<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) January 31, 1997
----------------
RENTAL SERVICE CORPORATION
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 000-21237 33-0569350
---------------------------- ------------------------ -------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
14505 North Hayden Road, Suite 322, Scottsdale, Arizona 85260
- -------------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(602) 905-3300
----------------------------------------------------
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS.
Effective January 31, 1997, Rental Service Corporation ("RSC" or the
"Company") amended its Amended and Restated Credit Agreement ("Revolver") to,
among other things, increase the availability to $200.0 million, increase the
advance rates on eligible rental equipment, decrease the interest rates by 0.50%
and extend the maturity date to January 31, 2001. In addition, the amended
Revolver modifies certain covenants, including the restrictions on investments,
capital expenditures and acquisitions. In connection with the implementation of
the amended Revolver, the Company anticipates recording an extraordinary loss on
extinguishment of debt in the first quarter of 1997 associated with the write-
off of unamortized debt issuance costs. A copy of the First Amendment to the
Amended and Restated Credit Agreement is attached as an exhibit to this Report
on Form 8-K, and is incorporated herein by reference.
On February 5, 1997, RSC announced that it received and accepted the
requisite number of votes from holders of its Common Stock, $.01 par value,
approving the 1996 Equity Participation Plan of Rental Service Corporation (the
"1996 Plan") and the authorization for issuance of one million shares of Common
Stock under the 1996 Plan. A copy of the press release relating to the approval
of the 1996 Plan is attached as an exhibit to this Report on Form 8-K, and is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired
None
(b) Pro Forma Financial Information
None
(c) Exhibits
99.1 First Amendment to the Amended and Restated Credit Agreement,
dated January 31, 1997.
99.2 Press Release dated February 7, 1997 re: Stockholder Approval
of the 1996 Equity Participation Plan of Rental Service
Corporation.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Rental Service Corporation
Date: February 12, 1997 By: /s/ Douglas A. Waugaman
--------------------------------
Douglas A. Waugaman,
Vice President and Chief Financial
Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<C> <S>
99.1 First Amendment to the Amended and Restated Credit Agreement,
dated January 31, 1997.
99.2 Press Release dated February 7, 1997 re: Stockholder Approval
of the 1996 Equity Participation Plan of Rental Service
Corporation.
</TABLE>
4
<PAGE>
EXHIBIT 99.1
FIRST AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the "First Amendment") dated
---------------
as of January 1, 1997 relates to that certain Amended and Restated Credit
Agreement dated as of September 24, 1996 (as further amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
----------------
among Acme Alabama, Inc., Acme Dixie Inc., Acme Duval Inc., Acme Rents, Inc.,
The Air & Pump Company and Walker Jones Equipment, Inc. (collectively, the
"Borrowers"), RSC Acquisition Corp., RSC Holdings, Inc. and Rental Service
- ----------
Corporation (collectively, the "Parent Guarantors"), each financial institution
-----------------
identified on Annex I thereto (together with its successors and permitted
assigns pursuant to Section 12.8 thereof, a "Lender"), the Issuing Bank and BT
------
Commercial Corporation ("BTCC") acting as agent for the Lenders and the Issuing
----
Bank (in such capacity, together with any successor agent appointed pursuant to
Section 11.8 thereof, the "Agent").
-----
1. Definitions. Capitalized terms used and not otherwise defined
-----------
herein have the meanings assigned to them in the Credit Agreement.
2. Amendments to the Credit Agreement. Upon the "Effective Date"
----------------------------------
(as defined in Section 4 below), the Credit Agreement is hereby amended as
follows:
2.1 Amendments to Section 1.1. Section 1.1 of the Credit
-------------------------
Agreement is hereby amended as follows:
(a) the definition of "Applicable Eurodollar Rate Margin"
is amended to delete the text thereof in its entirety and to
substitute in lieu thereof the definition set forth on Exhibit I
---------
attached hereto and made a part hereof;
(b) the definition of "Applicable Prime Rate Margin" is
amended to delete the text thereof in its
<PAGE>
entirety and to substitute in lieu thereof the definition set forth on
Exhibit II attached hereto and made a part hereof;
----------
(c) the definition of "Borrowing Base" is amended to delete
the text of clause (ii) thereof in its entirety and to substitute in
lieu thereof the following:
"(ii) (A) from the Effective Date until the First Amendment
Effective Date, seventy-five percent (75%) of the value of
Eligible Rental Equipment of the Borrower, (B) from the First
Amendment Effective Date through December 31, 1998, one hundred
percent (100%) of the value of Eligible Rental Equipment of the
Borrower, (C) from January 1, 1999 through December 31, 1999,
ninety percent (90%) of the value of Eligible Rental Equipment of
the Borrower, (D) from January 1, 2000 through December 31, 2000,
eighty percent (80%) of the value of Eligible Rental Equipment of
the Borrower and (E) from January 1, 2001 through the Expiration
Date, seventy-five percent (75%) of the value of Eligible Rental
Equipment of the Borrower, minus"
-----
(d) the definition of "Change of Control" is amended to
delete the text thereof in its entirety and to substitute in lieu
thereof the definition set forth on Exhibit III attached hereto and
-----------
made a part hereof.
(e) the definition of "Commitment" is amended to delete the
reference therein to "$125,000,000" and to substitute in lieu thereof
"$200,000,000";
(f) the definition of "Expiration Date" is amended to
delete the reference therein to "Effective Date" and to substitute in
lieu thereof "First Amendment Effective Date";
(g) the definition of "Financial Covenants" is amended to
insert ", 8.5(g)" immediately following the reference therein to
------
"8.5(f)";
-------
-2-
<PAGE>
(h) the following definition of "First Amendment Effective
Date" is hereby added to Section 1.01 of the Credit Agreement in
proper alphabetical order:
"First Amendment Effective Date means the "Effective Date"
------------------------------
under (and as defined in) the First Amendment to Amended and
Restated Credit Agreement dated as of January 1, 1997 among the
Borrowers, the Parent Guarantors, the Agent and the Lenders."
(i) the definition of "Voting Power" is amended to add the
following phrase immediately before the period at the end thereof:
"other than such shares issued pursuant to RSC's employee stock option
plan (which shall be in form and substance reasonably satisfactory to
the Agent and the Majority Lenders)".
2.2 Amendment to Section 4.4. Section 4.4 of the Credit
------------------------
Agreement is hereby amended to add the following proviso immediately before
the period at the end thereof:
", provided that if the Interest Coverage Ratio for the three-
--------
month period ending on December 31, 1996 and, thereafter, for
each of the applicable periods ending on the then two most recent
Quarterly Determination Dates (as shown on the quarterly
Compliance Certificates delivered pursuant to Section 7.1(c)) is
--------------
within the ranges set out below and no Default or Event of
Default exists as of either of such Quarterly Determination
Dates, the Unused Line Fee shall accrue at the per annum rates
--- -----
set out opposite the applicable range indicated below:
<TABLE>
<CAPTION>
Interest Unused Line
Coverage Ratio Fee Rate
-------------------- -----------
<S> <C>
Greater than 3.0:1
and not more than 3.5:1 0.40%
Greater than 3.5:1
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C>
and not more than 4.0:1 0.35%
Greater than 4.0:1 0.30%
</TABLE>
In the event of the delivery of a Compliance Certificate showing
an increase or decrease in the Interest Coverage Ratio which
requires a change in the rate at which the Unused Line Fee
accrues, the change in such rate shall be effective from the
March 1, June 1, September 1 or December 1, as applicable,
immediately following receipt of such Compliance Certificate
until the next such date on which such rate is subject to change
following the delivery of (or failure to deliver) a Compliance
Certificate showing an increase or decrease in the Interest
Coverage Ratio which requires a change in such rate. The failure
to deliver any Compliance Certificate by the date required under
the Credit Agreement (after giving effect to any applicable grace
period) shall automatically cause such rate to be 0.50% per
---
annum, effective as of the first day of the fiscal quarter
-----
immediately following the date on which the delivery of the
Compliance Certificate was otherwise required."
2.3 Amendment to Section 8.2. Section 8.2 of the Credit
------------------------
Agreement is hereby amended to delete in its entirety the text thereof and
to substitute in lieu thereof the text set forth on Exhibit IV attached
----------
hereto and made a part hereof.
2.4 Amendment to Section 8.3. Section 8.3 of the Credit
------------------------
Agreement is hereby amended to delete in its entirety the text thereof and
to substitute in lieu thereof the text set forth on Exhibit V attached
---------
hereto and made a part hereof.
2.5 Amendment to Section 8.4. Section 8.4 of the Credit
------------------------
Agreement is hereby amended to delete in its entirety the text thereof and
to substitute in lieu thereof the text set forth on Exhibit VI attached
----------
hereto and made a part hereof.
-4-
<PAGE>
2.6 Amendments to Section 8.5. Section 8.5 of the Credit
-------------------------
Agreement is hereby amended as follows:
(a) the text of clause (f) thereof is deleted in its
entirety and the text set forth on Exhibit VII attached hereto and
-----------
made a part hereof is substituted in lieu thereof;
(b) clause (g) thereof is re-designated as clause (h)
thereof; and
(c) the following is inserted as new clause (g) thereof:
"(g) Acquisitions directly related to, or in the same line
of, the business as conducted by the Credit Parties as of the
Closing Date, provided that the Credit Parties shall not, without
--------
the approval of the Majority Lenders, make any single Acquisition
(or series of related Acquisitions) in any Fiscal Year in excess
of $15,000,000 and shall not, without the approval of the
Majority Lenders, make Acquisitions, (i) for Fiscal Year 1996 in
an aggregate amount in excess of $20,000,000 (excluding
consideration consisting of the common stock of RSC) or (ii) for
the period from January 1, 1997 until the Expiration Date, in an
aggregate amount in excess of the sum of (A) $160,000,000
(excluding consideration consisting of the common stock of RSC),
plus (B) cash proceeds received by RSC immediately and directly
----
from the issuance of the common stock of RSC (other than pursuant
to the IPO) during such period; and"
2.7 Amendment to Section 8.20. Section 8.20 of the Credit
-------------------------
Agreement is hereby amended to delete the reference therein to "8.5(f)" and
------
to substitute in lieu thereof "8.5(g)".
------
2.8 Amendment to Annex I. Annex I to the Credit Agreement is
--------------------
hereby deleted in its entirety and new Annex I, attached hereto as Exhibit
-------
VIII, is substituted in lieu thereof.
----
-5-
<PAGE>
2.9 Amendment to Exhibit J. Exhibit J to the Credit Agreement
----------------------
(Projections) is hereby deleted in its entirety and new Exhibit J, attached
hereto as Exhibit IX, is substituted in lieu thereof.
----------
2.10 Amendment to Exhibit O. Exhibit O to the Credit Agreement
----------------------
(Form of Compliance Certificate) is hereby deleted in its entirety and new
Exhibit O, attached hereto as Exhibit X, is substituted in lieu thereof.
---------
2.11 Amendment to Schedule B. Schedule B to the Credit Agreement
-----------------------
(Real Property Locations) is hereby amended by adding the real property
locations and the information pertaining thereto set forth on Exhibit XI
----------
attached hereto.
2.12 Amendments to Schedule D. Part 8.7 of Schedule D to the
------------------------
Credit Agreement (Permitted Existing Liens) is deleted in its entirety and
new Part 8.7, attached hereto as Exhibit XII, is substituted in lieu
-----------
thereof.
3. Representations and Warranties. Each of the Borrowers hereby
------------------------------
represents and warrants to each Lender, the Issuing Bank and the Agent that, as
of the Effective Date and after giving effect to this First Amendment:
(a) Each of the representations and warranties contained in the
Credit Agreement and the other Credit Documents are true and correct on and
as of the Effective Date, as if then made, other than representations and
warranties that relate solely to an earlier date;
(b) No Default or Event of Default shall have occurred and is
continuing;
(c) No change, occurrence, event or development or event involving a
prospective change that is reasonably likely to have a Material Adverse
Effect shall have occurred and be continuing; and
(d) No Change of Control has occurred.
4. Effective Date. This First Amendment shall become effective as
--------------
of the date, on or before January 31, 1997 (the
-6-
<PAGE>
"Effective Date") when each of the following conditions shall have been
--------------
satisfied:
(a) the Agent shall have received each of the following documents, in
each case in form and substance satisfactory to the Agent:
(i) counterparts hereof executed by each Borrower, each Parent
Guarantor, the Agent and each Lender;
(ii) an amended and restated Note made by each Borrower, in each
case payable to BTCC, in a principal amount of $90,000,000 and
otherwise in substantially in the form of Exhibit D to the Credit
Agreement;
(iii) a Reaffirmation of Guaranty and Contribution Agreements
executed by each Borrower in favor of the Agent, the Issuing Bank and
the Lenders, pursuant to which each Borrower confirms its full and
unconditional guarantee of the payment and performance of the
Obligations of each other Borrower;
(iv) to the extent not delivered to the Agent prior to the date
hereof, on a best efforts basis, Collateral Access Agreements with
respect to each real property location leased or subleased by the
Credit Parties;
(v) to the extent not delivered to the Agent prior to the date
hereof, Uniform Commercial Code financing statements for filing in all
jurisdictions as may be necessary or desirable to perfect the Liens
granted to the Agent, for the benefit of the Holders, in the
Collateral;
(vi) To the extent not already delivered, Certificates of
Insurance issued by RSC's insurance agent(s) or carrier(s) evidencing
RSC's insurance coverage listed on Schedule C to the Credit Agreement
(A) showing that all Collateral locations are covered by such
insurance policies and (B) showing the Agent asan additional insured
with respect to RSC's liability insurance policies and loss payee with
respect to RSC's
-7-
<PAGE>
business interruption policies and casualty insurance policies
covering the Collateral, together with a Lender's Loss Payable
Endorsement (mortgagee form), executed by such agent or carrier in
favor of the Agent;
(vii) a certificate of the Secretary or Assistant Secretary of
each Credit Party certifying (A) the resolutions of the Board of
Directors of such Credit Party authorizing the execution, delivery and
performance of this First Amendment and the Credit Documents executed
in connection herewith, (B) the names, incumbency and signatures of
the officers of such Credit Party authorized to execute, deliver and
perform such Credit Documents and (C) the accuracy and completeness of
the Governing Documents delivered by such Credit Party to the Agent,
the Issuing Banks and the Lenders prior to the First Amendment
Effective Date, attaching any and all amendments and modifications of
such Governing Documents not previously delivered to such parties;
(viii) a certificate of the chief executive officer, chief
financial officer or treasurer of each Credit Party executed and
delivered on behalf of such Credit Party certifying that all
conditions precedent to the effectiveness of this First Amendment
(other than conditions within the control of the Agent and the
Lenders) have been met and no Default or Event of Default has occurred
or is continuing;
(ix) a Solvency Certificate for the Credit Parties, on a
combined basis, executed by the chief financial officer or treasurer
of the Credit Parties, together with such analyses, valuations,
appraisals, reviews, projections and other documentation as the Agent
deems appropriate;
(x) an opinion of counsel to the Credit Parties with respect to
this First Amendment and other matters which the Agent may reasonably
request; and
(xi) such additional documentation as the Agent may reasonably
request.
-8-
<PAGE>
(b) No law, regulation, order, judgment or decree of any Governmental
Authority shall, and the Agent shall not have received any notice that
litigation is pending or threatened which is likely to, enjoin, prohibit or
restrain the consummation of the transactions contemplated by this First
Amendment, except for such laws, regulations, orders or decrees, or pending
or threatened litigation that in the aggregate could not reasonably be
expected to result in a Material Adverse Effect.
(c) All Fees, and all Expenses as to which the Credit Parties have
received an invoice, in each case which are payable on or before the
Effective Date shall have been paid.
5. Miscellaneous. This First Amendment is a Credit Document. The
-------------
headings herein are for convenience of reference only and shall not alter or
otherwise affect the meaning hereof. Except to the extent specifically amended
or modified hereby, the provisions of the Credit Agreement shall not be amended,
modified, impaired or otherwise affected hereby and the Credit Agreement and all
of the Obligations are hereby confirmed in full force and effect. The
execution, delivery and effectiveness of this First Amendment shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of the Agent, any Lender or the Issuing Bank under any of the Credit Documents,
nor constitute a waiver of any provision of any of the Credit Documents.
6. Counterparts. This First Amendment may be executed in any number
------------
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
7. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
-------------
THIS FIRST AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS
FIRST AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL
BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS
OTHER THAN THOSE CONTAINED IN NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401)
AND DECISIONS OF THE STATE OF NEW YORK.
-9-
<PAGE>
IN WITNESS WHEREOF, the Agent, the Lenders, the Borrowers and the
Parent Guarantors have caused this First Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above
written.
BORROWERS: ACME ALABAMA, INC.,
- --------- an Alabama corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
ACME DIXIE INC.,
a Delaware corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
ACME DUVAL INC.,
a Delaware corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
ACME RENTS, INC.,
a California corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
THE AIR & PUMP COMPANY,
a Texas corporation
-10-
<PAGE>
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
WALKER JONES EQUIPMENT, INC.,
a Mississippi corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
PARENT GUARANTORS: RSC ACQUISITION CORP.,
- ----------------- a Delaware corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
RSC HOLDINGS, INC.,
a Delaware corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
RENTAL SERVICE CORPORATION,
a Delaware corporation
By: /s/ Douglas A. Waugaman
------------------------
Title: Vice President & Secretary
---------------------------
AGENT: BT COMMERCIAL CORPORATION,
- ----- as Agent
By: /s/ Albert Sun
---------------
Vice President
-11-
<PAGE>
LENDERS: BT COMMERCIAL CORPORATION
- -------
By: /s/ Albert Sun
---------------
Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ William Shiao
------------------
Assistant Secretary
CONGRESS FINANCIAL CORPORATION
By: /s/ Victor Hordies
-------------------
Vice President
GIBRALTAR CORPORATION OF AMERICA
By: /s/ Harvey Friedman
--------------------
Senior Vice President
NATIONSBANK OF TEXAS, N.A.
By: /s/ E. James Beckemeier
------------------------
Vice President
SANWA BANK CALIFORNIA
By: /s/ Joseph C. Arco
-------------------
Vice President
-12-
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Martin Valencia
--------------------
Asst. Vice President
-13-
<PAGE>
EXHIBIT I
TO
FIRST AMENDMENT
New Definition of Applicable Eurodollar Rate Margin
---------------------------------------------------
Applicable Eurodollar Rate Margin means (a) from the Effective Date
---------------------------------
until the First Amendment Effective Date, a rate per annum equal to 2.50%, (b)
--- -----
from the First Amendment Effective Date until the first anniversary of the
Effective Date, a rate per annum equal to 2.00%, provided that if the Interest
--- ----- --------
Coverage Ratio for the three-month period ending on December 31, 1996 and,
thereafter, for each of the applicable periods ending on the then two most
recent Quarterly Determination Dates (as shown on the quarterly Compliance
Certificates delivered pursuant to Section 7.1(c)) is within the ranges set out
--------------
below and no Default or Event of Default exists as of either of such Quarterly
Determination Dates, the Applicable Eurodollar Rate Margin shall be the per
---
annum rates set out opposite the applicable range indicated below:
- -----
<TABLE>
<CAPTION>
APPLICABLE EURODOLLAR
INTEREST COVERAGE RATIO RATE MARGIN
----------------------- ---------------------
<S> <C>
Greater than 3.5:1 1.75%
and not more than
4.0:1
Greater than 4.0:1 1.50%
</TABLE>
and (c) from the first anniversary of the Effective Date, a rate per annum equal
--- -----
to 2.25%, provided that if the Interest Coverage Ratio for each of the
--------
applicable periods ending on the then two most recent Quarterly Determination
Dates (as shown on the quarterly Compliance Certificates delivered pursuant to
Section 7.1(c)) is within the ranges set out below and no Default or Event of
- --------------
Default exists as of either of such Quarterly Determination Dates, the
Applicable Eurodollar Rate Margin shall
<PAGE>
be the per annum rates set out opposite the applicable range indicated below:
--- -----
<TABLE>
<CAPTION>
APPLICABLE EURODOLLAR
INTEREST COVERAGE RATIO RATE MARGIN
----------------------- ---------------------
<S> <C>
Greater than 3.0:1 2.00%
and not more than
3.5:1
Greater than 3.5:1 1.75%
and not more than
4.0:1
Greater than 4.0:1 1.50%
</TABLE>
In the event of the delivery of a Compliance Certificate showing an increase or
decrease in the Interest Coverage Ratio which requires a change in the
Applicable Eurodollar Rate Margin, the change in the Applicable Eurodollar Rate
Margin shall be effective from the March 1, June 1, September 1 or December 1,
as applicable, immediately following receipt of such Compliance Certificate
until the next such date on which the Applicable Eurodollar Rate Margin is
subject to change following the delivery of (or failure to deliver) a Compliance
Certificate showing an increase or decrease in the Interest Coverage Ratio which
requires a change in the Applicable Eurodollar Rate Margin. The failure to
deliver any Compliance Certificate by the date required under the Credit
Agreement (after giving effect to any applicable grace period) shall
automatically cause the Applicable Eurodollar Rate Margin to be the maximum per
---
annum rates for the periods described in clauses (b) and (c) above, as
- ----- ----------- ---
applicable, effective as of the first day of the fiscal quarter immediately
following the date on which the delivery of the Compliance Certificate was
otherwise required.
<PAGE>
EXHIBIT II
TO
FIRST AMENDMENT
New Definition of Applicable Prime Rate Margin
----------------------------------------------
Applicable Prime Rate Margin means (a) from the Effective Date until
----------------------------
the First Amendment Effective Date, a rate per annum equal to 1.00%, (b) from
--- -----
the First Amendment Effective Date until the first anniversary of the Effective
Date, a rate per annum equal to 0.50%, provided that if the Interest Coverage
--- ----- --------
Ratio for the three-month period ending on December 31, 1996 and, thereafter,
for each of the applicable periods ending on the then two most recent Quarterly
Determination Dates (as shown on the quarterly Compliance Certificates delivered
pursuant to Section 7.1(c)) is within the ranges set out below and no Default or
--------------
Event of Default exists as of either of such Quarterly Determination Dates, the
Applicable Prime Rate Margin shall be the per annum rates set out opposite the
--- -----
applicable range indicated below:
<TABLE>
<CAPTION>
APPLICABLE PRIME
INTEREST COVERAGE RATIO RATE MARGIN
----------------------- ----------------
<S> <C>
Greater than 3.5:1 0.25%
and not more than
4.0:1
Greater than 4.0:1 -0-
</TABLE>
and (c) from the first anniversary of the Effective Date, a rate per annum equal
--- -----
to 0.75%, provided that if the Interest Coverage Ratio for each of the
--------
applicable periods ending on the then two most recent Quarterly Determination
Dates (as shown on the quarterly Compliance Certificates delivered pursuant to
Section 7.1(c)) is within the ranges set out below and no Default or Event of
- --------------
Default exists as of either of such Quarterly Determination Dates, the
Applicable Prime Rate Margin shall be
<PAGE>
the per annum rates set out opposite the applicable range indicated below:
--- -----
<TABLE>
<CAPTION>
APPLICABLE PRIME
INTEREST COVERAGE RATIO RATE MARGIN
----------------------- ----------------
<S> <C>
Greater than 3.0:1 .50%
and not more than
3.5:1
Greater than 3.5:1 0.25%
and not more than
4.0:1
Greater than 4.0:1 -0-
</TABLE>
In the event of the delivery of a Compliance Certificate showing an increase or
decrease in the Interest Coverage Ratio which requires a change in the
Applicable Prime Rate Margin, the change in the Applicable Prime Rate Margin
shall be effective from the March 1, June 1, September 1 or December 1, as
applicable, immediately following receipt of such Compliance Certificate until
the next such date on which the Applicable Prime Rate Margin is subject to
change following the delivery of (or failure to deliver) a Compliance
Certificate showing an increase or decrease in the Interest Coverage Ratio which
requires a change in the Applicable Prime Rate Margin. The failure to deliver
any Compliance Certificate by the date required under the Credit Agreement
(after giving effect to any applicable grace period) shall automatically cause
the Applicable Prime Rate Margin to be the maximum per annum rates for the
--- -----
periods described in clauses (b) and (c) above, as applicable, effective as of
----------- ---
the first day of the fiscal quarter immediately following the date on which the
delivery of the Compliance Certificate was otherwise required.
<PAGE>
EXHIBIT III
TO
FIRST AMENDMENT
New Definition of Change of Control
-----------------------------------
Change in Control means the occurrence of one or more of the following
-----------------
events:
(a) To the extent that Brentwood RSC Partners, L.P. is required to be
the beneficial owner of any of the Voting Power under clause (b) below,
----------
Brentwood RSC Partners, L.P. shall cease to be managed by one or more
members of Brentwood Associates;
(b) Brentwood RSC Partners, L.P. shall cease to be the legal and
beneficial owner of at least 30% of the Voting Power; provided, however,
-------- -------
that after the First Amendment Effective Date, it shall not be a Change of
Control if (i) the Average Market Capitalization of RSC for the ninety day
period ending on the applicable date of determination (as shown on an
officer's certificate described in clause (ii) below), is no less than one
-----------
hundred twenty five million dollars ($125,000,000), (ii) the Credit Parties
have delivered to the Agent and the Lenders an officer's certificate
regarding Average Market Capitalization and the amount of cash proceeds
received by RSC from the issuance of RSC common stock after the First
Amendment Effective Date and before such date of determination, in each
case together with supporting calculations in reasonable detail and (iii)
Brentwood RSC Partners, L.P. shall be the legal and beneficial owner of at
least the percentage of the Voting Power set out below opposite the
applicable period following the First Amendment Effective Date and in the
column corresponding to the amount of cash proceeds received by RSC from
the issuance of RSC common stock (as set forth in the certificate delivered
pursuant to clause (ii) above):
-----------
<PAGE>
<TABLE>
<CAPTION>
Minimum Percentage of Voting Power Based
Upon Cash Proceeds Received by RSC from Sales
of RSC Common Stock
-----------------------------------------------------------------
At least At least
$50,000,000 $75,000,000
Applicable Less than but less than but less than $100,000,000
Period $50,000,000 $75,000,000 $100,000,000 or more
- ---------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
First
Amendment 25% 12.5% 12% 10%
Effective
Date until
3/15/97
3/15/97 20% 7.5% 5% 0%
until
9/15/97
9/15/97 10% 0% 0% 0%
until
3/15/98
3/15/98 5% 0% 0% 0%
until
9/15/98
9/15/98 and 0% 0% 0% 0%
thereafter
</TABLE>
(The officer's certificate described above shall not be delivered at any
time a Default or Event of Default has occurred and is continuing and,
notwithstanding the proper delivery of any such officer's certificate, no
sale, transfer or other disposition of the Voting Power resulting in
Brentwood RSC Partners, L.P. ceasing to be the legal and beneficial owner
of the required percentage of the Voting Power in effect immediately prior
to the delivery of such officer's certificate shall occur at any time a
Default or Event of Default has occurred and is continuing.)
(c) Any Person or group (within the meaning of Rule 13d-5, as in
effect on the Closing Date, under the
<PAGE>
Securities Exchange Act of 1934, as amended) shall be the beneficial owner
of more than 30% of the Voting Power;
(d) During any period of 12 consecutive calendar months ending after
the Effective Date, individuals who at the beginning of any such 12-month
period constituted the board of directors of RSC (together with any new
directors whose election by such board or whose nomination for election by
the shareholders of RSC was approved by a vote of a majority of the
directors still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) shall cease for any reason to constitute a majority of the board
of directors of RSC then in office; or
(e) RSC shall cease to be the legal and beneficial owner, directly or
indirectly, of all of the issued and outstanding capital stock of any other
Credit Party, except to the extent that the capital stock of a Borrower may
be sold in a transaction permitted under this Credit Agreement.
<PAGE>
EXHIBIT IV
TO
FIRST AMENDMENT
New Section 8.2
---------------
8.2 Minimum Interest Coverage Ratio. The Credit Parties shall not
-------------------------------
permit the ratio of (i) EBITA to (ii) Interest Expense (other than non-cash
Interest Expense on Indebtedness under the Citicorp Purchase Agreement) as
determined as of each Quarterly Determination Date set out below, for the
twelve-month period ending on such Quarterly Determination Date, to be less than
the ratio set out opposite such period below:
<TABLE>
<CAPTION>
QUARTERLY
DETERMINATION DATE MINIMUM RATIO
------------------ -------------
<S> <C>
September 30, 1996 2.5x
December 31, 1996 2.5x
March 31, 1997 2.3x
June 30, 1997 2.3x
September 30, 1997 2.3x
December 31, 1997 2.3x
March 31, 1998 2.3x
June 30, 1998 2.3x
September 30, 1998 2.3x
December 31, 1998 2.4x
March 31, 1999 2.5x
June 30, 1999 2.6x
September 30, 1999 2.7x
December 31, 1999 3.0x
and thereafter
</TABLE>
<PAGE>
EXHIBIT V
TO
FIRST AMENDMENT
New Section 8.3
---------------
8.3 Maximum Total Indebtedness Ratio. The Credit Parties shall not
--------------------------------
permit the ratio of (i) the aggregate amount of all Indebtedness of the Credit
Parties outstanding on each Quarterly Determination Date set out below or at any
time thereafter prior to the immediately following Quarterly Determination Date
set out below, to (ii) EBITDA, as determined as of each Quarterly Determination
Date set out below for the twelve-month period ending on such Quarterly
Determination Date, to be greater than the ratio set out opposite such date
below:
<TABLE>
<CAPTION>
QUARTERLY
DETERMINATION DATE MINIMUM RATIO
------------------ -------------
<S> <C>
September 30, 1996 2.6x
December 31, 1996 2.5x
March 31, 1997 3.5x
June 30, 1997 3.5x
September 30, 1997 3.5x
December 31, 1997 3.3x
March 31, 1998 3.1x
June 30, 1998 3.0x
September 30, 1998 2.9x
December 31, 1998 2.7x
March 31, 1999 2.7x
June 30, 1999 2.7x
September 30, 1999 2.6x
December 31, 1999 2.5x
and thereafter
</TABLE>
<PAGE>
EXHIBIT VI
TO
FIRST AMENDMENT
New Section 8.4
---------------
8.4 Minimum EBITDA. The Credit Parties shall not permit EBITDA, as
--------------
determined as of each Quarterly Determination Date set out below for the twelve-
month period ending on such
<PAGE>
Quarterly Determination Date, to be less than the amount set out opposite such
date below:
<TABLE>
<CAPTION>
QUARTERLY
DETERMINATION DATE MINIMUM AMOUNT
------------------ --------------
<S> <C>
September 30, 1996 $28,300,000
December 31, 1996 $29,300,000
March 31, 1997 $30,000,000
June 30, 1997 $32,000,000
September 30, 1997 $34,000,000
December 31, 1997 $36,000,000
March 31, 1998 $38,000,000
June 30, 1998 $40,000,000
September 30, 1998 $42,000,000
December 31, 1998 $44,000,000
March 31, 1999 $46,000,000
June 30, 1999 $48,000,000
September 30, 1999 $50,000,000
December 31, 1999 $52,000,000
March 31, 2000 $54,000,000
June 30, 2000 $56,000,000
September 30, 2000 $58,000,000
December 31, 2000 $60,000,000
March 31, 2001 $62,000,000
June 30, 2001 $64,000,000
September 30, 2001 $66,000,000
December 31, 2001 $68,000,000
</TABLE>
<PAGE>
EXHIBIT VII
TO
FIRST AMENDMENT
New Section 8.5(f)
------------------
(f) Capital Expenditures and Investments (other than Acquisitions),
in each case, directly related to, or in the same line of, the business as
conducted by the Credit Parties as of the Closing Date, the aggregate amount of
which shall not exceed, in any Fiscal Year set out below, the amount set out
opposite such Fiscal Year (the "Maximum Expenditure Amount"):
--------------------------
<TABLE>
<CAPTION>
FISCAL YEAR MAXIMUM AMOUNT
----------- --------------
<S> <C>
1996 $ 63,000,000
1997 $ 90,000,000
1998 $105,000,000
1999 $105,000,000
2000 $115,000,000
2001 $105,000,000
</TABLE>
provided, however, that the Maximum Expenditure Amount for any Fiscal Year may
- -------- -------
be increased by (i) the aggregate amount of cash proceeds (net of any bona fide
costs of sale with respect thereto) received by the Credit Parties and their
respective Subsidiaries during such Fiscal Year with respect to the sale of
Rental Equipment (whether through the actual sale of such Rental Equipment or
the sale of stock of the Person owning such Rental Equipment) and (ii) an amount
equal to twenty-five percent (25%) of the excess, if any, of (x) the Maximum
Expenditure Amount for the immediately preceding Fiscal Year, over (y) the
actual amount of Capital Expenditures and Investments (other than Acquisitions)
made by the Credit Parties and their respective Subsidiaries under this clause
------
(f) in such immediately preceding Fiscal Year;
- ---
<PAGE>
EXHIBIT 99.2
[LETTERHEAD OF RENTAL SERVICE CORPORATION]
PRESS RELEASE
For Immediate Release
Company Contact: Douglas A. Waugaman, Chief Financial Officer
(602) 905-3300
RENTAL SERVICE CORPORATION ANNOUNCES STOCKHOLDER APPROVAL OF ITS
1996 EQUITY PARTICIPATION PLAN
SCOTTSDALE, AZ - FEBRUARY 7, 1997 - RENTAL SERVICE CORPORATION (NASDAQ SYMBOL:
RSVC) announced today that its stockholders had approved the Company's adoption
of the 1996 Equity Participation Plan of Rental Service Corporation (the
"Plan").
The Company sought approval of the Plan by written consent of its stockholders
as set forth in a January 10, 1997 proxy statement. A majority of the
outstanding shares was necessary to approve the adoption of the Plan. The
stockholder approval became effective as of the close of business on February 5,
1997, at which time the Company had received unrevoked written consents in favor
of the adoption of the Plan representing a majority of the outstanding shares.
Rental Service Corporation is a leading equipment rental company serving the
needs of a wide variety of industrial, manufacturing, construction, government
and homeowner markets. Headquartered in Scottsdale, Arizona, the Company
operates over 90 rental locations throughout the southeastern United States.
