UNITED RENTALS, INC.
SERIES A PERPETUAL CONVERTIBLE PREFERRED STOCK,
$.01 Par Value
PREFERRED STOCK PURCHASE AGREEMENT
December 21, 1998
United Rentals, Inc.
Four ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
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December 21, 1998
Apollo Investment Fund IV, L.P.
Apollo Overseas Partners IV, L.P.
c/o Apollo Management IV, L.P.
1301 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
United Rentals, Inc., a Delaware corporation (the "Company"),
agrees with Apollo Investment Fund IV, L.P. and Apollo Overseas Partners
IV, L.P. (together, the "Purchasers") as follows:
1. Authorization of Stock. The Company will authorize the
issue and sale of 300,000 shares (the "Shares", such term to include any
such shares issued in substitution therefor pursuant to section 8) of
its Series A Perpetual Convertible Preferred Stock, $.01 par value, to be
designated as its "Series A Perpetual Convertible Preferred Stock" (the
"Stock"). The relative rights, preferences and limitations of the Stock,
including, without limitation, the right to convert Shares into shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
will be as set forth in the form of the Certificate of Designation of the
Stock of the Company attached as Exhibit A hereto (the "Certificate of
Designation"). Certain capitalized terms used in this Agreement are
defined in Section 9; references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement and references to a "section" are, unless otherwise specified, to
one of the sections of this Agreement.
2. Sale and Purchase of Stock. The Company will issue and sell
to the Purchasers and, subject to the terms and conditions of this
Agreement, the Purchasers will purchase from the Company, at the Closing
provided for in section 3, the Shares at a purchase price of $1,000 per
share.
3. Closing; Payment of Purchase Price. The sale of the Shares
to be purchased by the Purchasers shall take place at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New York City time, at a closing (the "Closing")
on the first Business Day after the conditions to closing set forth in
Section 4 (other than those to be satisfied at the Closing, which shall be
satisfied or waived at the Closing) have been satisfied or waived by the
party entitled to waive such condition or on such other Business Day
thereafter or prior to such date as may be agreed upon by the Company and
the Purchasers, provided that in no event shall the Closing occur earlier
than the 11th Business Day following the date of this Agreement.
The names in which the Company will register the shares of the
Stock to be purchased at the Closing are as set forth in Exhibit 1. At the
Closing, the Company will deliver to the Purchasers the Shares to be
purchased by the Purchasers in the form of a single certificate (or such
greater number of certificates representing such Shares as the Purchasers
may request) dated the date of the Closing and registered in the names
aforesaid, and the Purchasers jointly and severally shall deliver to the
Company or its order immediately available funds in the amount of the
purchase price for such Shares. If at the Closing the Company shall fail
to tender to the Purchasers the Shares to be purchased by the Purchasers,
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to the Purchasers' reasonable
satisfaction, the Purchasers shall, at their election, be relieved of all
further obligations under this Agreement, without thereby waiving any other
rights the Purchasers may have by reason of such failure or such
nonfulfillment. If at the Closing, Purchasers shall fail to tender to the
Company the purchase price for the Shares, as provided above in this
Section 3, other than on account of any of the conditions specified in
section 4 not having been fulfilled to the Purchasers' satisfaction or on
account of the breach by the Company of any of its obligations under this
Agreement, the Company shall, at its election, be relieved of all further
obligations under this Agreement, without thereby waiving any other rights
the Company may have by reason of such failure.
4. Conditions to Closing. The Purchasers' obligation to
purchase and pay for the Shares to be sold to the Purchasers at the Closing
is subject to the fulfillment to their reasonable satisfaction, prior to or
concurrently with the Closing, of the following conditions:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be in all
material respects correct when made and at the time of the Closing, except
as affected by the consummation of the transactions contemplated by this
Agreement.
4.2 Performance; No Default. The Company shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at the Closing.
4.3 Compliance Certificates. The Company shall have delivered
to the Purchasers an Officers' Certificate, dated the date of the Closing,
certifying that the conditions specified in sections 4.1 and 4.2 have been
fulfilled.
4.4 Opinion of Counsel. The Purchasers shall have received the
favorable opinions, dated the date of the Closing and reasonably
satisfactory in substance and form to the Purchasers from ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for
the Company, substantially in the form set forth in Exhibits B and C and
covering such other matters incident to the transactions contemplated by
this Agreement as the Purchasers or their counsel may reasonably request.
4.5 Certificate of Designation. The Certificate of Designation
shall have been duly filed under the laws of the State of Delaware, and the
Restated Certificate of Incorporation of the Company, as amended by the
Certificate of Designation, shall be in full force and effect, and shall
not have been otherwise amended or modified.
4.6 Registration Rights Agreement. The Purchasers shall have
received a fully executed counterpart of the Registration Rights Agreement
substantially in the form set out in Exhibit D (the "Registration Rights
Agreement"), such agreement shall be in full force and effect and no term
or condition thereof shall have been amended, modified or waived.
4.7 [omitted]
4.8 [omitted]
4.9 No Actions Pending. There shall be no suit, action,
investigation, inquiry or other proceeding by any Governmental Authority or
any other Person or any other legal or administrative proceeding pending or
to the knowledge of the Company threatened which questions the validity or
legality of the transactions contemplated by this Agreement, or seeks
damages in connection therewith.
4.10 Compliance with Securities Laws. The offering and sale by
the Company, at or prior to the Closing, of the Shares pursuant to this
Agreement shall have been made in compliance with all applicable
requirements of federal and state securities laws and the Purchasers shall
have received evidence thereof in form and substance reasonably
satisfactory to the Purchasers.
4.11 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this
Agreement and all documents and instruments incident to such transactions
shall be reasonably satisfactory to the Purchasers and their counsel, and
the Purchasers and their counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Purchasers
or their counsel may reasonably request.
4.12 Reservation of Common Stock. The shares of Common Stock
initially issuable upon conversion of the Stock shall have been duly
authorized and reserved for issuance upon conversion of the Stock.
4.13 Payment of Fees and Expenses. The Company shall have paid
the Purchasers on or before the Closing (a) a fee equal to 1% of the
purchase price of the Stock and (b) the costs and expenses provided for in
Section 10 hereof, provided that the Purchasers shall have provided to the
Company a statement of its estimated costs and expenses at least one
Business Day prior to the Closing.
4.14 HSR Act. Any waiting period (and any extension thereof)
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended,
applicable to this Agreement and the transactions contemplated hereby shall
have expired or been terminated.
5. Representations and Warranties. Except as disclosed in
Exhibit E, the Company represents and warrants that:
5.1 Organization, Standing, etc. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted
and as proposed to be conducted, to enter into and perform all of its
obligations under this Agreement and each of the Collateral Agreements to
which it is a party, to issue and sell the Shares to be issued and sold at
the Closing and to carry out the transactions contemplated hereby or
thereby.
5.2 Subsidiaries. Exhibit E correctly lists as to each
Subsidiary of the Company on the date of this Agreement (a) its name, (b)
the jurisdiction of its incorporation and (c) the percentage of its issued
and outstanding shares owned by the Company or by another Subsidiary of the
Company (specifying such other Subsidiary), as the case may be. Each
Subsidiary of the Company is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own
and operate its properties and to carry on its business as now conducted
and as proposed to be conducted. All the outstanding shares of capital
stock of each Subsidiary of the Company are validly issued, fully paid and
nonassessable, and all such shares indicated in Exhibit E as owned by the
Company or by a Subsidiary of the Company are so owned beneficially and of
record by the Company or by such Subsidiary, as the case may be, free and
clear of any Lien except as indicated in Exhibit E.
5.3 Qualification. Each of the Company and its Subsidiaries is
duly qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction (other than the jurisdiction of its
incorporation) in which the nature of its activities or the character of
the properties it owns or leases makes such qualification necessary and in
which the failure so to qualify would have a Material Adverse Effect. A
"Material Adverse Effect" shall mean any effect that is materially adverse
to the properties, business, results of operations or financial condition
of the Company and its Subsidiaries taken as a whole.
5.4 Business; Financial Statements. The Company has delivered to
the Purchasers complete and correct copies of the audited supplemental
consolidated balance sheets of the Company and its Subsidiaries as of
December 31, 1997 and December 31, 1996, and the related audited
supplemental consolidated statements of operations, stockholders' equity
and cash flows of the Company and its Subsidiaries for the years ended
December 31, 1997, 1996 and 1995. Such audited financial statements are
hereinafter referred to as the "Financial Statements." The Financial
Statements are accompanied by the report of Ernst & Young LLP 1997 and 1996
and by the report of Price Waterhouse Coopers for 1995, which state that
the Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved (except as otherwise
specified therein) and present fairly the financial position of the
corporations to which they relate as of the respective dates specified and
the results of their operations and changes in financial position for the
respective periods specified, and that the audit by such accountants of the
Financial Statements has been made in accordance with generally accepted
auditing standards. The Company has also delivered to the Purchasers
complete and correct copies of the unaudited consolidated balance sheet of
the Company and its Subsidiaries as of September 30, 1998, and the related
unaudited consolidated statement of operations, stockholders' equity and
cash flows of the Company and its Subsidiaries for the three month period
ended on such date. Such unaudited financial statements are hereinafter
referred to as the "Unaudited Statements." The Unaudited Statements have
been prepared in accordance with GAAP consistently applied throughout the
periods involved (except as otherwise specified therein) and present fairly
the financial position of the Company and its Subsidiaries as of the
respective dates specified, and the results of their operations and changes
in cash flows for the respective periods specified. As of the date of this
Agreement, the Purchasers are not aware that this representation is
incorrect in any material respect.
5.5 Changes, etc. Since September 30, 1998, neither the Company
nor any of the Subsidiaries has sustained any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree which would be material to the Company and the
Subsidiaries taken as a whole, otherwise than as reserved for as disclosed
in the Company's financials statements; and there has not been any change
in the capital stock of the Company or increase in the long-term debt
(other than accretion or scheduled repayments thereof) of the Company and
the Subsidiaries taken as a whole, or any material adverse change which has
had a Material Adverse Effect, in each case otherwise than as set forth on
Exhibit E.
5.6 Capital Stock and Related Matters. At the time of the
Closing and after giving effect to the transactions contemplated by this
Agreement, the authorized capital stock of the Company will consist of (a)
500,000,000 shares of Common Stock, of which approximately 68,500,000
shares will be outstanding, (b) 300,000 shares of Series A Perpetual
Convertible Preferred Stock, of which 300,000 shares will be outstanding,
and (c) 4,700,000 shares of preferred stock, undesignated as to terms, none
of which are outstanding. The Company is obligated to issue Common Stock on
conversion of debentures held by United Rentals Trust I, a business trust
organized under Delaware law. The Common Stock and the Stock are
hereinafter collectively referred to as "Capital Stock". All of the
outstanding shares of Capital Stock are, and at the Closing will be,
validly issued and outstanding, fully paid and non-assessable. Except as
set forth above and on Exhibit E, the Company has no outstanding stock or
securities convertible into or exchangeable for any shares of its Capital
Stock, or any outstanding rights (either preemptive or other) to subscribe
for or to purchase, or any outstanding options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
outstanding calls, commitments or claims of any character relating to, any
Capital Stock or any stock or securities convertible into or exchangeable
for any Capital Stock of the Company. Except as set forth on Exhibit E,
the Company is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its Capital Stock
or any convertible securities, rights or options of the type described in
the preceding sentence. Neither the Company nor any of its Subsidiaries is
a party to, or has knowledge of, any agreement (except as set forth on
Exhibit E) restricting the transfer of any shares of the Company's Capital
Stock which would affect the transferability of the Common Stock issuable
upon conversion of the Stock.
5.7 Tax Returns and Payments. The Company and each of the
Subsidiaries have filed all necessary federal, state, local and foreign
income, payroll, franchise and other tax returns (after giving effect to
extensions) and have paid all taxes shown as due thereon (except where the
failure to so file or pay would not, singly or in the aggregate, have a
Material Adverse Effect), and there is no tax deficiency that has been, or
to the knowledge of the Company is likely to be, asserted against the
Company, any of the Subsidiaries or any of their properties or assets that
would result in a Material Adverse Effect, except for taxes that are being
contested in good faith by appropriate proceedings and with respect to
which the Company has established adequate reserves in accordance with
United States generally accepted accounting principles.
5.8 Indebtedness of the Company. Exhibit F correctly describes
all secured and unsecured Indebtedness of the Company and its Subsidiaries
(other than intercompany items) outstanding, or for which the Company or
one of its Subsidiaries has commitments, which is individually in excess of
$5,000,000 ("Significant Indebtedness") (excluding operating leases), on
the date of this Agreement. The secured and unsecured Indebtedness of the
Company and its Subsidiaries (other than intercompany items, and other
than Significant Indebtedness) outstanding, or for which the Company or one
of its Subsidiaries has commitments does not in the aggregate exceed
$1,600,000,000 on the date of this agreement. Neither the Company nor any
of its Subsidiaries is in default with respect to any Indebtedness or any
instrument or agreement relating thereto, except for such defaults as would
not, either in any case or in the aggregate, have a Material Adverse
Effect.
5.9 Title to Properties; Liens. The Company and each of the
Subsidiaries have good and marketable title to all real property (other
than property which is leased) material to the conduct of the business of
the Company and the Subsidiaries, taken as a whole, and good and marketable
title to all personal property (other than property which is leased)
material to the conduct of the business of the Company and the
Subsidiaries, taken as a whole, in each case free and clear of all liens,
encumbrances and defects except such as are described on Exhibit E or such
as do not in the aggregate have a Material Adverse Effect; and any real
property and buildings held under lease by the Company and the
Subsidiaries, material to the conduct of the business of the Company and
the Subsidiaries, taken as a whole, are held by them under valid,
subsisting and enforceable leases with such exceptions as are described on
Exhibit E and except for such other exceptions as do not have a Material
Adverse Effect.
5.10 Litigation, etc. There is no action, proceeding or
investigation pending or (to the knowledge of the Company) threatened (or
any basis therefor known to the Company) which questions the validity of
this Agreement, the Shares or any action taken or to be taken pursuant to
this Agreement, the Shares or the Collateral Agreements. Other than as set
forth on Exhibit E, there are no legal or governmental proceedings pending
to which the Company or any of the Subsidiaries is a party or of which any
property of the Company or the Subsidiaries is the subject, which if
determined adversely to the Company or any of the Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
the Company's knowledge, no such proceedings which would in the aggregate
have a Material Adverse Effect are threatened or contemplated by
governmental authorities or threatened by others.
5.11 Compliance with Other Instruments, etc. Neither the Company
nor any of its Subsidiaries is in violation of any term of its certificate
or articles of incorporation or by-laws, and neither the Company nor any of
its Subsidiaries is in violation of any term of any agreement or instrument
to which it is a party or by which it is bound or any term of any
applicable law, ordinance, rule or regulation of any Governmental Authority
or any term of any applicable order, judgment or decree of any court,
arbitrator or Governmental Authority, the consequences of which violation
could reasonably be expected to have a Material Adverse Effect. The
compliance by the Company with all of the provisions of this Agreement and
the Registration Rights Agreement, the execution, delivery and performance
by the Company of this Agreement and the Registration Rights Agreement, the
issuance by the Company of the Common Stock upon the conversion of the
Shares, and the compliance with the terms of the Certificate of Designation
will not conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement (provided the consent of the
Company's lending banks must be obtained before the Company makes an offer
to purchase under Section 5 of the Certificate of Designation) or other
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which the Company or any of the Subsidiaries is bound or to
which any of the property or assets of the Company or any of the
Subsidiaries is subject, or constitute a Repayment Event thereunder, nor
will such actions result in any violation of the provisions of the
certificate of incorporation or bylaws of the Company or any of the
Subsidiaries or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries or any of their properties except in each case as would
not, individually or in the aggregate have a Material Adverse Effect.
Except as set forth on Exhibit E, the execution, delivery and performance
by the Company of this Agreement and the transactions contemplated hereby
will not subject the Company to or accelerate any obligation to make
payments to any Person.
5.12 Governmental Consents, etc. Except as required under the
HSR Act, no consent, approval or authorization of, or declaration or filing
with, any Governmental Authority on the part of the Company is required for
the valid execution and delivery of this Agreement, the valid offer, issue,
sale and delivery of the Shares pursuant to this Agreement or the valid
issue and delivery of shares of Common Stock issuable upon conversion of
the Stock. Except for (a) the requirements of the HSR Act and applicable
state securities or blue sky laws, and (b) consents, approvals, filings or
notices that will be given or made at or prior to the time of the Closing,
neither the Company nor any of its Subsidiaries is required to obtain any
consent, approval or authorization of, or to make any declaration or filing
with, any Governmental Authority as a condition to the valid execution,
delivery or performance of any of the Collateral Agreements or the
consummation of the transactions contemplated thereby.
5.13 Offering of Securities. Neither the Company nor any Person
acting on its behalf has offered the Stock or any similar securities of the
Company to, or solicited any offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any Person or Persons
other than the Purchasers in such manner as would subject the offering,
issuance or sale of any of the Stock to the provisions of Section 5 of the
Securities Act. Neither the Company nor any Person acting on behalf of
the Company has taken or will take any action which would subject the
offering, issuance or sale of any of the Stock to the provisions of Section
5 of the Securities Act.
5.14 Certain Fees. Except for the fee payable by the Company to
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., the amount of which will be disclosed to the
Purchasers in writing prior to the Closing, no broker's or finder's fees or
commissions will be payable by the Company with respect to the transactions
contemplated by this Agreement and the Collateral Agreements, and the
Company hereby indemnifies the Purchasers against and agrees that it will
hold the Purchasers harmless from any claim, demand or liability for
broker's or finder's fees alleged to have been incurred at the instance of
the Company or any Person acting on behalf of or at the request of the
Company or any agent of the Company in connection with any of the
transactions contemplated by this Agreement and the Collateral Agreements,
and from any expenses, including reasonable legal fees, arising in
connection with any such claim, demand or liability.
5.15 Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
5.16 Disclosure. None of this Agreement, the Financial
Statements, the Annual Report on Form 10K for the year ended December 31,
1997, any document filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act") since the Annual Report on Form 10K for the year ended December 31,
1997, the Unaudited Statements, or the Company's Offering Circular dated
December 8, 1998 in respect of its 9-1/4% Senior Subordinated Notes due
2009, contains (in each case, as of its date, and, in the case of the
Offering Circular, also as of the date of this Agreement) any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they are made, not misleading.
5.17 Enforceability. This Agreement and the Registration Rights
Agreement have been duly authorized and when validly executed and delivered
by the Company (assuming the due authorization, execution and delivery
thereof by the other parties thereto) will constitute the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
5.18 [omitted]
5.19 Integration. Neither the Company nor any affiliate (as such
term is defined in Rule 501(b) under the Securities Act) has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Shares,
in a manner that would require the registration of the Securities under the
Securities Act.
5.20 Manipulation. Prior to the date hereof, neither the Company
nor any of its affiliates has taken any action which is designed to or
which has constituted or which might have been expected to cause or result
in stabilization or manipulation of the price of any security of the
Company in connection with the sale of the Shares.
5.21 Acquired Companies. To the best knowledge of the Company,
the representations and warranties made by each of the Acquired Companies
(as defined in Section 9) and the selling stockholders in the respective
agreements pursuant to which the Company or another Subsidiary acquired the
Acquired Companies did not as of the respective dates thereof contain any
inaccuracies that would, singly or in the aggregate, have a Material
Adverse Effect.
5.22 Intellectual Property. The Company and the Subsidiaries own
or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names
or other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither the
Company nor any of the Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of the Subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
5.23 Government Licenses. The Company and the Subsidiaries
possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to so possess such Government Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and the Subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have, singly or in the aggregate, a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
5.24 Environmental Laws. Except as described on Exhibit E or
except as would not, singly or in the aggregate, result in a Material
Adverse Effect: (a) neither the Company nor any of the Subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (b) neither the Company nor any of the Subsidiaries is lacking any
permits, authorizations and approvals required under any applicable
Environmental Laws or are in violation of the requirements of such
Environmental Laws, (c) there are no pending or, to the best knowledge of
the Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of the Subsidiaries and (d) to the knowledge of
the Company there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of the Subsidiaries
relating to Hazardous Materials or any Environmental Laws.
5.25 Insurance. Neither the Company nor any Subsidiary has
received notice from any insurer providing insurance coverage for the
Company and the Subsidiaries or agent of such insurer that capital
improvements or other expenditures will have to be made in order to
continue present insurance coverage, except such as could not reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect.
5.26 Internal Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are
recorded as necessary (i) to permit preparation of financial statements in
conformity with generally accepted accounting principles and (ii) to
maintain accountability for assets; (c) access to assets is permitted only
in accordance with management's general or specific authorization; and (d)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
material differences. Any exceptions to this representation would not
render the representation in Section 5.4 incorrect in any material respect
or have a Material Adverse Effect.
5.27 ERISA. Neither the Company nor any of the Subsidiaries has
violated any provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate,
would not have a Material Adverse Effect. If any plan subject to ERISA is
adopted, the execution and delivery of this Agreement and the sale of the
Securities will not involve any non-exempt prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986, as amended.
5.28 Year 2000 Compliance. With such exceptions as would not have
a Material Adverse Effect, the Company has been advised by its vendors (and
has no reason to believe that such advice is not correct) that as of the
date of this Agreement, all Date Data and Date-Sensitive Systems used by
the Company and its Subsidiaries are Year 2000 Compliant. "Date-Sensitive
System" means any software, microcode or hardware system or component,
including any electronic or electronically controlled system or component,
that uses or processes any Date Data and that is installed, in development
or on order by the Company or any of its subsidiaries for their internal
use or for the use of third parties, or which the Company or any of its
subsidiaries sell, lease, license, assign or otherwise provide to any third
party. "Year 2000 Compliant" means (i) with respect to Date Data, that
such data is in proper format and accurate for all dates, including for
those before, on and after December 31, 1999 and (ii) with respect to Date-
Sensitive Systems, that each such system accurately processes all Date
Data, including for dates before, on and after December 31, 1999, without
loss of any functionality or performance, including but not limited to
calculating, comparing, sequencing, storing and displaying such Date Data
(including all leap year considerations), when used as a stand-alone system
or in combination with other software or hardware.
6. Investment Representations. The Purchasers understand that
neither the Shares nor any Common Stock issuable upon conversion, if any,
of the Shares has been registered under the Securities Act and that the
certificates for the Shares and such Common Stock will bear a legend to
that effect. The Purchasers also understand that the Shares are being
offered and sold pursuant to an exemption from registration contained in
the Securities Act, based in part upon their representations contained in
this Agreement. The Purchasers hereby represent and warrant as follows:
6.1 Acquisition for Own Account. The Purchasers are acquiring
the Shares for their own account for investment and not with a view toward
distribution in a manner which would violate the Securities Act.
6.2 Ability to Protect Own Interests. The Purchasers represent
that by reason of their business or financial experience, or the business
and financial experience of their management, the Purchasers have the
capacity to protect their own interests in connection with the transaction
contemplated in this Agreement. The Purchasers are not a corporation
formed for the specific purpose of consummating this transaction.
6.3 Accredited Investor. The Purchasers represent that they are
an "accredited investor" as that term is defined in Regulation D
promulgated under the Securities Act.
6.4 Access to Information. The Purchasers have been given
access to all Company documents, records, and other information, have
received physical delivery of all those which the Purchasers have
requested, and have had adequate opportunity to ask questions of, and
receive answers from, the Company's officers, employees, agents,
accountants, and representatives concerning the Company's business,
operations, financial condition, assets, liabilities, and all other matters
relevant to its investment in the Shares.
6.5 No Brokers. Purchasers represent and warrant to the Company
that no broker's or finder's fees or commissions will be payable by the
Purchasers with respect to the transactions contemplated by this Agreement
and the Collateral Agreements, and the Purchasers hereby jointly and
severally indemnify and hold the Company harmless from any claim, demand or
liability for broker's or finder's fees alleged to have been incurred at
the instance of the Purchasers, their affiliates or agents or any Person
acting on behalf of or at the request of the Purchasers, their affiliates
or agents.
6.6 Compliance with Laws. Purchasers and their transferees will
comply with all filing and other reporting obligations under all
Requirements of Law which shall be applicable to Purchasers with respect to
the Shares and to the Common Stock issuable or issued on conversion of the
Shares.
7. Affirmative Covenants. The Company covenants that from and
after the date of this Agreement through the Closing and thereafter so long
as the Purchasers own at least 25,000 Shares or 1,000,000 shares of Common
Stock which have been acquired upon conversion of any Shares:
7.1 Exchange Act and Securities Act Filings. The Company will
deliver to the Purchasers, within three Business Days of their filing with
the Securities and Exchange Commission, all documents filed by it with the
Securities and Exchange Commission pursuant to the Securities Act or the
Exchange Act, including exhibits thereto.
7.2 Certificates; Other Information. The Company will deliver
to the Purchasers: (a) promptly upon receipt thereof, copies of all final
reports submitted to the Company or any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
(but only if the holders of the Shares are then entitled under the
Certificate of Designation to elect as a class at least one member of the
Company's Board of Directors) special audit of the books of the Company or
any of its Subsidiaries made by such accountants, including, without
limitation, any final comment letter submitted by such accountants to
management in connection with their annual audit; and (b) promptly upon
their becoming available, copies of all financial statements, reports,
notices and proxy statements sent or made available generally by the
Company to all of its security holders in their capacity as such or by any
Subsidiary of the Company to its security holders.
7.3 [omitted]
7.4 [omitted]
7.5 Inspection of Property; Books and Records; Discussions. The
Company will, and will cause each of its Subsidiaries to keep proper books
of record and account in which entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities
7.6 Notices. The Company will, within 48 hours of occurrence,
give notice to the Purchasers: (a) of any (i) default or event of default
under any instrument or other agreement of the Company or any of its
Subsidiaries which default or event of default would have a Material
Adverse Effect or (ii) litigation, investigation or proceeding which may
exist at any time between the Company or any of its Subsidiaries and any
Governmental Authority, which in any such case, if adversely determined,
could reasonably be expected to have a Material Adverse Effect; and (b) of
any litigation or proceeding affecting the Company or any of its
Subsidiaries (i) in which the amount claimed is $2,000,000 or more and not
covered by insurance or covered by reserves on the Company's balance sheet,
or (ii) in which injunctive or similar relief is sought which if obtained
could reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this section 7.6 shall be accompanied by
a statement of the chief executive officer or chief financial officer of
the Company setting forth details of the occurrence referred to therein and
stating what action the Company proposes to take with respect thereto.
7.7 Reservation of Common Stock. The Company will at all times
reserve and keep available, solely for issuance and delivery upon
conversion of the Stock, the number of shares of Common Stock from time to
time issuable upon conversion of all shares of the Stock at the time
outstanding. All shares of Common Stock issuable upon conversion of the
Stock shall be duly authorized and, when issued upon such conversion, shall
be validly issued, fully paid and non-assessable.
7.8 Availability of Information. The Company will comply with
the reporting requirements of Sections 13 and 15(d) of the Exchange Act and
will comply with all other public information reporting requirements of the
Securities and Exchange Commission (including Rule 144 promulgated by the
Securities and Exchange Commission under the Securities Act) from time to
time in effect and relating to the availability of an exemption from the
Securities Act for the sale of any Restricted Securities. The Company will
also reasonably cooperate with each holder of any Restricted Securities in
supplying such information as may be necessary for such holder to complete
and file any information reporting forms presently or hereafter required by
the Securities and Exchange Commission as a condition to the availability
of an exemption from the Securities Act for the sale of any Restricted
Securities.
7.9 Public Announcements. Attached hereto is the text of the
press releases which the parties shall issue publicly to announce the
execution of this Agreement.
8. Registration, Transfer and Substitution of Certificates for
Stock.
8.1 Stock Register; Ownership of Stock. (a) The Company will
keep at its principal office a register in which the Company will provide
for the registration of the stock and the registration of transfers or
conversion of the Stock. The Company may treat the Person in whose name
any of the Shares or shares issued upon conversion of any of the Stock are
registered on such register as the owner thereof and the Company shall not
be affected by any notice to the contrary. All references in this
Agreement to a "holder" of any Shares or shares issued upon conversion of
any of the Stock shall mean the Person in whose name such Shares or shares
issued upon conversion of any of the Stock are at the time registered on
such register.
(b) Upon the surrender of any certificate for Stock,
properly endorsed, for registration of transfer or for conversion at the
office of the Company maintained pursuant to subdivision (a) of this
section 8.1, the Company at its expense will (subject to compliance with
section 8.2 hereof, if applicable) execute and deliver to or upon the order
of the holder thereof (i) a new certificate or certificates for the same
aggregate number of shares of Stock less the number of shares of Stock
being converted, if any, in the name of such holder or as such holder
(upon payment by such holder of any applicable transfer taxes) may direct,
and (ii) a certificate or certificates for the number of shares of Common
Stock to be issued upon conversion of the shares of Stock so surrendered.
8.2 Replacement of Certificates. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any certificate representing shares of Stock or Common Stock
issued upon the conversion of shares of Stock and, in the case of any such
loss, theft or destruction of any certificate representing shares of Stock
or Common Stock issued upon the conversion of shares of Stock held by a
Person other than the Purchasers, upon delivery of indemnity reasonably
satisfactory to the Company in form and amount or, in the case of any such
mutilation, upon surrender of such certificate representing shares of Stock
or Common Stock issued upon the conversion of shares of Stock for
cancellation at the office of the Company maintained pursuant to
subdivision (a) of section 8.1 hereof, the Company at its expense will
execute and deliver, in lieu thereof, a new certificate representing shares
of Stock or Common Stock of like tenor.
8.3 Restrictive Legends. Except as otherwise permitted by this
section 8, each certificate for Stock (including each certificate for Stock
issued upon the transfer of any certificate for Stock) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares represented by this Certificate and any shares
of Common Stock issuable upon conversion of any such shares have
not been registered under the Securities Act of 1933 and may not
be transferred in the absence of such registration or an
exemption therefrom under such Act. Such shares and any such
shares of Common Stock may be transferred only in compliance with
the conditions specified in the Preferred Stock Purchase
Agreement dated December __, 1998 between United Rentals, Inc.
(the "Company") and the purchasers identified therein. A
complete and correct copy of such Agreement is available for
inspection at the principal office of the Company and will be
furnished without charge to the holder of such shares upon
written request."
Except as otherwise permitted by this section 8, each certificate for
Common Stock issued upon the conversion of any of the Stock, and each
certificate issued upon the transfer of any such Common Stock, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred in the absence of such registration or an exemption
therefrom under such Act. Such shares may be transferred only in
compliance with the conditions specified in the Preferred Stock
Purchase Agreement dated December , 1998 between United
Rentals, Inc. (the "Company") and the purchasers identified
therein. A complete and correct copy of such Agreement is
available for inspection at the principal office of the Company
and will be furnished without charge to the holder of such shares
upon written request."
8.4 Notice of Proposed Transfer; Opinions of Counsel. Prior to
any transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act, the holder
thereof will give written notice to the Company of such holder's intention
to effect such transfer and to comply in all other respects with this
section 8.4. Each such notice shall describe the manner and circumstances
of the proposed transfer and shall be accompanied by an opinion of counsel
for such holder, which counsel and opinion shall each be reasonably
satisfactory to the Company, that the proposed transfer may be effected
without registration of such shares of Restricted Securities under the
Securities Act. Such holder shall thereupon be entitled to transfer such
shares in accordance with the terms of the notice delivered by such holder
to the Company. Each certificate representing such shares issued upon or
in connection with such transfer shall bear the restrictive legends
required by section 8.3, unless the related restrictions on transfer shall
have ceased and terminated as to such shares pursuant to section 8.5
hereof.
8.5 Termination of Restrictions. The restrictions imposed by
this section 8 upon the transferability of Restricted Securities shall
cease and terminate as to any particular Restricted Securities when such
restrictions are no longer required in order to insure compliance with the
Securities Act. Whenever such restrictions shall cease and terminate as to
any Restricted Securities, the holder thereof shall be entitled to receive
from the Company, without expense (other than applicable transfer taxes, if
any), new certificates for such securities of like tenor not bearing the
applicable legends required by section 8.3 hereof.
9. Definitions.
9.1 Certain Defined Terms. As used in this Agreement the
following terms have the following respective meanings:
Acquired Companies: The companies United Rentals, Inc. has
acquired since its formation in September 1997.
Affiliate: With reference to any Person, a spouse of such
Person, any relative (by blood, adoption or marriage) of such Person within
the second degree, any director, officer or employee of such Person, any
other Person of which such Person is a member, director, officer or
employee, and any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person.
Business Day: Any day except a Saturday, a Sunday, or any day on
which banking institutions in New York, New York are required or authorized
by law or other governmental action to be closed.
Capital Stock: As defined in section 5.6 of this Agreement.
Certificate of Designation: As defined in section 1 of this
Agreement.
Closing: As defined in section 3 of this Agreement.
Closing Date: The date of the Closing.
Code: The Internal Revenue Code of 1986, as amended from time to
time.
Collateral Agreements: The Registration Rights Agreement and the
Certificate of Designation.
Common Stock: As defined in section 1 of this Agreement.
Company: As defined in the introduction to this Agreement.
Exchange Act: At any time, the Securities Exchange Act of 1934 as
then in effect or any similar federal statute then in effect, and any
reference to a particular section of such Act shall be deemed to include a
reference to the comparable section, if any, in any such similar federal
statute.
Financial Statements: As defined in section 5.4 of this
Agreement.
GAAP: Generally accepted accounting principles set forth in the
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements by the Financial Accounting
Standards Board or in such other statement by such other entity as may be
approved by a significant segment of the accounting profession; and the
requisite that such principles be applied on a consistent basis shall mean
that the accounting principles observed in a current period are comparable
in all material respects to those applied in a preceding period.
Governmental Authority: Any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
Indebtedness: With respect to any Person, at a particular time
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property, (b) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all drafts
drawn thereunder, (c) all liabilities secured by any Lien on any property
owned by such Person, to the extent attributable to such Person's interest
in such property, even though such Person has not assumed or become liable
for the payment thereof, and (d) lease obligations of such Person which, in
accordance with GAAP, should be capitalized; but excluding trade and other
accounts payable in the ordinary course of business in accordance with
customary trade terms and which are not overdue for a period of more than
60 days or, if overdue for more than 60 days, as to which a dispute exists
and adequate reserves in conformity with GAAP have been established on the
books of such Person. The term "Indebtedness" shall not include amounts
which have not been drawn under credit facilities, notwithstanding that
such amounts when drawn will automatically be secured by an existing Lien.
Lien: Any mortgage, pledge, hypothecation, assignment, security
interest, lien, charge or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the
same economic effects as any of the foregoing, and the filing of, or
agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction). For the purposes of this
Agreement, the Company or one of its Subsidiaries shall be deemed to be the
owner of any property which it has placed in trust for the benefit of the
holders of Indebtedness of the Company or its Subsidiaries which
Indebtedness is deemed to be extinguished under GAAP but for which the
Company or its Subsidiaries remain legally liable, and such trust shall be
deemed to be a Lien.
Majority in Interest: At any time, the holders of a majority, by
number of shares, of the outstanding Shares and the outstanding shares of
Common Stock issued upon conversion of any Shares, such majority to be
determined by reference to the number of shares of Common Stock into which
all outstanding Shares are at the time convertible.
Officers' Certificate: As to the Company, a certificate
executed on behalf of the Company by its Chief Executive Officer, and any
one of its Vice Chairman, Chief Acquisition Officer, or Chief Financial
Officer.
Person: An individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
Registration Rights Agreement: As defined in section 4.6 of this
Agreement.
Repayment Event: Any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of the Subsidiaries.
Requirement of Law: As to any Person, the Certificate of
Incorporation and by-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
Restricted Securities: All of the following: (a) any
certificates for Stock bearing the applicable legend or legends referred to
in section 8.3 hereof, (b) any shares of Common Stock which have been
issued upon the conversion of any of the Stock and which are evidenced by a
certificate or certificates bearing the applicable legend or legends
referred to in such section and (c) unless the context otherwise requires,
any shares of Common Stock which are at the time issuable upon the
conversion of Stock and which, when so issued, will be evidenced by a
certificate or certificates bearing the applicable legend or legends
referred to in such section.
Securities Act: At any time, the Securities Act of 1933 as then
in effect or any similar federal statute then in effect, and any reference
to a particular section of such Act shall be deemed to include a reference
to the comparable section, if any, in any such similar federal statute.
Securities and Exchange Commission: The U.S. Securities and
Exchange Commission, or any other federal agency at the time administering
the Securities Act or the Exchange Act, whichever is the relevant statute
for the particular purpose.
Shares: As defined in section 1 of this Agreement.
Stock: As defined in section 1 of this Agreement.
Subsidiaries: With respect to any Person, any corporation with
respect to which more than 50% of the outstanding shares of stock of each
class having ordinary voting power (other than stock having such power only
by reason of the happening of a contingency) is at the time owned by such
Person or by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person.
Any of the above-defined terms may, unless the context otherwise
requires, be used in the singular or plural depending on the reference.
9.2 Accounting Terms. As used in this Agreement, and in any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in section 9.1 and accounting terms
partly defined in said section 9.1 to the extent not defined, shall have
the respective meanings given to them under GAAP.
9.3 Other Provisions Regarding Definitions: (1) Unless
otherwise defined therein, all terms defined in this Agreement shall have
the defined meanings when used in any certificate, report or other document
made or delivered pursuant to this Agreement.
(2) The words "hereof", "herein", and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
10. Expenses, etc. Whether or not the transactions contemplated
by this Agreement shall be consummated, the Company will pay all of its
expenses in connection with such transactions and in connection with any
amendments or waivers (whether or not the same become effective) under or
in respect of this Agreement or the Shares purchased by the Purchasers
hereunder, including, without limitation: (a) the cost and expenses of
reproducing this Agreement and the Shares purchased by the Purchasers, of
furnishing all opinions of counsel for the Company (including any opinions
requested by the Purchasers' special counsel as to any legal matter arising
hereunder) and all certificates on behalf of the Company, and of the
Company's performance of and compliance with all agreements and conditions
contained herein to be performed or complied with by it; and (b) the cost
(other than any applicable stock transfer taxes) of delivering to their
principal office, insured to their satisfaction, the Shares sold to the
Purchasers hereunder and any Shares delivered to the Purchasers upon any
substitution of Shares pursuant to section 8 and of the Purchasers
delivering any Shares, insured to their satisfaction, upon any such
substitution. In addition, if the transactions contemplated hereby have
been consummated, the Company shall pay 50% of the reasonably itemized
out-of-pocket expenses incurred by the Purchasers in connection with such
transactions (including the fees and disbursements of their counsel),
provided that the Company's liability under this sentence shall not exceed
$500,000. Reference is made to Section 5 of this Agreement for certain
agreements among the parties regarding the fees, if any, of brokers and
finders.
11. Survival of Representations and Warranties and
Indemnification; Certain Limitations. The Company's indemnification
obligations and all representations and warranties contained in this
Agreement shall survive the execution and delivery of this Agreement, any
investigation at any time made by the Purchasers or on their behalf, and
the purchase of the Shares by the Purchasers under this Agreement and any
conversion of any of the Stock or any disposition of any shares of Common
Stock issued upon conversion of any of the Stock; provided that all such
representations and warranties (and the indemnities in respect thereof with
respect to claims not made prior to such date) shall expire on the later of
March 31, 1999 and 30 days after the date the Company's audited financial
statements for the year ended December 31, 1998, including a signed audit
report of the Company's independent accountants, are publicly filed with
the Commission or delivered to Purchasers. No written (except as
explicitly stated therein) or oral statements made by or on behalf of the
Company, other than in this Agreement, the Collateral Agreements and the
exhibits hereto and thereto, shall constitute representations or warranties
within the meaning of this Agreement. In no event shall Purchasers be
entitled to the remedy of rescission.
12. Amendments and Waivers. Any term of this Agreement may be
amended or modified and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the
Company and (a) in the case of any such action prior to the Closing, the
Purchasers; and (b) in the case of any other such action, a Majority in
Interest.
13. Notices, etc. Except as otherwise provided in this
Agreement, notices and other communications under this Agreement shall be
in writing and shall be delivered, or mailed by first-class mail, postage
pre-paid, addressed, (a) if to the Purchasers, at the address set forth at
the beginning of this Agreement, or at such other address as the Purchasers
shall have furnished to the Company in writing, or (b) if to any other
holder of any Shares or shares of Common Stock into which any of the Shares
have been converted, at such address as such other holder shall have
furnished to the Company in writing, or, until any such other holder so
furnishes to the Company an address, then to and at the address of the last
holder of such Shares or shares of Common Stock into which such Shares have
been converted who has furnished an address to the Company, or (c) if to
the Company at the address of the Company set forth at the beginning of
this Agreement, to the attention of its President, or at such other
address, or to the attention of such other officer, as the Company shall
have furnished to the Purchasers and each such other holder in writing.
14. Indemnification. (a) The Company shall indemnify, defend
and hold harmless the Purchasers, their affiliates, partners, officers,
employees and agents (each, an "Indemnified Person") from and against any
and all losses, liabilities, damages, judgments, settlements and expenses
(including interest and penalties recovered by a third party with respect
thereto and reasonable attorneys' fees and expenses and reasonable
accountants' fees and expenses incurred in the investigation or defense of
any of the same or in asserting, preserving or enforcing any of rights
hereunder), that arise out of:
(i) any breach by the Company of any of its
representations, warranties or covenants contained in this Agreement or in
the Registration Rights Agreement; or
(ii) any litigation, investigation or proceeding
instituted by any Governmental Agency or any other Person with respect to
this Agreement or the collateral Agreements or the transactions
contemplated hereby or thereby and requiring the Purchasers participation
or involvement, excluding, however, any such litigation, investigation or
proceeding which arises solely from the acts or omissions of Purchasers or
their affiliates.
(b) The Purchasers shall give the Company prompt notice of
any third-party claim that may give rise to any indemnification obligation
under this Section 14 and the Company shall (except as set forth below)
have the right to assume and control the defense (at its expense) and
settlement of any such claim through the Company's own counsel or through
other counsel reasonably acceptable to the Purchasers. The Purchasers may
retain additional counsel at their own expense. If, under applicable
standards of professional conduct, a conflict with respect to any
significant issue between the Purchasers and the Company exists in respect
of such third-party claim, the Company shall not assume the defense of such
claim and shall also pay the reasonable fees and expenses of one counsel
selected by Purchasers in respect of such claim. Notwithstanding the
foregoing, without the Purchasers' consent, the Company will not settle any
action or proceeding which does not provide the Purchasers a full,
unconditional release from all liability with respect to such claim by each
claimant or plaintiff in a form acceptable to the Purchasers' counsel, nor
will the Company consent to any injunctive or other non-monetary relief
affecting any Indemnified Person.
15. Termination. This Agreement may be terminated (a) by the
mutual written consent of the Purchasers and the Company at any time or (b)
by the Purchasers or the Company if the Closing shall not have been
consummated on or before January 31, 1999; provided, however, that the
right to terminate this Agreement pursuant to (b) of this Section 15 shall
not be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure to consummate the
transactions by such time.
16. Miscellaneous. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns and affiliates of the parties hereto, whether so expressed or not,
and, in particular, shall inure to the benefit of and be enforceable by any
holder or holders at the time of the Shares or shares of Common Stock into
which any of the Shares have been converted; except as aforesaid, this
Agreement shall not inure to the benefit of any third party. This
Agreement embodies the entire agreement and understanding between the
Purchasers and the Company and supersedes all prior agreements and
understandings relating to the subject matter hereof. This Agreement shall
be construed and enforced in accordance with and governed by the law of the
State of New York without regard to the principles regarding conflicts of
laws. The headings in this Agreement are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.
If the Purchasers are in agreement with the foregoing, please
sign the form of agreement on the accompanying counterparts of this letter
and return one of the same to the Company, whereupon this letter shall
become a binding agreement between the Purchasers and the Company.
Very truly yours,
UNITED RENTALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Chief Executive Officer
The foregoing Agreement is hereby
agreed to as of the date thereof.
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors, IV, L.P.,
its general partner
By: Apollo Capital Management IV, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Title: Vice President
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors, IV, L.P.,
its general partner
By: Apollo Capital Management IV,
Inc., its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Title: Vice President
EXHIBIT 1
SHARES OF SERIES A
PERPETUAL CONVERTIBLE
PREFERRED STOCK
PURCHASER TO BE PURCHASED
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Apollo Investment Fund IV, L.P. . . . . . . . . . . . . . 284,726
Apollo Overseas Partners IV, L.P. . . . . . . . . . . . 15,274
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TOTAL 300,000
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TABLE OF CONTENTS
Page
1. Authorization of Stock . . . . . . . . . . . . . . . . . . . . . . . 2
2. Sale and Purchase of Stock . . . . . . . . . . . . . . . . . . . . . 2
3. Closing; Payment of Purchase Price . . . . . . . . . . . . . . . . . 3
4. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Representations and Warranties . . . . . . . . . . . . . . . . 4
4.2 Performance; No Default . . . . . . . . . . . . . . . . . . . . 4
4.3 Compliance Certificates . . . . . . . . . . . . . . . . . . . . 4
4.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . 4
4.5 Certificate of Designation . . . . . . . . . . . . . . . . . . 4
4.6 Registration Rights Agreement . . . . . . . . . . . . . . . . . 4
4.7 [omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.8 [omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.9 No Actions Pending . . . . . . . . . . . . . . . . . . . . . . 5
4.10 Compliance with Securities Laws . . . . . . . . . . . . . . . . 5
4.11 Proceedings and Documents . . . . . . . . . . . . . . . . . . . 5
4.12 Reservation of Common Stock . . . . . . . . . . . . . . . . . . 5
4.13 Payment of Fees and Expenses . . . . . . . . . . . . . . . . . 5
4.14 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Representations and Warranties . . . . . . . . . . . . . . . . . . . 5
5.1 Organization, Standing, etc. . . . . . . . . . . . . . . . . . 6
5.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.3 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4 Business; Financial Statements . . . . . . . . . . . . . . . . 6
5.5 Changes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.6 Capital Stock and Related Matters . . . . . . . . . . . . . . . 7
5.7 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . 8
5.8 Indebtedness of the Company . . . . . . . . . . . . . . . . . . 8
5.9 Title to Properties; Liens . . . . . . . . . . . . . . . . . . 9
5.10 Litigation, etc. . . . . . . . . . . . . . . . . . . . . . . . 9
5.11 Compliance with Other Instruments, etc. . . . . . . . . . . . . 9
5.12 Governmental Consents, etc. . . . . . . . . . . . . . . . . . 10
5.13 Offering of Securities . . . . . . . . . . . . . . . . . . . 11
5.14 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . 11
5.15 Investment Company Act . . . . . . . . . . . . . . . . . . . 11
5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.17 Enforceability . . . . . . . . . . . . . . . . . . . . . . . 12
5.18 [omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.19 Integration . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.20 Manipulation . . . . . . . . . . . . . . . . . . . . . . . . 12
5.21 Acquired Companies . . . . . . . . . . . . . . . . . . . . . 12
5.22 Intellectual Property . . . . . . . . . . . . . . . . . . . . 12
5.23 Government Licenses . . . . . . . . . . . . . . . . . . . . . 13
5.24 Environmental Laws . . . . . . . . . . . . . . . . . . . . . 13
5.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.26 Internal Controls . . . . . . . . . . . . . . . . . . . . . . 14
5.27 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.28 Year 2000 Compliance . . . . . . . . . . . . . . . . . . . . 15
6. Investment Representations . . . . . . . . . . . . . . . . . . . . 15
6.1 Acquisition for Own Account . . . . . . . . . . . . . . . . . 15
6.2 Ability to Protect Own Interests . . . . . . . . . . . . . . 15
6.3 Accredited Investor . . . . . . . . . . . . . . . . . . . . . 16
6.4 Access to Information . . . . . . . . . . . . . . . . . . . . 16
6.5 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . 16
7. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . 16
7.1 Exchange Act and Securities Act Filings . . . . . . . . . . . 16
7.2 Certificates; Other Information . . . . . . . . . . . . . . . 17
7.3 [omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.4 [omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.5 Inspection of Property; Books and Records; Discussions . . . 17
7.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.7 Reservation of Common Stock . . . . . . . . . . . . . . . . . 18
7.8 Availability of Information . . . . . . . . . . . . . . . . . 18
7.9 Public Announcements . . . . . . . . . . . . . . . . . . . . 18
8. Registration, Transfer and Substitution of Certificates for Stock 18
8.1 Stock Register; Ownership of Stock . . . . . . . . . . . . . 18
8.2 Replacement of Certificates . . . . . . . . . . . . . . . . . 19
8.3 Restrictive Legends . . . . . . . . . . . . . . . . . . . . . 19
8.4 Notice of Proposed Transfer; Opinions of Counsel . . . . . . 20
8.5 Termination of Restrictions . . . . . . . . . . . . . . . . . 21
9. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . 21
9.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . 25
9.3 Other Provisions Regarding Definitions . . . . . . . . . . . 25
10. Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11. Survival of Representations and Warranties and
Indemnification; Certain Limitations . . . . . . . . . . . . . . . 26
12. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 26
13. Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 27
15. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
16. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Exhibit A Form of Restated Certificate of Incorporation
Exhibit B Form of Opinion of Counsel for the Company
Exhibit C Form of Opinion of Counsel for the Company
Exhibit D Form of Registration Rights Agreement
Exhibit E Subsidiaries of the Company; exceptions to representations and
warranties
Exhibit F Indebtedness of the Company and the Subsidiaries