-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R5yFCqNb3hGEPcK3EOvevSGz6lGjEyTsdUwrLehsHPSXS2O6njP4psUBVpAVr8G8 PahYrQRpv4xC8raaESoNvA== /in/edgar/work/20000811/0000950130-00-004399/0000950130-00-004399.txt : 20000921 0000950130-00-004399.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950130-00-004399 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED RENTALS INC /DE CENTRAL INDEX KEY: 0001067701 STANDARD INDUSTRIAL CLASSIFICATION: [7359 ] IRS NUMBER: 061522496 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-14387 FILM NUMBER: 692959 BUSINESS ADDRESS: STREET 1: FOUR GREENWICH OFFICE PARK CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036223131 MAIL ADDRESS: STREET 1: FOUR GREENWICH OFFICE PARK CITY: GREENWICH STATE: CT ZIP: 06830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED RENTALS NORTH AMERICA INC CENTRAL INDEX KEY: 0001047166 STANDARD INDUSTRIAL CLASSIFICATION: [7359 ] IRS NUMBER: 061493538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13663 FILM NUMBER: 692960 BUSINESS ADDRESS: STREET 1: FOUR GREENWICH OFFICE PARK CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: 2036223131 MAIL ADDRESS: STREET 1: FOUR GREENWICH OFFICE PARK CITY: GREENWICH STATE: CT ZIP: 06830 FORMER COMPANY: FORMER CONFORMED NAME: UNITED RENTALS INC DATE OF NAME CHANGE: 19971020 10-Q 1 0001.txt QUARTERLY REPORT - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-14387 United Rentals, Inc. Commission File No. 1-13663 United Rentals (North America), Inc. (Exact names of registrants as specified in their charters) Delaware 06-1522496 Delaware 06-1493538 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Nos.) Five Greenwich Office Park, Greenwich, Connecticut 06830 (Address of principal executive offices) (Zip Code)
(203) 622-3131 (Registrants' telephone number, including area code) Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. X Yes No As of August 1, 2000, there were 70,286,251 shares of the United Rentals, Inc. common stock, $.01 par value outstanding. There is no market for the common stock of United Rentals (North America), Inc., all outstanding shares of which are owned by United Rentals, Inc. This combined Form 10-Q is separately filed by (i) United Rentals, Inc. and (ii) United Rentals (North America), Inc. (which is a wholly owned subsidiary of United Rentals, Inc.). United Rentals (North America), Inc. meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by such instruction. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED RENTALS, INC. UNITED RENTALS (NORTH AMERICA), INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000 INDEX
Page ---- PART I FINANCIAL INFORMATION Item 1 Unaudited Consolidated Financial Statements United Rentals, Inc. Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999 (unaudited).................................. 4 United Rentals, Inc. Consolidated Statements of Operations for the Six and Three Months Ended June 30, 2000 and 1999 (unaudited).................................................... 5 United Rentals, Inc. Consolidated Statement of Stockholders' Equity for the Six Months Ended June 30, 2000 (unaudited)...... 6 United Rentals, Inc. Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2000 and 1999 (unaudited)........ 7 United Rentals (North America), Inc. Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999 (unaudited).............................. 8 United Rentals (North America), Inc. Consolidated Statements of Operations for the Six and Three Months Ended June 30, 2000 and 1999 (unaudited).. 9 United Rentals (North America), Inc. Consolidated Statement of Stockholder's Equity for the Six Months Ended June 30, 2000 (unaudited).................................................... 10 United Rentals (North America), Inc. Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2000 and 1999 (unaudited)............ 11 Notes to Unaudited Consolidated Financial Statements............ 12 Management's Discussion and Analysis of Financial Condition and Item 2 Results of Operations.......................................... 23 Item 3 Quantitative and Qualitative Disclosures about Market Risk...... 31 PART II OTHER INFORMATION Item 1 Legal Proceedings............................................... 31 Item 2 Changes in Securities and Use of Proceeds....................... 31 Item 4 Submission of Matters to a Vote of Security Holders............. 31 Item 6 Exhibits and Reports on Form 8-K................................ 32 Signatures...................................................... 33
Certain of the statements contained in this Report are forward looking in nature. Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates" or the negative thereof or comparable terminology, or by discussions of strategy. You are cautioned that our business and operations are subject to a variety of risks and uncertainties and, consequently, our actual results may materially differ from those projected by any forward- looking statements. Certain of these factors are discussed in Item 2 of Part I of this Report under the caption "--Factors that May Influence Future Results and Accuracy of Forward-Looking Statements." We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made. UNITED RENTALS United Rentals is North America's largest equipment rental company with more than 700 locations in 47 states, seven Canadian provinces and Mexico. We offer for rent more than 600 different types of equipment to over 1.1 million customers, including construction and industrial companies, manufacturers, utilities, municipalities, homeowners and others. During the second quarter of 2000 we completed more than 2.2 million rental transactions. We have the largest fleet of rental equipment in the world, with over 500,000 units having an original purchase price of approximately $3.3 billion. Our fleet includes: . light to heavy construction and industrial equipment, such as aerial lifts, backhoes, skid-steer loaders, forklifts, ditching equipment, earth moving equipment, material handling equipment, compressors, pumps and generators; . traffic control equipment, such as barricades, cones, warning lights, message boards and pavement marking systems; . trench safety equipment for below ground work, such as trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment; . special event equipment used for sporting, corporate and other large events, such as light towers, air conditioning units, portable power units, electrical cable, temporary kitchens and tents; and . general tools and equipment, such as power washers, water pumps, heaters and hand tools. In addition to renting equipment, we sell used rental equipment, act as a dealer for new equipment, and sell related merchandise, parts and service. Competitive Advantages We believe that we benefit from the following competitive advantages: Large and Diverse Rental Fleet. We have the largest and most comprehensive equipment rental fleet in the industry, which helps us to: . attract customers by providing "one-stop" shopping; . serve a diverse customer base and reduce our dependence on any particular customer or group of customers; and . serve customers that require assurance that substantial quantities of different types of equipment will be available on a continuing basis. 1 Operating Efficiencies. We generally group our branches into clusters of 10 to 30 locations that are in the same geographic area. Our information technology system allows each branch to access all available equipment within a cluster. We believe that our cluster strategy produces significant operating efficiencies by enabling us to: (1) market equipment within a cluster through multiple branches, (2) cross-market equipment specialties of different branches within each cluster, and (3) reduce costs by centralizing common functions such as payroll, accounts payable and credit and collection into 31 credit offices and four service centers. In the second quarter of 2000, approximately 10.3% of our rental revenues was attributable to equipment sharing among branches. Geographic Diversity. We have branches in 47 states, seven Canadian provinces and Mexico. We believe that our geographic diversity reduces the impact that fluctuations in regional economic conditions have on our overall financial performance. Our geographic diversity and large network of branch locations also give us the ability to better serve National Account customers, better serve customers that operate at multiple locations, and access used equipment re-sale markets across the country. Customer Diversity. Our customer base is highly diversified and ranges from Fortune 500 companies to small companies and homeowners. We estimate that our top ten customers accounted for approximately 1% of our revenues during 1999. Strong and Motivated Branch Management. Each of our branches has a full-time branch manager who is supervised by one of our 56 district managers and nine regional vice presidents. We believe that our managers are among the most knowledgeable and experienced in the industry, and we empower them--within budgetary guidelines--to make day-to-day decisions concerning staffing, pricing, equipment purchasing and other branch matters. Management closely tracks branch, district and region performance with extensive systems and controls, including performance benchmarks and detailed monthly operating reviews. We promote equipment sharing among branches through our profit sharing program, which directly ties the compensation of branch personnel to their branch's financial performance and return on assets. Significant Purchasing Power. We purchase large amounts of equipment and other items, which enables us to negotiate favorable terms with our vendors. We are continuing our efforts to increase our purchasing power by narrowing our vendor base. We estimate that these efforts allowed us to reduce our equipment purchase costs in 1999 by approximately $50 million, and our goal is to increase these savings to a total of $150 million in 2000. National Account Program. Our National Account sales force is dedicated to establishing and expanding relationships with larger companies, particularly those with a national or multi-regional presence. We offer our National Account customers the benefits of a consistent level of service across North America and a single point of contact for all their equipment needs. Our National Account team currently includes 45 professionals. Revenues from National Account customers in the first six months of this year were $87.2 million and our goal is to reach $175 million by the end of this year. We currently have over 1,000 National Account customers. Information Technology System. Our information technology system facilitates rapid and informed decision making and permits us to respond quickly to changing market conditions. The system provides management with a wide range of operating and financial data and enables branch personnel to search for needed equipment throughout a geographic region, determine its closest location and arrange for delivery to a customer's work site. An in-house group of approximately 115 information technology specialists supports the system and extends it to new locations. The system includes software developed by our Wynne Systems(TM) subsidiary, which is the leading provider of proprietary software for use by equipment rental companies in managing and operating multiple branch locations. 2 E-Rental Store(TM). In February 2000, we launched our business-to-business e-commerce web site. The centerpiece of our site is the E-Rental Store(TM), where customers can rent or buy equipment online, 24 hours a day, seven days a week. The E-Rental Store(TM) is staffed by experienced managers, who have in- depth product knowledge and real-time access to all our equipment. Customers can also benefit from our URdata(TM) application, which gives them up-to-the- minute reports on their business activity with us. Risk Management and Safety Programs. We place great emphasis on risk reduction and safety and believe that we have one of the most comprehensive risk management and safety programs in the industry. Our risk management department is staffed by 43 experienced professionals and is responsible for implementing our safety programs and procedures, developing our employee and customer training programs, and managing any claims against us. We estimate that in 1999 we had approximately 19% fewer accidents than comparable companies, 45% lower workers' compensation claim costs and 50% lower liability claims, resulting in significant cost savings. Industry Background Industry Size and Growth The U.S. equipment rental industry has grown from about $6 billion in annual rental revenues in 1989 to over $24 billion in 1999, representing a compound annual growth rate of approximately 15%. This information is based on data reported by Manfredi & Associates, Inc. In addition to reflecting general economic growth, we believe that the growth in the equipment rental industry is being driven by the following trends: Recognition of Advantages of Renting. Equipment users are increasingly recognizing the many advantages that equipment rental may offer compared with ownership. They recognize that by renting they can: . avoid the large capital investment required for equipment purchases; . access a broad selection of equipment and select the equipment best suited for each particular job; . reduce storage and maintenance costs; and . access the latest technology without investing in new equipment. Outsourcing. Although growth in the equipment rental industry has to date been largely driven by an increase in rentals by the construction industry, we believe that the cost and other advantages of renting, together with the general trend toward the corporate outsourcing of non-core competencies, are increasingly leading industrial companies, municipalities, government agencies, utilities and others to rent equipment. 3 UNITED RENTALS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2000 1999 ---------------- ------------------ (In thousands, except share data) ASSETS Cash and cash equivalents.................. $ 33,192 $ 23,811 Accounts receivable, net of allowance for doubtful accounts of $57,758 in 2000 and $50,736 in 1999........................... 498,892 434,985 Inventory.................................. 156,258 129,473 Prepaid expenses and other assets.......... 92,807 81,457 Rental equipment, net...................... 1,794,785 1,659,733 Property and equipment, net................ 370,132 304,907 Intangible assets, net of accumulated amortization of $77,231 in 2000 and $51,231 in 1999........................... 2,134,556 1,863,372 ---------------- ---------------- $ 5,080,622 $ 4,497,738 ================ ================ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable......................... $ 395,238 $ 242,946 Debt..................................... 2,613,621 2,266,148 Deferred taxes........................... 93,672 81,229 Accrued expenses and other liabilities... 246,396 209,929 ---------------- ---------------- Total liabilities...................... 3,348,927 2,800,252 Commitments and contingencies Company-obligated mandatorily redeemable convertible preferred securities of a subsidiary trust........................ 300,000 300,000 Stockholders' equity: Preferred stock--$.01 par value, 5,000,000 shares authorized: Series A perpetual convertible preferred stock--$300,000 liquidation preference, 300,000 shares issued and outstanding.. 3 3 Series B perpetual convertible preferred stock--$150,000 liquidation preference, 150,000 shares issued and outstanding.. 2 2 Common stock--$.01 par value, 500,000,000 shares authorized, 70,281,363 shares issued and outstanding in 2000 and 72,051,095 in 1999...................... 703 721 Additional paid-in capital............... 1,186,243 1,216,968 Retained earnings........................ 244,085 179,475 Accumulated other comprehensive income... 659 317 ---------------- ---------------- Total stockholders' equity............. 1,431,695 1,397,486 ---------------- ---------------- $ 5,080,622 $ 4,497,738 ================ ================
The accompanying notes are an integral part of these consolidated financial statements. 4 UNITED RENTALS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended June 30, June 30, -------------------- -------------------- 2000 1999 2000 1999 ---------- -------- --------- --------- (In thousands, except per share data) Revenues: Equipment rentals.................. $ 911,632 $643,302 $ 511,534 $ 354,917 Sales of rental equipment.......... 155,171 87,194 84,839 51,251 Sales of equipment and merchandise and other revenues................ 242,105 165,475 133,573 97,494 ---------- -------- --------- --------- Total revenues...................... 1,308,908 895,971 729,946 503,662 Cost of revenues: Cost of equipment rentals, excluding depreciation............ 396,614 279,146 222,314 153,327 Depreciation of rental equipment... 159,035 124,067 85,532 64,954 Cost of rental equipment sales..... 91,168 49,919 50,082 29,077 Cost of equipment and merchandise sales and other operating costs... 184,309 124,784 100,220 72,240 ---------- -------- --------- --------- Total cost of revenues.............. 831,126 577,916 458,148 319,598 ---------- -------- --------- --------- Gross profit........................ 477,782 318,055 271,798 184,064 Selling, general and administrative expenses........................... 210,969 149,861 109,119 84,601 Non-rental depreciation and amortization....................... 40,721 26,520 20,703 14,350 ---------- -------- --------- --------- Operating income.................... 226,092 141,674 141,976 85,113 Interest expense.................... 106,210 51,306 56,527 26,933 Preferred dividends of a subsidiary trust.............................. 9,750 9,750 4,875 4,875 Other (income) expense, net......... (312) 9,224 (108) 9,430 ---------- -------- --------- --------- Income before provision for income taxes.............................. 110,444 71,394 80,682 43,875 Provision for income taxes.......... 45,834 29,283 33,483 17,989 ---------- -------- --------- --------- Net income.......................... $ 64,610 $ 42,111 $ 47,199 $ 25,886 ========== ======== ========= ========= Basic earnings per share............ $ 0.90 $ 0.60 $ 0.66 $ 0.36 ========== ======== ========= ========= Diluted earnings per share.......... $ 0.70 $ 0.46 $ 0.51 $ 0.28 ========== ======== ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 5 UNITED RENTALS, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
Series A Series B Perpetual Perpetual Convertible Convertible Preferred Stock Preferred Stock Common Stock --------------- --------------- ------------------ Accumulated Additional Other Number Number Number Paid-in Retained Comprehensive Comprehensive of Shares Amount of Shares Amount of Shares Amount Capital Earnings Income Income --------- ------ --------- ------ ---------- ------ ---------- -------- ------------- ------------- (In thousands, except share amounts) Balance, December 31, 1999........ 300,000 $3 150,000 $ 2 72,051,095 $721 $1,216,968 $179,475 $317 Comprehensive income: Net income...... 64,610 $64,610 Other comprehensive income: Foreign currency translation adjustments.... 342 342 ------- Comprehensive income.......... $64,952 ======= Issuance of common stock.... 5,784 100 Exercise of common stock options......... 9,499 107 Shares repurchased and retired......... (1,785,015) (18) (30,932) ------- --- ------- --- ---------- ---- ---------- -------- ---- Balance, June 30, 2000............ 300,000 $3 150,000 $2 70,281,363 $703 $1,186,243 $244,085 $659 ======= === ======= === ========== ==== ========== ======== ====
The accompanying notes are an integral part of these consolidated financial statements. 6 UNITED RENTALS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ---------------------- 2000 1999 ---------- ---------- (In thousands) Cash Flows From Operating Activities: Net income............................................ $ 64,610 $ 42,111 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................ 199,756 152,481 Gain on sale of rental equipment..................... (64,003) (37,275) Deferred taxes....................................... 14,571 18,808 Changes in operating assets and liabilities: Accounts receivable.................................. (31,981) (62,203) Inventory............................................ (13,616) (37,858) Prepaid expenses and other assets.................... (1,430) (47,143) Accounts payable..................................... 137,285 97,856 Accrued expenses and other liabilities............... (42,367) 46,720 ---------- ---------- Net cash provided by operating activities........ 262,825 173,497 Cash Flows From Investing Activities: Purchases of rental equipment......................... (513,817) (390,693) Purchases of property and equipment................... (69,241) (52,807) Proceeds from sales of rental equipment............... 155,171 87,194 In-process acquisition costs.......................... (2,445) (1,644) Payments of contingent purchase price................. (6,553) (1,118) Purchases of other companies.......................... (265,084) (587,561) ---------- ---------- Net cash used in investing activities............ (701,969) (946,629) Cash Flows From Financing Activities: Proceeds from issuance of common stock, net of issuance costs....................................... 65,198 Proceeds from issuance of series A perpetual convertible preferred stock, net of issuance costs... 287,000 Proceeds from debt.................................... 1,041,028 1,284,166 Payments of debt...................................... (702,342) (876,660) Proceeds from sale-leaseback.......................... 147,515 Payments of financing costs........................... (7,164) (4,657) Proceeds from the exercise of common stock options.... 96 17,501 Shares repurchased and retired........................ (30,950) ---------- ---------- Net cash provided by financing activities........ 448,183 772,548 Effect of foreign exchange rates...................... 342 2 ---------- ---------- Net increase (decrease) in cash and cash equivalents.. 9,381 (582) Cash and cash equivalents at beginning of period...... 23,811 20,410 ---------- ---------- Cash and cash equivalents at end of period............ $ 33,192 $ 19,828 ========== ========== Supplemental disclosure of cash flow information: Cash paid for interest................................ $ 101,046 $ 49,355 Cash paid for income taxes............................ $ 62,720 $ 11,461 Supplemental disclosure of non-cash investing and financing activities: The Company acquired the net assets and assumed certain liabilities of other companies as follows: Assets, net of cash acquired......................... $ 392,873 $ 869,523 Liabilities assumed.................................. (102,592) (272,567) Less: Amounts paid through issuance of debt.............. (25,197) (9,395) ---------- ---------- Net cash paid.................................... $ 265,084 $ 587,561 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 7 UNITED RENTALS (NORTH AMERICA), INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, 2000 December 31, 1999 ---------------- ------------------ (In thousands, except share data) ASSETS Cash and cash equivalents.................. $ 33,192 $ 23,811 Accounts receivable, net of allowance for doubtful accounts of $57,758 in 2000 and $50,736 in 1999........................... 498,892 434,985 Inventory.................................. 156,258 129,473 Prepaid expenses and other assets.......... 61,169 37,125 Rental equipment, net...................... 1,794,785 1,659,733 Property and equipment, net................ 334,328 276,524 Intangible assets, net of accumulated amor- tization of $77,231 in 2000 and $51,231 in 1999...................................... 2,134,556 1,863,372 ---------------- ---------------- $ 5,013,180 $ 4,425,023 ================ ================ LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities: Accounts payable......................... $ 355,394 $ 212,565 Debt..................................... 2,613,621 2,266,148 Deferred taxes........................... 93,672 81,229 Due to parent............................ 36,113 Accrued expenses and other liabilities... 194,180 171,807 ---------------- ---------------- Total liabilities...................... 3,292,980 2,731,749 Commitments and contingencies Stockholder's equity: Common stock--$0.01 par value, 3,000 shares authorized, 1,000 shares issued and outstanding......................... Additional paid-in capital............... 1,507,426 1,507,330 Retained earnings........................ 212,115 185,627 Accumulated other comprehensive income... 659 317 ---------------- ---------------- Total stockholder's equity............. 1,720,200 1,693,274 ---------------- ---------------- $ 5,013,180 $4,425,023 ================ ================
The accompanying notes are an integral part of these consolidated financial statements. 8 UNITED RENTALS (NORTH AMERICA), INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended June 30, June 30, -------------------- -------------------- 2000 1999 2000 1999 ---------- -------- --------- --------- (In thousands) Revenues: Equipment rentals.................. $ 911,632 $643,302 $ 511,534 $ 354,917 Sales of rental equipment.......... 155,171 87,194 84,839 51,251 Sales of equipment and merchandise and other revenues................ 242,105 165,475 133,573 97,494 ---------- -------- --------- --------- Total revenues....................... 1,308,908 895,971 729,946 503,662 Cost of revenues: Cost of equipment rentals, excluding depreciation............ 396,614 279,146 222,314 153,327 Depreciation of rental equipment... 159,035 124,067 85,532 64,954 Cost of rental equipment sales..... 91,168 49,919 50,082 29,077 Cost of equipment and merchandise sales and other operating costs... 184,309 124,784 100,220 72,240 ---------- -------- --------- --------- Total cost of revenues............... 831,126 577,916 458,148 319,598 ---------- -------- --------- --------- Gross profit......................... 477,782 318,055 271,798 184,064 Selling, general and administrative expenses............................ 210,969 149,861 109,119 84,601 Non-rental depreciation and amortization........................ 37,155 24,857 18,838 13,211 ---------- -------- --------- --------- Operating income..................... 229,658 143,337 143,841 86,252 Interest expense..................... 106,210 51,306 56,527 26,933 Other (income) expense, net.......... (312) 8,982 (108) 9,328 ---------- -------- --------- --------- Income before provision for income taxes............................... 123,760 83,049 87,422 49,991 Provision for income taxes........... 51,409 33,960 36,280 20,451 ---------- -------- --------- --------- Net income........................... $ 72,351 $ 49,089 $ 51,142 $ 29,540 ========== ======== ========= =========
The accompanying notes are an integral part of these consolidated financial statements. 9 UNITED RENTALS (NORTH AMERICA), INC. CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (Unaudited)
Common Stock ---------------- Additional Accumulated Number Paid-In Retained Comprehensive Other Comprehensive of Shares Amount Capital Earnings Income Income --------- ------ ---------- -------- ------------- ------------------- (In thousands, except share data) Balance, December 31, 1999................... 1,000 $1,507,330 $185,627 $317 Comprehensive income: Net income............. 72,351 $72,351 Other comprehensive income: Foreign currency translation adjustments.......... 342 342 ------- Comprehensive income.... $72,693 ======= Contributed capital from parent................. 96 Dividend distribution to parent................. (45,863) ----- --- ---------- -------- ---- Balance, June 30, 2000.. 1,000 $1,507,426 $212,115 $659 ===== === ========== ======== ====
The accompanying notes are an integral part of these consolidated financial statements. 10 UNITED RENTALS (NORTH AMERICA), INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30, ---------------------- 2000 1999 ---------- ---------- (In thousands) Cash Flows From Operating Activities: Net income............................................ $ 72,351 $ 49,089 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........................ 196,190 150,818 Gain on sale of rental equipment..................... (64,003) (37,275) Deferred taxes....................................... 14,571 18,808 Changes in operating assets and liabilities: Accounts receivable.................................. (31,981) (62,203) Inventory............................................ (13,616) (37,858) Prepaid expenses and other assets.................... (14,124) (39,924) Accounts payable..................................... 127,822 77,297 Accrued expenses and other liabilities............... (56,461) 55,472 ---------- ---------- Net cash provided by operating activities.......... 230,749 174,224 Cash Flows From Investing Activities: Purchases of rental equipment......................... (513,817) (390,693) Purchases of property and equipment................... (55,656) (27,947) Proceeds from sales of rental equipment............... 155,171 87,194 Payments of contingent purchase price................. (6,553) (1,118) Purchases of other companies.......................... (265,084) (587,561) ---------- ---------- Net cash used in investing activities.............. (685,939) (920,125) Cash Flows From Financing Activities: Proceeds from debt.................................... 1,041,028 1,284,166 Payments of debt...................................... (702,342) (876,660) Proceeds from sale-leaseback.......................... 147,515 Payments of financing costs........................... (7,155) (4,657) Due to parent......................................... 30,950 Capital contribution by parent........................ 96 369,699 Dividend distribution to parent....................... (45,863) (9,750) ---------- ---------- Net cash provided by financing activities.......... 464,229 762,798 Effect of foreign exchange rates...................... 342 2 ---------- ---------- Net increase in cash and cash equivalents............. 9,381 16,899 Cash and cash equivalents at beginning of period...... 23,811 20,410 ---------- ---------- Cash and cash equivalents at end of period............ $ 33,192 $ 37,309 ========== ========== Supplemental disclosure of cash flow information: Cash paid for interest................................ $ 91,296 $ 39,605 Cash paid for income taxes............................ $ 62,720 $ 11,461 Supplemental disclosure of non-cash investing and financing activities: The Company acquired the net assets and assumed certain liabilities of other companies as follows: Assets, net of cash acquired......................... $ 392,873 $ 869,523 Liabilities assumed.................................. (102,592) (272,567) Less: Amounts paid through issuance of debt.............. (25,197) (9,395) ---------- ---------- Net cash paid.................................... $ 265,084 $ 587,561 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 11 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation General United Rentals, Inc., is principally a holding company ("Holdings" or the "Company") and conducts its operations primarily through its wholly owned subsidiary United Rentals (North America), Inc. ("URI") and subsidiaries of URI. Separate footnote information is not presented for the financial statements of URI and subsidiaries as that information is substantially equivalent to that presented below. Earnings per share data is not provided for the operating results of URI and its subsidiaries as they are wholly owned subsidiaries of Holdings. The Consolidated Financial Statements of the Company included herein are unaudited and, in the opinion of management, such financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the results of the interim periods presented. Interim financial statements do not require all disclosures normally presented in year-end financial statements, and, accordingly, certain disclosures have been omitted. Results of operations for the six and three month periods ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. The Consolidated Financial Statements included herein should be read in conjunction with the Company's Consolidated Financial Statements and related Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Impact of Recently Issued Accounting Standards In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 137, "Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133". This standard delays the effective date of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", for one year, to fiscal years beginning after June 15, 2000. SFAS No. 133 establishes a new model for accounting for derivatives and hedging activities. The adoption of SFAS No. 133 is not expected to have a material effect on the Company's consolidated financial position or results of operations. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities". This standard amends SFAS No. 133 and addresses a limited number of issues causing implementation difficulties. The adoption of SFAS No. 138 is not expected to have a material effect on the Company's consolidated financial position or results of operations. Reclassifications Certain prior year balances have been reclassified to conform to the 2000 presentation. 2.Acquisitions During the six months ended June 30, 2000, the Company completed 40 acquisitions that were accounted for as purchases. The results of operations of the businesses acquired in these acquisitions have been included in the Company's results of operations from their respective acquisition dates. The aggregate initial consideration paid by the Company for such acquisitions that were accounted for as purchases was $252.3 million and consisted of approximately $227.1 million in cash and $25.2 million in seller notes. In addition, the Company repaid or assumed outstanding indebtedness of the companies acquired in such acquisitions in the aggregate amount of $49.0 million. The purchase prices for such acquisitions have been allocated to the assets acquired and liabilities assumed based on their respective fair values at their respective acquisition dates. However, the Company has not 12 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) completed its valuation of all of its purchases and, accordingly, the purchase price allocations are subject to change when additional information concerning asset and liability valuations are completed. The following table summarizes, on an unaudited pro forma basis, the results of operations of the Company for the six months ended June 30, 2000 and 1999 as though (i) each acquisition summarized above which was consummated during the six months ended June 30, 2000, was made on January 1, 2000, in the case of the results for the six months ended June 30, 2000, and (ii) each acquisition which was consummated during the period January 1, 1999 to June 30, 2000 as described above and in Note 3 to the Notes to Consolidated Financial Statements included in the Company's 1999 Annual Report on Form 10-K was made on January 1, 1999 in the case of the results for the six months ended June 30, 1999 (in thousands, except per share data):
Six Months Ended June 30, --------------------- 2000 1999 ---------- ---------- Revenues............................................ $1,374,003 $1,173,800 Net income.......................................... 67,599 51,880 Basic earnings per share............................ $ 0.94 $ 0.74 Diluted earnings per share.......................... $ 0.73 $ 0.56
The unaudited pro forma results are based upon certain assumptions and estimates, which are subject to change. These results are not necessarily indicative of the actual results of operations that might have occurred, nor are they necessarily indicative of expected results in the future. 3. Revolving Credit Facility The Company has a credit facility (the "Credit Facility") which enables URI to borrow up to $872.5 million on a revolving basis and permits a Canadian subsidiary of URI to directly borrow up to $40 million under the Credit Facility (provided that the aggregate borrowings of URI and the Canadian subsidiary do not exceed $872.5 million). The Credit Facility terminates on September 26, 2003, at which time all outstanding indebtedness is due. There was $475.0 million outstanding under the Credit Facility at June 30, 2000. 4. Term Loan D URI obtained a $100.0 million term loan dated as of June 9, 2000 from a financial institution (the "Term Loan D"). The Term Loan D matures in June 2006. Prior to maturity, quarterly installments of principal in the amount of $0.3 million are due on the last day of each calendar quarter, commencing September 30, 2000. The amount due at maturity is $94.3 million. The Term Loan D accrues interest, at URI's option, at either (a) the Base Rate (which is equal to the greater of (i) the Federal Funds Rate plus 0.5% or (ii) Bank of America's reference rate) plus a margin of 0.625% per annum, or (b) the Eurodollar Rate (which for borrowings by URI is equal to Bank of America's reserve adjusted eurodollar rate) plus a margin of 2.5% per annum. The Term Loan D is secured pari passu with the Credit Facility. The agreement governing the Term Loan D contains restrictive covenants substantially similar to those provided under the Credit Facility. 13 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 5. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data):
Three Months Six Months Ended Ended June 30, June 30, --------------- --------------- 2000 1999 2000 1999 ------- ------- ------- ------- Numerator: Net income............................. $64,610 $42,111 $47,199 $25,886 ======= ======= ======= ======= Denominator: Denominator for basic earnings per share--weighted-average shares........ 71,844 70,304 71,631 71,570 Effect of dilutive securities: Employee stock options............... 1,144 5,493 1,024 4,708 Warrants............................. 2,435 4,325 2,303 4,211 Series A perpetual convertible preferred stock..................... 12,000 11,803 12,000 11,803 Series B perpetual convertible preferred stock..................... 5,000 5,000 ------- ------- ------- ------- Denominator for diluted earnings per share--adjusted weighted-average shares................................ 92,423 91,925 91,958 92,292 ======= ======= ======= ======= Basic earnings per share................. $ 0.90 $ 0.60 $ 0.66 $ 0.36 ======= ======= ======= ======= Diluted earnings per share............... $ 0.70 $ 0.46 $ 0.51 $ 0.28 ======= ======= ======= =======
14 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 6. Condensed Consolidating Financial Information Of Guarantor Subsidiaries Certain indebtedness of URI is guaranteed by URI's United States subsidiaries (the "guarantor subsidiaries") but is not guaranteed by URI's foreign subsidiaries (the "non-guarantor subsidiaries"). The guarantor subsidiaries are all wholly-owned and the guarantees are made on a joint and several basis and are full and unconditional (subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). Pursuant to a legal reorganization of URI, certain guarantor subsidiaries and subsidiaries of URI were combined for the purpose of simplifying the Company's legal entity structure. As a result of this legal reorganization, prior period amounts have been reclassified to conform to the current year presentation. Separate consolidated financial statements of the guarantor subsidiaries have not been presented because management has determined that such information would not be material to investors. However, condensed consolidating financial information as of June 30, 2000 and December 31, 1999 and for the six and three months ended June 30, 2000 and 1999, are presented. The condensed consolidating financial information of URI and its subsidiaries are as follows: CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2000 --------------------------------------------------------------- Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total ---------- ------------ ------------ ------------ ------------ (In thousands) ASSETS Cash and cash equiva- lents.................. $ 31,051 $ 2,141 $ 33,192 Accounts receivable, net.................... $ 218,276 170,398 110,218 498,892 Intercompany receivable (payable).............. 453,674 (202,651) (251,023) Inventory............... 76,237 70,029 9,992 156,258 Prepaid expenses and other assets........... 43,799 15,832 1,538 61,169 Rental equipment, net... 842,660 824,768 127,357 1,794,785 Property and equipment, net.................... 124,360 188,665 21,303 334,328 Investment in subsidiar- ies.................... 2,157,421 $ (2,157,421) Intangible assets, net.. 911,355 1,094,753 128,448 2,134,556 ---------- ---------- -------- ------------ ---------- $4,827,782 $2,192,845 $149,974 $ (2,157,421) $5,013,180 ========== ========== ======== ============ ========== LIABILITIES AND STOCK- HOLDER'S EQUITY Liabilities: Accounts payable....... $ 313,325 $ 17,761 $ 24,308 $ 355,394 Debt................... 2,583,714 314 29,593 2,613,621 Deferred taxes......... 92,670 1,002 93,672 Due to parent.......... 36,113 36,113 Accrued expenses and other liabilities..... 101,842 81,846 10,492 194,180 ---------- ---------- -------- ------------ ---------- Total liabilities.... 3,127,664 99,921 65,395 3,292,980 Commitments and contin- gencies Stockholder's equity: Common stock........... Additional paid-in capital................ 1,488,003 1,830,274 65,648 $ (1,876,499) 1,507,426 Retained earnings...... 212,115 262,650 18,272 (280,922) 212,115 Accumulated other com- prehensive income...... 659 659 ---------- ---------- -------- ------------ ---------- Total stockholder's equity.............. 1,700,118 2,092,924 84,579 (2,157,421) 1,720,200 ---------- ---------- -------- ------------ ---------- $4,827,782 $2,192,845 $149,974 $ (2,157,421) $5,013,180 ========== ========== ======== ============ ==========
15 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 1999 --------------------------------------------------------------- Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total ---------- ------------ ------------ ------------ ------------ (In thousands) Assets Cash and cash equiva- lents.................. $ 3,689 $ 16,414 $ 3,708 $ 23,811 Accounts receivable, net.................... 200,419 199,981 34,585 434,985 Intercompany receivable (payable).............. 142,156 42,906 (185,062) Inventory............... 56,086 64,253 9,134 129,473 Prepaid expenses and other assets........... 1,020 18,296 17,809 37,125 Rental equipment, net... 747,232 789,967 122,534 1,659,733 Property and equipment, net.................... 150,841 106,232 19,451 276,524 Investment in subsidiar- ies.................... 2,072,115 $(2,072,115) Intangible assets, net.. 792,198 948,128 123,046 1,863,372 ---------- ---------- --------- ----------- ---------- $4,165,756 $2,186,177 $ 145,205 $(2,072,115) $4,425,023 ========== ========== ========= =========== ========== Liabilities and Stock- holder's Equity Liabilities: Accounts payable....... $ 71,995 $ 120,511 $ 20,059 $ 212,565 Debt................... 2,231,923 380 33,845 2,266,148 Deferred taxes......... 80,476 753 81,229 Accrued expenses and other liabilities..... 107,828 53,177 10,802 171,807 ---------- ---------- --------- ----------- ---------- Total liabilities.... 2,492,222 174,068 65,459 2,731,749 Commitments and contin- gencies Stockholder's equity: Common stock........... Additional paid-in capital................ 1,487,907 1,830,182 65,644 $(1,876,403) 1,507,330 Retained earnings...... 185,627 181,927 13,785 (195,712) 185,627 Accumulated other com- prehensive income...... 317 317 ---------- ---------- --------- ----------- ---------- Total stockholder's equity.............. 1,673,534 2,012,109 79,746 (2,072,115) 1,693,274 ---------- ---------- --------- ----------- ---------- $4,165,756 $2,186,177 $ 145,205 $(2,072,115) $4,425,023 ========== ========== ========= =========== ==========
16 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 -------------------------------------------------------------- Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total --- ------------ ------------ ------------ ------------ (In thousands) Revenues: Equipment rentals..... $ 378,801 $484,540 $ 48,291 $ 911,632 Sales of rental equip- ment................. 74,484 68,315 12,372 155,171 Sales of equipment and merchandise and other revenues............. 112,041 114,201 15,863 242,105 --------- -------- -------- -------- ---------- Total revenues.......... 565,326 667,056 76,526 1,308,908 Cost of revenues: Cost of equipment rentals, excluding depreciation......... 162,317 211,389 22,908 396,614 Depreciation of rental equipment............ 70,016 79,670 9,349 159,035 Cost of rental equip- ment sales........... 43,989 39,471 7,708 91,168 Cost of equipment and merchandise sales and other operating costs................ 91,840 79,645 12,824 184,309 --------- -------- -------- -------- ---------- Total cost of revenues.. 368,162 410,175 52,789 831,126 --------- -------- -------- -------- ---------- Gross profit............ 197,164 256,881 23,737 477,782 Selling, general and ad- ministrative expenses.. 92,687 106,523 11,759 210,969 Non-rental depreciation and amortization....... 17,912 16,597 2,646 37,155 --------- -------- -------- -------- ---------- Operating income........ 86,565 133,761 9,332 229,658 Interest expense........ 104,617 195 1,398 106,210 Other (income) expense, net.................... 3,929 (4,422) 181 (312) --------- -------- -------- -------- ---------- Income (loss) before provision for income taxes.................. (21,981) 137,988 7,753 123,760 Provision (benefit) for income taxes........... (9,122) 57,265 3,266 51,409 --------- -------- -------- -------- ---------- Income (loss) before equity in net earnings of subsidiaries........ (12,859) 80,723 4,487 $(85,210) (12,859) Equity in net earnings of subsidiaries........ 85,210 85,210 --------- -------- -------- -------- ---------- Net income ............. $ 72,351 $ 80,723 $ 4,487 $(85,210) $ 72,351 ========= ======== ======== ======== ==========
17 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1999 ------------------------------------------------------------- Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total --- ------------ ------------ ------------ ------------ (In thousands) Revenues: Equipment rentals..... $246,314 $362,682 $34,306 $643,302 Sales of rental equip- ment................. 43,029 37,558 6,607 87,194 Sales of equipment and merchandise and other revenues............. 84,463 67,101 13,911 165,475 -------- -------- ------- -------- -------- Total revenues.......... 373,806 467,341 54,824 895,971 Cost of revenues: Cost of equipment rentals, excluding depreciation......... 101,373 160,567 17,206 279,146 Depreciation of rental equipment............ 50,958 66,896 6,213 124,067 Cost of rental equip- ment sales........... 24,396 21,599 3,924 49,919 Cost of equipment and merchandise sales and other operating costs................ 69,917 44,152 10,715 124,784 -------- -------- ------- -------- -------- Total cost of revenues.. 246,644 293,214 38,058 577,916 -------- -------- ------- -------- -------- Gross profit............ 127,162 174,127 16,766 318,055 Selling, general and ad- ministrative expenses.. 63,015 77,461 9,385 149,861 Non-rental depreciation and amortization....... 12,400 10,958 1,499 24,857 -------- -------- ------- -------- -------- Operating income........ 51,747 85,708 5,882 143,337 Interest expense........ 50,526 627 153 51,306 Other (income) expense, net.................... (948) 10,355 (425) 8,982 -------- -------- ------- -------- -------- Income before provision for income taxes ...... 2,169 74,726 6,154 83,049 Provision for income taxes.................. 889 30,253 2,818 33,960 -------- -------- ------- -------- -------- Income before equity in net earnings of subsidiaries........ 1,280 44,473 3,336 $(47,809) 1,280 Equity in net earnings of subsidiaries........ 47,809 47,809 -------- -------- ------- -------- -------- Net income ............. $ 49,089 $ 44,473 $ 3,336 $(47,809) $ 49,089 ======== ======== ======= ======== ========
18 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 2000 ------------------------------------------------------------ Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total --- ------------ ------------ ------------ ------------ (In thousands) Revenues: Equipment rentals..... $212,902 $271,802 $26,830 $511,534 Sales of rental equip- ment................. 31,500 47,444 5,895 84,839 Sales of equipment and merchandise and other revenues............. 65,415 59,722 8,436 133,573 -------- -------- ------- -------- -------- Total revenues.......... 309,817 378,968 41,161 729,946 Cost of revenues: Cost of equipment rentals, excluding depreciation......... 84,062 126,661 11,591 222,314 Depreciation of rental equipment............ 36,928 43,798 4,806 85,532 Cost of rental equip- ment sales........... 17,848 28,830 3,404 50,082 Cost of equipment and merchandise sales and other operating costs................ 52,782 40,833 6,605 100,220 -------- -------- ------- -------- -------- Total cost of revenues.. 191,620 240,122 26,406 458,148 -------- -------- ------- -------- -------- Gross profit............ 118,197 138,846 14,755 271,798 Selling, general and ad- ministrative expenses.. 48,535 54,065 6,519 109,119 Non-rental depreciation and amortization....... 8,653 8,813 1,372 18,838 -------- -------- ------- -------- -------- Operating income........ 61,009 75,968 6,864 143,841 Interest expense........ 55,949 35 543 56,527 Other (income) expense, net.................... 2,156 (2,698) 434 (108) -------- -------- ------- -------- -------- Income before provision for income taxes ...... 2,904 78,631 5,887 87,422 Provision for income taxes.................. 1,205 32,661 2,414 36,280 -------- -------- ------- -------- -------- Income before equity in net earnings of subsidiaries........ 1,699 45,970 3,473 $(49,443) 1,699 Equity in net earnings of subsidiaries........ 49,443 49,443 -------- -------- ------- -------- -------- Net income ............. $ 51,142 $ 45,970 $ 3,473 $(49,443) $ 51,142 ======== ======== ======= ======== ========
19 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three Months Ended June 30, 1999 ------------------------------------------------------------- Non- Guarantor Guarantor Consolidated URI Subsidiaries Subsidiaries Eliminations Total --- ------------ ------------ ------------ ------------ (In thousands) Revenues: Equipment rentals..... $139,120 $194,839 $20,958 $354,917 Sales of rental equip- ment................. 23,309 24,014 3,928 51,251 Sales of equipment and merchandise and other revenues............. 47,548 41,171 8,775 97,494 -------- -------- ------- -------- -------- Total revenues.......... 209,977 260,024 33,661 503,662 Cost of revenues: Cost of equipment rentals, excluding depreciation......... 57,081 86,229 10,017 153,327 Depreciation of rental equipment............ 27,180 34,334 3,440 64,954 Cost of rental equip- ment sales........... 13,135 13,331 2,611 29,077 Cost of equipment and merchandise sales and other operating costs................ 36,287 28,913 7,040 72,240 -------- -------- ------- -------- -------- Total cost of revenues.. 133,683 162,807 23,108 319,598 -------- -------- ------- -------- -------- Gross profit............ 76,294 97,217 10,553 184,064 Selling, general and ad- ministrative expenses.. 41,603 37,490 5,508 84,601 Non-rental depreciation and amortization....... 6,045 6,310 856 13,211 -------- -------- ------- -------- -------- Operating income........ 28,646 53,417 4,189 86,252 Interest expense........ 26,587 288 58 26,933 Other (income) expense, net.................... (211) 9,759 (220) 9,328 -------- -------- ------- -------- -------- Income before provision for income taxes ...... 2,270 43,370 4,351 49,991 Provision for income taxes.................. 931 17,553 1,967 20,451 -------- -------- ------- -------- -------- Income before equity in net earnings of subsidiaries........ 1,339 25,817 2,384 $(28,201) 1,339 Equity in net earnings of subsidiaries........ 28,201 28,201 -------- -------- ------- -------- -------- Net income.............. $ 29,540 $ 25,817 $ 2,384 $(28,201) $ 29,540 ======== ======== ======= ======== ========
20 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING CASH FLOW INFORMATION
For the Six Months Ended June 30, 2000 ---------------------------------------------------------------- Guarantor Non-guarantor URI Subsidiaries Subsidiaries Eliminations Consolidated --------- ------------- ------------- ------------ ------------ (In thousands) Net cash provided by (used in) operating activities............. $(137,748) $356,725 $11,772 $ 230,749 Cash flows from investing activities: Purchases of rental equipment............. (127,778) (368,805) (17,234) (513,817) Purchases of property and equipment......... (12,678) (41,512) (1,466) (55,656) Proceeds from sales of rental equipment...... 74,484 68,315 12,372 155,171 Payments of contingent purchase price........ (851) (5,702) (6,553) Purchases of other companies............. (261,982) (3,102) (265,084) --------- -------- ------- ------- --------- Net cash used in investing activities.......... (328,805) (347,704) (9,430) (685,939) Cash flows from financing activities: Proceeds from debt..... 1,021,375 19,653 1,041,028 Payments of debt....... (684,054) (14,037) (4,251) (702,342) Proceeds from sale- leaseback............. 147,515 147,515 Payments of financing costs................. (7,155) (7,155) Due to parent.......... 30,950 30,950 Capital contribution by parent............. 96 96 Dividend distribution to parent............. (45,863) (45,863) --------- -------- ------- ------- --------- Net cash provided by (used in) financing activities.......... 462,864 5,616 (4,251) 464,229 Effect of foreign exchange rates......... 342 342 --------- -------- ------- ------- --------- Net increase (decrease) in cash and cash equivalents............ (3,689) 14,637 (1,567) 9,381 Cash and cash equivalents at beginning of period.... $ 3,689 16,414 3,708 23,811 --------- -------- ------- ------- --------- Cash and cash equivalents at end of period................. $ 31,051 $ 2,141 $ 33,192 ========= ======== ======= ======= ========= Supplemental disclosure of cash flow information: Cash paid for interest.. $ 89,682 $ 243 $ 1,371 $ 91,296 Cash paid for income taxes.................. $ 55,791 $ 6,929 $ 62,720 Supplemental disclosure of non-cash investing and financing activities: The Company acquired the net assets and assumed certain liabilities of other companies as follows: Assets, net of cash acquired.............. $ 387,989 $ 4,884 $ 392,873 Liabilities assumed.... (100,810) (1,782) (102,592) Less: Amounts paid through issuance of debt.... (25,197) (25,197) --------- -------- ------- ------- --------- Net cash paid...... $ 261,982 $ 3,102 $ 265,084 ========= ======== ======= ======= =========
21 UNITED RENTALS, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS--(Continued) CONDENSED CONSOLIDATING CASH FLOW INFORMATION
For the Six Months Ended June 30, 1999 ----------------------------------------------------------------- Guarantor Non-guarantor URI Subsidiaries Subsidiaries Eliminations Consolidated ---------- ------------- ------------- ------------ ------------ (In thousands) Net cash provided by (used in) operating activities............. $ (242,460) $ 351,839 $ 64,845 $ 174,224 Cash flows from investing activities: Purchases of rental equipment............. (349,243) (41,450) (390,693) Purchases of property and equipment......... (26,289) (1,658) (27,947) Proceeds from sales of rental equipment...... 43,029 37,558 6,607 87,194 Payments of contingent purchase price........ (1,118) (1,118) Purchases of other companies............. (549,281) (38,280) (587,561) ---------- --------- -------- ----- ---------- Net cash used in investing activities.......... (506,252) (337,974) (75,899) (920,125) Cash flows from financing activities: Proceeds from debt..... 1,258,483 12,840 12,843 1,284,166 Payments of debt....... (859,127) (17,533) (876,660) Payments of financing costs................. (4,657) (4,657) Capital contribution by parent............. 369,699 369,699 Dividend distribution to parent............. (9,750) (9,750) ---------- --------- -------- ----- ---------- Net cash provided by (used in) financing activities.......... 754,648 (4,693) 12,843 762,798 Effect of foreign exchange rates......... 2 2 ---------- --------- -------- ----- ---------- Net increase in cash and cash equivalents....... 5,936 9,172 1,791 16,899 Cash and cash equivalents at beginning of period.... 1,774 16,257 2,379 20,410 ---------- --------- -------- ----- ---------- Cash and cash equivalents at end of period................. $ 7,710 $ 25,429 $ 4,170 $ 37,309 ========== ========= ======== ===== ========== Supplemental disclosure of cash flow information: Cash paid for interest.. $ 38,825 $ 627 $ 153 $ 39,605 Cash paid for income taxes.................. $ 10,717 $ 744 $ 11,461 Supplemental disclosure of non-cash investing and financing activities: The Company acquired the net assets and assumed certain liabilities of other companies as follows: Assets, net of cash acquired.............. $ 807,576 $ 61,947 $ 869,523 Liabilities assumed.... (251,110) (21,457) (272,567) Less: Amounts paid through issuance of debt.... (7,185) (2,210) (9,395) ---------- --------- -------- ----- ---------- Net cash paid...... $ 549,281 $ 38,280 $ 587,561 ========== ========= ======== ===== ==========
22 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion reviews the Company's operations for the six and three months ended June 30, 2000 and 1999 and should be read in conjunction with the Unaudited Consolidated Financial Statements and related Notes thereto of the Company included herein and the Consolidated Financial Statements and related Notes thereto included in the Company's 1999 Annual Report on Form 10- K. General United Rentals, Inc. ("Holdings") is principally a holding company and primarily conducts its operations through its wholly owned subsidiary, United Rentals (North America), Inc. ("URI"), and subsidiaries of URI. The acquisitions completed by the Company during 2000 and 1999 were accounted for as "purchases" and the results of operations of the acquired businesses are included in the Company's financial statements only from their respective dates of acquisition. In view of the fact that the Company's operating results for 2000 and 1999 were impacted by acquisitions that were accounted for as purchases, the Company believes that the results of its operations for such periods are not directly comparable. The Company primarily derives revenues from the following sources: (i) equipment rental (including additional fees that may be charged for equipment delivery, fuel, repair of rental equipment, and damage waivers), (ii) the sale of rental equipment, (iii) the sale of equipment and (iv) the sale of related merchandise and parts and other revenue. Cost of operations consists primarily of depreciation costs associated with rental equipment, the cost of repairing and maintaining rental equipment, the cost of rental equipment and equipment and other merchandise sold, personnel costs, occupancy costs and supplies. The Company records rental equipment expenditures at cost and depreciates equipment using the straight-line method over the estimated useful life (which ranges from 2 to 10 years), after giving effect to an estimated salvage value of 0% to 10% of cost. Selling, general and administrative expenses primarily include sales commissions, advertising and marketing expenses, management salaries, and clerical and administrative overhead. Non-rental depreciation and amortization includes (i) depreciation expense associated with equipment that is not offered for rent (such as vehicles, computers and office equipment) and amortization expense associated with leasehold improvements and (ii) the amortization of intangible assets. The Company's intangible assets include non-compete agreements and goodwill, which represents the excess of the purchase price of acquired companies over the estimated fair market value of the net assets acquired. Results of Operations Six Months Ended June 30, 2000 and 1999 Revenues. Total revenues for the six months ended June 30, 2000 were $1,309.0 million, representing an increase of 46.1% over total revenues of $896.0 million for the six months ended June 30, 1999. The Company's 23 revenues in the first six months of 2000 and 1999 were attributable to: (i) equipment rental ($911.6 million or 69.6% of revenues, in the first six months of 2000 compared to $643.3 million, or 71.8% of revenues, in the first six months of 1999), (ii) sales of rental equipment ($155.2 million, or 11.9% of revenues, in the first six months of 2000 compared to $87.2 million, or 9.7% of revenues, in the first six months of 1999) and (iii) sales of equipment and merchandise and other revenues ($242.1 million, or 18.5% of revenues, in the first six months of 2000 compared to $165.5 million, or 18.5% of revenues, in the first six months of 1999). The 46.1% increase in total revenues in the first six months of 2000 reflected (i) increased revenues at locations open more than one year (which accounted for approximately 16.7 percentage points) and (ii) new rental locations acquired through acquisitions and the opening of start-up locations (which accounted for approximately 29.4 percentage points). The increase in revenues at locations open more than one year primarily reflected (a) an increase in the volume of rental transactions, (b) an expansion of the product lines offered by the Company for sale, (c) an increase in the sale of related merchandise and parts which was driven by the increase in equipment rental and sales transactions and (d) an increase in the sale of used equipment in order to maintain the quality of the Company's rental fleet. Gross Profit. Gross profit increased to $477.8 million in the first six months of 2000 from $318.1 million in the first six months of 1999. This increase in gross profit was primarily attributable to the increase in revenues described above. The Company's gross profit margin by source of revenue in the first six months of 2000 and 1999 was: (i) equipment rental (39.0% in the first six months of 2000 and 37.3% in the first six months of 1999), (ii) sales of rental equipment (41.2% in the first six months of 2000 and 42.7% in the first six months of 1999) and (iii) sales of equipment and merchandise and other revenues (23.9% in the first six months of 2000 and 24.6% in the first six months of 1999). The increase in the gross profit margin from rental revenues in the first six months of 2000 was primarily attributable to greater equipment utilization rates and to economies of scale. The decrease in the gross profit margin from the sales of rental equipment in the first six months of 2000 primarily reflected a shift in mix towards the sale of more late-model used equipment, which generally generates lower gross profit margins than older equipment. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") were $211.0 million, or 16.1% of total revenues, during the first six months of 2000 and $149.9 million, or 16.7% of total revenues, during the first six months of 1999. SG&A in the first six months of 1999 included an $8.3 million charge primarily due to professional fees incurred in connection with a terminated tender offer. Excluding this charge, SG&A as a percentage of revenues was 15.8% in the first six months of 1999. The increase in SG&A as a percentage of revenues, after excluding the tender offer charge, primarily reflected the increase in expenses associated with the Company's recently acquired traffic control and northern climate businesses, which typically generate a majority of their revenues in the second half of the year. Non-rental Depreciation and Amortization. Non-rental depreciation and amortization was $40.7 million, or 3.1% of total revenues, in the first six months of 2000 and $26.5 million, or 3.0% of total revenues in the first six months of 1999. Interest Expense. Interest expense increased to $106.2 million in the first six months of 2000 from $51.3 million in the first six months of 1999. This increase (i) primarily reflected an increase in the Company's indebtedness, principally to fund acquisitions, and (ii) to a lesser extent, reflected an increase in the interest rates applicable to the Company's variable rate debt. Preferred Dividends of a Subsidiary Trust. During the first six months of 2000 and 1999, preferred dividends of a subsidiary trust of Holdings were $9.8 million. Other (Income) Expense. Other income was $0.3 million in the first six months of 2000 compared to other expense of $9.2 million in the first six months of 1999. The other expense in the first six months of 1999 was primarily attributable to a $10.0 million charge that principally related to fees paid by the Company for a $2.0 billion financing commitment that was subsequently cancelled upon termination of a tender offer made by the Company in 1999. Income Taxes. Income taxes increased to $45.8 million, or an effective rate of 41.5%, in the first six months of 2000 from $29.3 million, or an effective rate of 41.0%, in the first six months of 1999. 24 Three months ended June 30, 2000 and 1999 Revenues. Total revenues for the three months ended June 30, 2000 were $729.9 million, representing an increase of 44.9% over total revenues of $503.7 million for the three months ended June 30, 1999. The Company's revenues in the three months ended June 30, 2000 and 1999 were attributable to: (i) equipment rental ($511.5 million, or 70.1% of revenues, in the three months ended June 30, 2000 compared to $354.9 million, or 70.5% of revenues, in the three months ended June 30, 1999), (ii) sales of rental equipment ($84.8 million, or 11.6% of revenues, in the three months ended June 30, 2000 compared to $51.3 million, or 10.2% of revenues, in the three months ended June 30, 1999) and (iii) sales of equipment and merchandise and other revenues ($133.6 million, or 18.3% of revenues, in the three months ended June 30, 2000 compared to $97.5 million, or 19.3% of revenues, in the three months ended June 30, 1999). The 44.9% increase in total revenues in the three months ended June 30, 2000 reflected (i) increased revenues at locations open more than one year (which accounted for approximately 16.8 percentage points) and (ii) new rental locations acquired through acquisitions and the opening of start-up locations (which accounted for approximately 28.1 percentage points). The increase in revenues at locations open more than one year primarily reflected (a) an increase in the volume of rental transactions, (b) an expansion of the product lines offered by the Company for sale, (c) an increase in the sale of related merchandise and parts which was driven by the increase in equipment rental and sales transactions and (d) an increase in the sale of used equipment in order to maintain the quality of the Company's rental fleet. Gross Profit. Gross profit increased to $271.8 million in the three months ended June 30, 2000 from $184.1 million in the three months ended June 30, 1999. This increase in gross profit was primarily attributable to the increase in revenues described above. The Company's gross profit margin by source of revenue in the three months ended June 30, 2000 and 1999 was: (i) equipment rental (39.8% in the three months ended June 30, 2000 and 38.5% in the three months ended June 30, 1999), (ii) sales of rental equipment (41.0% in the three months ended June 30, 2000 and 43.3% in the three months ended June 30, 1999) and (iii) sales of equipment and merchandise and other revenues (25.0% in the three months ended June 30, 2000 and 25.9% in the three months ended June 30, 1999). The increase in the gross profit margin from rental revenues in the three months ended June 30, 2000 was primarily attributable to greater equipment utilization rates and to economies of scale. The decrease in the gross profit margin from the sales of rental equipment in the three months ended June 30, 2000 primarily reflected a shift in mix towards the sale of more late-model used equipment, which generally generates lower gross profit margins than older equipment. Selling, General and Administrative Expenses. SG&A was $109.1 million, or 14.9% of total revenues, during the three months ended June 30, 2000 and $84.6 million, or 16.8% of total revenues, during the three months ended June 30, 1999. SG&A for the three months ended June 30, 1999, includes an $8.3 million charge primarily due to professional fees incurred in connection with a terminated tender offer. Excluding this charge, SG&A as a percentage of revenues was 15.2% for the three months ended June 30, 1999. The decrease in SG&A as a percentage of revenues in the three months ended June 30, 2000, principally reflected economies of scale related to the increase in revenues. The impact of such economies of scale was partially offset by an increase in expenses associated with the Company's recently acquired traffic control and northern climate businesses, which typically generate a majority of their revenues in the second half of the year. Non-rental Depreciation and Amortization. Non-rental depreciation and amortization was $20.7 million, or 2.8% of total revenues, in the three months ended June 30, 2000 and $14.4 million, or 2.8% of total revenues, in the three months ended June 30, 1999. Interest Expense. Interest expense increased to $56.5 million in the three months ended June 30, 2000 from $26.9 million in the three months ended June 30, 1999. This increase (i) primarily reflected an increase in the Company's indebtedness, principally to fund acquisitions, and (ii) to a lesser extent, reflected an increase in the interest rates applicable to the Company's variable rate debt. Preferred Dividends of a Subsidiary Trust. During the three months ended June 30, 2000 and 1999, preferred dividends of a subsidiary trust of Holdings were $4.9 million. 25 Other (Income) Expense. Other income was $0.1 million in the three months ended June 30, 2000 compared to other expense of $9.4 million in the three months ended June 30, 1999. The other expense in the three months ended June 30, 1999 was primarily attributable to a $10.0 million charge that principally related to fees paid by the Company for a $2.0 billion financing commitment that was subsequently cancelled upon termination of a tender offer made by the Company in 1999. Income Taxes. Income taxes increased to $33.5 million, or an effective rate of 41.5%, in the three months ended June 30, 2000 from $18.0 million, or an effective rate of 41.0%, in the three months ended June 30, 1999. Liquidity and Capital Resources Recent Financing In June 2000, URI obtained a $100.0 million term loan from a financial institution (the "Term Loan D"). The Term Loan D matures in June 2006. Prior to maturity, quarterly installments of principal in the amount of $0.3 million are due on the last day of each calendar quarter, commencing September 30, 2000. The amount due at maturity is $94.3 million. The Term Loan D accrues interest, at URI's option, at either (a) the Base Rate (which is equal to the greater of (i) the Federal Funds Rate plus 0.5% or (ii) Bank of America's reference rate) plus a margin of 0.625% per annum, or (b) the Eurodollar Rate (which is equal to Bank of America's reserve adjusted eurodollar rate) plus a margin of 2.5% per annum. The Term Loan D is secured pari passu with the Company's revolving credit facility, and the agreement governing the Term Loan D contains restrictive covenants substantially similar to those provided under such credit facility. Sources and Uses of Cash During the first six months of 2000, the Company (i) generated cash from operations of approximately $262.8 million, (ii) generated cash from the sale of rental equipment of approximately $155.2 million and (iii) obtained net proceeds from financing activities of approximately $448.2 million. The Company used cash during this period principally to (i) pay consideration for acquisitions (approximately $265.1 million), (ii) purchase rental equipment (approximately $513.8 million) and (iii) purchase other property and equipment (approximately $69.2 million). Certain Balance Sheet Changes The acquisitions and the equipment purchases made by the Company in the first six months of 2000 (and the financing of such acquisitions and purchases) were the principal reasons for the increase in all asset and liability accounts at June 30, 2000 compared with December 31, 1999. Certain Information Concerning the Company's Credit Facility URI has a revolving credit facility (the "Credit Facility") that enables URI to borrow up to $872.5 million on a revolving basis and permits a Canadian subsidiary of URI to directly borrow up to $40.0 million under the Credit Facility (provided that the aggregate borrowings of URI and the Canadian subsidiary do not exceed $872.5 million). The Credit Facility terminates on September 26, 2003, at which time all outstanding indebtedness is due. As of August 3, 2000, there was $685.0 million of indebtedness outstanding under the Credit Facility (not including undrawn outstanding letters of credit in the amount of $1.9 million). In May 2000, in connection with certain amendments to the agreement governing the Credit Facility, the Eurodollar Rate applicable to borrowings under the Credit Facility was increased by 0.25%. Cash Requirements Related to Operations The Company's principal existing sources of cash are borrowings available under the Credit Facility ($185.6 million available as of August 3, 2000) and cash generated from operations. 26 The Company expects that its principal needs for cash relating to its existing operations over the next 12 months will be to fund (i) operating activities and working capital, (ii) the purchase of rental equipment and inventory of items offered for sale and (iii) debt service. The Company plans to fund such cash requirements relating to its existing operations from its existing sources of cash described above. The Company estimates that rental equipment expenditures over the next 12 months will be approximately $850.0 million for the existing operations of the Company. These expenditures are comprised of approximately $510.0 million of expenditures to maintain the average age of the Company's rental fleet and $340.0 million of discretionary expenditures to increase the size of the Company's rental fleet. The Company expects that it will fund such expenditures from a combination of approximately $370.0 million of proceeds expected to be generated from the sale of used equipment, cash generated from operations and, if required, borrowings available under the Credit Facility. In addition, the Company expects that it will be required to make equipment expenditures in connection with new acquisitions. The Company cannot quantify at this time the amount of equipment expenditures that will be required in connection with new acquisitions. In addition to the Company's continued emphasis on internal growth, the Company expects to continue to expand through a disciplined acquisition program and the opening of new rental locations. The Company expects to pay for future acquisitions using cash, capital stock, notes and/or assumption of indebtedness. To the extent that the Company's existing sources of cash described above are not sufficient to fund such future acquisitions, the Company will require additional financing and, consequently, the Company's indebtedness may increase as the Company implements its growth strategy. There can be no assurance, however, that any additional financing will be available or, if available, will be on terms satisfactory to the Company. Based upon the terms of the Company's currently outstanding indebtedness, the Company is scheduled to repay debt principal of approximately $38.2 million during the period from July 1, 2000 to June 30, 2001. Relationship Between Holdings and URI Holdings is principally a holding company and primarily conducts its operations through its wholly owned subsidiary URI and subsidiaries of URI. Holdings provides certain services to URI in connection with its operations. These services principally include: (i) senior management services, (ii) finance related services and support, (iii) information technology systems and support and (iv) acquisition related services. In addition, Holdings leases certain equipment and real property that are made available for use by URI and its subsidiaries. URI has made, and expects to continue to make, certain payments to Holdings in respect of the services provided by Holdings to the Company. The expenses relating to URI's payments to Holdings are reflected on URI's financial statements as selling, general and administrative expenses. In addition, although not legally obligated to do so, URI has in the past, and expects that it will in the future, make distributions to Holdings to, among other things, enable Holdings to pay dividends on certain preferred securities (the "Trust Preferred Securities") that were issued by a subsidiary trust of Holdings in August 1998. The Trust Preferred Securities are the obligation of a subsidiary trust of Holdings and are not the obligation of URI. As a result, the dividends payable on these securities are reflected as an expense on the consolidated financial statements of Holdings, but are not reflected as an expense on the consolidated financial statements of URI. This is the principal reason why the net income reported on the consolidated financial statements of URI is higher than the net income reported on the consolidated financial statements of Holdings. Year 2000 In prior years, the Company discussed the nature of its plans to become Year 2000 compliant. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company is not aware of any material problems resulting from 27 Year 2000 issues, either with its equipment, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the Year 2000. Inflation Although the Company cannot accurately anticipate the effect of inflation on its operations, the Company believes that inflation has not had, and is not likely in the foreseeable future to have, a material impact on its results of operations. Recently Issued Accounting Standards In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 137, "Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133". This standard delays the effective date of SFAS No. 133, "Accounting for Derivative Instrument and Hedging Activities", for one year, to fiscal years beginning after June 15, 2000. SFAS No. 133 establishes a new model for accounting for derivatives and hedging activities. The adoption of SFAS No. 133 is not expected to have a material effect on the Company's consolidated financial position or results of operations. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities". This standard amends SFAS No. 133 and addresses a limited number of issues causing implementation difficulties. The adoption of SFAS No. 138 is not expected to have a material effect on the Company's consolidated financial position or results of operations. Factors that May Influence Future Results and Accuracy of Forward-Looking Statements Sensitivity to Changes in Construction and Industrial Activities Our equipment is principally used in connection with construction and industrial activities. Consequently, a downturn in construction or industrial activity may lead to a decrease in demand for our equipment, which could adversely affect our business. We have identified below certain of the factors which may cause such a downturn, either temporarily or long-term: . a general slow-down of the economy; . an increase in interest rates; . adverse weather conditions which may temporarily affect a particular region; or . government funding for highway and other construction projects does not reach expected levels. Dependence on Additional Capital to Finance Growth We will require substantial capital in order to execute our growth strategy. We will require capital for, among other purposes, purchasing rental equipment, completing acquisitions, and establishing new rental locations. If the cash that we generate from our business, together with cash that we may borrow under our credit facility, is not sufficient to fund our capital requirements, we will require additional debt and/or equity financing. We cannot, however, be certain that any additional financing will be available or, if available, will be available on terms that are satisfactory to us. If we are unable to obtain sufficient additional capital in the future, our ability to implement our growth strategy could be limited. Certain Risks Relating to Acquisitions The making of acquisitions entails certain risks, including: . acquired companies could have hidden liabilities that we fail to discover during our due diligence investigations; 28 . we may have difficulty in assimilating the operations and personnel of the acquired company with our existing operations; . we may lose key employees of the acquired company; and . we may have difficulty maintaining uniform standards, controls, procedures and policies. Dependence on Management We are highly dependent upon our senior management team. Consequently, our business could be adversely affected in the event that we lose the services of any member of senior management. Furthermore, if we lose the services of certain members of senior management, it is an event of default under the agreements governing our credit facility and certain of our other indebtedness, unless we appoint replacement officers satisfactory to the lenders within 30 days. We do not maintain "key man" life insurance with respect to members of senior management. Competition The equipment rental industry is highly fragmented and competitive. Our competitors primarily include small, independent businesses with one or two rental locations; regional competitors which operate in one or more states; public companies or divisions of public companies; and equipment vendors and dealers who both sell and rent equipment directly to customers. We may in the future encounter increased competition from our existing competitors or from new companies. In addition, certain equipment manufacturers may commence (or increase their existing efforts relating to) renting and selling equipment directly to our customers. Fluctuations of Operating Results We expect that our revenues and operating results may fluctuate from quarter to quarter or over the longer term due to a number of factors, including: . seasonal rental patterns of our customers--with rental activity tending to be lower in the winter; . the timing of expenditures for new equipment and the disposition of used equipment; . changes in demand for our equipment or the prices therefor due to changes in economic conditions, competition or other factors; and . increases in the interest rates applicable to our floating rate debt. Liability and Insurance We are exposed to various possible claims relating to our business. These include claims relating to (1) personal injury or death caused by equipment rented or sold by us, (2) motor vehicle accidents involving our delivery and service personnel and (3) employment related claims. We carry a broad range of insurance for the protection of our assets and operations. However, such insurance may not fully protect us for a number of reasons, including: . our coverage is subject to a deductible of $1.0 million and limited to a maximum of $97 million per occurrence; . we do not maintain coverage for environmental liability, since we believe that the cost for such coverage is high relative to the benefit that it provides; and 29 . certain types of claims, such as claims for punitive damages or for damages arising from intentional misconduct, which are often alleged in third party lawsuits, might not be covered by our insurance. We cannot be certain that insurance will continue to be available to us on economically reasonable terms, if at all. Environmental and Safety Regulations There are numerous federal, state and local laws and regulations governing environmental protection and occupational health and safety matters. These include laws and regulations that govern wastewater discharges, the use, treatment, storage and disposal of solid and hazardous wastes and materials, air quality and the remediation of contamination associated with the release of hazardous substances. Under these laws, an owner or lessee of real estate may be liable for, among other things, (1) the costs of removal or remediation of hazardous or toxic substances located on, in, or emanating from, the real estate, as well as related costs of investigation and property damage and substantial penalties, and (2) environmental contamination at facilities where its waste is or has been disposed. These laws often impose liability whether or not the owner or lessee knew of the presence of the hazardous or toxic substances and whether or not the owner or lessee was responsible for these substances. Our activities that are or may be affected by these laws include our use of hazardous materials to clean and maintain equipment and our disposal of solid and hazardous waste and wastewater from equipment washing. We also dispense petroleum products from underground and above-ground storage tanks located at certain rental locations, and at times we must remove or upgrade tanks to comply with applicable laws. Furthermore, we have acquired or lease certain locations which have or may have been contaminated by leakage from underground tanks or other sources and are in the process of assessing the nature of the required remediation. Based on the conditions currently known to us, we believe that any unreserved environmental remediation and compliance costs required with respect to those conditions will not have a material adverse effect on our business. However, we cannot be certain that we will not identify adverse environmental conditions that are not currently known to us, that all potential releases from underground storage tanks removed in the past have been identified, or that environmental and safety requirements will not become more stringent or be interpreted and applied more stringently in the future. If we are required to incur environmental compliance or remediation costs that are not currently anticipated by us, our business could be adversely affected depending on the magnitude of the cost. Risks Related to International Operations Our operations outside the United States are subject to risks normally associated with international operations. These include the need to convert currencies, which could result in a gain or loss depending on fluctuations in exchange rates, and the need to comply with foreign laws. Dependence on Information Technology System Our ability to monitor and control our operations depends to a large extent on the proper functioning of our information technology system. Any disruption in this system or the failure of this system to operate as expected could, depending on the magnitude and duration of the problem, adversely affect our business and our ability to implement our growth strategy. Restrictive Covenants The agreements governing our existing long-term indebtedness contain, and future agreements governing our long-term indebtedness may also contain, certain restrictive financial and operating covenants which affect, and in many respects significantly limit or prohibit, among other things, our ability to incur indebtedness, make prepayments of certain indebtedness, make investments, create liens, make acquisitions, sell assets and engage in mergers and consolidations. These covenants may significantly limit our operating and financial flexibility. 30 Item 3. Quantitative and Qualitative Disclosures about Market Risk Market risks relating to changes in interest rates and foreign currency exchanges rates were reported in Item 7A of the Company's Annual Report on Form 10-K for the year ended December 31, 1999. There has been no material change in these market risks since the end of the fiscal year 1999. PART II OTHER INFORMATION Item 1. Legal Proceedings The Company and its subsidiaries are parties to various litigation matters, in most cases involving ordinary and routine claims incidental to the business of the Company. The ultimate legal and financial liability of the Company with respect to such pending litigation cannot be estimated with certainty but the Company believes, based on its examination of such matters, that such ultimate liability will not have a material effect on the business or financial condition of the Company. Item 2. Changes in Securities and Use of Proceeds Sale of Unregistered Securities Set forth below is certain information concerning sales by the Company of unregistered securities during the second quarter of 2000. The issuances by the Company of the securities sold in the transactions referenced below were not registered under the Securities Act of 1933, pursuant to the exemption contemplated by Section 4(2) thereof for transactions not involving a public offering. 1. In April 2000, the Company issued 2,969 shares of common stock to an executive officer pursuant to an employment agreement. Item 4. Submission of Matters to a Vote of Security Holders The Company's Annual Meeting of Stockholders was held on June 1, 2000. The holders of 60,131,918 common shares, 300,000 Series A Perpetual Convertible Preferred Shares ("Series A Preferred") and 105,252 Series B-1 Perpetual Convertible Preferred Shares ("Series B-1 Preferred") were present either in person or by proxy. There were no broker non-votes at the meeting. The following three matters were voted on and approved at such meeting. 1. The election of three members to the Board of Directors by the holders of the Company's common stock and Series B-1 Preferred (where each share of Series B-1 Preferred is entitled to 33 1/3 votes).
For Withheld ---------- -------- William F. Berry.............................. 63,568,903 71,415 Ronald M. DeFeo............................... 63,568,903 71,415 Richard J. Heckmann........................... 63,568,903 71,415 2. The election of two members to the Board of Directors by the holders of the Series A Preferred. For ---------- Leon D. Black................................. 300,000 Michael S. Gross.............................. 300,000 3. The ratification of the appointment of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending December 31, 2000 by the holders of the Company's common stock, Series B-1 Preferred (where each share of Series B-1 Preferred is entitled to 33 1/3 votes) and Series A Preferred (where each share of Series A Preferred is entitled to 40 votes). For Abstain Against ---------- -------- ------- 75,606,064 9,111 25,143
31 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits:
Exhibit Number Description of Exhibit ------- ---------------------- 3(a) Amended and Restated Certificate of Incorporation of United Rentals, Inc., in effect as of the date hereof (incorporated by reference to exhibit 3.1 of United Rentals, Inc. Report on Form 10-Q for the quarter ended June 30, 1998) 3(b) Certificate of Amendment to the United Rentals, Inc. Certificate of Incorporation dated September 29, 1998 (incorporated by reference to Exhibit 4.2 to the United Rentals, Inc. Registration Statement on Form S-3, No. 333-70151) 3(c) By-laws of United Rentals, Inc., in effect as of the date hereof (incorporated by reference to exhibit 3.2 of United Rentals, Inc. Report on Form 10-Q for the quarter ended June 30, 1998) 3(d) Form of Certificate of Designation for Series A Perpetual Convertible Preferred Stock (incorporated by reference to Exhibit 4(k) to the United Rentals, Inc. Registration Statement on Form S-3, No. 333-64463) together with a certificate of amendment thereto (incorporated by reference to exhibit A of the United Rentals, Inc. Proxy Statement on Schedule 14A dated July 22, 1999) 3(e) Form of Certificate of Designation for Series B Perpetual Convertible Preferred Stock (incorporated by reference to exhibit B of the United Rentals, Inc. Proxy Statement on Schedule 14A dated July 22, 1999) 3(f) Amended and Restated Certificate of Incorporation of United Rentals (North America), Inc., in effect as of the date hereof (incorporated by reference to Exhibit 3.3 of the United Rentals (North America), Inc. Report on Form 10-Q for the quarter ended June 30, 1998) 3(g) By-laws of United Rentals (North America), Inc., in effect as of the date hereof (incorporated by reference to Exhibit 3.4 of the United Rentals (North America), Inc. Report on Form 10-Q for the quarter ended June 30, 1998) 10(a)* Term loan agreement dated as of June 9, 2000 among United Rentals, Inc., United Rentals (North America), Inc., various financial institutions, Goldman Sachs Credit Partners, L.P., as Syndication Agent and Bank of America, N.A., as Administrative Agent 10(b)* Fourth amendment dated as of May 12, 2000, to Credit Agreement dated as of September 29, 1998, between United Rentals, Inc., United Rentals (North America), Inc., various financial institutions, Bank of America as Canadian Agent, and Bank of America, N.A. (formerly known as Bank of America National Trust and Savings Association), as U.S. Agent 10(c)* Amended and Restated Term Loan Agreement dated as of May 12, 2000, amending and restating Term Loan Agreement dated as of July 10, 1998, between United Rentals, Inc., United Rentals (North America), Inc., various financial institutions, Fleet National Bank, as Documentation Agent, and Bank of America, N.A., as Administrative Agent 10(d)* Amended and Restated Term Loan Agreement dated as of May 12, 2000, amending and restating Term Loan Agreement dated as of July 15, 1999, between United Rentals, Inc., United Rentals (North America), Inc., various financial institutions and Bank of America, N.A., as Administrative Agent 10(e)* Amendment No. 1 to Employment Agreement with Robert Miner, dated as of August 2, 2000 27* Financial Data Schedule 27.1* Financial Data Schedule - -------- *Filed herewith. (b) Reports on Form 8-K: none
32 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. United Rentals, Inc. Dated: August 10, 2000 /s/ Michael J. Nolan By: _________________________________ Michael J. Nolan Chief Financial Officer (Principal Financial Officer) Dated: August 10, 2000 /s/ Peter R. Borzilleri By: _________________________________ Peter R. Borzilleri Vice President, Corporate Controller (Chief Accounting Officer) United Rentals (North America), Inc. Dated: August 10, 2000 /s/ Michael J. Nolan By: _________________________________ Michael J. Nolan Chief Financial Officer (Principal Financial Officer) Dated: August 10, 2000 /s/ Peter R. Borzilleri By: _________________________________ Peter R. Borzilleri Vice President, Corporate Controller (Chief Accounting Officer) 33 EX-10.A 2 0002.txt TERM LOAN AGMT DATED JUNE 9, 2000 EXHIBIT 10(A) ================================================================================ ================================================================================ TERM LOAN AGREEMENT dated as of June 9, 2000 among UNITED RENTALS, INC., UNITED RENTALS (NORTH AMERICA), INC., VARIOUS FINANCIAL INSTITUTIONS, GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication Agent, and BANK OF AMERICA, N.A., as Administrative Agent GOLDMAN SACHS CREDIT PARTNERS L.P., Lead Arranger and Book Manager ================================================================================
Page SECTION 1 DEFINITIONS, ETC.................................................... 1 1.1 Definitions......................................................... 1 1.2 Other Interpretive Provisions....................................... 16 SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION PROCEDURES....... 17 2.1 Loans............................................................... 17 2.1.1 Initial Loans.............................................. 17 2.1.2 Additional Loans........................................... 17 2.1.3 Tranches of Loans.......................................... 17 2.2 Borrowing Procedure................................................. 17 2.3 Conversion and Continuation Procedures.............................. 18 2.4 Pro Rata Treatment.................................................. 19 SECTION 3 NOTES EVIDENCING LOANS.............................................. 19 SECTION 4 INTEREST............................................................ 19 4.1 Interest Rates...................................................... 19 4.2 Interest Payment Dates.............................................. 19 4.3 Setting and Notice of Certain Rates................................. 19 4.4 Computation of Interest............................................. 20 SECTION 5 FEES................................................................ 20 5.1 Closing Fees......................................................... 20 5.2 Arrangement and Agent's Fees........................................ 21 SECTION 6 PREPAYMENTS......................................................... 21 SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES..................... 21 7.1 Making of Payments.................................................. 21 7.2 Due Date Extension.................................................. 22 7.3 Setoff.............................................................. 22 7.4 Proration of Payments............................................... 22 7.5 Taxes............................................................... 22 SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES......... 23 8.1 Increased Costs..................................................... 23 8.2 Basis for Determining Interest Rate Inadequate or Unfair............ 25 8.3 Changes in Law Rendering Eurodollar Lending Unlawful................ 25
8.4 Funding Losses...................................................... 26 8.5 Right of Lenders to Fund through Other Offices...................... 26 8.6 Discretion of Lenders as to Manner of Funding....................... 26 8.7 Mitigation of Circumstances; Replacement of Affected Lender......... 26 8.8 Conclusiveness of Statements; Survival of Provisions................ 27 SECTION 9 WARRANTIES.......................................................... 27 9.1 Organization, etc................................................... 27 9.2 Authorization; No Conflict.......................................... 27 9.3 Validity and Binding Nature......................................... 28 9.4 Information......................................................... 28 9.5 No Material Adverse Change.......................................... 28 9.6 Litigation and Contingent Liabilities............................... 29 9.7 Ownership of Properties; Liens...................................... 29 9.8 Subsidiaries........................................................ 29 9.9 Pension and Welfare Plans........................................... 29 9.10 Investment Company Act............................................. 30 9.11 Public Utility Holding Company Act................................. 30 9.12 Regulation U....................................................... 30 9.13 Taxes.............................................................. 30 9.14 Solvency, etc...................................................... 30 9.15 Environmental Matters.............................................. 30 9.16 Year 2000 Problem.................................................. 30 9.17 Senior Debt........................................................ 31 SECTION 10 COVENANTS......................................................... 31 10.1 Reports, Certificates and Other Information........................ 31 10.1.1 Audit Report.............................................. 31 10.1.2 Quarterly Reports......................................... 31 10.1.3 Compliance Certificates................................... 31 10.1.4 Reports to SEC and to Shareholders........................ 32 10.1.5 Notice of Default, Litigation and ERISA Matters........... 32 10.1.6 Subsidiaries.............................................. 33 10.1.7 Management Reports........................................ 33 10.1.8 Projections............................................... 33 10.1.9 Other Information......................................... 33 10.2 Books, Records and Inspections..................................... 33 10.3 Insurance.......................................................... 33 10.4 Compliance with Laws; Payment of Taxes and Liabilities............. 34 10.5 Maintenance of Existence, etc...................................... 34 10.6 Financial Covenants................................................ 34 10.6.1 Maximum Leverage.......................................... 34 10.6.2 Minimum Interest Coverage Ratio........................... 34 10.6.3 Funded Debt to Cash Flow Ratio............................ 34
ii 10.6.4 Senior Debt to Tangible Assets............................ 34 10.6.5 Senior Debt to Cash Flow Ratio............................ 35 10.7 Limitations on Debt................................................ 35 10.8 Liens.............................................................. 36 10.9 Asset Sales........................................................ 37 10.10 Restricted Payments............................................... 37 10.11 Mergers, Consolidations, Amalgamations, Sales..................... 38 10.12 Modification of Certain Documents................................. 39 10.13 Use of Proceeds................................................... 39 10.14 Further Assurances................................................ 39 10.15 Transactions with Affiliates...................................... 40 10.16 Employee Benefit Plans............................................ 40 10.17 Environmental Laws................................................ 40 10.18 Unconditional Purchase Obligations................................ 40 10.19 Inconsistent Agreements........................................... 40 10.20 Business Activities............................................... 41 10.21 Advances and Other Investments.................................... 41 10.22 Location of Assets................................................ 42 10.23 QuIPS Documents................................................... 42 10.24 Limitations on Securitization Transactions........................ 42 SECTION 11 CONDITIONS OF LENDING.............................................. 42 11.1 Initial Loans...................................................... 42 11.1.1 Notes..................................................... 42 11.1.2 Resolutions............................................... 42 11.1.3 Consents, etc............................................. 43 11.1.4 Incumbency and Signature Certificates..................... 43 11.1.5 Opinions of Counsel for the Company....................... 43 11.1.6 Confirmation.............................................. 43 11.1.7 Confirmatory Certificate.................................. 43 11.1.8 Other..................................................... 43 11.2 Additional Loans................................................... 43 11.2.1 Notes..................................................... 44 11.2.2 Confirmatory Certificate.................................. 44 11.2.3 Other..................................................... 44 11.3 All Loans.......................................................... 44 SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT................................. 44 12.1 Events of Default.................................................. 44 12.1.1 Non-Payment of the Loans, etc............................. 44 12.1.2 Non-Payment of Other Debt................................. 44 12.1.3 Other Material Obligations................................ 45 12.1.4 Bankruptcy, Insolvency, etc............................... 45 12.1.5 Non-Compliance with Provisions of This Agreement.......... 45
iii 12.1.6 Warranties................................................ 45 12.1.7 Pension Plans............................................. 45 12.1.8 Judgments................................................. 46 12.1.9 Invalidity of U.S. Guaranty, etc.......................... 46 12.1.10 Invalidity of Collateral Documents, etc................... 46 12.1.11 Change in Control......................................... 46 12.1.12 Invalidity of Parent Guaranty, etc........................ 46 12.2 Effect of Event of Default......................................... 47 SECTION 13 THE AGENT.......................................................... 47 13.1 Appointment and Authorization...................................... 47 13.2 Delegation of Duties............................................... 47 13.3 Liability of Agent................................................. 47 13.4 Reliance by Agents................................................. 48 13.5 Notice of Default.................................................. 48 13.6 Credit Decision.................................................... 48 13.7 Indemnification.................................................... 49 13.8 Agent in Individual Capacity....................................... 50 13.9 Successor Agent; Assignment of Agency.............................. 50 13.10 Withholding Tax.................................................... 51 SECTION 14 GENERAL............................................................ 53 14.1 Waiver; Amendments................................................. 53 14.2 Confirmations...................................................... 53 14.3 Notices............................................................ 53 14.4 Computations....................................................... 54 14.5 Regulation U....................................................... 54 14.6 Costs, Expenses and Taxes.......................................... 54 14.7 Judgment........................................................... 55 14.8 Captions........................................................... 55 14.9 Assignments; Participations........................................ 55 14.9.1 Assignments............................................... 55 14.9.2 Participations............................................ 56 14.10 Governing Law..................................................... 57 14.11 Counterparts...................................................... 57 14.12 Successors and Assigns............................................ 57 14.13 Indemnification by the Company.................................... 58 14.14 Forum Selection and Consent to Jurisdiction....................... 58 14.15 Waiver of Jury Trial.............................................. 59 14.16 Acknowledgments and Agreements regarding Intercreditor Agreement.. 59 14.17 Designated Senior Indebtedness.................................... 60
iv SCHEDULE 1.1(A) Lenders and 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(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 1) EXHIBIT B Form of Compliance Certificate (Section 10.1.3) 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 14.9.1) EXHIBIT I Copy of Intercreditor Agreement (Section 1) EXHIBIT J Form of Exemption Certificate (Section 13.10) EXHIBIT K Copy of Parent Guaranty (Section 1) EXHIBIT L Copy of Parent Pledge Agreement (Section 1) EXHIBIT M Form of Confirmation (Section 11) v TERM LOAN AGREEMENT ------------------- This TERM LOAN AGREEMENT dated as of June 9, 2000 (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, N.A. (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. 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 Moody's Investors Service, Inc., (c) any certificate of deposit (or time deposits represented by such certificates of deposit) or bankers acceptance, maturing not more than one year after such time, or overnight Federal Funds transactions that are issued or sold by any Permitted Bank or a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than U.S.$500,000,000, (d) any repurchase agreement entered into with any Permitted Bank (or other commercial banking institution of the stature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any - ---------- obligation of the type described in any of clauses (a) through (c) and (ii) has ----------- --- a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Permitted Bank (or other commercial banking institution) thereunder and (e) investments in short-term asset management accounts offered by any Permitted Bank for the purpose of investing in loans to any corporation (other than Parent or an Affiliate of Parent), state or municipality, in each case organized under the laws of any state of the United States or of the District of Columbia. 2 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 June 9, 2000. ------------ 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 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); 3 (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 account or upon the application of such Person, (f) all Hedging Obligations of such Person, (g) all Suretyship Liabilities of such Person and (h) all Synthetic Lease Obligations of such Person. 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. 4 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. Equipment Securitization Transaction means any sale, assignment, pledge or ------------------------------------ other transfer (a) by Parent or any Subsidiary of equipment or related assets, (b) by any ES Special Purpose Subsidiary of leases or rental agreements between Parent and/or any Subsidiary, as lessee, on the one hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such equipment or related assets, and lease receivables arising under such leases and rental agreements and (c) by Parent or any Subsidiary of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto, all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers' repurchase programs or guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto, and (iii) any collateral, guaranties, credit enhancement or other property or claims supporting or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables. ERISA means the Employee Retirement Income Security Act of 1974. ----- ES 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 a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith, owning the equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction, and pledging or transferring any of the foregoing or interests therein). Eurodollar 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: 5 Eurodollar Rate = IBOR ------------------------------------ 1.00 - Eurodollar Reserve Percentage where, Eurodollar Reserve Percentage means, for any day for any Interest ----------------------------- Period, a percentage (expressed as a decimal, rounded upward, if necessary, to an integral multiple of 1/100th of 1%) in effect on such day under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"); and IBOR means the rate per annum 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. ------------ 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 6 ending on December 31 of such calendar year. Floor Plan Financing Arrangement means any arrangement whereby Parent or a -------------------------------- Subsidiary grants a Lien to an equipment manufacturer (or an affiliate thereof which is in the financing business) on all equipment purchased from such manufacturer and the proceeds thereof, including equipment which was not financed by such manufacturer (or an affiliate thereof). Foreign 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. 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, all outstanding Securitization Obligations, but excluding (i) contingent obligations in respect of undrawn letters of credit and Suretyship Liabilities (except to the extent constituting contingent obligations or Suretyship Liabilities in respect of Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging Obligations, (iii) Debt of Parent to Subsidiaries and Debt of Subsidiaries to Parent 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. 7 Immaterial Law means any provision of any Environmental Law the violation -------------- of which will not (a) violate any judgment, decree or order which is binding upon Parent or any Subsidiary, (b) result in or threaten any injury to public health or the environment or any material damage to the property of any Person or (c) result in any liability or expense (other than any de minimis liability -- ------- or expense) for Parent or any Subsidiary; provided that no provision of any Environmental Law shall be an Immaterial Law if the 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 for the Lenders, the lenders under the Term Loan C Agreement and the holders of the Permitted Senior Secured Debt, BofA, as U.S. Agent for the banks under the Credit Agreement, BofA, as Agent for the lenders under the Term Loan B 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 (without duplication) 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 Synthetic Leases and any interest which is capitalized but excluding amortization of deferred financing costs) and (b) consolidated yield or discount accrued during such period on the aggregate investment or claim held by purchasers, assignees or other transferees of, or of interests in, accounts receivable, lease receivables and other rights to payment of 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 8 (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 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; 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. 9 Multiemployer Pension Plan means a multiemployer plan, as such term is -------------------------- defined in Section 4001(a)(3) of ERISA, and to which Parent or any member of the Controlled Group may have any liability. Net Worth means the sum of (a) Parent's consolidated stockholders' equity --------- (including preferred stock accounts) plus (b) to the extent, if any, not included in such stockholders' equity, the outstanding amount of the QuIPS Preferred Securities 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 --------------- assignments pursuant to Section 14.9.1, adjusted from time to time concurrently -------------- with the making of any Additional Loans and, if any Post 9/30 Loans are made, adjusted from time to time prior to March 31, 2001 concurrently with any payment (including any prepayment) of the Loans. 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) Richard D. Colburn 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 10 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 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, the Term Loan B Agreement, and the Term Loan C 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 be issued on or prior to December 31, 2000, shall mature no earlier than June 30, 2006 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 rate spreads greater than 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 U.S. $80,000,000. Post 9/30 Loan - see Section 3. -------------- --------- 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. 11 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. 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. Receivables 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 account related thereto, and any collateral, guaranties or other property or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables. 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 Charlotte, North Carolina (or such other office in the United States of America as BofA shall specify from time to time), as its "prime rate." (The "prime 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 prime 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. ---------------- RS 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 12 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 Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein). SEC means the Securities and Exchange Commission. --- Securitization Obligations means, with respect to any Securitization -------------------------- Transaction, the aggregate investment or claim held at any time by all purchasers, assignees or transferees of (or of interests in) or holders of obligations that are supported or secured by (i) in the case of an Equipment Securitization Transaction, equipment or related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) in connection with such Equipment Securitization Transaction, and (ii) in the case of a Receivables Securitization Transaction, accounts receivable, lease receivables and other rights to payment in connection with such Receivables Securitization Transaction. Securitization Transaction means an Equipment Securitization Transaction or -------------------------- a Receivables Securitization Transaction. Seller Subordinated Debt means unsecured indebtedness of the Company that: ------------------------ (a) is subordinated, substantially upon the terms set forth in Exhibit G or other terms that are more favorable to the 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 an ES Special Purpose Vehicle or an RS ----------------------- Special Purpose Vehicle. 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 13 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. 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 14 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. Synthetic Lease means a lease transaction under which the parties intend --------------- that (i) the lease will be treated as an "operating lease" by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property. Synthetic Lease Obligations means, with respect to any Person, the sum of --------------------------- (a) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (b) all rental and purchase price payment obligations of such Person under Synthetic Leases assuming such Person exercises the option to purchase the leased property at the end of the lease term. Tangible Assets means at any time all assets of Parent and its Subsidiaries --------------- excluding all Intangible Assets. For purposes of the foregoing, "Intangible - --------- ---------- Assets" means goodwill, patents, trade names, trademarks, copyrights, - ------ franchises, experimental expense, organization expense and any other assets that are properly classified as intangible assets in accordance with GAAP. Term Loan B Agreement means the Amended and Restated Term Loan Agreement --------------------- dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent, which amends and restates the Term Loan Agreement dated as of July 10, 1998. Term Loan C Agreement means the Amended and Restated Term Loan Agreement --------------------- dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent, which amends and restates the Term Loan Agreement dated as of July [15], 1999. 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. 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. 15 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." (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. 16 (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.$100,000,000. 2.1.2 Additional Loans. The Company may, from time to time prior to ---------------- December 31, 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 $250,000,000 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 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 17 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 (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 18 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 either (i) its Percentage or (ii) if any Post 9/30 Loans are made, then during the period from the date of the first Post 9/30 Loan to March 31, 2001, according a percentage equal to the sum of (i) the percentage which all of such Lender's Loans made on or prior to September 30, 2000 is of all Loans of all Lenders made on or prior to such date and (ii) the percentage which all of such Lender's Post 9/30 Loans is of all Post 9/30 Loans of all Lenders) of all Types and Groups of Tranches. 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 (or, in the case of any additional Loan made after September 30, 2000 (a "Post 9/30 Loan), on December 31, 2000) and continuing through June -------------- 30, 2006, with the first 23 installments each in an amount equal to 0.25% of the original principal amount of such Lender's Loan (provided that, in the case of -------- any Post 9/30 Loan, the installment payable on March 31, 2001 shall be in an amount equal to 0.50% of the original principal amount of such Loan) and the final installment in an amount equal to 94.25% of the original 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 (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%; 19 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 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 20 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 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. 21 (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 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 ----- 22 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 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. 23 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 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 24 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 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 25 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. 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. 26 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: 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 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 27 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 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. -------------------------- 28 (a) The audited consolidated financial statements of the Company and its Subsidiaries at December 31, 1999 and the unaudited consolidated financial statements of the Company and its Subsidiaries at March 31, 2000, 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, 1999, 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, ------------------------------ ------------ as of the Closing Date 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. ------------ 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 29 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. 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 30 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 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 31 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: (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 32 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. 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 33 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 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 0.675 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 34 Period Ending: Coverage Ratio ------------- -------------- Prior to 9/30/01 1.75 to 1.0 9/30/01 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 minus all Securitization Obligations to (ii) Tangible Assets minus, to the extent included in Tangible Assets, all assets which are owned by or subject to a Lien in favor of a Special Purpose Vehicle 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 2.75 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 Term Loan B Agreement, under the Term Loan C Agreement and under the other "Loan Documents" as defined in each of the Credit Agreement, the Term Loan B Agreement and the Term the Loan C Agreement; (b) unsecured Debt of Parent, the Company and Subsidiaries of the Company (excluding Contingent Payments and Seller Subordinated Debt); provided that -------- no Subsidiary of the Company 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; (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, and provided, -------- further, that the aggregate amount of all such Debt arising in connection ------- with Floor Plan Financing Arrangements shall not exceed U.S. $30,000,000; 35 (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 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 Closing Date 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 "Loans" under and as defined in the Term Loan C Agreement plus the aggregate principal amount of all Permitted Senior Secured Debt shall not at any time exceed U.S.$1,000,000,000; (k) Synthetic Lease Obligations, provided that the aggregate amount of all Synthetic Lease Obligations plus (without duplication) the aggregate amount of all Securitization Obligations arising under Equipment Securitization Transactions shall not at any time exceed the greater of U.S. $500,000,000 or 15% of Tangible Assets; (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 36 (n) Debt in connection with Securitization Transactions. 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 (i) being leased (in the case of Capital Leases), (ii) purchased from the relevant manufacturer (in the case of Floor Plan Financing Arrangements) or (iii) the purchase price for which was or is being financed by such Debt (in the case of other Debt) and, in each case, the proceeds (including insurance proceeds) of any disposition or loss of such property); (e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding 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; 37 (g) Liens in favor of the Collateral Agent arising under the Loan Documents and Liens securing Debt permitted by clauses (a), (j) and (k) of ----------- --- --- Section 10.7; and ------------ (h) Liens arising in connection with Securitization Transactions. 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; (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, 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 of the QuIPS Indenture; (v) so long as (x) no Event of Default or Unmatured Event of Default exists or would result therefrom and (y) the aggregate amount of all purchases made by Parent since April 30, 2000 (excluding purchases permitted by clause (vi) below) ----------- does not exceed U.S.$200,000,000, Parent may repurchase its capital stock; 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 (excluding purchases permitted by clause (v) above) 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; provided, further, that any stock of Parent, or warrants or -------- ------- units relating thereto, purchased by Parent pursuant to clause (v) or (vi) above ---------- ---- shall be immediately retired. 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 or exchanges of equipment consistent with industry practice), sell, transfer, convey or lease all or any substantial part of its assets, or sell or assign with or without recourse 38 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 or an asset exchange of like-kind property) 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 Receivables Securitization Transaction or of equipment and related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) pursuant to any Equipment Securitization Transaction, provided that the aggregate amount of all -------- equipment and related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) sold, assigned or otherwise transferred pursuant to all Equipment Securitization Transactions in any Fiscal Year (in addition to any such assets which are permitted to be sold in such Fiscal Year pursuant to clause (e)) shall not exceed U.S. $25,000,000; and (e) ----------- sales and dispositions of assets (including the stock of Subsidiaries and asset exchanges of like-kind property), in addition to sales and other dispositions in the ordinary course of business or permitted by clause (d), so long as the net ---------- book value of (i) all assets disposed of in like-kind exchanges 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 and (ii) all other 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 39 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, except in compliance with the applicable provisions of the FRB and this Agreement. 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 real property and 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 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. 40 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; ------------- (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 Parent or in any Subsidiary of the Company or by any of the Subsidiaries of the Company in Parent, the Company or any other Subsidiary of 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; ------------ 41 (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) Investments by Parent in the QuIPS Trust existing on the Closing Date; (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 U.S. $10,000,000; 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 QuIPS Documents. Not permit any amendment to or modification of the --------------- QuIPS Debentures, the QuIPS Preferred Securities, either QuIPS Guarantee or the QuIPS Indenture which, in any such case, is adverse to the interests of the Lenders. 10.24 Limitations on Securitization Transactions. Not at any time permit ------------------------------------------ the aggregate amount of all Securitization Obligations to exceed (a) in the case of Receivables Securitization Transactions, U.S. $150,000,000; and (b) in the case of Equipment Securitization Transactions, the remainder of (i) the greater of (x) U.S. $500,000,000 and (y) 15% of Tangible Assets minus (ii) the aggregate ----- amount of all Synthetic Lease Obligations (excluding, to prevent double- counting, Synthetic Lease Obligations which also are Securitization Obligations arising under Equipment Securitization Transactions) of Parent and its Subsidiaries. 42 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 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 & Manges LLP, special counsel to Parent and the Company, and (b) Oscar D. Folger, counsel to Parent and the Company. 11.1.6 Confirmation. A Confirmation, substantially in the form of Exhibit ------------ ------- M, 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. 11.1.7 Confirmatory Certificate. A certificate of a duly-authorized ------------------------ officer of Parent as to the matters set forth in Section 11.3. ------------ 11.1.8 Other. Such other documents as the Agent or any Lender may ----- reasonably request. 43 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. ------------ 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 44 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 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, 10.16 or 10.24; 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 45 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 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 46 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 any document evidencing or governing any Permitted Senior Secured Debt; or (e) the Company shall cease to be a direct, wholly-owned Subsidiary of Parent. 12.1.12 Invalidity of Parent Guaranty, etc. The Parent Guaranty shall ---------------------------------- cease to be in full force and effect, 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 47 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, 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, ---------- -------- 48 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 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, 49 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 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 50 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. 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. 51 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 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. 52 (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. --------- 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 53 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 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 54 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. 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 and shall not be required for any assignment and delegation to (a) another Lender or (B) a Related Fund), at any time assign and delegate to one or more Related Funds, 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 55 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 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 mark 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 56 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 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 57 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. 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 58 IN THE UNITED STATES DISTRICT 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 Term Loan B Agreement, as Agent under the Term Loan C Agreement and as "Collateral Agent" under the Intercreditor Agreement; and (b) this Agreement constitutes a "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 and each of the Lenders constitutes a "Permitted Creditor" as defined in the Intercreditor Agreement. Each of the 59 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 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 take any action permitted under subsection 3(f) of the Intercreditor Agreement. 14.17 Designated Senior Indebtedness. The Company hereby designates the ------------------------------ Loans and all other obligations of the Company hereunder and under the Notes as Designated Senior Indebtedness for purposes of, and as defined in, each Subordinated Note Debenture. 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, N.A., as Administrative Agent By_______________________________ Title____________________________ GOLDMAN SACHS CREDIT PARTNERS, L.P., as Syndication Agent, Lead Arranger and Book Manager and as a Lender By_______________________________ Title____________________________ S-1 SCHEDULE 1.1(A) Lender Amount of Loan Percentage ------ -------------- ---------- Goldman Sachs Credit Partners L.P. $100,000,000 100% SCHEDULE 12.1.11 KEY EXECUTIVES Name Current Office(s) - ---- ----------------- Bradley S. Jacobs Chairman, Chief Executive Officer and Director John N. Milne Vice Chairman, Secretary, Director and Chief Acquisition Officer Michael J. Nolan Chief Financial Officer Robert P. Miner Vice President, Finance SCHEDULE 14.3 ADDRESSES FOR NOTICES UNITED RENTALS, INC. - -------------------- Four Greenwich Office Park Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telephone: 203/622-3131 Facsimile: 203/622-6080 UNITED RENTALS (NORTH AMERICA), INC. - ------------------------------------ Four Greenwich Office Park Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telephone: 203/622-3131 Facsimile: 203/622-6080 BANK OF AMERICA, N.A., as Agent - ------------------------------- Agency Management Services 231 South LaSalle Street Chicago, Illinois 60697 Attention: Sean Grimes Telephone: 312/828-4900 Facsimile: 312/974-9102 GOLDMAN SACHS CREDIT PARTNERS, L.P. - ----------------------------------- 85 Broad Street New York, New York 10004 Attention: Ellen Jane Erbstein Telephone: 212/357-7874 Facsimile: 212/357-8068 EXHIBIT M CONFIRMATION Dated as of June 9, 2000 TO: Bank of America, N.A., as Agent for the Lenders party to the Term Loan D Agreement referred to below and as Collateral Agent under the Intercreditor Agreement referred to below; and the Lenders party to the Term Loan D Agreement Reference is made to (a) the Term Loan Agreement dated as of June 9, 2000 (the "Term Loan D Agreement") among United Rentals (North America), Inc. (the --------------------- "Company"), United Rentals, Inc. ("Parent"), various financial institutions (the -------- ------ "Lenders") and Bank of America, N.A., as Agent, (b) the Second Restated U.S. ------- Guaranty dated as of September 29, 1998 executed by various Subsidiaries of the Company, (c) the Second Restated U.S. Security Agreement dated as of September 29, 1998 (the "Security Agreement") among the Company, Parent, various ------------------ Subsidiaries of the Company and Bank of America, N.A., as Collateral Agent (in such capacity, the "Collateral Agent"), (d) the Second Restated Company Pledge ---------------- Agreement dated as of September 29, 1998 between the Company and the Collateral Agent, (e) the Restated Parent Guaranty dated as of September 29, 1998 executed by Parent, (f) the Restated Parent Pledge Agreement dated as of September 29, 1998 between Parent and the Collateral Agent, and (g) the Intercreditor Agreement dated as of September 29, 1998 (the "Intercreditor Agreement") among ----------------------- Bank of America, N.A., as U.S. Agent for the financial institutions which are parties to the Credit Agreement, Bank of America, N.A., as agent for the Term Loan B Agreement, Bank of America, N.A., as agent for the financial institutions which are parties to the Term Loan C Agreement and the Lenders, and the Collateral Agent. Each document referred to in items (b) through (f) above is --------- --- called a "Credit Document". Capitalized terms used but not defined herein shall --------------- have the meanings set forth in the Term Loan D Agreement. Each of the undersigned (a) confirms to each of the addressees that (i) each Credit Document to which such undersigned is a party continues in full force and effect on and after the date hereof, and is the legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms; and (ii) the obligations and liabilities guaranteed or secured (as applicable) under each Credit Document include, without limitation, all obligations and liabilities of the Company and Parent under the Term Loan D Agreement; and (b) agrees that each reference in each Credit Document to "Permitted Senior Secured Debt" shall include all Debt under the ----------------------------- Term Loan D Agreement. IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to be executed and delivered by its duly authorized officer as of the date first written above. UNITED RENTALS (NORTH AMERICA), INC. By:____________________________________ Title: Chief Financial Officer UNITED RENTALS, INC. By:____________________________________ Title:_________________________________ ADVANCE BARRICADES AND SIGNING, INC. COAST LINE MARKING, INC. FLASHER BARRICADES, INC. FLASHER COMPANY OF OKLAHOMA, INC. JADCO SIGNING, INC. LECTRIC LIGHTS COMPANY LIDDELL BROS., INC. LIDDELL MANAGEMENT CO., INC. PRECISION PAVEMENT MARKING, INC. SAFETY LIGHTS SALES AND LEASING, INC. OF TEXAS STATE BARRICADING, INC. TRAFFIC SAFETY SERVICES, INC. TWO WAY TRAFFIC, INC. UNITED RENTALS GULF, INC. UNITED RENTALS NORTHWEST, INC. UNITED RENTALS SOUTHEAST, INC. UNITED RENTALS OF CANADA, INC. WARNING LITES OF MINNESOTA, INC. WARNING SAFETY LIGHTS, INC. WARNING SAFETY LIGHTS OF GEORGIA, INC. WLI INDUSTRIES, INC. WARNING LITES OF INDIANA, INC. WARNING LITES OF IOWA, INC. SAFE-T-FLARE SERVICES, INC. WORK ZONE SAFETY, INC. WOUDENBERG ENTERPRISES, INC. WYNNE SYSTEMS, INC. By:________________________________ Title:_____________________________ UNITED EQUIPMENT RENTALS GULF, L.P. By: United Rentals (North America), Inc. Its: General Partner By:_________________________________ Title:______________________________ UNITED RENTALS SOUTHEAST, L.P. By: United Rentals (North America), Inc. Its: General Partner By:_________________________________ Title:______________________________ Accepted and Agreed to this 9th day of June, 2000 BANK OF AMERICA, N.A. (formerly Bank of America National Trust and Savings Association), as Collateral Agent for the Benefited Parties By:_____________________________________ Title:__________________________________ Agency Officer Amendment to Intercreditor Agreement EX-10.B 3 0003.txt FOURTH AMENDMENT EXHIBIT 10(B) FOURTH AMENDMENT ---------------- THIS FOURTH AMENDMENT dated as of May 12, 2000 (this "Amendment") amends --------- the Credit Agreement dated as of September 29, 1998 (as previously amended, the "Credit Agreement") among United Rentals (North America), Inc. (the "Company"), ---------------- ------- United Rentals, Inc. ("Parent"), United Rentals of Canada, Inc., various ------ financial institutions, Bank of America Canada, as Canadian Agent, and Bank of America, N.A. (formerly known as Bank of America National Trust and Savings Association), as U.S. Agent. Terms defined in the Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used herein as defined therein. WHEREAS, the parties hereto desire to amend the Credit Agreement as set forth herein; NOW, THEREFORE, the parties hereto agree as follows: 1 SECTION Amendments. Effective on (and subject to the occurrence of) ---------- the Amendment Effective Date (as defined below), the Credit Agreement shall be amended as set forth in this Section 1. --------- 1.1 Amendment to Cover Page. The cover page is amended by deleting the ----------------------- language "BANKBOSTON, N.A., as Co-Agent," therefrom and substituting the language "FLEET NATIONAL BANK," therefor (so that Fleet National Bank is designated a Documentation Agent). 1.2 Amendments to Definition of Debt. The definition of Debt in Section -------------------------------- 1.1 is amended by (a) deleting the word "and" at the end of clause (f) and substituting a comma therefor; and (b) adding the following language after the word "Person" at the end of clause (g): "and (h) all Synthetic Lease Obligations of such Person". 1.3 Amendment of Definition of Funded Debt. The definition of Funded Debt -------------------------------------- in Section 1.1 is amended in its entirety to read as follows: "Funded Debt means (a) all Debt of Parent and its Subsidiaries and ----------- (b) to the extent not included in the definition of Debt, all outstanding Securitization Obligations, but excluding (i) contingent obligations in respect of undrawn letters of credit and Suretyship Liabilities (except to the extent constituting contingent obligations or Suretyship Liabilities in respect of Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging Obligations, (iii) Debt of Parent to Subsidiaries and Debt of Subsidiaries to Parent or to other Subsidiaries and (iv) Debt (including guaranties thereof) in respect of the QuIPS Debentures and the QuIPS Preferred Securities." 1.4 Amendment to Definition of Interest Coverage Ratio. Clause (b) of the -------------------------------------------------- definition of Interest Coverage Ratio in Section 1.1 is amended by inserting the language "(without duplication)" after the word "plus" therein. ---- 1.5 Amendment to Definition of Interest Expense. The definition of ------------------------------------------- Interest Expense in Section 1.1 is amended by adding the following after the words "imputed interest on Capital Leases" in clause (a) thereof: "and Synthetic Leases". 1.6 Amendments to Definition of Interest Period. The definition of ------------------------------------------- Interest Period in Section 1.1 is amended by (a) adding the following language after the words "six months thereafter" in clause (a) thereof: "(or, in the case of the Company, two weeks thereafter)"; and (b) adding the following language after the words "for a Eurodollar Loan" in the first line of clause (ii) of the proviso thereto: "(other than a Eurodollar Loan with a two-week Interest Period)". 1.7 Amendment of Definition of Term Loan Agreement. The definition of the ---------------------------------------------- Term Loan Agreement in Section 1.1 is amended in its entirety to read as follows: "Term Loan Agreement" means the Amended and Restated Term Loan ------------------- Agreement dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent, which amends and restates the Term Loan Agreement dated as of July 10, 1998." 1.8 Amendment of Definition of Permitted Senior Secured Debt. The -------------------------------------------------------- definition of Permitted Senior Secured Debt in Section 1.1 is amended in its entirety to read as follows: "Permitted Senior Secured Debt means any Debt arising under (a) the ----------------------------- Amended and Restated Term Loan Agreement dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent which amends and restates the Term Loan Agreement dated as of July 15, 1999; and (b) any other term loan agreement (other than the Term Loan Agreement as defined herein) among Parent, the Company, various financial institutions and BofA, as agent; provided that (i) any such other 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 be issued on or prior to December 31, 2000, shall mature no earlier than June 30, 2006 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 Debt under any such other term loan agreement shall have interest rate spreads greater than the then-applicable interest rate spreads under the Term Loan Agreement referred to in clause (a) above." ---------- 1.9 Amendment to Definition of Reference Rate. The definition of ----------------------------------------- "Reference Rate" in Section 1.1 is amended by deleting the word "reference" therein and substituting the word "prime" therefor. 1.10 Amendment to Definition of Securitization Transaction. The ----------------------------------------------------- definition of "Securitization Transaction" in Section 1.1 is amended in its entirety to read as follows: "Securitization Transaction means an Equipment Securitization -------------------------- Transaction or a Receivables Securitization Transaction." 1.11 Amendment to Definition of Special Purpose Vehicle. The definition of -------------------------------------------------- "Special Purpose Vehicle" in Section 1.1 is amended in its entirety to read as follows: "Special Purpose Vehicle means an ES Special Purpose Vehicle or an RS ----------------------- Special Purpose Vehicle." 1.12 Addition of Definitions. Section 1.1 is amended by adding the ----------------------- following definitions in appropriate alphabetical sequence: "Equipment Securitization Transaction means any sale, assignment, ------------------------------------ pledge or other transfer (a) by Parent or any Subsidiary of equipment or related assets, (b) by any ES Special Purpose Subsidiary of leases or rental agreements between Parent and/or any Subsidiary, as lessee, on the one hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such equipment or related assets, and lease receivables arising under such leases and rental agreements and (c) by Parent or any Subsidiary of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto, all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers' repurchase programs or guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto, and (iii) any collateral, guaranties, credit enhancement or other property or claims supporting or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables." "ES 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 a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith, owning the equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction, and pledging or transferring any of the foregoing or interests therein)." "Floor Plan Financing Arrangement means any arrangement whereby -------------------------------- Parent or a Subsidiary grants a Lien to an equipment manufacturer (or an affiliate thereof which is in the financing business) on all equipment purchased from such manufacturer and the proceeds thereof, including equipment which was not financed by such manufacturer (or an affiliate thereof)." "Receivables 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 account related thereto, and any collateral, guaranties or other property or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables." "RS 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 Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein)." "Securitization Obligations means, with respect to any Securitization -------------------------- Transaction, the aggregate investment or claim held at any time by all purchasers, assignees or transferees of (or of interests in) or holders of obligations that are supported or secured by (i) in the case of an Equipment Securitization Transaction, equipment or related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) in connection with such Equipment Securitization Transaction, and (ii) in the case of a Receivables Securitization Transaction, accounts receivable, lease receivables and other rights to payment in connection with such Receivables Securitization Transaction." "Synthetic Lease means a lease transaction under which the parties --------------- intend that (i) the lease will be treated as an "operating lease" by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property." "Synthetic Lease Obligations means, with respect to any Person, the --------------------------- sum of (a) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (b) all rental and purchase price payment obligations of such Person under Synthetic Leases assuming such Person exercises the option to purchase the leased property at the end of the lease term." 1.13 Amendment to Section 2.2.1. Section 2.2.1 is amended by adding the -------------------------- following language after the words "to the Company" in clause (i) of the proviso thereto: ", or two different Groups of Eurodollar Loans with two-week Interest Periods,". 1.14 Amendments to Section 6.1.2. Section 6.1.2 is amended by (a) deleting --------------------------- the date "December 31, 1998" therein and substituting the date "December 31, 2000" therefor; and (b) deleting the amount of "$850,000,000" therein and substituting the amount "U.S.$922,500,000" therefor. 1.15 Amendment to Section 10.6.1. Section 10.6.1 is amended by deleting --------------------------- the ratio "0.65 to 1" therein and substituting the ratio "0.675 to 1" therefor. 1.16 Amendment to Section 10.6.2. The table in Section 10.6.2 is amended --------------------------- in its entirety to read as follows:
"Computation Interest Period Ending Coverage Ratio --------------------------------------------- 3/31/99 through 6/30/01 1.75 to 1 9/30/01 and thereafter 2.00 to 1."
1.17 Amendment to Section 10.6.4. Section 10.6.4 is amended in its --------------------------- entirety to read as follows: "10.6.4 Senior Debt to Tangible Assets. Not permit the ratio of (i) ------------------------------ Senior Debt minus all Securitization Obligations to (ii) Tangible Assets minus, to the extent included in Tangible Assets, all assets which are owned by or subject to a Lien in favor of a Special Purpose Vehicle to exceed 1.0 to 1.0 at any time." 1.18 Amendment to Section 10.6.5. Section 10.6.5 is amended by deleting --------------------------- the ratio "3.0 to 1.0" therein and substituting the ratio "2.75 to 1.0" therefor. 1.19 Amendments to Section 10.7. Section 10.7 is amended by (a) deleting -------------------------- the amount "U.S.$750,000,000" in clause (j) and substituting the amount "U.S.$1,000,000,000" therefor; (b) adding a comma followed by the following language before the semi-colon at the end of clause (c) therein: "and provided, -------- further, that the aggregate amount of all such Debt arising in connection with - ------- Floor Plan Financing Arrangements shall not exceed U.S.$30,000,000"; and (c) deleting the existing clauses (b), (e), (k) and (n) and substituting the following therefor, respectively: "(b) unsecured Debt of Parent, the Company and Subsidiaries of the Company (excluding Contingent Payments and Seller Subordinated Debt); provided that no Subsidiary of the Company 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;" ---------- "(e) unsecured Debt of any Special Purpose Vehicle to any Subsidiary of the Company;" "(k) Synthetic Lease Obligations, provided that the aggregate amount of all Synthetic Lease Obligations plus (without duplication) the aggregate amount of all Securitization Obligations arising under Equipment Securitization Transactions shall not at any time exceed the greater of U.S. $500,000,000 or 15% of Tangible Assets;" "(n) Debt in connection with Securitization Transactions." 1.20 Amendments to Section 10.8. Section 10.8 is amended by (a) deleting -------------------------- the reference to "clauses (a) and (j) of Section 10.7" in clause (g) thereof and ----------- --- ------------ substituting "clauses (a), (j) and (k) of Section 10.7" therefor; and (b) ----------- --- --- ------------ deleting the existing clauses (d) and (h) and substituting the following therefor, respectively: "(d) Liens securing Debt permitted by clause (c) of Section 10.7 (and ---------- ------------ attaching only to the property (i) being leased (in the case of Capital Leases), (ii) purchased from the relevant manufacturer (in the case of Floor Plan Financing Arrangements) or (iii) the purchase price for which was or is being financed by such Debt (in the case of other Debt) and, in each case, the proceeds (including insurance proceeds) of any disposition or loss of such property);" "(h) Liens arising in connection with Securitization Transactions." 1.21 Amendments to Section 10.10. Section 10.10 is amended in its entirety --------------------------- to read as follows: "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; (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, 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 of the QuIPS Indenture; (v) so long as (x) no Event of Default or Unmatured Event of Default exists or would result therefrom and (y) the aggregate amount of all purchases made by Parent since April 30, 2000 (excluding purchases permitted by clause (vi) below) does not exceed U.S.$200,000,000, Parent ----------- may repurchase its capital stock; 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 (excluding purchases permitted by clause (v) above) 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; provided, further, that any stock of Parent, or warrants or units -------- ------- relating thereto, purchased by Parent pursuant to clause (v) or (vi) above ---------- ---- shall be immediately retired. Nothing in this Section 10.10 shall prohibit ------------- Parent from permitting the cashless exercise of any options or warrants for stock of Parent." 1.22 Amendments to Section 10.11. Section 10.11 is amended by (a) --------------------------- inserting the words "or exchanges" after the words "including sales" in the first parenthetical clause therein; (b) inserting the words "or an asset exchange of like-kind property" in clause (c) immediately after "(including pursuant to a merger"; and (c) deleting clauses (d) and (e) in their entirety and substituting the following therefor, respectively: "(d) the sale, assignment or other transfer of accounts receivable, lease receivables or other rights to payment pursuant to any Receivables Securitization Transaction or of equipment and related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) pursuant to any Equipment Securitization Transaction, provided that the aggregate amount of all equipment and -------- related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) sold, assigned or otherwise transferred pursuant to all Equipment Securitization Transactions in any Fiscal Year (in addition to any such assets which are permitted to be sold in such Fiscal Year pursuant to clause (e)) shall not exceed $25,000,000; ---------- and (e) sales and dispositions of assets (including the stock of Subsidiaries and asset exchanges of like-kind property), in addition to sales and other dispositions in the ordinary course of business or permitted by clause (d), so long as the net book value of (i) all assets ---------- disposed of in like-kind exchanges 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 and (ii) all other 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." 1.23 Amendment to Section 10.13. Section 10.13 is amended by adding the -------------------------- following immediately after the words "for general corporate purposes" therein: "(including repurchases of stock of Parent to the extent permitted by Section ------- 10.10)". - ----- 1.24 Amendment to Section 10.14. Section 10.14 is amended by adding the -------------------------- following words after the words "other than" at the beginning of the parenthetical clause in clause (ii) therein: "real property and". 1.25 Amendments to Section 10.21. Section 10.21 is amended by (a) deleting --------------------------- the amount "$5,000,000" in clause (k) and substituting the amount "U.S.$10,000,000" therefor; and (b) deleting clauses (d) and (i) and substituting the following therefor, respectively: "(d) in the ordinary course of business, Investments by the Company in Parent or in any Subsidiary of the Company or by any of the Subsidiaries of the Company in Parent, the Company or any other Subsidiary of the Company, by way of intercompany loans, advances or guaranties, all to the extent permitted by Section 10.7;" ------------ "(i) Investments by Parent in the QuIPS Trust existing on the date hereof;". 1.26 Amendment of Section 10.23. Section 10.23 is amended in its entirety -------------------------- to read as follows: "10.23 Quips Documents. Not permit any amendment to or modification --------------- of the QuIPS Debentures, the QuIPS Preferred Securities, either QuIPS Guarantee or the QuIPS Indenture which, in any such case, is adverse to the interests of the Banks." 1.27 Addition of Section 10.24. The following Section 10.24 is added in ------------------------- appropriate numerical sequence: "10.24 Limitations on Securitization Transactions. Not at any time ------------------------------------------ permit the aggregate amount of all Securitization Obligations to exceed (a) in the case of Receivables Securitization Transactions, U.S.$150,000,000; and (b) in the case of Equipment Securitization Transactions, the remainder of (i) the greater of (x) U.S.$500,000,000 and (y) 15% of Tangible Assets minus (ii) the aggregate amount of all Synthetic Lease Obligations ----- (excluding, to prevent double-counting, Synthetic Lease Obligations which also are Securitization Obligations arising under Equipment Securitization Transactions) of Parent and its Subsidiaries." 1.28 Amendment to Section 12.1.5. Section 12.1.5 is amended by deleting --------------------------- the language "or 10.16" therein and substituting a comma therefor followed by ----- the language "10.16 or 10.24". ----- ----- 1.29 Amendment of Section 13.11. Section 13.11 is amended in its entirety -------------------------- to read as follows: "13.11 Collateral Matters. The Banks irrevocably authorize each ------------------ Agent, at its option and in its discretion, (a) to release any Lien granted to or held by such Agent under any Collateral Document (i) upon termination of the Commitments and payment in full of all Loans and all other obligations of the Borrowers hereunder and the expiration or termination of all Letters of Credit; (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 15.1, if approved, authorized or ------------ ratified in writing by the Required Banks; and (b) to subordinate any Lien on property granted to or held by such Agent under any Collateral Document to the holder of any Lien on such property which is permitted by clause (d) ---------- or (h) of Section 10.8. Upon request by either Agent at any time, the Banks --- ------------ will confirm in writing such Agent's authority to release, or subordinate its Lien on, particular types or items of collateral pursuant to this Section 13.11." ------------- 1.30 Amendment of Schedule 1.1(C). Schedule 1.1(C) to the Credit Agreement ---------------------------- is amended in its entirety to read as set forth in Schedule 1.1(C) to this --------------- Amendment. 2 SECTION Representations and Warranties. Parent and the Company represent ------------------------------ and warrant to the Agents and the Banks that (a) each of the representations and warranties made by Parent, the Company and each Subsidiary in Section 9 (excluding Section 9.8) of the Credit Agreement and the other Loan Documents, as amended hereby (as so amended, the "Amended Agreement"), is true and correct as ----------------- of the date hereof, with the same effect as if made on such date (except to the extent stated to relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), and (b) no Event of Default or Unmatured Event of Default has occurred or is continuing. 3 SECTION Effectiveness. The amendments set forth in Section 1 above shall ------------- --------- become effective on the date (the "Amendment Effective Date") when the U.S. ------------------------ Agent shall have received (a) counterparts hereof executed by the Company, Parent, the Required Banks and the U.S. Agent (provided that Section 1.14 (the -------- amendments to Section 6.1.2) shall become effective only when the U.S. Agent shall have received counterparts hereof executed by all U.S. Banks and all other conditions precedent to the effectiveness hereof have been satisfied); (b) confirmation that substantially similar amendments to each of the Term Loan Agreement and the term loan agreement relating to the existing Permitted Senior Secured Debt have (or concurrently with the effectiveness hereof will) become effective; (c) a Confirmation in the form of Exhibit A hereto signed by Parent, --------- the Company and all U.S. Subsidiaries (other than the QuIPS Trust); (d) the opinions of Weil, Gotshal & Manges LLP and Oscar D. Folger, substantially in the form of Exhibits B and C hereto, respectively; and (e) an amendment fee for each ---------- - U.S. Bank that has executed and delivered (by facsimile or otherwise) to the U.S. Agent a counterpart hereof prior to 2:00 p.m., Chicago time, on May 12, 2000, an amendment fee in an amount equal to 0.25% of such Bank's Commitment. 4 SECTION Miscellaneous. ------------- 4.1 Continuing Effectiveness, etc. As herein amended, the Credit Agreement ------------------------------ shall remain in full force and effect and is hereby ratified and confirmed in all respects. After the Amendment Effective Date, all references in the Credit Agreement and the other Loan Documents to the "Credit Agreement" or similar terms shall refer to the Amended Agreement. 4.2 Counterparts. This Amendment may be executed in any number of ------------ counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same agreement. 4.3 Expenses. The Company agrees to pay all reasonable expenses of the -------- U.S. Agent, including reasonable fees and charges of counsel for the U.S. Agent, in connection with the preparation, execution and delivery of this Amendment. 4.4 Governing Law. This Amendment shall be construed in accordance with ------------- and governed by the substantive laws of the State of Illinois applicable to contracts made and to be performed entirely within such State. 4.5 Successors and Assigns. This Amendment shall be binding upon Parent, ---------------------- the Company, the Banks and the Agents and their respective successors and assigns, and shall inure to the benefit of Parent, the Company, the Banks and the Agents and the respective successors and assigns of the Banks and the Agents. 4.6 Amendment to Intercreditor Agreement. The Required Banks hereby ------------------------------------ direct the U.S. Agent to enter into an amendment to the Intercreditor Agreement substantially in the form of Exhibit D hereto. --------- 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, N.A., as U.S. Agent By__________________________________ Title_______________________________ BANK OF AMERICA, N.A., as a U.S. Bank, as Issuing Bank and as Swing Line Bank By__________________________________ Title_______________________________ BANK OF AUSTRIA CREDITANSTALT, as a U.S. Bank By__________________________________ Title_______________________________ THE BANK OF NEW YORK, as a U.S. Bank By__________________________________ Title_______________________________ CREDIT LYONNAIS NEW YORK BRANCH, as a U.S. Bank and as a Documentation Agent By__________________________________ Title_______________________________ DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch, as a U.S. Bank and as a Documentation Agent By__________________________________ Title_______________________________ By__________________________________ Title_______________________________ ALLFIRST BANK, as a U.S. Bank By__________________________________ Title_______________________________ SUMMIT BANK, as a U.S. Bank By__________________________________ Title_______________________________ NATIONAL CITY BANK, as a U.S. Bank 2 By__________________________________ Title_______________________________ COMERICA BANK, as a U.S. Bank By__________________________________ Title_______________________________ FLEET NATIONAL BANK, N.A., as a U.S. Bank and as a Documentation Agent By__________________________________ Title_______________________________ HARRIS TRUST AND SAVINGS BANK, as a U.S. Bank By__________________________________ Title_______________________________ THE BANK OF NOVA SCOTIA, as a U.S. Bank By__________________________________ Title_______________________________ 3 UNION BANK OF CALIFORNIA, N.A., as a U.S. Bank By__________________________________ Title_______________________________ CIBC INC., as a U.S. Bank By__________________________________ Title_______________________________ LASALLE BANK NATIONAL ASSOCIATION, as a U.S. Bank By__________________________________ Title_______________________________ CITICORP DEL-LEASE, INC., as a U.S. Bank By__________________________________ Title_______________________________ ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG-NEW YORK, as a U.S. Bank By__________________________________ Title_______________________________ CITY NATIONAL BANK, as a U.S. Bank By__________________________________ Title_______________________________ 4 THE FUJI BANK, LIMITED, as a U.S. Bank By__________________________________ Title_______________________________ BANKERS TRUST COMPANY, as a U.S. Bank By__________________________________ Title_______________________________ WELLS FARGO BANK, N.A., as a U.S. Bank By__________________________________ Title_______________________________ THE SAKURA BANK LTD., as a U.S. Bank By__________________________________ Title_______________________________ 5 FIRSTRUST BANK, as a U.S. Bank By__________________________________ Title_______________________________ HUA NAN COMMERCIAL BANK, LTD., as a U.S. Bank By__________________________________ Title_______________________________ LAND BANK OF TAIWAN, as a U.S. Bank By__________________________________ Title_______________________________ 6 SCHEDULE 1.1(C) PRICING SCHEDULE The Floating Rate Margin, the Fixed Rate Margin, the rate per annum applicable for facility fees and the rate per annum applicable for letter of credit fees for Financial Letters of Credit, Non-Financial Letters of Credit and Commercial Letters of Credit, respectively, shall be determined in accordance with the table below and the other provisions of this Schedule 1.1(C). ---------------
============================================================================ Level I Level II Level III Level IV Level V - ---------------------------------------------------------------------------- Rate for 0.3750% 0.3750% 0.3750% 0.3750% 0.3000% Facility Fee - ---------------------------------------------------------------------------- Fixed Rate Margin* 1.8750% 1.6250% 1.3750% 1.2500% 1.2000% - ---------------------------------------------------------------------------- Floating Rate Margin 0 0 0 0 0 - ---------------------------------------------------------------------------- Rate for 0.7500% 0.6250% 0.5000% 0.4375% 0.4500% Non-Financial LC Fee - ---------------------------------------------------------------------------- Rate for 1.8750% 1.6250% 1.3750% 1.2500% 1.2000% Financial LC Fee* - ----------------------------------------------------------------------------
7 - ---------------------------------------------------------------------------- Rate for 0.7500% 0.6250% 0.5000% 0.4375% 0.4500% Commercial LC Fee ============================================================================
Level I applies when the Funded Debt to Cash Flow Ratio is equal to or ------- greater than 4.0 to 1.0. Level II applies when the Funded Debt to Cash Flow Ratio is equal to or -------- greater than 3.5 to 1.0 but less than 4.0 to 1.0. Level III applies when the Funded Debt to Cash Flow Ratio is equal to or --------- greater than 3.0 to 1.0 but less than 3.5 to 1.0. Level IV applies when the Funded Debt to Cash Flow Ratio is equal to or -------- greater than 2.5 to 1.0 but less than 3.0 to 1.0. Level V applies when the Funded Debt to Cash Flow Ratio is less than 2.5 to ------- 1.0. The applicable Level shall be adjusted, to the extent applicable, 45 days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days) after the end of each Fiscal Quarter based on the Funded Debt to Cash Flow Ratio as of the last day of such Fiscal Quarter; provided that if the Company fails to -------- deliver the financial statements required by Section 10.1.1 or 10.1.2, as -------------- ------ applicable, and the related certificate required by Section 10.1.4 by the 45th -------------- day (or, if applicable, the 90th day) after any Fiscal Quarter, Level I shall apply until such financial statements are delivered. * The Fixed Rate Margin and the Rate for Financial LC Fee for each of Level I through Level V shall be reduced by (i) 0.125% so long as the credit rating of the Company's senior unsecured non-credit-enhanced Debt (or an indicative rating for such Debt) is at least Ba2 by Moody's Investors Service, Inc. and BB+ by Standard & Poor's Ratings Group and (ii) an additional 0.125% so long as such credit rating is at least Ba1 by Moody's Investors Service, Inc. and BB+ by Standard & Poor's Ratings Group. The Company agrees to notify the U.S. Agent (which shall promptly notify each of the U.S. Banks) in writing within 3 Business Days of any change in a credit rating which causes a change in the Fixed Rate Margin and the Rate for Financial LC Fee pursuant to the preceding sentence. Any change in the Fixed Rate Margin and the Rate for Financial LC Fee pursuant to this paragraph shall be effective on the third Business Day after the change in the Company's credit rating which causes any such change in the Fixed Rate Margin and the Rate for Financial LC Fee. EXHIBIT A CONFIRMATION Dated as of May 12, 2000 TO: Bank of America, N.A., as U.S. Agent for the Banks party to the Credit Agreement referred to below, as Agent for the Lenders party to the Term Loan B Agreement referred to below, as Agent for the Lenders party to the Term Loan C Agreement referred to below, and as Collateral Agent under the Intercreditor Agreement referred to below; the Banks party to the Credit Agreement; and the Lenders party to the Term Loan B Agreement and the Term Loan C Agreement Reference is made to (a) the Credit Agreement dated as of September 29, 1998 (as previously amended, the "Credit Agreement") among United Rentals (North ---------------- America), Inc. (the "Company"), United Rentals, Inc. ("Parent"), United Rentals ------- ------ of Canada, Inc., various financial institutions, Bank of America Canada, as Canadian Agent, and Bank of America, N.A., as U.S. Agent, (b) the Term Loan Agreement dated as of July 10, 1998 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan B Agreement") among Parent, the --------------------- Company, various financial institutions and Bank of America, N.A., as Agent, (c) the Term Loan Agreement dated as of July 15, 1999 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan C Agreement") among --------------------- Parent, the Company, various financial institutions and Bank of America, N.A., as Agent, (d) the Fourth Amendment dated as of May 12, 2000 (the "Fourth ------ Amendment to Credit Agreement") to the Credit Agreement, (e) the Second Restated - ----------------------------- U.S. Guaranty dated as of September 29, 1998 executed by various Subsidiaries of the Company, (f) the Second Restated U.S. Security Agreement dated as of September 29, 1998 (the "Security Agreement") among the Company, Parent, various ------------------ Subsidiaries of the Company and Bank of America, N.A., as Collateral Agent (in such capacity, the "Collateral Agent"), (g) the Second Restated Company Pledge ---------------- Agreement dated as of September 29, 1998 between the Company and the Collateral Agent, (h) the Restated Parent Guaranty dated as of September 29, 1998 executed by Parent, (i) the Restated Parent Pledge Agreement dated as of September 29, 1998 between Parent and the Collateral Agent, and (j) the Intercreditor Agreement dated as of September 29, 1998 (the "Intercreditor Agreement") among ----------------------- Bank of America, N.A., as U.S. Agent, Bank of America, N.A., as Term Agent, Bank of America, N.A. as agent for the Lenders under the Term Loan C Agreement, and the Collateral Agent. Each document referred to in items (e) through (i) above --------- --- is called a "Credit Document". Capitalized terms used but not defined herein --------------- shall have the meanings set forth in the Credit Agreement. Each of the undersigned (a) confirms to each of the addressees that (i) each Credit Document to which such undersigned is a party continues in full force and effect on and after the date hereof, and is the legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms; and (ii) the obligations and liabilities guaranteed or secured (as applicable) under each Credit Document include, without limitation, all obligations and liabilities of the Company and Parent under the Credit Agreement, as amended by the Fourth Amendment to Credit Agreement (as so amended, the "Amended Credit -------------- Agreement"), the Term Loan B Agreement and the Term Loan C Agreement; (b) agrees - --------- that each reference in each Credit Document to the "Credit Agreement" or any ---------------- similar term shall, after the date hereof, be deemed to be a reference to the Amended Credit Agreement; (c) agrees that each reference in each Credit Document to the "Term Loan Agreement" or any similar term shall, after the date hereof, ------------------- be deemed to be a reference to the Term Loan B Agreement; and (d) agrees that each reference in each Credit Document to "Permitted Senior Secured Debt" shall ----------------------------- include all Debt under the Term Loan C Agreement. IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to be executed and delivered by its duly authorized officer as of the date first written above. UNITED RENTALS (NORTH AMERICA), INC. By:_____________________________________ Title: Chief Financial Officer UNITED RENTALS, INC. By:_____________________________________ Title:__________________________________ Confirmation Signature Page-1 ADVANCE BARRICADES AND SIGNING, INC. COAST LINE MARKING, INC. CONTRACTOR BARRICADE SERVICE, INC. FLASHER BARRICADES, INC. FLASHER CO. OF KANSAS, INC. FLASHER COMPANY OF OKLAHOMA, INC. FLASHER OF DIXIE II, INC. HIGHWAY SUPPLY COMPANY JADCO SIGNING, INC. LECTRIC LIGHTS COMPANY LIDDELL BROS., INC. LIDDELL MANAGEMENT CO., INC. PRECISION PAVEMENT MARKING, INC. SAFETY LIGHTS SALES AND LEASING, INC. OF TEXAS STATE BARRICADING, INC. STATE SIGN, INC. TRAFFIC SAFETY SERVICES, INC. TWO WAY TRAFFIC, INC. UNITED RENTALS GULF, INC. UNITED RENTALS NORTHWEST, INC. UNITED RENTALS SOUTHEAST, INC. UNITED RENTALS OF CANADA, INC. WARNING LITES OF MINNESOTA, INC. WARNING SAFETY LIGHTS, INC. WARNING SAFETY LIGHTS OF GEORGIA, INC. WLI INDUSTRIES, INC. WARNING LITES OF INDIANA, INC. WARNING LITES OF IOWA, INC. SAFE-T-FLARE SERVICES, INC. WORK SIGNS, INC. WORK ZONE, INC. WORK ZONE SAFETY, INC. WOUDENBERG ENTERPRISES, INC. WYNNE SYSTEMS, INC. By:______________________________ Title:___________________________ Confirmation Signature Page-2 Confirmation Signature Page-3 UNITED EQUIPMENT RENTALS GULF, L.P. By: United Rentals (North America), Inc. Its: General Partner By:________________________________ Title:_____________________________ UNITED RENTALS SOUTHEAST, L.P. By: United Rentals (North America), Inc. Its: General Partner By:________________________________ Title:_____________________________ Confirmation Signature Page-3 Accepted and Agreed to this 12th day of May, 2000 BANK OF AMERICA, N.A. (formerly Bank of America National Trust and Savings Association), as Collateral Agent for the Benefited Parties By:_________________________ Title:______________________ Agency Officer Confirmation Signature Page-4 EXHIBIT D FORM OF AMENDMENT TO INTERCREDITOR AGREEMENT Dated as of May 12, 2000 Reference is made to the Intercreditor Agreement (the "Intercreditor ------------- Agreement") dated as of September 29, 1998 among Bank of America, N.A. (formerly - --------- known as Bank of America National Trust and Savings Association), as U.S. Agent, Bank of America, N.A., as Term Agent, various other senior secured creditors of the Company and Bank of America, N.A., as Collateral Agent. Capitalized terms not defined herein are used as defined in the Intercreditor Agreement. Each of the undersigned hereby agrees that subsection 3(f) of the Intercreditor Agreement is amended in its entirety to read as follows: "(f) The Collateral Agent may (and shall at the request of any Grantor), without the approval of any other Benefited Party, (x) release any Collateral under any Security Document which is permitted to be sold or disposed of or otherwise released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and execute and deliver such releases as may be necessary to terminate of record the Collateral Agent's security interest (for the benefit of the Benefited Parties) in such Collateral, (y) release any Grantor from its obligations under the U.S. Guaranty which is permitted to be released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and (z) subordinate its interest in any Collateral to the holder of any Lien on such Collateral which is permitted by clause (d) or (h) of Section 10.8 of the Credit Agreement, clause (d) or (h) of Section 10.8 of the Term Loan Agreement and the comparable provisions of each Permitted Senior Secured Debt Agreement. In determining whether any such release or subordination is permitted, the Collateral Agent may (I) rely, as to factual matters, on a Certificate from the Company and (II) may (but shall not be obligated to) seek (and, if obtained, rely upon) instructions from the Required Banks (as to whether any such release is permitted under the Credit Agreement), from the Required Term Lenders (as to whether any such release is permitted under the Term Loan Agreement) and from the Required Permitted Creditors under each Permitted Senior Secured Debt Agreement or group of related Permitted Senior Secured Debt Agreements (as to whether any such release is permitted under the applicable Agreement or Agreements). In addition, the Collateral Agent may release all Collateral upon Confirmation receipt of (i) written notice from the U.S. Agent that all Credit Obligations have been paid in full (other than contingent obligations (A) in respect of Letters of Credit which have been cash collateralized or otherwise provided for to the satisfaction of the Issuing Bank (as defined in the Credit Agreement) and (B) arising under provisions of the Credit Agreement which by their terms survive termination thereof) and all commitments to create Credit Obligations have been terminated, (ii) written notice from the Term Agent that all Term Obligations have been paid in full (other than any Term Obligations arising under provisions of the Term Loan Agreement which by their terms survive termination thereof), (iii) written notice from each holder of Hedging Obligations that such Hedging Obligations have been paid in full or otherwise provided for to the satisfaction of such holder (it being understood that if the Collateral Agent notifies the Banks, the Term Lenders and the Permitted Creditors that it intends to release the Collateral pursuant to this sentence, the Collateral Agent may conclusively presume that there are no Hedging Obligations other than those of which the Collateral Agent receives notice not later than the later of five business days after notice is sent by the Collateral Agent of such intended release and the business day before the date on which such release occurs), (iv) written notice from each Permitted Creditor (or, in the case of any group of Permitted Creditors, an agent therefor) that all Permitted Senior Secured Debt Obligations owed to such Permitted Creditor (or group of Permitted Creditors) have been paid in full (other than any Permitted Senior Secured Debt Obligations arising under provisions of any Permitted Senior Secured Debt Document which by their terms survive termination thereof) and (v) payment of all other Benefited Obligations owed to the Collateral Agent or of which the Collateral Agent has received written notice." IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be executed and delivered by its duly authorized representative as of the date hereof. Signature-2 BANK OF AMERICA, N.A., as Collateral Agent By: Name: Title: BANK OF AMERICA, N.A., as U.S. Agent By: Name: Title: BANK OF AMERICA, N.A., as Term Agent By: Name: Title: BANK OF AMERICA, N.A., as Agent for the holders of the Permitted Senior Secured Debt By: Name: Title: Signature-3 EX-10.C 4 0004.txt AMENDED & RESTATED TERM LOAN AGREEMENT ================================================================================ EXHIBIT 10(C) AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of May 12, 2000 among UNITED RENTALS, INC., UNITED RENTALS (NORTH AMERICA), INC., VARIOUS FINANCIAL INSTITUTIONS, FLEET NATIONAL BANK, as Documentation Agent, and BANK OF AMERICA, N.A., as Administrative Agent Arranged by BANC OF AMERICA SECURITIES LLC TABLE OF CONTENTS SECTION 1 DEFINITIONS, ETC...................................................... 1 1.1 Definitions............................................................ 1 1.2 Other Interpretive Provisions.......................................... 16 SECTION 2 LOANS.................................................................. 17 2.1 Loans................................................................... 17 2.2 Borrowing Procedure.................................................... 17 2.3 Conversion and Continuation Procedures................................. 17 2.4 Pro Rata Treatment..................................................... 18 SECTION 3 NOTES EVIDENCING LOANS................................................ 18 SECTION 4 INTEREST.............................................................. 18 4.1 Interest Rates......................................................... 18 4.2 Interest Payment Dates................................................. 19 4.3 Setting and Notice of Certain Rates.................................... 19 4.4 Computation of Interest................................................ 19 SECTION 5 FEES.................................................................. 20 5.1 Fees................................................................... 20 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..................................................... 21 7.3 Setoff................................................................. 21 7.4 Proration of Payments.................................................. 21 7.5 Taxes.................................................................. 21 SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES........... 23 8.1 Increased Costs........................................................ 23 8.2 Basis for Determining Interest Rate Inadequate or Unfair............... 24 8.3 Changes in Law Rendering Eurodollar Lending Unlawful................... 24 8.4 Funding Losses......................................................... 25 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............ 26
8.8 Conclusiveness of Statements; Survival of Provisions................... 26 SECTION 9 WARRANTIES............................................................ 26 9.1 Organization, etc...................................................... 26 9.2 Authorization; No Conflict............................................. 27 9.3 Validity and Binding Nature............................................ 27 9.4 Information............................................................ 27 9.5 No Material Adverse Change............................................. 27 9.6 Litigation and Contingent Liabilities.................................. 28 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................................................. 30 9.16 Year 2000 Problem..................................................... 30 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.................................... 31 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 10.2 Books, Records and Inspections........................................ 32 10.3 Insurance............................................................. 33 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............................. 34 10.6.4 Senior Debt to Tangible Assets............................. 34 10.6.5 Senior Debt to Cash Flow Ratio............................. 34 10.7 Limitations on Debt................................................... 34 10.8 Liens................................................................. 36 10.9 Asset Sales........................................................... 37 10.10 Restricted Payments.................................................. 37 10.11 Mergers, Consolidations, Amalgamations, Sales........................ 37 10.12 Modification of Certain Documents.................................... 38 10.13 Use of Proceeds...................................................... 39 10.14 Further Assurances................................................... 39
10.15 Transactions with Affiliates............................................ 39 10.16 Employee Benefit Plans.................................................. 39 10.17 Environmental Laws...................................................... 40 10.18 Unconditional Purchase Obligations...................................... 40 10.19 Inconsistent Agreements................................................. 40 10.20 Business Activities..................................................... 40 10.21 Advances and Other Investments.......................................... 40 10.22 Location of Assets...................................................... 41 10.23 QuIPS Documents......................................................... 41 SECTION 11 CONDITIONS OF EFFECTIVENESS............................................. 42 SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT...................................... 42 12.1 Events of Default........................................................ 42 12.1.1 Non-Payment of the Loans, etc.................................. 42 12.1.2 Non-Payment of Other Debt...................................... 42 12.1.3 Other Material Obligations..................................... 43 12.1.4 Bankruptcy, Insolvency, etc.................................... 43 12.1.5 Non-Compliance with Provisions of This Agreement............... 43 12.1.6 Warranties..................................................... 43 12.1.7 Pension Plans.................................................. 43 12.1.8 Judgments...................................................... 44 12.1.9 Invalidity of U.S. Guaranty, etc............................... 44 12.1.10 Invalidity of Collateral Documents, etc........................ 44 12.1.11 Change in Control.............................................. 44 12.1.12 Invalidity of Parent Guaranty, etc............................. 44 12.2 Effect of Event of Default............................................... 45 SECTION 13 THE AGENT............................................................... 45 13.1 Appointment and Authorization............................................ 45 13.2 Delegation of Duties..................................................... 45 13.3 Liability of Agent....................................................... 45 13.4 Reliance by Agents....................................................... 46 13.5 Notice of Default........................................................ 46 13.6 Credit Decision.......................................................... 46 13.7 Indemnification.......................................................... 47 13.8 Agent in Individual Capacity............................................. 48 13.9 Successor Agent; Assignment of Agency.................................... 48 13.10 Withholding Tax.......................................................... 49 13.11 Documentation Agent...................................................... 50 SECTION 14 GENERAL................................................................. 51 14.1 Waiver; Amendments....................................................... 51 14.2 Confirmations............................................................ 51 14.3 Notices.................................................................. 51 14.4 Computations............................................................. 52 14.5 Regulation U............................................................. 52 14.6 Costs, Expenses and Taxes................................................ 52 14.7 Judgment................................................................. 52 14.8 Captions................................................................. 53
14.9 Assignments; Participations.............................................. 53 14.9.1 Assignments.................................................... 53 14.9.2 Participations................................................. 54 14.10 Governing Law........................................................... 55 14.11 Counterparts............................................................ 55 14.12 Successors and Assigns.................................................. 55 14.13 Indemnification by the Company.......................................... 56 14.14 Forum Selection and Consent to Jurisdiction............................. 56 14.15 Waiver of Jury Trial.................................................... 57 14.16 Intercreditor Agreement................................................. 57 14.17 Designated Senior Indebtedness.......................................... 57
SCHEDULE 1.1(A) Lenders and 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(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 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) EXHIBIT K Copy of Parent Guaranty (Section 1) EXHIBIT L Copy of Parent Pledge Agreement (Section 1) EXHIBIT M Form of Confirmation (Section 11) EXHIBIT N Form of Amendment to Intercreditor Agreement (Section 14.16) AMENDED AND RESTATED TERM LOAN AGREEMENT ---------------------------------------- This AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of May 12, 2000 (this "Agreement") is entered into among UNITED RENTALS, INC., a Delaware --------- corporation ("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"), FLEET NATIONAL BANK, as Documentation Agent, and ------- BANK OF AMERICA, N.A. (in its individual capacity, "BofA"), as administrative ---- agent (in such capacity, the "Agent"). ----- WHEREAS, Parent, the Company, various financial institutions and Bank of America, N.A. (then known as Bank of America National Trust and Savings Association), as agent, entered into a Term Loan Agreement dated as of July 10, 1998 (the "Original Agreement"). ------------------ WHEREAS, the parties hereto have agreed to amend and restate the Original Agreement pursuant hereto. NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto agree as follows: I. SECTION DEFINITIONS, ETC. A. 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. 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. Agreement - see the Preamble. --------- -------- Arranger means Banc of America Securities LLC. -------- 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 Moody's Investors Service, Inc., (c) any certificate of deposit (or time deposits represented by such certificates of deposit) or bankers acceptance, maturing not more than one year after such time, or overnight Federal Funds transactions that are issued or sold by any Permitted Bank or a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than U.S.$500,000,000, (d) any repurchase agreement entered into with any Permitted Bank (or other commercial banking institution of the stature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any - ---------- obligation of the type described in any of clauses (a) through (c) and (ii) has ----------- --- a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Permitted Bank (or other commercial banking institution) thereunder and (e) investments in short-term asset management accounts offered by any Permitted Bank for the purpose of investing in loans to any corporation (other than Parent or an Affiliate of Parent), state or municipality, in each case organized under the laws of any state of the United States or of the District of Columbia. Cash Flow means, as of the last day of any Fiscal Quarter, Consolidated Net --------- Income for the period of four Fiscal Quarters ending on 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 July 10, 1998. ------------ 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 of the following periods: (i) the period of ------------------ two Fiscal Quarters ended June 30, 1998; (ii) the period of three Fiscal Quarters ending September 30, 1998; and (iii) each period of four Fiscal Quarters ending on the last day of a Fiscal Quarter on or after December 31, 1998. Consolidated Net Income means, with respect to Parent and its Subsidiaries ----------------------- for any period, the net income (or loss) of Parent and its Subsidiaries for such period, excluding any extraordinary gains during such period 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 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 account or upon the application of such Person, (f) all Hedging Obligations of such Person, (g) all Suretyship Liabilities of such Person and (h) all Synthetic Lease Obligations of such Person. 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. Effective Date - see Section 11. -------------- ---------- 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. Equipment Securitization Transaction means any sale, assignment, pledge or ------------------------------------ other transfer (a) by Parent or any Subsidiary of equipment or related assets, (b) by any ES Special Purpose Subsidiary of leases or rental agreements between Parent and/or any Subsidiary, as lessee, on the one hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such equipment or related assets, and lease receivables arising under such leases and rental agreements and (c) by Parent or any Subsidiary of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto, all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers' repurchase programs or guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto, and (iii) any collateral, guaranties, credit enhancement or other property or claims supporting or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables. ERISA means the Employee Retirement Income Security Act of 1974. ----- ES 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 a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith, owning the equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction, and pledging or transferring any of the foregoing or interests therein). Eurodollar 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 1/16th of 1%) determined by the Agent as follows: Eurodollar Rate = IBOR --------------------------------------- 1.00 - Eurodollar Reserve Percentage where, Eurodollar Reserve Percentage means, for any day for any Interest ----------------------------- Period, a percentage (expressed as a decimal, rounded upward, if necessary, to an integral multiple of 1/100th of 1%) in effect on such day under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"); and IBOR means the rate per annum 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 at a rate ------------------ determined 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 U.S. Rentals Agreement means the Credit Agreement dated as of ------------------------------- February 26, 1997 among U.S. Rentals, various financial institutions and BofA, as Administrative 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 1997") refer to the Fiscal Year ending on December 31 of such calendar year. Floor Plan Financing Arrangement means any arrangement whereby Parent or a -------------------------------- Subsidiary grants a Lien to an equipment manufacturer (or an affiliate thereof which is in the financing business) on all equipment purchased from such manufacturer and the proceeds thereof, including equipment which was not financed by such manufacturer (or an affiliate thereof). Foreign 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. 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, all outstanding Securitization Obligations, but excluding (i) contingent obligations in respect of undrawn letters of credit and Suretyship Liabilities (except to the extent constituting contingent obligations or Suretyship Liabilities in respect of Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging Obligations, (iii) Debt of Parent to Subsidiaries and Debt of Subsidiaries to Parent 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 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 Collateral Agent, and BofA, as agent for the holders of the Permitted Senior Secured Debt, 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 (without duplication) 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 Synthetic Leases and any interest which is capitalized but excluding amortization of deferred financing costs) and (b) consolidated yield or discount accrued during such period on the aggregate investment or claim held by purchasers, assignees or other transferees of, or of interests in, accounts receivable, lease receivables and other rights to payment of 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 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 the 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 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 the Company, each Subsidiary of the Company which is a ---------- party to any Loan Document and Parent. 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. 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 - means each promissory note issued to a Lender under the Original ---- Agreement (except for any such promissory note which has been replaced prior to the Effective Date or which is replaced pursuant to Section 3) and each --------- promissory note issued pursuant to Section 3 (except for any such promissory --------- note which is replaced by a new promissory note hereunder). Original Agreement - see the recitals. ------------------ -------- 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 --------------- 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) Richard D. Colburn 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 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 (a) the Term ----------------------------- Loan Agreement dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent, which amends and restates the Term Loan Agreement dated as of July 15, 1999; and (b) any other term loan agreement (other than this Agreement) among Parent, the Company, various financial institutions and BofA, as agent; provided that (i) any such other 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 be issued on or prior to December 31, 2000, shall mature no earlier than June 30, 2006 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 Debt under any such other term loan agreement shall have interest rate spreads greater than the then-applicable interest rate spreads under the Term Loan Agreement referred to in clause (a) above. ---------- 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 U.S.$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. 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. Receivables 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 account related thereto, and any collateral, guaranties or other property or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables. 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 Charlotte, North Carolina (or such other office in the United States of America as BofA shall specify from time to time), as its "prime rate." (The "prime 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 prime 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. ---------------- RS 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 Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein). Restructuring means a transaction effected to create a holding company of ------------- the Company, pursuant to which the Company becomes a direct wholly-owned Subsidiary of such holding company, and as a result of which the holders of capital stock of such holding company are, upon consummation of such transaction, substantially the same as the holders of the common stock of the Company immediately prior to such transaction. SEC means the Securities and Exchange Commission. --- Securitization Obligations means, with respect to any Securitization -------------------------- Transaction, the aggregate investment or claim held at any time by all purchasers, assignees or transferees of (or of interests in) or holders of obligations that are supported or secured by (i) in the case of an Equipment Securitization Transaction, equipment or related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) in connection with such Equipment Securitization Transaction, and (ii) in the case of a Receivables Securitization Transaction, accounts receivable, lease receivables and other rights to payment in connection with such Receivables Securitization Transaction. Securitization Transaction means an Equipment Securitization Transaction or -------------------------- a Receivables Securitization Transaction. Seller Subordinated Debt means unsecured indebtedness of the Company that: ------------------------ (a) is subordinated, substantially upon the terms set forth in Exhibit G --------- or other terms that are more favorable to the 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. Senior Note Purchase Agreements means the Note Purchase Agreements, each ------------------------------- dated as of April 1, 1998, pursuant to which U.S. Rentals issued U.S.$252,000,000 of Senior Notes. Senior Note Purchase Agreement Amendment means an amendment to a Senior ---------------------------------------- Note Purchase Agreement which (a) permits the Company to assume the indebtedness evidenced by the Senior Note issued thereunder, (b) consents to the U.S. Rentals Acquisition and (c) amends certain other provisions thereof so that, after giving effect to the transactions contemplated to take place on or before the effective date of the First Amendment to this Agreement, no "Default" will exist under and as defined in the applicable Senior Note Purchase Agreement. Senior Notes means the U.S.$47,000,000 6.71% Series A Senior Notes due ------------ April 28, 2006, the U.S.$165,000,000 6.86% Series B Senior Notes due April 28, 2008 and the U.S.$40,000,000 6.93% Series C Senior Notes due April 28, 2010, in each case issued by U.S. Rentals pursuant to the Senior Note Purchase Agreements. Special Purpose Vehicle means an ES Special Purpose Vehicle or an RS ----------------------- Special Purpose Vehicle. 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. 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, pursuant to Section 10.14. --------- ------------- Suretyship Liability means, with respect to any Person, any liability of -------------------- such Person with respect to any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation in respect of any Suretyship Liability shall (subject to any limitation set forth therein) be deemed to be the principal amount of the debt, obligation or other liability supported thereby. Synthetic Lease means a lease transaction under which the parties intend --------------- that (i) the lease will be treated as an "operating lease" by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property. Synthetic Lease Obligations means, with respect to any Person, the sum of --------------------------- (a) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (b) all rental and purchase price payment obligations of such Person under Synthetic Leases assuming such Person exercises the option to purchase the leased property at the end of the lease term. Tangible Assets means at any time all assets of 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. 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 the Parent or any Subsidiary in the ordinary course of business, the terms of which provide for recourse against the 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. B. Other Interpretive Provisions. ----------------------------- a. Section, Schedule and Exhibit references are to this Agreement unless ------- -------- ------- otherwise specified. (1) The term "including" is not limiting and means "including without limitation." (2) 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." b. 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. c. 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. d. 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. C. Amendment and Restatement of Original Agreement. The Parent, the Company, ----------------------------------------------- the Required Lenders and the Administrative Agent agree that, effective on the Effective Date, this Agreement amends and restates in its entirety the Original Agreement. II. SECTION LOANS. A. Loans. The Company and the Required Lenders acknowledge that concurrently ----- with the effectiveness hereof the "Loans" outstanding to the Company under (and as defined in) the Original Agreement shall continue in existence as term loans hereunder and shall be deemed to be "Loans" as defined herein. B. Borrowing Procedure. The Company shall give written notice to the Agent of ------------------- the proposed borrowing of the Loans not later than (a) if all of the Loans initially are to bear interest at the Base Rate, 10:00 A.M., Chicago time, on the proposed date of borrowing, and (b) otherwise, 9:00 A.M., Chicago time, two Business Days prior to the proposed date of borrowing. 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. 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 Lender shall provide the Agent at the office specified by the Agent with immediately available funds in the amount of such Lender's Loan and, subject to the satisfaction of the conditions precedent set forth in Section 11, the Agent ---------- shall pay over the proceeds of the Loans to the Company on such date. C. 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: i) the proposed date of conversion or continuation; ii) the aggregate amount of the Tranches to be converted or continued; iii) the Type of Tranches resulting from the proposed conversion or continuation; and iv) 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. D. Pro Rata Treatment. Except as otherwise expressly provided herein, the ------------------ borrowing and all conversions, continuations and repayments shall be effected so that after giving effect thereto each Lender will have a pro rata share (according to its Percentage) of all Types and Groups of Tranches. III. SECTION NOTES EVIDENCING LOANS. Each Lender's Loan shall be evidenced by the Note issued to such Lender under the Original Agreement; provided that any Lender may request a new Note -------- substantially in the form set forth in Exhibit A. Each Note shall be payable in --------- 24 quarterly installments on the last day of each calendar quarter beginning on September 30, 1999 and continuing through June 30, 2005. Each of the first 23 installments shall be in an amount equal to such Lender's Percentage of U.S. $625,000; and the final installment shall be in an amount equal to such Lender's Percentage of U.S. $235,625,000. IV. SECTION INTEREST. A. 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 0.375%; and 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 2.25%; provided, however, that at any time an Event of Default exists, the interest - -------- ------- rate applicable to each Tranche shall be increased by 2%. B. 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. C. 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. D. 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 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. V. SECTION FEES. 5.1 Fees. On the Effective Date, the Company shall pay to the Agent for ---- the account of each applicable Lender the fees referred to in Section 11. ---------- 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. VI. SECTION 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. VII. SECTION MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES. A. 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 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. B. 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. C. 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. D. 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 purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery (but without interest). E. 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 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. VIII. SECTION INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES. A. 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 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. B. 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 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. C. 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. D. 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. E. 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. F. 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. G. 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). H. 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. IX. SECTION WARRANTIES. To induce the Agent and the Lenders to enter into this Agreement and to induce the Lenders to make the Loans hereunder, Parent warrants to the Agent and the Lenders that: A. Organization, etc. The Company is a corporation duly organized, validly ----------------- existing and in good standing under the laws of the State of Delaware; each of Parent and each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; and each of the Company, Parent and each Subsidiary is duly qualified to do business in each jurisdiction where the nature of its business makes such qualification necessary (except in those instances in which the failure to be qualified or in good standing does not have a Material Adverse Effect) and has full power and authority to own its property and conduct its business as presently conducted by it. B. Authorization; No Conflict. The execution and delivery by the Company of -------------------------- this Agreement and each other Loan Document to which it is a party, the borrowing hereunder, the execution and delivery by each other Loan Party of each Loan Document to which it is a party and the performance by 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 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 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 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 the Company, any other Loan Party or any other Subsidiary or of any agreement, indenture, instrument or other document which is binding on 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 the Company, any other Loan Party or any other Subsidiary (other than Liens arising under the Loan Documents). C. 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. D. 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 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). E. No Material Adverse Change. -------------------------- (a) The audited consolidated financial statements of the Company and its Subsidiaries at December 31, 1997 and the unaudited consolidated financial statements of the Company and its Subsidiaries at March 31, 1998, 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, 1997, 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. F. 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. G. Ownership of Properties; Liens. Except as set forth on Schedule 9.7, as of ------------------------------ ------------ the Closing Date 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. - ---- H. Subsidiaries. As of the Closing Date, the Company has no Subsidiaries ------------ except those listed in Schedule 9.8. ------------ I. 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. J. 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. K. 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. L. 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. M. 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. N. Solvency, etc. On the Effective Date (or, in the case of any Person which ------------- becomes a Loan Party after the Effective Date, on the date such Person becomes a Loan Party), (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. O. 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. P. 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. Q. Senior Debt. The obligations of the Company hereunder constitute "Senior ----------- Indebtedness" as such term is defined in each Subordinated Note Indenture. X. SECTION 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: A. 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 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 the Fiscal Year ending December 31, 1998, a copy of an annual agreed-upon procedures report on the equipment fleet of the Company and its Subsidiaries for such Fiscal Year as performed by the Company's independent auditors. 10.1.2 Quarterly Reports. Promptly when available and in any event within ----------------- 45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of each Fiscal Year, 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: (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. 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 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 0.675 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 9/30/01 1.75 to 1.0 9/30/01 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 minus all Securitization Obligations to (ii) Tangible Assets minus, to the extent included in Tangible Assets, all assets which are owned by or subject to a Lien in favor of a Special Purpose Vehicle 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 2.75 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 and under the other "Loan Documents" as defined in the Credit Agreement; (b) unsecured Debt of Parent, the Company and Subsidiaries of the Company (excluding Contingent Payments and Seller Subordinated Debt); provided that no -------- Subsidiary of the Company 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; ---------- (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, and provided, further, that the aggregate amount of all such -------- ------- Debt arising in connection with Floor Plan Financing Arrangements shall not exceed U.S.$30,000,000; (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 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 Closing Date 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 -------- aggregate principal amount of all Permitted Senior Secured Debt shall not at any time exceed U.S.$1,000,000,000; (k) Synthetic Lease Obligations, provided that the aggregate amount of all Synthetic Lease Obligations plus (without duplication) the aggregate amount of all Securitization Obligations arising under Equipment Securitization Transactions shall not at any time exceed the greater of U.S.$500,000,000 or 15% of Tangible Assets; (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. 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 (i) being leased (in the case of Capital Leases), (ii) purchased from the relevant manufacturer (in the case of Floor Plan Financing Arrangements) or (iii) the purchase price for which was or is being financed by such Debt (in the case of other Debt) and, in each case, the proceeds (including insurance proceeds) of any disposition or loss of such property); (e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding 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), (j) and (k) of Section 10.7; and ----------- --- --- ------------ (h) Liens arising in connection with Securitization Transactions. 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; (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, 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 of the QuIPS Indenture; (v) so long as (x) no Event of Default or Unmatured Event of Default exists or would result therefrom and (y) the aggregate amount of all purchases made by Parent since April 30, 2000 (excluding purchases permitted by clause (vi) below) ----------- does not exceed U.S.$200,000,000, Parent may repurchase its capital stock; 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 (excluding purchases permitted by clause (v) above) 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; provided, further, that any stock of Parent, or warrants or -------- ------- units relating thereto, purchased by Parent pursuant to clause (v) or (vi) above ---------- ---- shall be immediately retired. 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 or exchanges of equipment consistent with industry practice), sell, transfer, convey or lease all or any substantial part of its assets, or sell or assign with or without recourse any receivables, except for (a) any such merger or consolidation, amalgamation, sale, transfer, conveyance, lease or assignment of or by any 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 or an asset exchange of like-kind property) 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 Receivables Securitization Transaction or of equipment and related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) pursuant to any Equipment Securitization Transaction, provided that the aggregate amount of all equipment and related -------- assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) sold, assigned or otherwise transferred pursuant to all Equipment Securitization Transactions in any Fiscal Year (in addition to any such assets which are permitted to be sold in such Fiscal Year pursuant to clause (e)) shall not exceed U.S. $25,000,000; and (e) sales and dispositions of - ---------- assets (including the stock of Subsidiaries and asset exchanges of like-kind property), in addition to sales and other dispositions in the ordinary course of business or permitted by clause (d), so long as the net book value of (i) all ---------- assets disposed of in like-kind exchanges 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 and (ii) all other 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 real property and 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 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 the 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; ------------- (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 Parent or in any Subsidiary of the Company or by any of the Subsidiaries of the Company in Parent, the Company or any other Subsidiary of 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) Investments by Parent in the QuIPS Trust existing on July 15, 1999; (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 U.S.$10,000,000; 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 QuIPS Documents. Not permit any amendment to or modification of the --------------- QuIPS Debentures, the QuIPS Preferred Securities, either QuIPS Guarantee or the QuIPS Indenture which, in any such case, is adverse to the interests of the Lenders. 10.24 Limitations on Securitization Transactions. Not at any time permit ------------------------------------------ the aggregate amount of all Securitization Obligations to exceed (a) in the case of Receivables Securitization Transactions, U.S. $150,000,000; and (b) in the case of Equipment Securitization Transactions, the remainder of (i) the greater of (x) U.S. $500,000,000 and (y) 15% of Tangible Assets minus (ii) the aggregate ----- amount of all Synthetic Lease Obligations (excluding, to prevent double- counting, Synthetic Lease Obligations which also are Securitization Obligations arising under Equipment Securitization Transactions) of Parent and its Subsidiaries. XI. SECTION CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective and all outstanding loans under the Original Agreement shall continue in existence as term loans hereunder, and shall be deemed to be "Loans" as defined herein, on the date (the "Effective Date") that the Agent shall have received -------------- (a) counterparts hereof executed by the Company, Parent, the Required Lenders and the Agent; (b) confirmation that substantially similar amendments to the Credit Agreement and any document evidencing or governing the Permitted Senior Secured Debt have (or concurrently with the effectiveness hereof will) become effective; (c) a Confirmation in the form of Exhibit M hereto signed by Parent, the Company and all U.S. Subsidiaries (other - --------- than the QuIPS Trust); (d) the opinions of Weil, Gotshal & Manges LLP, special counsel to Parent and the Company, and Oscar D. Folger, counsel to Parent and the Company; and (e) an amendment fee for each Lender that has executed and delivered (by facsimile or otherwise) to the Agent a counterpart hereof prior to 2:00 p.m., Chicago time, on May 12, 2000, an amendment fee in an amount equal to 0.25% of the amount of such Lender's Loan. XII. SECTION EVENTS OF DEFAULT AND THEIR EFFECT. A. Events of Default. Each of the following shall constitute an Event of ----------------- Default: 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. 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 the 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 the 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. 3. Other Material Obligations. Default in the payment when due, or in the -------------------------- performance or observance of, any material obligation of, or condition agreed to by, Parent or any Subsidiary with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with other such defaults might reasonably be expected to have a Material Adverse Effect (except only to the extent that the existence of any such default is being contested by Parent or such Subsidiary in good faith and by appropriate proceedings and appropriate reserves have been made in respect of such default). 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. 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, 10.16 or 10.24; 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. 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. 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 liability that Parent and the Controlled Group have incurred on the date of such withdrawal) exceeds U.S.$15,000,000. 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. 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. 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. 11. Change in Control. (a) Any Person or group of Persons (within the ----------------- meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but excluding the Permitted Holders) shall acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under such 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 any document evidencing or governing any Permitted Senior Secured Debt; or (e) at any time after the date of the Restructuring, the Company shall cease to be a direct, wholly-owned Subsidiary of Parent. 12. Invalidity of Parent Guaranty, etc. The Parent Guaranty shall ---------------------------------- cease to be in full force and effect at any time after the Restructuring, Parent shall fail (subject to any applicable grace period) to comply with or to perform any provision of the Parent Guaranty, or Parent (or any Person by, through or on behalf of Parent) shall contest in any manner the validity, binding nature or enforceability of the Parent Guaranty. B. 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. XIII. SECTION THE AGENT. A. 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. B. 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. C. 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, 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. D. 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. E. 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. F. 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 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. G. 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 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. H. 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. I. 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. J. 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 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 (including Form W-8BEN or Form W-8ECI) or any applicable successor form, (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 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 any 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. - --------- K. Documentation Agent. No Lender identified on the facing page or the ------------------- signature pages of this Agreement as a "Documentation Agent" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, no Lender so identified as a "Documentation Agent" shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder. XIV. SECTION GENERAL. A. 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. B. 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. C. 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 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. D. 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. E. 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. F. 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. G. 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). H. Captions. Section captions used in this Agreement are for -------- convenience only and shall not affect the construction of this Agreement. I. Assignments; Participations. --------------------------- 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.$5,000,000; 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 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 mark 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). 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 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. J. 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. K. 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. L. 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. M. 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. N. 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 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. O. 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. P. Intercreditor Agreement. The Required Lenders hereby direct the Agent to ----------------------- enter into an amendment to the Intercreditor Agreement substantially in the form of Exhibit N hereto. Without limiting the foregoing sentence, the --------- Lenders irrevocably authorize the Collateral Agent, at its option and in its discretion to take any action permitted under subsection 3(f) of the Intercreditor Agreement. Q. Designated Senior Indebtedness. The Company hereby designates the Loans ------------------------------ and all other obligations of the Company hereunder and under the Notes as Designated Senior Indebtedness for purposes of, and as defined in, each Subordinated Note Debenture. Delivered at Chicago, Illinois, as of the day and year first above written. UNITED RENTALS, INC. Chief Financial Officer BANK OF AMERICA, N.A., as Agent BANK OF AMERICA, N.A. FLEET NATIONAL BANK, as Documentation Agent and as a Lender Title_________________________________ ALLFIRST BANK Title___________________________ ARCHIMEDES FUNDING II, LTD. By: ING Capital Advisors LLC, as Collateral Manager By__________________________________________ ARCHIMEDES FUNDING III, LTD. By: ING Capital Advisors LLC, as Collateral Manager By__________________________________________ THE BANK OF NEW YORK By Title THE BANK OF NOVA SCOTIA By________________________ Title COLUMBUS LOAN FUNDING LTD. By__________________________ Title COMERICA BANK By____________________________ Title CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC. As: Attorney-in-Fact and on behalf of First Allmerica Financial Life Insurance Company as Portfolio Manager By Title CYPRESSTREE INVESTMENT FUND, LLC By: CypressTree Investment Management Company, Inc., its Managing Member Title CYPRESSTREE INVESTMENT PARTNERS II, LTD. By: Title CYPRESSTREE SENIOR FLOATING RATE FUND By: Title DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch By Title EATON VANCE INSTITUTIONAL SENIOR LOAN FUND By: By_______________________________________ Title EATON VANCE SENIOR INCOME TRUST By: By______________________________________ Title FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY By______________________________________________ Title FIRST DOMINION FUNDING, I By: By______________________________________ Title FIRST UNION NATIONAL BANK By______________________________________ Title KZH CYPRESS TREE-1 LLC By Title KZH-CNC CORPORATION By Title KZH-ING-2 CORPORATION By Title METROPOLITAN LIFE INSURANCE COMPANY By Title MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST By Title NORTH AMERICAN SENIOR FLOATING RATE FUND By Title OXFORD STRATEGIC INCOME FUND SENIOR DEBT PORTFOLIO THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH THE TRAVELERS INSURANCE COMPANY VAN KAMPEN SENIOR INCOME TRUST By: By____________________________ SCHEDULE 1.1(A)
Amount of Lender Loan Percentage ------ ---- ---------- Allfirst Bank US$2,977,500.00 1.20% Archimedes Funding II, Ltd. 4,962,500.00 2.00% Archimedes Funding III, Ltd. 4,974,937.34 2.00% Bank of America, N.A. 14,887,500.00 6.00% The Bank of New York 9,925,000.00 4.00% The Bank of Nova Scotia 9,925,000.00 4.00% Columbus Loan Funding Ltd. 1,994,974.87 0.80% Comerica Bank 9,925,000.00 4.00% CypressTree Investment Fund, LLC 740,640.68 0.30% CypressTree Investment Partners II, Ltd. 3,216,896.98 1.30% CypressTree Senior Floating Rate Fund 994,987.48 0.40% Deutsche Bank AG 9,925,000.00 4.00% Eaton Vance Institutional Senior Loan Fund 992,500.00 0.40% Eaton Vance Senior Income Trust 2,977,500.00 1.20% First Allmerica Financial Life Insurance Company 1,487,506.26 0.60% First Dominion Funding, I 4,962,500.00 2.00% First Union National Bank 24,837,374.68 10.01% Fleet National Bank 9,925,000.00 4.00% KZH Cypress Tree-1 LLC 15,146,196.74 6.10% KZH-CNC Corporation 4,962,500.00 2.00% KZH-ING-2 Corporation 9,925,000.00 4.00% Metropolitan Life Insurance Company 14,887,500.00 6.00% Morgan Stanley Dean Witter Prime Income Trust 14,887,500.00 6.00% North American Senior Floating Rate Fund 1,243,734.34 0.50% Oxford Strategic Income Fund 1,488,750.00 0.60% Senior Debt Portfolio 49,128,750.00 19.80% The Sumitomo Trust & Banking Co., Ltd. 1,994,974.87 0.80% The Travelers Insurance Company 11,885,125.32 4.79% Van Kampen Senior Income Trust 2,942,650.46 1.19% US$248,125,000.00 100.00%
SCHEDULE 9.6(a) LITIGATION AND CONTINGENT LIABILITIES 1) A subsidiary of the Company has been named in a complaint alleging sexual harassment, intentional inflection of emotional distress and wrongful termination. The alleged acts took place prior to the Company's acquisition of such subsidiary. The plaintiff is seeking an aggregate of $450,000. 2) The Company is subject to a claim of wrongful termination by one of its branch sales manager. The sales manager has indicated he would settle the claim of wrongful termination for the sum of $350,000. 3) The Company brought suit against two former shareholders relating to one of its acquisitions, primarily alleging misrepresentation of sales and violation of non-compete agreements. Subsequent to the filing of the Company's suit, the former shareholders brought suit against the Company alleging breach of contract, breach of fiduciary duties, conversion and fraudulent misrepresentation among others. The Company estimates these suits could be settled for approximately $500,000. SCHEDULE 9.6(b) CONTINGENT PAYMENTS The Company has agreed in connection with 12 of its acquisitions to pay additional amounts to the former owners based upon specified future revenues (such amounts being limited to (i) $10,000,000, $2,800,000, $2,000,000, $1,400,000, $1,000,000, $800,000, $500,000, $500,000, $500,000, $350,000 and Cdn. $4,000,000, respectively, with respect to 11 of such acquisitions and (ii) an amount based on the revenues of a single store with respect to the other acquisition). Continent Payments Relating to U.S. Rentals, Inc. ------------------------------------------------ U.S. Rentals, Inc. has agreed in connection with two of its acquisitions to pay additional amounts to the former owners based upon a specified percentage of pre-tax profits (such amounts being limited to $2,500,000 with respect to one acquisition and based upon the pre-tax profits with respect to the other acquisition). SCHEDULE 9.8 SUBSIDIARIES of UNITED RENTALS,INC. THOSE CORPORATIONS WHICH ARE INDENTED REPRESENT SUBSIDIARIES OF THE CORPORATION UNDER WHICH THEY ARE INDENTED. EXCEPT AS OTHERWISE INDICATED, 100% OF THE VOTING STOCK OF EACH OF THE SUBSIDIARIES LISTED BELOW IS OWNED BY ITS PARENT. - ------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ------------------------------------------------------------------------------- United Rentals Trust I Delaware - ------------------------------------------------------------------------------- UR Acquisition Corporation Delaware - ------------------------------------------------------------------------------- United Rentals (North America), Inc. Delaware - ------------------------------------------------------------------------------- 1297334 Ontario Inc. Ontario - ------------------------------------------------------------------------------- Sky King Holding Equipment Limited Ontario - ------------------------------------------------------------------------------- A&A Tool Rentals and Sales, Inc. California - ------------------------------------------------------------------------------- Access Rentals, Inc. New York - ------------------------------------------------------------------------------- Adco Equipment, Inc. California - ------------------------------------------------------------------------------- Adco Equipment Supply, Inc. California - ------------------------------------------------------------------------------- Arrow Equipment Company Illinois - ------------------------------------------------------------------------------- BNR Equipment, Inc. New York - ------------------------------------------------------------------------------- Coran Enterprises, Incorporated (d/b/a A-1 Rents) California - ------------------------------------------------------------------------------- Dealers Service Co. New Jersey - ------------------------------------------------------------------------------- Grand Valley Equipment Company, Inc. Michigan - ------------------------------------------------------------------------------- Grey Fox Equipment, Inc. Connecticut - ------------------------------------------------------------------------------- High Reach, Inc. Oregon - ------------------------------------------------------------------------------- High Reach Co., Inc. Pennsylvania - ------------------------------------------------------------------------------- Independent Scissor Lifts, Inc. California - ------------------------------------------------------------------------------- Independent Scissor Lifts Southwest, Inc. California - ------------------------------------------------------------------------------- Kubota of Grand Rapids, Inc. Michigan - ------------------------------------------------------------------------------- Lift Systems, Inc. Illinois - ------------------------------------------------------------------------------- Madison Equipment Sales and Rental, Inc. Alabama - ------------------------------------------------------------------------------- McClinch, Inc. Connecticut - ------------------------------------------------------------------------------- McClinch Leasing Corporation Connecticut - ------------------------------------------------------------------------------- McClinch Equipment Corporation Connecticut - ------------------------------------------------------------------------------- McClinch Crane Services, Inc. Connecticut - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ------------------------------------------------------------------------------- McClinch Equipment Services, Inc. Connecticut - ------------------------------------------------------------------------------- Mercer Equipment Company North Carolina - ------------------------------------------------------------------------------- Misco Rents, Inc. Indiana - ------------------------------------------------------------------------------- Mission Valley Rentals, Inc. California - ------------------------------------------------------------------------------- Nevada High Reach Equipment, Inc. Nevada - ------------------------------------------------------------------------------- Palmer Equipment Company Michigan - ------------------------------------------------------------------------------- Paul E. Carlson, Inc. Minnesota - ------------------------------------------------------------------------------- Phoenix Rental Corporation Wisconsin - ------------------------------------------------------------------------------- Powers Rentals & Sales, Inc. California - ------------------------------------------------------------------------------- Rental Tools & Equipment Co. International, Inc. Maryland - ------------------------------------------------------------------------------- Rentals Unlimited, Incorporated Rhode Island - ------------------------------------------------------------------------------- Ross Equipment Corporation Ohio - ------------------------------------------------------------------------------- Rylan, Inc. Delaware - ------------------------------------------------------------------------------- Space Maker Systems of Va., Inc. Virginia - ------------------------------------------------------------------------------- United Equipment Rental of Houston, Inc. Texas (formerly J&J Rentals Services, Inc.) - ------------------------------------------------------------------------------- United Rentals of Canada, Inc. Ontario - ------------------------------------------------------------------------------- Access Lift Equipment, Inc. Canada - ------------------------------------------------------------------------------- 1292655 Ontario, Inc. Ontario - ------------------------------------------------------------------------------- Ray-Gordon Equipment Limited Ontario - ------------------------------------------------------------------------------- Reitzel Rentals Ltd. Ontario - ------------------------------------------------------------------------------- Select Equipment Ltd. Ontario - ------------------------------------------------------------------------------- 902277 Ontario Inc. Ontario - ------------------------------------------------------------------------------- United Rentals of Canada (Quebec), Inc. Quebec - ------------------------------------------------------------------------------- United Rentals of Colorado, Inc. (formerly Colorado Santa Fe Supply & Rental, Inc.) - ------------------------------------------------------------------------------- United Rentals of Kentucky, Inc. Kentucky - ------------------------------------------------------------------------------- United Rentals of Mid-Atlantic, Inc. (formerly New Jersey Industrial Lift, Inc.) - ------------------------------------------------------------------------------- United Rentals of New England, Inc. (formerly Connecticut Manchester Equipment Rental & Sales, Inc.) - ------------------------------------------------------------------------------- United Rentals of New Jersey, Inc. Delaware - ------------------------------------------------------------------------------- United Rentals of New York New York - -------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ----------------------------------------------------------------------------------------------- United Rentals of Southern California, Inc. (d/b/a California Able Equipment) (formerly Rental Equipment, Inc.) - ----------------------------------------------------------------------------------------------- United Rentals of Utah, Inc. Utah - ----------------------------------------------------------------------------------------------- Wynne Systems, Inc. California - ----------------------------------------------------------------------------------------------- Yankee Equipment Corporation Connecticut - -----------------------------------------------------------------------------------------------
SCHEDULE 9.15 ENVIRONMENTAL MATTERS Valley Rentals, Inc. with branches in Longview, Vancouver, and Turnwater, - -------------------- Washington Fill material used to level the Longview site before the building was constructed, was later determined to be "black mud", which now is considered a hazardous waste (generated at the Reynolds Metals aluminum foundry). The property is listed as a state hazardous waste site. The former Underground Storage Tanks "USTs" (removed in May 1991) have not been granted closure, because during their removal the waste material was found. The Company has obtained an indemnity for this matter from the seller. Pearson Equipment Rental, Ltd., two locations in Sarnia, Ontario - ------------------------------ At the Vidal Street site, there is likelihood that there remains petroleum hydrocarbon contaminated soils in the vicinity of a former underground oil/water separator tank and former above-ground fuel storage tanks. There were previously USTs at the south end of the property, and there also is a suspicion that contaminated soils may exist at this location. The purchase agreement provides for a $200,000 holdback, to address further site assessment work and remediation of the contamination. The Company is awaiting a proposal to conduct the additional Phase II site assessment work. Perco, Ltd., nine stores in Quebec and one in Ontario, Canada - ----------- Tank tightness tests and possibly Phase II site assessments need to be conducted at five of the sites which have fuel USTs. The sellers are responsible pursuant to the purchase agreement for the costs of these investigations and any remediation of contamination. Reitzel Rentals, Ltd., eleven branches in Ontario, Canada - --------------------- Five of the properties have had USTs removed, for which there is not any documentation of the soil or groundwater quality in proximity to the former tanks. A Phase II environmental assessment is soon to be conducted at each of these sites to determine whether any contamination is present. The sellers are to pay for the costs of the investigation and any subsequent remediation. Yankee Equipment, Bloomfield, Connecticut and Pascoag, Rhode Island - ---------------- There are two, 1981-vintage 10,000 gallon USTs at the Bloomfield, Connecticut site that will need to be removed and remediated, if needed, or upgraded to meet the December 22, 1998 federal deadline. This will be done pursuant to the stock purchase agreement dated June 5, 1998, at the seller's expense. There are two dry wells at the Bloomfield property that have received petroleum- contaminated water. These currently are being investigated by an environmental firm, and will be remediated and sealed off, as appropriate. This will be done pursuant to the stock purchase agreement at the seller's expense. Gaedcke Equipment Company, with branches in Dallas, Austin, Houston and - ------------------------- Beaumont, Texas The Dallas property had a UST installed that was not registered. The seller represented in the stock purchase agreement that these tanks meet the federal requirements. (Also the Houston property contains two USTs and the Beaumont facility contains one UST). These three USTs have mixed petroleum products. Seller has agreed to indemnify the Company. The Company will expend $5,000 each to remove these USTs for a total of $15,000 in the aggregate. Seller will be responsible for all remediation. There are small unregistered waste oil USTs at the Houston and Beaumont properties, which need to be removed. The estimated cost to remove the USTs is approximately $20,000. Rent-It Center, Inc., Salt Lake City, Utah - -------------------- The USTs at the Rent-It Center, Inc. property on the west side of Salt Lake City previously were removed. There remain low levels of several contaminants in soil and groundwater on the property. However, due to considerable contamination of groundwater in the vicinity of this property from other sources, it is unclear that such contamination is solely from Rent-It Center, Inc.'s former USTs. An environmental report was completed at this site in 1996 and was submitted to the state authorities requesting the UST removal case to be considered closed. To date, there has been no response to this request. It is unlikely further remediation would be required. However, if continued monitoring would be necessary, the maximum exposure is estimated to be approximately $20,000. A-1 Rental, Story Road, San Jose, California - ---------- A-1's Story Road, San Jose store was subject to the removal of USTs in 1986. Although the local agency has advised the company on how to obtain a conditional case closure (for cases where groundwater has not been impacted), the company has never followed up, and the UST removal case apparently remains open. The Company has been indemnified for any future costs associated with this matter, and is following up with the regulatory agency to determine what future actions may be required, on behalf of the previous owners. The maximum exposure to the Company if it has to complete the closure is estimated to be approximately $20,000. Mission Valley Rentals, Inc., Osgood Road Property, Fremont, California - ---------------------------- Two USTs were removed in 1990 by Mission Valley, and a soil remediation project followed; this UST case remains open with the local program administering agency, the Alameda County Water District (ACWD), which had requested additional monitoring. The company has recently had groundwater wells sampled, which indicated no remaining contamination. These results will be presented to the ACWD with a request for case closure. The maximum exposure to the Company is estimated to be approximately $70,000, which has been provided to the Company by the previous owners to resolve this matter. Ross Equipment Corporation - -------------------------- The subject property contains two, 8,000-gallon USTs that are suspected to have leaked and which need to be removed and remediated. As is common with old USTs, there is a significant prospect that these tanks or their piping may indeed have leaked, and that soils and possibly groundwater will need to be remediated. The maximum exposure to the Company is estimated to be $50,000, however, the company has received an indemnity from the former owners. Ray Gordon Equipment - -------------------- There are three UST's in use on the property (two 1,000-gallon UST's and one 2,000-gallon gasoline UST). It is not clear whether these UST's have leaked and require remediation. The maximum expense to the Company is estimated to be $225,000, however, the Company has received on indemnity from the former owners. Equipment Supply Company - ------------------------ Two facilities in connection with this acquisition have UST's that require upgrading or removal. The maximum exposure to the Company is estimated to be $150,000, however, the Company has received an indemnity from the former owners. Rental Tools & Equipment Co. International, Inc. - ------------------------------------------------ There was a number of recently removed UST's from 11 sites relating to this acquisition. The Company is awaiting test results and other documentation to determine the necessary follow-up procedures, if any, relating to these sites. The maximum exposure to the Company is estimated to be approximately $225,000. In addition, the former shareholders have agreed to remove and, if necessary, remediate 15 existing underground storage tanks at their expense. Environmental Matters Relating to U.S. Rentals ---------------------------------------------- The $1,072,511.31 reserve for hazardous waste on U.S. Rentals, Inc.'s financial statements represents estimated future cost for the pulling of underground fuel storage tanks and remediation of contaminated soil. Remediation Cost: - ---------------- Over the past 11 years, U.S. Rentals has pulled 125 underground storage tanks. The average remediation cost per tank is $14,297.20. U.S. Rentals currently owns 5 double-walled underground storage tanks. U.S. Rentals has seven sites with ongoing remediation. Total Hazardous Waste Reserve Breaks Down As Follows: - ---------------------------------------------------- Projected remediation cost on remaining underground storage tanks: $82,500.00. Projected remediation on sites in progress of remediation: $473,412.20. Environmental liability waste reserve: $539,880.80. Total A/P accrued liabilities waste reserve: $1,072,511.31. Based on the above, it is my opinion that the reserve of hazardous waste as of September 24, 1998 is adequate and no additional reserve or disclosure is required. Projected reserves on sites in process of remediation total $423,412.20 and breaks down as follows: Downey: - ------ The current remediation costs to date are $8,152.88. After monitoring wells were installed, the ground water tested Benzine at 0.8 parts per billion. 1.0 parts per billion is the limit. Therefore, our consultant is submitting for closure. If the local board still has an issue in regards to the soil contamination, our consultant will transfer the case to the regional board for consideration of closure, since the regional board is more lenient in regards to soil issues. The current remediation reserve for the Downey facility is $30,000. Long Beach: - ---------- U.S. rentals has relocated from the 5640 Cherry Avenue location. U.S. Rentals has paid $98,435.59 in remediation cost at this site. The soil may be excavated and disposed of from this facility if required by the City of Long Beach. The current reserves are $138,412.20. Fullerton: - --------- Six underground storage tanks were pulled from this facility. The contamination was minimal. Contaminated soil was removed from the facility and the case has been submitted for closure. The current reserves for administrative costs for closure are $10,000.00. Stockton: - -------- U.S. Rentals has spent $100,269.39 in remediation costs associated with this site. U.S. Rentals continues to test the monitoring wells. The current remediation reserve on this facility is $150,000. Tucson: - ------ In November of 1997, U.S. Rentals pulled an oil tank from this facility and found contamination. It is anticipated that the remediation exposure will be low due to the level of the ground water. U.S. rentals has reserved $15,000 for its remediation at this facility. San Francisco: - ------------- U.S. Rentals recently removed five active underground storage tanks at this facility, and contamination was discovered. U.S. Rentals has reserved $80,000 towards remediation costs associated with this facility. Keller: - ------ During construction a contractor discovered 10 to 12 55-gallon drums and contaminated soil. Reserves set for removal and disposal of 850 cubic yards of contaminated soil. To prevent delays in construction, the contaminated soil has been removed and stockpiled on plastic until disposal can take place. $50,000 to haul and dispose of contaminated soil. Remediation cost to remove contaminated soil, $38,029.14. Reserved at $50,000.00 to complete closure. SCHEDULE 10.7(g) OTHER EXISTING DEBT None SCHEDULE 10.8 EXISTING LIENS None SCHEDULE 12.1.11 KEY EXECUTIVES
Name Current Office(s) - ---- ----------------- Bradley S. Jacobs Chairman, Chief Executive Off Officer and Director John N. Milne Vice Chairman, Secretary, Director and Chief Acquisition Officer Michael J. Nolan Chief Financial Officer Robert P. Miner Vice President, Finance
SCHEDULE 14.3 ADDRESSES FOR NOTICES UNITED RENTALS, INC. - -------------------- Four Greenwich Office Park Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telephone: 203/622-3131 Facsimile: 203/622-6080 BANK OF AMERICA, N.A., as Agent - ------------------------------- Agency Management Services 231 South LaSalle Street Chicago, Illinois 60697 Attention: Kris Hyde Telephone: 312/828-1657 Facsimile: 312/974-9102 BANK OF AMERICA, N.A. - --------------------- 231 South LaSalle Street Chicago, Illinois 60697 Attention: Robert Rospierski Telephone: 312/828-8363 Facsimile: 312/828-1974 THE BANK OF NEW YORK - --------------------- 10 Mason Street, 3rd Floor Greenwich, CT 06830 Attention: Melinda E. White Telephone: 203/863-2692 Facsimile: 203/863-2610 THE BANK OF NOVA SCOTIA - ----------------------- 1 Liberty Plaza, 26th Floor New York, New York 10006 Attention: Kevin McCarthy Telephone: 212/225-5074 Facsimile: 212/225-5090 CHASE BANK OF TEXAS - ------------------- 600 Travis Street 50/th/ Floor Houston, TX 77002 Attention: Clifton Harris Telephone: 713/216-4629 Facsimile: 713/577-5266 COMERICA BANK - ------------- One Detroit Center 6th Floor 500 Woodward Avenue Detroit, MI 48226 Attention: Kimberly Kersten Telephone: 313/222-7441 Facsimile: 313/222-3503 FIRST UNION NATIONAL BANK - ------------------------- 301 s. College Street One First Union Center, DC5 Charlotte, NC 28288-0737 Attention: Steve Haas Telephone: 704/383-4993 Facsimile: 704/383-3927 FLEET NATIONAL BANK - ------------------- 100 Federal Street Mail: 01-09-04 Boston, MA 02110 Attention: Arthur Oberheim Telephone: 617/434-1956 Facsimile: 617/437-2160 THE SUMITOMO TRUST & BANKING CO. - -------------------------------- 527 Madison Avenue New York, NY 1022 Attention: Elizabeth Quirk Telephone: 212/326-0553 Facsimile: 212/418-4848 EATON VANCE MANAGEMENT EATON VANCE SENIOR INCOME TRUST EATON VANCE INSTITUTIONAL SENIOR LOAN FUND SENIOR DEBT PORTFOLIO OXFORD STRATEGIC INCOME FUND - ---------------------------- 255 State Street 8/th/ Floor Boston, MA 02109 Attention: John Redding Telephone: 617/598-8191 Facsimile: 617/695-9594 FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY - ----------------- c/o CypressTree Investment Management Company, Inc. 125 High Street, 14th Floor Boston, Massachuestts 02110 Attention: Peter Merrill Telephone: 617/946-0600 Facsimile: 617/946-5681 CYPRESSTREE INVESTMENT FUND, LLC CYPRESSTREE INVESTMENT PARTNERS II, LTD CYPRESSTREE SENIOR FLOATING RATE FUND NORTHAMERICAN SENIOR FLOATING RATE FUND - --------------------------------------- 125 High Street Boston, Massachusetts 02110 Attention: Jeffrey Heuer Telephone: 617/946-0600 Facsimile: 617/946-5681 ING CAPITAL ADVISORS INC. ARCHIMEDES FUNDING III, LTD. - ---------------------------- 333 S. Grand Avenue Suite 4250 Los Angeles, CA 90071 Attention: Michael Campbell Telephone: 213/346-3971 Facsimile: 213/346-3995 ING CAPITAL ADVISORS INC. ARCHIMEDES FUNDING II, LTD. - --------------------------- 333 S. Grand Avenue Suite 4250 Los Angeles, CA 90071 Attention: Michael Hatley Telephone: 213/346-3972 Facsimile: 213/346-3995 KZH-CYPRESSTREE-1 CORPORATION - ----------------------------- c/o The Chase Manhattan Bank 450 West 33rd Street - 15th Floor New York, New York 10001 Attention: Virginia Conway Telephone: 212/946-7575 Facsimile: 212/946-7776 DEUTSCHE BANK AG - ---------------- 31 West 52nd Street New York, NY 10019 Attention: Jean Hannigan Telephone: 212/469-8648 Facsimile: 212/469-3632 ALLFIRST BANK - ------------- 25 South Charles Street Mail Code 101-501 Baltimore, MD 21203 Attention: Tom McLoughlin Telephone: 410/244-4906 Facsimile: 410/244-4295 KZH-CNC CORPORATION - ------------------- c/o The Chase Manhattan Bank 450 West 33rd Street - 15th Floor New York, New York 10001 Attention: Virginia Conway Telephone: 212/946-7575 Facsimile: 212/946-7776 KZH-ING-2 CORPORATION - --------------------- c/o The Chase Manhattan Bank 450 West 33rd Street - 15th Floor New York, New York 10001 Attention: Virginia Conway Telephone: 212/946-7575 Facsimile: 212/946-7776 with a copy to: ING Capital Advisors 333 South Grand Avenue Suite 4250 Los Angeles, California 90071 Attention: Karen Morgan METROPOLITAN LIFE INSURANCE COMPANY - -------- 334 Madison Avenue Convent Station, New Jersey 07961 Attention: James Dingler Telephone: 973/254-3206 Facsimile: 973/254-3050 MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST - ------------------- c/o Morgan Stanley Dean Witter Advisors Inc. Two World Trade Center, 72nd Floor New York, New York 10048 Attention: Jinny Kim Telephone: 212/392-3206 Facsimile: 212/392-5345 TRUST COMPANY OF THE WEST - ------------------------- 200 Park Avenue, 22nd Floor New York, NY 10166 Attention: Scott Feldman Telephone: 212/771-4158 Facsimile: 212/771-4098 VAN KAMPEN AMEERICAN CAPITAL - ---------------------------- One Parkview Plaza Oakbrook Terrace, IL 60181 Attention: Brian Buscher Telephone: 630/684-6283 Facsimile: 630/684-6023 THE TRAVELERS INSURANCE COMPANY - ------------------------------- 399 park Ave., 7/th/ Floor New York, NY 10043 Attention: Glenn Marchak Telephone: 212/559-8597 Facsimile: 212/793-2089 EXHIBIT M CONFIRMATION Dated as of May 12, 2000 TO: Bank of America, N.A., as U.S. Agent for the Banks party to the Credit Agreement referred to below, as Agent for the Lenders party to the Term Loan B Agreement referred to below, as Agent for the Lenders party to the Term Loan C Agreement referred to below, and as Collateral Agent under the Intercreditor Agreement referred to below; the Banks party to the Credit Agreement; and the Lenders party to the Term Loan B Agreement and the Term Loan C Agreement Reference is made to (a) the Credit Agreement dated as of September 29, 1998 (as previously amended, the "Credit Agreement") among United Rentals (North ---------------- America), Inc. (the "Company"), United Rentals, Inc. ("Parent"), United Rentals ------- ------ of Canada, Inc., various financial institutions, Bank of America Canada, as Canadian Agent, and Bank of America, N.A., as U.S. Agent, (b) the Term Loan Agreement dated as of July 10, 1998 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan B Agreement") among Parent, the --------------------- Company, various financial institutions and Bank of America, N.A., as Agent, (c) the Term Loan Agreement dated as of July 15, 1999 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan C Agreement") among --------------------- Parent, the Company, various financial institutions and Bank of America, N.A., as Agent, (d) the Fourth Amendment dated as of May 12, 2000 (the "Fourth ------ Amendment to Credit Agreement") to the Credit Agreement, (e) the Second Restated - ----------------------------- U.S. Guaranty dated as of September 29, 1998 executed by various Subsidiaries of the Company, (f) the Second Restated U.S. Security Agreement dated as of September 29, 1998 (the "Security Agreement") among the Company, Parent, various ------------------ Subsidiaries of the Company and Bank of America, N.A., as Collateral Agent (in such capacity, the "Collateral Agent"), (g) the Second Restated Company Pledge ---------------- Agreement dated as of September 29, 1998 between the Company and the Collateral Agent, (h) the Restated Parent Guaranty dated as of September 29, 1998 executed by Parent, (i) the Restated Parent Pledge Agreement dated as of September 29, 1998 between Parent and the Collateral Agent, and (j) the Intercreditor Agreement dated as of September 29, 1998 (the "Intercreditor Agreement") among ----------------------- Bank of America, N.A., as U.S. Agent, Bank of America, N.A., as Term Agent, Bank of America, N.A. as agent for the Lenders under the Term Loan C Agreement, and the Collateral Agent. Each document referred to in items (e) through (i) above --------- --- is called a "Credit Document". Capitalized terms used but not defined herein --------------- shall have the meanings set forth in the Credit Agreement. Each of the undersigned (a) confirms to each of the addressees that (i) each Credit Document to which such undersigned is a party continues in full force and effect on and after the date hereof, and is the legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms; and (ii) the obligations and liabilities guaranteed or secured (as applicable) under each Credit Document include, without limitation, all obligations and liabilities of the Company and Parent under the Credit Agreement, as amended by the Fourth Amendment to Credit Agreement (as so amended, the "Amended Credit Agreement"), the Term Loan B Agreement and the Term ------------------------ Loan C Agreement; (b) agrees that each reference in each Credit Document to the "Credit Agreement" or any similar ---------------- term shall, after the date hereof, be deemed to be a reference to the Amended Credit Agreement; (c) agrees that each reference in each Credit Document to the "Term Loan Agreement" or any similar term shall, after the date hereof, be ------------------- deemed to be a reference to the Term Loan B Agreement; and (d) agrees that each reference in each Credit Document to "Permitted Senior Secured Debt" shall ----------------------------- include all Debt under the Term Loan C Agreement. IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to be executed and delivered by its duly authorized officer as of the date first written above. UNITED RENTALS (NORTH AMERICA), INC. By:_______________________________________ Title: Chief Financial Officer UNITED RENTALS, INC. By:_______________________________________ Title:____________________________________ ADVANCE BARRICADES AND SIGNING, INC. COAST LINE MARKING, INC. FLASHER BARRICADES, INC. FLASHER COMPANY OF OKLAHOMA, INC. JADCO SIGNING, INC. LECTRIC LIGHTS COMPANY LIDDELL BROS., INC. LIDDELL MANAGEMENT CO., INC. PRECISION PAVEMENT MARKING, INC. SAFETY LIGHTS SALES AND LEASING, INC. OF TEXAS STATE BARRICADING, INC. TRAFFIC SAFETY SERVICES, INC. TWO WAY TRAFFIC, INC. UNITED RENTALS GULF, INC. UNITED RENTALS NORTHWEST, INC. UNITED RENTALS SOUTHEAST, INC. UNITED RENTALS OF CANADA, INC. WARNING LITES OF MINNESOTA, INC. WARNING SAFETY LIGHTS, INC. WARNING SAFETY LIGHTS OF GEORGIA, INC. WLI INDUSTRIES, INC. WARNING LITES OF INDIANA, INC. WARNING LITES OF IOWA, INC. SAFE-T-FLARE SERVICES, INC. WORK ZONE SAFETY, INC. WOUDENBERG ENTERPRISES, INC. WYNNE SYSTEMS, INC. By:_______________________________________ Title:____________________________________ UNITED EQUIPMENT RENTALS GULF, L.P. By: United Rentals (North America), Inc. Its: General Partner By:_______________________________________ Title:____________________________________ UNITED RENTALS SOUTHEAST, L.P. By: United Rentals (North America), Inc. Its: General Partner By:_______________________________________ Title:____________________________________ Accepted and Agreed to this 12th day of May, 2000 BANK OF AMERICA, N.A. (formerly Bank of America National Trust and Savings Association), as Collateral Agent for the Benefited Parties By:_____________________________ Title:__________________________ Agency Officer EXHIBIT N FORM OF AMENDMENT TO INTERCREDITOR AGREEMENT Dated as of May 12, 2000 Reference is made to the Intercreditor Agreement (the "Intercreditor ------------- Agreement") dated as of September 29, 1998 among Bank of America, N.A. (formerly - --------- known as Bank of America National Trust and Savings Association), as U.S. Agent, Bank of America, N.A., as Term Agent, various other senior secured creditors of the Company and Bank of America, N.A., as Collateral Agent. Capitalized terms not defined herein are used as defined in the Intercreditor Agreement. Each of the undersigned hereby agrees that subsection 3(f) of the Intercreditor Agreement is amended in its entirety to read as follows: "(f) The Collateral Agent may (and shall at the request of any Grantor), without the approval of any other Benefited Party, (x) release any Collateral under any Security Document which is permitted to be sold or disposed of or otherwise released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and execute and deliver such releases as may be necessary to terminate of record the Collateral Agent's security interest (for the benefit of the Benefited Parties) in such Collateral, (y) release any Grantor from its obligations under the U.S. Guaranty which is permitted to be released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and (z) subordinate its interest in any Collateral to the holder of any Lien on such Collateral which is permitted by clause (d) or (h) of Section 10.8 of the Credit Agreement, clause (d) or (h) of Section 10.8 of the Term Loan Agreement and the comparable provisions of each Permitted Senior Secured Debt Agreement. In determining whether any such release or subordination is permitted, the Collateral Agent may (I) rely, as to factual matters, on a Certificate from the Company and (II) may (but shall not be obligated to) seek (and, if obtained, rely upon) instructions from the Required Banks (as to whether any such release is permitted under the Credit Agreement), from the Required Term Lenders (as to whether any such release is permitted under the Term Loan Agreement) and from the Required Permitted Creditors under each Permitted Senior Secured Debt Agreement or group of related Permitted Senior Secured Debt Agreements (as to whether any such release is permitted under the applicable Agreement or Agreements). In addition, the Collateral Agent may release all Collateral upon receipt of (i) written notice from the U.S. Agent that all Credit Obligations have been paid in full (other than contingent obligations (A) in respect of Letters of Credit which have been cash collateralized or otherwise provided for to the satisfaction of the Issuing Bank (as defined in the Credit Agreement) and (B) arising under provisions of the Credit Agreement which by their terms survive termination thereof) and all commitments to create Credit Obligations have been terminated, (ii) written notice from the Term Agent that all Term Obligations have been paid in full (other than any Term Obligations arising under provisions of the Term Loan Agreement which by their terms survive termination thereof), (iii) written notice from each holder of Hedging Obligations that such Hedging Obligations have been paid in full or otherwise provided for to the satisfaction of such holder (it being understood that if the Collateral Agent notifies the Banks, the Term Lenders and the Permitted Creditors that it intends to release the Collateral pursuant to this sentence, the Collateral Agent may conclusively presume that there are no Hedging Obligations other than those of which the Collateral Agent receives notice not later than the later of five business days after notice is sent by the Collateral Agent of such intended release and the business day before the date on which such release occurs), (iv) written notice from each Permitted Creditor (or, in the case of any group of Permitted Creditors, an agent therefor) that all Permitted Senior Secured Debt Obligations owed to such Permitted Creditor (or group of Permitted Creditors) have been paid in full (other than any Permitted Senior Secured Debt Obligations arising under provisions of any Permitted Senior Secured Debt Document which by their terms survive termination thereof) and (v) payment of all other Benefited Obligations owed to the Collateral Agent or of which the Collateral Agent has received written notice." IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be executed and delivered by its duly authorized representative as of the date hereof. Amendment t BANK OF AMERICA, N.A., as Collateral Agent By: Name: Title: BANK OF AMERICA, N.A., as U.S. Agent By: Name: Title: BANK OF AMERICA, N.A., as Term Agent By: Name: Title: BANK OF AMERICA, N.A., as Agent for the holders of the Permitted Senior Secured Debt By: Name: Title: EX-10.D 5 0005.txt AMENDED & RESTATED TERM LOAN AGREEMENT EXHIBIT 10 (D) ================================================================================ AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of May 12, 2000 among UNITED RENTALS, INC., UNITED RENTALS (NORTH AMERICA), INC., VARIOUS FINANCIAL INSTITUTIONS, GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication Agent, and BANK OF AMERICA, N.A., as Administrative Agent BANC OF AMERICA SECURITIES LLC Lead Arranger and Book Manager ================================================================================ TABLE OF CONTENTS
Page SECTION 1 DEFINITIONS, ETC.................................................... 1 1.1 Definitions.......................................................... 1 1.2 Other Interpretive Provisions........................................ 16 1.3 Amendment and Restatement............................................ 17 SECTION 2 LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION PROCEDURES....... 17 2.1 Loans................................................................ 17 2.1.1 Tranches of Loans........................................... 17 2.2 Borrowing Procedure.................................................. 17 2.3 Conversion and Continuation Procedures............................... 17 2.4 Pro Rata Treatment................................................... 19 SECTION 3 NOTES EVIDENCING LOANS.............................................. 19 SECTION 4 INTEREST............................................................ 19 4.1 Interest Rates....................................................... 19 4.2 Interest Payment Dates............................................... 19 4.3 Setting and Notice of Certain Rates.................................. 19 4.4 Computation of Interest.............................................. 20 SECTION 5 FEES................................................................ 20 5.1 Closing Fees......................................................... 20 5.2 Arrangement and Agent's Fees......................................... 20 SECTION 6 PREPAYMENTS......................................................... 20 SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES..................... 21 7.1 Making of Payments................................................... 21 7.2 Due Date Extension................................................... 21 7.3 Setoff............................................................... 22 7.4 Proration of Payments................................................ 22 7.5 Taxes................................................................ 22 SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES......... 23 8.1 Increased Costs...................................................... 23 8.2 Basis for Determining Interest Rate Inadequate or Unfair............. 25 8.3 Changes in Law Rendering Eurodollar Lending Unlawful................. 25
Page 8.4 Funding Losses....................................................... 26 8.5 Right of Lenders to Fund through Other Offices....................... 26 8.6 Discretion of Lenders as to Manner of Funding........................ 26 8.7 Mitigation of Circumstances; Replacement of Affected Lender.......... 26 8.8 Conclusiveness of Statements; Survival of Provisions................. 27 SECTION 9 WARRANTIES.......................................................... 27 9.1 Organization, etc.................................................... 27 9.2 Authorization; No Conflict........................................... 27 9.3 Validity and Binding Nature.......................................... 28 9.4 Information.......................................................... 28 9.5 No Material Adverse Change........................................... 28 9.6 Litigation and Contingent Liabilities................................ 29 9.7 Ownership of Properties; Liens....................................... 29 9.8 Subsidiaries......................................................... 29 9.9 Pension and Welfare Plans............................................ 29 9.10 Investment Company Act.............................................. 30 9.11 Public Utility Holding Company Act.................................. 30 9.12 Regulation U........................................................ 30 9.13 Taxes............................................................... 30 9.14 Solvency, etc....................................................... 30 9.15 Environmental Matters............................................... 31 9.16 Year 2000 Problem................................................... 31 9.17 Senior Debt......................................................... 31 SECTION 10 COVENANTS.......................................................... 31 10.1 Reports, Certificates and Other Information......................... 31 10.1.1 Audit Report............................................... 31 10.1.2 Quarterly Reports.......................................... 32 10.1.3 Compliance Certificates.................................... 32 10.1.4 Reports to SEC and to Shareholders......................... 32 10.1.5 Notice of Default, Litigation and ERISA Matters............ 32 10.1.6 Subsidiaries............................................... 33 10.1.7 Management Reports......................................... 33 10.1.8 Projections................................................ 33 10.1.9 Other Information.......................................... 33 10.2 Books, Records and Inspections...................................... 33 10.3 Insurance........................................................... 34 10.4 Compliance with Laws; Payment of Taxes and Liabilities.............. 34 10.5 Maintenance of Existence, etc....................................... 34 10.6 Financial Covenants................................................. 34 10.6.1 Maximum Leverage........................................... 34 10.6.2 Minimum Interest Coverage Ratio............................ 35
Page 10.6.3 Funded Debt to Cash Flow Ratio............................. 35 10.6.4 Senior Debt to Tangible Assets............................. 35 10.6.5 Senior Debt to Cash Flow Ratio............................. 35 10.7 Limitations on Debt................................................. 35 10.8 Liens............................................................... 37 10.9 Asset Sales......................................................... 38 10.10 Restricted Payments................................................ 38 10.11 Mergers, Consolidations, Amalgamations, Sales...................... 39 10.12 Modification of Certain Documents.................................. 40 10.13 Use of Proceeds.................................................... 40 10.14 Further Assurances................................................. 40 10.15 Transactions with Affiliates....................................... 40 10.16 Employee Benefit Plans............................................. 41 10.17 Environmental Laws................................................. 41 10.18 Unconditional Purchase Obligations................................. 41 10.19 Inconsistent Agreements............................................ 41 10.20 Business Activities................................................ 41 10.21 Advances and Other Investments..................................... 41 10.22 Location of Assets................................................. 42 10.23 Quips Documents.................................................... 43 SECTION 11 CONDITIONS OF EFFECTIVENESS........................................ 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.............................................. 45 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.................................................. 47
Page 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............................... 50 13.10 Withholding Tax..................................................... 50 SECTION 14 GENERAL............................................................ 52 14.1 Waiver; Amendments.................................................. 52 14.2 Confirmations....................................................... 53 14.3 Notices............................................................. 53 14.4 Computations........................................................ 53 14.5 Regulation U........................................................ 54 14.6 Costs, Expenses and Taxes........................................... 54 14.7 Judgment............................................................ 54 14.8 Captions............................................................ 55 14.9 Assignments; Participations......................................... 55 14.9.1 Assignments................................................ 55 14.9.2 Participations............................................. 56 14.10 Governing Law....................................................... 57 14.11 Counterparts........................................................ 57 14.12 Successors and Assigns.............................................. 57 14.13 Indemnification by the Company...................................... 57 14.14 Forum Selection and Consent to Jurisdiction......................... 58 14.15 Waiver of Jury Trial................................................ 59 14.16 Acknowledgments and Agreements regarding Intercreditor Agreement.... 59 14.17 Designated Senior Indebtedness...................................... 60 14.18 Amendment to Intercreditor Agreement................................ 60
SCHEDULE 1.1(A) Lenders and 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(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 1) EXHIBIT B Form of Compliance Certificate (Section 10.1.3) 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 14.9.1) EXHIBIT I Copy of Intercreditor Agreement (Section 1) EXHIBIT J Form of Exemption Certificate (Section 13.10) EXHIBIT K Copy of Parent Guaranty (Section 1) EXHIBIT L Copy of Parent Pledge Agreement (Section 1) EXHIBIT M Form of Confirmation (Section 11) EXHIBIT N Form of Amendment to Intercreditor Agreement (Section 14.16) AMENDED AND RESTATED TERM LOAN AGREEMENT ---------------------------------------- This AMENDED AND RESTATED TERM LOAN AGREEMENT dated as of May 12, 2000 (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, N.A. (in its individual capacity, "BofA"), as administrative agent ---- for the Lenders. WHEREAS, Parent, the Company, various financial institutions and Bank of America, N.A. (then known as Bank of America National Trust and Savings Association), as administrative agent, entered into a Term Loan Agreement dated as of July 15, 1999 (the "Original Agreement"). ------------------ WHEREAS, the parties hereto have agreed to amend and restate the Original Agreement pursuant hereto. NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto agree as follows: I. SECTION DEFINITIONS, ETC. A. 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. - ----- 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. 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 Moody's Investors Service, Inc., (c) any certificate of deposit (or time deposits represented by such certificates of deposit) or bankers acceptance, maturing not more than one year after such time, or overnight Federal Funds transactions that are issued or sold by any Permitted Bank or a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than U.S.$500,000,000, (d) any repurchase agreement entered into with any Permitted Bank (or other commercial banking institution of the stature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any - ---------- obligation of the type described in any of clauses (a) through (c) and (ii) has ----------- --- a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Permitted Bank (or other commercial banking institution) thereunder and (e) investments in short-term asset management accounts offered by any Permitted Bank for the purpose of investing in loans to any corporation (other than Parent or an Affiliate of Parent), state or municipality, in each case organized under the laws of any state of the United States or of the District of Columbia. Cash Flow means, as of the last day of any Fiscal Quarter, Consolidated Net --------- Income for the period of four Fiscal Quarters ending on 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 July 15, 1999. ------------ 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 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 account or upon the application of such Person, (f) all Hedging Obligations of such Person, (g) all Suretyship Liabilities of such Person and (h) all Synthetic Lease Obligations of such Person. 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. Effective Date - see Section 11. -------------- ---------- 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. Equipment Securitization Transaction means any sale, assignment, pledge or ------------------------------------ other transfer (a) by Parent or any Subsidiary of equipment or related assets, (b) by any ES Special Purpose Subsidiary of leases or rental agreements between Parent and/or any Subsidiary, as lessee, on the one hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such equipment or related assets, and lease receivables arising under such leases and rental agreements and (c) by Parent or any Subsidiary of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto, all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers' repurchase programs or guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto, and (iii) any collateral, guaranties, credit enhancement or other property or claims supporting or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables. ERISA means the Employee Retirement Income Security Act of 1974. ----- ES 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 a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith, owning the equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction, and pledging or transferring any of the foregoing or interests therein). Eurodollar 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 ---------------------------------------- 1.00 - Eurodollar Reserve Percentage where, Eurodollar Reserve Percentage means, for any day for any Interest ----------------------------- Period, a percentage (expressed as a decimal, rounded upward, if necessary, to an integral multiple of 1/100th of 1%) in effect on such day under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as "Eurocurrency liabilities"); and IBOR means the rate per annum 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 Amended and Restated Term Loan Agreement ----------------------- dated as of May 12, 2000 among Parent, the Company, various financial institutions and BofA, as Agent, which amends and restates the Term Loan Agreement dated as of July 10, 1998. 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. Floor Plan Financing Arrangement means any arrangement whereby Parent or a -------------------------------- Subsidiary grants a Lien to an equipment manufacturer (or an affiliate thereof which is in the financing business) on all equipment purchased from such manufacturer and the proceeds thereof, including equipment which was not financed by such manufacturer (or an affiliate thereof). Foreign 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. 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, all outstanding Securitization Obligations, but excluding (i) contingent obligations in respect of undrawn letters of credit and Suretyship Liabilities (except to the extent constituting contingent obligations or Suretyship Liabilities in respect of Funded Debt of a Person other than Parent or any Subsidiary), (ii) Hedging Obligations, (iii) Debt of Parent to Subsidiaries and Debt of Subsidiaries to Parent 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 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 for the holders of the Permitted Senior Secured Debt, 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 (without duplication) 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 Synthetic Leases and any interest which is capitalized but excluding amortization of deferred financing costs) and (b) consolidated yield or discount accrued during such period on the aggregate investment or claim held by purchasers, assignees or other transferees of, or of interests in, accounts receivable, lease receivables and other rights to payment of 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 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; 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. 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 means each promissory note issued to a Lender under the Original ---- Agreement (except for any such promissory note which has been replaced prior to the Effective Date or which is replaced pursuant to Section 3) and each --------- promissory note issued pursuant to Section 3 (except for any such promissory --------- note which is replaced by a new promissory note hereunder). Original Agreement - see the recitals. ------------------ -------- 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 --------------- 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) Richard D. Colburn 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 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 be issued on or prior to December 31, 2000, shall mature no earlier than June 30, 2006 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 rate spreads greater than 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 U.S. $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. 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. Receivables 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 account related thereto, and any collateral, guaranties or other property or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables. 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 Charlotte, North Carolina (or such other office in the United States of America as BofA shall specify from time to time), as its "prime rate." (The "prime 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 prime 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. ---------------- RS 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 Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein). SEC means the Securities and Exchange Commission. --- Securitization Obligations means, with respect to any Securitization -------------------------- Transaction, the aggregate investment or claim held at any time by all purchasers, assignees or transferees of (or of interests in) or holders of obligations that are supported or secured by (i) in the case of an Equipment Securitization Transaction, equipment or related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) in connection with such Equipment Securitization Transaction, and (ii) in the case of a Receivables Securitization Transaction, accounts receivable, lease receivables and other rights to payment in connection with such Receivables Securitization Transaction. Securitization Transaction means an Equipment Securitization Transaction or -------------------------- a Receivables Securitization Transaction. Seller Subordinated Debt means unsecured indebtedness of the Company that: ------------------------ (a) is subordinated, substantially upon the terms set forth in Exhibit G or other terms that are more favorable to the 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 an ES Special Purpose Vehicle or an RS ----------------------- Special Purpose Vehicle. 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. 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. Synthetic Lease means a lease transaction under which the parties intend --------------- that (i) the lease will be treated as an "operating lease" by the lessee pursuant to Statement of Financial Accounting Standards No. 13, as amended, and (ii) the lessee will be entitled to various tax and other benefits ordinarily available to owners (as opposed to lessees) of like property. Synthetic Lease Obligations means, with respect to any Person, the sum of --------------------------- (a) all remaining rental obligations of such Person as lessee under Synthetic Leases which are attributable to principal and, without duplication, (b) all rental and purchase price payment obligations of such Person under Synthetic Leases assuming such Person exercises the option to purchase the leased property at the end of the lease term. Tangible Assets means at any time all assets of 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. 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. B. Other Interpretive Provisions. ----------------------------- a. Section, Schedule and Exhibit references are to this Agreement ------- -------- ------- unless otherwise specified. (1) The term "including" is not limiting and means "including without limitation." (2) 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." b. 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. c. 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. d. 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. C. Amendment and Restatement of Original Agreement. The Parent, the Company, ----------------------------------------------- the Required Lenders and the Administrative Agent agree that, effective on the Effective Date, this Agreement amends and restates in its entirety the Original Agreement. II. SECTION LOANS; TRANCHES OF LOANS; BORROWING AND CONVERSION PROCEDURES. A. Loans. The Company and the Required Lenders acknowledge that concurrently ----- with the effectiveness hereof the "Loans" outstanding to the Company under (and as defined in) the Original Agreement shall continue in existence as term loans hereunder and shall be deemed to be "Loans" as defined herein. 1. 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 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. B. 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. C. 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: i) the proposed date of conversion or continuation; ii) the aggregate amount of the Tranches to be converted or continued; iii) the Type of Tranches resulting from the proposed conversion or continuation; and iv) 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. D. 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 Percentage) of all Types and Groups of Tranches. III. SECTION NOTES EVIDENCING LOANS. Each Lender's Loan shall be evidenced by the Note issued to such Lender under the Original Agreement; provided that any -------- Lender may request a new Note substantially in the form set forth in Exhibit A. --------- Each Note shall be payable 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. IV. SECTION INTEREST. A. 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 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%. B. 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. C. 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. D. 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 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. V. SECTION FEES. 5.1 Fees. On the Effective Date, the Company shall pay to the Agent for ---- the account of each applicable Lender the fees referred to in Section 11. ---------- 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. VI. SECTION 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. VII. SECTION MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES. A. 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 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. B. 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 . C. 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. D. 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 purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery (but without interest). E. 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 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. VIII. SECTION INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR TRANCHES. A. 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 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. B. 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 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. C. 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. D. 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. E. 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. F. 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. G. 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). H. 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. IX. SECTION 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: A. 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 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. B. 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). C. 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. D. 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 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). E. 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. F. 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. G. Ownership of Properties; Liens. Except as set forth on Schedule 9.7, as of ------------------------------ the Closing Date 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. - ---- H. Subsidiaries. As of the Closing Date, the Company has no Subsidiaries ------------ except those listed in Schedule 9.8. ------------ I. 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. J. 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. K. 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. L. 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 M. 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. N. Solvency, etc. On the Effective Date (or, in the case of any Person which -------------- becomes a Loan Party after the Effective Date, on the date such Person becomes a Loan Party), (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. O. 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. P. 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. Q. Senior Debt. The obligations of the Company hereunder constitute "Senior ----------- Indebtedness" as such term is defined in each Subordinated Note Indenture. X. SECTION 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: A. Reports, Certificates and Other Information. Furnish to the Agent and each ------------------------------------------- Lender: 1. Audit Report. Promptly when available and in any event within 90 days ------------ after the close of each Fiscal Year: (a) a copy of the annual audit report of Parent and its Subsidiaries for such Fiscal Year, including therein a consolidated balance sheet of Parent and its Subsidiaries as of the end of such Fiscal Year and consolidated statements of earnings and cash flow of Parent and its Subsidiaries for such Fiscal Year certified without qualification by Ernst & Young or other independent auditors of recognized standing selected by Parent and reasonably acceptable to the Required 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. 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. 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. 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. 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: (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. 6. Subsidiaries. Promptly upon any change in the list of its Subsidiaries, a ------------ written report of such change. 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. 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. 9. Other Information. From time to time such other information concerning ----------------- Parent and its Subsidiaries as any Lender or the Agent may reasonably request. B. 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. C. 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. D. 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. E. Maintenance of Existence, etc. Maintain and preserve, and (subject to ----------------------------- Section 10.11) cause each Subsidiary to maintain and preserve, (a) its existence - ------------- and good standing in the jurisdiction of its incorporation and (b) its qualification and good standing as a foreign corporation in each jurisdiction where the nature of its business makes such qualification necessary (except in those instances in which the failure to be qualified or in good standing does not have a Material Adverse Effect). F. Financial Covenants. ------------------- 1. Maximum Leverage. Not permit the ratio of (i) Funded Debt to (ii) Funded ---------------- Debt plus Net Worth to exceed 0.675 to 1.0 at any time. ---- 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 9/30/01 1.75 to 1.0 9/30/01 and thereafter 2.00 to 1.0. 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. 4. Senior Debt to Tangible Assets. Not permit the ratio of (i) Senior ------------------------------ Debt minus all Securitization Obligations to (ii) Tangible Assets minus, to the extent included in Tangible Assets, all assets which are owned by or subject to a Lien in favor of a Special Purpose Vehicle to exceed 1.0 to 1.0 at any time. 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 2.75 to 1.0. G. 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 of the Company 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; (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, and provided, -------- further, that the aggregate amount of all such Debt arising in connection ------- with Floor Plan Financing Arrangements shall not exceed U.S. $30,000,000; (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 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 Closing Date 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.$1,000,000,000; (k) Synthetic Lease Obligations, provided that the aggregate amount of all Synthetic Lease Obligations plus (without duplication) the aggregate amount of all Securitization Obligations arising under Equipment Securitization Transactions shall not at any time exceed the greater of U.S. $500,000,000 or 15% of Tangible Assets; (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. 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. H. 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 (i) being leased (in the case of Capital Leases), (ii) purchased from the relevant manufacturer (in the case of Floor Plan Financing Arrangements) or (iii) the purchase price for which was or is being financed by such Debt (in the case of other Debt) and, in each case, the proceeds (including insurance proceeds) of any disposition or loss of such property); (e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding 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), (j) and (k) of Section ----------- --- --- ------- 10.7; and ---- (h) Liens arising in connection with Securitization Transactions. I. 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). J. 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 -------- 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; (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, 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 of the QuIPS Indenture; (v) so long as (x) no Event of Default or Unmatured Event of Default exists or would result therefrom and (y) the aggregate amount of all purchases made by Parent since April 30, 2000 (excluding purchases permitted by clause (vi) below) does not exceed ----------- U.S.$200,000,000, Parent may repurchase its capital stock; 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 (excluding purchases permitted by clause (v) above) 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; provided, further, that any stock of Parent, or warrants or units relating -------- ------- thereto, purchased by Parent pursuant to clause (v) or (vi) above shall be ---------- ---- immediately retired. Nothing in this Section 10.10 shall prohibit Parent from ------------- permitting the cashless exercise of any options or warrants for stock of Parent. K. 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 or exchanges of equipment consistent with industry practice), sell, transfer, convey or lease all or any substantial part of its assets, or sell or assign with or without recourse any receivables, except for (a) any such merger or consolidation, amalgamation, sale, transfer, conveyance, lease or assignment of or by any 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 or an asset exchange of like-kind property) 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 Receivables Securitization Transaction or of equipment and related assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) pursuant to any Equipment Securitization Transaction, provided that the aggregate amount of all equipment and related -------- assets (and leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization Transaction) sold, assigned or otherwise transferred pursuant to all Equipment Securitization Transactions in any Fiscal Year (in addition to any such assets which are permitted to be sold in such Fiscal Year pursuant to clause (e)) shall not exceed U.S. $25,000,000; and (e) sales and dispositions of - ---------- assets (including the stock of Subsidiaries and asset exchanges of like-kind property), in addition to sales and other dispositions in the ordinary course of business or permitted by clause (d), so long as the net book value of (i) all ---------- assets disposed of in like-kind exchanges 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 and (ii) all other 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. L. 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. M. 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. N. 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 real property and 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). O. 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 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. P. 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. Q. 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). R. 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. S. 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. T. 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. U. 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; ------------- (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 Parent or in any Subsidiary of the Company or by any of the Subsidiaries of the Company in Parent, the Company or any other Subsidiary of 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) Investments by Parent in the QuIPS Trust existing on the Closing Date; (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 U.S. $10,000,000; 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. V. 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. W. QuIPS Documents. Not permit any amendment to or modification of --------------- the QuIPS Debentures, the QuIPS Preferred Securities, either QuIPS Guarantee or the QuIPS Indenture which, in any such case, is adverse to the interests of the Lenders. X. Limitations on Securitization Transactions. Not at any time permit ------------------------------------------ the aggregate amount of all Securitization Obligations to exceed (a) in the case of Receivables Securitization Transactions, U.S. $150,000,000; and (b) in the case of Equipment Securitization Transactions, the remainder of (i) the greater of (x) U.S. $500,000,000 and (y) 15% of Tangible Assets minus (ii) the aggregate ----- amount of all Synthetic Lease Obligations (excluding, to prevent double- counting, Synthetic Lease Obligations which also are Securitization Obligations arising under Equipment Securitization Transactions) of Parent and its Subsidiaries. XI. SECTION CONDITIONS OF EFFECTIVENESS. This Agreement shall become effective and all outstanding loans under the Original Agreement shall continue in existence as term loans hereunder, and shall be deemed to be "Loans" as defined herein, on the date (the "Effective Date") that the Agent shall have -------------- received (a) counterparts hereof executed by the Company, Parent, the Required Lenders and the Agent; (b) confirmation that substantially similar amendments to each of the Existing Loan Agreement and the Credit Agreement (or concurrently with the effectiveness hereof will) become effective; (c) a Confirmation in the form of Exhibit M hereto signed by Parent, the Company and all U.S. Subsidiaries --------- (other than the QuIPS Trust); (d) the opinions of Weil, Gotshal & Manges LLP, special counsel to Parent and the Company, and Oscar D. Folger, counsel to Parent and the Company; and (e) an amendment fee for each Lender that has executed and delivered (by facsimile or otherwise) to the Agent a counterpart hereof prior to 2:00 p.m., Chicago time, on May 12, 2000, an amendment fee in an amount equal to 0.25% of the amount of such Lender's Loan. XII. SECTION EVENTS OF DEFAULT AND THEIR EFFECT. A. Events of Default. Each of the following shall constitute an Event ----------------- of Default: 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. 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. 3. Other Material Obligations. Default in the payment when due, or in -------------------------- the performance or observance of, any material obligation of, or condition agreed to by, Parent or any Subsidiary with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with other such defaults might reasonably be expected to have a Material Adverse Effect (except only to the extent that the existence of any such default is being contested by Parent or such Subsidiary in good faith and by appropriate proceedings and appropriate reserves have been made in respect of such default). 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. 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, 10.16 or 10.24; 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. 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. 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 liability that Parent and the Controlled Group have incurred on the date of such withdrawal) exceeds U.S.$15,000,000. 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. 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. 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. 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 any document evidencing or governing any Permitted Senior Secured Debt; or (e) the Company shall cease to be a direct, wholly-owned Subsidiary of Parent. 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. B. 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. XIII. SECTION THE AGENT. A. 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. B. 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. C. 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, 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. D. 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. E. 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. F. 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 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. G. 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 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. H. 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. I. 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. J. 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 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. --------- K. 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. XIV. SECTION GENERAL. A. 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. B. 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. C. 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 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. D. 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. E. 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. F. 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. G. 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). H. Captions. Section captions used in this Agreement are for convenience only -------- and shall not affect the construction of this Agreement. I. Assignments; Participations. --------------------------- 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 and shall not be required for any assignment and delegation to (a) another Lender or (B) a Related Fund), at any time assign and delegate to one or more Related Funds, 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 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 mark 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). 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 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. J. 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. K. 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. L. 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. M. 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. N. 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 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. O. 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. P. 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 and each of the Lenders constitutes a "Permitted Creditor" as defined in the Intercreditor Agreement. The Required Lenders hereby direct the Agent to enter into an amendment to the Intercreditor Agreement substantially in the form of Exhibit N hereto. 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 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 take any action permitted under subsection 3(f) of the Intercreditor Agreement. Q. Designated Senior Indebtedness. The Company hereby designates the Loans ------------------------------ and all other obligations of the Company hereunder and under the Notes as Designated Senior Indebtedness for purposes of, and as defined in, each Subordinated Note Debenture. Delivered at Chicago, Illinois, as of the day and year first above written. UNITED RENTALS, INC. Chief Financial Officer UNITED RENTALS (NORTH AMERICA), INC. Chief Financial Officer BANK OF AMERICA, N.A., as Administrative Agent BANK OF AMERICA, N.A., as a Lender GOLDMAN SACHS CREDIT PARTNERS, L.P., as Syndication Agent and as a Lender AERIES FINANCE-II, LTD. By: INVESCO Senior Secured Management, Inc. as Sub-Managing Agent ALLSTATE LIFE INSURANCE COMPANY AMARA-I FINANCE LTD. By: INVESCO Senior Secured Management, Inc. as Subadvisor AMARA-II FINANCE, LTD. By: INVESCO Senior Secured Management, Inc. as Subadvisor AMMC CDO, I, LIMITED By: American Money Management Corp. as Collateral Manager ARCHIMEDES FUNDING II, LTD. By: ING Capital Advisors LLC, as Collateral Manager ARCHIMEDES FUNDING III, LTD. By: ING Capital Advisors LLC, as Collateral Manager ARCHIMEDES FUNDING, L.L.C. By: ING Capital Advisors LLC, as Collateral Manager ARES III CLO. LTD. By: ARES CLO Management LLC AVALON CAPITAL LTD. By: INVESCO Senior Secured Management, Inc. as Portfolio Advisor THE BANK OF NOVA SCOTIA CAPTIVA FINANCE LTD. CAPTIVA II FINANCE LTD. CARILLON HOLDING, LIMITED By: Summit Investment Partners, LLC CARLYLE HIGH YIELD PARTNERS II, LTD. By: Title: CARLYLE HIGH YIELD PARTNERS, L.P. By: Title: CERES FINANCE LTD. By: Title: COLUMBUS LOAN FUNDING LTD. By: Title: COMERICA BANK By: Title: CONTINENTAL ASSURANCE COMPANY Separate Account (E) By: TCW Asset Management Company, as Attorney-in-Fact By: Title: By: Title: CYPRESSTREE INSTITUTIONAL FUND, LLC By: CypressTree Investment Management Company, Inc. its Managing Member By: Title: CYPRESSTREE INVESTMENT FUND, LLC By: CypressTree Investment Management Company, Inc., as Managing Member By: Title: CYPRESSTREE INVESTMENT PARTNERS I, LTD. By: CypressTree Investment Management Company, Inc., as Portfolio Manager By: Title: CYPRESSTREE SENIOR FLOATING RATE FUND By: CypressTree Investment Management Company, Inc., as Portfolio Manager By: Title: DEBT STRATEGIES FUND II, INC. By: Title: DEBT STRATEGIES FUND, INC. By: Title: DLJ CAPITAL FUNDING, INC. By: Title: ELC (CAYMAN) LTD. By: Title: ELC (CAYMAN) LTD. 1999-II By: Title: ELC (CAYMAN) LTD. 1999-III By: Title: ELC (CAYMAN) LTD. CDO SERIES 1999-1 By: Title: ELT LTD. By: Title: FC CBO LIMITED By: Title: FIRST DOMINION FUNDING I By: Title: FIRST DOMINION FUNDING II By: Title: FIRST DOMINION FUNDING III By: Title: FIRST UNION NATIONAL BANK By: Title: CITIBANK, N.A. as Additional Investment Manager for an on behalf of Five Finance Corporation By: Title: FLEET NATIONAL BANK, N.A., as Trust Administrator for Long Lane Master Trust IV By: Title: FLOATING RATE PORTFOLIO By: INVESCO Senior Secured Management, Inc., as attorney in fact By: Title: FRANKLIN FLOATING RATE TRUST By: Title: FREEMONT INVESTMENT AND LOAN By: Title: THE FUJI BANK, LIMITED By: Title: GALAXY CLO 1999-1, LTD. By: SAI Investment Adviser, Inc., its Collateral Manager By: Title: GENERAL ELECTRIC CAPITAL CORPORATION By: Title: STATE STREET BANK AND TRUST COMPANY as Trustee for General Motors Welfare Benefits Trust By: Title: GREAT POINT CLO 1999-1 LTD. By: Title: HARRIS TRUST AND SAVINGS BANK By: Title: HELLER FINANCIAL, INC. By: Title: IKB DEUTSCHE INDUSTRIEBANK AG LUXEMBOURG BRANCH By: Title: INDOSUEZ CAPITAL FUNDING III, LIMITED By: Indosuez Capital as Portfolio Advisor By: Title: INDOSUEZ CAPITAL FUNDING IV, L.P. By: Indosuez Capital Luxembourg, as Collateral Manager By: Title: ING HIGH INCOME PRINCIPAL PRESERVATION FUND HOLDINGS, LLC By: ING Capital Advisors LLC, as Investment Advisor By: Title: JACKSON NATIONAL LIFE INSURANCE By: Title: KZH III LLC By: Title: KZH CRESCENT LLC By: Title: KZH CYPRESSTREE -1 LLC By: Title: KZH CRESCENT LLC-2 LLC By: Title: KZH CRESCENT LLC-3 LLC By: Title: KZH ING-1 LLC By: Title: KZH ING-3 LLC By: _______________________________, its By: Title: KZH SHOSHONE LLC By: Title: KZH SOLEIL LLC By: Title: KZH SOLEIL-2 LLC By: Title: KZH WATERSIDE LLC By: Title: BANKBOSTON, N.A. as Trust Administrator for Long Lane Master Trust IV By: Title: MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By: Title: METROPOLITAN LIFE INSURANCE COMPANY By: Title: ML CLO XV PILGRIM AMERICA (CAYMAN) LTD. By: Pilgrim Investments, Inc. as its Investment Manager ML CLO XX PILGRIM AMERICA (CAYMAN) LTD. By: Pilgrim Investments, Inc., as its Investment Manager MONUMENT CAPITAL LTD. By: Alliance Capital Management L.P., as Investment Manager By: Alliance Capital Management Corporation, as General Partner MONY LIFE INSURANCE COMPANY MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST MOUNTAIN CAPITAL CLO I, LTD. NOMURA BOND & LOAN FUND By: Nomura Corporate Research & Asset Management Inc., as Investment Advisor NORTH AMERICAN SENIOR FLOATING RATE FUND By: CypressTree Investment Management Company, Inc., as Portfolio Manager OASIS COLLATERALIZED HIGH INCOME PORTFOLIO-1, LTD. By: INVESCO Senior Secured Management Inc. as Subadviser OLYMPIC FUNDING TRUST 1999-1 OPPENHEIMER SENIOR FLOATING RATE FUND OSPREY INVESTMENTS PORTFOLIO By: Citibank, N.A., as Manager PACIFICA PARTNERS I, LTD. By: Imperial Credit Asset Management as its Investment Manager PARIBAS CAPITAL FUNDING LLC PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD. By: Pilgrim Investments, Inc., as its Investment Manager PILGRIM CLO 1999-1 LTD. By: Pilgrim Investments, Inc., as its Investment Manager PILGRIM PRIME RATE TRUST By: Pilgrim Investments Inc. as its Investment Manager PPM SPYGLASS FUNDING TRUST THE PRUDENTIAL INSURANCE COMPANY OF AMERICA SANKATY HIGH YIELD PARTNERS II, L.P. SENIOR DEBT PORTFOLIO By: Boston Management and Research, as Investment Advisor SENIOR HIGH INCOME PORTFOLIO SEQUILS I, LTD. By: TCW Advisors, Inc., as its Collateral Manager SEQUILS IV, LTD. By: TCW Advisors, Inc. as its Collateral Manager SEQUILS-ING 1 (HBDGM) LTD. By: ING Capital Advisors LLC., as Collateral Manager SEQUILS - PILGRIM I, LTD. By: Pilgrim Investments, Inc., as Investment Manager STANFIELD CLO, LTD. By: Stanfield Capital Partners LLC, as its Collateral Manager By: Title: STEIN ROE & FARNHAM CLO-I LTD. By: Stein Roe & Farnham Incorporated, as Portfolio Manager By: Title: STRATA FUNDING LTD. By: Title: STRATEGIC MANAGED LOAN PORTFOLIO By: Citibank, N.A. as Manager By: Title: THE SUMITOMO TRUST & BANKING CO., LTD. NEW YORK BRANCH By: Title: SWISS LIFE US RAINBOW LIMITED By: ING Capital Advisors, LLC as Investment Advisor By: Title: TENET HEALTHCARE CORPORATION By: TCW Asset Management Company, its Investment Advisor By: Title: TORONOTO DOMINION (TEXAS), INC. By: Title: TRAVELERS CORPORATE LOAN FUND By: Title: TRITON CBO III, LIMITED By: INVESCO Senior Secured Management, Inc., as Investment Advisor By: Title: UNION BANK OF CALIFORNIA, N.A. By: Title: UNITED OF OMAHA LIFE INSURANCE COMPANY By: TCW Asset Management Company, its Investment Advisor By: Title: By: Title: VAN KAMPEN CLO I, LIMITED By: Van Kampen Management Inc. as Collateral Manager By: Title: VAN KAMPEN CLO II, LIMITED By: Van Kampen Management Inc. as Collateral Manager By: Title: VAN KAMPEN PRIME RATE INCOME TRUST By: Van Kampen Investment Advisory Corp. By: Title: VAN KAMPEN SENIOR INCOME TRUST By: Van Kampen Investment Advisory Corp. By: Title: VAN KAMPEN SENIOR FLOATING RATE FUND By: Van Kampen Investment Advisory Corp. By: Title: WINGED FOOT FUNDING TRUST By: Title: SCHEDULE 1.1(A) - -------------------------------------------------------------------------------- Lender Amount of Loan Percentage ------ -------------- ---------- Aeries Finance-II, Ltd. $ 5,000,000 0.667% Allstate Life Insurance Company 5,000,000 0.667% Amara-I Finance Ltd. 2,500,000 0.333% Amara-II Finance, Ltd. 3,500,000 0.467% AMMC CDO, I, Limited 5,000,000 0.667% Archimedes Funding II, Ltd. 2,000,000 0.267% Archimedes Funding III, Ltd. 10,000,000 1.333% Archimedes Funding, L.L.C. 8,000,000 1.067% Ares III Clo. Ltd. 5,000,000 0.667% Avalon Capital Ltd. 10,000,000 1.333% Bank of America (Trading) 7,000,000 1.333% Bank of America, N.A. 5,000,000 0.667% The Bank of Nova Scotia 10,000,000 1.333% Captiva Finance Ltd. 5,000,000 0.667% Captiva II Finance Ltd. 2,700,000 0.360% Carillon Holding, Limited 6,000,000 0.800% Carlyle High Yield Partners II, Ltd. 8,500,000 1.133% Carlyle High Yield Partners, L.P. 5,000,000 0.667% Ceres Finance Ltd. 5,500,000 0.733% Columbus Loan Funding Ltd. 5,000,000 0.667% Comerica Bank 5,000,000 0.667% Continental Assurance Company 1,000,000 0.133% CypressTree Institutional Fund, LLC 1,000,000 0.133% CypressTree Investment Fund, LLC 1,000,000 0.133% CypressTree Investment Partners I, Ltd. 6,500,000 0.867% CypressTree Senior Floating Rate Fund 750,000 0.100% Debt Strategies Fund II, Inc. 3,000,000 0.400% Debt Strategies Fund, Inc. 1,000,000 0.133% DLJ Capital Funding, Inc. 7,500,000 1.000% ELC (Cayman) Ltd. 8,000,000 1.067% ELC (Cayman) Ltd. 1999-II 10,000,000 1.333% ELC (Cayman) Ltd. 1999-III 10,000,000 1.333% ELC (Cayman) Ltd. CDO Series 1999-1 8,000,000 1.067% ELT Ltd. 12,500,000 1.667% FC CBO Limited 10,000,000 1.333% Lender Amount of Loan Percentage ------ -------------- ---------- First Dominion Funding I 5,000,000 0.667% First Dominion Funding II 5,000,000 0.667% First Dominion Funding III 10,000,000 1.333% First Union National Bank 34,000,000 4.533% Five Financial Corporation 2,000,000 0.267% Floating Rate Portfolio 6,000,000 0.800% Franklin Floating Rate Trust 20,000,000 2.667% Freemont Investment and Loan 7,500,000 1.000% The Fuji Bank, Limited 15,000,000 2.000% Galaxy CLO 1999-1 Ltd. 5,000,000 0.667% General Electric Capital Corporation 6,000,000 0.800% Goldman Sachs Credit Partners, L.P. 3,000,000 0.400% Great Point CLO 1999-1, Ltd. 5,000,000 0.667% Harris Trust and Savings Bank 5,000,000 0.667% Heller Financial, Inc. 15,000,000 2.000% IKB Deutsche Industriebank AG 10,000,000 1.333% Luxembourg Branch Indosuez Capital Funding III, Limited 15,000,000 2.000% Indosuez Capital Funding IV, L.P. 12,500,000 1.667% ING High Income Principal 5,000,000 0.667% Preservation Fund Holdings, LLC Jackson National Life Insurance 12,500,000 1.667% KZH III LLC 8,000,000 1.067% KZH Crescent LLC 2,000,000 0.267% KZH Crescent LLC-2 LLC 3,000,000 0.400% KZH Crescent LLC-3 LLC 2,000,000 0.267% KZH Cypresstree-1 LLC 3,500,000 0.467% KZH Shoshone LLC 5,000,000 0.667% KZH Soleil LLC 5,000,000 0.667% KZH Soleil-2 LLC 5,000,000 0.667% KZH Waterside LLC 5,000,000 0.667% KZH-ING-1 LLC 3,000,000 0.400% KZH-ING-3 LLC 2,000,000 0.267% Long Lane Master Trust IV 5,000,000 0.667% Merrill Lynch Senior Floating Rate Fund 7,500,000 1.000% Metropolitan Life Insurance Company 15,000,000 2.000% Lender Amount of Loan Percentage ------ -------------- ---------- ML CLO XV Pilgrim America (Cayman) 1,500,000 0.200% Ltd. ML CLO XX Pilgrim America (Cayman) 5,000,000 0.667% Ltd. Monument Capital Ltd. 7,000,000 0.933% Mony Life Insurance Company 15,000,000 2.000% Morgan Stanley Senior Funding, Inc. 6,000,000 0.800% Mountain Capital CLO I, Ltd. 10,000,000 1.333% North American Senior Floating Rate 2,250,000 0.300% Fund Normura Bond & Loan Fund 4,000,000 0.533% Oasis Collateralized High Income 3,000,000 0.400% Portfolio-1, Ltd. Olympic Funding Trust 1999-1 5,000,000 0.667% Oppenheimer Senior Floating Rate Fund 5,000,000 0.267% Osprey Investments Portfolio 7,000,000 0.933% Pacifica Partners I, Ltd. 5,000,000 0.667% Paribas Capital Funding LLC 15,000,000 2.000% Pilgrim America High Income 6,500,000 0.867% Investments Ltd. Pilgrim CLO 1999-1 Ltd. 7,500,000 1.000% Pilgrim Prime Rate Trust 5,000,000 0.667% PPM Spyglass Funding Trust 12,500,000 1.667% The Prudential Insurance Company of 10,000,000 1.333% America Sankaty High Yield Partners II, L.P. 10,000,000 1.333% Senior High Income Portfolio 2,500,000 0.333% Sequils - Pilgrim I, Ltd. 4,500,000 0.600% Sequils I, Ltd. 10,500,000 1.400% Sequils IV, Ltd. 5,000,000 0.667% Sequils-ING 1 (HBDGM) Ltd. 5,000,000 0.667% Stanfield CLO, Ltd. 7,000,000 0.933% Stein Roe & Farnham CLO-I Ltd. 5,000,000 0.667% Strata Funding Ltd. 2,700,000 0.360% Strategic Managed Loan Portfolio 5,000,000 0.667% The Sumitomo Trust & Banking Co., 13,000,000 1.733% Ltd. New York Branch Swiss Life US Rainbow Limited 2,000,000 0.267% Tenet Healthcare Corporation 5,000,000 0.667% Lender Amount of Loan Percentage ------ -------------- ---------- Toronto Dominion (Texas), Inc. 6,600,000 0.880% Travelers Corporate Loan Fund 3,000,000 0.400% Triton CBO III, Limited 5,000,000 0.667% Union Bank of California 10,000,000 1.333% United of Omaha Life Insurance Company 1,500,000 0.200% Van Kampen CLO I, Limited 10,000,000 1.333% Van Kampen CLO II, Limited 5,000,000 0.667% Van Kampen Prime Rate Income Trust 7,500,000 1.000% Van Kampen Senior Income Trust 4,000,000 0.533% Van Kampen Senior Floating Rate Fund 12,500,000 1.667% Winged Foot Funding Trust 5,000,000 0.6677% $750,000,000 100.00% SCHEDULE 9.6(a) LITIGATION AND CONTINGENT LIABILITIES 1) A subsidiary of the Company has been named in a complaint alleging sexual harassment, intentional inflection of emotional distress and wrongful termination. The alleged acts took place prior to the Company's acquisition of such subsidiary. The plaintiff is seeking an aggregate of $450,000. 2) The Company is subject to a claim of wrongful termination by one of its branch sales manager. The sales manager has indicated he would settle the claim of wrongful termination for the sum of $350,000. 3) The Company brought suit against two former shareholders relating to one of its acquisitions, primarily alleging misrepresentation of sales and violation of non-compete agreements. Subsequent to the filing of the Company's suit, the former shareholders brought suit against the Company alleging breach of contract, breach of fiduciary duties, conversion and fraudulent misrepresentation among others. The Company estimates these suits could be settled for approximately $500,000. SCHEDULE 9.6(b) CONTINGENT PAYMENTS The Company has agreed in connection with 12 of its acquisitions to pay additional amounts to the former owners based upon specified future revenues (such amounts being limited to (i) $10,000,000, $2,800,000, $2,000,000, $1,400,000, $1,000,000, $800,000, $500,000, $500,000, $500,000, $350,000 and Cdn. $4,000,000, respectively, with respect to 11 of such acquisitions and (ii) an amount based on the revenues of a single store with respect to the other acquisition). Continent Payments Relating to U.S. Rentals, Inc. ------------------------------------------------ U.S. Rentals, Inc. has agreed in connection with two of its acquisitions to pay additional amounts to the former owners based upon a specified percentage of pre-tax profits (such amounts being limited to $2,500,000 with respect to one acquisition and based upon the pre-tax profits with respect to the other acquisition). SCHEDULE 9.8 SUBSIDIARIES of UNITED RENTALS, INC. THOSE CORPORATIONS WHICH ARE INDENTED REPRESENT SUBSIDIARIES OF THE CORPORATION UNDER WHICH THEY ARE INDENTED. EXCEPT AS OTHERWISE INDICATED, 100% OF THE VOTING STOCK OF EACH OF THE SUBSIDIARIES LISTED BELOW IS OWNED BY ITS PARENT.
- ------------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ------------------------------------------------------------------------------------- United Rentals Trust I Delaware - ------------------------------------------------------------------------------------- UR Acquisition Corporation Delaware - ------------------------------------------------------------------------------------- United Rentals (North America), Inc. Delaware - ------------------------------------------------------------------------------------- 1297334 Ontario Inc. Ontario - ------------------------------------------------------------------------------------- Sky King Holding Equipment Limited Ontario - ------------------------------------------------------------------------------------- A&A Tool Rentals and Sales, Inc. California - ------------------------------------------------------------------------------------- Access Rentals, Inc. New York - ------------------------------------------------------------------------------------- Adco Equipment, Inc. California - ------------------------------------------------------------------------------------- Adco Equipment Supply, Inc. California - ------------------------------------------------------------------------------------- Arrow Equipment Company Illinois - ------------------------------------------------------------------------------------- BNR Equipment, Inc. New York - ------------------------------------------------------------------------------------- Coran Enterprises, Incorporated (d/b/a A-1 Rents) California - ------------------------------------------------------------------------------------- Dealers Service Co. New Jersey - ------------------------------------------------------------------------------------- Grand Valley Equipment Company, Inc. Michigan - ------------------------------------------------------------------------------------- Grey Fox Equipment, Inc. Connecticut - ------------------------------------------------------------------------------------- High Reach, Inc. Oregon - ------------------------------------------------------------------------------------- High Reach Co., Inc. Pennsylvania - ------------------------------------------------------------------------------------- Independent Scissor Lifts, Inc. California - ------------------------------------------------------------------------------------- Independent Scissor Lifts Southwest, Inc. California - ------------------------------------------------------------------------------------- Kubota of Grand Rapids, Inc. Michigan - ------------------------------------------------------------------------------------- Lift Systems, Inc. Illinois - ------------------------------------------------------------------------------------- Madison Equipment Sales and Rental, Inc. Alabama - ------------------------------------------------------------------------------------- McClinch, Inc. Connecticut - ------------------------------------------------------------------------------------- McClinch Leasing Corporation Connecticut - ------------------------------------------------------------------------------------- McClinch Equipment Corporation Connecticut - -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ------------------------------------------------------------------------------------- McClinch Crane Services, Inc. Connecticut - ------------------------------------------------------------------------------------- McClinch Equipment Services, Inc. Connecticut - ------------------------------------------------------------------------------------- Mercer Equipment Company North Carolina - ------------------------------------------------------------------------------------- Misco Rents, Inc. Indiana - ------------------------------------------------------------------------------------- Mission Valley Rentals, Inc. California - ------------------------------------------------------------------------------------- Nevada High Reach Equipment, Inc. Nevada - ------------------------------------------------------------------------------------- Palmer Equipment Company Michigan - ------------------------------------------------------------------------------------- Paul E. Carlson, Inc. Minnesota - ------------------------------------------------------------------------------------- Phoenix Rental Corporation Wisconsin - ------------------------------------------------------------------------------------- Powers Rentals & Sales, Inc. California - ------------------------------------------------------------------------------------- Rental Tools & Equipment Co. International, Inc. Maryland - ------------------------------------------------------------------------------------- Rentals Unlimited, Incorporated Rhode Island - ------------------------------------------------------------------------------------- Ross Equipment Corporation Ohio - ------------------------------------------------------------------------------------- Rylan, Inc. Delaware - ------------------------------------------------------------------------------------- Space Maker Systems of Va., Inc. Virginia - ------------------------------------------------------------------------------------- United Equipment Rental of Houston, Inc. (formerly Texas J&J Rentals Services, Inc.) - ------------------------------------------------------------------------------------- United Rentals of Canada, Inc. Ontario - ------------------------------------------------------------------------------------- Access Lift Equipment, Inc. Canada - ------------------------------------------------------------------------------------- 1292655 Ontario, Inc. Ontario - ------------------------------------------------------------------------------------- Ray-Gordon Equipment Limited Ontario - ------------------------------------------------------------------------------------- Reitzel Rentals Ltd. Ontario - ------------------------------------------------------------------------------------- Select Equipment Ltd. Ontario - ------------------------------------------------------------------------------------- 902277 Ontario Inc. Ontario - ------------------------------------------------------------------------------------- United Rentals of Canada (Quebec), Inc. Quebec - ------------------------------------------------------------------------------------- United Rentals of Colorado, Inc. (formerly Santa Fe Colorado Supply & Rental, Inc.) - ------------------------------------------------------------------------------------- United Rentals of Kentucky, Inc. Kentucky - ------------------------------------------------------------------------------------- United Rentals of Mid-Atlantic, Inc. (formerly New Jersey Industrial Lift, Inc.) - ------------------------------------------------------------------------------------- United Rentals of New England, Inc. (formerly Connecticut Manchester Equipment Rental & Sales, Inc.) - ------------------------------------------------------------------------------------- United Rentals of New Jersey, Inc. Delaware - -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------- Name of Subsidiary State of Incorporation ------------------ ---------------------- - ------------------------------------------------------------------------------------- United Rentals of New York New York - ------------------------------------------------------------------------------------- United Rentals of Southern California, Inc. (d/b/a California Able Equipment) (formerly Rental Equipment, Inc.) - ------------------------------------------------------------------------------------- United Rentals of Utah, Inc. Utah - ------------------------------------------------------------------------------------- Wynne Systems, Inc. California - ------------------------------------------------------------------------------------- Yankee Equipment Corporation Connecticut - -------------------------------------------------------------------------------------
SCHEDULE 9.15 ENVIRONMENTAL MATTERS Valley Rentals, Inc. with branches in Longview, Vancouver, and Turnwater, - -------------------- Washington Fill material used to level the Longview site before the building was constructed, was later determined to be "black mud", which now is considered a hazardous waste (generated at the Reynolds Metals aluminum foundry). The property is listed as a state hazardous waste site. The former Underground Storage Tanks "USTs" (removed in May 1991) have not been granted closure, because during their removal the waste material was found. The Company has obtained an indemnity for this matter from the seller. Pearson Equipment Rental, Ltd., two locations in Sarnia, Ontario - ------------------------------ At the Vidal Street site, there is likelihood that there remains petroleum hydrocarbon contaminated soils in the vicinity of a former underground oil/water separator tank and former above-ground fuel storage tanks. There were previously USTs at the south end of the property, and there also is a suspicion that contaminated soils may exist at this location. The purchase agreement provides for a $200,000 holdback, to address further site assessment work and remediation of the contamination. The Company is awaiting a proposal to conduct the additional Phase II site assessment work. Perco, Ltd., nine stores in Quebec and one in Ontario, Canada - ----------- Tank tightness tests and possibly Phase II site assessments need to be conducted at five of the sites which have fuel USTs. The sellers are responsible pursuant to the purchase agreement for the costs of these investigations and any remediation of contamination. Reitzel Rentals, Ltd., eleven branches in Ontario, Canada - --------------------- Five of the properties have had USTs removed, for which there is not any documentation of the soil or groundwater quality in proximity to the former tanks. A Phase II environmental assessment is soon to be conducted at each of these sites to determine whether any contamination is present. The sellers are to pay for the costs of the investigation and any subsequent remediation. Yankee Equipment, Bloomfield, Connecticut and Pascoag, Rhode Island - ---------------- There are two, 1981-vintage 10,000 gallon USTs at the Bloomfield, Connecticut site that will need to be removed and remediated, if needed, or upgraded to meet the December 22, 1998 federal deadline. This will be done pursuant tot he stock purchase agreement dated June 5, 1998, at the seller's expense. There are two dry wells at the Bloomfield property that have received petroleum- contaminated water. These currently are being investigated by an environmental firm, and will be remediated and sealed off, as appropriate. This will be done pursuant to the stock purchase agreement at the seller's expense. Gaedcke Equipment Company, with branches in Dallas, Austin, Houston and - ------------------------- Beaumont, Texas The Dallas property had a UST installed that was not registered. The seller represented in the stock purchase agreement that these tanks meet the federal requirements. (Also the Houston property contains two USTs and the Beaumont facility contains one UST). These three USTs have mixed petroleum products. Seller has agreed to indemnify the Company. The Company will expend $5,000 each to remove these USTs for a total of $15,000 in the aggregate. Seller will be responsible for all remediation. There are small unregistered waste oil USTs at the Houston and Beaumont properties, which need to be removed. The estimated cost to remove the USTs is approximately $20,000. Rent-It Center, Inc., Salt Lake City, Utah - -------------------- The USTs at the Rent-It Center, Inc. property on the west side of Salt Lake City previously were removed. There remain low levels of several contaminants in soil and groundwater on the property. However, due to considerable contamination of groundwater in the vicinity of this property from other sources, it is unclear that such contamination is solely from Rent-It Center, Inc.'s former USTs. An environmental report was completed at this site in 1996 and was submitted to the state authorities requesting the UST removal case to be considered closed. To date, there has been no response to this request. It is unlikely further remediation would be required. However, if continued monitoring would be necessary, the maximum exposure is estimated to be approximately $20,000. A-1 Rental, Story Road, San Jose, California - ---------- A-1's Story Road, San Jose store was subject to the removal of USTs in 1986. Although the local agency has advised the company on how to obtain a conditional case closure (for cases where groundwater has not been impacted), the company has never followed up, and the UST removal case apparently remains open. The Company has been indemnified for any future costs associated with this matter, and is following up with the regulatory agency to determine what future actions may be required, on behalf of the previous owners. The maximum exposure to the Company if it has to complete the closure is estimated to be approximately $20,000. Mission Valley Rentals, Inc., Osgood Road Property, Fremont, California - ---------------------------- Two USTs were removed in 1990 by Mission Valley, and a soil remediation project followed; this UST case remains open with the local program administering agency, the Alameda County Water District (ACWD), which had requested additional monitoring. The company has recently had groundwater wells sampled, which indicated no remaining contamination. These results will be presented to the ACWD with a request for case closure. The maximum exposure to the Company is estimated to be approximately $70,000, which has been provided to the Company by the previous owners to resolve this matter. Ross Equipment Corporation - -------------------------- The subject property contains two, 8,000-gallon USTs that are suspected to have leaked and which need to be removed and remediated. As is common with old USTs, there is a significant prospect that these tanks or their piping may indeed have leaked, and that soils and possibly groundwater will need to be remediated. The maximum exposure to the Company is estimated to be $50,000, however, the company has received an indemnity from the former owners. Ray Gordon Equipment - -------------------- There are three UST's in use on the property (two 1,000-gallon UST's and one 2,000-gallon gasoline UST). It is not clear whether these UST's have leaked and require remediation. The maximum expense to the Company is estimated to be $225,000, however, the Company has received on indemnity from the former owners. Equipment Supply Company - ------------------------ Two facilities in connection with this acquisition have UST's that require upgrading or removal. The maximum exposure to the Company is estimated to be $150,000, however, the Company has received an indemnity from the former owners. Rental Tools & Equipment Co. International, Inc. - ------------------------------------------------ There was a number of recently removed UST's from 11 sites relating to this acquisition. The Company is awaiting test results and other documentation to determine the necessary follow-up procedures, if any, relating to these sites. The maximum exposure to the Company is estimated to be approximately $225,000. In addition, the former shareholders have agreed to remove and, if necessary, remediate 15 existing underground storage tanks at their expense. Environmental Matters Relating to U.S. Rentals ---------------------------------------------- The $1,072,511.31 reserve for hazardous waste on U.S. Rentals, Inc.'s financial statements represents estimated future cost for the pulling of underground fuel storage tanks and remediation of contaminated soil. Remediation Cost: - ---------------- Over the past 11 years, U.S. Rentals has pulled 125 underground storage tanks. The average remediation cost per tank is $14,297.20. U.S. Rentals currently owns 5 double-walled underground storage tanks. U.S. Rentals has seven sites with ongoing remediation. Total Hazardous Waste Reserve Breaks Down As Follows: - ---------------------------------------------------- Projected remediation cost on remaining underground storage tanks: $82,500.00. Projected remediation on sites in progress of remediation: $473,412.20. Environmental liability waste reserve: $539,880.80. Total A/P accrued liabilities waste reserve: $1,072,511.31. Based on the above, it is my opinion that the reserve of hazardous waste as of September 24, 1998 is adequate and no additional reserve or disclosure is required. Projected reserves on sites in process of remediation total $423,412.20 and breaks down as follows: Downey: - ------ The current remediation costs to date are $8,152.88. After monitoring wells were installed, the ground water tested Benzine at 0.8 parts per billion. 1.0 parts per billion is the limit. Therefore, our consultant is submitting for closure. If the local board still has an issue in regards to the soil contamination, our consultant will transfer the case to the regional board for consideration of closure, since the regional board is more lenient in regards to soil issues. The current remediation reserve for the Downey facility is $30,000. Long Beach: - ---------- U.S. rentals has relocated from the 5640 Cherry Avenue location. U.S. Rentals has paid $98,435.59 in remediation cost at this site. The soil may be excavated and disposed of from this facility if required by the City of Long Beach. The current reserves are $138,412.20. Fullerton: - --------- Six underground storage tanks were pulled from this facility. The contamination was minimal. Contaminated soil was removed from the facility and the case has been submitted for closure. The current reserves for administrative costs for closure are $10,000.00. Stockton: - -------- U.S. Rentals has spent $100,269.39 in remediation costs associated with this site. U.S. Rentals continues to test the monitoring wells. The current remediation reserve on this facility is $150,000. Tucson: - ------ In November of 1997, U.S. Rentals pulled an oil tank from this facility and found contamination. It is anticipated that the remediation exposure will be low due to the level of the ground water. U.S. rentals has reserved $15,000 for its remediation at this facility. San Francisco: - ------------- U.S. Rentals recently removed five active underground storage tanks at this facility, and contamination was discovered. U.S. Rentals has reserved $80,000 towards remediation costs associated with this facility. Keller: - ------ During construction a contractor discovered 10 to 12 55-gallon drums and contaminated soil. Reserves set for removal and disposal of 850 cubic yards of contaminated soil. To prevent delays in construction, the contaminated soil has been removed and stockpiled on plastic until disposal can take place. $50,000 to haul and dispose of contaminated soil. Remediation cost to remove contaminated soil, $38,029.14. Reserved at $50,000.00 to complete closure. SCHEDULE 12.1.11 KEY EXECUTIVES Name Current Office(s) - ---- ----------------- Bradley S. Jacobs Chairman, Chief Executive Officer and Director John N. Milne Vice Chairman, Secretary, Director and Chief Acquisition Officer Michael J. Nolan Chief Financial Officer Robert P. Miner Vice President, Finance SCHEDULE 14.3 ADDRESSES FOR NOTICES UNITED RENTALS, INC. - -------------------- Five Greenwich Office Park Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telephone: 203/622-3131 Facsimile: 203/622-6080 UNITED RENTALS (NORTH AMERICA), INC. - ------------------------------------ Five Greenwich Office Park Greenwich, Connecticut 06830 Attention: Chief Financial Officer Telephone: 203/622-3131 Facsimile: 203/622-6080 BANK OF AMERICA, N.A., as Agent - ------------------------------- Agency Management Services 231 South LaSalle Street Chicago, Illinois 60697 Attention: Kris Hyde Telephone: 312/828-1657 Facsimile: 312/974-9102 BANK OF AMERICA, N.A. - --------------------- 231 South LaSalle Street Chicago, Illinois 60697 Attention: Robert Rospierski Telephone: 312/828-8363 Facsimile: 312/974-0761 GOLDMAN SACHS CREDIT PARTNERS, L.P. - ----------------------------------- 85 Broad Street New York, New York 10004 Attention: Barbara Aaron Telephone: 212/357-3111 Facsimile: 212/357-4597 DEUTSCHE BANK AG - ---------------- 31 West 52nd Street New York, New York 10019 Attention: Jean Hannigan Telephone: (212) 469-8648 Facsimile: (212) 469-3632 PILGRIM INVESTMENTS, INC. - ------------------------- Two Renaissance Square 40 North Central Avenue, Suite 1200 Phoenix, Arizona 85004-4424 Attention: Mark Haak Telephone: 602/417-8155 Facsimile: 602/417-8327 KZH FUNDS - --------- c/o The Chase Manhattan Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Attention: Virginia Conway Telephone: 212/946-7575 Facsimile: 212/946-7776 NORTH AMERICAN SENIOR FLOATING RATE FUND - ---------------------------------------- CYPRESS TREE SENIOR FLOATING RATE FUND - -------------------------------------- CYPRESS TREE INVESTMENT PARTNERS I LTD. - --------------------------------------- CYPRESS TREE INSTITUTIONAL FUND LLC - ----------------------------------- CYPRESS TREE INVESTMENT FUND, LLC - --------------------------------- c/o CYPRESS TREE Investment Management Company 125 High Street, 14th Floor Boston, Massachusetts 02110 Attention: Jeff Heuer Telephone: 617/946-0600 Facsimile: 617/946-5687 AVALON CAPITAL LTD. - ------------------- TRITON CBO III, LTD. - -------------------- OASIS COLLATERALIZED HIGH INCOME PORT-1 - --------------------------------------- FLOATING RATE PORTFOLIO (AIM) - ----------------------------- c/o Invesco Senior Secured Management 1166 Avenue of the Americas, 27th Floor New York, New York 10036-2789 Attention: Tom Ewald Telephone: 212/278-9639 Facsimile: 212/278-9619 GENERAL ELECTRIC CAPITAL CORPORATION - ------------------------------------ 260 Long Ridge Road Stamford, Connecticut 06927-0001 Attention: Roger Burns Telephone: 203/316-7985 Facsimile: 203/316-7978 HARRIS TRUST & SAVINGS - ---------------------- 111 West Monroe Street Floor 10 West Chicago, Illinois 60603 Attention: Michael Johnson Telephone: 312/461-5457 Facsimile: 312/461-5225 IKB DEUTSCHE INDUSTRIEBANK AG - ----------------------------- c/o Structured Finance Wilhelm-Botzkes Strasse 1 40474 Dusseldorf PO Box 10 11 18 40002 Dusseldorf, Germany Attention: Andrea Schroeder Telephone: 49-211-8221-4181 Facsimile: 49-211-8221-2181 METROPOLITAN LIFE INSURANCE COMPANY - ----------------------------------- 334 Madison Avenue Convent Station, New Jersey 07961 Attention: James Dingler Telephone: 973/254-3206 Facsimile: 973/254-3032 MONY LIFE INS. CO. - ------------------ 1740 Broadway, 7/th/ Fl. New York, New York 10019 Attention: Eileen Fargis Telephone: 212/708-2664 Facsimile: 212/708-2491 PARIBAS CAPITAL FUNDING LLC - --------------------------- 787 Seventh Avenue 32nd Floor New York, New York 10019 Attention: Michael Weinberg Telephone: 212/841-2544 Facsimile: 212/841-2144 JACKSON NATIONAL LIFE INSURANCE COMPANY - --------------------------------------- c/o PPM America, Inc. 225 West Wacker Drive, Suite 1200 Chicago, Illinois 60606 Attention: John Walding Telephone: 312/634-1230 Facsimile: 312/634-0054 S-3 TYLER TRADING, INC. - ------------------- Banc of America Securities LLC 100 North Tryon Street, NC1-007-06-07 Charlotte, North Carolina 28255 Attention: Kelly C. Walker Telephone: 704/388-8943 Facsimile: 704/388-0648 THE PRUDENTIAL INSURANCE COMPANY OF AMERICA - ------------------------------------------- Gateway Center 4, 7th Floor 100 Mulberry Street Newark, NJ 07102-4069 Attention: Ross Smead Telephone: 973/802-6814 Facsimile: 973/802-7045 UNION BANK OF CALIFORNIA - ------------------------ 350 California Street, 6th Floor San Francisco, California 94101 Attention: Alison A. Mason Telephone: 415/705-7452 Facsimile: 415/705-7566 COMERICA BANK - ------------- 500 Woodward Avenue 9th Floor, MC: 3280 Detroit, Michigan 48275-3280 Attention: Kimberly Kersten Telephone: 313-222-6239 Facsimile: 313/222-3330 BANK OF NOVA SCOTIA - ------------------- One Liberty Plaza, 26th Floor New York, New York 10006 Attention: Kevin McCarthy Telephone: 212/225-5074 Facsimile: 212/225-5090 FUJI BANK, LTD. - --------------- 333 South Hope Street, 39th Floor Los Angeles, California 90071 Attention: Tami Kita Telephone: 213/253-4163 Facsimile: 213/253-4178 S-4 HELLER FINANCIAL INC. - --------------------- 500 West Monroe Street Chicago, Illinois 60661 Attention: Craig Gallehugh Telephone: 312/441-7630 Facsimile: 312/441-7357 FREMONT INVESTMENT AND LOAN - --------------------------- 2020 Santa Monica Boulevard, Suite 500 Santa Monica, California 90404 Attention: Maureen Nunnari Telephone: 310/315-5562 Facsimile: 310/264-7401 CONTINENTAL ASSURANCE COMPANY - ----------------------------- UNITED OF OMAHA - --------------- SEQUILS I, LTD. - --------------- TENET HEALTHCARE CORP. - ---------------------- KZH CRESCENT-3 LLC - ------------------ CNA Insurance CNA Plaza Floor 23 S Chicago, Illinois 60685 Attention: John Tsokolas Telephone: (312) 822-6338 Facsimile: (312) 822-1813 and - --- Trust Company of the West 865 South Figueroa Los Angeles, CA 90017 Attention: Elaine Nagos Telephone: (213) 244-0830 Facsimile: (213) 244-0485 With copies to: - --------------- TCW Asset Management Company 200 Park Avenue, Suite 2200 New York, NY 10166-0228 Attention: Mark L. Gold Telephone: (212) 771-4137 Facsimile: (212) 771-4159 S-5 UNITED OF OMAHA LIFE INSURANCE COMPANY - -------------------------------------- BNY Western Trust Company 700 South Flower Street, Suite 200 Los Angeles, CA 90017 Attention: Carol Grafals Telephone: (213) 630-6475 Facsimile: (213) 683-1035 and - --- Trust Company of the West 865 South Figueora Street, Suite 1800 Los Angeles, CA 90017 Attention: Elaine Nagos Telephone: (213) 244-0830 Facsimile: (213) 244-0485 With copies to: - --------------- TCW Asset Management Company 200 Park Avenue, Suite 2200 New York, NY 10166-0228 Attention: Mark L. Gold/Justin Driscoll/Jonathan Insull Telephone: (212) 771-4000 Facsimile: (212) 771-4159 SEQUILS I, LTD - -------------- c/o Chase Bank of Texas, N.A. Chase Tower, 9th Floor Houston, Texas Attention: Omar El-Aazami Telephone: (713) 216-2215 Facsimile: (713) 216-3571 OSPREY INVESTMENTS PORTFOLIO - ---------------------------- CAPTIVA II FINANCE LTD. - ----------------------- STRATEGIC MANAGED LOAN PORTFOLIO - -------------------------------- c/o Citibank Global Asset Management 399 Park Avenue 7/th/ Floor, Zone 2 New York, NY 10043 Attention: Martin Davey Telephone: (212) 559-4205 Facsimile: (212) 793-1871 S-6 LONGLANE MASTER TRUST IV - ------------------------ c/o Fleet National Bank 100 Federal Street Mail Stop 01-12-08 Boston, MA 02110 Attention: Matthew Rose Telephone: (617) 434-7264 Facsimile: (617) 434-5617 STRATA FUNDING LTD. - ------------------- CERES FINANCE LTD. - ------------------ CAPTIVA II FINANCE LTD. - ----------------------- KZH III LLC - ----------- STANFIELD CLO LTD. - ------------------ c/o Stanfield Capital Partners LLC 330 Madison Avenue, 27th Floor New York, NY 10017 Attention: Reginald Woodward Telephone: (212) 284-4308 Facsimile: (212) 284-4325 BANK OF AMERICA - --------------- 231 South LaSalle St. Chicago, IL 60697 Attention: Tom Trail Julie Mehring Telephone: (312) 828-7832/3097 Facsimile: (312) 974-0761 Attention: Kristyn Dunn Telephone: (312) 828-3603 Facsimile: (312) 765-2193 Attention: Bob Rospierski Telephone: (312) 828-8363 Facsimile: (312) 974-0761 UNITED RENTALS, INC. - -------------------- 4 Greenwich Office Park Greenwich, CT 06830 Attention: Beth Bonell Telephone: (203) 618-7175 Facsimile: (203) 622-6080 Attention: Mike Nolan Telephone: (203) 618-7132 Facsimile: (203) 622-0128 S-7 Attention: Elliott Mayer Telephone: (203) 618-7202 Facsimile: (203) 618-7262 MONUMENT CAPITAL LTD. - --------------------- c/o Alliance Capital Management 1345 Avenue of the Americas 38/th/ Floor New York, NY 10105 Attention: Scott Van den Bosch Telephone: (212) 969-1176 Facsimile: (212) 969-6815 ALLSTATE LIFE INSURANCE COMPANY - ------------------------------- 3075 Sanders Road, Suite G3A Northbrook, IL 60062-7127 Attention: Tom Napholz Telephone: (847) 402-7835 Facsimile: (847) 402-3092 AMMC CDO I, LTD. - ---------------- c/o American Money Management Corp. One East Fourth St., 3/rd/ Fl. Cincinnati, OH 45202 Attention: Dave Meyer Telephone: (513) 579-2904 Facsimile: (513) 579-2910 ARES III CLO MANAGEMENT - ----------------------- 1999 Avenue of the Stars Suite 1900 Los Angeles, CA 90067 Attention: Seth Brufsky Telephone: (310) 201-4225 Facsimile: (310) 201-4171 PPM SPYGLASS FUNDING TRUST - -------------------------- WINGED FOOT FUNDING TRUST - ------------------------- OLYMPIC FUNDING TRUST, SERIES 1999-1 - -------------------------------------- c/o Banc of America Securities 100 N. Tryon St. NC1-007-06-07 Charlotte, NC 28255 Attention: Kelly Walker Telephone: (704) 388-8943 Facsimile: (704) 388-0648 S-8 BANK OF AMERICA NA - ------------------ 100 N. Tryon Street 8th Floor Charlotte, NC 28255 Attention: Ed Hamilton Telephone: (704) 388-8809 Facsimile: (704) 388-0922 CARLYLE HIGH YIELD PARTNERS, L.P. - --------------------------------- CARLYLE HIGH YIELD PARTNERS II, LTD. - -------------------------------------- c/o Carlyle High Yield Partners 520 Madison Ave., 41st Fl. New York, NY 10022 Attention: Linda Pace Telephone: (212) 381-4946 Facsimile: (212) 381-4950 COLUMBUS LOAN FUNDING LTD. - -------------------------- c/o Chase Bank of Texas 600 Travis Street 50th Floor Houston, TX 77002 Attention: Clifton Harris Telephone: (713) 216-4629 Facsimile: (713) 577-5266 SEQUILS IV, LTD. - ---------------- c/o Chase Bank of Texas 600 Travis Street 50th Floor Houston, TX 77002 Attention: Anna Kuo Telephone: (713) 216-0947 Facsimile: (713) 216-3571 CAPTIVA FINANCE LTD. - -------------------- c/o Citibank Global Asset Management 399 Park Avenue 7/th/ Floor New York, NY 10043 Attention: Hans Christensen Telephone: (212) 793-1871 Facsimile: (212) 793-4786 S-9 CAPTIVA II FINANCE LTD. - ----------------------- c/o TCW Advisors, Inc. 200 Park Avenue, 22/nd/ Floor New York, NY 10166 Attention: Justin Driscoll Telephone: (212) 771-4137 Facsimile: (212) 771-4159 ELT LTD. - ------- c/o Citibank 599 Lexington Ave. 26th Floor, Zone 10 New York, NY 10043 Attention: Christine Wong Telephone: (212) 559-9220 Facsimile: (212) 793-1871 CYPRESS TREE INVESTMENT FUND LLC - -------------------------------- c/o Cypress Tree Investments Management Company 125 High Street, 14th Fl. Boston, MA 02110 Attention: Tim Barns Telephone: (617) 946-0600 Facsimile: (617) 946-5681 DLJ CAPITAL FUNDING - ------------------- 277 Park Ave., 10th Fl. New York, NY 10172 Attention: Tom Hendrick Telephone: (212) 892-5489 Facsimile: (212) 892-5286 FC CBO LIMITED - -------------- 115 South LaSalle Street 11/th/ Floor Chicago, IL 60603 Attention: Peter Konigsmann Telephone: (312) 750-8704 Facsimile: (312) 750-3834 FIRST DOMINION FUNDING I - ------------------------ FIRST DOMINION FUNDING II - ------------------------- FIRST DOMINION FUNDING III - -------------------------- c/o First Dominion Capital 1330 Avenue of the Americas 38th Floor New York, NY 10019 Attention: Tom Flannery Telephone: (212) 603-8565/(212) 603-8500 Facsimile: (212) 603-8505/(212) 603-8505 FIRST DOMINION FUNDING I - ------------------------ S-10 c/o First Dominion Capital 1330 Avenue of the Americas 37th Floor New York, NY 10019 Attention: Shashi Srikantan Telephone: (212) 603-8561 Facsimile: (212) 603-8505 ELC (CAYMAN) LTD. CLO SERIES 1999-II - ------------------------------------ ELC (CAYMAN) LTD. - ----------------- ELC (CAYMAN) LTD. CLO SERIES 1999-1 - ----------------------------------- ELC (CAYMAN) LTD. CLO SERIES 1999-III - ------------------------------------- c/o First Union Institutional Debt Management, Inc. 401 South Tryon 15/th/ Floor Charlotte, NC 28288 Attention: Amos Beason Telephone: (704) 383-6103 Facsimile: (704) 383-1507 FIRST UNION NATIONAL BANK - ------------------------- c/o First Union National Bank 301 S. College Street One First Union Center, DC5 Charlotte, NC 28288-0737 Attention: Steve Haas Telephone: (704) 383-4993 Facsimile: (704) 383-3927 FRANKLIN FLOATING RATE TRUST - ---------------------------- c/o Franklin Floating Rate Trust 777 Mariners Island Blvd. 3rd Floor San Mateo, CA 944041 Attention: Madeline Ip Telephone: (650) 312-3865 Facsimile: (650) 312-3346 S-11 ARCHIMEDES FUNDING LLC - ---------------------- ING HIGH INCOME PRINCIPAL PRESERVATION - -------------------------------------- SEQUILS-ING I (HBDGM), LTD - -------------------------- ARCHIMEDES FUNDING III, LTD - --------------------------- ARCHIMEDES FUNDING II, LTD. - --------------------------- SWISS LIFE US RAINBOW LTD - ------------------------- c/o ING Capital Advisors Inc. 333 S. Grand Avenue Suite 4250 Los Angeles, CA 90071 Attention: Helen Rhee Telephone: (213) 346-3983 Facsimile: 346-3995 PACIFICA PARTNERS I, L.P. - ------------------------- c/o Imperial Credit Asset Management 150 S. Rodeo Drive Suite 230 Beverly Hills, CA 90212 Attention: Dean Kawai Telephone: (310) 246-3604 Facsimile: (310) 246-3715 INDOSUEZ CAPITAL FUNDING III, LTD. - ---------------------------------- INDOSUEZ CAPITAL FUNDING IV, LP - ------------------------------- c/o Indosuez Capital 666 Third Avenue 9/th/ Floor New York, NY 10017 Attention: Melissa Marano Telephone: (646) 658-2231 Facsimile: (646) 658-2254 AMARA I FINANCE LTD. - -------------------- AMARA II FINANCE LTD. - ---------------------- AERIES FINANCE-II LTD - --------------------- c/o Invesco Senior Secured Management 1166 Avenue of the Americas 27th Floor New York, NY 10036-2789 Attention: Joseph Rotondo Telephone: (212) 278-9852 Facsimile: (212) 278-9619 S-12 SENIOR HIGH INCOME PORTFOLIO - ---------------------------- MERRILL LYNCH SENIOR FLOATING RATE FUND - --------------------------------------- DEBT STRATEGIES FUND, INC. - -------------------------- DEBT STRATEGIES FUND II, INC. - ----------------------------- c/o Merrill Lynch Asset Management 800 Scudders Mill Road - Area 1B Plainsboro, NJ 08536 Attention: Joseph Moroney Telephone: (609) 282-8926 Facsimile: (609) 282-2756 MORGAN STANLEY PRIME INCOME TRUST - --------------------------------- c/o Morgan Stanley Dean Witter 2 World Trade Center 72nd Floor New York, NY 10048 Attention: Jinny Kim Telephone: (212) 392-2883 Facsimile: (212) 392-5345 MOUNTAIN CAPITAL CLO I LTD. - --------------------------- c/o Mountain Capital Advisors 2 World Trade Center 79th Floor New York, NY 10048 Attention: Mark Hanslin/Paul O'Leary Telephone: (212) 898-2073/2093 Facsimile: (212) 898-2129 NOMURA BOND AND LOAN FUND - ------------------------- c/o Nomura Corporate Research Two World Financial Center Building B New York, NY 10281 Attention: Rick Stewart Telephone: (212) 667-9277 Facsimile: (212) 667-1661 OPPENHEIMER SENIOR FLOATING RATE FUND - ------------------------------------- 6803 South Tucson Way Englewood, CO 80112 Attention: Joe Welsh Telephone: (303) 768-3434 Facsimile: (303) 768-4383 S-13 PRUDENTIAL INSURANCE COMPANY - ---------------------------- c/o Prudential Capital Group 100 Mulberry St., GC4 7th Floor Newark, NY 07102 Attention: Janet Crowe Telephone: (973) 802-0285/ (973) 367-2036 Facsimile: (973) 802-7045 GALAXY CLO 1999-1, LTD. - ----------------------- c/o SAI Investment Advisor, Inc. 1 SunAmerica Center 34th Floor, Century City Los Angeles, CA 90067-6022 Attention: Jeff Golbus Telephone: (713) 546-1114 Facsimile: (713) 222-1402 SANKATY HIGH YIELD PARTNERS II, L.P. - ------------------------------------ GREAT POINT CLO 1999-1 LTD. - --------------------------- c/o Sankaty Advisors, Inc. Two Copley Place Boston, MA 02116 Attention: Diane Exter Telephone: (617) 572-3216 Facsimile: (617) 572-2134 GENERAL MOTORS WELFARE BENEFITS TRUST - ------------------------------------- c/o Shenkman Capital Management Inc. 461 Fifth Ave, 23rd Fl. New York, NY 10017 Attention: Jack Kranefuss Telephone: (212) 867-9090 Facsimile: (212) 292-0056 STEIN ROE & FARNHAM, INC. - ------------------------- c/o Stein Roe & Farnham Inc. One S. Wacker Dr., 3rd Fl. Chicago, IL 60606 Attention: Erica Heatwole Telephone: (312) 368-7644 Facsimile: (312) 368-7857 THE SUMITOMO TRUST & BANKING CO. - -------------------------------- 527 Madison Avenue New York, NY 10022 Attention: Elizabeth Quirk Telephone: (212) 326-0553 Facsimile: (212) 418-4848 CARRILLON HOLDING LTD. - ---------------------- c/o Summit Investment Partners S-14 312 Elm Street, Ste 2525 Cincinnati, OH 45202 Attention: Kevin Seagraves Telephone: (513) 632-1401 Facsimile: (513) 632-1439 TORONTO DOMINION TEXAS - ---------------------- 909 Fannin Street, Suite 1700 Houston, TX 77010 Attention: Gwen Zirkle Telephone: (713) 653-8214 Facsimile: (713) 652-0914 TRAVELERS CORPORATE LOAN FUND - ----------------------------- c/o Travelers Insurance Company 399 Park Avenue 7/th/ Floor New York, NY 10043 Attention: Glenn Marchak Telephone: (212) 559-8597 Facsimile: (212) 793-2089 SEQUILS - ------- c/o Trust Company of the West 200 Park Avenue, 22nd Floor New York, NY 10166 Attention: Scott Feldman Telephone: (212) 771-4158 Facsimile: (212) 771-4098 VAN KAMPEN FUNDS - ---------------- c/o Van Kampen American Capital One Parkview Plaza Oakbrook Terrace, IL 60181 Attention: Brian Buscher Telephone: (630) 684-6283 Facsimile: (630) 684-6023 S-15 EXHIBIT M CONFIRMATION Dated as of May 12, 2000 TO: Bank of America, N.A., as U.S. Agent for the Banks party to the Credit Agreement referred to below, as Agent for the Lenders party to the Term Loan B Agreement referred to below, as Agent for the Lenders party to the Term Loan C Agreement referred to below, and as Collateral Agent under the Intercreditor Agreement referred to below; the Banks party to the Credit Agreement; and the Lenders party to the Term Loan B Agreement and the Term Loan C Agreement Reference is made to (a) the Credit Agreement dated as of September 29, 1998 (as previously amended, the "Credit Agreement") among United Rentals (North ---------------- America), Inc. (the "Company"), United Rentals, Inc. ("Parent"), United Rentals ------- ------ of Canada, Inc., various financial institutions, Bank of America Canada, as Canadian Agent, and Bank of America, N.A., as U.S. Agent, (b) the Term Loan Agreement dated as of July 10, 1998 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan B Agreement") among Parent, the --------------------- Company, various financial institutions and Bank of America, N.A., as Agent, (c) the Term Loan Agreement dated as of July 15, 1999 and amended and restated as of May 12, 2000 (as so amended and restated, the "Term Loan C Agreement") among --------------------- Parent, the Company, various financial institutions and Bank of America, N.A., as Agent, (d) the Fourth Amendment dated as of May 12, 2000 (the "Fourth ------ Amendment to Credit Agreement") to the Credit Agreement, (e) the Second Restated - ----------------------------- U.S. Guaranty dated as of September 29, 1998 executed by various Subsidiaries of the Company, (f) the Second Restated U.S. Security Agreement dated as of September 29, 1998 (the "Security Agreement") among the Company, Parent, various ------------------ Subsidiaries of the Company and Bank of America, N.A., as Collateral Agent (in such capacity, the "Collateral Agent"), (g) the Second Restated Company Pledge ---------------- Agreement dated as of September 29, 1998 between the Company and the Collateral Agent, (h) the Restated Parent Guaranty dated as of September 29, 1998 executed by Parent, (i) the Restated Parent Pledge Agreement dated as of September 29, 1998 between Parent and the Collateral Agent, and (j) the Intercreditor Agreement dated as of September 29, 1998 (the "Intercreditor Agreement") among ----------------------- Bank of America, N.A., as U.S. Agent, Bank of America, N.A., as Term Agent, Bank of America, N.A. as agent for the Lenders under the Term Loan C Agreement, and the Collateral Agent. Each document referred to in items (e) through (i) above --------- --- is called a "Credit Document". Capitalized terms used but not defined herein --------------- shall have the meanings set forth in the Credit Agreement. Each of the undersigned (a) confirms to each of the addressees that (i) each Credit Document to which such undersigned is a party continues in full force and effect on and after the date hereof, and is the legal, valid and binding obligation of such undersigned, enforceable against such undersigned in accordance with its terms; and (ii) the obligations and liabilities guaranteed or secured (as applicable) under each Credit Document include, without limitation, all obligations and liabilities of the Company and Parent under the Credit Agreement, as amended by the Fourth Amendment to Credit Agreement (as so amended, the "Amended Credit Agreement"), the Term Loan B Agreement and the Term ------------------------ Loan C Agreement; (b) agrees that each reference in each Credit Document to the "Credit Agreement" or any similar term shall, after the date hereof, be deemed ---------------- to be a reference to the Amended Credit Agreement; (c) agrees that each reference in each Credit Document to the "Term Loan Agreement" or any similar ------------------- term S-16 shall, after the date hereof, be deemed to be a reference to the Term Loan B Agreement; and (d) agrees that each reference in each Credit Document to "Permitted Senior Secured Debt" shall include all Debt under the Term Loan C ----------------------------- Agreement. IN WITNESS WHEREOF, each of the undersigned has caused this Confirmation to be executed and delivered by its duly authorized officer as of the date first written above. UNITED RENTALS (NORTH AMERICA), INC. By:_______________________________ Title: Chief Financial Officer UNITED RENTALS, INC. By:_______________________________ Title:____________________________ ADVANCE BARRICADES AND SIGNING, INC. COAST LINE MARKING, INC. FLASHER BARRICADES, INC. FLASHER COMPANY OF OKLAHOMA, INC. JADCO SIGNING, INC. LECTRIC LIGHTS COMPANY LIDDELL BROS., INC. LIDDELL MANAGEMENT CO., INC. PRECISION PAVEMENT MARKING, INC. SAFETY LIGHTS SALES AND LEASING, INC. OF TEXAS STATE BARRICADING, INC. TRAFFIC SAFETY SERVICES, INC. TWO WAY TRAFFIC, INC. UNITED RENTALS GULF, INC. UNITED RENTALS NORTHWEST, INC. UNITED RENTALS SOUTHEAST, INC. UNITED RENTALS OF CANADA, INC. WARNING LITES OF MINNESOTA, INC. WARNING SAFETY LIGHTS, INC. WARNING SAFETY LIGHTS OF GEORGIA, INC. WLI INDUSTRIES, INC. WARNING LITES OF INDIANA, INC. WARNING LITES OF IOWA, INC. SAFE-T-FLARE SERVICES, INC. WORK ZONE SAFETY, INC. WOUDENBERG ENTERPRISES, INC. WYNNE SYSTEMS, INC. By:______________________________ Title:___________________________ UNITED EQUIPMENT RENTALS GULF, L.P. By: United Rentals (North America), Inc. Its: General Partner By:____________________________________ Title:_________________________________ UNITED RENTALS SOUTHEAST, L.P. By: United Rentals (North America), Inc. Its: General Partner By:____________________________________ Title:_________________________________ Accepted and Agreed to this 12th day of May, 2000 BANK OF AMERICA, N.A. (formerly Bank of America National Trust and Savings Association), as Collateral Agent for the Benefited Parties By:________________________ Title:_____________________ Agency Officer EXHIBIT N FORM OF AMENDMENT TO INTERCREDITOR AGREEMENT Dated as of May 12, 2000 Reference is made to the Intercreditor Agreement (the "Intercreditor ------------- Agreement") dated as of September 29, 1998 among Bank of America, N.A. (formerly - --------- known as Bank of America National Trust and Savings Association), as U.S. Agent, Bank of America, N.A., as Term Agent, various other senior secured creditors of the Company and Bank of America, N.A., as Collateral Agent. Capitalized terms not defined herein are used as defined in the Intercreditor Agreement. Each of the undersigned hereby agrees that subsection 3(f) of the Intercreditor Agreement is amended in its entirety to read as follows: "(f) The Collateral Agent may (and shall at the request of any Grantor), without the approval of any other Benefited Party, (x) release any Collateral under any Security Document which is permitted to be sold or disposed of or otherwise released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and execute and deliver such releases as may be necessary to terminate of record the Collateral Agent's security interest (for the benefit of the Benefited Parties) in such Collateral, (y) release any Grantor from its obligations under the U.S. Guaranty which is permitted to be released pursuant to the Credit Agreement, the Term Loan Agreement and any applicable Permitted Senior Secured Debt Agreement and (z) subordinate its interest in any Collateral to the holder of any Lien on such Collateral which is permitted by clause (d) or (h) of Section 10.8 of the Credit Agreement, clause (d) or (h) of Section 10.8 of the Term Loan Agreement and the comparable provisions of each Permitted Senior Secured Debt Agreement. In determining whether any such release or subordination is permitted, the Collateral Agent may (I) rely, as to factual matters, on a Certificate from the Company and (II) may (but shall not be obligated to) seek (and, if obtained, rely upon) instructions from the Required Banks (as to whether any such release is permitted under the Credit Agreement), from the Required Term Lenders (as to whether any such release is permitted under the Term Loan Agreement) and from the Required Permitted Creditors under each Permitted Senior Secured Debt Agreement or group of related Permitted Senior Secured Debt Agreements (as to whether any such release is permitted under the applicable Agreement or Agreements). In addition, the Collateral Agent may release all Collateral upon receipt of (i) written notice from the U.S. Agent that all Credit Obligations have been paid in full (other than contingent obligations (A) in respect of Letters of Credit which have been cash collateralized or otherwise provided for to the satisfaction of the Issuing Bank (as defined in the Credit Agreement) and (B) arising under provisions of the Credit Agreement which by their terms survive termination thereof) and all commitments to create Credit Obligations have been terminated, (ii) written notice from the Term Agent that all Term Obligations have been paid in full (other than any Term Obligations arising under provisions of the Term Loan Agreement which by their terms survive termination thereof), (iii) written notice from each holder of Hedging Obligations that such Hedging Obligations have been paid in full or otherwise provided for to the satisfaction of such holder (it being understood that if the Collateral Agent notifies the Banks, the Term Lenders and the Permitted Creditors that it intends to release the Collateral pursuant to this sentence, the Collateral Agent may conclusively presume that there are no Hedging Obligations other than those of which the Collateral Agent receives notice not later than the later of five business days after notice is sent by the Collateral Agent of such intended release and the business day before the date on which such release occurs), (iv) written notice from each Permitted Creditor (or, in the case of any group of Permitted Creditors, an agent therefor) that all Permitted Senior Secured Debt Obligations owed to such Permitted Creditor (or group of Permitted Creditors) have been paid in full (other than any Permitted Senior Secured Debt Obligations arising under provisions of any Permitted Senior Secured Debt Document which by their terms survive termination thereof) and (v) payment of all other Benefited Obligations owed to the Collateral Agent or of which the Collateral Agent has received written notice." IN WITNESS WHEREOF, each of the undersigned has caused this amendment to be executed and delivered by its duly authorized representative as of the date hereof. BANK OF AMERICA, N.A., as Collateral Agent By: Name: Title: BANK OF AMERICA., N.A., as U.S. Agent By: Name: Title: BANK OF AMERICA., N.A., as Term Agent By: Name: Title: BANK OF AMERICA., N.A., as Agent for the holders of the Permitted Senior Secured Debt By: Name: Title: EX-10.E 6 0006.txt AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT Exhibit 10(E) Amendment No. 1 to Employment Agreement --------------------------------------- Reference is made to the Employment Agreement dated as of October 10, 1997 (the "Agreement"), between United Rentals, Inc. (subsequently renamed United Rentals (North America), Inc.), a Delaware corporation (the "Company"), and Robert Miner ("Employee"). The Company and Employee agree that the Agreement shall be amended and supplemented as set forth below. Except as specifically set forth below, the Agreement remains unmodified and in full force and effect: 1. Modification to Paragraph 2 1.1. The following new subparagraph shall be added following Paragraph 2(d): (e) The Company and Bradley S. Jacobs ("Jacobs") are parties to an Employment Agreement dated September 19, 1997 (the "Jacobs Agreement"). Paragraph 6(a)(iii)(D) of the Jacobs Agreement provides that Jacobs may terminate the Jacobs Agreement for "Good Reason" (as defined in the Jacobs Agreement). If (1) Jacobs terminates the Jacobs Agreement for Good Reason (as defined in the Jacobs Agreement) (2) the circumstances constituting such "Good Reason" are described in clause (i) of the definition of such term in the Jacobs Agreement, and (3) concurrently therewith or during the 90-day period that commences on the date of such termination, Employee resigns as an employee of the Company or his employment with the Company otherwise terminates for any reason, the Company shall be obligated to pay to Employee a severance payment equal to 7.46 times the sum of (x) the Employee's annual base salary in effect at the time of termination plus (y) the highest annual cash bonus (if any) paid by the Company to Employee during the three-year period preceding the date of termination. Such severance payment shall be payable in a lump sum payment within fifteen (15) days of the termination of Employee's employment. 2. Addition of New Paragraph 12 Relating to Taxes 2.1. The following new Paragraph 12 is added after Paragraph 11. 12. Taxes ----- (a) The payment of the base salary and any bonus or other incentive compensation to Employee hereunder shall be subject to all federal, state and local withholding taxes, social security deductions and any other required payroll deductions. (b) If all or any portion of the payments and benefits which Employee is entitled to receive pursuant to the terms of this Agreement or any other plan, arrangement or agreement in respect of the Company or its affiliates (the "Payments") constitutes "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are subject to the excise tax (the "Excise Tax") imposed by Section 4999 of 1 the Code (or similar tax and/or assessment), the Company (or its successors or assigns) shall pay to Employee an additional amount ("Gross-Up Payment") such that the net amount retained by Employee, after deduction of (i) any Excise Tax on Payments, (ii) any federal, state and local income tax and Excise Tax upon the payment provided for by this paragraph 12(b), and (iii) any interest and penalties imposed in respect of the Excise Tax shall be equal to the full amount of the Payments. For purposes of determining the amount of the Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rates of taxation in the state and locality of Employee's residence on the date the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. (c) The Gross-Up Payment for any Payment made shall be paid to Employee within ten (10) days after the Imposition of Excise Tax, unless the Company undertakes to indemnify him as provided in paragraph 12(d). The "Imposition of Excise Tax" shall mean the earliest of: (i) the issuance by the Internal Revenue Service of a notice stating in effect that an Excise Tax is due with respect to the Payment; (ii) Employee's delivery to the Company of an opinion of tax counsel selected by Employee that all or a portion of the Payment is subject to the Excise Tax and the amount of the Excise Tax on the Payment; or (iii) the Company's delivery to Employee of an opinion of tax counsel selected by the Company and acceptable to Employee that all or a portion of the Payment is subject to the Excise Tax and the amount of the Excise Tax on the Payment. (d) In lieu of paying the Gross-Up Payment for any Payment, the Company may elect to undertake, at its sole expense, the defense and settlement of any assessment by the Internal Revenue Service of the Excise Tax on any Payment. If the Company so elects, the Company shall protect, defend, indemnify and hold Employee forever harmless from and against the Excise Tax on such Payment and payments pursuant to this paragraph 12(d) and any federal, state or local income tax (determined pursuant to the last sentence of paragraph 12(b)) upon payments pursuant to this paragraph 12(d) and any and all liabilities, demands, claims, actions, causes of action, assessments, losses, costs, damages or expenses, including attorneys' and accountants' fees in connection with any thereof, and any interest and penalties sustained by Employee as a result of or arising out of or by virtue of the Company's undertaking. (e) If the Excise Tax is determined to be less than the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 12(c), Employee shall repay to the Company, within ten (10) days after the time that the amount of such reduction in Excise Tax is determined, the portion of the Gross-Up Payment attributable to such reduction plus interest on the amount of such repayment at the rate provided in section 1274(b)(2)(B) of the Code for debt instruments with a maturity after issuance equal to the period beginning on the date the Gross-Up Payment was made and ending on the date of repayment 2 required by this sentence. If the Excise Tax is determined to exceed the amount taken into account in determining the Gross-Up Payment paid pursuant to paragraph 12(c), the Company within ten (10) days after the time that the amount of such excess Excise Tax is determined shall make an additional payment to Employee of an amount equal to such excess plus an amount equal to any interest and penalties payable to the Internal Revenue Service with respect to such excess and any Excise Tax on payment pursuant to this sentence and any federal, state and local income tax (determined pursuant to the last sentence of paragraph 12(b)) upon payments made pursuant to this sentence. 3. Amendment and Restatement. This Amendment No. 1 amends and restates in its entirety any amendments heretofore executed to the Agreement. In Witness Whereof, the parties have on August 2, 2000 executed and delivered this Amendment No. 1 to the Agreement. UNITED RENTAL (NORTH AMERICA), INC. By ___________________________ ______________________________ Robert Miner 3 EX-27.1 7 0007.txt FINANCIAL DATA SCHEDULE
5 0001067701 UNITED RENTALS INC. /DE 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 33,192 0 556,650 57,758 156,258 0 2,759,564 594,647 5,080,622 0 2,613,621 300,000 5 703 1,430,987 5,080,622 1,308,908 1,308,908 275,477 831,126 (312) 20,286 115,960 110,444 45,834 64,610 0 0 0 64,610 0.90 0.70
EX-27.2 8 0008.txt FINANCIAL DATA SCHEDULE
5 0001047166 UNITED RENTALS NORTH AMERICA INC. 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 33,192 0 548,847 57,758 156,258 0 2,714,935 585,822 5,013,180 0 2,613,621 0 0 0 1,720,200 5,013,180 1,308,908 1,308,908 275,477 831,126 (312) 20,286 106,210 123,760 51,409 72,351 0 0 0 72,351 0 0
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