canada has been
appointed as Canadian Collateral Agent (in such capacity, together with any
successor in such capacity, the "Canadian Collateral Agent") to act on behalf of
the Canadian Secured Parties (as defined herein) with respect to this agreement
and certain other Canadian Security Documents (as defined in the Credit
Agreement);
C. The Obligor, pursuant to a guarantee dated as of the date hereof (the
"Guarantee") in favour of the Canadian Collateral Agent and the other Canadian
Securities Parties (as defined herein), guaranteed the payment and performance
of all present and future debts, liabilities and obligations, direct and
indirect, absolute or contingent, of the Borrower to the Canadian Collateral
Agent and the other Canadian Secured Parties (as defined herein) arising under,
in connection with or pursuant to the Credit Agreement and the other Loan
Documents (as defined in the Credit Agreement) or any other document executed
and delivered by the Borrower in connection with the Credit Agreement and all
Hedging Obligations (as defined in the Credit Agreement) of the Borrower; and
D. The Obligor has agreed to execute and deliver this security agreement to
and in favour of the Canadian Collateral Agent as security for the payment and
- 2 -
performance of all debts, liabilities and obligations including all charges and
fees of the Canadian Collateral Agent and the other Canadian Secured Parties (as
defined herein) due from the Obligor to the Canadian Collateral Agent and the
other Canadian Secured Parties (as defined herein) pursuant to or in connection
with the Guarantee or the other Loan Documents (as defined in the Credit
Agreement) to which it is a party.
NOW THEREFORE in consideration of the foregoing, the sum of $10.00 now paid
by the Canadian Collateral Agent and the other Canadian Secured Parties (as
defined herein) to the Obligor and such other good and valuable consideration,
the receipt and sufficiency of which are acknowledged by the Obligor, the
Obligor agrees as follows:
ARTICLE 1
SECURITY
Section 1.1 Terms Incorporated by Reference.
Terms defined in the Personal Property Security Act (Ontario) (as amended
from time to time, the "PPSA") and used in this security agreement shall have
the same meanings.
Section 1.2 Grant of Security.
Subject to Section 1.5, the Obligor grants to the Canadian Collateral
Agent, for its own benefit as a C $ Revolving Lender (as defined in the Credit
Agreement) and as agent and in trust for the rateable benefit of itself and the
other Canadian Secured Parties (as defined herein), a security interest in all
the Obligor's right, title and interest in and to the personal property and
undertaking of the Obligor now owned or hereafter acquired (collectively, the
"Collateral") including, without limitation, any and all of the Obligor's:
(a) inventory including goods held for sale, lease or resale, goods
furnished or to be furnished to third parties under contracts of
lease, consignment or service, goods which are raw materials or work
in process, goods used in or procured for packing and materials used
or consumed in the business of the Obligor;
(b) equipment, machinery, furniture, fixtures, plants, vehicles and other
goods of every kind and description and all licences and other rights
and all records, files, charts, plans, drawings, specifications,
manuals and documents relating thereto;
- 3 -
(c) accounts due or accruing due and all agreements, books, accounts,
invoices, letters, documents and papers recording, evidencing or
relating thereto;
(d) money, documents of title, chattel paper, instruments and securities;
(e) intangibles including all security interests, goodwill, choses in
action and other contractual benefits and all trade marks, trade ▇▇▇▇
registrations and pending trade ▇▇▇▇ applications, patents and pending
patent applications and copyrights and other intellectual property
(collectively, the "Intellectual Property");
(f) substitutions and replacements of and increases, additions and, where
applicable, accessions to the property described in Sections
1.2(a)-(e) inclusive; and
(g) proceeds in any form derived directly or indirectly from any dealing
with all or any part of the property described in Sections 1.2(a)-(f)
inclusive or the proceeds of such proceeds.
Section 1.3 Obligations Secured.
(1) The security interest granted hereby (the "Security Interest") secures the
payment and performance of all debts, liabilities and obligations including
all charges and fees of the Canadian Collateral Agent and the C $ Revolving
Lenders (as defined in the Credit Agreement) (including any assignees or
participants thereof) (collectively, the "Canadian Secured Parties") due
from the Obligor to the Canadian Secured Parties pursuant to or in
connection with the Guarantee and each of the other Loan Documents (as
defined in the Credit Agreement) to which it is a party or any other
document executed and delivered by the Obligor in connection with the
Credit Agreement (collectively, and together with the expenses, costs and
charges set out in Section 1.3(2), the "Obligations").
(2) All expenses, costs and charges incurred by or on behalf of the Canadian
Collateral Agent and the other Canadian Secured Parties in connection with
this security agreement, the Security Interest or the Collateral, including
all legal fees, court costs, receiver's or agent's remuneration and other
expenses of taking possession of, repairing, protecting, insuring,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment for the Collateral, and of taking,
defending or participating in any action or proceeding in connection with
any of the foregoing matters or otherwise in connection with the Canadian
Collateral Agent's or any other Canadian Secured Party's interest in any
Collateral, whether or not directly relating to the enforcement of this
security agreement or any other Loan
- 4 -
Document (as defined in the Credit Agreement), shall be added to and form a
part of the Obligations.
Section 1.4 Attachment.
(1) The Obligor acknowledges that (i) value has been given, (ii) it has rights
in the Collateral (other than after-acquired Collateral), (iii) it has not
agreed to postpone the time of attachment of the Security Interest, and
(iv) it has received a duplicate original copy of this security agreement.
(2) If the Obligor acquires Collateral consisting of chattel paper,
instruments, securities or negotiable documents of title (collectively,
"Negotiable Collateral"), the Obligor will, immediately upon receipt,
deliver to the Canadian Collateral Agent the Negotiable Collateral, other
than Negotiable Collateral that is chattel paper or instruments and has
been acquired by the Obligor in the ordinary course of business, and shall,
at the request of the Canadian Collateral Agent (i) cause the transfer of
the Negotiable Collateral to the Canadian Collateral Agent to be registered
wherever, in the opinion of the Canadian Collateral Agent, such
registration may be required or advisable, (ii) duly endorse the same for
transfer in blank or as the Canadian Collateral Agent may direct, and (iii)
immediately deliver to the Canadian Collateral Agent any and all consents
or other documents which may be necessary to effect the transfer of the
Negotiable Collateral to the Canadian Collateral Agent or any third party.
(3) The Obligor will promptly inform the Canadian Collateral Agent in writing
of the acquisition by the Obligor of any personal property which is not
adequately described in this security agreement, and the Obligor will
execute and deliver, at its own expense, from time to time, amendments to
this security agreement or additional security agreements as may be
required by the Canadian Collateral Agent.
Section 1.5 Scope of Security Interest.
(1) To the extent that the creation of the Security Interest would constitute a
breach or permit the acceleration or termination of any agreement, right,
licence or permit of the Obligor (each, a "Restricted Asset"), the
Security Interest created hereunder will constitute a trust created in
favour of the Canadian Secured Parties pursuant to which the Obligor shall
hold as trustee its interest in all proceeds arising under or in connection
with the Restricted Asset in trust for the Canadian Collateral Agent on the
following basis:
(i) until the Security Interest has become enforceable, the Obligor
shall be entitled to receive all such proceeds; and
- 5 -
(ii) whenever the Security Interest has become enforceable, all rights
of the Obligor to receive such proceeds shall cease, the Obligor
shall at the request of the Canadian Collateral Agent take all
such actions to collect and enforce payment and other rights
arising under the Restricted Asset in accordance with the
instructions of the Canadian Collateral Agent and all such
proceeds arising under or in connection with the Restricted Asset
shall be immediately paid over to the Canadian Collateral Agent
for the benefit of the Canadian Secured Parties.
The Obligor shall not exercise any rights of set-off with respect to
amounts payable under or in connection with any Restricted Asset and shall
use its best efforts to ensure that no other party to the Restricted Asset
shall exercise any rights of set-off against any amounts payable
thereunder. The Obligor shall use its best efforts to obtain the consent of
each other party to the Restricted Asset to the creation of a security
interest in the Restricted Asset in favour of the Canadian Collateral Agent
in accordance with this security agreement and shall use its best efforts
to ensure that all agreements entered into on and after the date hereof
expressly permit the creation of a security interest in the Restricted
Asset in favour of the Canadian Collateral Agent in accordance with the
terms of this security agreement.
(2) Until the Security Interest shall have become enforceable, the grant of the
Security Interest in the Intellectual Property shall not affect in any way
the Obligor's rights to commercially exploit the Intellectual Property,
defend it, enforce the Obligor's rights in it or with respect to it against
third parties in any court or claim and be entitled to receive any damages
with respect to any infringement of it.
(3) The Security Interest shall not extend to consumer goods.
(4) The Security Interest shall not extend or apply to the last day of the term
of any lease or sublease or any agreement for a lease or sublease, now held
or hereafter acquired by the Obligor in respect of real property, but the
Obligor shall stand possessed of any such last day upon trust to assign and
dispose of it as the Canadian Collateral Agent may direct.
Section 1.6 Grant of Licence to Use Intellectual Property.
For purposes of enabling the Canadian Collateral Agent to exercise its
rights and remedies pursuant to Article 2, at such time as the Canadian
Collateral Agent shall be lawfully entitled to exercise its rights and remedies
and for no other purpose, the Obligor grants to the Canadian Collateral Agent an
irrevocable, nonexclusive licence (exercisable without payment of royalty or
other compensation to the Obligor) to use, assign or sublicense any of the
Intellectual Property wherever
- 6 -
the same may be located, including in such licence access to (i) all media in
which any of the licensed items may be recorded or stored, and (ii) all computer
programs used for compilation or print-out.
Section 1.7 Care and Custody of Collateral.
(1) The Canadian Collateral Agent and the other Canadian Secured Parties shall
have no obligation to keep Collateral in their possession identifiable.
(2) The Canadian Collateral Agent may, after the Security Interest shall have
become enforceable, (i) notify any person obligated on an account or on
chattel paper or any obligor on an instrument to make payments to the
Canadian Collateral Agent whether or not the Obligor was previously making
collections on such accounts, chattel paper or instruments, and (ii) assume
control of any proceeds arising from the Collateral.
ARTICLE 2 ENFORCEMENT
Section 2.1 Enforcement.
The Security Interest shall be and become enforceable against the Obligor
upon the occurrence and during the continuance of an Event of Default (under and
as defined in the Credit Agreement).
Section 2.2 Remedies.
Whenever the Security Interest has become enforceable, the Canadian
Collateral Agent may realize upon the Collateral and enforce the rights of the
Canadian Collateral Agent and the other Canadian Secured Parties by:
(a) entry onto any premises where Collateral consisting of tangible
personal property may be located;
(b) entry into possession of the Collateral by any method permitted by
law;
(c) sale or lease of all or any part of the Collateral;
(d) collection of any proceeds arising in respect of the Collateral;
(e) collection, realization or sale of, or other dealing with, the
accounts;
(f) appointment by instrument in writing of a receiver (which term as used
in this security agreement includes a receiver and manager) or agent
of all or any part of the Collateral and removal or replacement from
time to time of any receiver or agent;
- 7 -
(g) institution of proceedings in any court of competent jurisdiction for
the appointment of a receiver of all or any part of the Collateral;
(h) institution of proceedings in any court of competent jurisdiction for
sale or foreclosure of all or any part of the Collateral;
(i) filing of proofs of claim and other documents to establish claims to
the Collateral in any proceeding relating to the Obligor; and
(j) any other remedy or proceeding authorized or permitted under the PPSA
or otherwise by law or equity.
Such remedies may be exercised from time to time separately or in
combination and are in addition to, and not in substitution for, any other
rights of the Canadian Collateral Agent and the other Canadian Secured Parties
however created. The Canadian Collateral Agent shall not be bound to exercise
any right or remedy, and the exercise of rights and remedies shall be without
prejudice to the rights of the Canadian Collateral Agent and the other Canadian
Secured Parties in respect of the Obligations including the right to claim for
any deficiency.
Section 2.3 Additional Rights.
In addition to the remedies set forth in Section 2.2, the Canadian
Collateral Agent may, whenever the Security Interest has become enforceable:
(a) require the Obligor, at the Obligor's expense, to assemble the
Collateral at a place or places designated by notice in writing and
the Obligor agrees to so assemble the Collateral;
(b) require the Obligor, by notice in writing, to disclose to the Canadian
Collateral Agent the location or locations of the Collateral and the
Obligor agrees to make such disclosure when so required;
(c) repair, process, modify, complete or otherwise deal with the
Collateral and prepare for the disposition of the Collateral, whether
on the premises of the Obligor or otherwise;
(d) carry on all or any part of the business of the Obligor and, to the
exclusion of all others including the Obligor, enter upon, occupy and
use all or any of the premises, buildings, and other property of or
used by the Obligor for such time as the Canadian Collateral Agent
sees fit, free of charge, and the Canadian Collateral Agent and the
other Canadian Secured Parties shall not be liable to the Obligor for
any act, omission or negligence in so doing or for any rent, charges,
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depreciation or damages incurred in connection with or resulting from
such action;
(e) borrow for the purpose of carrying on the business of the Obligor or
for the maintenance, preservation or protection of the Collateral and
grant a security interest in the Collateral, whether or not in
priority to the Security Interest, to secure repayment; and
(f) commence, continue or defend any judicial or administrative
proceedings for the purpose of protecting, seizing, collecting,
realizing on or obtaining possession or payment of the Collateral, and
give good and valid receipts and discharges in respect of the
Collateral and compromise or give time for the payment or performance
of all or any part of the accounts or any other obligation of any
third party to the Obligor.
Section 2.4 Receiver's Powers.
(1) Any receiver appointed by the Canadian Collateral Agent shall be vested
with the rights and remedies which could have been exercised by the
Canadian Collateral Agent in respect of the Obligor or the Collateral and
such other powers and discretions as are granted in the instrument of
appointment and any supplemental instruments. The identity of the receiver,
its replacement and its remuneration shall be within the sole and
unfettered discretion of the Canadian Collateral Agent.
(2) Any receiver appointed by the Canadian Collateral Agent shall act as agent
for the Canadian Collateral Agent for the purposes of taking possession of
the Collateral, but otherwise and for all other purposes (except as
provided below), as agent for the Obligor. The receiver may sell, lease, or
otherwise dispose of Collateral as agent for the Obligor or as agent for
the Canadian Collateral Agent as the Canadian Collateral Agent may
determine in its discretion. The Obligor agrees to ratify and confirm all
actions of the receiver acting as agent for the Obligor, and to release and
indemnify the receiver in respect of all such actions.
(3) The Canadian Collateral Agent, in appointing or refraining from appointing
any receiver, shall not incur liability to the receiver, the Obligor or
otherwise and shall not be responsible for any misconduct or negligence of
such receiver.
Section 2.5 Appointment of Attorney.
The Obligor irrevocably appoints the Canadian Collateral Agent (and any of
its officers) as attorney of the Obligor (with full power of substitution) to
do, make and execute, in the name of and on behalf of the Obligor, all such
further acts,
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documents, matters and things which the Canadian Collateral Agent may deem
necessary or advisable to accomplish the purposes of this security agreement
including the execution, endorsement and delivery of documents and any notices,
receipts, assignments or verifications of the accounts. All acts of the attorney
are ratified and approved, and the attorney shall not be liable for any act,
failure to act or any other matter or thing, except for its own gross negligence
or wilful misconduct.
Section 2.6 Dealing with the Collateral.
(1) The Canadian Collateral Agent and the other Canadian Secured Parties shall
not be obliged to exhaust their recourse against the Obligor or any other
person or against any other security they may hold in respect of the
Obligations before realizing upon or otherwise dealing with the Collateral
in such manner as the Canadian Collateral Agent may consider desirable.
(2) The Canadian Collateral Agent and the other Canadian Secured Parties may
grant extensions or other indulgences, take and give up securities, accept
compositions, grant releases and discharges and otherwise deal with the
Obligor and with other persons, sureties or securities as they may see fit
without prejudice to the Obligations, the liability of the Obligor or the
rights of the Canadian Collateral Agent and the other Canadian Secured
Parties in respect of the Collateral.
(3) Except as otherwise provided by law or this security agreement, the
Canadian Collateral Agent and the other Canadian Secured Parties shall not
be (i) liable or accountable for any failure to collect, realize on or
obtain payment in respect of the Collateral, (ii) bound to institute
proceedings for the purpose of collecting, enforcing, realizing on or
obtaining payment of the Collateral or for the purpose of preserving any
rights of any persons in respect of the Collateral, (iii) responsible for
any loss occasioned by any sale or other dealing with the Collateral or by
the retention of or failure to sell or otherwise deal with the Collateral,
or (iv) bound to protect the Collateral from depreciating in value or
becoming worthless.
Section 2.7 Standards of Sale.
Without prejudice to the ability of the Canadian Collateral Agent to
dispose of the Collateral in any manner which is commercially reasonable, the
Obligor acknowledges that:
(a) Collateral may be disposed of in whole or in part;
(b) Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other
formality;
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(c) any assignee of such Collateral may be the Canadian Collateral Agent,
another Canadian Secured Party or a customer of any such person;
(d) any sale conducted by the Canadian Collateral Agent shall be at such
time and place, on such notice and in accordance with such procedures
as the Canadian Collateral Agent, in its sole discretion, may deem
advantageous;
(e) Collateral may be disposed of in any manner and on any terms necessary
to avoid violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that the prospective
bidders and purchasers have certain qualifications, and restrict the
prospective bidders and purchasers to persons who will represent and
agree that they are purchasing for their own account for investment
and not with a view to the distribution or resale of the Collateral)
or in order to obtain any required approval of the disposition (or of
the resulting purchase) by any governmental or regulatory authority or
official;
(f) a disposition of Collateral may be on such terms and conditions as to
credit or otherwise as the Canadian Collateral Agent, in its sole
discretion, may deem advantageous; and
(g) the Canadian Collateral Agent may establish an upset or reserve bid or
price in respect of Collateral.
Section 2.8 Dealings by Third Parties.
(1) No person dealing with the Canadian Collateral Agent, any of the other
Canadian Secured Parties or an agent or receiver shall be required to
determine (i) whether the Security Interest has become enforceable, (ii)
whether the powers which such person is purporting to exercise have become
exercisable, (iii) whether any money remains due to the Canadian Collateral
Agent or the other Canadian Secured Parties by the Obligor, (iv) the
necessity or expediency of the stipulations and conditions subject to which
any sale or lease is made, (v) the propriety or regularity of any sale or
other dealing by the Canadian Collateral Agent or any other Canadian
Secured Parties with the Collateral, or (vi) how any money paid to the
Canadian Collateral Agent or other Canadian Secured Parties has been
applied.
(2) Any purchaser of all or any part of the Collateral from the Canadian
Collateral Agent or any receiver or agent shall hold the Collateral
absolutely, free from any claim or right of whatever kind, including any
equity of
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redemption, of the Obligor, which it specifically waives (to the fullest
extent permitted by law) as against any such purchaser together with all
rights of redemption, stay or appraisal which the Obligor has or may have
under any rule of law or statute now existing or hereafter adopted.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1 Representations and Warranties.
The Obligor hereby represents and warrants to and in favour of the Canadian
Collateral Agent and the other Canadian Secured Parties acknowledging and
confirming that the Canadian Collateral Agent and each other Canadian Secured
Parties is relying thereon without independent inquiry in connection with the
acceptance of this security agreement as security for the Obligations, that:
(a) no financing statement or other document creating a security interest
(other than (i) any which may have been filed on behalf of the
Canadian Collateral Agent, (ii) financing statements registered under
the PPSA or any other applicable personal property security
legislation which are expressly permitted by the Credit Agreement)
covering any of the Collateral is on file in any public office;
(b) the Obligor is and will be the lawful owner of all Collateral, free of
all liens and claims whatsoever, other than the security interest
hereunder and liens and claims expressly permitted by the Credit
Agreement (the "Permitted Liens"), with full power and authority to
execute this security agreement and perform the Obligor's obligations
hereunder, and to subject the Collateral to the security interest
hereunder;
(c) all information with respect to Collateral and account debtors of the
Obligor set forth in any schedule, certificate or other writing at any
time heretofore or hereafter furnished by the Obligor to the Canadian
Collateral Agent or any other Canadian Secured Parties and all other
written information heretofore or hereafter furnished by the Obligor
to the Canadian Collateral Agent or any other Canadian Secured Parties
in connection with the Credit Agreement or the other Loan Documents
(as defined in the Credit Agreement) will be true and correct in all
material respects as of the date furnished;
(d) the Obligor's chief executive office and principal place of business
are as set forth on Schedule "A" hereto (and the Obligor has not
maintained its chief executive office and principal place of business
at any other location at any time);
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(e) each other location where the Obligor maintains a place of business is
set forth on Schedule "B" hereto;
(f) except as disclosed on Schedule "C" hereto, the Obligor is not now
known and during the five years preceding the date hereof has not
previously been known by any trade name;
(g) except as disclosed on Schedule "C" hereto, during the five years
preceding the date hereof the Obligor has not been known by any legal
name different from the one set forth on the signature page of this
security agreement nor has the Obligor been the subject of any merger
or other corporate reorganization;
(h) Schedule "D" hereto contains a complete listing of all of the
Obligor's registrations or pending applications in respect of
Intellectual Property;
(i) the Obligor is a corporation duly organized, validly existing and in
good standing under the laws of [name of jurisdiction];
(j) the execution and delivery of this security agreement and the
performance by the Obligor of its obligations hereunder are within the
Obligor's corporate powers, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval
(if any shall be required), and do not and will not contravene or
conflict with any provision of law or of the certificate and articles
of incorporation or by-laws of the Obligor or of any material
agreement, indenture, instrument or other document, or any material
judgment, order or decree, which is binding upon the Obligor;
(k) the Obligor is not prohibited, restricted or limited under the terms
of any agreement, lease or indenture with any of its customers from
assigning or granting a security interest in such agreement, lease or
indenture or any account receivable thereunder and the Obligor shall
ensure that no agreement, lease or indenture now or hereafter entered
into with a customer contains any such prohibition, restriction or
limitation;
(l) this security agreement is a legal, valid and binding obligation of
the Obligor, enforceable in accordance with its terms, except that the
enforceability of this security agreement may be limited by
bankruptcy, winding-up, moratorium, insolvency, reorganization,
arrangement, fraudulent preference and conveyance, assignment and
preference and other similar laws of general application now or
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hereafter in effect relating to creditors' rights generally and by
general principles of equity and the obligation to act and exercise
discretion in a reasonable manner, and by the fact that the
availability of any specific remedy is in the discretion of the court
(regardless of whether enforcement is sought in a proceeding in equity
or at law); and
(m) the Obligor is in compliance with the requirements of all applicable
laws, rules, regulations and orders of every governmental authority,
the non-compliance with which would materially adversely affect the
business, properties, assets, operations or condition (financial or
otherwise) of the Obligor and its Subsidiaries (as such term is
defined in the Credit Agreement) taken as a whole or the value of the
Collateral or the worth of the Collateral as collateral security.
Section 3.2 Covenants.
The Obligor covenants and agrees that until the Security Interest has been
discharged in accordance with Section 4.2 hereof, the Obligor will:
(a) from time to time deliver to the Canadian Collateral Agent such
schedules, certificates and reports respecting all or any of the
Collateral at the time subject to the Security Interest hereunder, and
the items or amounts received by the Obligor in full or partial
payment of any of the Collateral, as the Canadian Collateral Agent may
reasonably request. Any such schedule, certificate or report shall be
executed by a duly authorized officer of the Obligor and shall be in
such form and detail as the Canadian Collateral Agent may specify. The
Obligor shall immediately notify the Canadian Collateral Agent of the
occurrence of any event causing any loss or depreciation in the value
of its inventory or other goods which is material to the Obligor and
its Subsidiaries (as such term is defined in the Credit Agreement)
taken as a whole, and such notice shall specify the amount of such
loss or depreciation;
(b) upon request of the Canadian Collateral Agent, execute such financing
statements and other documents (and pay the cost of filing or
recording the same in all public offices reasonably deemed appropriate
by the Canadian Collateral Agent) and do such other acts and things
(including, without limitation, delivery to the Canadian Collateral
Agent of any instruments or securities which constitute Collateral),
all as the Canadian Collateral Agent may from time to time reasonably
request, to establish and maintain a valid security interest in the
Collateral (free of all other liens, claims and rights of third
parties whatsoever, other than Permitted Liens) to secure the payment
of the Obligations;
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(c) keep all its inventory at, and will not maintain any place of business
at any location other than, its addresses shown on Schedules I and II
hereto or at such other addresses of which the Obligor shall have
given the Canadian Collateral Agent not less than 10 days' prior
written notice;
(d) keep its records concerning the Collateral in a location listed in
Schedule "B" in the province where the applicable Collateral is
located, and keep its records concerning the intangible Collateral in
such a manner as will enable the Canadian Collateral Agent or its
designees to determine at any time the status of the intangible
Collateral;
(e) furnish the Canadian Collateral Agent such information concerning the
Obligor, the Collateral and the account debtors of the Obligor as the
Canadian Collateral Agent may from time to time reasonably request;
(f) permit the Canadian Collateral Agent and its designees, from time to
time, on reasonable notice and at reasonable times and intervals
during normal business hours (or at any time without notice whenever
the Security Interest has become enforceable) to inspect the Obligor's
inventory and other goods, and to inspect, audit and make copies of
and extracts from all records and all other papers in the possession
of the Obligor pertaining to the Collateral and the account debtors of
the Obligor, and will, upon request of the Canadian Collateral Agent
whenever the Security Interest has become enforceable, deliver to the
Canadian Collateral Agent all of such records and papers;
(g) upon request of the Canadian Collateral Agent, stamp on its records
concerning the Collateral and add on all chattel paper constituting a
portion of the Collateral, a notation, in form satisfactory to the
Canadian Collateral Agent, of the security interest of the Canadian
Collateral Agent hereunder;
(h) except for the sale or lease of inventory in the ordinary course of
its business and sales of equipment which is no longer useful in its
business or which is being replaced by similar equipment or as
otherwise permitted by the Credit Agreement, not sell, lease, assign
or create or permit to exist any lien on or security interest in any
Collateral other than Permitted Liens and liens and security interests
in favour of the Canadian Collateral Agent for the benefit of the
Canadian Collateral Agent and the other Canadian Secured Parties;
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(i) at all times keep all its inventory and other goods insured under
policies maintained with reputable, financially sound insurance
companies against loss, damage, theft and other risks to such extent
as is customarily maintained by companies similarly situated, and
cause all such policies to provide that loss thereunder shall be
payable to the Canadian Collateral Agent as its interest may appear
(it being understood that (A) so long as the Security Interest has not
become enforceable, the Canadian Collateral Agent shall deliver any
proceeds of such insurance which may be received by it to the Obligor
and (B) whenever the Security Interest has become enforceable, the
Canadian Collateral Agent may apply any proceeds of such insurance
which may be received by it toward payment of the Obligations, whether
or not due, in such order of application as the Canadian Collateral
Agent may determine) and such policies or certificates thereof shall,
if the Canadian Collateral Agent, so requests, be deposited with or
furnished to the Canadian Collateral Agent;
(j) take such actions as are reasonably necessary to keep its inventory in
good repair and condition, ordinary wear and tear excepted;
(k) take such actions as are reasonably necessary to keep its equipment
(other than obsolete equipment) in good repair and condition and in
good working or running order, ordinary wear and tear excepted;
(l) promptly pay when due all license fees, registration fees, taxes,
assessments and other charges which may be levied upon or assessed
against the ownership, operation, possession, maintenance or use of
its equipment and other goods (as applicable); provided, however, that
the Obligor shall not be required to pay any such fee, tax, assessment
or other charge if the validity thereof is being contested by the
Obligor in good faith by appropriate proceedings, so long as
forfeiture of any substantial part of its equipment or other goods
will not result from the failure of the Obligor to pay any such fee,
tax, assessment or other charge during the period of such contest;
(m) upon request of the Canadian Collateral Agent, (i) cause to be noted
on the applicable certificate, in the event any of its equipment is
covered by a certificate of title, the security interest of the
Canadian Collateral Agent for the benefit of the Canadian Collateral
Agent and the other Canadian Secured Parties in the equipment covered
thereby and (ii) deliver all such certificates to the Canadian
Collateral Agent or its designees;
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(n) take all steps reasonably necessary to protect, preserve and maintain
all of its rights in the Collateral; and
(o) ensure that all of the Collateral remains at all times within one of
the jurisdictions specified in Schedule "B" except equipment with an
aggregate value of not more than $200,000 that is: (i) equipment
leased in the ordinary course of business to a customer where the
aggregate value of all equipment leased to such customer does not
exceed $150,000 or (ii) equipment leased in the ordinary course of
business to a customer that has been removed by such customer from one
of the jurisdictions specified in Schedule "B" in breach of the lease
contract between the customer and the Obligor.
ARTICLE 4
GENERAL
Section 4.1 Notices.
Any notices, directions or other communications provided for in this
security agreement shall be in writing and given in accordance with the
provisions of the Guarantee.
Section 4.2 Discharge.
The Security Interest shall be discharged upon, but only upon, (i) full
payment and performance of the Obligations, and (ii) the Canadian Collateral
Agent and the other Canadian Secured Parties having no obligations under the
Loan Documents. Upon discharge of the Security Interest and at the request and
expense of the Obligor, the Canadian Collateral Agent shall execute and deliver
to the Obligor such releases and discharges as the Obligor may reasonably
require.
Section 4.3 No Merger.
This security agreement shall not operate by way of merger of any of the
Obligations and no judgment recovered by the Canadian Collateral Agent or any of
the other Canadian Secured Parties shall operate by way of merger of, or in any
way affect, the Security Interest, which is in addition to, and not in
substitution for, any other security now or hereafter held by the Canadian
Collateral Agent and the other Canadian Secured Parties in respect of the
Obligations.
Section 4.4 Further Assurances.
The Obligor shall from time to time, whether before or after the Security
Interest shall have become enforceable, do all acts and things and execute and
deliver all transfers, assignments and instruments as the Canadian Collateral
Agent may reasonably require for (i) protecting the Collateral, (ii) perfecting
the Security
- 17 -
Interest, and (iii) exercising all powers, authorities and discretions conferred
upon the Canadian Collateral Agent. The Obligor shall, from time to time after
the Security Interest has become enforceable, do all acts and things and execute
and deliver all transfers, assignments and instruments as the Canadian
Collateral Agent may require for facilitating the sale or other disposition of
the Collateral in connection with its realization.
Section 4.5 Supplemental Security.
This security agreement is in addition and without prejudice to and
supplemental to all other security now held or which may hereafter be held by
the Canadian Collateral Agent or the other Canadian Secured Parties.
Section 4.6 Successors and Assigns.
This security agreement shall be binding upon the Obligor, its successors
and assigns, and shall enure to the benefit of the Canadian Collateral Agent and
its successors and assigns. All rights of the Canadian Collateral Agent shall be
assignable and in any action brought by an assignee to enforce any such right,
the Obligor shall not assert against the assignee any claim or defence which the
Obligor now has or hereafter may have against the Canadian Collateral Agent or
any of the other Canadian Secured Parties.
Section 4.7 Gender and Number.
Any reference in this security agreement to gender shall include all
genders and words importing the singular number only shall include the plural
and vice versa.
Section 4.8 Headings, etc.
The division of this security agreement into Articles and Sections and the
insertion of headings are for convenient reference only and are not to affect
its interpretation.
Section 4.9 No Liability.
Neither the Canadian Collateral Agent nor any other Canadian Secured Party
shall have any obligation or liability regarding the Collateral or any portion
thereof by reason of, or arising out of, this security agreement.
Section 4.10 Amendments.
No amendment to, or waiver of, any provision of this security agreement
shall be effective unless in writing and signed by the Canadian Collateral Agent
(and, in the case of an amendment, signed by the Obligor).
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Section 4.11 Severability.
If any provision of this security agreement is deemed by any court of
competent jurisdiction to be invalid or void, the remaining provisions shall
remain in full force and effect.
Section 4.12 Governing Law.
This security agreement shall be governed by and interpreted and enforced
in accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
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IN WITNESS WHEREOF the Obligor has caused this security agreement to be
executed by its duly authorized officer as of the date first above written.
[CANADIAN SUBSIDIARY]
By:
--------------------------
Authorized Signing Officer
SCHEDULE "A"
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
SCHEDULE "B"
PLACES OF BUSINESS
SCHEDULE "C"
TRADENAMES AND LEGAL NAMES
SCHEDULE "D"
INTELLECTUAL PROPERTY
EXHIBIT "G"
FORM OF CANADIAN SECURITIES PLEDGE AGREEMENT
Securities pledge agreement dated as of [<063>] made by [Name of Pledgor]
(the "Pledgor"), to and in favour of the Canadian Collateral Agent (as
hereinafter defined).
WHEREAS:
A. The Chase Manhattan Bank of Canada and such other financial institutions
(collectively, the "Lenders") as may from time to time be parties to the Credit
Agreement (as hereinafter defined) have made certain credit facilities available
to United Rentals of Canada Inc. (the "Borrower") upon the terms and conditions
contained in an amended and restated credit agreement dated as of April ____,
2001, among United Rentals (North America), Inc., United Rentals, Inc., the
Borrower, The Chase Manhattan Bank of Canada, as Canadian administrative agent
(in such capacity, the "Canadian Administrative Agent"), The Chase Manhattan
Bank, as U.S. administrative agent, and the Lenders (as amended, modified,
extended, renewed, replaced, restated, supplemented or refinanced from time to
time and including any agreement extending the maturity of, or refinancing or
restructuring (including the inclusion of additional borrowers thereunder or any
increase in the amount borrowed) all or any portion of, the indebtedness under
such agreement or any successor agreements, whether or not with the same agents,
co-agents or lenders, the "Credit Agreement");
B. Pursuant to the Credit Agreement, Bank of America Canada has been
appointed as Canadian Collateral Agent (in such capacity, together with any
successors in such capacity, the "Canadian Collateral Agent") to act on behalf
of the Canadian Secured Parties (as defined herein) with respect to this
agreement and certain other Canadian Security Documents (as defined in the
Credit Agreement);
C. The Pledgor has, pursuant to a guarantee dated as of the date hereof
(the "Guarantee") in favour of the Canadian Collateral Agent and the other
Canadian Secured Parties (as defined herein), guaranteed the payment and
performance of all present and future debts, liabilities and obligations, direct
or indirect, absolute or contingent, direct or indirect, absolute or contingent,
of the Borrower to the Canadian Collateral Agent and the other Canadian Secured
Parties arising under, in connection with or pursuant to the Credit Agreement
and each of the other Loan Documents (as defined in the Credit Agreement) to
which it is a party or any other document executed and delivered by the Borrower
in connection with the Credit Agreement; and
- 2 -
D. The Pledgor has agreed to execute and deliver this securities pledge
agreement to and in favour of the Canadian Collateral Agent and the other
Canadian Secured Parties (as defined herein) as security for the payment and
performance of all debts, liabilities and obligations including all charges and
fees of the Canadian Collateral Agent and the other Canadian Secured Parties (as
defined herein) due from the Pledgor to the Canadian Collateral Agent and the
other Canadian Secured Parties (as defined herein) pursuant to or in connection
with the Guarantee and each of the other Loan Documents (as defined in the
Credit Agreement) to which it is a party.
NOW THEREFORE in consideration of the foregoing, the sum of $10.00 now paid
by the Canadian Collateral Agent and the other Canadian Secured Parties (as
defined herein) to the Pledgor and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the Pledgor, the Pledgor
agrees as follows:
ARTICLE 1
SECURITY
Section 1.1 Terms Incorporated by Reference.
Terms defined in the Personal Property Security Act (Ontario) (as amended
from time to time, the "PPSA") and used in this securities pledge agreement
shall have the same meaning in this securities pledge agreement.
Section 1.2 Grant of Security.
(1) The Pledgor assigns, mortgages, charges, hypothecates and pledges to the
Canadian Collateral Agent, for its own benefit as a C $ Revolving Lender
(as defined in the Credit Agreement) and as agent and in trust for the
rateable benefit of itself and the other Canadian Secured Parties (as
defined herein) and grants to the Canadian Collateral Agent, for its own
benefit as a C $ Revolving Lender (as defined in the Credit Agreement) and
as agent and in trust for the rateable benefit of itself and the other
Canadian Secured Parties (as defined herein), a security interest in, all
securities now owned or hereafter acquired by the Pledgor and deposits
(and, in the case of any securities hereafter acquired by the Pledgor,
agrees to deposit immediately upon acquiring such securities) with the
Canadian Collateral Agent any and all security certificates evidencing such
securities accompanied in each case by a duly executed stock power of
attorney (collectively, together with the dividends, moneys, rights and
claims hereinafter referred to and the securities referred to in Section
1.2(2), the "Securities"), any cash dividends or other moneys now or
hereafter received or declared in respect of the Securities and all other
rights and claims of the Pledgor in respect of the Securities.
- 3 -
(2) The Securities shall include any substitutions, additions or proceeds
arising out of any consolidation, subdivision, reclassification, stock
dividend or similar increase or decrease in, or alteration to, the capital
of each issuer of the Securities (each, an "Issuer").
Section 1.3 Obligations Secured.
(1) The assignments, mortgages, charges, hypothecations, pledges and security
interests granted hereby (the "Security Interest") secure the payment and
performance of all debts, liabilities and obligations including all charges
and fees of the Canadian Collateral Agent and the C $ Revolving Lenders (as
defined in the Credit Agreement) (including any assignees or participants
thereof) (collectively, the "Canadian Secured Parties") due from the
Pledgor to the Canadian Collateral Agent and the other Canadian Secured
Parties pursuant to or in connection with the Guarantee and each of the
other Loan Documents (as defined in the Credit Agreement) to which it is a
party (collectively, and together with the expenses, costs and charges set
out in Section 1.3(2), the "Obligations").
(2) All expenses, costs and charges incurred by or on behalf of the Canadian
Collateral Agent and the other Canadian Secured Parties in connection with
this securities pledge agreement, the Security Interest or the Securities
including all reasonable legal fees, court costs, receiver's or agent's
remuneration and other expenses of taking possession of, repairing,
protecting, insuring, preparing for disposition, realizing, collecting,
selling, transferring, delivering or obtaining payment for the Securities,
and of taking, defending or participating in any action or proceeding in
connection with any of the foregoing matters or otherwise in connection
with the Canadian Collateral Agent and the other Canadian Secured Parties'
interest in any Securities, whether or not directly relating to the
enforcement of this securities pledge agreement or any other Loan Document
(as defined in the Credit Agreement), shall be added to and form a part of
the Obligations.
Section 1.4 Attachment.
(1) The Pledgor acknowledges that (i) value has been given, (ii) it has rights
in the Securities, (iii) it has not agreed to postpone the time of
attachment of the Security Interest, and (iv) it has received a duplicate
original copy of this securities pledge agreement.
(2) If the Securities are now or at any time hereafter become evidenced, in
whole or in part, by uncertificated securities registered or recorded in
records maintained by or on behalf of any Issuer in the name of a clearing
agency, the Pledgor shall, at the request of the Canadian Collateral Agent,
cause the Security Interest to be entered in the records of such clearing
agency.
- 4 -
(3) At the election of the Canadian Collateral Agent and immediately upon
written notice being provided by the Canadian Collateral Agent to the
Pledgor, the Pledgor shall cause the Securities to be transferred into and
registered in the name of the Canadian Collateral Agent or as it may direct
and the Pledgor covenants that, at the time of any such transfer, it will
provide all required consents and approvals.
Section 1.5 Care and Custody of Securities.
The Canadian Collateral Agent need not see to the collection of dividends
on, or exercise any option or right in connection with, the Securities and need
not protect or preserve them from depreciating in value or becoming worthless
and is released from all responsibility for any loss of value. The Canadian
Collateral Agent shall be bound to exercise in the physical keeping of the
Securities only the same degree of care as it would exercise with respect to its
own securities kept at the same place.
Section 1.6 Negative Covenant of the Pledgor.
The Pledgor shall not, without the prior written consent of the Canadian
Collateral Agent, sell, exchange, release or abandon or otherwise dispose of,
absolutely or by way of security, any of its right, title or interest in and to
the Securities.
Section 1.7 Representation.
The Pledgor represents and warrants that (i) it is the registered, legal
and beneficial owner of the Securities, (ii) the Securities are free and clear
of all liens, mortgages, charges and security interests whatsoever other than
those created in favour of the Canadian Collateral Agent, (iii) the Securities
have been validly issued and are fully paid and non-assessable, (iv) the
Securities represent 100% of the issued and outstanding shares in the capital of
each Issuer, and (v) the Securities described in Schedule "A" are all securities
owned by the Pledgor as of the date hereof.
Section 1.8 Rights of the Pledgor.
(1) Until the Security Interest has become enforceable, the Pledgor shall be
entitled to vote the Securities and to receive all cash dividends. Whenever
the Security Interest has become enforceable, all rights of the Pledgor to
vote or to receive dividends shall cease and all such rights shall become
vested solely and absolutely in the Canadian Collateral Agent.
(2) Any dividends received by the Pledgor contrary to Section 1.8(1) or any
other moneys or property which may be received by the Pledgor at any time
for, or in respect of, the Securities shall be received as trustee for the
Canadian
- 5 -
Collateral Agent and the other Canadian Secured Parties and shall be
immediately paid and transferred over to the Canadian Collateral Agent.
ARTICLE 2
ENFORCEMENT
Section 2.1 Enforcement.
The Security Interest shall be and become enforceable against the Pledgor
upon the occurrence and during the continuance of an Event of Default (under and
as defined in the Credit Agreement).
Section 2.2 Remedies.
Whenever the Security Interest has become enforceable, the Canadian
Collateral Agent may, at any time in its sole discretion, (i) realize upon or
otherwise dispose of or contract to dispose of the Securities by sale, transfer
or delivery, or (ii) exercise and enforce all rights and remedies of a holder of
the Securities as if the Canadian Collateral Agent were their absolute owner
(including, if necessary, causing the Securities to be registered in the name of
the Canadian Collateral Agent or its nominee if not already done pursuant to
Section 1.4(3)), all without demand of performance or other demand,
advertisement or notice of any kind to or upon the Pledgor (except as may be
required by law). Any remedy may be exercised separately or in combination and
shall be in addition to, and not in substitution for, any other rights the
Canadian Collateral Agent and the other Canadian Secured Parties may have,
however created. The Canadian Collateral Agent shall not be bound to exercise
any right or remedy, and the exercise of rights and remedies shall be without
prejudice to the rights of the Canadian Collateral Agent and the other Canadian
Secured Parties in respect of the Obligations including the right to claim for
any deficiency.
Section 2.3 Appointment of Attorney.
The Pledgor irrevocably appoints the Canadian Collateral Agent (and any of
its officers) as attorney of the Pledgor (with full power of substitution) to
do, make and execute in the name of and on behalf of the Pledgor all such
further acts, documents, matters and things which the Canadian Collateral Agent
may deem necessary or advisable to accomplish the purposes of this securities
pledge agreement including the execution, endorsement and delivery and transfer
of the Securities to the Canadian Collateral Agent or its nominees or
transferees. Except as herein provided, the Canadian Collateral Agent or its
nominees and transferees are empowered to exercise all rights and powers and to
perform all acts of ownership with respect to the Securities to the same extent
as the Pledgor might do. The powers of attorney herein granted is an addition
to, and not in substitution for any stock power of attorney delivered by the
Pledgor and such power of attorney may
- 6 -
be relied upon by the Canadian Collateral Agent severally or in combination. All
acts of any such attorney are ratified and approved, and the attorney shall not
be liable for any act, failure to act or any other matter or thing in connection
therewith, except for its own gross negligence or wilful misconduct.
Section 2.4 Dealing with the Securities.
(1) The Canadian Collateral Agent and the other Canadian Secured Parties shall
not be obliged to exhaust their recourse against the Pledgor or any other
person or against any other security they may hold in respect of the
Obligations before realizing upon or otherwise dealing with the Securities
in such manner as the Canadian Collateral Agent may consider desirable.
(2) The Canadian Collateral Agent and the other Canadian Secured Parties may
grant extensions or other indulgences, take and give up securities, accept
compositions, grant releases and discharges and otherwise deal with the
Pledgor and with other persons, sureties or securities as they may see fit
without prejudice to the Obligations, the liability of the Pledgor or the
rights of the Canadian Collateral Agent and the other Canadian Secured
Parties in respect of the Securities.
(3) Except as otherwise provided by law or this securities pledge agreement,
the Canadian Collateral Agent and the other Canadian Secured Parties shall
not be (i) liable or accountable for any failure to collect, realize or
obtain payment in respect of the Securities, (ii) bound to institute
proceedings for the purpose of collecting, enforcing, realizing or
obtaining payment of the Securities or for the purpose of preserving any
rights of any persons, (iii) responsible for any loss occasioned by any
sale or other dealing with the Securities or by the retention of or failure
to sell or otherwise deal with the Securities, or (iv) bound to protect the
Securities from depreciating in value or becoming worthless.
Section 2.5 Standards of Sale.
Without prejudice to the ability of the Canadian Collateral Agent to
dispose of the Securities in any manner which is commercially reasonable, the
Pledgor acknowledges that:
(a) Securities may be disposed of in whole or in part;
(b) Securities may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other
formality;
(c) any assignee of such Securities may be the Canadian Collateral Agent,
another Canadian Secured Party or a customer of any such person;
- 7 -
(d) any sale conducted by the Canadian Collateral Agent shall be at such
time and place, on such notice and in accordance with such procedures
as the Canadian Collateral Agent, in its sole discretion, may deem
advantageous;
(e) Securities may be disposed of in any manner and on any terms necessary
to avoid violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that the prospective
bidders and purchasers have certain qualifications, and restrict the
prospective bidders and purchasers to persons who will represent and
agree that they are purchasing for their own account for investment
and not with a view to the distribution or resale of the Securities)
or in order to obtain any required approval of the disposition (or of
the resulting purchase) by any governmental or regulatory authority or
official;
(f) a disposition of Securities may be on such terms and conditions as to
credit or otherwise as the Canadian Collateral Agent, in its sole
discretion, may deem advantageous; and
(g) the Canadian Collateral Agent may establish an upset or reserve bid or
price in respect of the Securities.
Section 2.6 Dealings by Third Parties.
(1) No person dealing with the Canadian Collateral Agent, any of the other
Canadian Secured Parties or an agent or receiver shall be required to
determine (i) whether the Security Interest has become enforceable, (ii)
whether the powers which such person is purporting to exercise have become
exercisable, (iii) whether any money remains due to the Canadian Collateral
Agent or the other Canadian Secured Parties by the Pledgor, (iv) the
necessity or expediency of the stipulations and conditions subject to which
any sale or lease shall be made, (v) the propriety or regularity of any
sale or other dealing by the Canadian Collateral Agent or any other
Canadian Secured Parties with the Securities, or (vi) how any money paid to
the Canadian Collateral Agent or the other Canadian Secured Parties has
been applied.
(2) Any purchaser of Securities from the Canadian Collateral Agent or the other
Canadian Secured Parties shall hold the Securities absolutely, free from
any claim or right of whatever kind, including any equity of redemption, of
the Pledgor, which it specifically waives (to the fullest extent permitted
by law) as against any such purchaser together with all rights of
redemption, stay or
- 8 -
appraisal which the Pledgor has or may have under any rule of law or
statute now existing or hereafter adopted.
ARTICLE 3
GENERAL
Section 3.1 Notices.
Any notices, directions and other communications provided for in this
securities pledge agreement shall be in writing and given in accordance with the
provisions of the Guarantee.
Section 3.2 Discharge.
The Security Interest shall be discharged upon, but only upon, (i) full
payment and performance of the Obligations, and (ii) the Canadian Collateral
Agent and the other Canadian Secured Parties having no obligation under the Loan
Documents (as defined in the Credit Agreement). Upon discharge of the Security
Interest and at the request and expense of the Pledgor, the Canadian Collateral
Agent shall execute and deliver to the Pledgor such releases and discharges as
the Pledgor may reasonably require.
Section 3.3 No Merger.
This securities pledge agreement shall not operate by way of merger of any
of the Obligations and no judgment recovered by the Canadian Collateral Agent or
any of the other Canadian Secured Parties shall operate by way of merger of, or
in any way affect, the Security Interest, which is in addition to, and not in
substitution for, any other security held by the Canadian Collateral Agent and
the other Canadian Secured Parties in respect of the Obligations.
Section 3.4 Further Assurances.
The Pledgor shall from time to time, whether before or after the Security
Interest shall have become enforceable, do all such acts and things and execute
and deliver all such transfers, assignments and instruments as the Canadian
Collateral Agent may reasonably require for (i) protecting the Securities, (ii)
perfecting the Security Interest, and (iii) exercising all powers, authorities
and discretions hereby conferred upon the Canadian Collateral Agent. The Pledgor
shall, from time to time after the Security Interest has become enforceable, do
all such acts and things and execute and deliver all such transfers, assignments
and instruments as the Canadian Collateral Agent may require for facilitating
the sale or other disposition of the Securities in connection with their
realization.
- 9 -
Section 3.5 Supplemental Security.
This securities pledge agreement is in addition and without prejudice to
and supplemental to all other security now held or which may hereafter be held
by the Canadian Collateral Agent and the other Canadian Secured Parties.
Section 3.6 Successors and Assigns.
This securities pledge agreement shall be binding upon the Pledgor, its
successors and assigns, and shall enure to the benefit of the Canadian
Collateral Agent and its successors and assigns. All rights of the Canadian
Collateral Agent shall be assignable and in any action brought by an assignee to
enforce any such right, the Pledgor shall not assert against the assignee any
claim or defence which the Pledgor now has or hereafter may have against the
Canadian Collateral Agent or any of the other Canadian Secured Parties.
Section 3.7 Gender and Number.
Any reference in this securities pledge agreement to gender shall include
all genders and words importing the singular number only shall include the
plural and vice versa.
Section 3.8 Headings, etc.
The division of this securities pledge agreement into Articles and Sections
and the insertion of headings are for convenient reference only and are not to
affect its interpretation.
Section 3.9 No Liability.
Neither the Canadian Collateral Agent nor any other Canadian Secured Party
shall have any obligation or liability regarding the Securities or any portion
thereof by reason of, or arising out of, this securities pledge agreement.
Section 3.10 Section 3.9. Amendments.
No amendment to, or waiver of, any provision of this securities pledge
agreement shall be effective unless in writing and signed by the Canadian
Collateral Agent (and, in the case of an amendment, signed by the Pledgor).
Section 3.11 Severability.
If any provision of this securities pledge agreement shall be deemed by any
court of competent jurisdiction to be invalid or void, the remaining provisions
shall remain in full force and effect.
- 10 -
Section 3.12 Governing Law.
This securities pledge agreement shall be governed by and interpreted and
enforced in accordance with the laws of the Province of Ontario and the federal
laws of Canada applicable therein.
- 11 -
IN WITNESS WHEREOF the Pledgor has caused this securities pledge agreement
to be executed by its duly authorized officer as of the date first above
written.
[CANADIAN PLEDGOR]
Per: __________________________
Authorized Signing Officer
SCHEDULE "A"
SECURITIES
Issuer Class of Securities Number of Certificate
Securities Number
--------------------------------------------------------------------------------
EXHIBIT I
PERFECTION CERTIFICATE
Reference is made to the Credit Agreement dated as of April ___ , 2001 (the
"Credit Agreement") among United Rentals (North America), Inc. (the "Borrower"),
United Rentals, Inc. ("Holdings"), the lenders party thereto and The Chase
Manhattan Bank, as Administrative Agent. Capitalized terms used but not defined
herein have the meanings assigned in the Credit Agreement or the Security
Agreement referred to therein, as applicable.
The undersigned, a Financial Officer and a Legal Officer, respectively, of
the Borrower, hereby certify to the Collateral Agent and each other Secured
Party as follows:
1. Names and FEIN numbers. The exact name of each Grantor, as such name appears
----------------------
in its respective certificate of incorporation or partnership agreement, and
such Grantor's Federal Taxpayer Identification Number, are as set forth on
Schedule 1.
----------
2. Current Locations. (a) The chief executive office of each Grantor is located
-----------------
at Five ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
(b) Set forth opposite the name of each Grantor on Schedule 2 are all the
----------
places of business of such Grantor not identified in paragraph (a) above:
-------------
3. Unusual Transactions. All Accounts Receivable have been originated by the
--------------------
Grantors and all Inventory has been acquired by the Grantors in the ordinary
course of business.
4. File Search Reports. File search reports have been obtained from each Uniform
-------------------
Commercial Code filing office identified with respect to such Grantor in
Section 2 hereof (except for those locations listed on Schedule 3), and such
--------- ----------
search reports reflect no liens against any of the Collateral other than those
permitted under the Credit Agreement and those listed on Schedule 4.
----------
5. UCC Filings. Duly signed financing statements on Form UCC- 1 in substantially
-----------
the form of Schedule 5 hereto have been filed or prepared for filing in the
----------
Uniform Commercial Code filing office in each jurisdiction identified with
respect to such Grantor in Section 2.
---------
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
------------------- ----------
forth, with respect to the filings described in Section 5 above, each filing and
---------
the filing office in which such filing has been or is to be made.
7. Stock Ownership and other Equity Interests. Attached hereto as Schedule 7 is
------------------------------------------ ----------
a true and correct list of all the issued and outstanding stock, partnership
interests, limited liability company membership interests or other equity
interests of Holdings and each Subsidiary and the record and beneficial owners
of such stock, partnership interests, membership interests or other equity
interests. Also set forth on Schedule 7 is each equity investment of Holdings,
----------
the Borrower or
any Subsidiary that represents 50% or less of the equity of the entity in which
such investment was made.
8. Debt Instruments. Attached hereto as Schedule 8 is a true and correct list of
---------------- ----------
all promissory notes and other evidence of indebtedness held by Holdings, the
Borrower and each Subsidiary that are required to be pledged under the Pledge
Agreement, including all intercompany notes between Holdings and each Subsidiary
of Holdings and each Subsidiary of Holdings and each other such Subsidiary.
9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all
-------- ----------
advances made by Holdings to any Subsidiary of Holdings or made by any
Subsidiary of Holdings to Holdings or to any other Subsidiary of Holdings (other
than those identified on Schedule 8), which advances will be on and after the
----------
date hereof evidenced by one or more intercompany notes pledged to the
Collateral Agent under the Pledge Agreement and (b) a true and correct list of
all unpaid intercompany transfers of goods sold and delivered by or to Holdings
or any Subsidiary of Holdings.
10. Intellectual Property. Attached hereto as Schedule 11(A) in proper form for
---------------------
filing with the United States Patent and Trademark Office is a schedule setting
forth all of each Grantor's Patents, Patent Licenses, Trademarks and Trademark
Licenses, including the name of the registered owner, the registration number
and the expiration date of each Patent, Patent License, Trademark and Trademark
License owned by any Grantor. Attached hereto as Schedule 11(B) in proper form
for filing with the United States Copyright Office is a schedule setting forth
all of each Grantor's Copyrights and Copyright Licenses, including the name of
the registered owner, the registration number and the expiration date of each
Copyright or Copyright License owned by any Grantor.
2
IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this
[ ] day of April 2001.
UNITED RENTALS (NORTH AMERICA), INC.
By:
Name:
------------------
Title:
By:
------------------------
Name:
Title:
[PERFECTION CERTIFICATE]
EXHIBIT J
---------
SUBORDINATION PROVISIONS APPLICABLE TO
SELLER SUBORDINATED DEBT
1. The indebtedness evidenced by the subordinated notes* shall at all times be
wholly subordinate and junior in right or payment to any and all Superior
Indebtedness (as defined below) in the manner and with the force and effect
hereafter set forth:
a. In the event of any liquidation, dissolution or winding up of the
Borrowers, or of any execution sale, receivership, insolvency, bankruptcy,
reorganization or other similar proceeding relative to the Borrowers or its
property, all principal, interest, fees, reimbursement obligations and
other amounts owing on all Superior Indebtedness shall first be paid in
full before any payment is made upon the indebtedness evidenced by the
subordinated notes; and in any such event any payment or distribution of
any kind or character, whether in cash, property or securities (other than
in securities or other evidences of indebtedness, the payment of which is
subordinated to the same extent as the indebtedness evidenced hereby to the
payment of all Superior Indebtedness which may at the time be outstanding)
which shall be made upon or in respect of the subordinated notes shall be
paid over to the holders of such Superior Indebtedness, pro rata, for
application in payment thereof until such Superior Indebtedness shall have
been paid or satisfied in full.
b. (a) During the continuance of any default in any agreement pursuant to
which any Superior Indebtedness is issued which arises from the failure to
pay when due (whether by acceleration or otherwise) any principal of,
premium, if any, interest on, fees or other amounts in respect of such
Superior Indebtedness (a "Superior Payment Default"), no payment of
------------------------
principal, premium or interest shall be made on the subordinated notes if
either (i) notice in writing of such default has been given to the
Borrowers by any holder or holders of any Superior Indebtedness or (ii)
judicial proceedings shall be pending in respect of such default.
(b) During the continuance of any event of default or unmatured event of
default in any agreement pursuant to which any Superior Indebtedness is
issued other than a Superior Payment Default (a "Superior Non-Payment
--------------------
Default") as to which the Borrowers have received notice in writing from
-------
any holder or holders of Superior Indebtedness, no payment of principal,
premium or interest shall be made on the subordinated notes for a period
(each, a "Payment Blockage Period") commencing on the date of receipt by
-----------------------
the Borrowers of such notice and terminating on the earliest to occur of
the following dates: (i) the date of acceleration of the Superior
Indebtedness, (ii) 180 days after the Borrowers'
--------
* Or debentures or other designation as may be appropriate.
receipt of such written notice, (iii) the date such Superior Non-Payment
Default shall have been cured or waived, or shall have ceased to exist,
(iv) the date the Superior Indebtedness shall have been discharged or paid
in full in cash, or (v) the date such Payment Blockage Period shall have
been terminated by written notice to the Borrowers from the holder or
holders of Superior Indebtedness initiating such Payment Blockage Period,
after which, in the case of clauses (ii), (iii), (iv) and (v), the
------------ ----- ---- ---
Borrowers shall resume making payments in respect of the subordinated
notes, unless clause (a) above is then applicable.
----------
c. If the subordinated notes are declared or become due and payable prior
to stated maturity because of the occurrence of any default thereunder or
under the agreement or instrument under which they are issued or otherwise
than at the option of the Borrowers, under circumstances when clause (a)
----------
above shall not be applicable, the holders of the subordinated notes shall
not be entitled to payments until sixty (60) days after such event and then
only if such payment is permitted under clauses (a) and (b) above.
----------- ---
2. The holder of each subordinated note undertakes and agrees for the benefit
of each holder of Superior Indebtedness to execute, verify, deliver and file any
proof of claim, consent, assignment or other instrument which any holder of
Superior Indebtedness may at any time require in order to prove and realize upon
any right or claim pertaining to the subordinated notes and to effectuate the
full benefit of the subordination contained herein; and upon failure of the
holder of any subordinated note so to do any such holder of Superior
Indebtedness shall be deemed to be irrevocably appointed the agent and attorney-
in-fact of the holder of such note to execute, verify, deliver and file any such
proof of claim, consent, assignment or other instrument.
3. No right of any holder of any Superior Indebtedness to enforce
subordination as herein provided shall at any time or in any way be affected or
impaired by any failure to act on the part of the Borrowers or any holder of
Superior Indebtedness, or by any non-compliance by the Borrowers with any term,
provision or covenant of the subordinated notes or the agreement under which
they are issued, regardless of any knowledge thereof that any such holder of
Superior Indebtedness may have or be otherwise charged with.
4. The Borrowers agree, for the benefit of the holders of Superior
Indebtedness, that in the event that any subordinated note is declared due and
payable before its expressed maturity because of the occurrence of a default
thereunder or under the agreement under which it was issued, the Borrowers will
give prompt notice in writing of such happening to the holders of Superior
Indebtedness.
5. "Superior Indebtedness" means (a) all obligations of the Borrowers under or
---------------------
in connection with the Amended and Restated Credit Agreement, dated as of April
20, 2001, among United Rentals, Inc., United Rentals (North America), Inc., the
Canadian borrower party thereto, various financial institutions, and The Chase
Manhattan Bank, as
2
agent (as amended, restated, amended and restated, otherwise modified or
refinanced from time to time, the "Credit Agreement"), whether for principal,
----------------
interest (including any interest that would accrue but for the filing of a
petition initiating any bankruptcy, insolvency or like proceeding, whether or
not such interest is an allowed claim enforceable against the debtor), fees,
expenses or otherwise and (b) all obligations of the Borrowers under or in
connection with any interest rate swap agreement or similar hedging arrangement
(as amended or otherwise modified from time to time) with any financial
institution which is a party to the Credit Agreement or any affiliate of such
financial institution.
3
EXHIBIT K
FORM OF B/A EQUIVALENT NOTE
C $[ ] [Date]
The undersigned refers to the Amended and Restated Credit Agreement dated
as of April 20, 2001, among United Rentals, Inc., United Rentals (North
America), Inc., United Rentals of Canada, Inc., the Lenders party thereto, The
Chase Manhattan Bank, as U.S. Administrative Agent and The Chase Manhattan Bank
of Canada, a Canadian chartered bank, as Canadian Administrative Agent (as
supplemented, amended or restated from time to time, the "Credit Agreement").
----------------
All capitalized terms set forth herein will have the respective meanings
specified in the Credit Agreement.
For value received, the undersigned promises to pay to the holder hereof,
on [Date] or on such earlier date as such amount may become due pursuant to the
provisions of the Credit Agreement, the sum of C $_______, without interest, or,
in the event such amount is not paid when due, with interest.
The undersigned hereby waives presentment, protest and notice of every kind
and waives any defense based upon indulgences which may be granted by the holder
of this note to the undersigned and waives any days of grace.
Payment of this note shall be made in Canadian Dollars immediately
available funds. This note evidences debt incurred under, is secured as provided
in, and is subject to the terms and provisions of, the Credit Agreement.
This note shall be governed by the laws of the State of New York.
DATED this [ ] day of [ ], 2001
-------------------------
By:
----------------------
Name:
Title:
By:
----------------------
Name:
Title: