EXHIBIT 10(d)
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TERM LOAN AGREEMENT
dated as of July 15, 1999
among
UNITED RENTALS, INC.,
UNITED RENTALS (NORTH AMERICA), INC.,
VARIOUS FINANCIAL INSTITUTIONS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Syndication Agent,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
BANC OF AMERICA SECURITIES LLC
Lead Arranger and Book Manager
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TABLE OF CONTENTS
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SECTION 1 DEFINITIONS, ETC.................................................1
1.1 Definitions......................................................1
1.2 Other Interpretive Provisions...................................15
SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION
PROCEDURES......................................................16
2.1 Loans...........................................................16
2.1.1 Initial Loans.....................................16
2.1.2 Additional Loans..................................16
2.1.3 Tranches of Loans.................................16
2.2 Borrowing Procedure.............................................16
2.3 Conversion and Continuation Procedures..........................17
2.4 Pro Rata Treatment..............................................18
2.5 Commitments Several.............................................18
SECTION 3 NOTES EVIDENCING LOANS..........................................18
SECTION 4 INTEREST........................................................18
4.1 Interest Rates..................................................18
4.2 Interest Payment Dates..........................................18
4.3 Setting and Notice of Certain Rates.............................18
4.4 Computation of Interest.........................................19
SECTION 5 FEES............................................................19
5.1 Closing Fees....................................................19
5.2 Arrangement and Agent's Fees....................................20
SECTION 6 PREPAYMENTS....................................................20
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.................20
7.1 Making of Payments..............................................20
7.2 Due Date Extension..............................................20
7.3 Setoff..........................................................21
7.4 Proration of Payments...........................................21
7.5 Taxes...........................................................21
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SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
TRANCHES.............................................................22
8.1 Increased Costs.................................................22
8.2 Basis for Determining Interest Rate Inadequate or Unfair........23
8.3 Changes in Law Rendering Eurodollar Lending Unlawful............24
8.4 Funding Losses..................................................24
8.5 Right of Lenders to Fund through Other Offices..................25
8.6 Discretion of Lenders as to Manner of Funding...................25
8.7 Mitigation of Circumstances; Replacement of Affected Lender.....25
8.8 Conclusiveness of Statements; Survival of Provisions............26
SECTION 9 WARRANTIES.........................................................26
9.1 Organization, etc...............................................26
9.2 Authorization; No Conflict......................................26
9.3 Validity and Binding Nature.....................................27
9.4 Information.....................................................27
9.5 No Material Adverse Change......................................27
9.6 Litigation and Contingent Liabilities...........................27
9.7 Ownership of Properties; Liens..................................28
9.8 Subsidiaries....................................................28
9.9 Pension and Welfare Plans.......................................28
9.10 Investment Company Act.........................................29
9.11 Public Utility Holding Company Act.............................29
9.12 Regulation U...................................................29
9.13 Taxes..........................................................29
9.14 Solvency, etc..................................................29
9.15 Environmental Matters..........................................29
9.16 Year 2000 Problem..............................................29
9.17 Senior Debt....................................................30
SECTION 10 COVENANTS.........................................................30
10.1 Reports, Certificates and Other Information....................30
10.1.1 Audit Report........................................30
10.1.2 Quarterly Reports...................................30
10.1.3 Compliance Certificates.............................30
10.1.4 Reports to SEC and to Shareholders..................31
10.1.5 Notice of Default, Litigation and ERISA Matters.....31
10.1.6 Subsidiaries........................................32
10.1.7 Management Reports..................................32
10.1.8 Projections.........................................32
10.1.9 Other Information...................................32
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10.2 Books, Records and Inspections.................................32
10.3 Insurance......................................................32
10.4 Compliance with Laws; Payment of Taxes and Liabilities.........33
10.5 Maintenance of Existence, etc..................................33
10.6 Financial Covenants............................................33
10.6.1 Maximum Leverage....................................33
10.6.2 Minimum Interest Coverage Ratio.....................33
10.6.3 Funded Debt to Cash Flow Ratio......................33
10.6.4 Senior Debt to Tangible Assets......................33
10.6.5 Senior Debt to Cash Flow Ratio......................33
10.7 Limitations on Debt............................................34
10.8 Liens..........................................................35
10.9 Asset Sales....................................................36
10.10 Restricted Payments...........................................36
10.11 Mergers, Consolidations, Amalgamations, Sales.................37
10.12 Modification of Certain Documents.............................38
10.13 Use of Proceeds...............................................38
10.14 Further Assurances............................................38
10.15 Transactions with Affiliates..................................39
10.16 Employee Benefit Plans........................................39
10.17 Environmental Laws............................................39
10.18 Unconditional Purchase Obligations............................39
10.19 Inconsistent Agreements.......................................39
10.20 Business Activities...........................................39
10.21 Advances and Other Investments................................40
10.22 Location of Assets............................................41
10.23 Activities of Parent..........................................41
SECTION 11 CONDITIONS OF LENDING.............................................41
11.1 Initial Loans..................................................41
11.1.1 Notes...............................................41
11.1.2 Resolutions.........................................42
11.1.3 Consents, etc.......................................42
11.1.4 Incumbency and Signature Certificates...............42
11.1.5 Opinions of Counsel for the Company.................42
11.1.6 Second Amendment to Credit Agreement................42
11.1.7 Second Amendment to Existing Loan Agreement.........42
11.1.8 Confirmation........................................42
11.1.9 Confirmatory Certificate............................42
11.1.10 Other..............................................42
11.2 Additional Loans...............................................42
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11.2.1 Notes...............................................43
11.2.2 Confirmatory Certificate............................43
11.2.3 Other...............................................43
11.3 All Loans......................................................43
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT................................43
12.1 Events of Default..............................................43
12.1.1 Non-Payment of the Loans, etc.......................43
12.1.2 Non-Payment of Other Debt...........................43
12.1.3 Other Material Obligations..........................44
12.1.4 Bankruptcy, Insolvency, etc.........................44
12.1.5 Non-Compliance with Provisions of This Agreement....44
12.1.6 Warranties..........................................44
12.1.7 Pension Plans.......................................44
12.1.8 Judgments...........................................45
12.1.9 Invalidity of U.S. Guaranty, etc....................45
12.1.10 Invalidity of Collateral Documents, etc............45
12.1.11 Change in Control..................................45
12.1.12 Invalidity of Parent Guaranty, etc.................46
12.2 Effect of Event of Default.....................................46
SECTION 13 THE AGENT.........................................................46
13.1 Appointment and Authorization..................................46
13.2 Delegation of Duties...........................................46
13.3 Liability of Agent.............................................46
13.4 Reliance by Agents.............................................47
13.5 Notice of Default..............................................47
13.6 Credit Decision................................................48
13.7 Indemnification................................................48
13.8 Agent in Individual Capacity...................................49
13.9 Successor Agent; Assignment of Agency..........................49
13.10 Withholding Tax...............................................50
SECTION 14 GENERAL...........................................................52
14.1 Waiver; Amendments.............................................52
14.2 Confirmations..................................................52
14.3 Notices........................................................53
14.4 Computations...................................................53
14.5 Regulation U...................................................53
14.6 Costs, Expenses and Taxes......................................53
14.7 Judgment........................................................54
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14.8 Captions.......................................................54
14.9 Assignments; Participations....................................54
14.9.1 Assignments.........................................54
14.9.2 Participations......................................56
14.10 Governing Law.................................................56
14.11 Counterparts..................................................56
14.12 Successors and Assigns........................................57
14.13 Indemnification by the Company................................57
14.14 Forum Selection and Consent to Jurisdiction...................57
14.15 Waiver of Jury Trial..........................................58
14.16 Acknowledgments and Agreements regarding
Intercreditor Agreement....................................58
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SCHEDULE 1.1(A) Initial Lenders and Initial Percentages
SCHEDULE 9.6(a) Litigation and Contingent Liabilities
SCHEDULE 9.6(b) Contingent Payments
SCHEDULE 9.7 Properties
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7(c) Existing Equipment Debt
SCHEDULE 10.7(g) Other Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11 Key Executives
SCHEDULE 14.3 Addresses for Notices
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section 10.1.4)
EXHIBIT C Copy of Restated U.S. Guaranty (Section 1)
EXHIBIT D Copy of Restated U.S. Security Agreement (Section 1)
EXHIBIT E Copy of Restated Company Pledge Agreement (Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement (Section 1)
EXHIBIT G Form of Subordination Language (Section 1)
EXHIBIT H Form of Assignment Agreement (Section 14.9)
EXHIBIT I Copy of Intercreditor Agreement (Section 1)
EXHIBIT J Form of Exemption Certificate (Section 13.10)
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EXHIBIT K Copy of Parent Guaranty (Section 1)
EXHIBIT L Copy of Parent Pledge Agreement (Section 1)
EXHIBIT M Form of Request for Additional Loan (Section 2.1.2)
EXHIBIT N Form of Confirmation (Section 11.1.8)
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TERM LOAN AGREEMENT
This TERM LOAN AGREEMENT dated as of July 15, 1999 (this "Agreement")
is entered into among UNITED RENTALS, INC. ("Parent"), UNITED RENTALS (NORTH
AMERICA), INC., a Delaware corporation (the "Company"), the financial
institutions that are or may from time to time become parties hereto (together
with their respective successors and assigns, the "Lenders"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (in its individual capacity,
"BofA"), as administrative agent for the Lenders.
WHEREAS, the Lenders have agreed to extend certain term loans to the
Company and may from time to time extend additional loans to the Company.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
SECTION 1 DEFINITIONS, ETC.
1.1 Definitions. When used herein the following terms shall have the
following meanings (such definitions to be applicable to both the singular and
plural forms of such terms):
Acquisition Subsidiary means a Subsidiary of Parent organized solely
for the purpose of acquiring the stock or assets of a Person as permitted by
Section 10.11.
Additional Loan - see Section 2.1.2.
Affected Lender means any Lender that has given notice to the Company
(which has not been rescinded) of (i) any obligation of the Company to pay any
amount pursuant to Section 7.5 or 8.1 or (ii) the occurrence of any
circumstances of the nature described in Section 8.2 or 8.3.
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 BofA in its capacity as administrative agent for the
Lenders hereunder and any successor thereto in such capacity.
Agent-Related Persons means the 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.
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Agreement - see the Preamble.
Arranger means Banc of America Securities LLC, a Delaware limited
liability company.
Assignment Agreement - see Section 14.9.1.
Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Reference Rate.
Base Rate Tranche means any Tranche which bears interest at or by
reference to the Base Rate.
BofA - see the Preamble.
Business Day means any day on which BofA is open for commercial banking
business in Charlotte, Chicago, New York and San Francisco and, in the case of a
Business Day which relates to a Eurodollar Tranche, on which dealings are
carried on in the applicable offshore U.S.
Dollar interbank market.
Canadian Subsidiary means any Subsidiary of the Company which is
organized 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 "Bank" under and as defined in the
Credit Agreement or a Lender or its holding company for such a "Bank" or a
Lender (any such Person a "Permitted Bank")) rated at least A-l by Standard &
Poor's Ratings Group or P-l 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
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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 such day 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 11 of Regulation S-X
of the SEC.
Closing Date means the date the initial Loans are made hereunder.
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 Parent Pledge Agreement, the U.S. Security
Agreement, and any other agreement pursuant to which the Company, Parent or any
Subsidiary grants a Lien on collateral to the Collateral Agent.
Company - see the Preamble.
Company Pledge Agreement means the Second Restated Company Pledge
Agreement dated as of September 29, 1998 between the Company and the Collateral
Agent, a copy of which is attached as Exhibit E.
Computation Period means each period of four Fiscal Quarters ending on
the last day of a Fiscal Quarter on or after the Closing Date.
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 and any Pooling Charges booked 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 Parent or any
Subsidiary in connection with the purchase of any asset or business,
where the obligation of Parent or the applicable
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Subsidiary to make such payment (or the amount thereof) is contingent
upon the financial or other performance of such asset or business on an
ongoing basis (e.g., based on revenues or similar measures of
performance);
(b) such payment is required to be made by Parent or any
Subsidiary in connection with the achievement of any particular
business goal (excluding employee compensation and bonuses in the
ordinary course of business);
(c) such payment is required to be made by Parent or any
Subsidiary under circumstances similar to those described in clause (a)
or (b) or 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 Parent or any
Subsidiary in connection with the purchase of any real estate, where
the obligation to make such payment is contingent on any event or
condition (other than customary closing conditions for a purchase of
real estate).
Controlled Group means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Parent,
are treated as a single employer under Section 414 of the Code or Section 4001
of ERISA.
Credit Agreement means the Credit Agreement dated as of September 29,
1998 among the Company, Parent, UR Canada, various financial institutions, Bank
of America Canada, as Canadian Agent, and BofA, as U.S. Agent, as amended or
restated from time to time (including any amendment or restatement increasing
the amount available thereunder) and any Successor Credit Agreement as defined
in the Intercreditor Agreement.
Debt of any Person means, without duplication, (a) all indebtedness of
such 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
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account or upon the application of such Person, (f) all Hedging Obligations of
such Person 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 any other currency, the equivalent amount in U.S. Dollars as
determined by the Agent at such time on the basis of the Spot Rate for the
purchase of U.S. Dollars with such currency.
Environmental Claims means all claims, however asserted, by any
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 Office means, with respect to any Lender, the office or
offices of such Lender which shall be making or maintaining a Eurodollar Tranche
of such Lender hereunder or, in the case of any Reference Lender, such office or
offices through which such Reference Lender makes any determination for purposes
of calculating the Eurodollar Rate. A Eurodollar Office of any Lender may be, at
the option of such Lender, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Tranche for any
Interest Period, the rate of interest per annum (rounded upward, if necessary,
to the next 1/100th of 1%) determined by the Agent as follows:
Eurodollar Rate = IBOR
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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
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IBOR means the rate per annum determined by the Agent
to be the arithmetic mean of the rates of interest per annum
notified to the Agent by each Reference Lender as the rate of
interest at which deposits in U.S. Dollars in immediately
available funds are offered by the Eurodollar Office of such
Reference Lender two Business Days prior to the beginning of
such Interest Period to major banks in the interbank
eurodollar market as at or about 10:00 a.m., Chicago time, for
delivery on the first day of such Interest Period, for the
number of days comprised therein and in an amount equal or
comparable to the amount of the Eurodollar Loan of such
Reference Lender for such Interest Period.
Eurodollar Tranche means any Tranche which bears interest by reference
to the Eurodollar Rate.
Event of Default means any of the events described in Section 12.1.
Exchange Act means the Securities Exchange Act of 1934.
Existing Loan Agreement means the Term Loan Agreement dated as of July
10, 1998 among Parent, the Company (then known as United Rentals, Inc.), various
financial institutions and BofA, as Agent.
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 Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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 1998") refer to the Fiscal Year ending on December 31 of
such calendar year.
Foreign Subsidiary means each Subsidiary of Parent 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.
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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 (a) all Debt of Parent and its Subsidiaries and (b)
to the extent not included in the definition of Debt, the aggregate outstanding
investment or claim held at such time by purchasers, assignees or other
transferees of (or of interests in) accounts receivable, lease receivables or
other rights to payment of Parent and its Subsidiaries in connection with any
Securitization Transaction (regardless of the accounting treatment of such
Securitization Transaction), but excluding (i) contingent obligations in respect
of undrawn letters of credit and Suretyship Liabilities (except to the extent
constituting contingent obligations or Suretyship Liabilities in respect of
Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging
Obligations, (iii) Debt of 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 means a group of Tranches of the same Type and, in the case of
Eurodollar Tranches, which have the same Interest Period.
Hedging Obligations means, with respect to any Person, all liabilities
of such Person under interest rate, currency, commodity and equity swap
agreements, cap agreements and collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates, commodity prices or equity prices.
Holdback means an unsecured, non-interest-bearing obligation of Parent
or 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
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the Agent has notified the Company that the Required Lenders have determined in
good faith that such provision is material.
Intercreditor Agreement means the Intercreditor Agreement dated as of
September 29, 1998 among BofA, as Agent, BofA, as U.S. Agent for the banks under
the Credit Agreement, BofA, as Agent for the lenders under the Existing Loan
Agreement, and BofA, as Collateral Agent, a copy of which is attached as Exhibit
I.
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 sum, without duplication, of
(a) 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) and (b) consolidated yield
or discount accrued during such period on the aggregate investment or claim held
by purchasers, assignees or other transferees of, or of interests in, accounts
receivable, lease receivables and other rights to payment of Parent and its
Subsidiaries in connection with any Securitization Transaction (regardless of
the accounting treatment of such Securitization Transaction).
Interest Period means, as to any Eurodollar Tranche, the period
commencing on the date such Tranche is borrowed or continued as, or converted
into, a Eurodollar Tranche and ending on the date one, two, three or six months
thereafter as selected by the Company pursuant to Section 2.2 or 2.3, as the
case may be; provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall end on
the last Business Day of the calendar month at the end of such
Interest Period; and
(iii) the Company may not select any Interest Period
which would extend beyond any date on which an installment of
the Notes is scheduled to be paid pursuant to Section 3 if,
after giving effect to such selection, the aggregate principal
amount of all Eurodollar Tranches having Interest Periods
ending after such date would exceed the
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aggregate principal amount of the Notes scheduled to be
outstanding after payment of such installment.
Investment means, relative to any Person, (a) any loan or advance made
by such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of Parent or any of its
Subsidiaries), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses (excluding deposits
placed in escrow pursuant to bona fide arrangements that provide for the return
of such deposits to Parent or the applicable Subsidiary in the event that the
related transaction is not consummated for any reason by a date certain).
Lender - see the Preamble.
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge,
hypothecation or other security interest of any kind, whether arising by
contract, as a matter of law, by judicial process or otherwise.
Loan means, with respect to any Lender, such Lender's term loan to the
Company hereunder (whether made as part of the initial term loans on the Closing
Date or as an Additional Loan or a combination thereof); and Loans means all of
the term loans made hereunder.
Loan Documents means this Agreement, the Notes, the U.S. Guaranty, the
Collateral Documents and the Parent Guaranty.
Loan Party means Parent, the Company and each Subsidiary of the Company
which is a party to any Loan Document.
Margin Stock means any "margin stock" as defined in Regulation U of the
FRB.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of Parent and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against Parent, the Company or any Subsidiary
of the Company of any Loan Document.
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.
9
Net Worth means the sum of (a) Parent's consolidated stockholders'
equity (including preferred stock accounts) plus (b) to the extent, if any, not
included in such stockholders' equity, the outstanding amount of the QuIPS
Preferred Securities plus (c) the amount of the Pooling Charges.
Note - see Section 3.
Parent - see the Preamble.
Parent Guaranty means the Restated Parent Guaranty dated as of
September 29, 1998 executed by Parent, a copy of which is attached as Exhibit K.
Parent Pledge Agreement means the Restated Parent Pledge Agreement
dated as of September 29, 1998 between Parent and the Collateral Agent, a copy
of which is attached as Exhibit L.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which Parent or any member of the Controlled Group may
have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any Lender, the percentage specified
opposite such Lender's name on Schedule 1.1(A), reduced (or increased) by the
making of Additional Loans pursuant to Section 2.1.2 or by assignments pursuant
to Section 14.9.1.
Permitted Holders means (a) the executive managers of the Company as of
the Closing Date and their respective estates, their respective spouses and
former spouses, their lineal descendants, the legal representatives of any of
the foregoing, the trustees of any bona fide trusts of which any of the
foregoing are the sole beneficiaries, and any Person of which any of the
foregoing "beneficially owns" (within the meaning of Rule 13d-3 under the
Exchange Act) at least 51% of each class of equity interests of such Person; and
(b) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and any of his estate, his spouse or any former spouse,
his lineal descendants, the legal representatives of any of the foregoing, the
trustees of any bona fide trusts of which any of the foregoing and/or one or
more charitable organizations (as defined below) are the sole beneficiaries, any
Person of which any of the foregoing "beneficially owns" (within the meaning of
Rule 13d-3 under the Exchange Act) at least 51% of each class of the equity
interests of such Person and any charitable organization to which any of the
foregoing transfers 20% or more of the outstanding shares of common stock of
Parent. For purposes of the foregoing, a "charitable
10
organization" is an organization to which a contribution is deductible for
income tax purposes under the Code.
Permitted Senior Secured Debt means any Debt arising under any term
loan agreement among Parent, the Company, various financial institutions and
BofA, as agent (other than this Agreement and the Existing Loan Agreement);
provided that (i) such term loan agreement shall contain covenants and defaults
which are no more restrictive for Parent and its Subsidiaries than the covenants
and defaults contained in this Agreement, (ii) any such Debt shall mature no
earlier than September 30, 2005 and shall have amortization of no more than 20%
of the principal amount thereof prior to July 15, 2005, (iii) any such Debt
shall constitute "Senior Indebtedness" as defined in each Subordinated Note
Indenture and (iv) no such Debt shall have interest spreads greater than (x) if
such Debt matures on or before December 31, 2005, the then-applicable interest
rate spreads under the Existing Loan Agreement or (y) if such Debt matures after
December 31, 2005, the then-applicable interest rate spreads hereunder.
Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
Pooling Charges means pooling charges and extraordinary items related
to acquisitions booked by Parent in the third fiscal quarter of 1998 (including
pooling charges and extraordinary items related to the U.S. Rentals
Acquisition), but not more than $80,000,000.
QuIPS Debentures means the 6 1/2% convertible subordinated debentures
issued by Parent to the QuIPS Trust pursuant to the QuIPS Indenture.
QuIPS Guarantees means (i) the Guarantee Agreement dated as of August
5, 1998 issued by Parent (then known as United Rentals Holdings, Inc.) relating
to the common securities of the QuIPS Trust and (ii) the Guarantee Agreement
dated as of August 5, 1998 between Parent (then known as United Rentals
Holdings, Inc.) and The Bank of New York, as Trustee, relating to the QuIPS
Preferred Securities.
QuIPS Indenture means the Indenture dated as of August 5, 1998 between
Parent (then known as United Rentals Holdings, Inc.) and The Bank of New York,
as Trustee.
QuIPS Preferred Securities means the 6 1/2% convertible quarterly
income preferred securities issued by the QuIPS Trust pursuant to the QuIPS
Purchase Agreement.
QuIPS Purchase Agreement means the Purchase Agreement dated as of July
30, 1998 among the QuIPS Trust, Parent (then known as United Rentals Holdings,
Inc.), the Company (then known as United Rentals, Inc.) and the purchasers named
therein.
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QuIPS Trust means United Rentals Trust I, a special purpose Delaware
business trust established pursuant to the Amended and Restated Trust Agreement
dated as of August 5, 1998 among Parent (then known as United Rentals Holdings,
Inc.), The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and the administrative trustees named therein.
Reference Lenders means BofA and any other Lender designated by the
Company and the Agent (which shall promptly notify each Lender of such
designation) as a "Reference Lender".
Reference Rate means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California (or such other office in the United States of America as BofA shall
specify from time to time), 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.
Related Fund means, with respect to any Lender which is a fund that
invests in bank loans, any other fund that invests in bank loans and is managed
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
Rentals means the aggregate fixed amounts payable by Parent or any
Subsidiary under any lease of (or other agreement conveying the right to use)
any real or personal property by Parent or any Subsidiary, as lessee, other than
(i) any Capital Lease or (ii) any lease with a remaining term of six months or
less which is not renewable solely at the option of the lessee.
Required Lenders means Lenders having Percentages aggregating 51% or
more.
SEC means the Securities and Exchange Commission.
Securitization Transaction means any sale, assignment or other transfer
by Parent or any Subsidiary of accounts receivable, lease receivables or other
payment obligations owing to Parent or such Subsidiary or any interest in any of
the foregoing, together in each case with any collections and other proceeds
thereof, any collection or deposit accounts related thereto, and any collateral,
guaranties or other property or claims supporting or securing payment by the
obligor thereon of, or otherwise related to, or subject to leases giving rise
to, any such receivables.
Seller Subordinated Debt means unsecured indebtedness of the Company
that:
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(a) is subordinated, substantially upon the terms set forth in
Exhibit G or other terms that are more favorable to the Agent and the
Lenders, in right of payment to the payment in full in cash of the
Loans and all other amounts owed under the Loan Documents (whether or
not matured or due and payable); and
(b) represents all or part of the purchase price payable by
the Company in connection with a transaction described in Section
10.11(c).
Senior Debt means all Funded Debt of Parent and its Subsidiaries other
than Subordinated Debt.
Special Purpose Vehicle means a trust, bankruptcy remote entity or
other special purpose entity which is a Subsidiary of Parent (or, if not a
Subsidiary, the common equity of which is wholly-owned, directly or indirectly,
by Parent) and which is formed for the purpose of, and engages in no material
business other than, acting as an issuer or a depositor in a Securitization
Transaction (and, in connection therewith, owning accounts receivable, lease
receivables, other rights to payment, leases and related assets and pledging or
transferring any of the foregoing or interests therein).
Spot Rate for a currency means the rate quoted by BofA as the spot rate
for the purchase by BofA of such currency with another currency in accordance
with its customary procedures at approximately 10:00 a.m. (Chicago time) on the
date on which the foreign exchange computation is made.
Subordinated Debt means (a) the U.S.$200,000,000 of 9.50% unsecured
senior subordinated notes due 2008 issued by the Company (then known as United
Rentals, Inc.) on May 22, 1998 and the unsecured subordinated guarantees thereof
provided for in the applicable Subordinated Note Indenture, (b) the
U.S.$205,000,000 of 8.80% unsecured senior subordinated notes due 2008 issued by
the Company on August 12, 1998 and the unsecured subordinated guarantees thereof
provided for in the applicable Subordinated Note Indenture, (c) the
U.S.$300,000,000 of 9.25% unsecured senior subordinated notes due 2009 issued by
the Company on December 15, 1998 and the unsecured subordinated guarantees
thereof provided for in the applicable Subordinated Note Indenture, (d) the
U.S.$250,000,000 of 9.0% unsecured senior subordinated notes due 2009 issued by
the Company on March 23, 1999 and the unsecured subordinated guarantees thereof
provided for in the applicable Subordinated Note Indenture, (e) Seller
Subordinated Debt and (f) any other unsecured Debt of the Company and unsecured
guarantees thereof by any Subsidiary of the Company which (i) is owed to Persons
other than officers, employees, directors or Affiliates of the Company, (ii) has
no amortization prior to December 31, 2006 and (iii) has subordination terms
(including subordination terms with respect to guarantees) which are not less
favorable to the Lenders than those set forth in the Subordinated Note
Indentures or are otherwise approved by the Required Lenders, such approval not
to be unreasonably withheld.
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Subordinated Note Indenture means each of (a) the Indenture dated as of
May 22, 1998 among the Company (then known as United Rentals, Inc.), various
Subsidiaries of the Company and State Street Bank and Trust Company, as Trustee,
pursuant to which the Company issued U.S.$200,000,000 of Subordinated Debt, (b)
the Indenture dated as August 12, 1998 among the Company, various Subsidiaries
of the Company and State Street Bank and Trust Company, as Trustee, pursuant to
which the Company issued U.S.$205,000,000 of Subordinated Debt, (c) the
Indenture dated as of December 15, 1998 among the Company, various Subsidiaries
of the Company and State Street Bank and Trust Company, as Trustee, pursuant to
which the Company issued U.S.$300,000,000 of Subordinated Debt, and (d) the
Indenture dated as of March 23, 1999 among the Company, various Subsidiaries of
the Company and The Bank of New York, as Trustee, pursuant to which the Company
issued U.S.$250,000,000 of Subordinated Debt.
Subsidiary means, with respect to any Person, a corporation, limited
liability company, partnership or other entity of which such Person and/or its
other Subsidiaries own, directly or indirectly, more than 50% of the voting
stock, membership interests or similar equity interests. Unless the context
otherwise requires, each reference to Subsidiaries herein shall be a reference
to Subsidiaries of Parent.
Subsidiary Pledge Agreement means each pledge agreement substantially
in the form of Exhibit F issued by any Subsidiary.
Suretyship Liability means, with respect to any Person, any liability
of such Person with respect to any agreement, undertaking or arrangement by
which such Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of 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.
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.
Tranche refers to a portion of a Loan bearing interest at a particular
interest rate and, in the case of a portion bearing interest based on the
Eurodollar Rate, having a particular Interest Period.
Type of Tranche refers to the interest rate basis for a Tranche. The
"Types" of Tranches are Base Rate Tranches and Eurodollar Tranches.
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Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.
UR Canada means United Rentals of Canada, Inc., an Ontario corporation.
U.S. Dollar and the sign "U.S.$" mean lawful money of the United States
of America.
U.S. Guaranty means the Second Restated U.S. Guaranty dated as of
September 29, 1998 executed by various Subsidiaries of the Company, a copy of
which is attached as Exhibit C.
U.S. Rentals means U.S. Rentals, Inc., a Delaware corporation.
U.S. Rentals Acquisition means the acquisition of U.S. Rentals by
Parent pursuant to the terms of the USR Merger Agreement.
USR Merger Agreement means the Amended and Restated Agreement and Plan
of Merger among U.S. Rentals, Parent and UR Acquisition Corporation dated as of
August 31, 1998.
U.S. Security Agreement means the Second Restated U.S. Security
Agreement dated as of September 29, 1998 among Parent, the Company, various
Subsidiaries of the Company and the Collateral Agent, a copy of which is
attached as Exhibit D.
U.S. Subsidiary means any Subsidiary of the Company other than a
Foreign Subsidiary.
Vendor Financing Arrangement means any financing arrangement provided
by a Person (other than Parent or any Affiliate thereof) to any purchaser of
equipment sold by Parent or any Subsidiary in the ordinary course of business,
the terms of which provide for recourse against Parent and/or the applicable
Subsidiary in the event of default by the purchaser.
Welfare Plan means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
1.2 Other Interpretive Provisions.
(a) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(b) (i) The term "including" is not limiting and means
"including without limitation."
(ii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
15
(c) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such statute or regulation.
(d) This Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms.
(e) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company, the Lenders and the other parties thereto and are the products of all
parties. Accordingly, they shall not be construed against the Agent or the
Lenders merely because of the Agent's or Lenders' involvement in their
preparation.
SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION
PROCEDURES.
2.1 Loans.
2.1.1 Initial Loans. On and subject to the terms and conditions of this
Agreement, each of the Lenders which is a party hereto on the Closing Date,
severally and for itself alone, agrees to make a term loan to the Company on the
Closing Date in such Lender's Percentage of U.S.$150,000,000.
2.1.2 Additional Loans. The Company may, from time to time prior to
September 29, 2000, by means of a letter addressed to the Agent substantially in
the form of Exhibit M, request that additional term loans ("Additional Loans")
be made hereunder by any existing Lender or, with the prior written consent of
the Agent, any other commercial bank or other Person; provided that (a) the
aggregate amount of Additional Loans made on any day shall not be less than
$5,000,000 and shall be an integral multiple of $1,000,000 and (b) in no event
shall the aggregate principal amount of all Loans made hereunder (whether or not
then outstanding) exceed $750,000,000 without the written consent of all
Lenders. The Agent shall promptly notify the Company and the Lenders of the
making of any Additional Loans and of the aggregate amount of the Loans and the
Percentage of each Lender after giving effect thereto. The Company acknowledges
that, in order to comply with Section 2.4, prepayment of all or portions of
certain Loans may be required on the date of the making of any Additional Loan
(and any such prepayment shall be subject to the provisions of Section 8.4).
2.1.3 Tranches of Loans. Each Loan may be divided into Tranches from
time to time, provided that (i) not more than eight different Groups of
Eurodollar Tranches shall be outstanding at any
16
one time and (ii) the aggregate principal amount of each Group of Eurodollar
Tranches shall at all times (including after giving effect to any conversion or
continuation) be at least U.S.$500,000.
2.2 Borrowing Procedure. The Company shall give written notice to the
Agent of any proposed borrowing not later than 10:00 A.M., Chicago time, two
Business Days prior to the proposed date of such borrowing (or such later time
and date as the Agent and all applicable Lenders may agree). Such notice shall
be effective upon receipt by the Agent and shall specify the date (which shall
be a Business Day) of borrowing and, if applicable, the amount of and the
initial Interest Period for each Group of Eurodollar Tranches to be outstanding
after giving effect to such borrowing. Promptly upon receipt of such notice, the
Agent shall advise each Lender thereof. Not later than 1:00 p.m., Chicago time,
on the date of the proposed borrowing, each applicable Lender shall provide the
Agent at the office specified by the Agent with immediately available funds in
the amount of such Lender's pro rata share of such borrowing and, subject to the
satisfaction of the applicable conditions precedent set forth in Section 11, the
Agent shall pay over the proceeds of such borrowing to the Company on such date.
2.3 Conversion and Continuation Procedures. (a) Subject to Section 2.2,
the Company may, upon irrevocable written notice to the Agent in accordance with
clause (b) below:
(i) elect, as of any Business Day, to convert any
Group of Tranches (or any part thereof in an aggregate amount
not less than U.S.$500,000) into Tranches of the other Type;
or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Group of Eurodollar Tranches
having Interest Periods expiring on such day (or any part
thereof in an aggregate amount not less than U.S.$500,000) for
a new Interest Period.
(b) The Company shall give written or telephonic (followed
immediately by written confirmation thereof) notice to the Agent of
each proposed conversion or continuation not later than (i) in the case
of conversion into Base Rate Tranches, 10:00 A.M., Chicago time, on the
proposed date of such conversion; and (ii) in the case of conversion
into or continuation of Eurodollar Tranches, 9:00 A.M., Chicago time,
at least two Business Days prior to the proposed date of such
conversion or continuation, specifying in each case:
(1) the proposed date of conversion or continuation;
(2) the aggregate amount of the Tranches to be
converted or continued;
(3) the Type of Tranches resulting from the proposed
conversion or continuation; and
17
(4) in the case of conversion into, or continuation
of, Eurodollar Tranches, the duration of the requested
Interest Period therefor.
(c) If upon the expiration of any Interest Period applicable
to any Eurodollar Tranche, the Company has failed to select timely a
new Interest Period to be applicable to such Eurodollar Tranche, the
Company shall be deemed to have elected to convert such Eurodollar
Tranche into a Base Rate Tranche effective on the last day of such
Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a notice of conversion or continuation pursuant to this Section 2.3
or, if no timely notice is provided by the Company, of the details of
any automatic conversion.
(e) Unless the Required Lenders otherwise consent, during the
existence of an Event of Default or Unmatured Event of Default, the
Company may not elect to have any portion of a Loan converted into or
continued as a Eurodollar Tranche.
2.4 Pro Rata Treatment. Except as otherwise expressly provided herein,
after giving effect to any borrowing, conversion, continuation or repayment,
each Lender will have a pro rata share (according to its then-applicable
Percentage) of all Types and Groups of Tranches.
2.5 Commitments Several. The failure of any Lender to make its pro rata
share of any borrowing available on the requested borrowing date shall not
relieve any other Lender of any obligation it may have to make its pro rata
share of such borrowing available on such date, but no Lender shall be
responsible for the failure of any other Lender to make such other Lender's pro
rata share of such borrowing available on such date.
SECTION 3 NOTES EVIDENCING LOANS. Each Lender's Loan shall be evidenced
by a promissory note (each a "Note") substantially in the form set forth in
Exhibit A, with appropriate insertions, payable to the order of such Lender in
quarterly installments on the last day of each calendar quarter beginning on
September 30, 2000 and continuing through June 30, 2006, with the first 23
installments each in an amount equal to 0.25% of the principal amount of such
Lender's Loan and the final installment in an amount equal to 94.25% of the
principal amount of such Lender's Loan.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Tranche of each Loan, as follows:
(a) at all times while such Tranche is a Base Rate Tranche, at
a rate per annum equal to the sum of the Base Rate from time to time in
effect plus 0.625; and
18
(b) at all times while such Tranche is a Eurodollar Tranche,
at a rate per annum equal to the sum of the Eurodollar Rate applicable
to each Interest Period for such Tranche plus 2.5%;
provided, however, that at any time an Event of Default exists, the interest
rate applicable to each Tranche shall be increased by 2%.
4.2 Interest Payment Dates. Accrued interest on each Base Rate Tranche
shall be payable in arrears on the last day of each calendar month and at
maturity. Accrued interest on each Eurodollar Tranche shall be payable on the
last day of each Interest Period for such Tranche (and, in the case of a
Eurodollar Tranche with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. After
maturity, accrued interest on all Tranches shall be payable on demand.
4.3 Setting and Notice of Certain Rates. The applicable Eurodollar Rate
for each Interest Period shall be determined by the Agent, and notice thereof
shall be given by the Agent promptly to the Company and the Lenders. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Lender, deliver to the
Company or such Lender a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate.
4.4 Computation of Interest.
(a) All computations of interest on Base Rate Tranches when
the Base Rate is determined by the Reference Rate shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of interest shall be made on the basis of a 360-day year and
actual days elapsed (which results in more interest being paid than if computed
on the basis of a 365-day year). Interest shall accrue during each period during
which interest is computed from the first day thereof to the last day thereof.
(b) If for any reason whatsoever a Reference Lender ceases to
be a Lender hereunder, such Reference Lender shall thereupon cease to be a
Reference Lender, and the Eurodollar Rate shall be determined on the basis of
the rates as notified by the remaining Reference Lender(s).
(c) Each of the Reference Lenders shall use its best efforts
to furnish quotations of rates to the Agent as contemplated hereby. If any
Reference Lender fails to supply such rates to the Agent upon its request, the
Eurodollar Rate shall be determined on the basis of the quotations of the
remaining Reference Lender(s).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Lender hereunder shall be subject to the
limitation that payments of interest
19
shall not be required for any period for which interest is computed hereunder to
the extent (but only to the extent) that contracting for or receiving such
payment by such Lender would be contrary to the provisions of any law applicable
to such Lender limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Lender, and in such event the
Company shall pay such Lender interest at the highest rate permitted by
applicable law.
(e) The applicable interest rate for each Base Rate Tranche
shall change simultaneously with each change in the Base Rate.
SECTION 5 FEES.
5.1 Closing Fees. On the Closing Date, the Company shall pay to the
Agent for the account of each Lender which is a party hereto on such date a
closing fee in the amount previously agreed to by the Company and such Lender.
In addition, on the date of the making of any Additional Loan, the Company shall
pay to each Lender which is increasing the amount of its Loan or becoming a
party hereto a closing fee in the amount agreed to by the Company and such
Lender.
5.2 Arrangement and Agent's Fees. The Company agrees to pay to the
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company, the Arranger and the Agent.
SECTION 6 PREPAYMENTS. The Company may from time to time prepay the
Loans, in whole or in part, without penalty. The Company shall give the Agent
(which shall promptly advise each Lender) notice of any prepayment not later
than 10:00 A.M., Chicago time, on the day of such prepayment, specifying the
Tranches to be prepaid and the date and amount of prepayment. Each partial
prepayment of Loans shall be in a principal amount of at least U.S.$500,000. Any
prepayment of a Eurodollar Tranche on a day other than the last day of an
Interest Period therefor shall be subject to Section 8.4. All prepayments shall
be applied pro rata to the then-remaining installments of the Notes.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. (a) All payments of principal of or interest on
the Notes shall be made by the Company to the Agent in immediately available
funds at the office specified by the Agent not later than noon, Chicago time, on
the date due; and funds received after that hour shall be deemed to have been
received by the Agent on the next following Business Day. The Company hereby
authorizes and instructs the Agent to charge any demand deposit account of the
Company maintained with BofA for the amount of any such payment on the due date
therefor, and (subject to there being a sufficient balance in such account for
such purpose) the Agent agrees to do so, provided that the Agent's failure to so
charge any such account shall in no way affect the obligation of the Company to
20
make any such payment. The Agent shall promptly remit to each Lender its share
of all such payments received in collected funds by the Agent for the account of
such Lender.
(b) All payments under Section 8.1 shall be made by the
Company directly to the Lender entitled thereto.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Lenders that the Company will not
make such payment in full as and when required, the Agent may assume that the
Company has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Company has not
made such payment in full to the Agent, each Lender shall repay to the Agent on
demand the amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
7.2 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans falls due on a day which is not a Business Day, then
such due date shall be extended to the immediately following Business Day
(unless, in the case of a Eurodollar Tranche, such immediately following
Business Day is the first Business Day of a calendar month, in which case such
date shall be the immediately preceding Business Day) and, in the case of
principal, additional interest shall accrue and be payable for the period of any
such extension.
7.3 Setoff. The Company agrees that the Agent and each Lender have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time (a) any payment or other amount
owing by the Company under this Agreement is then due to the Agent or any Lender
or (b) any Unmatured Event of Default under Section 12.1.4 with respect to the
Company or any Event of Default exists, the Agent and each Lender may apply to
the payment of such payment or other amount (or, in the case of clause (b), to
any obligations of the Company hereunder, whether or not then due) any and all
balances, credits, deposits, accounts or moneys of the Company then or
thereafter with the Agent or such Lender.
7.4 Proration of Payments. If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise, but excluding any payment pursuant to Section 8.7 or 14.9) on account
of principal of or interest on any Note in excess of its pro rata share of
payments and other recoveries obtained by all Lenders on account of principal of
and interest on the applicable Notes then held by them, such Lender shall
purchase from the other Lenders such participation in the applicable Notes held
by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such
21
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery (but without interest).
7.5 Taxes. (a) All payments of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Lender's net income or receipts (all non-
excluded items being called "Taxes"). If any withholding or deduction from any
payment to be made by the Company hereunder (including any additional amount or
amounts to be paid under this Section 7.5) is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Company will:
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(iii) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
(b) If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
applicable Lender, the required receipts or other required documentary evidence,
the Company shall indemnify such Lender for any incremental Taxes, interest or
penalties that may become payable by any such Lender as a result of any such
failure. For purposes of this Section 7.5, a distribution hereunder by the Agent
to or for the account of any Lender shall be deemed a payment by the Company.
(c) Upon the request from time to time of the Company or the Agent,
each Lender that is organized under the laws of a jurisdiction other than the
United States of America or any state thereof shall execute and deliver to the
Company and the Agent one or more (as the Company or the Agent may reasonably
request) United States Internal Revenue Service Forms 4224 or Forms 1001 or any
22
applicable successor form (including Form W-8ECI or W-8BEN) or such other forms
or documents, appropriately completed, as may be applicable to establish the
extent, if any, to which a payment by the Company to such Lender is exempt from
withholding or deduction of Taxes.
(e) The obligations of the Company under this Section 7.5 (i) are
subject to the limitations set out in Section 14.9.1 and (ii) shall survive
repayment of the Loans, cancellation of the Notes and any termination of this
Agreement.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
TRANCHES.
8.1 Increased Costs.
(a) If, after the date hereof, the adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any Eurodollar Office of such Lender) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency
(A) shall subject any Lender (or any Eurodollar Office of such
Lender) to any tax, duty or other charge with respect to its Eurodollar
Tranches, its Note or its obligation to maintain Eurodollar Tranches,
or shall change the basis of taxation of payments to any Lender of the
principal of or interest on its Eurodollar Tranches or any other
amounts due under this Agreement in respect of its Eurodollar Tranches
or its obligation to maintain Eurodollar Tranches (except for changes
in the rate of tax on the overall net income of such Lender or its
Eurodollar Office imposed by the jurisdiction in which such Lender's
principal executive office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the FRB, but excluding any reserve
included in the determination of interest rates pursuant to Section 4),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Lender (or any
Eurodollar Office of such Lender); or
(C) shall impose on any Lender (or its Eurodollar Office) any
other condition affecting its Eurodollar Tranches, its Note or its
obligation to maintain Eurodollar Tranches;
and the result of any of the foregoing is to increase the cost to (or, in the
case of Regulation D of the FRB, to impose a cost on) such Lender (or any
Eurodollar Office of such Lender) of making, maintaining or participating in any
Eurodollar Tranche, or to reduce the amount of any sum received or receivable by
such Lender (or its Eurodollar Office) under this Agreement or under its Note
with
23
respect thereto, then within 10 days after demand by such Lender (which demand
shall be accompanied by a statement setting forth the basis for such demand, a
copy of which shall be furnished to the Agent), the Company shall pay directly
to such Lender such additional amount as will compensate such Lender for such
increased cost or such reduction.
(b) If any Lender shall reasonably determine that the adoption or
phase-in of or any change in any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender or any
Person controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's or such controlling Person's capital as a consequence of
such Lender's obligations hereunder to a level below that which such Lender or
such controlling Person could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such controlling Person's
policies with respect to capital adequacy) by an amount deemed by such Lender or
such controlling Person to be material, then from time to time, within 10 days
after demand by such Lender (which demand shall be accompanied by a statement
setting forth the basis for such demand, a copy of which shall be furnished to
the Agent), the Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling Person for such
reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
respect to any Interest Period:
(a) none of the Reference Lenders are being offered deposits
in U.S. Dollars (in the applicable amounts) in the interbank Eurodollar
market for such Interest Period, or the Agent otherwise reasonably
determines (which determination shall be binding and conclusive on the
Company) that by reason of circumstances affecting the interbank
Eurodollar market adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate; or
(b) Lenders having an aggregate Percentage of 30% or more
advise the Agent that the Eurodollar Rate, as determined by the Agent,
will not adequately and fairly reflect the cost to such Lenders of
maintaining or funding their Eurodollar Tranches for such Interest
Period (taking into account any amount to which such Lenders may be
entitled under Section 8.1) or that the maintaining or funding of
Eurodollar Tranches has become impracticable as a result of an event
occurring after the date of this Agreement which in the opinion of such
Lenders materially affects such Tranches;
then the Agent shall promptly notify the Company and the Lenders thereof and, so
long as such circumstances shall continue, (i) no Lender shall be under any
obligation to convert into Eurodollar
24
Tranches and (ii) on the last day of the current Interest Period for each
Eurodollar Tranche, such Tranche shall, unless then repaid in full,
automatically convert to a Base Rate Tranche.
8.3 Changes in Law Rendering Eurodollar Lending Unlawful. If any change
in (including the adoption of any new) applicable laws or regulations, or any
change in the interpretation of applicable laws or regulations by any
governmental or other regulatory body charged with the administration thereof,
should make it (or in the good faith judgment of any Lender cause a substantial
question as to whether it is) unlawful for any Lender to make, maintain or fund
any Eurodollar Tranche, then such Lender shall promptly notify the Company and
the Agent and, so long as such circumstances shall continue, (a) such Lender
shall have no obligation to make or convert into Eurodollar Tranches (but shall
make or maintain Base Rate Tranches concurrently with the making of or
conversion into Eurodollar Tranches by the Lenders which are not so affected, in
each case in an amount equal to such Lender's pro rata share of all Eurodollar
Tranches which would be made or converted into at such time in the absence of
such circumstances) and (b) on the last day of the current Interest Period for
each Eurodollar Tranche of such Lender (or, in any event, on such earlier date
as may be required by the relevant law, regulation or interpretation), such
Eurodollar Tranche shall, unless then repaid in full, automatically convert to a
Base Rate Tranche. Each Base Rate Tranche maintained by a Lender which, but for
the circumstances described in the foregoing sentence, would be a Eurodollar
Tranche (an "Affected Tranche") shall remain outstanding for the same period as
the Group of Eurodollar Tranches of which such Affected Tranche would be a part
absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Lender against any net loss or expense which
such Lender may sustain or incur (including any net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain any Eurodollar Tranche), as reasonably
determined by such Lender, as a result of (a) any payment, prepayment or
conversion of any Eurodollar Tranche of such Lender on a date other than the
last day of an Interest Period for such Tranche (including any conversion
pursuant to Section 8.3) or (b) any failure of the Company to borrow, convert
into, continue or prepay any Eurodollar Tranche on a date specified therefor in
a notice of borrowing, conversion, continuation or prepayment pursuant to this
Agreement. For this purpose, all notices to the Agent pursuant to this Agreement
shall be deemed to be irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if
it so elects, fulfill its commitment as to any Eurodollar Tranche by causing a
foreign branch or affiliate of such Lender to maintain or fund such Tranche,
provided that in such event for the purposes of this Agreement such Tranche
shall be deemed to have been maintained and funded by such Lender and the
obligation of the Company to repay such Lender's Loan shall nevertheless be to
such Lender and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or affiliate.
25
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loan in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each Eurodollar Tranche during each Interest Period for such
Tranche through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the IBOR (as defined in
the definition of Eurodollar Rate) for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Lender.
(a) Each Lender shall promptly notify the Company and the Agent of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Lender's good faith
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation of the Company to pay any amount pursuant to Section 7.5 or 8.1
or (ii) the occurrence of any circumstances of the nature described in Section
8.2 or 8.3, and, if any Lender has given notice of any event described in clause
(i) or (ii) above and thereafter such event ceases to exist, such Lender shall
promptly so notify the Company and the Agent. Without limiting the foregoing,
each Lender will designate a different funding office if such designation will
avoid (or reduce the cost to the Company of) any event described in clause (i)
or (ii) of the preceding sentence and such designation will not, in such
Lender's sole judgment, be otherwise disadvantageous to such Lender.
(b) At any time any Lender is an Affected Lender, the Company may
replace such Affected Lender as a party to this Agreement with one or more other
bank(s) or financial institution(s) reasonably satisfactory to the Agent (and
upon notice from the Company such Affected Lender shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Loan, its Note and
all of its other rights and obligations hereunder to such replacement bank(s) or
other financial institution(s) for a purchase price equal to the sum of the
principal amount of the Loan so assigned, all accrued and unpaid interest
thereon, any amounts payable under Section 8.4 as a result of such Lender
receiving payment of any Eurodollar Tranche prior to the end of an Interest
Period therefor and all other obligations owed to such Affected Lender
hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Lenders may use reasonable
averaging and attribution methods in determining compensation under Sections 8.1
and 8.4, and the provisions of such Sections shall survive repayment of the
Loans, cancellation of the Notes and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to make the Loans hereunder, Parent and the Company warrant
to the Agent and the Lenders that:
26
9.1 Organization, etc. Each of Parent and the Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; each of Parent, the Company and each other Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; and each of Parent, the Company and each other
Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by Parent
and the Company of this Agreement and each other Loan Document to which it is a
party, the borrowings hereunder, the execution and delivery by each other Loan
Party of each Loan Document to which it is a party and the performance by
Parent, the Company and each other Loan Party of its obligations under each Loan
Document to which it is a party are within the corporate powers of Parent, the
Company and each other Loan Party, have been duly authorized by all necessary
corporate action (including any necessary shareholder action) on the part of
Parent, the Company and each other Loan Party, have received all necessary
governmental approval (if any shall be required), and do not and will not (a)
violate any provision of law or any order, decree or judgment of any court or
other government agency which is binding on Parent, the Company, any other Loan
Party or any other Subsidiary, (b) contravene or conflict with, or result in a
breach of, any provision of the Certificate or Articles of Incorporation, By-
Laws or other organizational documents of Parent, the Company, any other Loan
Party or any other Subsidiary or of any agreement, indenture, instrument or
other document which is binding on Parent, the Company, any other Loan Party or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of Parent, the Company, any other Loan Party or any
other Subsidiary (other than Liens arising under the Loan Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and each Loan Document to which any other Loan Party is a party is,
or upon the execution and delivery thereof by such Loan Party will be, the
legal, valid and binding obligation of such Loan Party, enforceable against such
Loan Party in accordance with its terms.
9.4 Information. All information heretofore or contemporaneously
herewith furnished in writing by Parent or any Subsidiary to any Lender for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of Parent or any Subsidiary to any Lender pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Lenders that any
projections and forecasts provided by Parent or any
27
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, 1998 and the unaudited consolidated financial
statements of the Company and its Subsidiaries at March 31, 1999, copies of each
of which have been delivered to each Lender, have been prepared in accordance
with generally accepted accounting principles (subject, in the case of the
unaudited statements, to the absence of footnotes and to normal year-end
adjustments) and present fairly the consolidated financial condition of the
Company and its Subsidiaries taken as a whole as at such dates and the results
of their operations for the periods then ended.
(b) Since December 31, 1998, there has been no material adverse change
in the financial condition, operations, assets, business, properties or
prospects of the Company and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities.
(a) No litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation or proceeding is
pending or, to Parent's knowledge, threatened against Parent or any Subsidiary
which might reasonably be expected to have a Material Adverse Effect, except as
set forth in Schedule 9.6(a). Other than any liability incident to such
litigation or proceedings, neither Parent nor any Subsidiary has any material
contingent liabilities not listed in Schedule 9.6(a) or 9.6(b).
(b) Schedule 9.6(b) sets out descriptions of all arrangements existing
on the Closing Date pursuant to which the Company or any Subsidiary may be
required to pay any Contingent Payment.
9.7 Ownership of Properties; Liens. Except as set forth on Schedule
9.7, each of Parent and each Subsidiary owns good and marketable title to all of
its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and material claims (including
material infringement claims with respect to patents, trademarks, copyrights and
the like) except as permitted pursuant to Section 10.8.
9.8 Subsidiaries. As of the Closing Date, the Company has no
Subsidiaries except those listed in Schedule 9.8.
28
9.9 Pension and Welfare Plans.
(a) During the twelve-consecutive-month period prior to the date of the
execution and delivery of this Agreement, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by Parent of
any material liability, fine or penalty. Parent has no contingent liability with
respect to any post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Subtitle B of Title I
of ERISA.
(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by Parent or any other member of the
Controlled Group under the terms of such Multiemployer Pension Plan or of any
collective bargaining agreement or by applicable law; neither Parent nor any
member of the Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Pension Plan, incurred any withdrawal liability with respect to
any Multiemployer Pension Plan, or received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any Multiemployer
Pension Plan, and no condition has occurred which, if continued, might result in
a withdrawal or partial withdrawal from any Multiemployer Pension Plan; and
neither Parent nor any member of the Controlled Group has received any notice
that any Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any Multiemployer Pension Plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
Multiemployer Pension Plan is or may be terminated, or that any Multiemployer
Pension Plan is or may become insolvent.
(c) All contributions required under applicable law have been made in
respect of all pension plans of UR Canada and each of its Subsidiaries and each
such pension plan is fully funded on an ongoing and termination basis.
9.10 Investment Company Act. Neither Parent nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither Parent nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of purchasing or carrying Margin Stock
or extending credit for the purpose of purchasing or carrying Margin Stock.
29
9.13 Taxes. Each of Parent and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
9.14 Solvency, etc. On the Closing Date (or, in the case of any Person
which becomes a Loan Party after the Closing Date, on the date such Person
becomes a Loan Party), (a) each of the Company's and each other Loan Party's
assets will exceed its liabilities and (b) each of the Company and each other
Loan Party will be solvent, will be able to pay its debts as they mature, will
own property with fair saleable value greater than the amount required to pay
its debts and will have capital sufficient to carry on its business as then
constituted.
9.15 Environmental Matters. Parent conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof Parent has reasonably concluded that, except as specifically disclosed
in Schedule 9.15, such Environmental Laws and Environmental Claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.16 Year 2000 Problem. Parent and its Subsidiaries have reviewed the
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by Parent
and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, Parent reasonably believes
that the "Year 2000 Problem" will not have a Material Adverse Effect.
9.17 Senior Debt. The obligations of the Company hereunder constitute
"Senior Indebtedness" as such term is defined in each Subordinated Note
Indenture.
SECTION 10 COVENANTS.
Until all obligations of the Company hereunder or in connection
herewith are paid in full, Parent agrees that, unless at any time the Required
Lenders shall otherwise expressly consent in writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent
and each Lender:
10.1.1 Audit Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of Parent and its Subsidiaries for such Fiscal Year, including therein a
consolidated balance sheet of Parent and its Subsidiaries as of the end of such
Fiscal Year and consolidated statements of earnings and cash flow of Parent and
its Subsidiaries for
30
such Fiscal Year certified without qualification by Ernst & Young or other
independent auditors of recognized standing selected by Parent and reasonably
acceptable to the Required Lenders, together with a written statement from such
accountants to the effect that in making the examination necessary for the
signing of such annual audit report by such accountants, they have not become
aware of any Event of Default or Unmatured Event of Default that has occurred
and is continuing or, if they have become aware of any such event, describing it
in reasonable detail; (b) consolidating balance sheets of Parent and its
Subsidiaries as of the end of such Fiscal Year and consolidating statements of
earnings for Parent and its Subsidiaries for such Fiscal Year, certified by the
Chief Financial Officer or the Vice President, Finance of Parent; and (c)
commencing with Fiscal Year 1999, a copy of an annual agreed-upon procedures
report on the equipment fleet of the Company and its Subsidiaries for such
Fiscal Year as performed by the Company's independent auditors.
10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, a consolidated balance sheet of Parent and its
Subsidiaries as of the end of such Fiscal Quarter, together with consolidated
statements of earnings and cash flow for such Fiscal Quarter and for the period
beginning with the first day of such Fiscal Year and ending on the last day of
such Fiscal Quarter, certified by the Chief Financial Officer or the Vice
President, Finance of Parent.
10.1.3 Compliance Certificates. Contemporaneously with the furnishing
of a copy of each annual audit report pursuant to Section 10.1.1 and of each set
of quarterly statements pursuant to Section 10.1.2, (a) a duly completed
compliance certificate in the form of Exhibit B, with appropriate insertions,
dated the date of such annual report or such quarterly statements and signed by
the Chief Financial Officer or the Vice President, Finance of Parent, containing
a computation of each of the financial ratios and restrictions set forth in
Section 10.6 and to the effect that such officer has not become aware of any
Event of Default or Unmatured Event of Default that has occurred and is
continuing or, if there is any such event, describing it and the steps, if any,
being taken to cure it; and (b) an updated organizational chart listing all
Subsidiaries and the locations of their businesses.
10.1.4 Reports to SEC and to Shareholders. Promptly upon the filing or
sending thereof, copies of all regular, periodic or special reports of Parent or
any Subsidiary filed with the SEC (excluding exhibits thereto, provided that
Parent shall promptly deliver any such exhibit to the Agent or any Lender upon
request therefor); copies of all registration statements of Parent or any
Subsidiary filed with the SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally concerning
material developments in the business of Parent or any Subsidiary.
10.1.5 Notice of Default, Litigation and ERISA Matters. Immediately
upon becoming aware of any of the following, written notice describing the same
and the steps being taken by Parent or the Subsidiary affected thereby with
respect thereto:
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(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 or has been funded at a rate less than that
required under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent;
(d) any cancellation (without replacement) or material change
in any insurance maintained by Parent or any Subsidiary;
(e) any event (including any violation of any Environmental
Law or the assertion of any Environmental Claim) which might reasonably
be expected to have a Material Adverse Effect; or
(f) any setoff, claims (including Environmental Claims),
withholdings or other defenses to which any of the collateral granted
under any Collateral Document, or the Lenders' rights with respect to
any such collateral, are subject.
10.1.6 Subsidiaries. Promptly upon any change in the list of its
Subsidiaries, a written report of such change.
10.1.7 Management Reports. Promptly upon the request of the Agent or
any Lender, copies of all detailed financial and management reports submitted to
Parent by independent auditors in connection with each annual or interim audit
made by such auditors of the books of Parent.
32
10.1.8 Projections. As soon as practicable and in any event within 60
days after the commencement of each Fiscal Year, financial projections for
Parent and its Subsidiaries for such Fiscal Year prepared in a manner consistent
with those projections delivered by the Company to the Lenders prior to the
Closing Date or otherwise in a manner satisfactory to the Agent.
10.1.9 Other Information. From time to time such other information
concerning Parent and its Subsidiaries as any Lender or the Agent may reasonably
request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Lender or the Agent or
any representative thereof to inspect the properties and operations of Parent
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Lender or the Agent or any representative thereof
to visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and Parent hereby authorizes such
independent auditors to discuss such financial matters with any Lender or the
Agent or any representative thereof whether or not any representative of Parent
or any Subsidiary is present), and to examine (and, at the expense of Parent or
the applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon request of the
Agent or any Lender, furnish to the Agent or such Lender a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by
Parent and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
Comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
shall not require Parent or any Subsidiary to pay any such tax or charge so long
as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
to Section 10.11) cause each Subsidiary to maintain and preserve, (a) its
existence and good standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each jurisdiction
33
where the nature of its business makes such qualification necessary (except in
those instances in which the failure to be qualified or in good standing does
not have a Material Adverse Effect).
10.6 Financial Covenants.
10.6.1 Maximum Leverage. Not permit the ratio of (i) Funded Debt to
(ii) Funded Debt plus Net Worth to exceed 0.65 to 1.0 at any time.
10.6.2 Minimum Interest Coverage Ratio. Not permit the Interest
Coverage Ratio for any Computation Period to be less than the applicable ratio
set forth below:
Computation Interest
Period Ending: Coverage Ratio
Prior to 12/31/99 1.75 to 1.0
3/31/00 and thereafter 2.00 to 1.0.
10.6.3 Funded Debt to Cash Flow Ratio. Not permit the Funded Debt to
Cash Flow Ratio as of the last day of any Fiscal Quarter to exceed 4.5 to 1.0.
10.6.4 Senior Debt to Tangible Assets. Not permit the ratio of (i)
Senior Debt to (ii) the sum of Tangible Assets plus the outstanding amount of
accounts receivable, lease receivables and other payment obligations which are
not included on Parent's consolidated balance sheet but would be so included if
not sold pursuant to a Securitization Transaction to exceed 1.0 to 1.0 at any
time.
10.6.5 Senior Debt to Cash Flow Ratio. Not permit the ratio of (i)
Senior Debt to (ii) Cash Flow as of the last day of any Fiscal Quarter to exceed
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
Credit Agreement, under the Existing Loan Agreement and under the other
"Loan Documents" as defined in each of the Credit Agreement and the
Existing Loan Agreement;
(b) unsecured Debt of Parent, the Company and Subsidiaries of the
Company (excluding Contingent Payments and Seller Subordinated Debt);
provided that no Subsidiary shall incur any such Debt if, after giving
effect thereto, the aggregate amount of all then-outstanding Debt of
Subsidiaries of the Company permitted solely by this clause (b) would
exceed 10% of Net Worth;
34
(c) Debt of Parent or any Subsidiary in respect of Capital Leases or
arising in connection with the acquisition of equipment (including Debt
assumed in connection with an asset purchase permitted by Section
10.11, or incurred pursuant to a Capital Lease or in connection with
the acquisition of equipment by a Person before it became a Subsidiary
in connection with a stock purchase permitted by Section 10.11, in each
case so long as such Debt is not incurred in contemplation of such
purchase), and refinancings of any such Debt so long as the terms
applicable to such refinanced Debt are no less favorable to Parent or
the applicable Subsidiary than the terms in effect immediately prior to
such refinancing, provided that the aggregate amount of all such Debt
at any time outstanding shall not exceed a Dollar Equivalent amount
equal to U.S.$150,000,000;
(d) Debt of Subsidiaries owed to the Company or Parent; provided that
the aggregate amount of all such Debt of Foreign Subsidiaries owed to
the Company and Parent shall not at any time exceed 15% of the
consolidated assets of Parent and its Subsidiaries;
(e) unsecured Debt of the Company to Subsidiaries of the Company, of
Parent to the Company and Subsidiaries of the Company and of any
Special Purpose Vehicle to any Subsidiary of the Company;
(f) Subordinated Debt; provided that (i) the aggregate principal amount
of all Seller Subordinated Debt at any time outstanding shall not
exceed a Dollar Equivalent amount of U.S.$50,000,000 and (ii) the
Company shall not issue or incur any Debt described in clause (f) of
the definition of Subordinated Debt (x) at any time that an Event of
Default or Unmatured Event of Default exists or would result therefrom
and (y) unless the Company has delivered to the Agent (which shall
promptly deliver a copy thereof to each Lender) a certificate in
reasonable detail demonstrating that, after giving effect to such
issuance or incurrence, Parent will be in pro forma compliance with all
financial covenants set forth in this Section 10;
(g) other Debt of the Company or any Subsidiary, not of a type
described in clause (c), outstanding on the date hereof and listed in
Schedule 10.7(g);
(h) Contingent Payments, provided that Parent shall not, and shall not
permit any Subsidiary to, incur any obligation to make Contingent
Payments the maximum possible amount of which exceeds a Dollar
Equivalent amount of U.S.$50,000,000 in the aggregate for all
Contingent Payments at any time outstanding;
(i) the QuIPS Debentures, the QuIPS Preferred Securities and the QuIPS
Guarantees;
(j) Permitted Senior Secured Debt and guarantees thereof, provided that
the sum of the principal of all Loans plus the aggregate principal
amount of all Permitted Senior Secured Debt shall not at any time
exceed U.S.$750,000,000;
35
(k) Guarantees by Parent of the obligations of the Company or any
Subsidiary; provided that any such guaranty of Debt is subordinated to
the obligations of Parent under the Parent Guaranty at least to the
extent set forth in Exhibit G or otherwise in a manner reasonably
satisfactory to the Required Lenders;
(l) unsecured recourse obligations of Parent or any Subsidiary in
respect of Vendor Financing Arrangements;
(m) Hedging Obligations incurred for purposes of protection from price,
interest rate or currency fluctuations posed by bona fide debt,
contract or purchase order obligations or from changes in the price of
Parent's stock; and
(n) Debt in connection with Securitization Transactions; provided that
the aggregate principal amount of all such Debt shall not at any time
exceed U.S.$150,000,000.
For purposes of clause (h) above, a Contingent Payment shall be deemed
to be "outstanding" from the time that Parent or any Subsidiary enters into the
agreement containing the obligation to make such Contingent Payment until such
time as either such Contingent Payment has been made in full or it has become
certain that such Contingent Payment will never have to be made.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and, in each case, for which it
maintains adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens
of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of
social security (excluding Liens arising under ERISA) or in connection
with surety bonds, bids, performance bonds and similar obligations) for
sums not overdue or being contested in good faith by appropriate
proceedings and not involving any deposits or advances or borrowed
money or the deferred purchase price of property or services, and, in
each case, for which it maintains adequate reserves;
(c) Liens identified in Schedule 10.8;
(d) Liens securing Debt permitted by clause (c) of Section 10.7 (and
attaching only to the property being leased (in the case of Capital
Leases) or the purchase price for which was or is
36
being financed by such Debt (in the case of other Debt) and the
proceeds (including insurance proceeds) of any disposition or loss of
such property);
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding a Dollar Equivalent amount of U.S.$1,000,000 arising
in connection with court proceedings, provided the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the
Company or any Subsidiary;
(g) Liens in favor of the Collateral Agent arising under the Loan
Documents and Liens securing Debt permitted by clauses (a) and (j) of
Section 10.7; and
(h) Liens arising in connection with Securitization Transactions;
provided that the aggregate investment or claim held at any time by all
purchasers, assignees or other transferees of (or of interests in)
accounts receivable, lease receivables and other rights to payment in
all Securitization Transactions shall not exceed $150,000,000.
10.9 Asset Sales. Not make, or permit any Subsidiary to make, any sale
or other disposition of assets which would require the Company to make, or offer
to make, or give any notice of, any prepayment of Subordinated Debt (other than
Seller Subordinated Debt).
10.10 Restricted Payments. Not, and not permit any Subsidiary to, (a)
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt, (e) make any payment of principal of or interest on, or
acquire, redeem or otherwise retire, or make any other distribution in respect
of, any of the QuIPS Debentures or the QuIPS Preferred Securities or (f) set
aside funds for any of the foregoing; provided that (i) any Subsidiary of the
Company may declare and pay dividends to the Company or to any other wholly-
owned Subsidiary of the Company; (ii) the Company may declare and pay dividends
to Parent to the extent necessary to enable Parent to pay the taxes and
accounting, legal, payroll, benefits and corporate overhead expenses (including
all SEC and stock exchange fees and expenses) of Parent, any Acquisition
Subsidiary, the QuIPS Trust and any Special Purpose Vehicle and payables
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 Indenture and (B) the Company may declare and pay dividends to Parent
37
in the amount necessary for Parent to make such payments; (v) so long as no
Event of Default or Unmatured Event of Default exists or would result therefrom,
the Company may declare and pay dividends to Parent in the amount necessary for
Parent to consummate any acquisition permitted by Section 10.11 (provided that
Parent shall immediately use the proceeds of such dividend to make such
acquisition) or to make distributions permitted by clause (vi); and (vi) so long
as (x) no Event of Default or Unmatured Event of Default exists or would result
therefrom and (y) the aggregate amount of all purchases of stock, warrants or
units made by Parent (or, prior to August 5, 1998, the Company) since October 1,
1997 does not exceed U.S.$12,000,000, Parent may purchase its common stock or
warrants, or units issued in respect thereof, from time to time on terms
consistent with those set forth under the heading "Certain Agreements Relating
to the Outstanding Securities" in the Company's Private Placement Memorandum
dated September 12, 1997. Nothing in this Section 10.10 shall prohibit Parent
from permitting the cashless exercise of any options or warrants for stock of
Parent.
10.11 Mergers, Consolidations, Amalgamations, Sales. Not, and not
permit any Subsidiary to, be a party to any merger, consolidation or
amalgamation, or purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, or, except in the ordinary course of its business
(including sales 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 Parent, an Acquisition Subsidiary, the Company or any wholly-owned
Subsidiary of the Company of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in the equipment rental and
related businesses; (2) immediately before and after giving effect to such
purchase or acquisition, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (3) the board of directors of such Person has
not announced that it will oppose such acquisition and has not commenced any
litigation which alleges that such acquisition violates or will violate any
requirement of law or any contractual obligation of such Person; and (4) in the
case of any such purchase or other acquisition by Parent or any Acquisition
Subsidiary, Parent immediately contributes the acquired stock or assets to the
Company or merges the acquired company or the Acquisition Subsidiary into the
Company or with or into any wholly-owned Subsidiary of the Company; (d) the
sale, assignment or other transfer of accounts receivable, lease receivables or
other rights to payment pursuant to any Securitization Transaction; provided
that the aggregate investment or claim held at any time by all purchasers,
assignees or other transferees of (or of interests in) such receivables or other
rights to payment shall not exceed $150,000,000; and (e) sales and dispositions
of assets (including the stock of Subsidiaries), in addition to sales and other
dispositions permitted by clause (d), so long as the net book value of all
38
assets sold or otherwise disposed of in any Fiscal Year does not exceed 5% of
the net book value of the consolidated assets of Parent and its Subsidiaries as
of the last day of the preceding Fiscal Year.
10.12 Modification of Certain Documents. Not permit the Certificate or
Articles of Incorporation, By-Laws or other organizational documents of Parent
or any Subsidiary, or any Subordinated Note Indenture or any other document
evidencing or setting forth the terms applicable to any Subordinated Debt, to be
amended or modified in any way which might reasonably be expected to materially
adversely affect the interests of the Lenders.
10.13 Use of Proceeds. Use the proceeds of the Loans solely to finance
the Company's working capital, for acquisitions permitted by Section 10.11, for
capital expenditures and for other general corporate purposes (including
repayment of existing Debt); and not use or permit any proceeds of any Loan to
be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying" any Margin Stock.
10.14 Further Assurances. Take, and cause each Subsidiary to take, such
actions as are necessary or as the Agent or the Required Lenders may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets (other than real property and the Company's interest in any Special
Purpose Vehicle) of the Company and guaranteed by Parent by execution of the
Parent Guaranty and by all of the U.S. Subsidiaries (including, promptly upon
the acquisition or creation thereof, any U.S. Subsidiary acquired or created
after the date hereof) by execution of a counterpart of the U.S. Guaranty
(provided that neither the QuIPS Trust nor any Special Purpose Vehicle shall
have any obligation to execute the U.S. Guaranty), (ii) the obligations of
Parent under the Parent Guaranty are secured by substantially all of the assets
of Parent (other than Parent's interest in the QuIPS Trust or any Special
Purpose Vehicle), and (iii) the obligations of each U.S. Subsidiary (other than
the QuIPS Trust and any Special Purpose Vehicle) under the U.S. Guaranty are
secured by substantially all of the assets (other than real property and such
U.S. Subsidiary's interest in any Special Purpose Vehicle) of such U.S.
Subsidiary. In addition, upon the occurrence of any Event of Default or
Unmatured Event of Default and the request of Lenders having Percentages
aggregating 80% or more, the Company will cause each Canadian Subsidiary to
guaranty all of the obligations of the Company hereunder and to take all actions
necessary so that the obligations of such Canadian Subsidiary under such
guaranty are secured by substantially all of the assets (other than real
property) of such Canadian Subsidiary (it being understood that, at the request
of the Company at any time thereafter when no Event of Default or Unmatured
Event of Default exists, such guaranties and collateral security shall be
released).
10.15 Transactions with Affiliates. Not, and not permit any Subsidiary
to, enter into, or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates (other
39
than Parent, the Company and Subsidiaries of the Company) which is on terms
which are less favorable than are obtainable from any Person which is not one of
its Affiliates; provided that Parent may enter into transactions with
Acquisition Subsidiaries or the QuIPS Trust, and Parent or any Subsidiary may
enter into transactions with any Special Purpose Vehicle in connection with any
Securitization Transaction, to the extent permitted by the terms of this
Agreement.
10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan and each Canadian pension plan in substantial
compliance with all applicable requirements of law and regulations.
10.17 Environmental Laws. Conduct, and cause each Subsidiary to
conduct, its operations and keep and maintain its property in compliance with
all Environmental Laws (other than Immaterial Laws).
10.18 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit Parent or any Subsidiary from entering into options
for the purchase of particular assets or businesses.
10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by the performance by Parent or any Subsidiary of any of its
obligations hereunder or under any other Loan Document or (b) would prohibit
Parent, the Company or any Subsidiary of the Company (other than any Special
Purpose Vehicle) from granting to the Collateral Agent, for the benefit of the
Lenders, a Lien on any of its assets.
10.20 Business Activities. Not, and not permit any Subsidiary (other
than the QuIPS Trust and any Special Purpose Vehicle) to, engage in any line of
business other than the equipment rental business and businesses reasonably
related thereto.
10.21 Advances and Other Investments. Not, and not permit any
Subsidiary to, make, incur, assume or suffer to exist any Investment in any
other Person, except (without duplication) the following:
(a) equity Investments existing on the Closing Date in wholly-owned
Subsidiaries of the Company identified in Schedule 9.8;
(b) equity Investments in Subsidiaries of the Company acquired after
the Closing Date in transactions permitted as acquisitions of stock or
assets pursuant to Section 10.11;
40
(c) in the ordinary course of business, contributions by the Company
to the capital of any of its Subsidiaries, or by any such Subsidiary to
the capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in
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, in Subsidiaries of the
Company and, subject to the provisions of Section 10.11, in Acquisition
Subsidiaries;
(i) other Investments by Parent permitted by Section 10.23;
(j) Cash Equivalent Investments; and
(k) Investments by Parent or any Subsidiary in any Special Purpose
Vehicle; provided that the aggregate amount of all such Investments
made in cash shall not exceed $5,000,000;
provided that (x) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (b),
(c), (d), (e), (f), (g) or (k) shall be permitted to be made if, immediately
before or after giving effect thereto, any Event of Default or Unmatured
Event of Default shall have occurred and be continuing; and (z) the aggregate
principal amount of Investments by the Company in Foreign Subsidiaries pursuant
to clauses (b), (c), (d), (e), and (f) plus, without duplication, the aggregate
amount of all "Canadian Loans" under and as defined in the Credit Agreement
shall not at any time exceed 15% of the consolidated assets of Parent and its
Subsidiaries.
10.22 Location of Assets. Not permit at any time more than 15% of the
consolidated assets of Parent and its Subsidiaries to be owned by Foreign
Subsidiaries.
10.23 Activities of Parent. Not engage in any business other than
ownership of the Company, Acquisition Subsidiaries, the QuIPS Trust and any
Special Purpose Vehicle and activities reasonably
41
related thereto (including the incurrence of Debt permitted by Section 10.7, the
incurrence of unsecured trade obligations in respect of goods to be delivered to
and properties to be used by, and services (including management and consulting
services) to be performed for the benefit of, and unsecured lease obligations
incurred for the benefit of, Subsidiaries and the incurrence of payroll and
benefit expenses). Without limiting the foregoing, Parent will not (a) incur any
Debt other than the QuIPS Debentures, the QuIPS Preferred Securities, the Parent
Guaranty, the QuIPS Guarantees, Debt permitted by Section 10.7 and guarantees of
the obligations of the Company or any other Subsidiary (provided that any such
guaranty of Debt is subordinated to the obligations of Parent under the Parent
Guaranty at least to the extent set forth in Exhibit G or otherwise in a manner
reasonably satisfactory to the Required Lenders), (b) make any Investments other
than (i) Investments in the Company and its Subsidiaries, (ii) Investments in
Acquisition Subsidiaries, (iii) Investments in the QuIPS Trust existing on the
date hereof and (iv) Investments in any Special Purpose Vehicle, (c) grant any
Liens on any of its assets (other than pursuant to the U.S. Security Agreement
or as expressly permitted under this Agreement) or (d) permit any amendment to
or modification of the QuIPS Debentures, the QuIPS Preferred Securities or the
QuIPS Indenture which, in any such case, is adverse to the interests of the
Lenders.
SECTION 11 CONDITIONS OF LENDING.
11.1 Initial Loans. The obligation of the Lenders to make the initial
Loans is (in addition to the conditions precedent set forth in Section 11.3)
subject to the conditions precedent that the Agent shall have received (a) all
amounts which are then due and payable pursuant to Section 5 and (to the extent
billed) Section 14.6 and (b) all of the following, each duly executed and dated
the Closing Date (or such earlier date as shall be satisfactory to the Agent),
in form and substance satisfactory to the Agent, and each (except for the Notes,
of which only the originals shall be signed) in sufficient number of signed
counterparts to provide one for each Lender:
11.1.1 Notes. A Note for each Lender which is a party hereto on the
Closing Date.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of each of Parent and the Company authorizing or ratifying the
execution, delivery and performance by such entity of this Agreement and, in the
case of the Company, the Notes.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by Parent and the Company
of the documents referred to in this Section 11, as applicable.
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of each of Parent and the Company certifying
the names of the officer or officers of such entity authorized to sign this
Agreement and, in the case of the Company, the Notes, together with a sample of
the true signature of each such officer (it being understood that the Agent and
each Lender
42
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).
11.1.5 Opinions of Counsel for the Company. The opinions of (a) Weil,
Gotshal & ▇▇▇▇▇▇ LLP, special counsel to Parent and the Company, and (b) ▇▇▇▇▇
▇. ▇▇▇▇▇▇, counsel to Parent and the Company.
11.1.6 Second Amendment to Credit Agreement. A Second Amendment to the
Credit Agreement in form and substance satisfactory to the Agent, executed by
Parent, the Company and the "Required Banks" as defined in the Credit Agreement.
11.1.7 Second Amendment to Existing Loan Agreement. A Second Amendment
to the Existing Loan Agreement in form and substance satisfactory to the Agent,
executed by Parent, the Company and the "Required Lenders" as defined in the
Existing Loan Agreement.
11.1.8 Confirmation. A Confirmation, substantially in the form of
Exhibit N, signed by Parent, the Company and each other Loan Party confirming
the effectiveness of the U.S. Guaranty, the Parent Guaranty and each Collateral
Document and that the Agent and the Lenders are entitled to the benefits of such
documents.
11.1.9 Confirmatory Certificate. A certificate of a duly-authorized
officer of Parent as to the matters set forth in Section 11.3.
11.1.10 Other. Such other documents as the Agent or any Lender may
reasonably request.
11.2 Additional Loans. The right of the Company to borrow any
Additional Loan is (in addition to the conditions precedent set forth in Section
11.3) subject to the conditions precedent that the Agent shall have received all
of the following, each duly executed and dated the date of such Additional Loans
(or such earlier date as shall be satisfactory to the Agent), in form and
substance satisfactory to the Agent, and each (except for any Note, of which
only the original shall be signed) in sufficient number of signed counterparts
to provide one for each Lender which is increasing the amount of its Loan or
becoming a party hereto:
11.2.1 Notes. A Note for each new Lender and a replacement Note for
each existing Lender which is making an Additional Loan.
11.2.2 Confirmatory Certificate. A certificate of a duly-authorized
officer of Parent as to the matters set forth in Section 11.3.
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11.2.3 Other. Such other documents as the Agent or any Lender may
reasonably request (including copies or updates of any of the documents referred
to in Section 11.1.2, 11.1.3, 11.1.4, 11.1.5, or 11.1.8).
11.3 All Loans. The obligation of the Lenders to make the initial Loans
and the right of the Company to borrow any Additional Loans is (in addition to
the conditions precedent set forth in Section 11.1.1 or 11.1.2, as applicable)
subject to the conditions precedent that (a) the representations and warranties
of Parent, the Company and each other Subsidiary set forth in this Agreement and
the other Loan Documents shall be true and correct in all material respects with
the same effect as if then made; and (b) no Event of Default or Unmatured Event
of Default shall have then occurred and be continuing.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
of Default:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due
of the principal of any Loan; or default, and continuance thereof for five days,
in the payment when due of any interest or other amount payable by the Company
hereunder or under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of Parent or any Subsidiary (excluding Holdbacks)
in an aggregate amount (for all such Debt so affected) exceeding a Dollar
Equivalent amount of U.S.$15,000,000 and such default shall (a) consist of the
failure to pay such Debt when due (subject to any applicable grace period),
whether by acceleration or otherwise, or (b) accelerate the maturity of such
Debt or permit the holder or holders thereof, or any trustee or agent for such
holder or holders, to cause such Debt to become due and payable prior to its
expressed maturity; or any default of the type referred to in clause (a) or (b)
above shall occur under the terms of any Holdback owed by Parent or any
Subsidiary in an aggregate amount (for all Holdbacks so affected) exceeding a
Dollar Equivalent amount of U.S.$15,000,000, provided that no amount payable in
respect of any Holdback shall be deemed to be in default to the extent that the
obligation to pay such amount is being contested by Parent or the applicable
Subsidiary in good faith and by appropriate proceedings and appropriate reserves
have been set aside in respect of such amount; or any event of default, default,
liquidation event or similar event shall occur or exist relating to any
Securitization Transaction if the effect of such event is to cause or permit
(subject to any applicable grace period) an aggregate cash amount exceeding a
Dollar Equivalent amount of U.S. $15,000,000 to become immediately due and
payable by Parent or any Subsidiary under such Securitization Transaction.
12.1.3 Other Material Obligations. Default in the payment when due, or
in the performance or observance of, any material obligation of, or condition
agreed to by, Parent or any Subsidiary with respect to any material purchase or
lease of goods or services where such default, singly or in the
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aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by Parent or such Subsidiary in good faith and
by appropriate proceedings and appropriate reserves have been made in respect of
such default).
12.1.4 Bankruptcy, Insolvency, etc. Parent or any Subsidiary becomes
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or Parent or any Subsidiary applies
for, consents to, or acquiesces in the appointment of a trustee, receiver or
other custodian for Parent or such Subsidiary or any property thereof, or makes
a general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for Parent or any Subsidiary or for a substantial part of the property
of any thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding
(except the voluntary dissolution, not under any bankruptcy or insolvency law,
of any Subsidiary of the Company), is commenced in respect of Parent or any
Subsidiary, and if such case or proceeding is not commenced by Parent or such
Subsidiary, an order for relief is entered, it is consented to or acquiesced in
by Parent or such Subsidiary, or remains for 60 days undismissed; or Parent or
any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by
Parent to comply with or to perform any covenant set forth in Sections 10.5
through 10.13, 10.15 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 or any Lender.
12.1.6 Warranties. Any warranty made or deemed made by the Company
herein is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by Parent or the Company to the Agent or any Lender in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are (or are deemed) stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by Parent or any
other Person to terminate a Pension Plan if as a result of such termination
Parent could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of
U.S.$15,000,000; (ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; or (iii)
there shall occur any withdrawal or partial withdrawal from a Multiemployer
Pension Plan and the withdrawal liability (without unaccrued interest) to
Multiemployer Pension Plans as a result of such withdrawal (including any
outstanding withdrawal
45
liability that Parent and the Controlled Group have incurred on the date of such
withdrawal) exceeds U.S.$15,000,000.
12.1.8 Judgments. Final judgments which exceed an aggregate Dollar
Equivalent amount of U.S.$15,000,000 shall be rendered against Parent or any
Subsidiary and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 30 days after entry or filing of such
judgments.
12.1.9 Invalidity of U.S. Guaranty, etc. The U.S. Guaranty shall cease
to be in full force and effect with respect to any applicable Subsidiary, any
applicable Subsidiary shall fail (subject to any applicable grace period) to
comply with or to perform any applicable provision of the U.S. Guaranty, or any
applicable Subsidiary (or any Person by, through or on behalf of such
Subsidiary) shall contest in any manner the validity, binding nature or
enforceability of the U.S. Guaranty with respect to such Subsidiary.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral
Document shall cease to be in full force and effect with respect to Parent, the
Company or any applicable Subsidiary, Parent, the Company or any applicable
Subsidiary shall fail (subject to any applicable grace period) to comply with or
to perform any applicable provision of any Collateral Document to which such
entity is a party, or Parent, the Company or any applicable Subsidiary (or any
Person by, through or on behalf of Parent, the Company or such Subsidiary) shall
contest in any manner the validity, binding nature or enforceability of any
Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Exchange Act, but excluding Permitted
Holders) shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of the outstanding shares of
common stock of Parent; (b) during any 24-month period, individuals who at the
beginning of such period constituted Parent's Board of Directors (together with
any new directors whose election by Parent's Board of Directors or whose
nomination for election by Parent's shareholders was approved by a vote of at
least two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of Parent; (c) a
period of 30 consecutive days shall have elapsed during which any two of the
individuals named in Schedule 12.1.11 shall have ceased to hold executive
offices with Parent at least equal in seniority to their present offices, as set
out in such Schedule 12.1.11, excluding any such individual who has been
replaced by another individual or individuals reasonably satisfactory to the
Required Lenders (it being understood that any such replacement individual shall
be deemed added to Schedule 12.1.11 on the date of approval thereof by the
Required Lenders); (d) any "Change of Control" shall occur under, and as defined
in, any Subordinated Note Indenture; or (e) the Company shall cease to be a
direct, wholly-owned Subsidiary of Parent.
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12.1.12 Invalidity of Parent Guaranty, etc. The Parent Guaranty shall
cease to be in full force and effect, Parent shall fail (subject to any
applicable grace period) to comply with or to perform any provision of the
Parent Guaranty, or Parent (or any Person by, through or on behalf of Parent)
shall contest in any manner the validity, binding nature or enforceability of
the Parent Guaranty.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Notes and all other obligations hereunder shall
become immediately due and payable, all without presentment, demand, protest or
notice of any kind; and, if any other Event of Default shall occur and be
continuing, the Agent (upon written request of the Required Lenders) shall
declare all Notes and all other obligations hereunder to be due and payable,
whereupon the Notes and all other obligations hereunder shall become immediately
due and payable, all without presentment, demand, protest or notice of any kind.
The Agent shall promptly advise the Company of any such declaration, but failure
to do so shall not impair the effect of such declaration. Notwithstanding the
foregoing, the effect as an Event of Default of any event described in Section
12.1.1 or Section 12.1.4 may be waived by the written concurrence of all of the
Lenders, and the effect as an Event of Default of any other event described in
this Section 12 may be waived by the written concurrence of the Required
Lenders.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. Each Lender hereby irrevocably
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
13.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate,
47
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates.
13.4 Reliance by Agents. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders (or, if required, all Lenders) as
it deems appropriate and, if it so requests, confirmation from the Lenders of
their obligation to indemnify the Agent against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders (or, if required,
all Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest or
fees required to be paid to the Agent for the account of the Lenders, unless the
Agent shall have received written notice from a Lender or the Company referring
to this Agreement, describing such Event of Default or Unmatured Event of
Default and stating that such notice is a "notice of default." If the Agent
receives such a notice, the Agent will promptly notify the Lenders of its
receipt thereof. The Agent shall take such action with respect to such Event of
Default or Unmatured Event of Default as may be requested by the Required
Lenders (or, if required, all Lenders) in accordance with Section 12; provided,
however, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Lenders.
13.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereafter taken, including any review of the affairs of the
Company or any Subsidiary or Affiliate of the Company, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender
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represents to the Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Company or any Subsidiary or Affiliate of the Company,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Company hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial or other condition or creditworthiness of the Company or any
Subsidiary or Affiliate of the Company which may come into the possession of any
of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for any payment to any Agent-Related Person of any
portion of the Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing (but
subject to the proviso to the foregoing sentence), each Lender shall reimburse
the Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including reasonable fees of attorneys for the Agent (including the
allocable costs of internal legal services and all disbursements of internal
counsel)) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive repayment of the Loans,
cancellation of the Notes, any foreclosure under, or any modification, release
or discharge of, any or all of the Collateral Documents, any termination of this
Agreement and the resignation or replacement of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities" shall
mean: any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or the replacement of any Lender) be imposed on, incurred by or asserted
49
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or any other Loan Document, whether or not
any Agent-Related Person, any Lender or any of their respective officers,
directors, employees, counsel, agents or attorneys-in-fact is a party thereto.
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, and without
notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to
such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Affiliate) and
acknowledge that BofA and its Affiliates shall be under no obligation to provide
such information to them. With respect to its Loans (if any), BofA and its
Affiliates shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though BofA were not the Agent, and
the term "Lender" includes BofA and its Affiliates, to the extent applicable, in
their individual capacities.
13.9 Successor Agent; Assignment of Agency. The Agent may, and at the
request of the Required Lenders shall, resign as Agent upon 30 days' notice to
the Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall, with (so long as no Event of Default exists) the consent of the Company
(which shall not be unreasonably withheld or delayed), appoint from among the
Lenders a successor Agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Company, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent, and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 13 and Sections 14.6 and 14.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement. If no successor agent has accepted appointment as
the Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.
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13.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of, U.S. withholding tax under Section 1441 or
1442 of the Code, such Lender agrees to deliver to the Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed Internal Revenue Service ("IRS")
Forms 1001 and W-8 or any applicable successor form (including
Form W-8BEN) before the payment of any interest in the first
calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be
paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two properly completed and
executed copies of IRS Form 4224 or any applicable successor
form (including Form W-8ECI) before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9;
(iii) if such Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver
either IRS Form 1001 or 4224 or any applicable successor form
(including Form W-8BEN or W-8ECI), (A) a certificate
substantially in the form of Exhibit J and (B) two properly
completed and signed copies of IRS Form W-8 certifying that
such Lender is entitled to an exemption from United States
withholding tax with respect to payments of interest to be
made under this Agreement; and
(iv) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Any such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 or any applicable successor form (including Form W-8BEN) and such
Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the obligations of the Company to
51
such Lender, such Lender agrees to notify the Agent of the percentage
amount in which it is no longer the beneficial owner of such
obligations of the Company hereunder. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form 1001 (or applicable
successor form) as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 or any applicable successor
form (including Form W-8ECI) with the Agent grants a participation in
all or part of the obligations of the Company to such Lender hereunder,
such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of
the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. If the forms or other
documentation required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other governmental authority of the
United States or any other jurisdiction asserts a claim that the Agent
did not properly withhold tax from amounts paid to or for the account
of any Lender (because such Lender failed to notify the Agent of a
change in circumstances which rendered an exemption from, or reduction
of, withholding tax ineffective), such Lender shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax
or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on any amount payable to the Agent under
this Section, together with all costs and expenses (including
reasonable fees of attorneys for the Agent (including the allocable
costs of internal legal services and all disbursements of internal
counsel)). The obligations of the Lenders under this subsection shall
survive the repayment of the Loans, cancellation of the Notes, any
termination of this Agreement and the resignation or replacement of the
Agent.
(f) If any Lender claims exemption from, or reduction of,
withholding tax under the Code by providing IRS Form W-8 and a
certificate in the form of Exhibit J and such Lender sells, assigns,
grants a participation in, or otherwise transfers all or part of the
obligations of the Company to such Lender, such Lender agrees to notify
the Agent and the Company of the percentage amount in which it is no
longer the beneficial owner of obligations of the Company to such
Lender. To the extent of such percentage amount, the Agent and the
Company will treat such Lender's IRS Form W-8 and certificate in the
form of Exhibit J as no longer valid.
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13.11 Other Agents. None of the Lenders identified on the signature
pages of this Agreement or otherwise herein, or in any amendment hereof or other
document related hereto, as being the "Syndication Agent", the "Documentation
Agent" or a "Co-Agent" (collectively, the "Other Agents") shall have any right,
power, obligation, liability, responsibility or duty under this Agreement in
such capacity other than those applicable to all Lenders. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Other
Agents in deciding to enter into this Agreement or in taking or refraining from
taking any action hereunder or pursuant hereto.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent or any
Lender in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by any of them of any right,
power or remedy preclude any other or further exercise thereof, or the exercise
of any other right, power or remedy. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement or the Notes shall in
any event be effective unless the same shall be in writing and signed and
delivered by Lenders having an aggregate Percentage of not less than the
aggregate Percentage expressly designated herein with respect thereto or, in the
absence of such designation as to any provision of this Agreement or the Notes,
by the Required Lenders, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent shall
change the Percentage of any Lender without the consent of such Lender. No
amendment, modification, waiver or consent shall (i) extend the date for payment
of any principal of or interest on the Loans or any fees payable hereunder, (ii)
reduce the principal amount of any Loan, the rate of interest thereon or any
fees payable hereunder, (iii) release the U.S. Guaranty (other than with respect
to a Person which ceases to be a Subsidiary as a result of a transaction
permitted hereunder) or the Parent Guaranty or all or substantially all of the
collateral granted under the Collateral Documents or (iv) reduce the aggregate
Percentage required to effect an amendment, modification, waiver or consent
without, in each case, the consent of all Lenders. No provision of Section 13 or
any other provision of this Agreement affecting the Agent in its capacity as
such shall be amended, modified or waived without the written consent of the
Agent.
14.2 Confirmations. The Company and each Lender agree from time to
time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loan then outstanding under the
applicable Note.
14.3 Notices. Except as otherwise provided in Section 2.3, all notices
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 14.3 or at such
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three
53
Business Days after the date when sent by registered or certified mail, postage
prepaid; and notices sent by hand delivery or overnight courier service shall be
deemed to have been given when received. For purposes of Section 2.3, the Agent
shall be entitled to rely on telephonic instructions from any person that the
Agent in good faith believes is an authorized officer or employee of the
Company, and the Company shall hold the Agent and each other Lender harmless
from any loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if Parent notifies
the Agent that Parent wishes to amend any covenant in Section 10 to eliminate or
to take into account the effect of any change in GAAP on the operation of such
covenant (or if the Agent notifies Parent that the Required Lenders wish to
amend Section 10 for such purpose), then Parent's compliance with such covenant
shall be determined on the basis of GAAP as in effect immediately before the
relevant change in GAAP became effective until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to Parent and the Required
Lenders.
14.5 Regulation U. Each Lender represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including the
reasonable fees and charges of counsel for the Agent and of local counsel, if
any, who may be retained by said counsel) in connection with the preparation,
execution, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (including any amendment,
supplement or waiver to any Loan Document), and all reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees, court costs and other
legal expenses and allocated costs of staff counsel) incurred by the Agent and
each Lender after an Event of Default in connection with the enforcement of this
Agreement, the other Loan Documents or any such other documents. In addition,
the Company agrees to pay, and to save the Agent and the Lenders harmless from
all liability for, (a) any stamp or other taxes (excluding income taxes and
franchise taxes based on net income) which may be payable in connection with the
execution and delivery of this Agreement, the borrowings hereunder, the issuance
of the Notes or the execution and delivery of any other Loan Document or any
other document provided for herein or delivered or to be delivered hereunder or
in connection herewith and (b) any fees of Parent's auditors in connection with
any reasonable exercise by the Agent and the Lenders of their rights pursuant to
Section 10.2. All obligations provided for in this Section 14.6 shall survive
repayment of the Loans, cancellation of the Notes and any termination of this
Agreement.
54
14.7 Judgment. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder or under any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of the Company in respect of
any such sum due from it to the Agent or any Lender hereunder or under any other
Loan Document shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by the
Agent or such Lender of any sum adjudged to be so due in the Judgment Currency,
the Agent or such Lender may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to the Agent
or such Lender in the Agreement Currency, the Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Agent or such
Lender against such loss. If the amount of the Agreement Currency so purchased
is greater than the sum originally due to the Agent or such Lender in such
currency, the Agent or such Lender agrees to return the amount of any excess to
the Company (or to any other Person who may be entitled thereto under applicable
law).
14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Lender may, with the prior written consents of
the Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more Related Funds
(provided that no written consent of the Company or the Agent shall be required
in connection with any assignment and delegation by a Lender to a Related Fund),
commercial banks or other Persons (any Person to whom such an assignment and
delegation is to be made being herein called an "Assignee") all or any fraction
of such Lender's Loan in a minimum aggregate amount equal to the lesser of (i)
the amount of the assigning Lender's Loan and (ii) U.S.$1,000,000; provided,
however, that (a) no assignment and delegation may be made to any Person if, at
the time of such assignment and delegation, the Company would be obligated to
pay any greater amount under Section 7.5 or Section 8 to the Assignee than the
Company is then obligated to pay to the assigning Lender under such Sections
(and if any assignment is made in violation of the foregoing, the Company will
not be required to pay the incremental amounts); and (b) the Company and the
Agent shall be entitled to continue to deal solely and directly with such Lender
in connection with the interests so assigned and delegated to an Assignee until
the date when all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the
Agent and the assigning Lender shall agree) shall have passed after
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
55
Assignee, shall have been given to the Company and the Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed
and delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit H (an "Assignment Agreement"),
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) the assigning Lender or the Assignee shall have paid the
Agent a processing fee of U.S.$3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder, and (y) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations hereunder. Within five Business Days after the effectiveness of
any assignment and delegation, the Company shall execute and deliver to the
Agent (for delivery to the Assignee and the Assignor, as applicable) a new Note
in the amount of the Assignee's Loan and, if the assigning Lender continues to
have a Loan hereunder, a replacement Note in the amount of the assigning
Lender's Loan. Each such Note shall be dated the effective date of such
assignment. The assigning Lender shall ▇▇▇▇ the predecessor Note "exchanged" and
deliver such Note to the Company. Any attempted assignment and delegation not
made in accordance with this Section 14.9.1 shall be null and void.
The Company designates the Agent as its agent for maintaining a book
entry record of ownership identifying the Lenders, their respective addresses
and the amount of the respective Loans and Notes which they own. The foregoing
provisions are intended to comply with the registration requirements in Treasury
Regulation Section 5f.103-1 so that the Loans and Notes are considered to be in
"registered form" pursuant to such regulation.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loan and its Note to a Federal Reserve Bank (but no such
assignment shall release any Lender from any of its obligations hereunder).
14.9.2 Participations. Any Lender may at any time sell to one or more
commercial banks or other Persons participating interests in such Lender's Loan,
the Note held by such Lender or any other interest of such Lender hereunder (any
Person purchasing any such participating interest being called a "Participant").
In the event of a sale by a Lender of a participating interest to a Participant,
(x) such Lender shall remain the holder of its Note for all purposes of this
Agreement, (y) the Company and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
56
and obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any of the events described in the
fourth sentence of Section 14.1. Each Lender agrees to incorporate the
requirements of the preceding sentence into each participation agreement which
such Lender enters into with any Participant. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and payable (as a result
of acceleration or otherwise), each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or such Note; provided that such right of setoff shall be subject to
the obligation of each Participant to share with the Lenders, and the Lenders
agree to share with each Participant, as provided in Section 7.4. The Company
also agrees that each Participant shall be entitled to the benefits of Section
7.5 and Section 8 as if it were a Lender (provided that no Participant shall
receive any greater compensation pursuant to Section 7.5 or Section 8 than would
have been paid to the participating Lender if no participation had been sold).
Each Lender which sells a participation will maintain a book entry record of
ownership identifying the Participant and the amount of such participation owned
by such Participant. Such book entry record of ownership shall be maintained by
the Lender as agent for the Company and the Agent. This provision is intended to
comply with the registration requirements in Treasury Regulation Section 5f.103-
1 so that the Loans and Notes are considered to be in "registered form" pursuant
to such regulation.
14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the
Lenders expressed herein or in any other Loan Document shall be in addition to
and not in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same agreement.
14.12 Successors and Assigns. This Agreement shall be binding upon the
Company, the Lenders and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders and the Agent and the
successors and assigns of the Lenders and the Agent. The Company may not assign
its rights or obligations hereunder without the prior written consent of all
Lenders.
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14.13 Indemnification by the Company.
(a) In consideration of the execution and delivery of this Agreement by
the Agent and the Lenders and the agreement to make the Loans hereunder, the
Company hereby agrees to indemnify and exonerate the Agent, each Lender and each
of the officers, directors, investment advisors, trustees, employees, Affiliates
and agents of the Agent and each Lender (each a "Lender Party") against, and
hold each Lender Party free and harmless from, any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including reasonable
attorneys' fees and charges and allocated costs of staff counsel (collectively,
for purposes of this Section 14.13, called the "Indemnified Liabilities"),
incurred by the Lender Parties or any of them as a result of, or arising out of,
or relating to (i) any tender offer, merger, amalgamation purchase of stock,
purchase of assets or other similar transaction financed or proposed to be
financed in whole or in part, directly or indirectly, with the proceeds of the
Loans, (ii) the use, handling, release, emission, discharge, transportation,
storage, treatment or disposal of any hazardous substance at any property owned
or leased by the Company or any Subsidiary, (iii) any violation of any
Environmental Laws with respect to conditions at any property owned or leased by
the Company or any Subsidiary or the operations conducted thereon, (iv) the
investigation, cleanup or remediation of offsite locations at which the Company
or any Subsidiary or their respective predecessors are alleged to have directly
or indirectly disposed of hazardous substances or (v) the execution, delivery,
performance or enforcement of this Agreement or any other Loan Document by any
of the Lender Parties, except for any such Indemnified Liabilities arising on
account of any such Lender Party's gross negligence or willful misconduct. If
and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Nothing set forth above shall be construed to
relieve any Lender Party from any obligation it may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of, any or all of the Collateral Documents
and any termination of this Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT
58
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 Waiver of Jury Trial. THE COMPANY, THE AGENT AND EACH LENDER
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
14.16 Acknowledgments and Agreements regarding Intercreditor Agreement.
Each Lender hereby acknowledges that (a) in addition to acting as Agent
hereunder, BofA acts as "U.S. Agent" under the Credit Agreement, as "Agent"
under the Existing Loan Agreement and as "Collateral Agent" under the
Intercreditor Agreement; and (b) this Agreement constitutes the "Permitted
Senior Secured Debt Agreement" as defined in the Intercreditor Agreement, the
obligations hereunder constitute "Permitted Senior Secured Debt Obligations" as
defined in the Intercreditor Agreement, each of the Lenders constitutes a
"Permitted Creditor" as defined in the Intercreditor Agreement and the Required
Lenders constitute the "Required Permitted Creditors" as defined in the
Intercreditor Agreement. Each of the Lenders agrees that (i) the Agent may act
on its behalf under the Intercreditor Agreement and may grant any consent, or
take or omit to take any other action, thereunder on behalf of the Lenders at
the direction or with the consent of the Required Lenders (unless, pursuant to
the express terms of this Agreement or the Intercreditor Agreement, such
consent, action or inaction may only be granted or
59
taken the direction or consent of all Lenders) and (ii) the
Collateral Agent may act on behalf of such Lender as set forth in the
Intercreditor Agreement. Without limiting clause (ii) of the foregoing sentence,
the Lenders irrevocably authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent under
any Collateral Document (i) upon payment in full of all Loans and all other
obligations of the Company hereunder; (ii) covering property sold or to be sold
or disposed of as part of or in connection with any disposition permitted
hereunder; or (iii) subject to Section 14.1, if approved, authorized or ratified
in writing by the Required Lenders. Upon request by the Collateral Agent at any
time, the Lenders will confirm in writing the Collateral Agent's authority to
release particular types or items of collateral pursuant to this Section 14.16.
60
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By ___________________________________________
Chief Financial Officer
UNITED RENTALS (NORTH AMERICA), INC.
By ___________________________________________
Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By ___________________________________________
Title
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Lender
By ___________________________________________
Title
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P.,
as Syndication Agent and as a Lender
