THIRD AMENDED AND RESTATED CREDIT AGREEMENT
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THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 12, 1998 is
among United Rentals, Inc. (the "Company"), United Rentals of Canada, Inc. ("UR
Canada"), various financial institutions, various Co-Agents, Bank of America
Canada, as Canadian Agent (the "Canadian Agent"), and Bank of America National
Trust and Savings Association, as U.S. Agent (the "U.S. Agent"), and amends and
restates the Second Amended and Restated Credit Agreement dated as of March 30,
1998 (the "Credit Agreement") among the Company, UR Canada, various financial
institutions, various Co-Agents, the Canadian Agent and the U.S. Agent. Terms
defined in the Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used herein as defined therein.
WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein and to restate the Credit Agreement in its entirety to read as set
forth in the Credit Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Covenant Amendments. Effective upon the occurrence of the
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Amendment Effective Date (as defined below), the Credit Agreement shall be
amended in accordance with Sections 1.1 through 1.9 below.
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1.1 Addition of Definition. Section 1.1 is amended by adding the
----------------------
following definition of "Cash Flow" in appropriate alphabetical sequence:
Cash Flow means, as of the last day of any Fiscal Quarter,
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Consolidated Net Income for the period of four Fiscal Quarters ending on
the last day of such Fiscal Quarter plus, to the extent deducted in
----
determining such Consolidated Net Income, Interest Expense, income tax
expense, depreciation and amortization for such period, all calculated on a
pro forma basis in accordance with Article II of Regulation S-X of the SEC.
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1.2 Amendment to Definition. The definition of Funded Debt to Cash Flow
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Ratio is amended in its entirety to read as follows:
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.
1.3 Amendment to Section 6.1. Section 6.1 is amended by (i) designating
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the existing text thereof, except the last sentence thereof, as subsection (a);
(ii) adding the following subsection (b) immediately before the last sentence of
the existing text thereof: "(b) The Company shall reduce
the Aggregate Commitment at any time, and in the amount, required by Section
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10.23."; and (iii) designating the last sentence of the existing text thereof as
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subsection (c).
1.4 Amendment to Section 6.2.1. Section 6.2.1 is amended by adding the
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following sentence immediately before the last sentence of such Section: "In
addition, the Company shall make any prepayment required by Section 10.23."
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1.5 Amendments to Section 10.6. Section 10.6 is amended by (a) amending
--------------------------
and restating Sections 10.6.2, 10.6.3, 10.6.4 and 10.6.5 in their entirety to
read as set forth below, respectively, and (b) adding the Section 10.6.6 set
forth below:
10.6.2 Maximum Leverage. Not permit the ratio of (i) Funded Debt to
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(ii) Funded Debt plus Net Worth to exceed 0.65 to 1.0 at any time.
----
10.6.3 Minimum Interest Coverage. Not permit the Interest Coverage
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Ratio for any Computation Period to be less than the applicable ratio set
forth below:
COMPUTATION INTEREST
PERIOD ENDING: COVERAGE RATIO
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3/31/98 through 12/31/98 1.50 to 1.0
3/31/99 through 12/31/99 1.75 to 1.0
3/31/2000 and thereafter 2.00 to I.O.
10.6.4 Funded Debt to Cash Flow Ratio. Not permit the Funded Debt
------------------------------
to Cash Flow Ratio as of the last day of any Fiscal Quarter to exceed 4.5
to 1.0.
10.6.5 Senior Debt to Tangible Assets. Not permit the ratio of (i)
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Senior Debt to (ii) Tangible Assets to exceed 1.0 to 1.0 at any time.
10.6.6 Senior Debt to Cash Flow Ratio. Not permit the ratio of (i)
------------------------------
Senior Debt to (ii) Cash Flow as of the last day of any Fiscal Quarter to
exceed 3.0 to 1.0.
1.6 Section 10.11. Section 10.11 is amended by (i) adding a comma and the
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words "but excluding any capital stock of or other equity interest in the
Company which is part of such consideration" after the term "GAAP" and before
the first close parenthesis in clause (c)(3)(i) and (ii) deleting the amount
"U.S.$20,000,000" therein and substituting the amount "U.S.$40,000,000"
therefor.
1.7 Addition of Section 10.23. The following Section 10.23 is added in
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appropriate numerical sequence:
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10.23 Asset Sales. Not later than one Business Day prior to the date
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on which the Company would be required to make, or offer to make, or give
any notice of, any prepayment of Subordinated Debt (other than Seller
Subordinated Debt) as a result of any sale or other disposition of assets,
make a prepayment of the Loans and reduce the Aggregate Commitment by an
amount at least equal to the amount which otherwise would be required to be
applied to prepay such Subordinated Debt.
1.8 Amendment to Section 12.1.11. Section 12.1.11 shall be amended by
----------------------------
(a) deleting the word "or" after clause (b) thereof and (b) inserting a
semi-colon and the following language before the period at the end thereof:
or (d) any "Change of Control" shall occur under, and as defined in,
the indenture for the Company's senior subordinated notes due 2008.
1.9 Amendment to Section 13.1(d). Section 13.1(d) is amended in its
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entirety to read as follows:
(d) The Banks authorize the U.S. Agent and the Canadian Agent to
hold, for and on behalf of the Banks, security in the assets and properties
of the Borrowers and their Subsidiaries securing the obligations of the
Borrowers and their Subsidiaries under the Loan Documents.
SECTION 2 Pricing Amendments. Effective upon the occurrence of the
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Restatement Effective Date (as defined below), Schedule 1.1(C) to the Credit
Agreement shall be amended in its entirety by substituting the Schedule 1.1(C)
---------------
attached hereto therefor (and the pricing set forth in such Schedule shall
become effective immediately upon such occurrence based upon the most recent
financial statements and compliance certificate delivered by the Company).
SECTION 3 Representations and Warranties. Each Borrower represents and
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warrants to the Agents and the Banks that (a) each of the representations and
warranties made by such Borrower in Section 9 of the Credit Agreement (excluding
Sections 9.6 and 9.8), as amended and restated hereby (as so amended and
restated, the "Restated Credit Agreement"), is true and correct as of the date
hereof, with the same effect as if made on such date, (b) the execution and
delivery hereof by such Borrower, and the performance by such Borrower of its
obligations under the Restated Credit Agreement, (i) are within the powers of
such Borrower, (ii) have been duly authorized by all necessary corporate action
on the part of such Borrower, (iii) have received all necessary governmental
approval and (iv) do not and will not contravene or conflict with (A) any
provision of law or the certificate of incorporation or by-laws or other
organizational documents of such Borrower or (B) any agreement, judgment,
injunction, order, decree or other instrument binding upon such Borrower or any
of its Subsidiaries, (c) the Restated Credit Agreement is the legal, valid and
binding obligation of such Borrower enforceable, against such Borrower in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws of
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general application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies and (d) no
Event of Default or Unmatured Event of Default has occurred or is continuing.
SECTION 4 Effectiveness. The amendments set forth in Section 1 above shall
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become effective on the date (the "Amendment Effective Date") when (a) the U.S.
Agent shall have received counterparts hereof executed by the Company, the
Required Banks and the U.S. Agent and (b) the Company shall have issued not less
than $200,000,000 of Subordinated Debt. The amendments set forth in Section 2
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above shall become effective on the date (the "Restatement Effective Date") when
(a) the U.S. Agent shall have received counterparts hereof executed by the
Company, UR Canada, all of the Banks and each of the Agents and (b) the Company
shall have issued not less than $200,000,000 of Subordinated Debt; it being
understood that the Amendment Effective Date may occur prior to the Restatement
Effective Date.
SECTION 5 Miscellaneous.
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5.1 Amendment and Restatement. Upon the Restatement Effective Date, the
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Restated Credit Agreement shall replace the Credit Agreement in its entirety and
the Credit Agreement shall be of no further force or effect (except for any
provisions thereof which be their terms survive termination thereof). After the
Restatement Effective Date, all references in the Loan Documents to "Credit
Agreement", "Second Amended and Restated Credit Agreement", "Agreement" or
similar terms shall refer to the Restated Credit Agreement.
5.2 Counterparts. This agreement may be executed in any number of
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counterparts and by the different parties 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.
5.3 Fees. The Company agrees to pay to the U.S. Agent for the account of
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each U.S. Bank on the Restatement Effective Date a restatement fee in an amount
equal to 0.075% of such U.S. Bank's Percentage of the Aggregate Commitment.
5.4 Expenses. The Company agrees to pay all reasonable expenses of the
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U.S. Agent, including fees and charges of counsel, in connection with the
preparation, execution and delivery of this agreement.
5.5 Governing Law. This agreement shall be construed in accordance with
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and governed by the substantive laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.
5.6 Successors and Assigns. This agreement shall be binding upon the
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Company, UR Canada, the Banks and the Agents and their respective successors and
assigns, and shall inure to the
4
benefit of the Company, UR Canada, the Banks and the Agents and the respective
successors and assigns of the Banks and the Agents.
5
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By____________________________________________
Chief Financial Officer
UNITED RENTALS OF CANADA, INC.
By____________________________________________
Title_________________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as U.S. Agent
By____________________________________________
Title_________________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as a U.S. Bank, as Issuing
Bank and as Swing Line Bank
By____________________________________________
Title_________________________________________
THE BANK OF NEW YORK, as a U.S. Bank
By____________________________________________
Title_________________________________________
S-1
CREDIT LYONNAIS NEW YORK BRANCH, as a
U.S. Bank
By____________________________________________
Title_________________________________________
DEUTSCHE BANK AG, New York Branch and/or
Cayman Islands Branch, as a U.S. Bank
By____________________________________________
Title_________________________________________
By____________________________________________
Title_________________________________________
FIRST NATIONAL BANK OF MARYLAND, as a
U.S. Bank
By____________________________________________
Title_________________________________________
SUMMIT BANK, as a U.S. Bank
By____________________________________________
Title_________________________________________
NATIONAL CITY BANK, as a U.S. Bank
By____________________________________________
Title_________________________________________
S-2
BANKBOSTON, N.A., as a U.S. Bank
By____________________________________________
Title_________________________________________
COMERICA BANK, as a U.S. Bank
By____________________________________________
Title_________________________________________
FLEET BANK, N.A., as a U.S. Bank
By____________________________________________
Title_________________________________________
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as a U.S.
Bank
By____________________________________________
Title_________________________________________
LASALLE NATIONAL BANK, as a U.S. Bank
By____________________________________________
Title_________________________________________
THE BANK OF NOVA SCOTIA, as a U.S. Bank
By____________________________________________
Title_________________________________________
S-3
UNION BANK OF CALIFORNIA, N.A., as a U.S.
Bank
By____________________________________________
Title_________________________________________
THE CHASE MANHATTAN BANK, as a U.S. Bank
By____________________________________________
Title_________________________________________
BANK OF AMERICA CANADA, as Canadian Agent
By____________________________________________
Title_________________________________________
BANK OF AMERICA CANADA, as a Canadian Bank
By____________________________________________
Title_________________________________________
CREDIT LYONNAIS CANADA, as a Canadian Bank
By____________________________________________
Title_________________________________________
THE BANK OF NOVA SCOTIA, as a Canadian Bank
By____________________________________________
Title_________________________________________
S-4
DEUTSCHE BANK CANADA, as a Canadian Bank
By____________________________________________
Title_________________________________________
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SCHEDULE 1.1(C)
PRICING SCHEDULE
The Floating Rate Margin, the Fixed Rate Margin, the rate per annum
applicable for facility fees and the rate per annum applicable for letter of
credit fees for Financial Letters of Credit and Non-Financial Letters of Credit,
respectively, shall be determined in accordance with the table below and the
other provisions of this Schedule 1.1(C).
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LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
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Rate for
Facility Fee 0.3750% 0.3750% 0.3750% 0.3750% 0.3000%
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Fixed Rate Margin 1.6250% 1.3750% 1.1250% 1.0000% 0.9500%
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Floating Rate Margin 0 0 0 0 0
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Rate for
Non-Financial LC Fee 0.6250% 0.5000% 0 .3750% 0.3125% 0.3250%
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Rate for
Financial LC Fee 1.6250% 1.3750% 1.1250% 1.0000% 0.9500%
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Level I applies when the Funded Debt to Cash Flow Ratio is equal to or
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greater than 4.0 to 1.0.
Level II applies when the Funded Debt to Cash Flow Ratio is equal to or
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greater than 3.5 to 1.0 but less than 4.0 to 1.0.
Level III applies when the Funded Debt to Cash Flow Ratio is equal to or
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greater than 3.0 to 1.0 but less than 3.5 to 1.0.
Level IV applies when the Funded Debt to Cash Flow Ratio is equal to or
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greater than 2.5 to 1.0 but less than 3.0 to 1.0.
Level V applies when the Funded Debt to Cash Flow Ratio is less than 2.5 to
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1.0.
The applicable Level shall be adjusted, to the extent applicable, 45 days
(or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days) after
the end of each Fiscal Quarter based on the Funded Debt to Cash Flow Ratio as of
the last day of such Fiscal Quarter; provided that if the Company fails to
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deliver the financial statements required by Section 10.1.1 or 10.1.2, as
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applicable, and the related certificate required by Section 10.1.4 by the 45th
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day (or, if applicable, the 90th day) after any Fiscal Quarter, Level I shall
apply until such financial statements are delivered.
FIRST AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
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THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated
as of July 10, 1998 (this "First Amendment") amends the Third Amended and
Restated Credit Agreement dated as of May 12, 1998 (the "Credit Agreement")
among United Rentals, Inc. (the "Company"), United Rentals of Canada, Inc.,
various financial institutions, various Co-Agents, Bank of America Canada, as
Canadian Agent, and Bank of America National Trust and Savings Association, as
U.S. Agent (the "U.S. Agent"). Terms defined in the Credit Agreement are, unless
otherwise defined herein or the context otherwise requires, used herein as
defined therein.
WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Amendments. Effective on (and subject to the occurrence of) the
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Amendment Effective Date (as defined below), the Credit Agreement shall be
amended in accordance with Sections 1.1 through 1.5 below.
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1.1 Amendment to Section 1.1, Section 9, Section 10 and Section 12.
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Section 1.1, Section 9, Section 10 and Section 12 are amended and restated in
their entirety to read as set forth on Schedule I, Schedule II, Schedule III and
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Schedule IV hereto, respectively.
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1.2 Amendment to Section 13.1 (d). Section 13. 1 (d) is amended by
-----------------------------
adding a comma and the words "Collateral Agent" immediately following the
reference to "U.S. Agent" therein.
1.3 Amendment to Section 15.1. Section 15.1 is amended by adding the
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words "or of Parent under the Parent Guaranty" immediately following the
reference to "Section 14" therein.
1.4 Amendment to Section 15.4. Section 15.4 is amended by (a) deleting all
-------------------------
of the references to "the Company" therein and substituting the word "Parent"
therefor and (b) deleting the reference to "the Company's" therein and
substituting the word "Parent's" therefor.
1.5 Amendment to Section 15.6. Section 15.6 is amended by deleting the
-------------------------
reference to "the Company's auditors" therein and substituting the words
"Parent's auditors" therefor.
SECTION 2 Authorization of Intercreditor Agreement. The Required Banks
----------------------------------------
hereby authorize the U.S. Agent and BofA, in its capacity as Collateral Agent
(in such capacity, the "Collateral Agent"), to execute and deliver an
Intercreditor Agreement substantially in the form of Exhibit D.
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SECTION 3 Representations and Warranties. The Company represents and
------------------------------
warrants to the Agents and the Banks that (a) each of the representations and
warranties made by the Borrowers in Section 9 (excluding Sections 9.6 and 9.8)
of the Credit Agreement, as amended hereby (as so amended, the "Amended Credit
Agreement"), is true and correct as of the date hereof, with the same effect as
if made on such date, (b) the execution and delivery hereof by the Borrowers,
and the performance by the Borrowers of their respective obligations under the
Amended Credit Agreement, (i) are within the powers of each Borrower, (ii) have
been duly authorized by all necessary corporate action on the part of each
Borrower, (iii) have received all necessary governmental approval and (iv) do
not and will not contravene or conflict with (A) any provision of law or the
certificate of incorporation or by-laws or other organizational documents of
either Borrower or (B) any agreement, judgment, injunction, order, decree or
other instrument binding upon the Company or any of its Subsidiaries, (c) the
Amended Credit Agreement is the legal, valid and binding obligation of each
Borrower, enforceable against such Borrower in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or other similar laws
of general application affecting the enforcement of creditors' rights or by
general principles of equity limiting the availability of equitable remedies and
(d) no Event of Default or Unmatured Event of Default has occurred or is
continuing.
SECTION 4 Effectiveness. The amendments set forth in Section 1 above shall
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become effective on the date (the "Amendment Effective Date") when the U.S.
Agent shall have received (a) counterparts hereof executed by the Borrowers, the
Required Banks and the U.S. Agent, (b) a Restated Company Pledge Agreement,
substantially in the form of Exhibit A, signed by the Company and the Collateral
---------
Agent, (c) a Restated U. S. Guaranty, substantially in the form of Exhibit B,
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signed by each U. S. Subsidiary of the Company, and (d) a Restated U. S.
Security Agreement, substantially in the form of Exhibit D, signed by the
---------
Company, each U.S. Subsidiary of the Company and the Collateral Agent.
SECTION 5 Miscellaneous.
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5.1 Continuing Effectiveness, etc. As herein amended, the Credit
------------------------------
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the Amendment Effective Date, all references
in the Credit Agreement and the other Loan Documents to "Credit Agreement",
"Agreement" or similar terms shall refer to the Amended Credit Agreement.
5.2 Counterparts. This First Amendment may be executed in any number of
------------
counterparts and by the different parties 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.
5.3 Expenses. The Company agrees to pay all reasonable expenses of the
--------
U.S. Agent, including reasonable fees and charges of counsel for the U.S. Agent,
in connection with the preparation, execution and delivery of this First
Amendment.
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5.4 Governing Law. This First Amendment shall be construed in accordance
-------------
with and governed by the substantive laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.
5.5 Successors and Assigns. This First Amendment shall be binding upon the
----------------------
Borrowers, the Banks and the Agents and their respective successors and assigns,
and shall inure to the benefit of the Borrowers, the Banks and the Agents and
the respective successors and assigns of the Banks and the Agents.
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Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By________________________________________________
Chief Financial Officer
UNITED RENTALS OF CANADA, INC.
By________________________________________________
Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as U.S. Agent
By________________________________________________
Title_____________________________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as a U.S. Bank, as Issuing
Bank and as Swing Line Bank
By________________________________________________
Title_____________________________________________
THE BANK OF NEW YORK, as a U.S. Bank
By________________________________________________
Title_____________________________________________
S-1
CREDIT LYONNAIS NEW YORK BRANCH, as a
U.S. Bank
By_________________________________________
Title______________________________________
DEUTSCHE BANK AG, New York Branch and/or
Cayman Islands Branch, as a U.S. Bank
By_________________________________________
Title______________________________________
By_________________________________________
Title______________________________________
FIRST NATIONAL BANK OF MARYLAND, as a
U.S. Bank
By_________________________________________
Title______________________________________
SUMMIT BANK, as a U.S. Bank
By_________________________________________
Title______________________________________
NATIONAL CITY BANK, as a U.S. Bank
By_________________________________________
Title______________________________________
S-2
BANKBOSTON, N.A., as a U.S. Bank
By_________________________________________
Title______________________________________
COMERICA BANK, as a U.S. Bank
By_________________________________________
Title______________________________________
FLEET BANK, N.A., as a U.S. Bank
By________________________________________
Title_____________________________________
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as a U.S.
Bank
By________________________________________
Title_____________________________________
LASALLE NATIONAL BANK, as a U.S. Bank
By_________________________________________
Title______________________________________
THE BANK OF NOVA SCOTIA, as a U.S. Bank
By_________________________________________
Title______________________________________
S-3
UNION BANK OF CALIFORNIA, N.A., as a U.S.
Bank
By_________________________________________
Title______________________________________
THE CHASE MANHATTAN BANK, as a U.S. Bank
By________________________________________
Title_____________________________________
S-4
Schedule I
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See attached.
S-5
Definitions. When used herein the following terms shall have the following
-----------
meanings (such definitions to be applicable to both the singular and plural
forms of such terms):
Affected Bank means any Bank that has given notice to a Borrower (which has
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not been rescinded) of (i) any obligation of such Borrower to pay any amount
pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any circumstances of
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the nature described in Section 8.2 or 8.3.
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Affiliate of any Person means (i) any other Person which, directly or
---------
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means each of the Canadian Agent and the U.S. Agent.
-----
Agent-Related Persons means either Agent and any successor thereto in such
---------------------
capacity hereunder, together with their respective Affiliates (including the
Arranger) and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
Aggregate Canadian Commitment means at any time an amount equal to the lesser
-----------------------------
of (a) the Aggregate Commitment and (b) a Dollar Equivalent amount of U.
S.$40,000,000.
Aggregate Commitment means at any time an amount equal to the aggregate
--------------------
amount of the Commitments of all U.S. Banks. The initial amount of the Aggregate
Commitment is U.S. $300,000,000.
Aggregate Outstandings means at any time the sum of (a) the aggregate Dollar
----------------------
Equivalent principal amount of all outstanding Loans and (b) the Stated Amount
of all Letters of Credit.
Agreement - see the Preamble.
--------- --------
Arranger means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Delaware corporation.
--------
Assignment Agreement - see Section 15.9.1.
-------------------- ------
BAC - see the Preamble.
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BA Rate means, with respect to any BA Rate Loan for any Interest Period, the
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rate of interest per annum as announced by BAC in Toronto, Ontario as its "BA
Rate" on the first day of such Interest Period for a period comparable to such
Interest Period.
BA Rate Loan means a Loan to UR Canada that bears interest based on the BA
------------
Rate.
S-6
Bank - see the Preamble. References to the "Banks" shall include the
---- --------
Issuing Bank and the Swing Line Bank; for purposes of clarification only, to the
extent that BofA (or any successor Issuing Bank or Swing Line Bank) may have any
rights or obligations in addition to those of the other Banks due to its status
as Issuing Bank or Swing Line Bank, its status as such will be specifically
referenced.
Bank Act Security means assignments of inventory and proceeds by UR Canada
-----------------
to and in favour of each Canadian Bank creating a first fixed charge on such
assets pursuant to Section 427 of the Bank Act (Canada), together with all
documents related or ancillary thereto.
Base Rate means at any time the greater of (a) the Federal Funds Rate plus
---------
0.5% and (b) the Reference Rate.
Base Rate Loan means any Loan to the Company which bears interest at or by
---------
reference to the Base Rate.
BofA - see the Preamble.
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Borrower means each of the Company and UR Canada.
--------
Business Day means any day on which BofA is open for commercial banking
------------
business in Chicago, New York and San Francisco (and, in the case of payments
and disbursements in Canadian Dollars, on which BAC is open for commercial
banking business in Toronto) and, in the case of a Business Day which relates to
a Eurodollar Loan, on which dealings are carried on in the applicable offshore
U.S. Dollar or Canadian Dollar interbank market.
Canadian Agent means BAC in its capacity as agent for the Canadian Banks
--------------
hereunder and any successor thereto in such capacity.
Canadian Bank means each Bank listed on Schedule 1.1(B) and its permitted
------------- ---------------
successors and assigns. Each Canadian Bank shall be either (i) a U.S. Bank or
(ii) an Affiliate of a U.S. Bank which has been designated to be a Canadian Bank
hereunder by such U.S. Bank.
Canadian Cost of Funds Rate means, for any day, a rate per annum equal to
---------------------------
the cost of funds of the Canadian Agent as established by the Canadian Agent
based on its customary practice.
Canadian Dollar and Cdn.$ mean lawful money of Canada.
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Canadian Guaranty means a guaranty issued by a Subsidiary of UR Canada
-----------------
substantially in the form of Exhibit I hereto.
---------
Canadian Loan - see Section 2.1.2.
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S-7
Canadian Participation Funding Notice means a written notice from any Bank
--------------------------------------
(including any Canadian Bank) informing the U.S. Agent that an Event of Default
has occurred and is continuing and directing the U. S. Agent to notify all Banks
thereof and to notify all Non-Canadian Banks to fund their participations in the
Canadian Loans as provided in Section 2.3.4.
-------------
Canadian Percentage means, with respect to any Canadian Bank, the percentage
-------------------
specified opposite such Canadian Bank's name on Schedule 1.1 (B), reduced (or
------------
increased) by assignments pursuant to Section 15.9.1.
--------------
Canadian Security Agreement means a security agreement issued by UR Canada
---------------------------
or a Subsidiary thereof substantially in the form of Exhibit J hereto.
---------
Canadian Subsidiary means any Subsidiary of the Company which is organized
-------------------
under the federal or provincial laws of Canada and which carries on its business
primarily in Canada.
Capital Lease means, with respect to any Person, any lease of (or other
-------------
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
--------------------------
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" under and as defined in the Term Loan
Agreement or a Bank or its holding company) for such a "Lender" or a Bank (any
such Person a "Permitted Bank") rated at least A-1 by Standard & Poor's Ratings
Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., (c) any certificate of deposit
(or time deposits represented by such certificates of deposit) or bankers
acceptance, maturing not more than one year after such time, or overnight
Federal Funds transactions that are issued or sold by any Permitted Bank or a
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
U.S.$500,000,000, (d) any repurchase agreement entered into with any Permitted
Bank (or other commercial banking institution of the stature referred to in
clause (c)) which (i) is secured by a fully perfected security interest in any
----------
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 for the purpose of
investing in loans to any corporation (other than Parent or an Affiliate of
Parent), state or municipality, in each case organized under the laws of any
state of the United States or of the District of Columbia.
Cash Flow means, as of the last day of any Fiscal Quarter, Consolidated Net
---------
Income for the period of four Fiscal Quarters ending on the last day of such
Fiscal Quarter @us, to the extent deducted in determining such Consolidated Net
Income, Interest Expense, income tax expense,
S-8
depreciation and amortization for such period, all calculated on a pro forma
---------
basis in accordance with Article II of Regulation S-X of the SEC.
Code means the Internal Revenue Code of 1986.
----
Collateral Agent means BofA in its capacity as Collateral Agent under the
----------------
Intercreditor Agreement and any successor thereto in such capacity.
Collateral Documents means the Company Pledge Agreement, each Subsidiary
--------------------
Pledge Agreement, the U.S. Security Agreement, each Canadian Security Agreement,
the Bank Act Security and any other agreement pursuant to which the Company or
any Subsidiary grants a Lien on collateral to the Collateral Agent, either Agent
or any Bank for the benefit of the Banks.
Commitment means (a) as to any U.S. Bank, the obligation of such U.S. Bank
----------
to make U.S. Loans, and to issue or participate in Letters of Credit, hereunder;
and (b) as to any Canadian Bank, the obligation of such Canadian Bank to make
Canadian Loans hereunder. The amount of the Commitment of each Bank is set
forth on Schedule 1.1(A) and/or 1.1(B), as applicable.
--------------- ------
Company - see the Preamble.
------- --------
Company Pledge Agreement means the Restated Company Pledge Agreement dated
------------------------
as of July 10, 1998 between the Company and the Collateral Agent, substantially
in the form of Exhibit A to the First Amendment to this Agreement.
Computation Date means the last Business Day of each calendar month, each
----------------
date on which UR Canada borrows, converts or continues any Canadian Loan
hereunder and each date on which the Dollar Equivalent principal amount of a
Canadian Loan of an Affected Bank is required to be determined under Section
-------
8.3.
---
Computation Period means each of the following periods: (i) the Fiscal
------------------
Quarter ended March 31, 1998; (ii) the period of two Fiscal Quarters ended June
30, 1998; (iii) the period of three Fiscal Quarters ending September 30, 1998;
and (iv) each period of four Fiscal Quarters ending on the last day of a Fiscal
Quarter on or after December 31, 1998.
Consolidated Net Income means, with respect to Parent and its Subsidiaries
-----------------------
for any period, the net income (or loss) of Parent and its Subsidiaries for such
period, excluding any extraordinary gains during such period.
---------
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 the Company or any
Subsidiary in connection with the purchase of any asset or business, where
the obligation of the Company
S-9
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 the Company 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 the Company 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 the Company or any
Subsidiary in connection with the purchase of any real estate, where the
obligation to make such payment is contingent on any event or condition
(other than customary closing conditions for a purchase of real estate).
Controlled Group means all members of a controlled group of corporations
----------------
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which together with Parent, are treated as a
single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
----
Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (including Contingent Payments and
Holdbacks but excluding trade accounts payable in the ordinary course of
business), (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person
(it being understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face amount
of such indebtedness or the fair market value of all property of such Person
securing such indebtedness), (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account or upon the application of such
Person (including the Letters of Credit), (f) net liabilities of such Person
under all Hedging, Obligations and (g) all Suretyship Liabilities of such
Person.
Dollar Equivalent means, at any time, (a) as to any amount denominated in
-----------------
U. S. Dollars, the amount thereof at such time, and (b) as to any amount
denominated in Canadian Dollars, the equivalent amount in U.S. Dollars as
determined by the U.S. Agent at such time on the basis of the Spot Rate for the
purchase of U.S. Dollars with Canadian Dollars on the most recent Computation
Date or such other date as is specified herein.
S-10
Effective Date - see Section 11.1.
-------------- -------------
Environmental Claims means all claims, however asserted, by any
--------------------
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all federal, state, provincial or local laws,
------------------
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to environmental, health, safety and land use matters.
ERISA means the Employee Retirement Income Security Act of 1974.
-----
Eurodollar Loan means any Loan which bears interest at a rate determined by
---------------
reference to the Eurodollar Rate.
Eurodollar Office means, with respect to any Bank, the office or offices of
-----------------
such Bank which shall be making or maintaining the Eurodollar Loans of such Bank
hereunder or such other office or offices through which such Bank determines its
Eurodollar Rate. A Eurodollar Office of any Bank may be, at the option of such
Bank, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any Interest
---------------
Period, the rate of interest per annum (rounded upward, if necessary, to the
next 1/16th of 1%) determined by the applicable Agent as follows:
(a) In the case of Eurodollar Loans to the Company:
Eurodollar Rate = IBOR
----
1.00 - Eurodollar Reserve Percentage
where,
Eurodollar Reserve Percentage means, for any day for any
-----------------------------
Interest Period, a percentage (expressed as a decimal, rounded upward,
if necessary, to an integral multiple of 1/100th of 1%) in effect on
such day under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
IBOR means the rate per annum at which deposits in U.S. Dollars
----
in immediately available funds are offered by the Eurodollar Office of
BofA two Business Days prior to the beginning of such Interest Period
to major banks in the
S-11
interbank eurodollar market as at or about 10: 00 a.m., Chicago time,
for delivery on the first day of such Interest Period, for the number
of days comprised therein and in an amount equal or comparable to the
amount of the Eurodollar Loan of BofA for such Interest Period.
(b) In the case of Eurodollar Loans to UR Canada:
Eurodollar Rate = Canadian IBOR
-------------
1.00 - Canadian Eurodollar Reserve Percentage
where,
Canadian Eurodollar Reserve Percentage means for any day for any
--------------------------------------
Interest Period, a percentage (expressed as a decimal, rounded upward,
if necessary, to an integral multiple of 1/100th of 1%) in effect on
such day under regulations issued from time to time by the Bank of
Canada or any other relevant governmental authority in Canada for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding, and
Canadian IBOR means the rate per annum at which deposits in
-------------
Canadian Dollars in immediately available funds are offered by the
Eurodollar Office of BAC two Business Days prior to the first day of
such Interest Period to major banks in the interbank eurodollar market
as at or about 10:00 A.M., Chicago time, for delivery on the first day
of such Interest Period, for the number of days comprised therein and
in an amount equal or comparable to the amount of the Eurodollar Loan
of BAC for such Interest Period.
Event of Default means any of the events described in Section 12.1.
---------------- ------------
Existing Agreement - see the Recitals.
------------------ --------
Federal Funds Rate means, for any day, the rate set forth in the weekly
------------------
statistical release designated as H. 15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H. 15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate IS not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the U. S. Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the U.S. Agent.
Financial Letter of Credit means any Letter of Credit determined by the
--------------------------
U.S. Agent to be a "financial guaranty-type Standby Letter of Credit" as defined
in footnote 13 to Appendix A to the
S-12
Risk Based Capital Guidelines issued by the Comptroller of the Currency (or in
any successor regulation, guideline or ruling by any applicable banking
regulatory authority).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
--------------
Fiscal Year means the fiscal year of Parent 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 1997") refer to the Fiscal Year ending on December 31 of
such calendar year.
Fixed Rate Loan means a Eurodollar Loan or a BA Rate Loan.
---------------
Fixed Rate Margin - see Schedule 1.1(C).
----------------- ---------------
Floating Rate Margin - see Schedule 1.1(C).
-------------------- ---------------
Foreign Subsidiary means each Subsidiary of the Company which is organized
------------------
under the laws of any jurisdiction other than, and which is conducting the
majority of its business outside of, the United States or any state thereof.
FRB means the Board of Governors of the Federal Reserve System, and any
---
governmental authority succeeding to any of its principal functions.
Funded Debt means all Debt of Parent and its Subsidiaries, excluding (i)
-----------
contingent obligations in respect of undrawn letters of credit and Suretyship
Liabilities (except to the extent constituting contingent obligations or
Suretyship Liabilities in respect of Funded Debt of a Person other than Parent
or any Subsidiary), (ii) Hedging Obligations, (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries
and (iv) Debt (including guaranties thereof) in respect of the QuIPS Debentures
and the QuIPS Preferred Securities.
Funded Debt to Cash Flow Ratio means, as of the last day of any Fiscal
------------------------------
Quarter, the ratio of (i) Funded Debt as of such day to (ii) Cash Flow as of
such day.
GAAP means generally accepted accounting principles set forth from time to
----
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group of Loans means Loans of the same type made by the U.S. Banks or the
--------------
Canadian Banks, as the case may be, to the same Borrower which have the same
Interest Period.
S-13
Guaranty means each Canadian Guaranty and the U.S. Guaranty.
--------
Hedging Obligations means, with respect to any Person, all liabilities of
-------------------
such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
Holdback means an unsecured, non-interest-bearing obligation of the Company
--------
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.
Immaterial Law means any provision of any Environmental Law the violation
--------------
of which will not (a) violate any judgment, decree or order which is binding
upon Parent or any Subsidiary, (b) result in or threaten any injury to public
health or the environment or any material damage to the property of any Person
or (c) result in any liability or expense (other than any de minimis liability
----------
or expense) for Parent or any Subsidiary; provided that no provision of any
Environmental Law shall be an Immaterial Law if the U.S. Agent has notified the
Company that the Required Banks have determined in good faith that such
provision is material.
Interest Coverage Ratio means the ratio of (a) Consolidated Net Income
-----------------------
before deducting Interest Expense, income tax expense and Rentals for any
Computation Period to (b) Interest Expense plus Rentals for such Computation
----
Period.
Interest Expense means for any period the consolidated interest expense of
----------------
Parent and its Subsidiaries for such period (including, without duplication,
interest paid on the QuIPS Debentures, distributions on (but not redemptions of)
the QuIPS Preferred Securities, imputed interest on Capital Leases and any
interest which is capitalized but excluding amortization of deferred financing
costs).
Interest Period means, (a) as to any Eurodollar Loan, the period commencing
---------------
on the date such Loan is borrowed or continued as, or converted into, a
Eurodollar Loan and ending on the date one, two, three or six months thereafter
as selected by the applicable Borrower pursuant to Section 2.2 or 2.3, as the
----------- ---
case may be; and (b) as to any BA Rate Loan, the period commencing on the date
on which such Loan is borrowed or continued as, or converted into, a BA Rate
Loan and ending on the date 30, 60 or 90 days thereafter, as selected by UR
Canada pursuant to Section 2.3; provided that:
----------- --------
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the
following Business Day unless, in the case of a Eurodollar Loan, the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end
on the preceding Business Day;
(ii) any Interest Period for a Eurodollar Loan that begins on a
day for which there is no numerically corresponding day in the
calendar month at the end of such
S-14
Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(iii) neither Borrower may select any Interest Period for any
Loan which would extend beyond the scheduled Termination Date.
Investment means, relative to any Person, (a) any loan or advance made by
----------
such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of Parent or any of its
Subsidiaries), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses (excluding deposits
placed in escrow pursuant to bona fide arrangements that provide for the return
of such deposits to the Company or the applicable Subsidiary in the event that
the related transaction is not consummated for any reason by a date certain).
Issuing Bank means BofA in its capacity as issuer of one or more Letters of
------------
Credit hereunder, together with any replacement letter of credit issuer under
Section 13.9.
------------
L/C Application means, with respect to any request for the issuance of a
---------------
Letter of Credit, a letter of credit application in the form being used by the
Issuing Bank at the time of such request for the type of letter of credit
requested.
Letter of Credit - see Section 2.1.3.
---------------- -------------
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 Notes, each Guaranty, the L/C
--------------
Applications, the Collateral Documents and, after the Restructuring, the Parent
Guaranty.
Loan Party means each Borrower, each Subsidiary which is a party to any Loan
----------
Document and, after the Restructuring, Parent.
Loans means U.S. Loans, Canadian Loans and Swing Line Loans.
-----
Margin Stock means any "margin stock" as defined in Regulation U of the FRB.
------------
Material Adverse Effect means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of Parent, and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
S-15
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against Parent, the Company or any Subsidiary
of the Company of any Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as such term is
--------------------------
defined in Section 4001(a)(3) of ERISA, and to which Parent or any member of the
Controlled Group may have any liability.
Net Worth means the sum of (a) Parent's consolidated stockholders' equity
---------
(including preferred stock accounts) plus (b) to the extent, if any, not
included in such stockholders' equity, the outstanding amount of the QuIPS
Preferred Securities.
Non-Canadian Bank means a U.S. Bank which is not, and has not designated an
-----------------
Affiliate as, a Canadian Bank.
Non-Financial Letter of Credit means any Letter of Credit other than a
------------------------------
Financial Letter of Credit.
Note - see Section 3. 1.
---- ------------
PBGC means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
Parent means (a) prior to the Restructuring, the Company, and (b)
------
thereafter, the holding company of which the Company becomes a direct wholly-
owned Subsidiary as a result of the Restructuring.
Parent Guaranty - see Section 10.14.
--------------- -------------
Pension Plan means a "pension plan", as such term is defined in Section 3(2)
------------
of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which Parent or any member of the Controlled Group may
have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any U.S. Bank, the percentage specified
----------
opposite such U.S. Bank's name on Schedule 1.1(A), reduced (or increased) by
----------------
assignments pursuant to Section 15.9.1.
--------------
Person means any natural person, corporation, partnership, trust, limited
------
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
S-16
Prime Rate means, for any day, the per annum rate of interest in effect for
----------
such day as publicly announced from time to time by BAC in Toronto, Ontario as
its "prime rate." (The "prime rate" is a rate set by BAC based upon various
factors including BAC's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above or below such announced rate.) Any change in the
prime rate announced by BAC shall take effect at the opening of business on the
day specified in the public announcement of such change.
Prime Rate Loan means a Canadian Loan that bears interest based on the
---------------
Prime Rate.
QuIPS Debentures means convertible subordinated debentures issued by Parent
----------------
to a QuIPS Trust relating to QuIPS Preferred Securities substantially on the
terms set forth in the QuIPS Term Sheet.
QuIPS Preferred Securities means convertible trust originated preferred
--------------------------
securities issued by a QuIPS Trust substantially on the terms set forth in the
QuIPS Term Sheet.
QuIPS Term Sheet means the Indicative Term Sheet for the proposed quarterly
----------------
income preferred securities to be issued by the QuIPS Trust delivered to the
Lenders on July 2, 1998.
QuIPS Trust means a special purpose Delaware business trust established by
-----------
Parent, of which Parent holds all the common securities, which is to issue QuIPS
Preferred Securities, and which is to lend to Parent (such loan to be evidenced
by QuIPS Debentures) the net proceeds of issuance and sale of such QuIPS
Preferred Securities.
Reference Rate means, for any day, the rate of interest in effect for such
--------------
day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
Rentals means the aggregate fixed amounts payable by Parent or any
-------
Subsidiary under any lease of (or other agreement conveying the right to use)
any real or personal property by Parent or any Subsidiary, as lessee, other than
(i) any Capital Lease or (ii) any lease with a remaining term of six months or
less which is not renewable solely at the option of the lessee.
Required Banks means U.S. Banks having Percentages aggregating 66-2/3% or
--------
more; provided that if and so long as any Bank falls to fund its participation
--------
in any Canadian Loan, Letter of Credit or Swing Line Loan when required by
Section 2.3.4, 2.4.5 or 2.5.3, as the case may be, such Bank's Percentage shall
------------- ----- -----
be deemed for purposes of this definition to be reduced by the percentage which
the defaulted amount constitutes of such Bank's Percentage, and the Percentage
S-17
of each Canadian Bank (to the extent of its Canadian Percentage of the defaulted
amount), the Issuing Bank or the Swing Line Bank, as applicable, shall be deemed
for purposes of this definition to be increased by such percentage.
Restructuring means a transaction effected to create a holding company of
-------------
the Company, pursuant to which the Company becomes a direct wholly-owned
Subsidiary of such holding company, and as a result of which the holders of
capital stock of such holding company are, upon consummation of such
transaction, substantially the same as the holders of the common stock of the
Company immediately prior to such transaction.
SEC means the Securities and Exchange Commission.
---
Seller Subordinated Debt means unsecured indebtedness of the Company that:
------------------------
(a) is subordinated, substantially upon the terms set forth in Exhibit
-------
G or other terms that are more favorable to the Agents and the Banks, 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), including amounts required to provide cash collateral for the
Letters of Credit; and
(b) represents all or part of the purchase price payable by the
Company in connection with a transaction described in Section 10.11(c).
----------------
Senior Debt means all Funded Debt of Parent and its Subsidiaries other than
-----------
Subordinated Debt.
Senior Subordinated Indenture means the Indenture dated as of May 22, 1998
-----------------------------
among the Company, various Subsidiaries of the Company and State Street Bank and
Trust Company, as Trustee.
Spot Rate for a currency means the rate quoted by BofA as the spot rate for
---------
the purchase by BofA of such currency with another currency in accordance with
its customary procedures at approximately 10:00 a.m. (Chicago time) on the date
on which the foreign exchange computation is made.
Stated Amount means, with respect to any Letter of Credit at any date of
-------------
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means (i) the $200,000,000 of unsecured senior
-----------------
subordinated notes issued pursuant to the Senior Subordinated Indenture and the
unsecured subordinated guarantees thereof provided for in the Senior
Subordinated Indenture, (ii) Seller Subordinated Debt and (iii) any other
S-18
unsecured indebtedness of the Company which (x) is owed to Persons other than
officers, employees, directors or Affiliates of the Company, (y) has no
amortization prior to December 31, 2001 and (z) has subordination terms and
covenants approved by the Required Banks, the approval of which shall not be
unreasonably withheld.
Subsidiary means, with respect to any Person, a corporation, limited
----------
liability company, partnership or other entity of which such Person and/or its
other Subsidiaries own, directly or indirectly, more than 50% of the voting
stock, membership interests or similar equity interests. Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of Parent.
Subsidiary Pledge Agreement means each pledge agreement substantially in
---------------------------
the form of Exhibit F (or such other form as is acceptable to the Collateral
---------
Agent or U.S. Agent, as applicable) issued by any Subsidiary, whether pursuant
to Section 11.1.7 or Section 10.14.
-------------- -----
Suretyship Liability means, with respect to any Person, any liability of
--------------------
such Person with respect to any agreement, undertaking or arrangement by which
such Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to or otherwise to invest in a debtor, or
otherwise to assure a creditor against loss) any indebtedness, obligation or
other liability of any other Person (other than by endorsements of instruments
in the course of 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.
Swing Line Bank means BofA in its capacity as swing, line lender hereunder,
---------------
together with any replacement swing line lender arising, under Section 13.9.
------------
Swing Line Loan - see Section 2.5.1.
--------------- -------------
Tangible Assets means at any time all assets of Parent and its
---------------
Subsidiaries excluding all Intangible Assets. For purposes of the foregoing,
---------
"Intangible Assets" means goodwill, patents, trade names, trademarks,
-----------------
copyrights, franchises, experimental expense, organization expense and any other
assets that are properly classified as intangible assets in accordance with
GAAP.
Term Loan Agreement means the Term Loan Agreement dated as of July 10, 1998
-------------------
among the Company, various financial institutions and BofA, as agent.
Termination Date means the earlier to occur of (a) March 30, 2001, or such
----------------
later date to which the Termination Date may be extended at the request of the
Company and with the consent of each Bank or (b) such other date on which the
Commitments shall terminate pursuant to Section 6 or 12.
--------- --
S-19
Type of Loan or Borrowing refers to the interest rate basis for a loan or
-------------------------
borrowing. The "types" of U.S. Loans or borrowings are Base Rate Loans or
borrowings and Eurodollar Loans or borrowings. The "types" of Canadian Loans or
borrowings are Prime Rate Loans or borrowings, BA Rate Loans or borrowings and
Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues uncured,
--------------------------
will, with lapse of time or notice or both, constitute an Event of Default.
UR Canada - see the Preamble.
--------- --------
U.S. Agent means BofA in its capacity as agent for the Banks hereunder and
----------
any successor thereto in such capacity.
U.S. Bank means each Bank listed on Schedule 1.1(A) and its permitted
--------- ---------------
successors and assigns.
U.S. Dollar and the sign "U.S.$" mean lawful money of the United States of
-----------
America.
U.S. Guaranty means the Restated U.S. Guaranty dated as of July 10, 1998
-------------
executed by various Subsidiaries of the Company, substantially in the form of
Exhibit B to the First Amendment to this Agreement.
U.S. Loan - see Section 2.1.1.
---------- -------------
USR Merger Agreement means the Agreement and Plan of Merger among U.S.
---------------------
Rentals, Inc., the Company and UR Acquisition Corporation dated as of June 15,
1998, as the same may be amended pursuant to its terms.
U.S. Security Agreement means the Restated U.S. Security Agreement dated as
-----------------------
of July 10, 1998 among the Company, various Subsidiaries of the Company and the
Collateral Agent, substantially in the form of Exhibit C to the First Amendment
to this Agreement.
U.S. Subsidiaries means any Subsidiary of the Company other than a Foreign
-----------------
Subsidiary.
Welfare Plan means a "welfare plan", as such term is defined in Section
------------
3(l) of ERISA.
This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by
counsel to the Agents, the Company, the Banks and the other
parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agents
or the Banks merely because of the Agents' or Banks'
involvement in their preparation.
S-20
Schedule II
-----------
See attached.
S-21
SECTION 9 WARRANTIES.
To induce the Issuing Bank to issue Letters of Credit and to induce the
Agents and the Banks to enter into this Agreement and to induce the Banks to
make and participate in Loans and purchase participations in Letters of Credit
hereunder, Parent and the Company warrant to the Agents and the Banks (and, with
respect to Sections 9.1 through 9.4, UR Canada warrants with respect to itself)
------------ ---
that:
9.1 Organization, etc. The Company is a corporation duly organized,
-----------------
validly existing and in good standing under the laws of the State of Delaware;
UR Canada is a corporation duly organized, validly existing and in good
standing under the laws of the Province of Ontario and is a wholly-owned
Subsidiary of the Company; each of Parent and each other Subsidiary is a duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; and each of the Company, Parent and each
Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by each
--------------------------
Borrower of this Agreement and each other Loan Document to which it is a party,
the borrowings and obtaining of letters of credit hereunder, the execution and
delivery by each other Loan Party of each Loan Document to which it is a party
and the performance by each Borrower and each other Loan Party of its
obligations under each Loan Document to which it is a party are within the
corporate powers of each Borrower and each other Loan Party, have been duly
authorized by all necessary corporate action (including any necessary
shareholder action) on the part of each Borrower and each other Loan Party, have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on either
Borrower, any other Loan Party or any other Subsidiary, (b) contravene or
conflict with, or result in a breach of, any provision of the Certificate or
Articles of Incorporation, By-Laws or other organizational documents of either
Borrower, any other Loan Party or any other Subsidiary or of any agreement,
indenture, instrument or other document which is binding on either Borrower, any
other Loan Party or any other Subsidiary or (c) result in, or require, the
creation or imposition of any Lien on any property of either Borrower, any other
Loan Party or any other Subsidiary (other than Liens arising under the Loan
Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other
---------------------------
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; each of this Agreement and each other Loan Document to which UR
Canada is a party is the legal, valid and binding obligation of UR Canada,
enforceable against UR Canada in accordance with its terms; and each Loan
Document to which any other Loan Party is a party is, or upon the execution and
delivery thereof by such Loan Party will be, the legal, valid and binding
obligation of such Loan Party, enforceable against such Loan Party in accordance
with its terms.
S-22
9.4 Information. All information heretofore or contemporaneously herewith
-----------
furnished in writing by Parent, either Borrower or any other Subsidiary to any
Bank for purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of Parent, either Borrower or any Subsidiary to any Bank pursuant hereto
or in connection herewith will be, true and accurate in every material respect
on the date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agents and the Banks that any
projections and forecasts provided by Parent or any Subsidiary are based on good
faith estimates and assumptions believed by Parent or such Subsidiary to be
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).
9.5 No Material Adverse Change.
--------------------------
(a) The audited consolidated financial statements of the Company and its
Subsidiaries at December 31, 1997, copies of each of which have been delivered
to each Bank, have been prepared in accordance with generally accepted
accounting principles and present fairly the consolidated financial condition of
the Company and its Subsidiaries taken as a whole as at such date and the
results of their operations for the period then ended.
(b) Since December 31, 1997, there has been no material adverse change in
the financial condition, operations, assets, business, properties or prospects
of the Parent and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities.
-------------------------------------
No litigation (including derivative actions),
arbitration proceeding, labor controversy or
governmental investigation or proceeding is pending or,
to Parent's knowledge, threatened against Parent or any
Subsidiary which might reasonably be expected to have a
Material Adverse Effect, except as set forth in
Schedule 9.6(a). Other than any liability incident to
---------------
such litigation or proceedings, neither Parent nor any
Subsidiary has any material contingent liabilities not
listed in Schedule 9.6(a) or 9.6(b).
--------------- ------
Schedule 9.6(b) sets out descriptions of all
---------------
arrangements existing on the Effective Date pursuant to
which the Company or any Subsidiary may be required to
pay any Contingent Payment.
9.7 Ownership of Properties; Liens. Except as set forth on Schedule 9.7,
------------------------------ ------------
each of Parent and each Subsidiary owns good and marketable title to all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service
S-23
marks and copyrights), free and clear of all Liens, charges and material claims
(including material infringement claims with respect to patents, trademarks,
copyrights and the like) except as permitted pursuant to Section 10. 8.
-----
9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
------------
Schedule 9.8.
------------
9.9 Pension and Welfare Plans.
-------------------------
During the twelve-consecutive-month period prior
to the date of the execution and delivery of this
Agreement or the making of any Loan hereunder, (i) no
steps have been taken to terminate any Pension Plan and
(ii) no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to a Lien
under Section 302(0 of ERISA. No condition exists or
event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by
Parent of any material liability, fine or penalty.
Parent has no contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other
than liability for continuation coverage described in
Part 6 of Subtitle B of Title I of ERISA.
All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made
by Parent or any other member of the Controlled Group
under the terms of such Multiemployer Pension Plan or
of any collective bargaining agreement or by applicable
law; neither Parent nor any member of the Controlled
Group has withdrawn or partially withdrawn from any
Multiemployer Pension Plan, incurred any withdrawal
liability with respect to any Multiemployer Pension
Plan, or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability
from any Multiemployer Pension Plan, and no condition
has occurred which, if continued, might result in a
withdrawal or partial withdrawal from any Multiemployer
Pension Plan; and neither Parent nor any member of the
Controlled Group has received any notice that any
Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any
excise tax, that any Multiemployer Pension Plan is or
has been funded at a rate less than that required under
Section 412 of the Code, that any Multiemployer Pension
Plan is or may be terminated, or that any Multiemployer
Pension Plan is or may become insolvent.
All contributions required under applicable law
have been made in respect of all pension plans of UR
Canada and each of its
S-24
Subsidiaries and each such pension plan is fully funded
on an ongoing and termination basis.
9.10 Investment Company Act. Neither Parent nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither Parent nor any
----------------------------------
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
------------
its important activities, in the business of purchasing or carrying Margin Stock
or extending credit for the purpose of purchasing or carrying Margin Stock.
9.13 Taxes. Each of Parent and each Subsidiary has filed all tax returns
-----
and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any
-------------
Person which becomes a Loan Party after the Effective Date, on the date such
Person becomes a Loan Party), and immediately prior to and after giving effect
to the issuance of each Letter of Credit and each borrowing hereunder and the
use of the proceeds thereof, (a) each of the Company's and each other Loan
Party's assets will exceed its liabilities and (b) each of the Company and each
other Loan Party will be solvent, will be able to pay its debts as they mature,
will own property with fair saleable value greater than the amount required to
pay its debts and will have capital sufficient to carry on its business as then
constituted.
9.15 Environmental Matters. Parent conducts in the ordinary course
---------------------
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof Parent has reasonably concluded that, except as specifically disclosed
in Schedule 9.15, such Environmental Laws and Environmental Claims could not,
-------------
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.16 Year 2000 Problem. Parent and its Subsidiaries have reviewed the
-----------------
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by Parent
and its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999).
S-25
Based on such review and program, Parent reasonably believes that the "Year 2000
Problem" will not have a Material Adverse Effect.
9.17 Senior Debt. The obligations of the Company hereunder constitute
-----------
"Senior Indebtedness" as such term is defined in the Senior Subordinated
Indenture.
S-26
Schedule III
------------
See attached.
S-27
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Borrowers hereunder and under the other Loan Documents
are paid in full and all Letters of Credit have been terminated, Parent agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
1O.1 Reports, Certificates and Other Information. Furnish to the U.S.
-------------------------------------------
Agent, the Canadian Agent and each Bank:
10.1.1 Audit Report. Promptly when available and in any event within 90
------------
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of Parent and its Subsidiaries for such Fiscal Year, including therein a
consolidated balance sheet of Parent and its Subsidiaries as of the end of such
Fiscal Year and consolidated statements of earnings and cash flow of Parent and
its Subsidiaries for such Fiscal Year certified without qualification by Ernst &
Young or other independent auditors of recognized standing selected by Parent
and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing, of such annual audit report by such accountants, they
have not become aware of any Event of Default or Unmatured Event of Default that
has occurred and is continuing or, if they have become aware of any such event,
describing it in reasonable detail; (b) consolidating balance sheets of Parent
and its Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings for Parent and its Subsidiaries for such Fiscal Year,
certified by the Chief Financial Officer or the Vice President, Finance of
Parent; and (c) commencing with the Fiscal Year ending december 31, 1998, a copy
of an annual agreed-upon procedures report on the equipment fleet of the Company
and its Subsidiaries for such Fiscal Year as performed by the Company's
independent auditors.
10.1.2 Quarterly Reports. Promptly when available and in any event
-----------------
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
Parent and its Subsidiaries as of the end of such Fiscal Quarter, together with
consolidated and consolidating statements of earnings and consolidated
statements of cash flow for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer or the Vice President, Finance
of Parent.
10.1.3 Monthly Reports. Promptly when available and in any event within
---------------
30 days after the end of each of the first two months of each Fiscal Quarter,
consolidated balance sheets of Parent and its Subsidiaries as of the end of such
month, together with consolidated statements of earnings for such month and for
the period beginning with the first day of the Fiscal Year and ending on the
last day of such month, certified by the Chief Financial Officer or the Vice
President, Finance of Parent.
S-28
10.1.4 Compliance Certificates. Contemporaneously with the
-----------------------
furnishing of a copy of each annual audit report pursuant to Section 1O.1.1
--------------
and of each set of quarterly statements pursuant to Section 10.1.2, (a) a duly
--------------
completed compliance certificate in the form of Exhibit B, with appropriate
---------
insertions, dated the date of such annual report or such quarterly statements
and signed by the Chief Financial Officer or the Vice President, Finance of
Parent, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
------------
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it; and (b) an updated organizational chart
listing all Subsidiaries and the locations of their businesses.
10.1.5 Reports to SEC and to Shareholders. Promptly upon the filing
----------------------------------
or sending thereof, copies of all regular, periodic or special reports of Parent
or any Subsidiary filed with the SEC (excluding exhibits thereto, provided that
Parent shall promptly deliver any such exhibit to the Agent or any Bank upon
request therefor); copies of all registration statements of Parent or any
Subsidiary filed with the SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally concerning
material developments in the business of Parent or any Subsidiary.
10.1.6 Notice of Default, Litigation and ERISA Matters.
-----------------------------------------------
Immediately upon becoming aware of any of the following, written notice
describing the same and the steps being taken by Parent or the Subsidiary
affected thereby with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured
Event of Default;
(b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by Parent to the Lenders which
has been instituted or, to the knowledge of Parent, is threatened
against Parent or any Subsidiary or to which any of the properties of
any thereof is subject which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan, or
the failure of any member of the Controlled Group to make a required
contribution to any Pension Plan (if such failure is sufficient to
give rise to a Lien under Section 302(f) of ERISA) or to any
Multiemployer Pension Plan, or the taking of any action with respect
to a Pension Plan which could result in the requirement that Parent
furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan or
Multiemployer Pension Plan which could result in the incurrence by any
member of the Controlled Group of any material liability, fine or
penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any
material increase in the contingent liability of Parent with respect
to any post-retirement Welfare Plan benefit, or any notice that any
Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or
the imposition of an excise tax, that any such plan is
S-29
or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any
such plan is or may become insolvent;
(d) any cancellation (without replacement) or material change
in any insurance maintained by Parent or any Subsidiary;
(e) any event (including any violation of any Environmental
Law or the assertion of any Environmental Claim) which might
reasonably be expected to have a Material Adverse Effect; or
(f) any setoff, claims (including, with respect to the
environmental claims) withholdings or other defenses to which any of
the collateral granted under any Collateral Document, or the Banks'
rights with respect to any such collateral, are subject.
10.1.7 Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
10.1.8 Management Reports. Promptly upon the request of either Agent
-------------------
or any Bank, copies of all detailed financial and management reports submitted
to Parent by independent auditors in connection with each annual audit made by
such auditors of the books of Parent.
10.1.9 Projections. As soon as practicable and in any event within
-----------
60 days after the commencement of each Fiscal Year, financial projections for
Parent and its Subsidiaries for such Fiscal Year prepared in a manner consistent
with those projections delivered by the Company to the Banks prior to the
Effective Date or otherwise in a manner satisfactory to the U.S. Agent.
10.1.10 Other Information. From time to time such other information
------------------
concerning Parent and its Subsidiaries as any Bank or either Agent may
reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary
------------------------------
to keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or either Agent or
any representative thereof to inspect the properties and operations of Parent
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or either Agent or any representative thereof
to visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and Parent hereby authorizes such
independent auditors to discuss such financial matters with any Bank or either
Agent or any representative thereof whether or not any representative of Parent
or any Subsidiary is present), and to examine (and, at the expense of Parent or
the applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.
S-30
10.3 Insurance. Maintain, and cause each Subsidiary to maintain,
---------
with responsible insurance companies, such insurance as may be required by any
law or governmental regulation or court decree or order applicable to it and
such other insurance, to such extent and against such hazards and liabilities,
as is customarily maintained by companies similarly situated; and, upon request
of either Agent or any Bank, furnish to such Agent or such Bank a certificate
setting forth in reasonable detail the nature and extent of all insurance
maintained by Parent and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
------------------------------------------------------
Comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
-------- -------
shall not require Parent or any Subsidiary to pay any such tax or charge so long
as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and
-----------------------------
(subject to Section 10.11) cause each Subsidiary to maintain and preserve, (a)
-------------
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect).
10.6 Financial Covenants.
-------------------
10.6.1 Minimum Net Worth. Not permit its Net Worth at the
-----------------
end of any month to be less than the sum of (a) U.S.$45,000,000 plus
----
(b) 75% of the sum of Consolidated Net Income plus any extraordinary
gains during the period beginning on October 1, 1997 and ending on the
last day of the most recently-ended Fiscal Quarter (provided that, if
--------
the sum of Consolidated Net Income plus any extraordinary gains is
less than zero for any Fiscal Quarter, for purposes of this Section
-------
10.6.1 such sum will be deemed to have been zero for such quarter)
------
plus (c) 100% of the net proceeds of any equity (including the QuIPS
----
Preferred Securities) issued by Parent or any of its Subsidiaries (on
a consolidated basis) after October 1, 1997.
10.6.2 Maximum Leverage. Not permit the ratio of (i) Funded
----------------
Debt to (ii) Funded Debt plus Net Worth to exceed 0.65 to 1.0 at any
----
time.
10.6.3 Minimum Interest Coverage Ratio. Not permit the
-------------------------------
Interest Coverage Ratio for any Computation Period to be less than the
applicable ratio set forth below:
S-31
COMPUTATION INTEREST
PERIOD ENDING: COVERAGE RATIO
------------- --------------
3/31/98 through 12/31/98 1.50 to 1.0
3/31/99 through 12/31/99 1.75 to 1.0
3/31/2000 and thereafter 2.00 to 1.0
10.6.4 Funded Debt to Cash Flow Ratio. Not permit the Funded Debt
------------------------------
to Cash Flow Ratio as of the last day of any Fiscal Quarter to exceed 4.5
to 1.0.
10.6.5 Senior Debt to Tangible Assets. Not permit the ratio of (i)
------------------------------
Senior Debt to (ii) Tangible Assets to exceed 1.0 to 1.0 at any time.
10.6.6 Senior Debt to Cash Flow Ratio. Not permit the ratio of (i)
------------------------------
Senior Debt to (ii) Cash Flow as of the last day of any Fiscal Quarter to
exceed 3.0 to 1.0.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
-------------------
incur, assume or suffer to exist any Debt, except:
(a) obligations hereunder, under the other Loan Documents, under the
Term Loan Agreement and under the other "Loan Documents" as defined in the
Term Loan Agreement;
(b) unsecured Debt of the Company (excluding Contingent Payments and
Seller Subordinated Debt); provided that the aggregate principal amount of
--------
all such unsecured Debt (other than Holdbacks) shall not at any time exceed
a Dollar Equivalent amount equal to U.S.$10,000,000;
(c) Debt of the Company or any Subsidiary in respect of Capital Leases or
arising in connection with the acquisition of equipment that, in each case,
either is identified in Schedule 10.7(c) or is incurred, or assumed in
----------------
connection with an asset purchase permitted by Section 1O.11, after the
-------------
date hereof (it being understood that for purposes of this Section 10.7
------------
Debt of any Person which becomes a Subsidiary after the date hereof shall
be deemed to be incurred, and equipment of such Person shall be deemed to
be acquired, on the date such Person becomes a Subsidiary so long as such
Debt is not incurred in contemplation of such Person becoming a
Subsidiary), and refinancings of any such Debt so long as the terms
applicable to such refinanced Debt are no less favorable to the Company or
the applicable Subsidiary than the terms in effect immediately prior to
such refinancing, provided that the aggregate amount of all such Debt at
--------
any time outstanding shall not exceed a Dollar Equivalent amount equal to
U.S.$30,000,000;
(d) Debt of Subsidiaries owed to the Company; provided that the aggregate
amount of all such Debt of Foreign Subsidiaries owed to the Company shall
not (i) at any time prior to January 1, 1999, exceed 15% of the
consolidated assets of the Company and its Subsidiaries
S-32
and (ii) at any time on or after January 1, 1999, exceed 10% of the
consolidated assets of the Company and its Subsidiaries;
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt; provided that the aggregate principal amount of all
--------
Seller Subordinated Debt at any time outstanding shall not exceed a Dollar
Equivalent amount of U.S.$15,000,000;
(g) other Debt of the Company or any Subsidiary, not of a type described
in clause (c), outstanding on the date hereof and listed in Schedule
---------- --------
10.7(g);
-------
(h) Contingent Payments, provided that the Company shall not, and shall
--------
not permit any Subsidiary to, incur any obligation to make Contingent
Payments the maximum possible amount of which exceeds a Dollar Equivalent
amount of U.S.$25,000,000 in the aggregate for all Contingent Payments at
any time outstanding; and
(i) the QuIPS Debentures, the QuIPS Preferred Securities and a guaranty
of the QuIPS Preferred Securities by Parent (provided that such guaranty is
subordinated to the obligations of Parent under the Parent Guaranty),
provided that (v) the net proceeds received by Parent pursuant thereto are
--------
promptly invested in the Company, (w) the interest rate on the QuIPS
Debentures is not more than 8% per annum, (x) neither the aggregate
principal amount of the QuIPS Debentures nor the liquidation preference of
the QuIPS Preferred Securities shall at any time exceed $400,000,000, (y)
no Event of Default or Unmatured Event of Default shall exist at the time
of issuance thereof or will result from such issuance and (z) prior to the
issuance thereof, Parent shall have delivered to the Agent a certificate
demonstrating that, after giving effect to such issuance, Parent will be in
pro forma compliance with the covenants set forth in Section 10.6.
------------
For purposes of clause (h) above, a Contingent Payment shall be deemed to
----------
be "outstanding" from the time that the Company or any Subsidiary enters into
the agreement containing the obligation to make such Contingent Payment until
such time as either such Contingent Payment has been made in full or it has
become certain that such Contingent Payment will never have to be made.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
-----
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
S-33
(b) Liens arising in the ordinary course of business (such as (i) Liens
of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds,
bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price
of property or services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified in Schedule 10.8;
-------------
(d) Liens securing Debt permitted by clause (c) of Section 10.7 (and
---------- ------------
attaching only to the property being leased (in the case of Capital Leases)
or the purchase price for which was or is being financed by such Debt (in
the case of other Debt));
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding a Dollar Equivalent amount of U.S.$250,000 arising in
connection with court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Company
or any Subsidiary; and
(g) Liens arising under the Loan Documents and Liens securing Debt
permitted by clause (a) of Section 10.7.
---------- ------------
10.9 Asset Sales. Not later than one Business Day prior to the date on
-----------
which the Company would be required to make, or offer to make, or give any
notice of, any prepayment of Subordinated Debt (other than Seller Subordinated
Debt) as a result of any sale or other disposition of assets, make a prepayment
of the Loans by an amount at least equal to the amount which otherwise would be
required to be applied to repay such Subordinated Debt.
10.10 Restricted Payments. Not, and not permit any Subsidiary to, (a)
------------------
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt, (e) make any payment of principal of or interest on, or
acquire, redeem or otherwise retire, or make any other distribution in respect
of, any of the QuIPS Debentures or the QuIPS Preferred Securities or (f) set
aside funds for any of the foregoing; provided that (i) any Subsidiary of the
--------
Company may declare and pay dividends to the Company or to any other wholly-
owned Subsidiary of the Company; (ii) after the Restructuring, the Company may
declare and pay dividends to Parent to the extent necessary to enable Parent to
pay its taxes, accounting, legal and corporate overhead expenses
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(including all SEC and stock exchange fees and expenses), the payables described
in Section 10.23 and the Investments in the QuIPS Trust described in Section
------------- -------
10.23; (iii) the QuIPS Trust may make a distribution of Parent's common stock
-----
pursuant to the terms of the QuIPS Preferred Securities or the QuIPS Debentures;
(iv) so long as no Event of Default or Unmatured Event of Default exists or
would result therefrom, (A) Parent may make payments on the QuIPS Debentures and
permit the QuIPS Trust to make corresponding distributions on the QuIPS
Preferred Securities in accordance with the terms set forth in the QuIPS Term
Sheet and (B) the Company may declare and pay dividends to Parent in the amount
necessary for Parent to make such payments; and (v) so long as (x) no Event of
Default or Unmatured Event of Default exists or would result therefrom and (y)
the aggregate amount of all purchases of stock, warrants or units since October
1, 1997 does not exceed a Dollar Equivalent amount of U.S.$12,000,000, Parent
may purchase its common stock or warrants, or units issued in respect thereof,
from time to time on terms consistent with those set forth under the heading
"Certain Agreements Relating to the Outstanding Securities" in the Company's
Private Placement Memorandum dated September 12, 1997.
10.11 Mergers, Consolidations, Amalgamations, Sales. Not, and not permit
---------------------------------------------
any Subsidiary to, be a party to any merger, consolidation or amalgamation, or
purchase or otherwise acquire all or substantially all of the assets or any
stock of any class of, or any partnership or joint venture interest in, any
other Person, or, except in the ordinary course of its business (including sales
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
wholly-owned Subsidiary of the Company into the Company or into, with or to any
other wholly-owned Subsidiary of the Company; (b) any such purchase or other
acquisition by the Company or any wholly-owned Subsidiary of the Company of the
assets or stock of any wholly-owned Subsidiary of the Company, (c) any such
purchase or other acquisition (including pursuant to a merger) by the Company or
any wholly-owned Subsidiary of the Company of the assets or stock of any other
Person where (1) such assets (in the case of an asset purchase) are for use, or
such Person (in the case of a stock purchase) is engaged, solely in the
equipment rental and related businesses; (2) immediately before and after
giving effect to such purchase or acquisition, no Event of Default or Unmatured
Event of Default shall have occurred and be continuing; and (3) either (i) the
aggregate consideration to be paid by Parent and its Subsidiaries (including any
Debt assumed or issued in connection therewith, the amount thereof to be
calculated in accordance with GAAP, but excluding any capital stock of or other
equity interest in Parent which is part of such consideration) in connection
with such purchase or other acquisition (or any series of related acquisitions)
is less than a Dollar Equivalent amount of U.S.$40,000,000 or (ii) (x) Parent
is in pro forma compliance with all the financial ratios and restrictions set
forth in Section 10.6 and (y) unless after giving effect to such purchase or
------------
acquisition the pro forma Funded Debt to Cash Flow Ratio will be less than 1.25
--- -----
to 1.0, the Required Banks have consented to such purchase or acquisition; and
(d) sales and dispositions of assets (including the stock of Subsidiaries) so
long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed 5% of the net book value of the consolidated assets
of Parent and its Subsidiaries as of the last day of the preceding Fiscal Year.
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10.12 Modification of Certain Documents. Not permit the Certificate or
---------------------------------
Articles of Incorporation, By-Laws or other organizational documents of Parent
or any Subsidiary, or the Senior Subordinated 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 Banks.
10.13 Use of Proceeds. Use the proceeds of the Loans, and the Letters of
---------------
Credit, solely to finance the Company's working capital, for acquisitions
permitted by Section 10.11, for capital expenditures and for other general
-------------
corporate purposes; and not use or permit any proceeds of any Loan to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying" any Margin Stock.
10.14 Further Assurances. Take, and cause each Subsidiary to take, such
------------------
actions as are necessary or as either Agent or the Required Banks may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets (other than real property) of the Company and guaranteed by all of
the U.S. Subsidiaries (including, promptly upon the acquisition or creation
thereof, any U.S. Subsidiary acquired or created after the date hereof) by
execution of a counterpart of the U.S. Guaranty (provided that the QuIPS Trust
shall have no obligation to execute the U.S. Guaranty), and (ii) the obligations
of each U.S. Subsidiary (other than the QuIPS Trust) under the U.S. Guaranty are
secured by substantially all of the assets (other than real property) of such
U.S. Subsidiary, (iii) the obligations of UR Canada hereunder and under the
other Loan Documents are secured by substantially all of the assets (other than
real property) of UR Canada and guaranteed by all of the Canadian Subsidiaries
(including, promptly upon the acquisition or creation thereof, any Candian
Subsidiary acquired or created after the date hereof) by execution of a Candaian
Guaranty and (iv) the obligations of each Canadian Subsidiary under its Canadian
Guaranty are secured by substantially all assets (other than real property) of
such Canadian Subsidiary. In addition, (a) upon the occurrence of any Event of
Default or Unmatured Event of Default and the request of U.S. Banks having
Percentages aggregating 80% or more, the Company will cause each Canadian
Subsidiary to guaranty all of the obligations of the Company hereunder and to
take all actions necessary so that the obligations of such Canadian Subsidiary
under such guaranty are secured by substantially all of the assets (other than
real property) of such Canadian Subsidiary (it being understood that, at the
request of the Company at any time thereafter when no Event of Default or
Unmatured Event of Default exists, such guaranties and collateral security shall
be released); and (b) on the date of the Restructuring, Parent shall issue an
unconditional guaranty of all obligations of the Company hereunder (such
guaranty, the "Parent Guaranty "), which guaranty shall contain an undertaking
---------------
by Parent to comply with and perform the covenants set forth in this Section 10.
----------
10.15 Transactions with Affiliates. Not, and not permit any Subsidiary to,
----------------------------
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other
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Affiliates (other than the Company and its Subsidiaries) which is on terms which
are less favorable than are obtainable from any Person which is not one of its
Affiliates.
10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to
----------------------
maintain, each Pension Plan and each Canadian pension plan in substantial
compliance with all applicable requirements of law and regulations.
10.17 Environmental Laws. Conduct, and cause each Subsidiary to conduct,
------------------
its operations and keep and maintain its property in compliance with all
Environmental Laws (other than Immaterial Laws).
10.18 Unconditional Purchase Obligations. Not, and not permit any
-----------------------------------
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets or businesses.
10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to,
-----------------------
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing, or the obtaining of any Letter of Credit, by the
Company hereunder or by the performance by Parent or any Subsidiary of any of
its obligations hereunder or under any other Loan Document or (b) would prohibit
the Company or any Subsidiary of the Company from granting to the Collateral
Agent or either Agent, for the benefit of the Banks, a Lien on any of its
assets.
10.20 Business Activities. Not, and not permit any Subsidiary to, engage
-------------------
in any line of business other than the equipment rental business and businesses
reasonably related thereto.
10.21 Advances and Other Investments. Not, and not permit any Subsidiary
------------------------------
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries of the Company identified in Schedule 9.8;
------------
(b) equity Investments in Subsidiaries of the Company acquired after the
Effective Date in transactions permitted as acquisitions of stock or assets
pursuant to Section 1O.11;
-------------
(c) in the ordinary course of business, contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
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(d) in the ordinary course of business, Investments by the Company in any
Subsidiary of the Company or by any of the Subsidiaries of the Company in
the Company, by way of intercompany loans, advances or guaranties, all to
the extent permitted by Section 10.7;
------------
(e) Suretyship Liabilities permitted by Section 10.7;
------------
(f) good faith deposits made in connection with prospective acquisitions
of stock or assets permitted by Section 10.11;
-------------
(g) loans to officers and employees not exceeding (i) a Dollar Equivalent
amount of U.S.$100,000 in the aggregate to any single individual or (ii) a
Dollar Equivalent amount of U.S.$300,000 in the aggregate for all such
individuals,
(h) Investments by Parent in the Company;
(i) other Investments by Parent permitted by Section 10.23; and
-------------
(j) Cash Equivalent Investments;
provided, however, that (x) any Investment which when made complies with the
-------- -------
requirements of the definition of the term "Cash Equivalent Investment" may
--------------------------
continue to be held notwithstanding that such Investment if made thereafter
would not comply with such requirements; (y) no Investment otherwise permitted
by clause (b), (c), (d), (e), (f) or (g) shall be permitted to be made if,
---------- --- --- --- --- ---
immediately before or after giving effect thereto, any Event of Default or
Unmatured Event of Default shall have occurred and be continuing; and (z) the
aggregate principal amount of Investments by the Company in Foreign Subsidiaries
pursuant to clauses (b), (c), (d), (e), and (f) plus, without duplication, the
----------- --- --- --- ---
aggregate amount of all Canadian Loans shall not (i) at any time prior to
January 1, 1999, exceed 15% of the consolidated assets of Parent and its
Subsidiaries and (ii) at any time on or after January 1, 1999, exceed 10% of the
consolidated assets of Parent and its Subsidiaries.
10.22 Location of Assets. Not permit (a) at any time prior to January 1,
------------------
1999, more than 15% of the consolidated assets of Parent and its Subsidiaries to
be owned by Foreign Subsidiaries and (b) at any time on or after January 1,
1999, more than 10% of the consolidated assets of Parent and its Subsidiaries to
be owned by Foreign Subsidiaries.
10.23 Activities of Parent. Not, at any time after the occurrence of the
--------------------
Restructuring, engage in any business other than ownership of the Company and
the QuIPS Trust and activities reasonably related thereto (including the
incurrence of Debt permitted by Section 10.7 and the incurrence of unsecured
------------
trade obligations in respect of goods to be delivered and services to be
performed for the benefit of, and unsecured lease obligations incurred for the
benefit of, Subsidiaries). Without limiting the foregoing, Parent will not (a)
incur any Debt other than the QuIPS Debentures, the QuIPS Preferred Securities
and the Parent Guaranty, (b) make any Investments other than (i) Investments in
the Company and (ii) Investments in the QuIPS Trust in an amount not exceeding
U.S.
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$12,000,000, (c) grant any Liens on any of its assets or (d) permit any
amendment to or modification of the QuIPS Debentures, the QuIPS Preferred
Securities or the Indenture for the QuIPS Debentures which, in any such case, is
adverse to the interests of the Lenders. Notwithstanding the foregoing, Parent
may become a party to the USR Merger Agreement.
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Schedule IV
-----------
See attached.
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SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
-----------------
of Default:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
-----------------------------
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest fee, reimbursement obligation with respect
to any Letter of Credit or other amount payable by either Borrower hereunder or
under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the terms
-------------------------
applicable to any Debt of Parent or any Subsidiary (excluding Holdbacks) in an
aggregate amount (for all such Debt so affected) exceeding a Dollar Equivalent
amount of U.S. $5,000,000 and such default shall (a) consist of the failure to
pay such Debt when due (subject to any applicable grace period), whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable prior to its expressed
maturity; or any default of the type referred to in clause (a) or (b) above
---------- ---
shall occur under the terms of any Holdback owed by the Company or any
Subsidiary in an aggregate amount (for all Holdbacks so affected) exceeding a
Dollar Equivalent amount of U.S. $10,000,000, 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 the Company or the
applicable Subsidiary in good faith and by appropriate proceedings and
appropriate reserves have been set aside in respect of such amount.
12.1.3 Other Material Obligations. Default in the payment when due, or in
--------------------------
the performance or observance of, any material obligation of, or condition
agreed to by, Parent or any Subsidiary with respect to any material purchase or
lease of goods or services where such default, singly or in the aggregate with
other such defaults might reasonably be expected to have a Material Adverse
Effect (except only to the extent that the existence of any such default is
being contested by Parent or such Subsidiary in good faith and by appropriate
proceedings and appropriate reserves have been made in respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. Parent or any Subsidiary becomes
---------------------------
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or Parent or any Subsidiary applies
for, consents to, or acquiesces in the appointment of a trustee, receiver or
other custodian for Parent or such Subsidiary or any property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for Parent or any Subsidiary or for a substantial part of the property
of any thereof and is not discharged within 60 days or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of any Subsidiary other than the Company or UR Canada), is commenced in respect
of Parent or any Subsidiary, and if such case or proceeding is not commenced by
Parent or such Subsidiary, it is consented to or acquiesced in by Parent or such
Subsidiary, or remains for 60 days undismissed;
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or Parent or any Subsidiary takes any corporate action to authorize, or in
furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by
------------------------------------------------
Parent to comply with or to perform any covenant set forth in Sections 10.5
-------------
through 10.13, 10.15 or 10.16; or (b) failure by Parent or the Company to
----- ----- -----
comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
---------- ----------
days (or, in the case of Section 10.14, five Business Days) after notice thereof
-------------
to the Company from the Agent, any Bank or the holder of any Note.
12.1.6 Warranties. Any warranty made or deemed made by either Borrower
----------
herein is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by Parent or either Borrower to either Agent or any Bank in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are (or are deemed) stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by Parent or any other
-------------
Person to terminate a Pension Plan if as a result of such termination Parent
could be required to make a contribution to such Pension Plan, or could incur a
liability or obligation to such Pension Plan, in excess of U.S.$5,000,000; (ii)
a contribution failure occurs with respect to any Pension Plan sufficient to
give rise to a Lien under Section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that Parent and the Controlled Group have incurred on the date of such
withdrawal) exceeds U.S.$5,000,000.
12.1.8 Judgments. Final judgments which exceed an aggregate Dollar
---------
Equivalent amount of U.S.$5,000,000 shall be rendered against Parent or any
Subsidiary and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 30 days after entry or filing of such
judgments.
12.1.9 Invalidity of U.S. Guaranty, etc. Any Guaranty shall cease to be
--------------------------------
in full force and effect with respect to any applicable Subsidiary, any
applicable Subsidiary shall fall (subject to any applicable grace period) to
comply with or to perform any applicable provision of the applicable Guaranty,
or any Subsidiary (or any Person by, through or on behalf of such Subsidiary)
shall contest in any manner the validity, binding, nature or enforceability of
the applicable Guaranty with respect to such Subsidiary.
12.1.1O Invalidity of Collateral Documents, etc. Any Collateral Document
---------------------------------------
shall cease to be in full force and effect with respect to the Company or any
Subsidiary, the Company or any Subsidiary shall fail (subject to any applicable
grace period) to comply with or to perform any applicable provision of any
Collateral Document to which such entity is a party, or the Company or
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any Subsidiary (or any Person by, through or on behalf of the Company or such
Subsidiary) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within
------------------
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Effective Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 25% or more of the outstanding shares of common stock of Parent;
(b) during any 24-month period, individuals who at the beginning of such period
constituted Parent's Board of Directors (together with any new directors whose
election by Parent's Board of Directors or whose nomination for election by
Parent's shareholders was approved by a vote of at least two-thirds of the
directors who either were directors at beginning of such period or whose
election or nomination was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of Parent; (c) a period of 30
consecutive days shall have elapsed during which any two of the individuals
named in Schedule 12.1.11 shall have ceased to hold executive offices with
----------------
Parent at least equal in seniority to their present offices, as set out in such
Schedule 12.1.11, excluding any such individual who has been replaced by another
---------------- ---------
individual or individuals reasonably satisfactory to the Required Banks (it
being understood that any such replacement individual shall be deemed added to
Schedule 12.1.11 on the date of approval thereof by the Required Banks); (d) any
----------------
"Change of Control" shall occur under, and as defined in, the Senior
Subordinated Indenture; or (e) at any time after the date of the Restructuring,
the Company shall cease to be a direct, wholly-owned Subsidiary of Parent.
12.1.12 Invalidity of Parent Guaranty, etc. The Parent Guaranty shall
----------------------------------
cease to be in full force and effect at any time after the Restructuring, Parent
shall fail (subject to any applicable grace period) to comply with or to perform
any provision of the Parent Guaranty, or Parent (or any Person by, through or on
behalf of Parent) shall contest in any manner the validity, binding nature or
enforceability of the Parent Guaranty.
12.2 Effect of Event of Default. If any Event of Default described in
--------------------------
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
--------------
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the U.S. Agent cash collateral in an amount
equal to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the U.S. Agent (upon written request of
the Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the U.S. Agent cash collateral in an amount equal to the outstanding
face amount of all Letters of Credit, whereupon the Commitments (if they have
not theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to deliver to the U.S. Agent cash
collateral in an amount equal to the face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind. The U.S. Agent shall
promptly advise the Borrowers of any
S-43
such declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in Section 12.1.1 or Section 12.1.4 may be waived by the
-------------- --------------
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
----------
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the U.S. Agent (without liability for interest thereon) and applied
to obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the U.S Agent to any remaining obligations
hereunder and any excess shall be delivered to the Company or as a court of
competent jurisdiction may elect.
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