<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
------------------------
RENTAL SERVICE CORPORATION
(Name of Subject Company)
UR ACQUISITION CORPORATION
UNITED RENTALS, INC.
(Bidders)
------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
------------------------
76009V 10 2
(CUSIP Number of Class of Securities)
------------------------
UNITED RENTALS, INC.
FOUR GREENWICH OFFICE PARK
GREENWICH, CT 06830
ATTN: BRADLEY S. JACOBS
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
TELEPHONE: (203) 622-3131
FACSIMILE: (203) 622-6080
(Name, Address and Telephone Number of Person authorized to
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
MILTON G. STROM, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
FACSIMILE: (212) 735-2000
CALCULATION OF FILING FEE
<TABLE>
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Transaction Valuation* Amount of Filing Fee
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<S> <C>
$578,696,642 $115,740
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</TABLE>
* Estimated for purposes of calculating the amount of the filing fee only. The
amount assumes the purchase of 25,437,215 shares of common stock, $.01 par
value (the "Shares"), of Rental Service Corporation, a Delaware corporation
(the "Company") at a price of $22.75 per Share in cash. According to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998,
there were (1) 24,123,392 Shares issued and outstanding as of February 26,
1999 and (2) 1,313,823 unexercised options to acquire Shares under various
employee stock option plans of the Company as of December 31, 1998. In
addition, although pursuant to an option agreement (the "NationsRent
Option") between the Company and NationsRent, Inc., a Delaware corporation
("NationsRent"), 4,795,431 Shares are purportedly issuable to NationsRent in
the event that NationsRent exercises the NationsRent Option, the Offer is
conditioned upon the NationsRent Option having been terminated or
invalidated without any Shares having been issued thereunder. Based on the
foregoing and disregarding for such purposes the 4,795,431 Shares
purportedly issuable pursuant to the NationsRent Option agreement, the
transaction value is based on 25,437,215 Shares outstanding on a fully
diluted basis. The amount of the filing fee calculated in accordance with
Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th
of one percent of the value of the transaction.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
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<PAGE> 2
14D-1
CUSIP NO. 76009V 10 2
<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSONS
UR Acquisition Corporation
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF, BK (SEE ITEM 10 OF THE OFFER TO PURCHASE)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEMS 2(e) or 2(f)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES
[ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Less than 1%
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10 TYPE OF REPORTING PERSON
CO
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</TABLE>
<PAGE> 3
14D-1
CUSIP NO. 76009V 10 2
<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSONS
United Rentals, Inc.
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF, BK (SEE ITEM 10 OF THE OFFER TO PURCHASE)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO
ITEMS 2(e) or 2(f)
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES
[ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
Less than 1%
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10 TYPE OF REPORTING PERSON
CO
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</TABLE>
<PAGE> 4
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by UR Acquisition Corporation, a Delaware corporation ("Purchaser"),
and a wholly owned subsidiary of United Rentals, Inc., a Delaware corporation
("Parent"), to purchase all of the outstanding shares of common stock, par value
$.01 per share (the "Shares"), of Rental Service Corporation, a Delaware
corporation (the "Company"), at $22.75 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 5, 1999 (the "Offer to Purchase"), a copy of which
is attached hereto as Exhibit (a)(1), and in the related Letter of Transmittal,
a copy of which is attached hereto as Exhibit (a)(2) (which, as they may be
amended or supplemented from time to time, together constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Rental Service Corporation and the
address of its principal executive offices is 6929 East Greenway Parkway, Suite
200, Scottsdale, Arizona 85254.
(b) The information set forth in the "INTRODUCTION" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in "Section 6 -- Price Range of the Shares;
Dividends on the Shares" of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Purchaser and Parent. The
information set forth in the "INTRODUCTION" and "Section 9 -- Certain
Information Concerning Parent and Purchaser" of the Offer to Purchase and
Schedule I thereto is incorporated herein by reference.
(e)-(f) During the last five years neither Purchaser nor Parent nor, to the
best knowledge of Purchaser and Parent, any of the persons listed in Schedule I
of the Offer to Purchase have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or was a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which any such person was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting activities subject to, federal or
state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I of the Offer to Purchase has entered into any
transaction with the Company, or any of the Company's affiliates which are
corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Other than the transactions described in Item 3(b) below, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed in Schedule I to the Offer to Purchase has entered into any
transaction since the commencement of the Company's third full fiscal year
preceding the date of this Statement, with the executive officers, directors or
1
<PAGE> 5
affiliates of the Company which are not corporations, in which the aggregate
amount involved in such transaction or in a series of similar transactions,
including all periodic installments in the case of any lease or other agreement
providing for periodic payments or installments, exceeded $40,000.
(b) The information set forth in the "INTRODUCTION," "Section 9 -- Certain
Information Concerning Parent and Purchaser," "Section 11 -- Background of the
Offer; Contacts with the Company" and "Section 12 -- Purpose of the Offer; Plans
for the Company" of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 10 -- Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the "INTRODUCTION," "Section
11 -- Background of the Offer; Contacts with the Company" and "Section
12 -- Purpose of the Offer; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in "Section 7 -- Effect of the Offer on
the Market for the Shares; Exchange Listing; Exchange Act Registration; Margin
Regulations" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in "Section 9 -- Certain Information
Concerning Parent and Purchaser" and "Section 11 -- Background of the Offer;
Contacts with the Company" of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "INTRODUCTION," "Section 10 -- Source and
Amount of Funds," "Section 11 -- Background of the Offer; Contacts with the
Company," "Section 12 -- Purpose of the Offer; Plans for the Company" and
"Section 16 -- Fees and Expenses" of the Offer to Purchase is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 16 -- Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in "Section 9 -- Certain Information Concerning
Parent and Purchaser" of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser or Parent, or to the best knowledge of Purchaser and Parent,
any of the persons listed in Schedule I of the Offer to Purchase, and the
Company, or any of its executive officers, directors, controlling persons or
subsidiaries.
2
<PAGE> 6
(b)-(c) The information set forth in the "INTRODUCTION," "Section
14 -- Conditions to the Offer" and "Section 15 -- Certain Legal Matters;
Regulatory Approvals; Certain Litigation" of the Offer to Purchase is
incorporated herein by reference.
(d) The information set forth in "Section 7 -- Effect of the Offer on the
Market for the Shares; Exchange Listing; Exchange Act Registration; Margin
Regulations" and "Section 15 -- Certain Legal Matters; Regulatory Approvals;
Certain Litigation" of the Offer to Purchase is incorporated herein by
reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated April 5, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement dated April 5, 1999.
(a)(8) Press Release of Parent dated April 5, 1999.
(b)(1) Commitment Letter from Goldman Sachs Credit Partners L.P. dated
April 4, 1999.
(c) None.
(d) None.
(e) Not applicable.
3
<PAGE> 7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
UR ACQUISITION CORPORATION
By: /s/ JOHN N. MILNE
------------------------------------
Name: John N. Milne
Title: President
UNITED RENTALS, INC.
By: /s/ BRADLEY S. JACOBS
------------------------------------
Name: Bradley S. Jacobs
Title: Chairman and Chief Executive
Officer
Date: April 5, 1999
4
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
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<C> <S>
(a)(1) Offer to Purchase dated April 5, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement dated April 5, 1999.
(a)(8) Press Release of Parent dated April 5, 1999.
(b)(1) Commitment Letter from Goldman Sachs Credit Partners L.P.
dated April 4, 1999.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
AT
$22.75 NET PER SHARE
BY
UR ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
UNITED RENTALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 30, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH CONSTITUTES A MAJORITY OF THE SHARES (AS DEFINED HEREIN)
OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"), (2) THE
STOCKHOLDERS OF RENTAL SERVICE CORPORATION, A DELAWARE CORPORATION (THE
"COMPANY"), NOT HAVING APPROVED THE AGREEMENT AND PLAN OF MERGER, DATED AS OF
JANUARY 20, 1999 (THE "NATIONSRENT MERGER AGREEMENT"), BETWEEN THE COMPANY AND
NATIONSRENT, INC., A DELAWARE CORPORATION ("NATIONSRENT"), (3) UR ACQUISITION
CORPORATION, A DELAWARE CORPORATION ("PURCHASER"), BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE NATIONSRENT MERGER AGREEMENT HAS BEEN TERMINATED AND THE
COMPANY HAVING ENTERED INTO A DEFINITIVE MERGER AGREEMENT WITH UNITED RENTALS,
INC., A DELAWARE CORPORATION AND THE PARENT OF PURCHASER ("PARENT"), AND
PURCHASER TO PROVIDE FOR THE ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER
AND THE PROPOSED MERGER DESCRIBED HEREIN, (4) PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT THE PROVISIONS OF SECTION 203 OF THE DELAWARE GENERAL
CORPORATION LAW, AS AMENDED, ARE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER, (5) THE COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY AGREEMENT OR
TRANSACTION WITH ANY PERSON OR ENTITY HAVING THE EFFECT OF IMPAIRING PURCHASER'S
ABILITY TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE EXPECTED ECONOMIC
VALUE TO PURCHASER OF THE ACQUISITION OF THE COMPANY, (6) ANY APPLICABLE WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, HAVING EXPIRED OR BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER,
(7) THE OPTION HELD BY NATIONSRENT TO PURCHASE UP TO 19.9% OF THE OUTSTANDING
SHARES HAVING BEEN TERMINATED OR INVALIDATED WITHOUT ANY SHARES HAVING BEEN
ISSUED THEREUNDER, AND (8) THE TERMINATION FEE AND EXPENSE REIMBURSEMENT
PROVISIONS IN THE NATIONSRENT MERGER AGREEMENT HAVING BEEN INVALIDATED, OR THE
OBLIGATION TO PAY ANY AMOUNTS PURSUANT TO SUCH PROVISIONS HAVING BEEN
TERMINATED, WITHOUT ANY TERMINATION FEE OR EXPENSE REIMBURSEMENT, OR ANY PORTION
THEREOF, HAVING BEEN PAID BY THE COMPANY OR ANY OF ITS AFFILIATES PURSUANT TO
THE NATIONSRENT MERGER AGREEMENT OR OTHERWISE. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE. SEE SECTION 14.
------------------------
IMPORTANT
Parent intends to seek to negotiate with the Company with respect to the
acquisition of the Company by Parent or Purchaser. Purchaser reserves the right
to amend the Offer (including the purchase price and the proposed merger
consideration) upon entering into a merger agreement with the Company or to
negotiate a merger agreement with the Company not involving a tender offer
pursuant to which Purchaser would terminate the Offer and the Shares would, upon
consummation of such merger, be converted into cash, common stock of Parent
and/or other securities in such amounts as are negotiated by Parent and the
Company.
Any stockholder who desires to tender all or any portion of such
stockholder's Shares should either (i) complete and sign the Letter of
Transmittal (or facsimile thereof) in accordance with the instructions to the
Letter of Transmittal, mail or deliver it and any other required documents to
the Depositary and either deliver the certificates for such Shares to the
Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 hereof prior to the expiration of the Offer or
(ii) request such stockholder's broker, dealer, commercial bank, trust company
or other nominee to effect the transaction for such stockholder. Any stockholder
whose Shares are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if such stockholder desires to tender such
Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3 hereof.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may be directed to the
Information Agent.
------------------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
------------------------
The date of this Offer to Purchase is April 5, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
INTRODUCTION................................................ 1
THE OFFER................................................... 7
1. Terms of the Offer; Expiration Date.................... 7
2. Acceptance for Payment and Payment..................... 8
3. Procedure for Tendering Shares......................... 9
4. Withdrawal Rights...................................... 12
5. Certain Federal Income Tax Consequences................ 13
6. Price Range of the Shares; Dividends on the Shares..... 14
7. Effect of the Offer on the Market for the Shares;
Exchange Listing; Exchange Act Registration; Margin
Regulations............................................ 14
8. Certain Information Concerning the Company............. 15
9. Certain Information Concerning Parent and Purchaser.... 17
10. Source and Amount of Funds............................. 18
11. Background of the Offer; Contacts with the Company..... 21
12. Purpose of the Offer and the Merger; Plans for the
Company................................................... 24
13. Dividends and Distributions............................ 26
14. Conditions to the Offer................................ 27
15. Certain Legal Matters; Regulatory Approvals; Certain
Litigation............................................. 31
16. Fees and Expenses...................................... 36
17. Miscellaneous.......................................... 37
</TABLE>
SCHEDULE I Information Concerning Directors and Executive Officers of Parent
and Purchaser.
i
<PAGE> 3
To the Holders of Common Stock of
RENTAL SERVICE CORPORATION:
INTRODUCTION
UR Acquisition Corporation, a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of United Rentals, Inc., a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Shares" or the "Common Stock"), of Rental Service
Corporation, a Delaware corporation (the "Company"), at a price of $22.75 per
Share (the "Offer Price"), net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the sale of Shares pursuant to the Offer.
Purchaser will pay all fees and expenses of Goldman, Sachs & Co., as Dealer
Managers (the "Dealer Managers"), Georgeson & Company Inc., as Information Agent
(the "Information Agent"), and American Stock Transfer & Trust Company, as
Depositary (the "Depositary"), incurred in connection with the Offer. See
Section 16.
The purpose of the Offer and the proposed second-step merger is to enable
Parent to acquire control of, and ultimately the entire equity interest in, the
Company. The Offer, as the first step in the acquisition of the Company, is
intended to facilitate the acquisition of a majority of the outstanding Shares.
As soon as practicable after consummation of the Offer, Parent will seek to
negotiate with the Company to consummate a merger (the "Proposed Merger") with
the Purchaser or another direct or indirect subsidiary of Parent, pursuant to
which Purchaser or such subsidiary would be merged with and into the Company. In
the Proposed Merger, the Company would be the surviving corporation and would
continue as a wholly owned subsidiary of Parent. See Section 10. Upon the
consummation of the Proposed Merger, each then outstanding Share (other than
Shares held by the Parent, Purchaser or any wholly owned subsidiary of Parent,
Shares held in the treasury of the Company and Shares held by stockholders who
properly exercise appraisal rights under the Delaware General Corporation Law,
as amended ("DGCL")), would be converted into the right to receive in cash the
price per Share paid by Purchaser pursuant to the Offer and the Company would
become a wholly owned subsidiary of Parent. Pursuant to the Proposed Merger, the
officers and directors of Purchaser will be the officers and directors of the
Company following the effective time of the Proposed Merger.
According to the Current Report on Form 8-K filed by the Company with the
Securities and Exchange Commission (the "SEC") on January 28, 1999 (the "Company
Form 8-K"), the Company entered into an Agreement and Plan of Merger, dated as
of January 20, 1999 (the "NationsRent Merger Agreement"), with NationsRent
Corporation, a Delaware corporation ("NationsRent"), pursuant to which
NationsRent would merge (the "Proposed NationsRent Merger") with and into the
Company, with the Company continuing as the surviving corporation in the
Proposed NationsRent Merger.
In the Proposed NationsRent Merger, (1) each issued and outstanding share
of common stock, par value $.01 per share, of NationsRent (the "NationsRent
Common Stock") (other than shares of NationsRent owned by the Company or any
direct or indirect subsidiary of the Company and shares of NationsRent Common
Stock owned by any direct or indirect subsidiary of NationsRent) would be
converted into and become exchangeable for 0.355 of a Share and (2) each issued
and outstanding Share shall remain issued and outstanding after the NationsRent
Merger.
<PAGE> 4
On April 5, 1999, Parent submitted to the Company a written proposal for
the acquisition of the Company by Purchaser pursuant to the Offer and the
Proposed Merger and announced its intention to commence the Offer.
Parent and Purchaser are commencing litigation against the Company, the
Company Board and NationsRent in the Chancery Court of the State of Delaware
alleging, among other things, breaches of fiduciary duties by the Company Board
in connection with the NationsRent Merger Agreement. Parent and Purchaser are
seeking an order, among other things, (i) invalidating the NationsRent Option
(as hereinafter defined) and the NationsRent Termination Fee (as hereinafter
defined) and (ii) compelling the Company Board to approve the Offer and the
Proposed Merger for purposes of Section 203 of the DGCL.
According to the Company Form 8-K, the only conditions to the consummation
of the Proposed NationsRent Merger are the following: (1) approval and adoption
of the NationsRent Merger Agreement by stockholders of the Company and
NationsRent, and approval of an increase in the number of authorized Shares by
stockholders of the Company, (2) receipt of all regulatory approvals, (3)
absence of any law, order or judgment of any governmental authority that
restrains, enjoins or otherwise prohibits the Proposed NationsRent Merger or
that would have a material adverse effect of the combination of the Company and
NationsRent following the Proposed NationsRent Merger, (4) effectiveness of the
registration statement registering the Shares to be issued in the Proposed
NationsRent Merger, (5) authorization of the listing of such Shares on the New
York Stock Exchange (the "NYSE"), (6) receipt of all state securities and "blue
sky" permits and approvals, (7) accuracy of the representations and warranties
of the Company and NationsRent set forth in the NationsRent Merger Agreement in
all material respects, (8) performance by the Company and NationsRent of their
respective material obligations under the NationsRent Merger Agreement, (9)
receipt by the Company and NationsRent of all material consents required from
third parties, and (10) receipt by the Company and NationsRent of opinions of
their respective legal counsel with respect to the qualification of the Proposed
NationsRent Merger as a "reorganization" under the Internal Revenue Code of
1986, as amended (the "Code").
According to the Company Form 8-K, the termination of the NationsRent
Merger Agreement by either party under certain specified circumstances will
require one party to pay the other a $35 million termination fee and up to an
additional $5 million in expenses (collectively, the "NationsRent Termination
Fee").
In connection with the execution of the NationsRent Merger Agreement, the
Company entered into an option agreement with NationsRent (the "NationsRent
Option Agreement"). According to the Company Form 8-K, pursuant to the
NationsRent Option Agreement, the Company granted NationsRent an option (the
"NationsRent Option") to purchase 4,795,431 Shares (subject to certain
adjustments), or approximately 19.9% of the Company's issued and outstanding
Shares on January 19, 1999; the NationsRent Option becomes exercisable upon the
occurrence of any event that would result in NationsRent being entitled to the
NationsRent Termination Fee.
AS OF APRIL 2, 1999, TO THE BEST KNOWLEDGE OF PARENT, NEITHER THE COMPANY
NOR NATIONSRENT HAD PUBLICLY FILED WITH THE SEC (i) THE NATIONSRENT MERGER
AGREEMENT, (ii) THE NATIONSRENT OPTION AGREEMENT OR (iii) A PROXY STATEMENT
RELATING TO A MEETING OF STOCKHOLDERS TO VOTE ON THE NATIONSRENT MERGER
AGREEMENT. ACCORDINGLY, ANY DISCUSSION CONTAINED IN THIS OFFER TO PURCHASE WITH
RESPECT TO THE PROPOSED NATIONSRENT MERGER, THE NATIONSRENT MERGER AGREEMENT,
THE NATIONSRENT OPTION, THE NATIONSRENT OPTION AGREEMENT AND THE NATIONSRENT
TERMINATION FEE IS NECESSARILY LIMITED BY, AND QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO, THE DISCLOSURES MADE BY THE COMPANY IN THE COMPANY FORM 8-K, AND
THE FACT THAT, TO THE BEST KNOWLEDGE OF PARENT, THE NATIONSRENT MERGER AGREEMENT
AND RELATED DOCUMENTS HAVE NOT BEEN PUBLICLY FILED.
Parent intends to seek to negotiate with the Company with respect to the
acquisition of the Company by Parent or Purchaser, whether pursuant to the Offer
and the Proposed Merger, or otherwise. If such negotiations result in a
definitive merger agreement between the Company and
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<PAGE> 5
Parent or Purchaser, the consideration to be received by holders of Shares could
include or consist of consideration other than cash. Accordingly, such
negotiations could result in, among other things, amendment or termination of
the Offer and submission of a different acquisition proposal to the Company's
stockholders for their approval. See Section 12 and Section 14.
In connection with the Offer and during its pendency, or in the event the
Offer is terminated or not consummated, or after the expiration of the Offer and
pending the consummation of the Proposed Merger, in accordance with applicable
law and subject to the terms and conditions of any merger agreement that it may
enter into with the Company, Parent (alone or through affiliates) may explore
any and all options which may be available to it. In this regard, Parent may
solicit proxies against the approval of the Proposed NationsRent Merger and the
NationsRent Merger Agreement at any meeting of the Company's stockholders held,
among other reasons, for the purpose of voting on the NationsRent Merger
Agreement and the Proposed NationsRent Merger and at any adjournment,
postponement or continuation thereof (the "Company Meeting"). Parent may also
determine to conduct a proxy contest or consent solicitation seeking, among
other things, to remove the current members of the Company Board and elect a new
slate of directors designated by Parent, and to cause the Company Board to
approve the Offer and the Proposed Merger and satisfy the Section 203 Condition
(as hereinafter defined).
In addition, Parent reserves the right to acquire additional Shares, after
expiration or termination of the Offer, through open market purchases, privately
negotiated transactions, a tender offer or exchange offer or otherwise, upon
such terms and at such prices as it may determine, which may be more or less
than the price to be paid per Share in the Offer and could be for cash or other
consideration.
The Offer does not constitute a solicitation of proxies for any meeting of
the Company's stockholders, nor does this Offer constitute a solicitation of
consents. Any such solicitation which Parent or Purchaser might make would only
be pursuant to separate proxy or consent materials, as the case may be, in
compliance with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In addition, the Offer does not constitute an
offer to sell or a solicitation of an offer to buy any securities of Parent.
Such an offer may be made only pursuant to a prospectus pursuant to the
Securities Act of 1933, as amended (the "Securities Act").
CERTAIN CONDITIONS TO THE OFFER
The Offer is subject to the fulfillment of certain conditions, including
the following:
THE MINIMUM CONDITION. THE CONSUMMATION OF THE OFFER IS CONDITIONED UPON
THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER THAT NUMBER OF SHARES WHICH, TOGETHER WITH ANY SHARES OWNED BY PARENT AND
PURCHASER, CONSTITUTE A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED
BASIS (I.E., AS THOUGH ALL OPTIONS OR OTHER SECURITIES CONVERTIBLE INTO OR
EXERCISABLE OR EXCHANGEABLE FOR SHARES HAD BEEN SO CONVERTED, EXERCISED OR
EXCHANGED) (THE "MINIMUM CONDITION").
According to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Company 1998 Form 10-K"), there were (1) 24,123,392
Shares issued and outstanding as of February 26, 1999 and (2) 1,313,823
unexercised outstanding options to acquire Shares under various employee stock
option plans of the Company as of December 31, 1998. Although, pursuant to the
NationsRent Option Agreement 4,795,431 Shares are purportedly issuable to
NationsRent, the Offer is conditioned upon the NationsRent Option having been
terminated or invalidated without any Shares having been issued thereunder.
Based on the foregoing and disregarding for such purposes the 4,795,431
Shares purportedly issuable pursuant to the NationsRent Option Agreement,
Purchaser believes that there are approximately 25,437,215 Shares outstanding on
a fully diluted basis. Parent currently beneficially owns 100
3
<PAGE> 6
Shares which were acquired in an open market purchase. Accordingly, Purchaser
believes that the Minimum Condition would be satisfied if approximately
12,718,609 Shares are either validly tendered pursuant to the Offer or
beneficially owned by Parent, assuming that the NationsRent Option is terminated
or invalidated without any Shares having been issued thereunder. However, if any
additional Shares have been issued since February 26, 1999 or options to acquire
Shares have been issued since December 31, 1998, then additional Shares would be
required to be validly tendered pursuant to the Offer to satisfy the Minimum
Condition. On March 30, 1999, United Rentals (North America), Inc., a direct,
wholly owned subsidiary of Parent, purchased 100 Shares in an open market
transaction effected on the NYSE at a price of $16 13/16 per Share plus
brokerage commissions and related expenses.
THE STOCKHOLDER VOTE CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE STOCKHOLDERS OF THE COMPANY NOT APPROVING THE NATIONSRENT MERGER
AGREEMENT AT THE COMPANY MEETING.
Parent may solicit proxies from stockholders of the Company against the
approval of the Proposed NationsRent Merger and the NationsRent Merger
Agreement. Such solicitation would be made pursuant to separate proxy materials
complying with the requirements of Section 14(a) of the Exchange Act. In
addition, Parent may conduct a proxy contest or a consent solicitation seeking,
among other things, to remove the current members of the Company Board and elect
a new slate of directors designated by Parent, and to cause the Company Board to
approve the Offer and the Proposed Merger and satisfy the Section 203 Condition.
The Offer does not constitute a solicitation of proxies for any meeting of
the Company's stockholders, nor does this Offer constitute a solicitation of
consents. Any such solicitation which Parent or Purchaser might make would only
be pursuant to separate proxy or consent materials, as the case may be, in
compliance with the requirements of the Exchange Act.
THE MERGER AGREEMENT CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE NATIONSRENT
MERGER AGREEMENT HAS BEEN TERMINATED, AND THE COMPANY HAVING ENTERED INTO A
DEFINITIVE MERGER AGREEMENT WITH PARENT AND PURCHASER THAT WOULD PROVIDE FOR THE
ACQUISITION OF THE COMPANY PURSUANT TO THE OFFER AND THE PROPOSED MERGER (THE
"MERGER AGREEMENT CONDITION").
In order for the Merger Agreement Condition to be satisfied, the Company
Board and the Board of Directors of each of Parent and Purchaser must approve
any such merger agreement entered into among Parent, Purchaser and the Company.
THE DELAWARE SECTION 203 CONDITION. CONSUMMATION OF THE OFFER IS
CONDITIONED UPON PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PROVISIONS OF SECTION 203 OF THE DGCL ARE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER (THE "DELAWARE SECTION 203 CONDITION").
The Proposed Merger, including the timing and details thereof, is subject
to, among other things, compliance with the provisions of the DGCL, including
the provisions of Section 203 thereof. In general, Section 203 of the DGCL
provides that a Delaware corporation cannot consummate a "Business Combination"
(defined to include a variety of transactions including mergers) with an
"Interested Stockholder" (defined generally as a person that is the beneficial
owner of 15% or more of a corporation's outstanding voting stock) for a period
of three years following the date that such person became an Interested
Stockholder unless (a) prior to the date such person became an Interested
Stockholder, the board of directors of the subject corporation approved either
the Business Combination or the transaction that resulted in the stockholder
becoming an Interested Stockholder, (b) upon consummation of the transaction
that resulted in the stockholder becoming an Interested Stockholder, the
Interested Stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding stock held by
directors who are also officers of the corporation and employee stock ownership
plans that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be
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<PAGE> 7
tendered in a tender or exchange offer, or (c) on or subsequent to the date such
person became an Interested Stockholder, the Business Combination is approved by
the board of directors of the corporation and authorized at a meeting of
stockholders, and not by written consent, by the affirmative vote of the holders
of at least 66 2/3% of the outstanding voting stock of the corporation not owned
by the Interested Stockholder. See Section 15.
Section 203(b)(6) of the DGCL provides that the restrictions contained in
Section 203 do not apply to a Business Combination proposed prior to the
consummation or abandonment of and following the announcement or notification of
one of certain extraordinary transactions (including a merger) involving the
corporation which transaction (i) is with a person who has not been an
Interested Stockholder during the previous three years or who became an
Interested Stockholder with the approval of the corporation's board of directors
and (ii) has been approved or has not been opposed by a majority of the
corporation's board of directors then in office who were directors prior to any
person becoming an Interested Stockholder during the previous three years or
were recommended for election or elected to succeed such directors by a majority
of such directors.
Accordingly, the Delaware Section 203 Condition would be satisfied if the
Company Board approved the Offer prior to the consummation of the Offer, or if,
upon consummation of the Offer, Purchaser owned at least 85% of the total voting
stock of the Company outstanding at the time the transaction commenced
(excluding Shares owned by persons who are directors and also officers of the
Company and possibly excluding any Shares held in certain employee stock plans),
or if Purchaser is satisfied, in its sole discretion, that the restrictions of
Section 203 of the DGCL are inapplicable to the Proposed Merger for any reason,
including, without limitation, those specified in Section 203 of the DGCL.
In the Delaware Litigation, Parent and Purchaser are seeking, among other
things, to compel the Company Board to approve the Offer and the Proposed Merger
for purposes of Section 203 of the DGCL. See Section 15.
THE DEFENSIVE ACTION CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE COMPANY NOT HAVING ENTERED INTO OR EFFECTUATED ANY AGREEMENT OR
TRANSACTION WITH ANY PERSON OR ENTITY HAVING THE EFFECT OF IMPAIRING PURCHASER'S
ABILITY TO ACQUIRE THE COMPANY OR OTHERWISE DIMINISHING THE EXPECTED ECONOMIC
VALUE TO PURCHASER OF THE ACQUISITION OF THE COMPANY (THE "DEFENSIVE ACTION
CONDITION").
THE HSR CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE
EXPIRATION OR TERMINATION, PRIOR TO THE EXPIRATION DATE, OF THE WAITING PERIOD
UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND
THE RULES AND REGULATIONS THEREUNDER (THE "HSR ACT"), APPLICABLE TO THE
ACQUISITION OF THE SHARES PURSUANT TO THE OFFER (THE "HSR CONDITION").
Parent intends to file with the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "Antitrust Division") a
Premerger Notification and Report Form under the HSR Act with respect to the
Offer. If such filing is made on April 5, 1999, the waiting period under the HSR
Act applicable to the Offer will expire at 11:59 p.m., New York City time, on
April 20, 1999, unless prior to the expiration or termination of the waiting
period the FTC or the Antitrust Division extends the waiting period by
requesting additional information or documentary material from Parent. If such a
request is made, the waiting period applicable to the Offer will expire on the
tenth calendar day after the date of substantial compliance by Parent with such
request. Thereafter, the waiting period may be extended by court order or by
consent of Parent. The waiting period under the HSR Act may be terminated by the
FTC and the Antitrust Division prior to its expiration. See Section 15.
THE OPTION TERMINATION CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE NATIONSRENT OPTION HAVING BEEN TERMINATED OR INVALIDATED WITHOUT ANY
SHARES HAVING BEEN ISSUED THEREUNDER (THE "OPTION TERMINATION CONDITION").
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<PAGE> 8
In the Delaware Litigation, Parent and Purchaser are seeking, among other
things, to invalidate the NationsRent Option in the event that it is not
revoked, waived or otherwise rendered unexercisable by the Company and
NationsRent. See Section 15.
THE TERMINATION FEE CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE NATIONSRENT TERMINATION FEE HAVING BEEN INVALIDATED, OR THE OBLIGATION
TO PAY SUCH FEE HAVING BEEN TERMINATED, WITHOUT ANY SUCH FEE, OR ANY PORTION
THEREOF, HAVING BEEN PAID BY THE COMPANY OR ANY OF ITS AFFILIATES PURSUANT TO
THE NATIONSRENT MERGER AGREEMENT OR OTHERWISE (THE "TERMINATION FEE CONDITION").
In the Delaware Litigation, Parent and Purchaser are seeking, among other
things, to invalidate and/or enjoin the NationsRent Termination Fee in the event
that the obligation to pay such fee is not terminated.
Certain other conditions to the consummation of the Offer, including
receipt of the financing pursuant to the Commitment Letter (as defined herein),
are described in Section 14. Purchaser expressly reserves the right, in its sole
discretion, to waive any one or more of the conditions to the Offer. See Section
14.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
6
<PAGE> 9
THE OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered prior to the Expiration Date (as
hereinafter defined) and not withdrawn in accordance with Section 4 of this
Offer to Purchase. The term "Expiration Date" means 12:00 Midnight, New York
City time, on Friday, April 30, 1999, unless and until Purchaser, in its sole
discretion, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE STOCKHOLDER VOTE CONDITION, THE MERGER AGREEMENT
CONDITION, THE DELAWARE SECTION 203 CONDITION, THE DEFENSIVE ACTION CONDITION,
THE HSR CONDITION, THE OPTION TERMINATION CONDITION AND THE TERMINATION FEE
CONDITION. SEE SECTION 14. IF ANY OR ALL OF SUCH CONDITIONS ARE NOT SATISFIED OR
IF ANY OF THE OTHER EVENTS SET FORTH IN SECTION 14 SHALL HAVE OCCURRED PRIOR TO
THE EXPIRATION DATE, PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED)
TO (i) DECLINE TO PURCHASE ANY OF THE SHARES TENDERED AND TO TERMINATE THE OFFER
AND RETURN ALL TENDERED SHARES TO THE TENDERING STOCKHOLDERS, (ii) WAIVE OR
REDUCE THE MINIMUM CONDITION OR WAIVE OR AMEND ANY OR ALL OF THE CONDITIONS TO
THE OFFER TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND, SUBJECT TO COMPLYING
WITH APPLICABLE RULES AND REGULATIONS OF THE SEC, PURCHASE ALL SHARES VALIDLY
TENDERED, OR (iii) EXTEND THE OFFER AND RETAIN THE SHARES WHICH WILL HAVE BEEN
TENDERED DURING THE PERIOD OR PERIODS FOR WHICH THE OFFER IS OPEN OR EXTENDED,
SUBJECT TO THE RIGHT OF STOCKHOLDERS TO WITHDRAW SHARES UNTIL THE EXPIRATION
DATE.
Purchaser expressly reserves the right, in its sole discretion, at any time
or from time to time, (i) to extend the period of time during which the Offer is
open and thereby delay the acceptance for payment of, and payment for, any
Shares by giving oral or written notice of such extension to the Depositary and
(ii) subject to applicable rules and regulations of the SEC, to amend the Offer
in any respect (including, without limitation, by decreasing or increasing the
Offer Price and/or by decreasing the number of Shares being sought in the Offer)
by giving oral or written notice of such amendment to the Depositary. The rights
reserved by Purchaser in this paragraph are in addition to Purchaser's rights to
terminate the Offer as described in Section 14. Any extension, amendment or
termination will be followed as promptly as practicable by public announcement
thereof, the announcement in the case of an extension to be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Without limiting the obligation of Purchaser under
such Rule or the manner in which Purchaser may choose to make any public
announcement, Purchaser currently intends to make announcements by issuing a
press release to the Dow Jones News Service. Under no circumstances will
interest be paid on the Offer Price to be paid by Purchaser for the Shares,
regardless of any extension of the Offer or any delay in making such payment.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of, or payment
for, Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described in Section 4. However, the ability of Purchaser to delay the
payment for Shares which Purchaser has accepted for payment is limited by Rule
14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by, or on behalf of,
holders of securities promptly after the termination or withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer
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<PAGE> 10
materials and extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the
Offer must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in price, will depend upon
the facts and circumstances then existing, including the relative materiality of
the changed terms or information. In a public release, the SEC has stated that
in its view an offer must remain open for a minimum period of time following a
material change in the terms of the Offer and that waiver of a material
condition, such as the Minimum Condition, is a material change in the terms of
the Offer. The release states that an offer should remain open for a minimum of
five (5) business days from the date a material change is first published, sent
or given to security holders and that, if material changes are made with respect
to information not materially less significant than the offer price and the
number of shares being sought, a minimum of ten (10) business days may be
required to allow adequate dissemination and investor response. The requirement
to extend the Offer will not apply to the extent that the number of business
days remaining between the occurrence of the change and the then-scheduled
Expiration Date equals or exceeds the minimum extension period that would be
required because of such amendment. As used in this Offer to Purchase, "business
day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
Requests are being made to the Company pursuant to Rule 14d-5 under the
Exchange Act and Section 220 of the DGCL for the use of the Company's
stockholders lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will be furnished by Purchaser to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares by Purchaser following receipt of
such lists or listings from the Company, or by the Company if it so elects.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), Purchaser will
purchase, by accepting for payment, and will pay for, promptly after the
Expiration Date, all Shares validly tendered prior to the Expiration Date and
not properly withdrawn in accordance with Section 4. All determinations
concerning the satisfaction of such terms and conditions will be within
Purchaser's sole discretion, which determinations will be final and binding. See
Sections 1 and 14. Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of, or payment for, Shares in order
to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. Any such delays will be effected in compliance with
Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay
the consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined below), and (iii)
any other documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY
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<PAGE> 11
PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
Upon deposit of funds with the Depositary for the purpose of making
payments to tendering stockholders, Purchaser's obligation to make such payment
shall be satisfied and tendering stockholders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance for
payment of the Shares pursuant to the Offer. Purchaser will pay any stock
transfer taxes incident to the transfer to it of validly tendered Shares, except
as otherwise provided in Instruction 6 of the Letter of Transmittal, as well as
any charges and expenses of the Depositary and the Information Agent incurred in
connection with the Offer and pursuant to Parent's or Purchaser's agreements
therewith.
If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment, or pay for, Shares tendered pursuant
to the Offer for any reason, then, without prejudice to Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 14) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 4.
If any tendered Shares are not accepted for payment pursuant to the Offer
for any reason or if certificates are submitted evidencing more Shares than are
tendered, certificates for any such Shares will be returned, without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined below) pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
Purchaser reserves the right to transfer or assign, in whole at any time,
or in part from time to time, to Parent or one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer, but any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Share pursuant to the Offer, Purchaser will pay such increased
consideration for all such Shares purchased pursuant to the Offer, whether or
not such Shares were tendered prior to such increase in consideration.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase prior to
the Expiration Date and either certificates for tendered Shares must be received
by the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) must be received by the Depositary),
in each case prior to the Expiration Date, or (ii) the tendering stockholder
must comply with the guaranteed delivery procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at The Depositary Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two (2) business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's systems may make book-entry delivery of
Shares
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<PAGE> 12
by causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message in connection with a book-entry delivery of Shares, and any
other required documents must, in any case, be transmitted to, and received by,
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering stockholder must
comply with the guaranteed delivery procedures described below. The confirmation
of a book-entry transfer of Shares into the Depositary's account at the
Book-Entry Transfer Facility as described above is referred to herein as a
"Book-Entry Confirmation." Delivery of documents to the Book-Entry Transfer
Facility in accordance with the Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agent's Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution" and, collectively, "Eligible Institutions"). In all other
cases, all signatures on Letters of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as described
above. See Instruction 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
10
<PAGE> 13
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof), with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other required documents are received by the
Depositary within three NYSE trading days after the date of execution of
such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY PURCHASER FOR THE SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering stockholder and
Purchaser upon the terms and subject to the conditions of the Offer.
Appointment of Proxies. By executing the Letter of Transmittal as set
forth above, the tendering stockholder will irrevocably appoint designees of
Purchaser as such stockholder's attorneys-in-fact and proxies, in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by Purchaser (and any and all non-cash
dividends, distributions, rights, other Shares or other securities issued or
issuable in respect of such Shares on or after the date of this Offer to
Purchase (collectively, "Distributions")). All such proxies will be considered
coupled with an interest in the tendered Shares. Such appointment will be
effective when, and only to the extent that, Purchaser accepts for payment
Shares tendered by such stockholder as provided herein. Upon such appointment,
all prior powers of attorney, proxies and consents given by such stockholder
with respect to such Shares or other securities or rights will, without further
action, be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given by such stockholder (and, if given, will not be deemed
effective). The designees of Purchaser will be empowered to exercise all voting
and other rights with respect to such Shares and any Distributions, including,
without limitation, in respect of any annual, special, adjourned or postponed
meeting of the Company's stockholders, actions by written consent in lieu of any
such meeting or otherwise, as they, in their sole discretion, deem proper.
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Shares, Purchaser must be able to exercise full voting, consent and other rights
with respect to such Shares and any Distributions, including voting at any
meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance
11
<PAGE> 14
for payment of, or payment for which may, in the opinion of Purchaser's counsel,
be unlawful. Purchaser also reserves the absolute right, in its sole discretion,
to waive any of the conditions of the Offer or any defect or irregularity in the
tender of any Shares of any particular stockholder, whether or not similar
defects or irregularities are waived in the case of other stockholders. No
tender of Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived.
Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. None of Purchaser, Parent, the Dealer Managers, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification.
Backup Withholding. Under the "backup withholding" provisions of federal
income tax law, unless a tendering registered holder, or his assignee (in either
case, the "Payee"), satisfies the conditions described in Instruction 10 of the
Letter of Transmittal or is otherwise exempt, the cash payable as a result of
the Offer may be subject to backup withholding tax at a rate of 31%. To prevent
backup withholding, each Payee should provide the Depositary with such
stockholder's correct Taxpayer Identification Number and certify that such
stockholder is not subject to backup withholding by completing and signing the
Substitute Form W-9 included in the Letter of Transmittal. See Instruction 10 of
the Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn pursuant to the procedures set forth
below at any time prior to the Expiration Date and, unless theretofore accepted
for payment and paid for by Purchaser pursuant to the Offer, may also be
withdrawn at any time after June 4, 1999.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights set forth in the Offer to
Purchase, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares and such Shares may not be withdrawn except to the extent that
the tendering stockholder is entitled to and duly exercises withdrawal rights as
described in this Section 4. Any such delay will be an extension of the Offer to
the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Dealer Managers, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
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<PAGE> 15
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 3 any time prior to the Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of
certain United States federal income tax consequences of the Offer and the
Proposed Merger to stockholders of the Company whose Shares are tendered and
accepted for payment pursuant to the Offer or whose Shares are converted to cash
pursuant to the Proposed Merger. The discussion is for general information only
and does not purport to consider all aspects of federal income taxation that
might be relevant to stockholders of the Company. The discussion is based on
current law which is subject to change, possibly with retroactive effect. The
discussion applies only to stockholders who hold Shares as capital assets, and
may not apply to Shares received pursuant to the exercise of employee stock
options or otherwise as compensation, or to certain types of stockholders (such
as insurance companies, tax-exempt organizations, financial institutions and
broker-dealers) who may be subject to special rules. This discussion does not
discuss the federal income tax consequences to any stockholder of the Company
who, for United States federal income tax purposes, is a non-resident alien
individual, foreign corporation, foreign partnership or foreign estate or trust,
and does not address any aspect of state, local or foreign tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH STOCKHOLDER SHOULD
CONSULT SUCH STOCKHOLDER'S TAX ADVISOR REGARDING THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
STOCKHOLDER OF THE OFFER AND THE PROPOSED MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Proposed Merger
will be a taxable transaction for United States federal income tax purposes. In
general, a stockholder who exchanges Shares pursuant to the Offer or surrenders
Shares for cash pursuant to the Proposed Merger will recognize gain or loss for
United States federal income tax purposes equal to the difference, if any,
between the amount of cash received and the stockholder's adjusted tax basis in
the Shares exchanged pursuant to the Offer or surrendered for cash pursuant to
the Proposed Merger. Gain or loss will be determined separately for each block
of Shares (i.e., Shares acquired at the same cost in a single transaction)
exchanged pursuant to the Offer or surrendered for cash pursuant to the Proposed
Merger. Such gain or loss will be long-term capital gain or loss provided that a
stockholder's holding period for such Shares is more than 12 months at the time
of consummation of the Offer or the Proposed Merger, as the case may be. Capital
gain recognized by individuals (and certain estates and trusts) upon a
disposition of a Share that has been held for more than one year generally will
be subject to a maximum tax rate of 20% or, in the case of a Share that has been
held for one year or less, will be subject to tax at ordinary income tax rates.
Certain limitations apply to the use of capital losses.
13
<PAGE> 16
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES. The Shares are
traded on the NYSE under the symbol "RSV." The following table sets forth, for
each period indicated, the high and low sales prices per Share on the NYSE.
<TABLE>
<CAPTION>
PRICE
--------------
HIGH LOW
----- -----
<S> <C> <C>
Fiscal Year Ended December 31, 1997
First Quarter............................................. 28 18
Second Quarter............................................ 26 1/2 17 1/2
Third Quarter............................................. 28 1/16 21 11/16
Fourth Quarter............................................ 28 3/16 22 1/4
Fiscal Year Ended December 31, 1998
First Quarter............................................. 24 7/8 19 5/16
Second Quarter............................................ 33 5/8 23 3/16
Third Quarter............................................. 37 7/16 17 3/4
Fourth Quarter............................................ 26 1/16 10 1/8
Fiscal Year Ending December 31, 1999
First Quarter............................................. 25 1/8 15
Second Quarter (through April 1, 1999).................... 18 1/4 17 1/16
</TABLE>
On April 1, 1999, the last full trading day prior to the announcement of
the Offer, the last reported sales price of the Shares on the NYSE Composite
Tape was $17 1/4 per Share. Stockholders are urged to obtain a current market
quotation for the Shares.
The Company has never declared or paid any cash dividends on the Shares.
The Company 1998 Form 10-K indicates that the Company is effectively restricted
by the terms of its credit facilities from paying cash dividends on the Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE LISTING;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether it would cause future market prices to be greater or
lesser than the Offer Price.
NYSE Listing. According to the NYSE's published guidelines, the NYSE would
consider delisting the Shares if, among other things, the number of record
holders of at least 100 Shares should fall below 1,200, the number of publicly
held Shares (exclusive of holdings of officers, directors and their families and
other concentrated holdings of 10% or more (the "NYSE Excluded Holdings"))
should fall below 600,000 or the aggregate market value of publicly held Shares
(exclusive of NYSE Excluded Holdings) should fall below $5,000,000. If, as a
result of the purchase of Shares pursuant to the Offer or otherwise, the Shares
no longer meet the requirements of the NYSE for continued listing and the
listing of the Shares is discontinued, the market for the Shares could be
adversely affected.
14
<PAGE> 17
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the Nasdaq National Market or through other sources. The extent of the
public market for such Shares and the availability of such quotations would
depend, however, upon such factors as the number of stockholders and/or the
aggregate market value of such securities remaining at such time, the interest
in maintaining a market in the Shares on the part of securities firms, the
possible termination of registration under the Exchange Act as described below,
and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application of the
Company to the SEC if the Shares are neither listed on a national securities
exchange nor held by 300 or more holders of record. The termination of
registration of the Shares under the Exchange Act, assuming there are no other
securities of the Company subject to registration, would substantially reduce
the information required to be furnished by the Company to its stockholders and
to the SEC and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement pursuant to Section 14(a) in connection with
stockholders' meetings and the related requirement of furnishing an annual
report to stockholders and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Company. Furthermore, the ability of "affiliates" of the Company and persons
holding "restricted securities" of the Company to dispose of such securities
pursuant to Rule 144 or Rule 144A promulgated under the Securities Act may be
impaired or eliminated. If registration of the Shares under the Exchange Act
were terminated, such Shares would no longer be eligible for continued listing
on any stock exchange.
Margin Regulations. The Shares presently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers. In addition, if registration of the Shares under the
Exchange Act were terminated, the Shares would no longer constitute "margin
securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The information concerning the Company contained in this Offer to
Purchase, including financial information, has been taken from or based upon the
Company 1998 Form 10-K and other publicly available documents and records on
file with the SEC and other public sources. None of Parent, Purchaser, the
Dealer Manager, the Depositary or the Information Agent assumes responsibility
for the accuracy or completeness of the information concerning the Company
contained in such documents and records or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to Parent or Purchaser.
According to information filed by the Company with the SEC, the Company is
a Delaware corporation whose principal executive offices are located at 6929 E.
Greenway Parkway, Suite 200, Scottsdale, Arizona 85254 and the telephone number
of the Company at such address is (602) 905-3300. The Company is a participant
in the equipment rental industry. Through a network of 245 rental locations in
27 states and Canada, the Company rents equipment ranging from small items such
as pumps, generators, welders and electric hand tools to larger equipment such
as backhoes, forklifts, air compressors, scissor lifts, booms, aerial manlifts
and skid-steer loaders. The Company also sells maintenance, repair and
operations supplies, small tools, contractor supplies, parts and used rental
equipment, and acts as a distributor for new equipment on behalf of certain
national equipment manufacturers.
15
<PAGE> 18
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company, excerpted or
derived from the Company 1998 Form 10-K, filed by the Company with the SEC
pursuant to the Exchange Act. More comprehensive financial information is
included in such report and in other documents filed by the Company with the
SEC. The following summary is qualified in its entirety by reference to such
report and other documents and all of the financial information (including any
related notes) contained therein. Such reports and other documents may be
inspected and copies may be obtained from the SEC in the manner set forth below.
RENTAL SERVICE CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1994 1995 1996 1997 1998
------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
REVENUES:
Equipment rentals....................... $27,775 $47,170 $ 94,218 $170,704 $404,185
Sales of parts, supplies and new
equipment............................ 10,800 14,621 21,919 70,957 130,823
Sales of used equipment................. 3,240 4,126 12,217 19,602 43,466
------- ------- -------- -------- --------
Total revenues....................... 41,815 65,917 128,354 261,263 578,474
COST OF REVENUES:
Cost of equipment rentals, excluding
rental equipment depreciation........ 16,284 27,854 55,202 87,552 199,773
Depreciation, rental equipment.......... 4,020 7,691 17,840 37,413 87,260
Cost of sales of parts, supplies and new
equipment............................ 7,978 10,439 15,582 54,739 100,875
Cost of sales of used equipment......... 2,320 2,178 8,488 12,927 31,259
------- ------- -------- -------- --------
Total cost of revenues............... 30,602 48,162 97,112 192,631 419,167
------- ------- -------- -------- --------
Gross profit.............................. 11,213 17,755 31,242 68,632 159,307
Selling, general and administrative
expense................................. 4,747 6,421 12,254 20,996 37,230
Depreciation and amortization, excluding
rental equipment depreciation........... 504 1,186 2,835 5,373 10,244
Amortization of intangibles............... 2,078 718 2,379 3,907 10,333
------- ------- -------- -------- --------
Operating income.......................... 3,884 9,430 13,774 38,356 101,500
Interest expense, net..................... 731 3,314 7,063 14,877 50,375
------- ------- -------- -------- --------
Income before income taxes and
extraordinary items..................... 3,153 6,116 6,711 23,479 51,125
Provision for income taxes................ 1,177 2,401 2,722 10,330 21,933
------- ------- -------- -------- --------
Income before extraordinary items......... 1,976 3,715 3,989 13,149 29,192
Extraordinary items(2).................... -- 478 1,269 534 --
------- ------- -------- -------- --------
Net income................................ 1,976 3,237 2,720 12,615 29,192
Redeemable preferred stock accretion...... 1,646 1,717 1,643 -- --
------- ------- -------- -------- --------
Net income available to common
stockholders............................ $ 330 $ 1,520 $ 1,077 $ 12,615 $ 29,192
======= ======= ======== ======== ========
Income before extraordinary items per
common share............................ $ 0.08 $ 0.50 $ 0.34 $ 0.96 $ 1.33
Income before extraordinary items per
common share, assuming dilution......... $ 0.08 $ 0.49 $ 0.33 $ 0.94 $ 1.32
</TABLE>
16
<PAGE> 19
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
----------------------------------------------------
1994 1995 1996 1997 1998
------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Locations at end of period.............. 25 50 94 165 241
Number of acquisitions completed during
period................................ 1 5 11 22 24
BALANCE SHEET DATA:
Net book value of rental equipment...... $24,138 $52,818 $116,921 $314,696 $ 656,207
Total assets............................ 48,098 137,832 218,933 699,326 1,352,576
Total debt.............................. 12,752 68,555 68,594 306,975 808,712
Redeemable preferred stock (net of
treasury stock)....................... 26,684 28,401 -- -- --
Common stockholders' equity (deficit)... (1,474) 46 95,072 290,781 417,485
</TABLE>
- ------------------------
(1) According to the Company 1998 Form 10-K, the Company's acquisitions have
been accounted for as purchases and, accordingly, the operations of the
acquired businesses are included in the statements of operations data from
the date of effective control of each acquisition.
(2) According to the Company 1998 Form 10-K, the extraordinary items represent
the losses on extinguishment of debt related to various amendments to, or
repayments of, the Company's revolving bank credit facility.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, options granted to them, the principal holders of the Company's
securities and any material interests of such persons in transactions with the
Company is required to be disclosed in proxy statements distributed to the
Company's stockholders and filed with the SEC. Such reports, proxy statements
and other information should be available for inspection at the public reference
facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at Seven World Trade Center, Suite 1300,
New York, NY 10048 and 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such information should be obtainable by mail, upon payment of the
SEC's customary charges, by writing to the SEC's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The SEC also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
filed electronically by the Company. The Shares are listed on the NYSE, and
reports, proxy statements and other information concerning the Company should
also be available at the offices of the NYSE located at 20 Broad Street, New
York, NY 10005.
9. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.
Purchaser. Purchaser is a newly incorporated Delaware corporation
organized in connection with the Offer and the Proposed Merger and has not
carried on any activities other than in connection with the Offer and the
Proposed Merger. The principal offices of Purchaser are located at Four
Greenwich Office Park, Greenwich, Connecticut 06830. The telephone number of
Purchaser at such location is (203) 622-3131. All of the outstanding capital
stock of Purchaser is owned directly by Parent. Until immediately prior to the
time Purchaser purchases Shares pursuant to the Offer, it is not anticipated
that Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Proposed Merger.
17
<PAGE> 20
Parent. Parent is a Delaware corporation with its principal executive
offices located at Four Greenwich Office Park, Greenwich, Connecticut 06830. The
telephone number of Parent at such location is (203) 622-3131.
Parent is the largest equipment rental company in North America with 470
branch locations in 40 states, Canada and Mexico. Parent offers to rent over 600
different types of equipment on a daily, weekly or monthly basis and serves
customers that includes construction industry participants, industrial companies
and homeowners. Parent also sells used rental equipment, acts as a dealer for
many types of new equipment, and sells related merchandise and parts. In the
past year, Parent has served over 900,000 customers.
Parent has one of the most comprehensive and newest customer rental fleets
in the industry. The types of rental equipment that Parent offers includes a
broad range of light to heavy construction and industrial equipment, such as
backhoes, aerial lifts, skid-steer loaders, forklifts, compressors, pumps and
generators, as well as a variety of smaller tools and equipment. Parent's
equipment fleet has an original purchase price of approximately $2.2 billion and
a weighted average age of approximately 26 months.
Parent began operations in October 1997 and has grown through a combination
of internal growth and the acquisition of 101 companies (through March 3, 1999).
Parent's acquisitions include its merger with U.S. Rentals Inc., a California
corporation ("U.S. Rentals"), in September 1998. At the time of such merger,
U.S. Rentals was the second largest equipment rental company in the United
States based on 1997 rental revenues.
Available Information. Parent is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Information as of
particular dates concerning Parent's directors and officers, their remuneration,
options granted to them, the principal holders of Parent's securities and any
material interests of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's stockholders and filed
with the SEC. Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
SEC located at Seven World Trade Center, Suite 1300, New York, NY 10048 and 500
West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such information
should be obtainable by mail, upon payment of the SEC's customary charges, by
writing to the SEC's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549. The SEC also maintains a website at http://www.sec.gov that contains
reports, proxy statements and other information filed electronically by Parent.
Parent's common stock is listed on the NYSE, and reports, proxy statements and
other information concerning Parent should also be available at the offices of
the NYSE located at 20 Broad Street, New York, NY 10005.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of Purchaser and parent are set forth in Schedule I hereto.
10. SOURCE AND AMOUNT OF FUNDS. Purchaser estimates that the total amount
of funds required to purchase all Shares validly tendered pursuant to the Offer,
consummate the Proposed Merger, refinance certain of the Company's indebtedness
and pay all costs and expenses incurred in connection with the Offer and the
Proposed Merger is approximately $1.26 billion. See Section 16. Purchaser intend
to obtain such funds through a capital contribution or loan from Parent or
United Rentals (North America), Inc., a Delaware corporation and a wholly owned
subsidiary of Parent (the "Borrower").
The Borrower has executed a commitment letter dated as of April 4, 1999
(the "Commitment Letter"), with Goldman Sachs Credit Partners L.P. ("GSCP")
pursuant to which GSCP will provide the Borrower with financing in an aggregate
amount up to $2 billion. GSCP has committed to provide
18
<PAGE> 21
the financing upon the terms and subject to the conditions set forth in the
Commitment Letter, and GSCP has committed to form a syndicate of financial
institutions acceptable to the Borrower (the "Lenders"), upon the terms and
subject to the conditions set forth in the Commitment Letter.
Pursuant to the Commitment Letter, following the consummation of the
Proposed Merger, the Company (the surviving corporation in the Proposed Merger)
will be merged with the Borrower.
Pursuant to the Commitment Letter, the financing is expected to consist of:
(i) up to $400 million under a senior secured term loan facility (the "Term Loan
A Facility"), (ii) up to $1.0 billion under another senior secured term loan
facility (the "Term Loan B Facility," and together with the Term Loan A
Facility, the "Term Facilities") and (iii) up to $600 million under a senior
secured revolving credit facility (the "Revolving Credit Facility," and,
together with the Term Facilities, the "Facilities").
The Commitment Letter provides that the commitment of GSCP will terminate
unless the closing of the Facilities, on the terms and subject to the conditions
contained therein (including the acquisition of Shares pursuant to the Offer),
occurs prior to September 30, 1999.
The following is a summary of the principal terms of the Facilities based
upon the Commitment Letter. This summary is qualified in its entirety by
reference to the Commitment Letter, a copy of which has been filed as an exhibit
to the Schedule 14D-1 filed with the SEC in connection with the Offer and is
hereby incorporated by reference.
Pursuant to the Commitment Letter, Parent and each of its subsidiaries
(other than the Borrower and, prior to the Proposed Merger, the Company and its
subsidiaries and other than any subsidiary that is a controlled foreign
corporation (a "CFC") under Section 957 of the Code) shall guarantee (the
"Guarantee") all obligations under the Facilities.
The Term Loan A Facility will mature five years from the closing thereof;
the Term Loan B Facility matures seven years from the closing thereof; and the
Revolving Credit Facility will mature five years from the closing date thereof.
The Commitment Letter provides that the Facilities will be subject to
certain mandatory prepayments tied to the sale of assets, the issuance of debt,
pension plan reversions and extraordinary receipts of Borrower.
During the six-month period commencing on the closing date, the amounts
borrowed pursuant to the Revolving Credit Facility and the Term Loan A Facility
will bear interest at (a) the Base Rate plus 1.0% per annum; or (b) at the
reserve adjusted Eurodollar Rate (as defined below) plus 2.00% per annum; and
during the one-year period commencing on the closing date, the amounts borrowed
pursuant to the Term Loan B Facility will bear interest at (a) the Base Rate (as
defined below) plus 1.5% per annum; or (b) at the reserve adjusted Eurodollar
Rate plus 2.50% per annum. Thereafter, the Facilities will bear interest at
margins above the Base Rate or the reserve adjusted Eurodollar Rate as specified
on the pricing grid forming a part of the Commitment Letter. As used in the
Facilities, the term "Base Rate" and "reserve adjusted Eurodollar Rate" shall
have the meanings customary and appropriate for financings of this type, and the
basis of calculating accrued interest and the interest periods for loans bearing
interest at the reserve adjusted Eurodollar Rate shall be customary and
appropriate for financings of this type. Interest on outstanding amounts
following an event of default shall accrue at a rate equal the Base Rate plus an
additional two percentage points per annum and shall be payable on demand.
Pursuant to the Commitment Letter, the Facilities and each Guarantee will
be secured by first priority security interests in substantially all assets,
including without limitation, all personal property of Parent and its
subsidiaries (including, from and after the Proposed Merger, the Company and its
subsidiaries). In addition, the Facilities shall be secured by a first priority
security interest in 100% of the stock of each subsidiary of Parent (or, in the
case of each subsidiary that is a CFC, 66% of the voting stock of such
subsidiary) and all intercompany debt.
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The Facilities will contain certain customary and appropriate
representations and warranties including due organization and authorization,
execution, delivery and enforceability of the loan documents, financial
condition, no material adverse change, title to properties, liens, litigation,
payment of taxes, no material adverse agreements, compliance with laws,
environmental matters, matters related to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), Year 2000 compliance, consents and
approvals and full disclosure.
The Facilities will also contain customary and appropriate affirmative and
negative covenants. Such covenants will include financial covenants related to
minimum interest coverage, maximum senior debt to tangible assets, maximum
senior leverage and maximum total leverage. Other covenants will include
limitations on other indebtedness, liens, negative pledge, investments,
guarantees, restricted junior payments (including dividends, redemptions and
payments on subordinated debt), mergers and acquisitions, sales of assets,
leases and transactions with affiliates. The foregoing covenants shall be
subject to exceptions and baskets to be mutually agreed upon, provided, however,
that with respect to the Company and its subsidiaries, such covenants shall be
applicable only from and after the date on which persons designated or approved
by the Borrower shall constitute a majority of the board of directors of the
Company. In addition, the Borrower has agreed to use its best efforts to cause
the Proposed Merger to occur as soon as practicable following the consummation
of the Offer.
Pursuant to the Commitment Letter, events of default will include failure
to make payments when due, defaults under other agreements or instruments of
indebtedness, noncompliance with covenants, breaches of representations and
warranties, bankruptcy, judgments in excess of specified amounts, ERISA related
defaults, impairment of security interests in collateral, invalidity of
guarantees and changes of control (which will be defined in the definitive
documentation).
The funding of the Facilities will be subject to customary closing
conditions, including, among others (1) execution of satisfactory documentation,
(2) granting of perfected first priority security interests in all assets to the
extent described above, (3) since December 31, 1998, there shall not have been
any adverse change in or affecting the general affairs, management, prospects,
financial position, shareholders' equity or results of operations of Parent, the
Borrower or the Company, together with their respective subsidiaries, which
GSCP, in its judgment, deems material, (4) no disruption of financial and
capital markets, (5) the receipt of all necessary governmental and third party
approvals in connection with the Facilities and the consummation of the Offer,
and (6) the absence of any litigation that could be reasonably likely to have a
material adverse effect in or affecting the general affairs, management,
prospects, financial position, shareholders' equity or results of operations of
Parent, the Borrower or the Company, together with their respective
subsidiaries, taken as a whole, or the Offer or the Proposed Merger or any of
the Facilities. Although Parent expects that the Facilities will be available to
provide funds for the consummation of the Offer and the Proposed Merger in
accordance with their respective terms, there can be no assurance that the
Facilities will be consummated. See "Conditions to the Offer" set forth in
Section 14 hereof.
In connection with the Facilities, Parent has agreed to pay the GSCP
certain commitment, underwriting, administrative and termination fees, to
reimburse GSCP for reasonable out-of-pocket fees and expenses, whether or not
the Facilities close, and to provide certain indemnities, as is customary for
commitments such as the Facilities.
Parent anticipates that indebtedness incurred through borrowings under the
Facilities in connection with the Offer and Proposed Merger will be repaid from
a variety of sources, which may include funds generated internally by Parent and
its subsidiaries, bank financing, the public or private sale of debt or equity
securities and, following the Proposed Merger, funds generated by the Company.
No decision has been made concerning the method Parent will employ to repay such
indebtedness. Such decision will be made based on Parent's review from time to
time of the advisability of particular actions, as well as on prevailing
interest rates and financial and other
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economic conditions and such other factors as Parent may deem appropriate.
Parent expressly reserves its right to obtain financing for the transaction
through alternative sources.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. In the ordinary
course of Parent's long-term strategic review process, Parent is continuously
involved in discussions relating to acquisitions of varying size and due
diligence investigations of several acquisition candidates. Parent generally
seeks to acquire companies of various sizes, including relatively large
companies to serve as platforms for new regional clusters of equipment rental
locations and smaller companies to complement existing or anticipated locations.
In December 1998, a representative of Goldman Sachs & Co., Parent's
financial advisor, acting on behalf of Parent, telephoned Martin R. Reid,
Chairman of the Board and Chief Executive Officer of the Company, to arrange a
meeting. On January 15, 1999, such representative met with Mr. Reid and Robert
M. Wilson, Executive Vice President, Chief Financial Officer, Secretary and
Treasurer of the Company. At such meeting, such representative asked Mr. Reid
whether the Company was interested in discussing a business combination with
Parent, and Mr. Reid stated that the Company was not for sale.
On January 21, 1999, the Company and NationsRent announced that they had
entered into the NationsRent Merger Agreement and the NationsRent Option
Agreement.
On April 3, 1999, at a special meeting of the Board of Directors of Parent,
such Board unanimously approved the Offer.
On April 5, 1999, Parent and Purchaser commenced the Offer and sent the
following letter to Messrs. Reid and Wilson regarding a proposed business
combination between the Company and Parent.
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April 5, 1999
Mr. Martin R. Reid
Chairman of the Board and Chief Executive Officer
Rental Service Corporation
6929 East Greenway Parkway, Suite 200
Scottsdale, Arizona 85254
Dear Marty:
United Rentals, Inc. is publicly announcing today a cash tender offer to
acquire all of the outstanding shares of Rental Service Corporation at $22.75
per share. Our offer represents approximately a 32% premium over your company's
closing market price on Thursday, April 1, 1999. We are also proposing that,
upon consummation of the tender offer, United Rentals and Rental Service enter
into a merger in which each remaining Rental Service share will be exchanged for
$22.75 in cash. In connection with our offer, we have received a commitment
letter from Goldman Sachs Credit Partners L.P. to provide $2 billion in
financing for the purchase of all of Rental Service's shares pursuant to our
tender offer and the refinancing of Rental Service's existing debt, as well as
for other corporate purposes.
The combination of United Rentals and Rental Service would give us an
unparalleled capacity to serve customers in 42 states, Canada and Mexico.
Together, we would be able to offer for rent over 400,000 pieces of equipment,
with an original cost of over $3 billion, to more than one million customers
through a network of over 700 locations. Our combined companies would have a
broader geographic diversification and excellent opportunities to achieve
greater operating efficiencies through economies of scale. In addition, the
combined operations would provide significant opportunities for the employees of
Rental Service to expand their professional careers.
Our offer is subject to certain conditions, including the valid tender of a
majority of Rental Service's shares, termination of the merger agreement between
Rental Service and NationsRent, Inc., the execution of a definitive merger
agreement between Rental Service and United Rentals, the termination or
invalidation of the option held by NationsRent to purchase up to 19.9% of Rental
Service's shares, the termination or invalidation of the termination fee
obligation provided for in Rental Service's merger agreement with NationsRent,
the expiration or termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, the approval of our offer and our proposed
merger by your Board of Directors, and Rental Service not taking any action that
would impair United Rentals' ability to acquire Rental Service or otherwise
diminish the value to United Rentals of Rental Service. The complete details of
our tender offer will be set forth in a filing to be made today with the
Securities and Exchange Commission.
We appreciate that you will want to present our proposal to your Board of
Directors for its careful consideration. We feel confident that after such
consideration, your Board will recognize the fairness and certainty of the value
that we are offering your stockholders.
We are prepared to meet with you and your directors, at your earliest
convenience, to discuss our proposal and to answer relevant questions.
Sincerely,
/s/ Bradley S. Jacobs
Bradley S. Jacobs
Chairman and Chief Executive Officer
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Pursuant to a Master Agreement, dated as of August 31, 1994, by and between
ACME Acquisition Corp., a California corporation and a predecessor to the
Company ("ACME"), and Wynne Systems, Inc., a California corporation and a wholly
owned indirect subsidiary of Parent ("Wynne"), Wynne has granted ACME a
non-exclusive, non-transferable perpetual license with respect to certain
software and has agreed to provide ACME with certain software installation and
support services. In accordance with the terms of such license, a license fee
was paid upon inception of such license and additional fees are payable based on
certain system upgrades and other factors.
Pursuant to an Asset Purchase Agreement, dated as of June 14, 1996, U.S.
Rentals acquired certain of the assets of ACME Rents, Inc. d/b/a Contractors
Equipment Rentals, Inc., a California Corporation ("ACME Rents"). The purchase
price of the assets acquired was approximately $9 million. U.S. Rentals was
merged with a wholly owned subsidiary of Parent in September 1998, and ACME
Rents is a predecessor to the Company.
Certain related investment funds of Apollo Advisors, L.P. ("Apollo") hold
bank indebtedness of the Company, which Apollo has advised Parent has a value of
approximately $15 million. Two of Parent's directors, Leon D. Black and Michael
S. Gross, are principals of Apollo. Apollo and Messrs. Black and Gross disclaim
any beneficial ownership in such indebtedness.
On March 30, 1999, United Rentals (North America), Inc., a direct, wholly
owned subsidiary of Parent, purchased 100 Shares in an open market transaction
effected on the NYSE at a price of $16 13/16 per Share plus brokerage
commissions.
Except as described in this Offer to Purchase, none of Purchaser, Parent,
or to the best knowledge of Purchaser, any of the persons listed on Schedule I
hereto, or any associate, or majority owned subsidiary of Parent, Purchaser or
any of the persons so listed, beneficially owns any equity security of the
Company, and none of Parent, Purchaser or, to the best knowledge of Purchaser,
any of the persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any equity security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, none of Purchaser, Parent
or, to the best knowledge of Purchaser or Parent, any of the persons listed on
Schedule I, has had since January 1, 1996, any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates which would require reporting under the SEC rules.
Except as described in this Offer to Purchase, there have not been any
contacts, negotiations or transactions which have occurred since January 1, 1996
between Parent or Purchaser, or their respective subsidiaries, or, to the
knowledge of Parent or Purchaser, any of the persons listed on Schedule I hereto
on the one hand, and the Company or its executive officers, directors or
affiliates on the other hand, concerning a merger, consolidation or acquisition,
tender offer or other acquisition of securities, an election of directors, or a
sale or other transfer of a material amount of assets. During the Offer, Parent
and Purchaser intend to have ongoing contacts and negotiations with the Company
and its directors, officers and stockholders.
Except as set forth in this Offer to Purchase, none of Purchaser or Parent
or, to the best knowledge of Parent or Purchaser, any of the persons listed on
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangement, puts or calls, guarantees of loans,
guarantees against loss, or the giving or withholding of proxies.
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12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
Purpose of the Offer and the Merger. The purpose of the Offer and the
Proposed Merger is to enable Parent to acquire control of, and the entire equity
interest in, the Company. The United States equipment rental industry is highly
fragmented and competitive, with over 20,000 participants. Parent believes that
larger, national firms have, and will continue to have, a significant
competitive advantage because they benefit from increased purchasing power,
economies of scale, higher utilization, and better inventory management.
Parent is seeking to enter into negotiations with the Company with respect
to the Proposed Merger. However, there can be no assurance that such
negotiations will occur, or, if such negotiations occur, as to the outcome
thereof. Purchaser reserves the right to amend the Offer (including amending the
number of Shares to be purchased, the purchase price and the Proposed Merger
consideration) in connection with entering into a merger agreement with respect
to the Proposed Merger or otherwise or to negotiate a merger agreement with the
Company not involving a tender offer pursuant to which Purchaser would terminate
the Offer and the Shares would, upon consummation of such merger, be converted
into cash, common stock of Parent and/or other securities in such amounts as may
be negotiated by Parent and the Company.
If the Proposed Merger is consummated, each then outstanding Share (other
than Shares held by the Parent, Purchaser or any wholly owned subsidiary of
Parent, Shares held in the treasury of the Company and Shares held by
stockholders who properly exercise appraisal rights under the DGCL), would be
converted into the right to receive in cash the price per Share paid by
Purchaser pursuant to the Offer and the Company would become a wholly owned
subsidiary of Parent.
Except in the case of a "short-form" merger as described below, under the
DGCL, approval by the Company Board and the affirmative vote of a majority of
the outstanding Shares (including any Shares owned by Purchaser) would be
required to approve the Proposed Merger. If Purchaser were to accept for payment
all Shares validly tendered pursuant to the Offer and at least a majority of the
outstanding Shares were validly tendered (and the Option Termination Condition
was satisfied), Purchaser would have sufficient voting power to ensure approval
of the Proposed Merger by holders of Shares.
In connection with the Offer and during its pendency, or in the event the
Offer is terminated or not consummated, or after the expiration of the Offer and
pending consummation of the Proposed Merger, in accordance with applicable law
and subject to the terms of any merger agreement that it may enter into with the
Company, Parent may explore any and all options which may be available to it. In
this regard, Parent may solicit proxies from stockholders of the Company against
the approval of the Proposed NationsRent Merger and the NationsRent Merger
Agreement at the Company Meeting. Parent may also determine to conduct a proxy
contest or consent solicitation seeking, among other things, to remove the
current members of the Company Board and elect a new slate of directors
designated by Parent and to cause the Company Board to approve the Proposed
Merger and satisfy the Delaware Section 203 Condition. In addition, after
expiration or termination of the Offer, Parent may seek to acquire Shares,
through open market purchases, privately negotiated transactions, a tender offer
or exchange offer or otherwise, upon such terms and at such prices as it may
determine, which may be higher or lower than the Offer Price and could be for
cash or other consideration.
The Offer does not constitute a solicitation of proxies for any meeting of
the Company's stockholders, nor does this Offer constitute a solicitation of
consents. Any such solicitation which Parent or Purchaser might make would be
made only pursuant to separate proxy or consent materials, as the case may be,
in compliance with the requirements of the Exchange Act. In addition, the Offer
does not constitute an offer to sell or solicitation of an offer to buy any
securities of Parent. Such an offer may be made only pursuant to the Securities
Act.
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Whether or not the Offer is consummated, Purchaser reserves the right,
subject to applicable legal restrictions, to sell or otherwise dispose of any or
all Shares acquired pursuant to the Offer or otherwise. Such transactions may be
effected on terms and at prices as it shall determine, which may be higher or
lower than the Offer Price and could be for cash or other consideration.
Plans for the Company. In connection with the Offer, Parent and Purchaser
have reviewed and will continue to review, based on publicly available
information, various possible business strategies they might consider in the
event the Parent acquires control of the Company, whether pursuant to the Offer,
the Proposed Merger or otherwise. In addition, if and to the extent Parent
acquires control of the Company or otherwise obtains access to the books and
records of the Company, Parent and Purchaser intend to conduct a detailed review
of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
to consider and determine what, if any, changes would be desirable in light of
the circumstances which then exist. However, except as stated in this Offer to
Purchase, neither Parent nor Purchaser has any present plans or proposals which
relate to or would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries or any material change in the Company's
capitalization or dividend policy or any other material changes in the Company's
corporate structure or business, or the composition of the Company's Board or
management.
Short-Form Merger. Section 253 of the DGCL provides that if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge such other corporation
into itself without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "short-form merger"). In the event
that Parent, Purchaser and any other subsidiaries of Parent acquire in the
aggregate at least 90% of the outstanding Shares, pursuant to the Offer or
otherwise, then, at the election of Parent, a short-form merger could be
effected without any approval of the Board of Directors or the stockholders of
the Company, subject to compliance with the provisions of Section 253 of the
DGCL. Even if Parent and Purchaser do not own 90% of the outstanding Shares
following consummation of the Offer, Parent and Purchaser could seek to purchase
additional shares in the open market or otherwise in order to reach the 90%
thresholds and utilize a short-form merger. The per share consideration paid for
any Shares so acquired may be greater or less than that paid in the Offer.
Parent presently intends to effect a short-form merger if permitted to do so
under the DGCL.
The Company Certificate and the Company By-laws. The Company's Certificate
of Incorporation (the "Company Certificate") and the Company's Amended and
Restated By-laws (the "Company By-laws") contain several provisions that may
delay a change in control of the Company following the purchase of Shares by
Purchaser pursuant to the Offer, including, among other things, (i) a provision
requiring advance notice to the Company of any stockholder nominations for
directors at any meeting of stockholders called for the purpose of electing one
or more directors, (ii) a provision that special meetings of stockholders may be
called only by the Chief Executive Officer of the Company, the Company Board,
the Chairman of the Company Board or by a committee of the Company Board
authorized and empowered by the Company Board to call such meetings, and (iii) a
provision that allows the Company Board to issue up to 500,000 shares of
preferred stock in such series and having such rights, preferences, privileges
and restrictions (including without limitation voting rights) as the Company
Board shall determine from time to time. As of the date hereof, the Company has
no shares of preferred stock issued and outstanding.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Proposed Merger is consummated,
holders of the Shares at the effective time of the Proposed Merger will have
certain rights pursuant to the provisions of Section 262 of the DGCL to dissent
and demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. Dissenting stockholders of the Company who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the "fair value" of their Shares (exclusive
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of any element of value arising from the accomplishment or expectation of the
Proposed Merger) and to receive payment of such fair value in cash, together
with a fair rate of interest thereon, if any. Any such judicial determination of
the fair value of the Shares could be based upon factors other than, or in
addition to, the price per Share to be paid in the Proposed Merger or the market
value of the Shares. The value so determined could be more or less than the
price per Share to be paid in the Proposed Merger.
In addition, several decisions by the Delaware courts have held that, in
certain instances, a controlling stockholder of a corporation involved in a
merger has a fiduciary duty to the other stockholders that requires the merger
to be fair to such other stockholders. In determining whether a merger is fair
to minority stockholders, the Delaware courts have considered, among other
things, the type and amount of consideration to be received by the stockholders
and whether there were fair dealings among the parties. Although the remedies of
rescission or rescissory damages are possible in an action challenging a merger
as a breach of fiduciary duty, decisions of the Delaware courts have indicated
that in most cases the remedy available in a merger that is found to be "fair"
to minority stockholders is a damages remedy based on essentially the same
principles as an appraisal.
The foregoing summary of the rights of dissenting stockholders under the
DGCL does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any dissenters' rights available
under the DGCL. The preservation and exercise of dissenters' rights require
strict adherence to the applicable provisions of the DGCL.
"Going Private" Transactions. The SEC has adopted Rule 13e-3 under the
Exchange Act, which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Proposed Merger or
another business combination following the purchase of Shares pursuant to the
Offer in which Purchaser seeks to acquire the remaining Shares not held by it.
Rule 13e-3 should not be applicable to the Proposed Merger if the Proposed
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Proposed Merger is not less than the per Share
price paid pursuant to the Offer. However, in the event that Purchaser is deemed
to have acquired control of the Company pursuant to the Offer and if the
Proposed Merger is consummated more than one year after completion of the Offer
or an alternative acquisition transaction is effected whereby stockholders of
the Company receive consideration less than that paid pursuant to the Offer, in
either case at a time when the Shares are still registered under the Exchange
Act, Purchaser may be required to comply with Rule 13e-3 under the Exchange Act.
If Rule 13e-3 were applicable to the Proposed Merger, it would require, among
other things, that certain financial information concerning the Company, and
certain information relating to the fairness of the Proposed Merger or such
alternative transaction and the consideration offered to the stockholders of the
Company other than Purchaser, Parent and their affiliates in the Proposed Merger
or such alternative transaction, be filed with the SEC and disclosed to
stockholders prior to consummation of the Proposed Merger or such alternative
transaction. If registration of the Shares under the Exchange Act were
terminated, Rule 13e-3 would be inapplicable to any such transaction.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after the date of this Offer to
Purchase, the Company should (i) split, combine or otherwise change the Shares
or its capitalization, (ii) issue or sell any additional securities of the
Company or otherwise cause an increase in the number of outstanding securities
of the Company or (iii) acquire currently outstanding Shares or otherwise cause
a reduction in the number of outstanding Shares, then, without prejudice to
Purchaser's rights under Sections 1 and 14, Purchaser, in its sole discretion,
may make such adjustments as it deems appropriate in the purchase price and
other terms of the Offer, including, without limitation, the amount and type of
securities offered to be purchased.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any dividend on the Shares or make any distribution (including,
without limitation, the issuance of
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additional Shares pursuant to a stock dividend or stock split, the issuance of
other securities or the issuance of rights for the purchase of any securities)
with respect to the Shares that is payable or distributable to stockholders of
record on a date prior to the transfer to the name of Purchaser or its nominee
or transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Sections 1 and 14, (i) the purchase price per Share payable by Purchaser
pursuant to the Offer will be reduced by the amount of any such cash dividend or
cash distribution and (ii) any such non-cash dividend, distribution or right to
be received by the tendering stockholders will be received and held by such
tendering stockholders for the account of Purchaser and will be required to be
promptly remitted and transferred by each such tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount of the value
thereof, as determined by Purchaser in its sole discretion.
14. CONDITIONS TO THE OFFER. Notwithstanding any other provisions of the
Offer, and in addition to (and not in limitation of) Purchaser's rights to
extend and amend the Offer at any time in its sole discretion, Purchaser shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate the Offer as to any Shares not then
paid for, if, in the sole judgment of Purchaser (1) at or prior to the
expiration of the Offer any one or more of the Minimum Condition, the
Stockholder Vote Condition, the Merger Agreement Condition, the Delaware Section
203 Condition, the Defensive Action Condition, the HSR Condition, the Option
Termination Condition or the Termination Fee Condition has not been satisfied,
or (2) at any time on or after April 5, 1999 and prior to the acceptance for
payment of Shares, any of the following events shall occur or shall be
determined by Purchaser to have occurred:
(a) there shall have been threatened, instituted or pending any
action, proceeding, application or counterclaim before any court,
governmental, regulatory or administrative agency or commission, authority
or tribunal, domestic, foreign or supranational, by any government,
governmental authority or other regulatory or administrative agency or
commission, domestic, foreign or supranational, or by any other person,
domestic or foreign (whether brought by the Company, an affiliate of the
Company or any other person), which (i) challenges or seeks to challenge
the acquisition by Parent or Purchaser or any affiliate of either of them
of the Shares, restrains, delays or prohibits or seeks to restrain, delay
or prohibit the making of the Offer or the Proposed Merger, consummation of
the transactions contemplated by the Offer or any other subsequent business
combination with the Company, restrains or prohibits or seeks to restrain
or prohibit the performance of any of the contracts or other arrangements
entered into by Purchaser or any of its affiliates in connection with the
acquisition of the Company or obtains or seeks to obtain any material
damages or otherwise directly or indirectly relating to the transactions
contemplated by the Offer, the Proposed Merger or any other subsequent
business combination with the Company, (ii) prohibits or limits or seeks to
prohibit or limit Parent's or Purchaser's ownership or operation of all or
any portion of their or the Company's business or assets (including without
limitation the business or assets of their respective affiliates and
subsidiaries) or to compel or seeks to compel Parent or Purchaser or any
other affiliates of Parent to dispose of or hold separate all or any
portion of their own or the Company's business or assets (including without
limitation the business or assets of their respective affiliates and
subsidiaries) or imposes or seeks to impose any limitation on the ability
of Parent, Purchaser or any affiliate of either of them to conduct its own
business or own such assets as a result of the transactions contemplated by
the Offer, Proposed Merger or any other subsequent business combination
with the Company, (iii) makes or seeks to make the
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acceptance for payment, purchase of, or payment for, some or all of the
Shares pursuant to the Offer or the Proposed Merger illegal or results in a
delay in, or restricts, the ability of Parent or Purchaser, or renders
Parent or Purchaser unable, to accept for payment, purchase or pay for some
or all of the Shares or to consummate the Proposed Merger, (iv) imposes or
seeks to impose limitations on the ability of Parent or Purchaser or any
affiliate of either of them effectively to acquire or hold or to exercise
full rights of ownership of the Shares, including, without limitation, the
right to vote the Shares purchased by them on an equal basis with all other
Shares on all matters properly presented to the stockholders of the
Company, (v) seeks to require divestiture by Parent, Purchaser or any other
affiliates of Parent of any Shares, (vi) in the sole judgment of Parent or
Purchaser, might materially adversely affect the business, properties,
assets, liabilities, capitalization, stockholders' equity, condition
(financial or other), operations, license or franchises, results of
operations or prospects of the Company or any of its subsidiaries, (vii) in
the sole judgment of Parent or Purchaser, might materially adversely affect
Parent, Purchaser or any other affiliates of Parent, (viii) in the sole
judgment of Parent or Purchaser, might result in a diminution in the value
of the Shares or the benefits expected to be derived by Parent or Purchaser
as a result of the transactions contemplated by the Offer or the Proposed
Merger, or (ix) in the sole judgment of Parent or Purchaser, imposes or
seeks to impose any material condition to the Offer unacceptable to Parent
or Purchaser; or
(b) there shall be any action taken, or any statute, rule, regulation,
judgment, order or injunction shall be sought, proposed, enacted,
promulgated, entered, enforced, issued or deemed or become applicable to
the Offer, the Proposed Merger or other subsequent business combination
between Purchaser or any affiliate of Purchaser and the Company or any
affiliate of the Company or any other action shall have been taken,
proposed or threatened, by any government, governmental authority or other
regulatory or administrative agency or commission or court, domestic,
foreign or supranational, other than the routine application of the waiting
period provisions of the HSR Act to the Offer, that, in the sole judgment
of Parent or Purchaser, might directly or indirectly, result in any of the
consequences referred to in clauses (i) through (ix) of paragraph (a)
above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, stockholders' equity,
condition (financial or otherwise), operations, licenses, franchises,
permits, permit applications, results of operations, cash flows or
prospects of the Company or any of its subsidiaries or affiliates which, in
the sole judgment of Parent or Purchaser, is or may be materially adverse
to the Company or any of its subsidiaries or affiliates, or Parent or
Purchaser shall have become aware of any fact which, in the sole judgment
of Parent or Purchaser, has or may have material adverse significance with
respect to either the value of the Company or any of its subsidiaries or
the value of the Shares to Parent or Purchaser; or
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, any decline in either the Dow
Jones Industrial Average or the Standard & Poors Index of 500 Industrial
Companies by an amount in excess of 10% measured from the close of business
on April 1, 1999 or any material adverse change in prices generally of
shares on the NYSE, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks by federal or state authorities
in the United States (whether or not mandatory), (iii) any limitation
(whether or not mandatory) by any governmental authority or agency on, or
other event which, in the sole judgment of Parent or Purchaser, might
affect the extension of credit by banks or other lending institutions, (iv)
a commencement of a war, armed hostilities or other national or
international crisis directly or indirectly involving the United States,
(v) any significant change in United States or any other currency exchange
rates or any suspension of, or limitation on, the markets therefor (whether
or not mandatory), or (vi) in the case of any of the foregoing
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<PAGE> 31
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(e) a tender or exchange offer for some or all of the Shares shall
have been publicly proposed to be made or shall have been made by another
person (including the Company or any of its subsidiaries or affiliates), or
it shall have been publicly disclosed or the Purchaser shall have otherwise
learned that (i) any person, entity (including the Company or any of its
subsidiaries or affiliates) or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire
(other than pursuant to the NationsRent Merger Agreement as in effect on
the date hereof) beneficial ownership of more than 5% of any class or
series of capital stock of the Company (including the Shares) through the
acquisition of stock, the formation of a group or otherwise, or shall have
been granted any option (other than the NationsRent Option), right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 5% of any class or series of capital stock of the Company (including
the Shares), other than acquisitions for bona fide arbitrage purposes only
and other than as disclosed in a Schedule 13D or 13G on file with the SEC
prior to the date of this Offer to Purchase, (ii) any such person, entity
or group which, prior to such date, had filed such a Schedule 13D or 13G
with the SEC, shall have acquired or proposed to acquire, through the
acquisition of stock, the formation of a group or otherwise, beneficial
ownership of additional shares of any class or series of capital stock of
the Company (including the Shares) constituting 2% or more of any such
class or series, or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of shares of any
class or series of capital stock of the Company (including the Shares)
constituting 2% or more of any such class or series, (iii) any person,
entity or group shall have entered into a definitive agreement or an
agreement in principle or made a proposal with respect to a tender or
exchange offer for some or all the Shares or a merger, consolidation or
other business combination with or involving the Company or any of its
subsidiaries or affiliates (other than the NationsRent Merger Agreement as
in effect on the date hereof), or (iv) any person, entity or group shall
have filed a Notification and Report Form under the HSR Act or made a
public announcement reflecting an intent to acquire the Company or any of
its subsidiaries or any assets or securities of the Company or any of its
subsidiaries; or
(f) the Company or any subsidiary of the Company shall have (i)
issued, distributed, pledged, sold or authorized, proposed or announced the
issuance of or sale, distribution or pledge to any person of (A) any shares
of its capital stock (other than sales or issuances pursuant to options
outstanding on April 3, 1999 in accordance with their terms as disclosed on
such date) of any class (including without limitation the Shares) or
securities convertible into any such shares of capital stock, or any
rights, warrants or options to acquire any such shares or convertible
securities or any other securities of the Company, or (B) any other
securities in respect of, in lieu of, or in substitution for, Shares
outstanding on April 3, 1999, (ii) purchased, acquired or otherwise caused
a reduction in the number of, or proposed or offered to purchase, acquire
or otherwise reduce the number of, any outstanding Shares, or other
securities, (iii) declared, paid or proposed to declare or pay any dividend
or distribution on any Shares or on any other security or issued,
authorized, recommended or proposed the issuance or payment of any other
distribution in respect of the Shares, whether payable in cash, securities
or other property, (iv) altered or proposed to alter any material term of
any outstanding security, (v) incurred any debt other than in the ordinary
course of business and consistent with past practice or any debt containing
burdensome covenants, (vi) issued, sold or authorized or announced or
proposed the issuance of or sale to any person of any debt securities or
any securities convertible into or exchangeable for debt securities or any
rights, warrants or options entitling the holder thereof to purchase or
otherwise acquire any debt securities or incurred or announced its
intention to incur any debt other than in the ordinary course of business
and consistent with past practice, (vii) split, combined or otherwise
changed, or authorized or proposed the split, combination or other change
of the Shares or its capitalization,
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<PAGE> 32
(viii) authorized, recommended, proposed or entered into or publicly
announced its intent to enter into any merger, consolidation, liquidation,
dissolution, business combination, acquisition or disposition of a material
amount of assets or securities, any material change in its capitalization,
any waiver, release or relinquishment of any material contract rights or
comparable right of the Company or any of its subsidiaries or any agreement
contemplating any of the foregoing or any comparable event not in the
ordinary course of business, or taken any action to implement any such
transaction previously authorized, recommended, proposed or publicly
announced, (ix) transferred into escrow any amounts required to fund any
existing benefit, employment or severance agreements with any of its
employees, entered into any employment agreement or arrangement with any of
its employees other than in the ordinary course of business and consistent
with past practice, entered into any severance or similar agreement,
arrangement or plan with any of its employees or entered into or amended
any agreements, arrangements or plans so as to provide for increased
benefits to any officers, directors or employees as a result of or in
connection with the transactions contemplated by the Offer or the Proposed
Merger or any other change in control of the Company, (x) except as may be
required by law, taken any action to terminate or amend any employee
benefit plan (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended) of the Company or any of its subsidiaries
or Parent or Purchaser shall have become aware of any such action which was
not previously disclosed in publicly available filings, (xi) amended or
proposed or authorized any amendment to the Company Certificate or the
Company By-Laws or similar organizational documents, (xii) authorized,
recommended, proposed or entered into any other transaction that in the
sole judgment of Parent or Purchaser could, individually or in the
aggregate, adversely affect the value of the Shares to Parent or Purchaser
or (xiii) agreed in writing or otherwise to take any of the foregoing
actions or Parent or Purchaser shall have learned about any such action
which has not previously been publicly disclosed by the Company and also
set forth in filings with the SEC; or
(g) the Company and Parent or Purchaser shall have reached an
agreement or understanding providing for the termination or amendment of
the Offer; or
(h) Parent or Purchaser shall become aware (i) that any material
contractual right of the Company or any of its subsidiaries or affiliates
shall be impaired or otherwise adversely affected or that any material
amount of indebtedness of the Company or any of its subsidiaries shall
become accelerated or otherwise become due prior to its stated due date, in
either case with or without notice or the lapse of time or both, as a
result of the transactions contemplated by the Offer or the Proposed
Merger, or (ii) of any covenant, term or condition in any of the Company's
or any of its subsidiaries' instruments or agreements that are or may be
materially adverse to the value of the Shares in the hands of Purchaser or
any other affiliate of Parent (including, but not limited to, any event of
default that may ensue as a result of the consummation of the Offer,
consummation of the Proposed Merger or any other business combination or
the acquisition of control of the Company); or
(i) Parent or Purchaser shall not have obtained any waiver, consent,
extension, approval, action or non-action from any governmental authority
or agency which is necessary to consummate the Offer; or
(j) Borrower shall not have received the financing for the Offer and
the Proposed Merger pursuant to the Commitment Letter;
which, in the sole judgment of Parent or Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Purchaser or any of their affiliates), giving rise to any such condition, makes
it inadvisable to proceed with the Offer and/or with such acceptance for payment
or payment.
Parent and Purchaser have the right to rely on any condition set forth in
the immediately preceding sentence being satisfied in determining whether to
consummate the Offer; however, if
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<PAGE> 33
Parent or Purchaser asserts the failure of any such condition without relying on
the exercise of its reasonable judgment or some other objective criteria, Parent
and Purchaser shall promptly disclose such assertion and the Expiration Date
will be (and, if necessary, will be extended to be) at least five business days
after the date of such disclosure.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser in their sole discretion regardless
of the circumstances (including any action or omission by Parent or Purchaser)
giving rise to any such conditions or may be waived by Parent or Purchaser in
their sole discretion in whole or in part at any time and from time to time. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time. Any determination by Parent or Purchaser concerning any condition or event
described in this Section 14 shall be final and binding upon all parties.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION.
General. Except as described in this Offer to Purchase, based on a review
of publicly available information, neither Purchaser nor Parent is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by Purchaser's acquisition of Shares as contemplated herein or of any approval
or other action by a domestic or foreign governmental, administrative or
regulatory agency or authority that would be required for the acquisition and
ownership of the Shares by Purchaser as contemplated herein. Should any such
approval or other action be required, Purchaser and Parent presently contemplate
that such approval or other action will be sought, except as described below
under "State Antitakeover Statutes." While, except as otherwise described in
this Offer to Purchase, Purchaser does not presently intend to delay the
acceptance for payment of, or payment for, Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no assurance that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that failure to obtain any such approval or
other action might not result in consequences adverse to the Company's business
or that certain parts of the business of the Company or Parent might not have to
be disposed of, or other substantial conditions complied with, in the event that
such approvals were not obtained or such other actions were not taken or in
order to obtain any such approval or other action. If certain types of adverse
action are taken with respect to the matters discussed below, Purchaser could
decline to accept for payment, or pay for, any Shares tendered. See Section 14
for certain conditions to the Offer, including conditions with respect to
governmental actions.
Section 203. Consummation of the Offer is conditioned upon Purchaser being
satisfied, in its sole discretion, that the provisions of Section 203 of the
DGCL ("Section 203") are inapplicable to the acquisition of Shares by Purchaser
pursuant to the Offer.
Section 203, in general, prohibits a Delaware corporation such as the
Company, from engaging in a "Business Combination" (defined as a variety of
transactions, including mergers, as set forth below) with an "Interested
Stockholder" (defined generally as a person that is the beneficial owner of 15%
or more of a corporation's outstanding voting stock) for a period of three years
following the date that such person became an Interested Stockholder unless (a)
prior to the date such person became an Interested Stockholder, the board of
directors of the corporation approved either the Business Combination or the
transaction that resulted in the stockholder becoming an Interested Stockholder,
(b) upon consummation of the transaction that resulted in the stockholder
becoming an Interested Stockholder, the Interested Stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding stock held by directors who are also officers
of the corporation and employee stock ownership plans that do not provide
employees with the right to determine confidentially whether shares held subject
to the plan will be tendered in a tender or exchange offer or (c) on or
subsequent to the date such person became an Interested Stockholder, the
Business Combination is approved by the board of directors of the
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<PAGE> 34
corporation and authorized at a meeting of stockholders, and not by written
consent, by the affirmative vote of the holders of a least 66 2/3% of the
outstanding voting stock of the corporation not owned by the Interested
Stockholder.
Under Section 203, the restrictions described above do not apply if, among
other things (a) the corporation's original certificate of incorporation
contains a provision expressly electing not to be governed by Section 203; (b)
the corporation, by action of its stockholders, adopts an amendment to its
certificate of incorporation or by-laws expressly electing not to be governed by
Section 203, provided that, in addition to any other vote required by law, such
amendment of the certificate of incorporation or by-laws must be approved by the
affirmative vote of a majority of the shares entitled to vote, which amendment
would not be effective until 12 months after the adoption of such amendment and
would not apply to any Business Combination between the corporation and any
person who became an Interested Stockholder of the corporation on or prior to
the date of such adoption; (c) the corporation does not have a class of voting
stock that is (1) listed on a national securities exchange, (2) authorized for
quotation on an inter-dealer quotation system of a registered national
securities association or (3) held of record by more than 2,000 stockholders,
unless any of the foregoing results from action taken, directly or indirectly,
by an Interested Stockholder or from a transaction in which a person became an
Interested Stockholder; or (d) a stockholder becomes an Interested Stockholder
"inadvertently" and thereafter divests itself of a sufficient number of shares
so that such stockholder ceases to be an Interested Stockholder. Under Section
203, the restrictions described above also do not apply to certain Business
Combinations proposed by an Interested Stockholder following the announcement or
notification or one of certain extraordinary transactions involving the
corporation and a person who had not been an Interested Stockholder during the
previous three years or who became an Interested Stockholder with the approval
of a majority of the corporation's directors.
Section 203 provides that, during such three-year period, the corporation
may not merge or consolidate with an Interested Stockholder or any affiliate or
associate thereof, and also may not engage in certain other transactions with an
Interested Stockholder or any affiliate or associate thereof, including, without
limitation, (a) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets (except proportionately as a stockholder of the
corporation) having an aggregate market value equal to 10% or more of the
aggregate market value of all assets of the corporation determined on a
consolidated basis or the aggregate market value of all the outstanding stock of
a corporation; (b) any transaction which results in the issuance or transfer by
the corporation or by certain subsidiaries thereof of any stock of the
corporation or such subsidiaries to the Interested Stockholder, except pursuant
to a transaction which effects a pro rata distribution to all stockholders of
the corporation; (c) any transaction involving the corporation or any
subsidiaries thereof which has the effect of increasing the proportionate share
of the stock of any class or series, or securities convertible into the stock of
any class or series, of the corporation or any such subsidiary which is owned
directly or indirectly by the Interested Stockholder (except as a result of
immaterial changes due to fractional share adjustments); or (d) any receipt of
the Interested Stockholder of the benefit (except proportionately as a
stockholder of such corporation) of any loans, advances, guarantees, pledges or
other financial benefits provided by or through the corporation.
The foregoing description of Section 203 does not purport to be complete
and is qualified in its entirety by reference to the provisions of Section 203.
The Arizona Control Share Statute. Chapter 23, Article 2, of Arizona
Revised Statutes (the "Arizona Control Share Statute") provides, in general,
that shares of an "issuing public corporation" acquired in a "control share
acquisition" will not have voting rights except to elect directors and except to
the extent approved by a vote of a majority of the votes entitled to be cast on
the matter, excluding shares of stock owned by the acquiror, its affiliates and
associates, or by officers or directors of the corporation. As used in the
Arizona Control Share Statute, shares are deemed to be acquired in a "control
share acquisition" if the acquisition of such shares, when added to all
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<PAGE> 35
other shares of stock beneficially owned by the acquiror, would entitle the
acquiror to exercise voting power in electing directors within one of the
following ranges of voting power: (a) 20% or more but less than 33 1/3%; (b)
33 1/3% or more but less than a majority; or (c) a majority of all voting power.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions, may compel the corporation to call a special
meeting of stockholders to consider the voting rights of the shares. If voting
rights are not approved at the meeting (subject to certain conditions and
limitations), the corporation may redeem any or all of the shares acquired in
the control share acquisition for market value.
Not later than ten days after a control share acquisition, the acquiring
person is required to deliver to the issuing public corporation at its principal
executive office an information statement (the "Acquiring Person Statement").
The Acquiring Person Statement must set forth (i) the identity of the acquiring
person, including the identity of each member of any partnership, syndicate or
other group constituting the acquiring person and the identity of each affiliate
and associate of the acquiring person, including the identity of each affiliate
and associate of each member of such partnership, syndicate or other group, (ii)
a statement that the Acquiring Person Statement is being given pursuant to
Section 10-2722 of the Arizona Revised Statutes, (iii) the number of and class
or series of shares of the issuing public corporation beneficially owned,
directly or indirectly, before the control share acquisition by the acquiring
person, (iv) the number and class of shares or series of shares of the issuing
public corporation acquired or proposed to be acquired by the acquiring person
pursuant to the control share acquisition and the specification of which of the
ranges of voting power in the election of directors that, except for the Arizona
Control Share Statute, the acquiring person believes resulted or would result
from consummation of the control share acquisition, and (v) the terms of the
control share acquisition or proposed control share acquisition, including the
source of funds or other consideration and the material terms of the financial
arrangements for the control share acquisition, plans or proposals of the
acquiring person and other objective facts as would be substantially likely to
affect the decision of a stockholder with respect to voting on the control share
acquisition.
If the acquiring person so requests in writing at the time of delivery of
the Acquiring Person Statement, and has made, or has made a bona fide written
offer to make, a control share acquisition and gives a written undertaking to
pay or reimburse the issuing public corporation's expenses of a special meeting,
other than the expenses of the issuing public corporation in opposing approval
of the control share acquisition, within thirty days after receipt by the
issuing public corporation of the Acquiring Person Statement, a special meeting
of the stockholders of the issuing public corporation shall be called for the
purpose of considering the voting rights to be accorded to shares acquired or to
be acquired in the control share acquisition. The special meeting shall be held
no later than ninety days after receipt of the Acquiring Person Statement unless
the acquiring person agrees to a later date. If no request for a special meeting
is made, voting rights to be accorded the shares acquired in the control share
acquisition shall be presented to the next special or annual meeting of the
stockholders.
The Arizona Control Share Statute provides that no call of a special
meeting of the stockholders of the issuing public corporation is required to be
made for the purpose of according voting rights to shares acquired, or to be
acquired, in a control share acquisition unless, at the time of delivery of the
Acquiring Person Statement, the acquiring person has entered into and delivered
to the issuing public corporation a copy or copies of a definitive financing
agreement or agreements with one or more responsible financial institutions or
other entities having the necessary financial capacity for any financing of the
control share acquisition not be provided by funds of the acquiring person.
In addition, the Arizona Control Share Statute provides that, unless
otherwise expressly provided in the articles of incorporation or in bylaws
approved by stockholders of an issuing public corporation, the issuing public
corporation may call for redemption of all but not less than all the shares
acquired by the acquiring person in a control share acquisition at a redemption
price equal to the market value of the shares at the time the call for
redemption is given if either (i) an Acquiring
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Person Statement has not been delivered to the issuing public corporation by the
acquiring person by the tenth day after the control share acquisition, or (ii)
an Acquiring Person Statement has been delivered to the issuing public
corporation but the stockholders have not voted to accord voting rights to such
shares.
The foregoing summary of the Arizona Control Share Statute does not purport
to be complete and is qualified in its entirety by reference to the provisions
of the Arizona Control Share Statute.
The Arizona Business Combination Statute. Chapter 23, Article 3, of
Arizona Revised Statutes (the "Arizona Business Combination Statute") in
general, provides that an issuing public corporation may not engage in any
business combination or vote, consent or otherwise act to authorize a subsidiary
of the issuing public corporation to engage in any business combination with
respect to, proposed by or on behalf of or pursuant to any agreement,
arrangement or understanding, whether or not in writing, with any "interested
stockholder" of the issuing public corporation or any affiliate or associate of
the interested stockholder for a period of three years after the interested
stockholder's share acquisition unless either (i) the business combination with
the interested stockholder is approved by a committee of "disinterested
directors" of the issuing public corporation before the interested stockholder's
share acquisition date, or (ii) the acquisition of shares made by the interested
stockholder on the stockholder's share acquisition date is approved by a
committee of disinterested directors of the issuing public corporation before
the interested stockholder's share acquisition date. As used in the Arizona
Business Combination Statute, a director is disinterested if the director or
person is not an interested stockholder, an affiliate or associate of an
interested stockholder or a present or former officer or employee of the issuing
public corporation or of an affiliate or associate of the issuing public
corporation or of the interested stockholder or of any affiliate or associate of
the interested stockholder.
The foregoing summary of the Arizona Business Combination Statute does not
purport to be complete and is qualified in its entirety by reference to the
provisions of the Arizona Business Combination Statute.
For purposes of the Arizona Control Share Statute and the Arizona Business
Combination Statute, an issuing public corporation is generally defined as a
corporation that has a class of equity securities registered pursuant to Section
12 of the Exchange Act or is subject to Section 15(d) of the Exchange Act and
which either (a) is incorporated under the laws of Arizona, or (b) has its
principal place of business or its principal executive offices located in
Arizona and owns or controls assets located within Arizona that have a fair
value of at least one million dollars and has more than five hundred employees
residing in Arizona. The Company is incorporated in Delaware and has its
principal place of business in Arizona. However, based upon its general
knowledge of the Company and the equipment rental industry, Parent does not
believe that the Company has more than five hundred employees residing in
Arizona. Accordingly, Parent does not believe that the Arizona Control Share
Statute is applicable to the Offer or that the Arizona Business Combination
Statute is applicable to the Proposed Merger.
Other State Antitakeover Statutes. A number of other states have adopted
laws and regulations that purport to apply to attempts to acquire corporations
that are incorporated in such states, or whose business operations have
substantial economic effects in such states, or which have substantial assets,
security holders, employees, principal executive offices or principal places of
business in such states. In Edgar v. MITE Corp., the Supreme Court of the United
States invalidated on constitutional grounds the Illinois Business Takeover
Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
presenting stockholders. The state law before the Supreme Court of the United
States
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was by its terms applicable only to corporations that had a substantial number
of stockholders in the state and were incorporated there. Subsequently, in TLX
Acquisition v. Telex Corp., a Federal district court in Oklahoma ruled that the
Oklahoma statutes were unconstitutional insofar as they apply to corporations
incorporated outside Oklahoma and that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a
Federal district court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
Neither Parent nor Purchaser has attempted to comply with any state
antitakeover statute or regulation. Purchaser reserves the right to challenge
the applicability or validity of any state law purportedly applicable to the
Offer or the Proposed Merger and nothing in this Offer to Purchase or any action
taken in connection with the Offer or the Proposed Merger is intended as a
waiver of such right. If it is asserted that any state antitakeover statute is
applicable to the Offer and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or to receive approvals from, the relevant state
authorities, and Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer or may be delayed in consummating the
Offer. In such case, Purchaser may not be obligated to accept for payment, or
pay for, any Shares tendered pursuant to the Offer. See Section 14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless a Premerger Notification and Report Form has filed with the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied. Parent intends to file such information on the date hereof. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent, unless the
Antitrust Division and the FTC terminate the waiting period prior thereto.
Accordingly, if Parent makes such filing on the date hereof, the waiting period
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York
City time, on April 20, 1999, unless, prior to the expiration or termination of
the waiting period, the FTC or the Antitrust Division extends the waiting period
by requesting additional information or documentary material from Parent. If
such a request is made, the waiting period will be extended and would expire at
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Parent with such request. Only one extension of the
waiting period pursuant to a request for additional information is authorized by
the HSR Act. Thereafter, such waiting period may be extended only by court order
or with the consent of Parent. Purchaser will not accept for payment Shares
tendered pursuant to the Offer unless and until the waiting period requirements
imposed by the HSR Act with respect to the Offer have been satisfied. See
Section 14.
The Proposed Merger may not be consummated until 30 calendar days after
receipt by the Antitrust Division and the FTC of the Notification and Report
Forms of both Parent and the Company unless Purchaser acquires 50% of more of
the outstanding Shares pursuant to the Offer or the 30-day period is earlier
terminated by the Antitrust Division and the FTC.
The FTC and the Antitrust Division frequently scrutinize the legality under
the Antitrust Laws of transactions such as Purchaser's acquisition of Shares
pursuant to the Offer and the Proposed Merger. At any time before or after
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the Antitrust Laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by Purchaser
or divestiture of substantial assets of Parent or its subsidiaries. Private
parties and state attorneys general may also bring legal action under the
Antitrust Laws under certain circumstances.
35
<PAGE> 38
Based upon an examination of publicly available information relating to the
businesses in which Parent and the Company are engaged, Parent and Purchaser
believe that the acquisition of Shares by Purchaser pursuant to the Offer or the
Proposed Merger will not violate the Antitrust Laws. Nevertheless, there can be
no assurance that a challenge to the Offer or other acquisition of Shares by
Purchaser on antitrust grounds will not be made or, if such a challenge is made,
of the result. See Section 14 for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
Federal Reserve Board Regulations. Regulations T, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. As described in Section 10
of this Offer to Purchase, the financing of the Offer will be secured by, among
other things, the Shares. Based upon the value of the Shares and the value of
the other pledged collateral, Purchaser believes that the financing will be in
compliance with the Margin Regulations.
Litigation. Parent and Purchaser are commencing litigation against the
Company, the Company Board and NationsRent in the Chancery Court of the State of
Delaware alleging, among other things, breaches of fiduciary duties by the
Company Board in connection with the NationsRent Merger Agreement. Parent and
Purchaser seek an order, among other things, (i) invalidating the NationsRent
Option and the NationsRent Termination Fee and (ii) compelling the Company Board
to approve the Offer and the Proposed Merger for purposes of Section 203 of the
DGCL.
16. FEES AND EXPENSES. Parent has retained Goldman, Sachs & Co. ("Goldman
Sachs") to act as the Dealer Manager in connection with the Offer and to provide
certain financial advisory services to Parent in connection with its effort to
acquire the Company. Pursuant to its engagement letter with Goldman Sachs,
Parent has agreed to pay Goldman Sachs a transaction fee of $5.75 million if
Parent or an affiliate of Parent acquires at least 50% of the Shares or the
Company's assets (based on the book value thereof) in one or more transactions.
If Parent or an affiliate of Parent acquires less than 50% of the Shares or the
Company's assets (based on the book value thereof), Parent will pay Goldman
Sachs a mutually acceptable transaction fee. Each such transaction fee is
payable in cash upon consummation of any such acquisition. In the event that
Goldman Sachs' services are terminated by the Company and, prior to March 20,
2000, Parent or an affiliate thereof enters into an agreement with respect to
the acquisition of all or a majority of the Shares or the Company's assets which
is eventually consummated by Parent or an affiliate thereof, the applicable
transaction fee described above would be payable to Goldman Sachs upon such
consummation. Parent has also agreed to pay to Goldman Sachs an advisory fee of
$2 million payable in cash upon commencement of the Offer and an additional
advisory fee of $3 million payable in cash upon consummation of the Offer.
Goldman Sachs has agreed to credit Parent with approximately $1.33 million
pursuant to any investment banking transactions that are consummated prior to
April 3, 2000 other than the Offer or the Proposed Merger. Parent has also
agreed to reimburse Goldman Sachs for its reasonable out-of-pocket expenses,
including the reasonable fees and expenses of its legal counsel, plus any sales,
use or similar taxes (including additions to such taxes, if any), incurred in
connection with its engagement, and to indemnify Goldman Sachs against certain
liabilities and expenses in connection with its engagement, including certain
liabilities under the federal securities laws. Out of-pocket expenses (other
than sales, use or similar taxes) including attorneys' fees cannot exceed
$75,000 without the prior written consent of Parent. Such limitation does not
apply to
36
<PAGE> 39
Parent's obligation to indemnify Goldman Sachs in connection with its
engagement. Goldman Sachs has rendered various investment banking services and
other advisory services to Parent and its affiliates in the past and is expected
to continue to render such services, for which they have received and will
continue to receive customary compensation from Parent and its affiliates. In
the ordinary course of business, Goldman Sachs and its affiliates may actively
trade securities of the Company and Parent for their own account or for the
account of customers and, accordingly, may at any time hold a long or short
position in such securities. Goldman Sachs has advised Parent that, as of the
date of this Offer to Purchase, Goldman Sachs and its affiliates do not own any
Shares for their own account.
Parent has retained Georgeson & Company Inc. to act as the Information
Agent and American Stock Transfer & Trust Company to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph, other method of electronic communication
and personal interview and may request brokers, dealers, commercial banks, trust
companies and other nominees to forward the Offer materials to beneficial
owners. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their services. Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities in connection with their
services, including certain liabilities under federal securities laws.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or other person (other than the Dealer Manager and the Information
Agent) for making solicitations or recommendations in connection with the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding materials
to their customers.
17. MISCELLANEOUS. Purchaser is not aware of any jurisdiction in which the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of the
Shares pursuant thereto, Purchaser will make a good faith effort to comply with
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares residing in such state. In
any jurisdiction where the securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by the Dealer Managers or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Parent or Purchaser not contained herein or in the
Letter of Transmittal and, if given or made, such information or representation
must not be relied upon as having been authorized.
Purchaser and Parent have filed with the SEC the Schedule 14D-1, together
with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer. The Schedule 14D-1 and any amendments thereto, including exhibits, may be
examined and copies may be obtained at the same places and in the same manner
set forth in Section 9 of this Offer to Purchase (except that they will not be
available at the regional offices of the SEC).
UR Acquisition Corporation
United Rentals, Inc.
April 5, 1999
37
<PAGE> 40
SCHEDULE I
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent. Each such person is a citizen of the
United States of America and, unless otherwise indicated, the business address
of each such person is c/o United Rentals, Inc., Four Greenwich Office Park,
Greenwich, Connecticut 06830. Unless otherwise indicated, the position set forth
opposite an individual's name refers to employment with Parent. Unless otherwise
indicated, each such person has held his or her present occupation as set forth
below, or has been an executive officer at Parent, or the organization
indicated, for the past five years.
<TABLE>
<CAPTION>
NAME AGE POSITIONS
- ---- --- ---------
<S> <C> <C>
Bradley S. Jacobs......................... 42 Chairman, Chief Executive Officer and
Director
Wayland R. Hicks.......................... 56 Vice Chairman, Chief Operating Officer and
Director
John N. Milne............................. 39 Vice Chairman, Chief Acquisition Officer,
Secretary and Director
William F. Berry.......................... 46 President and Director
Michael J. Nolan.......................... 38 Chief Financial Officer
Robert P. Miner........................... 49 Vice President, Strategic Planning
John S. McKinney.......................... 44 Vice President, Finance and Director
Leon D. Black............................. 47 Director
Richard D. Colburn........................ 87 Director
Ronald M. DeFeo........................... 46 Director
Michael S. Gross.......................... 37 Director
Richard J. Heckmann....................... 55 Director
Gerald Tsai, Jr........................... 70 Director
Christian M. Weyer........................ 74 Director
</TABLE>
Bradley S. Jacobs has been Chairman, Chief Executive Officer and a director
of Parent since its formation in September 1997. Mr. Jacobs founded United Waste
Systems, Inc. in 1989 and served as its Chairman and Chief Executive Officer
from its inception until the sale of the company in August 1997. From 1984 to
July 1989, Mr. Jacobs was Chairman and Chief Operating Officer of Hamilton
Resources Ltd., an international trading company, and from 1979 to 1983, he was
Chief Executive Officer of Amerex Oil Associates, Inc., an oil brokerage firm
that he co-founded.
Wayland R. Hicks has been Chief Operating Officer of Parent since November
1997 and a director since June 1998. He also served as president of Parent
during the period from November 1997 until September 1998, when be became Vice
Chairman. Mr. Hicks previously held various senior executive positions at Xerox
Corporation where he worked for 28 years (1966-1994). His positions at Xerox
Corporation included Executive Vice President, Corporate Operations (1993-
1994), Executive Vice President, Corporate Marketing and Customer Support
Operations (1989-1993) and Executive Vice President, Engineering and
Manufacturing -- Xerox Business Products and Systems Group (1987-1989). Mr.
Hicks also served as Vice Chairman and Chief Executive Officer of Nextel
Communications Corp. (1994-1995) and as Chief Executive Officer and President of
Indigo N.V. (1996-1997). He is also a director of Maytag Corporation.
John N. Milne has been Vice Chairman, Chief Acquisition Officer and a
director of Parent since its formation in September 1997. Mr. Milne was Vice
Chairman and Chief Acquisition Officer of
I-1
<PAGE> 41
United Waste Systems, Inc. from 1993 until August 1997 and held other senior
executive positions at United Waste from 1990 until 1993. Mr. Milne had primary
responsibility for implementing United Waste's acquisition program. From
September 1987 to March 1990, Mr. Milne was employed in the Corporate Finance
Department of Drexel Burnham Lambert Incorporated. Mr. Milne is a citizen of
Canada.
William F. Berry joined Parent as President and a director in September
1998 following the merger of Parent with U.S. Rentals. Mr. Berry served as
President and Chief Executive Officer of U.S. Rentals from 1987 until the merger
with United Rentals (North America), Inc. and held numerous other operational
and managerial positions at U.S. Rentals and a predecessor during the more than
30 years that he was employed there (1966-1998).
Michael J. Nolan has been Chief Financial Officer of Parent since its
formation in September 1997. Mr. Nolan served as the Chief Financial Officer of
United Waste Systems, Inc. from February 1994 until August 1997. He served in
other finance positions at United Waste from November 1991 until February 1994,
including Vice President, Finance, from October 1992 to February 1994. From 1985
until November 1991, Mr. Nolan held various positions at the accounting firm of
Ernst & Young, including senior audit manager. Mr. Nolan is a Certified Public
Accountant.
Robert P. Miner has been an executive officer of Parent since its formation
in September 1997. He currently serves as Vice President, Strategic Planning (a
position he was appointed to in July 1998) and also heads the Company's Risk
Management and Safety Department. He previously served as Vice President,
Finance. Mr. Miner was an executive officer of United Waste Systems, Inc. from
November 1994 until August 1997, serving first as Vice President, Finance and
then Vice President, Acquisitions. Prior to joining United Waste, he was a
research analyst with PaineWebber Incorporated (November 1988 to October 1994)
and Needham & Co. (January 1987 to October 1988) and held various executive
positions at General Electric Environmental Services, Inc., Stauffer Chemical
Company, and OHM Corporation.
John S. McKinney joined Parent as Vice President, Finance and a director in
September 1998 following the merger of U.S. Rentals with United Rentals (North
America), Inc. Mr. McKinney served as Chief Financial Officer of U.S. Rentals
from 1990 until the merger and as Controller of U.S. Rentals from 1988 until
1990. Prior to joining U.S. Rentals, Mr. McKinney's experience included holding
various positions at Iomega Corporation, including Assistant Controller, and at
the accounting firm of Arthur Andersen & Co.
Leon D. Black became a director of Parent in January 1999. Mr. Black is one
of the founding principals of (i) Apollo Advisors, L.P. (which was established
in August 1990 and which, together with its affiliates, acts as the managing
general partner of several private securities investments funds); (ii) Apollo
Real Estate Advisors, L.P. (which, together with its affiliates, acts as the
managing general partner of several real estate investment funds); and (iii)
Lion Advisors, L.P. (a financial advisor to, and representative of institutional
investors with respect to, securities investments). Mr. Black is also a director
of Converse, Inc., Samsonite Corporation, Sequa Industries, Inc., Telemundo
Group Inc. and Vail Resorts, Inc. He also serves as a trustee of The Museum of
Modern Art, Mount Sinai -- NYU Medical Center, Lincoln Center for the Performing
Arts, and Vail Valley Foundation.
Richard D. Colburn became a director of Parent in September 1998 following
the merger of U.S. Rentals with United Rentals (North America), Inc. Mr. Colburn
was Chairman of U.S. Rentals for 22 years. Mr. Colburn is a private investor.
Ronald M. DeFeo has been a director of Parent since October 1997. Mr. DeFeo
is the Chairman, Chief Executive Officer, President and a director of Terex
Corporation, a leading global provider of equipment for the manufacturing,
mining and construction industries. Mr. DeFeo joined Terex in 1992 as President
of the heavy equipment group and was appointed President and Chief Operating
Office in 1993 and Chief Executive Officer in 1995. From 1984 to 1992, Mr. DeFeo
held various
I-2
<PAGE> 42
management positions at Tenneco, Inc., including Senior Vice President and
Managing Director of East Europe.
Michael S. Gross became a director of Parent in January 1999. Mr. Gross is
one of the founding principals of Apollo Advisors, L.P. (which was established
in August 1990 and which, together with its affiliates, acts as the managing
general partner of several private securities investment funds) and of Lion
Advisors, L.P. (a financial advisor to, and representative of institutional
investors with respect to, securities investments). Mr. Gross is also a director
of Alliance Imaging, Inc., Allied Waste Industries, Inc., Breuners Home
Furnishings, Inc., Converse, Inc., Florsheim Group, Inc., and Saks Incorporated.
Richard J. Heckmann has been a director of Parent since October 1997. Mr.
Heckmann has served since 1990 as Chairman, President and Chief Executive
Officer of United States Filter Corporation, a leading global provider of
industrial and commercial water and wastewater treatment systems and services.
Mr. Heckmann is also a director of Waste Management, Inc. and K2 Inc.
Gerald Tsai, Jr. has been a director of Parent since December 1997. Mr.
Tsai served as Chairman, Chief Executive Officer and President of Delta Life
Corporation, an insurance company, from 1993 until the sale of the company in
October 1997. Mr. Tsai was Chairman of the Executive Committee of the Board of
Directors of Primerica Corporation, a diversified financial services company,
from December 1988 until April 1991, and served as Chief Executive Officer of
Primerica Corporation from April 1986 until December 1988. Mr. Tsai is currently
a private investor and serves as a director of The Meditrust Companies, Saks
Incorporated, Rite Aid Corporation, Sequa Corporation, Triarc Companies, Inc.
and Zenith National Insurance Corp. He also serves as a trustee of Boston
University, Mount Sinai -- NYU Medical Center and Health System and NYU School
of Medicine Foundation Board.
Christian M. Weyer became a director of Parent in December 1998. Mr. Weyer
has been in the international banking business for 31 years and has served as
President of Enerfin S.A., an international trade and financial advisory firm,
since 1985. From May 1988 to December 1992, Mr. Weyer was a member of senior
management at Banque Indosuez in Geneva, Switzerland, with responsibility for
matters relating to commercial banking, and from 1971 to 1985, held various
senior management positions at Banque Paribas and its affiliates (including
President of Banque Paribas (Suisse) in Geneva during 1984). Prior to 1971, Mr.
Weyer held senior management positions with Chase Manhattan Bank in Paris and in
Geneva. Mr. Weyer is a citizen of France.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table
sets forth the name and position of each director and executive officer of
Purchaser. Unless otherwise indicated, the business address of each such person
is c/o United Rentals, Inc., Four Greenwich Office Park, Greenwich, Connecticut
06830. The present principal occupation or employment and material occupation,
position, offices or employment of each such person for the past five years is
set forth in the table above under "Directors and Executive Officers of Parent."
Each such person is a citizen of the United States unless otherwise indicated in
such table.
<TABLE>
<CAPTION>
NAME POSITIONS
---- ---------
<S> <C>
John N. Milne....................... President and Director
Michael J. Nolan.................... Vice President, Secretary and
Director
Robert P. Miner..................... Vice President and Director
Wayland R. Hicks.................... Treasurer and Director
</TABLE>
I-3
<PAGE> 43
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
40 Wall Street 40 Wall Street 40 Wall Street
New York, New York 10005 New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department Attn: Reorganization Department
By Facsimile Transmission:
(For Eligible Institutions
Only)
(718) 234-5001
Confirm by Telephone:
(800) 937-5449
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the Guidelines for Certification of Taxpayer Identification on Substitute Form
W-9 may be directed to the Information Agent at the address and telephone
numbers set forth below. Stockholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, NY 10005
(212) 440-9800 (Banks and Brokers Call Collect)
(800) 223-2064 (All Others Call Toll Free)
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED APRIL 5, 1999
OF
UR ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
UNITED RENTALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 30, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
40 Wall Street 40 Wall Street 40 Wall Street
New York, New York 10005 New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(718) 234-5001
Confirm by Telephone:
(800) 937-5449
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Rental Service
Corporation if certificates for Shares (as such term is defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in Instruction 2
below) is utilized, if delivery of Shares is to be made by book-entry transfer
to an account maintained by the Depositary at the Book-Entry Transfer Facility
(as defined in and pursuant to the procedures set forth in Section 3 of the
Offer to Purchase). Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders who
deliver shares are referred to herein as "Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 3 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
Account Number
Transaction Code Number
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s)
Window Ticket Number (if any)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution which Guaranteed Delivery
If delivery by Book-Entry Transfer, Account Number
Transaction Code Number
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED BY NUMBER
CERTIFICATE SHARE OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by Share certificates delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to UR Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of United Rentals, Inc.,
a Delaware corporation ("Parent"), the above-described shares of common stock,
par value $.01 per share (the "Shares"), of Rental Service Corporation, a
Delaware corporation (the "Company"), pursuant to Purchaser's offer to purchase
all of the outstanding Shares at a price of $22.75 per Share, net to the seller
in cash, without interest thereon (the "Offer Price") upon the terms and subject
to the conditions set forth in the Offer to Purchase dated April 5, 1999 (the
"Offer to Purchase") and in this Letter of Transmittal (which, together with any
amendments or supplements thereto or hereto, collectively constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, in whole at any time, or in part from time to time, to one
or more of its affiliates, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or assignment will
not relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer. Receipt of the
Offer is hereby acknowledged.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after April 5,
1999 (collectively, "Distributions")) and irrevocably constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and all Distributions), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares (and any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares (and any and all Distributions) for transfer on the books of the Company,
and (iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and any and all Distributions), all in accordance with
the terms of the Offer.
If, on or after April 5, 1999, the Company should declare or pay any
dividend on the Shares, or make any distribution (including, without limitation,
the issuance of additional Shares pursuant to a stock dividend or a stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer of the Shares purchased
pursuant to the Offer to the Purchaser to the name of the Purchaser or its
nominee or transferee on the Company's stock transfer records, then (a) the
Offer Price may, in the sole discretion of the Purchaser, be reduced by the
amount of any such cash dividend or cash distribution and (b) the whole of any
Distributions to be received by the tendering stockholders will (i) be received
and held by the tendering stockholders for the account of the Purchaser and will
be required to be promptly remitted and transferred by each tendering
stockholder to the Depositary for the account of the Purchaser, accompanied by
appropriate documentation of transfer, or (ii) at the direction of the
Purchaser, be exercised for the benefit of the Purchaser, in which case the
proceeds of such exercise will promptly be remitted to the Purchaser. Pending
such remittance and subject to applicable law, the Purchaser will be entitled to
all rights and privileges as owner of any such Distributions or proceeds thereof
and may withhold the entire Offer Price or deduct from the Offer Price the
amount or value thereof, as determined by the Purchaser in its sole discretion.
<PAGE> 4
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Bradley S. Jacobs and John N. Milne, in their respective capacities as
officers of Purchaser, and any individual who shall thereafter succeed to any
such office of Purchaser, and each of them, the attorneys-in-fact and proxies of
the undersigned, each with full power of substitution and resubstitution, to
vote at any annual or special meeting of the Company's stockholders or any
adjournment or postponement thereof or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, all of the Shares (and any and all Distributions)
tendered hereby and accepted for payment by Purchaser. This appointment will be
effective if and when, and only to the extent that, Purchaser accepts such
Shares for payment pursuant to the Offer. This power of attorney and proxy are
irrevocable and are granted in consideration of the acceptance for payment of
such Shares in accordance with the terms of the Offer. Such acceptance for
payment shall, without further action, revoke any prior powers of attorney and
proxies granted by the undersigned at any time with respect to such Shares (and
any and all Distributions), and no subsequent powers of attorney, proxies,
consents or revocations may be given by the undersigned with respect thereto
(and, if given, will not be deemed effective). Purchaser reserves the right to
require that, in order for Shares or Distributions to be deemed validly tendered
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser
must be able to exercise full voting, consent and other rights with respect to
such Shares (and any and all Distributions), including voting at any meeting of
the Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned owns the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that the
tender of the tendered Shares complies with Rule 14e-4 under the Exchange Act,
and that when the same are accepted for payment by Purchaser, Purchaser will
acquire good, marketable and unencumbered title thereto and to all
Distributions, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is extended or amended, the terms or conditions of any such extension
or amendment). Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the Offer, the price to be paid to the
undersigned will be the amended price notwithstanding the fact that a different
price is stated in this Letter of Transmittal. The undersigned recognizes that
under certain circumstances set forth in the Offer to Purchase, Purchaser may
not be required to accept for payment any of the Shares tendered hereby.
<PAGE> 5
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price of all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment (and
any accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered." In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
of all Shares purchased and/or return any certificates evidencing Shares not
tendered or not accepted for payment (and any accompanying documents, as
appropriate) in the name(s) of, and deliver such check and/or return any such
certificates (and any accompanying documents, as appropriate) to, the person(s)
so indicated. Unless otherwise indicated herein in the box entitled "Special
Payment Instructions," please credit any Shares tendered herewith by book-entry
transfer that are not accepted for payment by crediting the account at the
Book-Entry Transfer Facility designated above. The undersigned recognizes that
Purchaser has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Shares from the name of the registered holder thereof if Purchaser
does not accept for payment any of the Shares so tendered.
<PAGE> 6
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
NUMBER OF SHARES REPRESENTED BY LOST, DESTROYED OR STOLEN CERTIFICATES:
------------------------------
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned
or if Shares tendered hereby and delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.
Issue check and/or Share certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit Shares delivered by book-entry transfer and not purchased to the
Book-Entry Transfer Facility account set forth below:
------------------------------------------------------------
(ACCOUNT NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown under
"Description of Shares Tendered."
Mail check and/or Share certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
-------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
<PAGE> 7
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- --------------------------- , 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s) ----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm -----------------------------------------------------------------
Capacity (full title)-----------------------------------------------------------
(SEE INSTRUCTION 5)
Address ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number -----------------------------------------
Taxpayer Identification or
Social Security Number ------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
-------------------------------------------------------------
Name(s)-------------------------------------------------------------------------
(PLEASE PRINT)
Title---------------------------------------------------------------------------
Name of Firm -----------------------------------------------------------------
Address ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number -----------------------------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of
the Company either if Share certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if delivery of Shares is to be made by
book-entry transfer pursuant to the procedures set forth herein and in Section 3
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (in connection with book-entry transfer) and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either (i)
certificates for tendered Shares must be received by the Depositary at one of
such addresses prior to the Expiration Date or (ii) Shares must be delivered
pursuant to the procedures for book-entry transfer set forth herein and in
Section 3 of the Offer to Purchase and a Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Date or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth herein
and in Section 3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-entry
transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Shares, in proper form for transfer (or
a Book-Entry Confirmation with respect to all Shares tendered by book-entry
transfer), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents must be received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A "trading
day" is any day on which the New York Stock Exchange is open for business.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
<PAGE> 9
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled "Number of
Shares Tendered." In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution.
<PAGE> 10
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS; WIRE TRANSFERS. If a check
for the purchase price of any Shares accepted for payment is to be issued in the
name of, and/or Share certificates for Shares not accepted for payment or not
tendered are to be issued in the name of and/or returned to, a person other than
the signer of this Letter of Transmittal or if a check is to be sent, and/or
such certificates are to be returned, to a person other than the signer of this
Letter of Transmittal, or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. Any
stockholder(s) delivering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at a Book-Entry Transfer
Facility as such stockholder(s) may designate in the box entitled "Special
Payment Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above as the account from which such Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent, at the address or telephone numbers set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive, at any time or from time to time, any of the specified
conditions of the Offer, in whole or in part, in the case of any Shares
tendered.
10. BACKUP WITHHOLDING. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 in this Letter of Transmittal and certify, under penalties
of perjury, that such TIN is correct and that such stockholder is not subject to
backup withholding.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
<PAGE> 11
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for more instructions.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the Share certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct taxpayer identification number on Substitute Form W-9
below. If such stockholder is an individual, the taxpayer identification number
is his social security number. If a tendering stockholder is subject to backup
withholding, such stockholder must cross out item (2) of the Certification box
on the Substitute Form W-9. If the Depositary is not provided with the correct
taxpayer identification number, the stockholder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made to
such stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Certain stockholders (including, among others, all corporations, and
certain foreign individual entities) are not subject to these backup withholding
and reporting requirements. In order for a noncorporate foreign stockholder to
qualify as an exempt recipient, that stockholder must submit a statement, signed
under penalties of perjury, attesting to that stockholder's exempt status. Such
statements can be obtained from the Depositary. Exempt stockholders, other than
noncorporate foreign stockholders, should furnish their TIN, write "Exempt" on
the face of the Substitute Form W-9 below, and sign, date and return the
Substitute Form W-9 to the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
<PAGE> 12
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such stockholder is awaiting a taxpayer identification number).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, such stockholder
should write "Applied For" in the space provided for in the TIN in Part 1, and
sign and date the Substitute Form W-9. If "Applied For" is written in Part I and
the Depositary is not provided with a TIN by the time of payment of the purchase
price, the Depositary will withhold 31% on all payments of the purchase price.
However, such amounts will be refunded to such stockholder if a TIN is provided
to the Depositary within 60 days.
<PAGE> 13
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PAYER'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY
- ---------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT -------------------------------
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
DEPARTMENT OF THE TREASURY (If awaiting TIN write
INTERNAL REVENUE SERVICE "Applied For")
OR
-------------------------------
Employer Identification Number
(If awaiting TIN write
"Applied For")
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PAYER'S REQUEST FOR TAXPAYER PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
IDENTIFICATION NUMBER (1) The number shown on this form is my correct Taxpayer Identification Number (or I
("TIN") am waiting for a number to be issued for me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
---------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding because of
under-reporting interest or dividends on your tax returns. However, if after being
notified by the IRS that you are subject to backup withholding, you receive another
notification from the IRS that you are no longer subject to backup withholding, do not
cross out such item (2). (Also see instructions in the enclosed Guidelines).
---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
SIGNATURE DATE , 1999
--------------------------------- ------------------
-----------------------------------------------------
PART 3--Awaiting TIN [ ]
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (2)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number to the Depositary by the
time of payment, 31% of all reportable payments made to me thereafter will be
withheld, but that such amounts will be refunded to me if I provide a certified
Taxpayer Identification Number to the Depositary within sixty (60) days.
- --------------------------------------- Date , 1999
Signature -------------------------
<PAGE> 14
QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO
PURCHASE, THIS LETTER OF TRANSMITTAL AND OTHER TENDER OFFER MATERIALS MAY BE
DIRECTED TO THE INFORMATION AGENT AS SET FORTH BELOW:
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
(212) 440-9800 (Banks and Brokers Call Collect)
(800) 223-2064 (All Others Call Toll Free)
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
TO
UR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
OF
UNITED RENTALS, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $.01 per share (the "Shares"), of
Rental Service Corporation, a Delaware corporation, are not immediately
available, if the procedure for book-entry transfer cannot be completed prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase), or if
time will not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). Such form
may be delivered by hand, transmitted by facsimile transmission or mailed to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
AMERICAN STOCK TRANSFER & TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Delivery:
<S> <C> <C>
40 Wall Street 40 Wall Street 40 Wall Street
New York, New York 10005 New York, New York 10005 New York, New York 10005
Attn: Reorganization Department Attn: Reorganization Department Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions Only)
(718) 234-5001
Confirm by Telephone:
(800) 937-5449
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to UR Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of United Rentals, Inc.,
a Delaware corporation, upon the terms and subject to the conditions set forth
in Purchaser's Offer to Purchase dated April 5, 1999 and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
shares set forth below of common stock, par value $.01 per share (the "Shares"),
of Rental Service Corporation, a Delaware corporation, pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Number of Shares:
- ----------------------------------
Certificate Nos. (if available):
- ---------------------------------------------------------
- ---------------------------------------------------------
Book-Entry Transfer Facility
Account Number:
- ------------------------------------
Dated:
- ---------------------------------------- , 1999
Name(s) of Record Holder(s):
- ---------------------------------------------------------
- ---------------------------------------------------------
Please Print
Address(es):
- ----------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
Zip Code
Area Code and Tel. No.:
- ---------------------------------------------------------
- ---------------------------------------------------------
Signature(s):
- ----------------------------------------
- ---------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, guarantees to deliver to the Depositary
either certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, in each case with delivery
of a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), and any other documents required by the
Letter of Transmittal, within three New York Stock Exchange trading days (as
defined in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm:
- ---------------------------------------
Address:
- ----------------------------------------------
- ---------------------------------------------------------
Zip Code
Area Code and Tel. No.:
- ----------------------------
- ---------------------------------------------------------
Authorized Signature
Name:
- ------------------------------------------------
Please Print
Title:
- --------------------------------------------------
Dated:
- ---------------------------------------- , 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
AT
$22.75 NET PER SHARE
BY
UR ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
UNITED RENTALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 30, 1999, UNLESS THE OFFER IS EXTENDED.
April 5, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by UR Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of United Rentals, Inc.,
a Delaware corporation ("Parent"), to act as Dealer Managers in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par value
$.01 per share (the "Shares"), of Rental Service Corporation, a Delaware
corporation (the "Company"), at $22.75 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated April 5, 1999 (the "Offer to Purchase") and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer") enclosed herewith. Please furnish
copies of the enclosed materials to those of your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee.
Holders of Shares whose certificates evidencing Shares are not immediately
available or who cannot deliver confirmation of the book-entry transfer of their
Shares into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase) and all other documents required hereby to the
Depositary on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) must tender their Shares according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2 of
the Letter of Transmittal. Delivery of documents to a Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated April 5, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, prior to the Expiration Date;
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
<PAGE> 2
6. A return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for Shares which are
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn when, as and if Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment pursuant to the
Offer. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (i) certificates for such
Shares, or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, pursuant to the
procedures described in Section 3 of the Offer to Purchase, (ii) a properly
completed and duly executed Letter of Transmittal (or a properly completed and
manually signed facsimile thereof) or an Agent's Message (as defined in the
Offer to Purchase) in connection with a book-entry transfer and (iii) all other
documents required by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary, the Dealer Managers and the Information
Agent as described in the Offer to Purchase) for soliciting tenders of Shares
pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers,
dealers, commercial banks and trust companies for customary mailing and handling
costs incurred by them in forwarding the enclosed materials to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER EXPIRES AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, APRIL
30, 1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer of Shares, and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Dealer Managers or the Information Agent at the respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF PARENT, PURCHASER, THE DEALER MANAGERS, THE INFORMATION AGENT, THE
DEPOSITARY, ANY AFFILIATE OF ANY OF THE FOREGOING OR ANY OTHER PERSON, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
AT
$22.75 NET PER SHARE IN CASH
BY
UR ACQUISITION CORPORATION,
A WHOLLY OWNED SUBSIDIARY
OF
UNITED RENTALS, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, APRIL 30, 1999, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated April 5,
1999 and the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the "Offer") in connection with
the offer by UR Acquisition Corporation, a Delaware corporation ("Purchaser"),
and a wholly owned subsidiary of United Rentals, Inc., a Delaware corporation
("Parent"), to purchase for cash all outstanding shares of common stock, par
value $.01 per share (the "Shares"), of Rental Service Corporation, a Delaware
corporation (the "Company"). We are the holder of record of Shares held for your
account. A tender of such Shares can be made only by us as the holder of record
and pursuant to your instructions. The enclosed Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is invited to the following:
1. The offer price is $22.75 per Share, net to you in cash.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, April 30, 1999, unless the Offer is extended.
4. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares will
be tendered unless otherwise specified on the reverse side of this letter. YOUR
INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated April 5, 1999 and the related Letter of Transmittal in
connection with the Offer by UR Acquisition Corporation, a Delaware corporation
and a wholly owned subsidiary of United Rentals, Inc., a Delaware corporation,
to purchase all outstanding shares of common stock, par value $.01 per share
(the "Shares"), of Rental Service Corporation, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
Number of Shares to be Tendered:*
- ---------------------------------------------Shares
Dated:
- ------------------------------------, 1999
- ------------------------------------------------------
- ------------------------------------------------------
SIGNATURE(S)
- ------------------------------------------------------
- ------------------------------------------------------
PRINT NAME(S)
- ------------------------------------------------------
- ------------------------------------------------------
ADDRESS(ES)
- ------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
- ------------------------------------------------------
TAX ID OR SOCIAL SECURITY NUMBER
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT SOCIAL SECURITY
NUMBER OF --
- ---------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(2)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(2)
4. Custodian account of a minor The minor(3)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if the
minor is the only
contributor, the
minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent person(4)
minor, or incompetent person
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
8. Sole proprietorship account The owner(5)
- ---------------------------------------------------------------
- ---------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF --
- ---------------------------------------------------------------
9. A valid trust, estate, or pension The legal entity (do
trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title)(1)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ---------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the legal trust, estate, or pension trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(A) or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under Section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, interest
or other payments to give taxpayer identification numbers to payers who must
report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS--If you fail to
properly include any portion of an includible payment for interest, dividends,
or patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated April 5,
1999 and the related Letter of Transmittal, and is being made to all holders of
Shares. The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction or any administrative or judicial action pursuant thereto. In any
jurisdiction where securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of UR Acquisition Corporation by Goldman, Sachs & Co. or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
RENTAL SERVICE CORPORATION
AT
$22.75 NET PER SHARE
BY
UR ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
UNITED RENTALS, INC.
UR Acquisition Corporation, a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of United Rentals, Inc., a Delaware corporation
("Parent"), is offering to purchase all of the outstanding shares of Common
Stock, par value $.01 per share (the "Shares"), of Rental Service Corporation, a
Delaware corporation (the "Company"), at a price of $22.75 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 5, 1999 (the "Offer to
Purchase") and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, APRIL 30, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Shares which constitutes a majority of the Shares outstanding on a
fully diluted basis (the "Minimum Condition"), (2) the stockholders of the
Company not having approved the Agreement and Plan of Merger, dated as of
January 20, 1999 (the "NationsRent Merger Agreement"), between the Company and
NationsRent, Inc., a Delaware corporation
<PAGE> 2
("NationsRent"), (3) Purchaser being satisfied, in its sole discretion, that the
NationsRent Merger Agreement has been terminated in accordance with its terms,
and the Company having entered into a definitive merger agreement with Parent
and Purchaser, to provide for the acquisition of the Company pursuant to the
Offer and the proposed merger described in the Offer to Purchase, (4) Purchaser
being satisfied, in its sole discretion, that the provisions of Section 203 of
the Delaware General Corporation Law, as amended, are inapplicable to the Offer
and the proposed merger described in the Offer to Purchase, (5) the Company not
having entered into or effectuated any agreement or transaction with any person
or entity having the effect of impairing Purchaser's ability to acquire the
Company or otherwise diminishing the expected economic value to Purchaser of the
acquisition of the Company, (6) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated prior to the expiration of the Offer, and (7) the option held
by NationsRent to purchase up to 19.9% of the outstanding Shares having been
terminated or invalidated without any Shares having been issued thereunder. The
Offer is also subject to other terms and conditions set forth in the Offer to
Purchase.
The purpose of the Offer is to enable Parent to acquire control of, and
the entire equity interest in, the Company. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all of
the Shares.
Parent intends to seek to negotiate with the Company with respect to the
acquisition of the Company by Parent. Purchaser reserves the right to amend the
Offer upon entering into an acquisition agreement or other agreement regarding a
business combination with the Company or otherwise to negotiate an acquisition
agreement or other agreement regarding a business combination with the Company
not involving a tender offer.
Purchaser expressly reserves the right, in its sole discretion, at any time
and from time to time, to extend the period of time during which the Offer is
open and thereby delay acceptance for payment of, and the payment for, any
Shares, by giving oral or written notice of such extension to American Stock
Transfer & Trust Company (the "Depositary"). During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the right of a tendering stockholder to withdraw such stockholder's
Shares. Subject to the applicable regulations of the Securities and Exchange
Commission, Purchaser also expressly reserves the right, in its sole discretion,
at any time or from time to time, (i) to delay acceptance for payment of any
Shares, (ii) to terminate the Offer whether or not any Shares have theretofore
been accepted for payment if any condition referred to in Section 14 of the
Offer to Purchase has not been satisfied or upon the occurrence of any event
specified in Section 14, and (iii) to waive any condition or otherwise amend the
offer to Purchase in any respect, in each case, by giving oral or written notice
of such termination, waiver or amendment to the Depositary and, other than in
the case of any such waiver, by making a public announcement thereof. Any such
extension, delay, termination or amendment will be followed as promptly as
practicable by a public announcement thereof, and such announcement in the case
of an extension will be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled date on which the Offer was to
expire.
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the
purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold
their Shares through a bank or broker should check with such institution as to
whether they charge any service fees. Purchaser will pay all fees and expenses
of the Depositary, Goldman, Sachs & Co., which are acting as Dealer Managers
for the Offer, and Georgeson & Company Inc., which is acting as the Information
Agent for the Offer, incurred in connection with the Offer and in accordance
with the terms of the agreements entered into between Purchaser and/or Parent
and each such person.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering stockholders. In all cases, payment
for
2
<PAGE> 3
Shares accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates for such Shares ("Certificates")
or a confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to Pur-
chase), (ii) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase),
and (iii) any other documents required by the Letter of Transmittal. The per
Share consideration paid to any stockholder pursuant to the Offer will be the
highest per Share consideration paid to any other stockholder pursuant to the
Offer. Under no circumstances will interest be paid on the purchase price to be
paid by Purchaser for such Shares, regardless of any extension of the Offer or
any delay in making such payment.
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or if Purchaser is unable to accept
for payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to Purchaser's rights set forth in the Offer to Purchase, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares and
such Shares may not be withdrawn except to the extent that the tendering
stockholder is entitled to and duly exercises withdrawal rights as described in
Section 4 of the Offer to Purchase. Any such delay will be an extension of the
Offer to the extent required by law.
If certain events occur, Purchaser will not be required to accept for
payment or pay for any Shares tendered pursuant to the Offer. If any tendered
Shares are not purchased pursuant to the Offer for any reason or are not paid
for because of invalid tender, or if Certificates are submitted representing
more Shares than are tendered, Certificates representing unpurchased or
untendered Shares will be returned to the tendering stockholder (or, in the case
of Shares delivered by book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3
of the Offer to Purchase, such Shares will be credited to an account maintained
within such Book-Entry Transfer Facility), as soon as practicable following the
expiration, termination or withdrawal of the Offer.
Except as otherwise provided below, tenders of Shares made pursuant to
the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time prior to 12:00 Midnight, New York City time, on Friday,
April 30, 1999 and, unless theretofore accepted for payment pursuant to the
Offer, may also be withdrawn at any time after June 4, 1999, or such later time
as may apply if the Offer is extended. For a withdrawal to be effective, a
written, telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth in the Offer
to Purchase and must specify the name of the person having tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If Certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Certificates, the serial numbers shown on such Certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in the Offer to Purchase), the signatures on
the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer
set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and otherwise comply with the
Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares may
not be rescinded, and any Shares properly withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by again following one of the procedures described in Section 3 of
the Offer to Purchase at any time prior to the Expiration Date. All questions as
to the form
3
<PAGE> 4
and validity (including time of receipt) of notices of withdrawal will be
determined by Purchaser, in its sole discretion, which determination will be
final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is contained in the Offer to Purchase and is
incorporated herein by reference.
Requests are being made to the Company pursuant to Rule 14d-5 under the
Exchange Act for use of the Company's stockholder list and security position
listings for purposes of disseminating the Offer to holders of Shares. Upon
compliance by the Company with such request, the Offer to Purchase and the
related Letter of Transmittal and, if required, other relevant materials will be
mailed to record holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the stockholder list, or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Managers at their respective addresses and telephone
numbers set forth below. Copies of the Offer to Purchase, Letter of Transmittal
and other tender offer materials may be obtained at Purchaser's expense from the
Information Agent or from brokers, dealers, commercial banks and trust
companies. Purchaser will not pay any fees or commissions to any broker or
dealer or other person (other than the Information Agent and the Dealer
Managers) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, NY 10005
(212) 440-9800 (Banks and Brokers Call Collect)
(800) 223-2064 (All Others Call Toll Free)
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
(212) 902-1000 (Call Collect)
(800) 323-5678 (Call Toll Free)
April 5, 1999
4
<PAGE> 1
UNITED RENTALS ANNOUNCES $22.75 PER SHARE
ALL CASH OFFER TO ACQUIRE RENTAL SERVICE CORPORATION
FULLY-FINANCED OFFER PRICED AT 32 PERCENT PREMIUM
TO CURRENT RENTAL SERVICE
SHARE PRICE; TOTAL VALUE OF TRANSACTION APPROXIMATELY $1.36 BILLION
COMBINED COMPANY WOULD SERVE MORE THAN ONE MILLION CUSTOMERS
FROM OVER 700 LOCATIONS ACROSS NORTH AMERICA
---------------
GREENWICH, CT, APRIL 5, 1999--United Rentals, Inc. (NYSE: URI), North
America's largest equipment rental company, today announced that it has
commenced a $22.75 per share cash tender offer for all of the outstanding shares
of Rental Service Corporation (NYSE: RSV). The United Rentals offer provides
Rental Service shareholders a 32 percent premium over Rental Service's closing
price of $17.25 on Thursday, April 1, 1999, the last day of trading prior to the
announcement of this offer, and a 28 percent premium to Rental Service's 30-day
average closing price. The offer expires on April 30, 1999, unless extended.
Rental Service has approximately 24.3 million common shares and
equivalents outstanding, and approximately $810 million of debt. The total
value of the proposed transaction is approximately $1.36 billion.
United Rentals has a firm commitment from Goldman, Sachs & Co. to provide
$2 billion in financing to complete the transaction and for other corporate
purposes.
Bradley Jacobs, chairman and chief executive officer of United Rentals,
said, "The combination of United Rentals, North America's largest equipment
rental company, and Rental Service, the third largest company, would serve over
one million customers through more than 700 branch locations with a rental
fleet of more than 400,000 pieces of equipment. The combined company would have
an annual revenue run rate of nearly $3 billion, giving us about a 10 percent
share of this rapidly growing industry."
Mr. Jacobs continued, "Since we formed United Rentals 18 months ago, our
mission has been to create a large and geographically diversified equipment
rental
<PAGE> 2
company to take full advantage of the many benefits of greater size in this
business. A combination with Rental Service would improve our cost structure,
and enable us to provide our customers with better service and a greater
selection of modern equipment. We believe that we could achieve at least $20
million in cost savings and operating synergy and that the transaction would be
accretive to earnings in the first year of combined operations."
Mr. Jacobs added, "We have asked that the Rental Service board carefully
consider the certainty and the attractive premium we are offering to Rental
Service stockholders."
The Company said that the offer is conditioned on, among other things, the
tender to United Rentals of a majority of Rental Service shares on a
fully-diluted basis, the termination of the merger agreement between Rental
Service and NationsRent Inc., the agreement by the board of directors of Rental
Service to enter into a merger agreement for the acquisition of Rental Service
by United Rentals, the expiration or termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the termination
or invalidation of a 19.9% lock-up option and break-up fee provided to
NationsRent in its merger agreement with Rental Service.
Goldman, Sachs & Co. is serving as financial advisor to United Rentals.
Georgeson & Company is serving as information agent for the offer.
United Rentals, Inc. is the largest equipment rental company in North
America and currently serves more than 900,000 customers through its network of
470 locations in 40 states, Canada and Mexico.
This press release contains forward looking statements which involve
certain risks and uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward looking statements include,
among others, the following possibilities: (1) expected cost savings and
operating synergies from the proposed transaction are not fully realized or are
not realized within the expected time frame; (2) revenues and earnings following
the proposed transaction are lower than expected; (3) costs or difficulties
related to the integration of the businesses of United Rentals and Rental
Service are greater than expected; or (4) general economic conditions, either
nationally or in the local areas in which the combined company will be doing
business, are less favorable
<PAGE> 3
than expected.
This press release is neither an offer to purchase nor a solicitation of
an offer to sell any shares of Rental Service. The offer is made solely by
United Rentals' Offer to Purchase dated April 5, 1999 and the related Letter of
Transmittal. In addition, this press release should not be construed to
constitute a solicitation of proxies for any meeting of the stockholders of
Rental Service, nor should this press release be construed to constitute a
solicitation of any consent. Any such solicitation which United Rentals or any
affiliate thereof might make would be made only pursuant to separate proxy or
consent materials prepared and filed with the Securities and Exchange
Commission in compliance with the requirements of the Securities Exchange Act
of 1934.
###
Investor contact: Media contact:
Robert Miner Fred Bratman
United Rentals or Tracy Williams
Phone: 203-622-3131 Sard Verbinnen & Co.
Fax: 203-622-6080 Phone: 212-687-8080
e-mail: [email protected] Fax: 212-687-8344
e-mail: [email protected]
or [email protected]
<PAGE> 1
GOLDMAN SACHS CREDIT PARTNERS L.P.
85 Broad Street
New York, New York 10004
PERSONAL AND CONFIDENTIAL
April 4, 1999
United Rentals (North America), Inc.
Four Greenwich Office Park
Greenwich, CT 06830
Attention: Bradley S. Jacobs
Chairman and Chief Executive Officer
Ladies and Gentlemen:
We are pleased to confirm the arrangements under which Goldman Sachs Credit
Partners L.P. ("GSCP") is exclusively authorized by United Rentals (North
America), Inc. (the "COMPANY"), a direct, wholly owned subsidiary of United
Rentals, Inc., a publicly-held corporation (the "PARENT"), to act as sole Lead
Arranger and sole Syndication Agent in connection with, and commits to provide
the financing for, certain loans described herein, in each case on the terms and
subject to the conditions set forth in this letter, the attached Annex A and the
attached Annex B (together, the "COMMITMENT LETTER").
As we understand the transaction, the Parent will organize a single-purpose,
wholly-owned subsidiary (the "PURCHASER") that will offer to acquire through a
tender offer (the "TENDER OFFER") for $22.75 in cash per share all of the shares
of the outstanding common stock (the "TARGET STOCK") of a publicly-held Delaware
corporation code-named "Alpha" (the "TARGET"), but in any event not less than
sufficient shares of Target Stock to enable the Purchaser, voting without any
other shareholders of the Target, to approve a merger of the Purchaser with the
Target. As promptly as practicable after the closing of the Tender Offer, the
Purchaser (or a subsidiary of the Purchaser) will consummate a merger with the
Target in which the Target will be the surviving corporation (the "SURVIVING
CORPORATION") and the Surviving Corporation will then immediately merge with the
Company (collectively, the "MERGER").
The Company intends to establish a single credit facility to consist of up to
$400 million under a senior secured term loan A facility (the "TERM LOAN A
FACILITY"), up to $1.0 billion under a senior secured term loan B facility (the
"TERM LOAN B FACILITY" and, together with the Term Loan A Facility, the "TERM
FACILITIES") and up to $600 million under a senior secured revolving credit
<PAGE> 2
-2-
facility (the "REVOLVING FACILITY" and, together with the Term Facilities, the
"FACILITIES"). The proceeds from the Term Facilities are expected to be used to
finance the Tender Offer, refinance certain existing debt of the Company and the
Target and pay transaction costs. Up to the amount that you and we have
previously discussed of the proceeds from the Revolving Facility are expected to
be used to provide working capital; the remaining amounts available under the
Revolving Facility are expected to be used to finance the Merger and provide
working capital and for general corporate purposes.
GSCP is pleased to confirm its commitment to provide the Company the full $2.0
billion of the Facilities and to act as sole Lead Arranger to provide the
Company with structuring advice in connection with the Facilities and as sole
Syndication Agent to provide the Company with syndication advice in connection
with the Facilities, in each case on the terms and subject to the conditions
contained in this Commitment Letter. Our fees for such services are set forth in
a separate fee letter (the "FEE LETTER") entered into by the Company and GSCP on
the date hereof.
GSCP's commitment is subject, in its discretion, to the following conditions:
(i) there shall not have been, since the date of the most recent audited
financial statements of the Parent, the Company or the Target furnished by the
Company to GSCP, any change in the capital stock or long-term debt of the
Parent, the Company or the Target and their subsidiaries or any adverse change
in or affecting the general affairs, management, prospects, financial position,
stockholders' equity or results of operations of the Parent, the Company or the
Target and their respective subsidiaries, taken as a whole, or (ii) there shall
not have been any disruption or adverse change in the financial or capital
markets generally as set forth in Section 14(d)(i) of the Offer to Purchase (as
defined in Annex B hereto), or in the market for debt securities or loan
syndications in particular, which in any such case under clause (i) or (ii)
GSCP, in its reasonable judgment, deems material and adverse (it being
understood that the issuance by the Company or the Parent since such date of
$250 million in subordinated notes, 2.3 million shares of common stock and, from
time to time, common stock pursuant to existing stock options does not
constitute any such material adverse change or development). GSCP's commitment
is also subject, in its discretion, to the satisfactory negotiation, execution
and delivery of appropriate loan documents relating to the Facilities,
including, without limitation, a credit agreement, guaranties, security
agreements, pledge agreements, opinions of counsel and other related definitive
documents (collectively, the "LOAN DOCUMENTS") to be based upon and
substantially consistent with the terms set forth in this Commitment Letter.
The terms of this Commitment Letter are intended as an outline of certain of the
material terms of the Facilities, but do not include all of the terms,
conditions, covenants, representations, warranties, default clauses and other
provisions that will be contained in the Loan Documents. The Loan Documents
shall include, in addition, provisions that are customary or typical for
financings of this type and other provisions that GSCP may reasonably determine
to be appropriate in the context of the proposed transactions.
GSCP intends and reserves the right to syndicate the Facilities to the Lenders
(as defined in the attached Annex B). GSCP shall select the Lenders in
consultation with the Company with the Company's consent, not to be unreasonably
withheld. GSCP will identify a Lender acceptable to the Company to act as
collateral agent and administrative agent for the Lenders (the "ADMINISTRATIVE
<PAGE> 3
-3-
AGENT"). GSCP will lead the syndication, including determining the timing of all
offers to potential Lenders, any title of agent or similar designations awarded
to any Lender and the acceptance of commitments, the amounts offered and the
compensation provided to each Lender from the amounts to be paid to GSCP
pursuant to the terms of this Commitment Letter and the Fee Letter (it being
understood that the only fees payable to the Lenders are the fees specified in
this Commitment Letter and the Fee Letter). GSCP will determine the final
commitment allocations and will notify the Company of such determinations. To
ensure an orderly and effective syndication of the Facilities, you agree that,
until the later of the termination of the syndication as determined by GSCP (but
in any event not later than 180 days following the date of the initial funding
under the Facilities) and 90 days following the date of initial funding under
the Facilities, you will not, and will not permit any of your affiliates to,
syndicate or issue, attempt to syndicate or issue, announce or authorize the
announcement of the syndication or issuance of, or engage in discussions
concerning the syndication or issuance of, any debt facility or debt security of
the Parent or the Company or any of its subsidiaries (other than operating
leases, sale-leaseback transactions currently in process or presently
contemplated, debt issued to sellers in connection with acquisitions and the
Facilities and other indebtedness contemplated hereby), including any renewals
or refinancings of any existing debt facility or debt security, without the
prior written consent of GSCP. Nothing in the immediately preceding sentence
shall prohibit any borrowings or drawings under existing credit facilities. You
also agree that GSCP shall be entitled, but not obligated, after consultation
with you, to change the pricing and/or allocation among tranches of the
Facilities if GSCP determines in its discretion that such changes are advisable
to insure the successful syndication of all of the Facilities; provided that the
total amount of the Facilities remains unchanged and provided further that, if
the general syndication shall not have been completed as of the closing of the
Facilities, the provisions of this sentence shall survive the closing of the
Facilities until the general syndication has been completed and, if the general
syndication shall have been completed as of the closing of the Facilities, the
provisions of this sentence shall not survive the closing of the Facilities.
The Company agrees to cooperate with GSCP in connection with (i) the preparation
of an information package regarding the business, operations and prospects of
the Parent, the Company and the Target, including, without limitation, the
delivery of all information relating to the transactions contemplated hereunder
prepared by or on behalf of the Company deemed reasonably necessary by GSCP to
complete the syndication of the Facilities and (ii) the presentation of such
information package in bank meetings and other communications with prospective
Lenders in connection with the syndication of the Facilities. The Company shall
be solely responsible for the contents of any such information package and
presentation and acknowledges that GSCP will be using and relying upon the
information contained in such information package and presentation without
independent verification thereof. In addition, the Company represents and
covenants that (a) all information, other than Projections (as defined below),
provided directly or indirectly by the Company to GSCP or the Lenders in
connection with the transactions contemplated hereunder is and will be complete
and correct in all material respects (in the case of information relating to the
Target, to the best of the Company's knowledge) and does not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading (in the case
of information relating to the Target, to the best of the Company's knowledge)
and (b) all financial projections concerning the Parent, the Company and the
Target and their respective subsidiaries that have been or are hereafter made
available to GSCP or the Lenders
<PAGE> 4
-4-
by the Company or any of its representatives (or on its or their behalf) (the
"PROJECTIONS") have been or will be prepared in good faith based upon reasonable
assumptions.
In connection with arrangements such as this, it is our firm policy to receive
indemnification. The Company agrees to the provisions with respect to our
indemnity and other matters set forth in Annex A which is incorporated by
reference into this Commitment Letter.
Please note that this Commitment Letter, the Fee Letter and any written or oral
advice provided by GSCP in connection with this arrangement is exclusively for
the information of the Board of Directors and senior management of the Company
and may not be disclosed to any third party or circulated or referred to
publicly without our prior written consent, except, after providing written
notice to Goldman Sachs, pursuant to a subpoena or order issued by a court of
competent jurisdiction or by a judicial, administrative or legislative body or
committee. In addition, we hereby consent to your disclosure of (i) such advice
to your officers, directors, agents and advisors who are directly involved in
the consideration of the Facilities to the extent such persons are obligated to
hold such advice in confidence and (ii) upon your acceptance of this Commitment
Letter and the Fee Letter, this Commitment Letter (but not the Fee Letter) or
the information contained herein (but not in the Fee Letter) to the Target and
its advisors in connection with the Tender Offer. In addition, to the extent the
Company seeks to disclose this Commitment Letter or the information contained
herein in any filing required to be made under the federal securities laws or in
any public announcement in connection with the Tender Offer, we will not
unreasonably withhold our consent thereto so long as we have approved in advance
the text of any such disclosure.
As you know, GSCP may from time to time effect transactions, for its own account
or the account of customers, and hold positions in loans or options on loans of
the Parent, the Company and the Target, and other companies that may be the
subject of this arrangement. In addition, Goldman, Sachs & Co. is a full service
securities firm and as such may from time to time effect transactions, for its
own account or the account of customers, and hold positions in securities or
options on securities of the Parent, the Company, the Target and other companies
that may be the subject of this arrangement. In addition, GSCP may employ the
services of its affiliates in providing certain services hereunder and may
exchange with such affiliates information concerning the Parent, the Company,
the Target and other companies that may be the subject of this arrangement, and
such affiliates shall be entitled to the benefits afforded to GSCP hereunder.
GSCP's commitment hereunder shall terminate on September 30, 1999 unless the
closing of the Facilities, on the terms and subject to the conditions contained
herein, shall have been consummated.
<PAGE> 5
-5-
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 6
-6-
Please confirm that the foregoing is in accordance with your understanding by
signing and returning to GSCP the enclosed copy of this Commitment Letter,
together, if not previously executed and delivered, with the Fee Letter, on or
before the close of business on April 12, 1999, whereupon this Commitment Letter
and the Fee Letter shall become binding agreements between us. If not signed and
returned as described in the preceding sentence by such date, this offer will
terminate on such date. We look forward to working with you on this assignment.
Very truly yours,
GOLDMAN SACHS CREDIT PARTNERS L.P.
By:
-------------------------
Authorized Signatory
ACCEPTED AS OF THE DATE ABOVE:
UNITED RENTALS (NORTH AMERICA), INC.
By:
-----------------------------------
Name:
Title:
<PAGE> 7
Annex A
In the event that GSCP becomes involved in any capacity in any action,
proceeding or investigation brought by or against any person, including
stockholders of the Company, in connection with or as a result of either this
arrangement or any matter referred to in this Commitment Letter or the Fee
Letter (together, the "Letters"), the Company periodically will reimburse GSCP
for its legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith. The Company also will indemnify
and hold GSCP harmless against any and all losses, claims, damages or
liabilities to any such person in connection with or as a result of either this
arrangement or any matter referred to in the Letters, except to the extent that
any such loss, claim, damage or liability results from the gross negligence or
bad faith of GSCP in performing the services that are the subject of the
Letters. If for any reason the foregoing indemnification is unavailable to GSCP
or insufficient to hold it harmless, then the Company shall contribute to the
amount paid or payable by GSCP as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative economic
interests of the Company and stockholders on the one hand and GSCP on the other
hand in the matters contemplated by the Letters as well as the relative fault of
the Company and GSCP with respect to such loss, claim, damage or liability and
any other relevant equitable considerations. The reimbursement, indemnity and
contribution obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any affiliate of GSCP and the partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of GSCP and any such affiliate, and shall be binding upon and inure to the
benefit of any successors, assigns, heirs and personal representatives of the
Company, GSCP, any such affiliate and any such person. The Company also agrees
that neither GSCP nor any of such affiliates, partners, directors, agents,
employees or controlling persons shall have any liability to the Company, any
person asserting claims on behalf of or in right of the Company or any other
person in connection with or as a result of either this arrangement or any
matter referred to in the Letters except to the extent that any losses, claims,
damages, liabilities or expenses incurred by the Company result from the gross
negligence or bad faith of GSCP in performing the services that are the subject
of the Letters. Any right to trial by jury with respect to any action or
proceeding arising in connection with or as a result of either this arrangement
or any matter referred to in the Letters is hereby waived by the parties hereto.
The provisions of this Annex A shall survive any termination or completion of
the arrangement provided by the Letters, and this Commitment Letter shall be
governed by and construed in accordance with the laws of the State of New York.
<PAGE> 8
ANNEX B
UNITED RENTALS (NORTH AMERICA), INC.
SUMMARY OF TERMS AND CONDITIONS OF THE FACILITIES
This Summary of Terms and Conditions outlines certain terms of the Facilities
referred to in the Commitment Letter, of which this Annex B is a part. Certain
capitalized terms used herein are defined in the Commitment Letter.
BORROWER: United Rentals (North America), Inc. (the "COMPANY"), a
direct, wholly owned subsidiary of United Rentals, Inc.
(the "PARENT").
GUARANTORS: The Parent and each of its subsidiaries (other than the
Company and, prior to the Merger, the Target and its
subsidiaries and other than any subsidiary that is a
"controlled foreign corporation" (a "CFC") under Section
957 of the Internal Revenue Code) shall guaranty (the
"GUARANTEE") all obligations under the Facilities.
PURPOSE/USE OF To finance the Tender Offer and the Merger, to refinance
PROCEEDS: certain existing debt of the Company, the Target and
their respective subsidiaries, to pay transaction costs,
to provide working capital and for general corporate
purposes.
SOLE LEADER Goldman Sachs Credit Partners L.P. (in such capacity,
ARRANGER AND SOLE the "ARRANGER").
SYNDICATION AGENT:
ADMINISTRATIVE A Lender to be identified by GSCP and acceptable to the
AGENT: Company (such Lender, in such capacity, the
"ADMINISTRATIVE AGENT").
<PAGE> 9
-2-
LENDERS: GSCP and/or other financial institutions selected by
GSCP in consultation with the Company and subject to the
Company's consent (each a "LENDER" and collectively, the
"LENDERS").
AMOUNT OF SENIOR Up to $2.0 billion of senior bank financing (the
FACILITIES: "FACILITIES") to include:
(i) $400 million senior term loan A facility
(the "TERM LOAN A FACILITY");
(ii) $1.0 billion senior term loan B facility
(the "TERM LOAN B FACILITY" and, together
with the Term Loan A Facility, the "TERM
FACILITIES"); and
(iii) $600 million senior revolving credit
facility (the "REVOLVING FACILITY").
GSCP reserves the right to reapportion the relative
amounts of the Facilities; provided, however, that the
aggregate amount of the Facilities taken together shall
remain unchanged.
MATURITIES: Term Loan A Facility: 5 years from the Closing Date.
- ----------
Term Loan B Facility: 7 years from the Closing Date.
Revolving Facility: 5 years from the Closing Date.
CLOSING DATE: The date on or before September 30, 1999 on which the
- ------------ initial borrowings under the Facilities are made.
AMORTIZATION: Term Loan A Facility: Increasing over the term of
the Facilities in amounts to
be determined but in any event
not to exceed the following
amounts (expressed as a
percentage of the Term Loan A
Facility) during the following
years:
<PAGE> 10
-3-
Year Percentage
1 0%
2 10%
3 20%
4 30%
Term Loan B Facility: Amounts to be determined, with
de minimis amounts during the
first 5 years after the
Closing Date.
Revolving Facility: Fully revolving until 5 years
from the Closing Date.
LETTERS OF CREDIT: At the Company's option, a portion of the Revolving
Facility in an amount to be agreed will be made available
for the issuance of letters of credit ("LETTERS OF
CREDIT").
INTEREST RATE: All amounts outstanding under the Facilities shall bear
interest, at the Company's option, as follows:
(1) A. For the six-month period commencing on the
Closing Date, with respect to loans made under the
Term Loan A Facility and the Revolving Facility:
(i) at the Base Rate plus 1.00% per annum; or
(ii) at the reserve adjusted Eurodollar Rate plus
2.00% per annum.
B. For the one-year period commencing on the Closing
Date, with respect to loans made under the Term
Loan B Facility:
(i) at the Base Rate plus 1.50% per annum; or
(ii) at the reserve adjusted Eurodollar Rate
plus 2.50% per annum; and
(2) thereafter, at margins above the Base Rate or the
reserve adjusted Eurodollar Rate as specified on
the pricing grid attached hereto as Schedule I.
<PAGE> 11
-4-
As used herein, the terms "Base Rate" and "reserve
adjusted Eurodollar Rate" shall have meanings customary
and appropriate for financings of this type, and the
basis for calculating accrued interest and the interest
periods for loans bearing interest at the reserve
adjusted Eurodollar Rate shall be customary and
appropriate for financings of this type. Interest on
outstanding amounts following an Event of Default shall
accrue at a rate equal to the rate on loans bearing
interest at the rate determined by reference to the Base
Rate plus an additional two percentage points (2.00%)
per annum and shall be payable on demand.
INTEREST PAYMENTS: Quarterly for loans bearing interest with reference to
the Base Rate; on the last day of selected interest
periods (which shall be one, two, three and six months)
for loans bearing interest with reference to the reserve
adjusted Eurodollar Rate (and at the end of every three
months, in the case of interest periods of longer than
three months); and upon prepayment, in each case payable
in arrears and computed on the basis of, in the case of
Base Rate loans, a 365-day year, and, in all other
cases, a 360-day year.
INTEREST RATE Within 30 days after the date of consummation of the
PROTECTION: Merger, the Company will obtain interest rate protection
through interest rate swaps, caps or other agreements
satisfactory to the Arranger and the Administrative
Agent against increases in the interest rates with
respect to a notional amount equal to not less than 50%
of total debt for a period to be agreed.
FUNDING PROTECTION: Customary for transactions of this type, including
breakage costs, gross-up for withholding, compensation
for increased costs and compliance with capital adequacy
and other regulatory restrictions.
COMMITMENT FEES: Commitment fees based on the daily average unused
portion of the Revolving Facility (reduced by the amount
of letters of credit issued and outstanding) shall
accrue from the Closing Date and shall be payable
quarterly in arrears on the unused portion of the
Revolving Facility at a rate per annum equal to (a)
until the 6-month anniversary of the Closing Date, 0.50%
per annum, and (b) following the 6-month anniversary of
the Closing Date, a percentage per annum as specified on
the pricing grid attached hereto as Schedule I.
<PAGE> 12
-5-
LETTERS OF CREDIT A fee at a percentage per annum equal to the margin on
FEES: Eurodollar Rate loans under the Revolving Facility on
the maximum amount which may be drawn thereunder shall
be payable quarterly with respect to each Letter of
Credit. A fronting fee of a percentage to be agreed of
the maximum amount which may be drawn under each Letter
of Credit shall be payable to the issuer of the Letter
of Credit. In addition, certain customary fees assessed
by the Issuing Lender shall be payable.
VOLUNTARY The Facilities may be prepaid in whole or in part
PREPAYMENTS: without premium or penalty (provided that loans bearing
interest with reference to the reserve adjusted
Eurodollar Rate shall be prepayable only on the last day
of the related interest period unless the Company pays
any related "broken funding" costs). Voluntary
prepayments of the Term Facilities shall be applied to
scheduled amortization payments on a pro rata basis.
MANDATORY The Company shall make the following mandatory
PREPAYMENTS: prepayments (subject to certain basket amounts to be
negotiated in the definitive Loan Documents):
1. Asset sales - prepayments in the amount of all of
the net aftertax cash proceeds of the sale or
other disposition of any property or assets of the
Parent or its subsidiaries, other than net cash
proceeds of sales or other dispositions of
inventory and rental equipment in the ordinary
course of business and other than sales of assets
not exceeding, in the aggregate over the term of
the Facilities, 5% of tangible assets (calculated,
as of any date of determination, based on the then
most recently delivered audited annual financial
statements), payable no later than the first
Business Day (subject, however, to a 180-day
reinvestment period) following the date of receipt
(with certain exceptions to be agreed);
2. Debt Offerings - prepayments in an amount equal to
100% of the net cash proceeds received from the
issuance of debt of the Parent or its subsidiaries
(with certain exceptions to be agreed), payable no
later than the first Business Day following the
date of receipt, provided, however, that such
prepayment shall not be required to the extent
that, after giving pro forma effect to the
issuance of such debt, the senior leverage ratio
is equal to or less than the then applicable
senior leverage ratio covenant level less 0.5;
<PAGE> 13
-6-
3. Pension Plan Reversions - prepayments in the
amount of all proceeds received from any pension
plan reversion, payable upon receipt; and
4. Extraordinary Receipts - prepayments in the amount
of all Extraordinary Receipts (to be defined in
the loan documentation and to exclude cash
receipts in the ordinary course of business and
with certain exceptions to be agreed), payable
upon receipt.
All such prepayments shall be applied without penalty or
premium (except for breakage costs, if any) to repay,
first, outstanding loans under the Term Facilities as
set forth in the next sentence and, second, outstanding
loans (and to the permanent reduction of commitments)
under the Revolving Facility. All mandatory prepayments
shall be applied to scheduled amortization prepayments
of the Term Facilities pro rata across the Term
Facilities and on a pro rata basis within each such
Facility; provided that any Lender under the Term Loan B
Facility may, so long as there is a corresponding
principal amount outstanding under the Term Loan A
Facility, decline to accept any such prepayment, in
which case the amount of such declined payment shall be
applied to the prepayment of scheduled amortization
payments of the outstanding Term A loans on a pro rata
basis.
SECURITY: The Facilities and each Guarantee will be secured by
first priority security interests in all assets,
including without limitation, all personal property of
the Parent and its subsidiaries (including, from and
after the Merger, the Target and its subsidiaries
(except as otherwise agreed to by the Arranger)). In
addition, the Facilities shall be secured by a first
priority security interest in 100% of the stock of each
subsidiary of the Parent (or, in the case of each
subsidiary that is a CFC, 66% of the voting stock of
such subsidiary) and all intercompany debt. All security
arrangements shall be in form and substance satisfactory
to the Arranger and the Administrative Agent.
REPRESENTATIONS AND Customary and appropriate including, without limitation,
WARRANTIES: due organization and authorization, execution, delivery
and enforceability of the Loan Documents, financial
condition, no material adverse change, title to
properties, liens, litigation, payment of taxes, no
material adverse agreements, compliance with laws,
environmental and ERISA matters, Year 2000 compliance,
consents and approvals and full disclosure.
<PAGE> 14
-7-
COVENANTS: Customary and appropriate affirmative and negative
covenants, including, without limitation, financial
covenants related to minimum interest coverage (to be
set initially at 2.25:1.0), maximum senior debt/tangible
assets (to be set initially at 1.0:1.0), maximum senior
leverage (to be set initially at 3.0:1.0) and maximum
total leverage (to be set initially at 4.5:1.0). Other
covenants will include, without limitation, limitations
on other indebtedness, liens, negative pledge,
investments, guarantees, restricted junior payments
(dividends, redemptions and payments on subordinated
debt), mergers and acquisitions, sales of assets,
leases and transactions with affiliates, including
exceptions and baskets to be mutually agreed upon,
provided, however, that with respect to the Target and
its subsidiaries, such covenants shall be applicable
only from and after the date on which persons designated
or approved by the Company shall constitute a majority
of the board of directors of the Target. In addition,
the Company shall use its best efforts to cause the
Merger to occur as soon as practicable following
consummation of the Tender Offer.
EVENTS OF DEFAULT: Customary and appropriate including, without limitation,
failure to make payments when due, defaults under other
agreements or instruments of indebtedness, noncompliance
with covenants, breaches of representations and
warranties, bankruptcy, judgments in excess of specified
amounts, ERISA, impairment of security interests in
collateral, invalidity of guarantees, and "changes of
control" (to be defined in a mutually agreed upon
manner).
CONDITIONS PRECEDENT 1. Satisfactory Documentation. The definitive
TO INITIAL documentation evidencing the Facilities shall be
BORROWINGS: prepared by counsel to the Arranger and shall be
in form and substance satisfactory to the
Arranger, the Administrative Agent and the
Lenders.
2. Security. The Administrative Agent, for the
benefit of the Lenders, shall have been granted
perfected first priority security interests in all
assets to the extent described above under the
heading "Security" in form and substance
satisfactory to the Arranger and the
Administrative Agent, and the Administrative Agent
shall have received such landlord waivers and
access letters as the Arranger or the
Administrative Agent shall have requested.
<PAGE> 15
-8-
3. Environmental Matters. The Lenders shall have
received reports and other information relating to
the Parent and its subsidiaries (other than the
Target and its subsidiaries) in form, scope and
substance satisfactory to the Arranger and the
Lenders concerning any environmental liabilities.
4. No Material Adverse Change. Since December 31,
1998, there shall not have been any material
adverse change in or affecting the general
affairs, management, prospects, financial
position, shareholders' equity or results of
operations of the Parent, the Company or the
Target, together with their respective
subsidiaries, taken as a whole.
5. No Disruption of Financial and Capital Markets.
There shall not have been any disruption or
adverse change in the financial or capital markets
generally as set forth in Section 14(d)(i) of the
Offer to Purchase (as hereinafter defined) or in
the market for debt securities or loan
syndications in particular, which the Arranger, in
its judgment, deems material.
6. Financial Statements. The Lenders shall have
received the audited financial statements for the
Parent, the Company and the Target and their
respective subsidiaries for the period ended
December 31, 1998 and the unaudited financial
statements for the most recently concluded monthly
period for which statements have been prepared in
the ordinary course (to the extent available, in
the case of the Target) and such other financial
information as the Arranger may reasonably
request.
7. Consents and Approvals. All necessary governmental
and third party approvals in connection with the
Facilities, the transactions contemplated by the
Facilities and otherwise referred to herein shall
have been obtained and remain in effect, and all
applicable waiting periods shall have expired
without any action being taken by any applicable
authority, and no law or regulation shall be
applicable in the judgment of the Arranger that
restrains, prevents or imposes materially adverse
conditions upon the Tender Offer, the Merger or
any of the financings contemplated hereby.
8. Payments of Amounts Due. All costs, fees, expenses
(including, without limitation, legal fees and
expenses and filing fees) and other compensation
contemplated hereby payable to the Arranger, the
Administrative Agent or the Lenders shall have
been paid to the extent due.
<PAGE> 16
-9-
9. Capital Structure: Related Agreements. All
agreements relating to, and the corporate
structure of, the Parent, the Company and (to the
extent available) the Target and their respective
subsidiaries, and all organizational documents of
such entities shall be satisfactory to the
Arranger.
10. Customary Closing Documents. All documents
required to be delivered under the definitive
financing documents, including customary legal
opinions, corporate records and documents from
public officials and officers' certificates, shall
have been delivered.
11. Tender Offer. The Lenders shall be satisfied with
the final terms and conditions of the Tender
Offer, including, without limitation, the price
per share and number of shares to be acquired, and
with the proposed terms and conditions of the
Merger; the Lenders shall be satisfied with all
legal and tax aspects of the Tender Offer and the
Merger; all documentation relating to the Tender
Offer and the Merger, including, without
limitation, the offer to purchase the Target Stock
(the "OFFER TO PURCHASE"), shall be in form and
substance satisfactory to the Lenders; and the
Lenders shall be satisfied that any preferred
stock purchase rights issued pursuant to any
rights agreement are not then applicable to the
Tender Offer or the Merger.
12. Consummation of the Tender Offer. The Tender Offer
shall have been consummated in accordance with the
terms of the Offer to Purchase, without any waiver
or amendment not consented to by the Lenders of
any term, provision or condition set forth
therein, and in compliance with all applicable
laws, and the Lenders shall be satisfied in their
sole discretion that the restrictions in any
applicable state takeover laws are not applicable
to the purchase of the Company Stock or the Merger
or that any conditions to avoiding the
restrictions contained therein have been
satisfied.
13. Ownership of Target Stock. All Target Stock owned
by affiliates of the Company shall have been
contributed to the Purchaser; all Target Stock
held by the Purchaser shall be free and clear of
any lien, charge or encumbrance; and the Lenders
shall have a valid and perfected first priority
security interest in such Target Stock.
14. Litigation. There shall exist no action, suit,
investigation, litigation or proceeding pending or
threatened in any court or
<PAGE> 17
-10-
before any arbitrator or governmental
instrumentality that could be reasonably likely to
have a material adverse effect in or affecting the
general affairs, management, prospects, financial
position, shareholders' equity or results of
operations of the Parent, the Company or the
Target, together with their respective
subsidiaries, taken as a whole, or the Tender
Offer or the Merger or any of the Facilities.
15. Margin Regulations. All loans made by the Lenders
and all other loans or extensions of credit made
by other parties to the Company or any of its
affiliates shall be in full compliance with the
Federal Reserve's Margin Regulations, and the
Company shall have delivered an appropriately
completed Federal Reserve Form U-1 for each
Lender.
16. Solvency. The Company shall have delivered
certificates and letters, in form and substance
satisfactory to the Lenders, attesting to the
solvency of the Company, the Target and each
Guarantor after giving effect to the transactions
contemplated hereby, from the Company's chief
financial officer and a nationally recognized
valuation consultant satisfactory to the Arranger.
17. Use of Proceeds, etc. All proceeds of the initial
borrowing under the Facilities shall have been
used by the Company to finance the Tender Offer,
to refinance certain other debt and to pay
transaction fees and expenses; and the Lenders
shall be satisfied with the terms and conditions
of all surviving debt.
CONDITIONS TO ALL The conditions to all borrowings will include
BORROWINGS: requirements relating to prior written notice of
borrowing, the accuracy of representations and
warranties, and the absence of any default or potential
event of default, and will otherwise be customary and
appropriate for financings of this type.
ASSIGNMENTS AND The Lenders may assign all or, in an amount of not less
PARTICIPATIONS: than $5 million, any part of their share of the
Facilities to affiliates or one or more banks, financial
institutions or other entities that are eligible
assignees (to be defined in the Loan Documents) which,
in the case of assignments made by Lenders other than
GSCP, are acceptable to the Administrative Agent, such
consent not to be unreasonably withheld, and upon such
assignment, such affiliate, bank, financial institution
or entity shall become a Lender for all purposes of the
loan
<PAGE> 18
-11-
documentation; provided that assignments made to
affiliates and other Lenders shall not be subject to the
$5 million minimum assignment requirement. The Lenders
will have the right to sell participations, subject to
customary limitations on voting rights, in their share
of the Facilities.
REQUISITE LENDERS: Lenders holding more than 50% of total commitments or
exposure under the Facilities, except that (x) any
amendment which would disproportionately affect the
obligation of the Company to make payment of the loans
under the Revolving Facility or the Term Facility shall
not be effective without the approval of holders of more
than 50% of such class of loans and (y) with respect to
matters relating to the interest rates, maturity,
amortization, collateral issues and the definition of
Requisite Lenders, Requisite Lenders will be defined as
Lenders holding 100% of total commitments or exposure of
the Facilities affected thereby.
TAXES, RESERVE All payments are to be made free and clear of any taxes
REQUIREMENTS AND (other than franchise taxes and taxes on overall net
INDEMNITIES: income), imposts, assessments, withholdings or other
deductions whatsoever. Foreign Lenders shall furnish to
the Administrative Agent appropriate certificates or
other evidence of exemption from U.S. federal tax
withholding. The Company will indemnify the Lenders
against all increased costs of capital resulting from
reserve requirements or otherwise imposed, in each case
subject to customary increased costs, capital adequacy
and similar provisions to the extent not taken into
account in the calculation of the Base Rate or the
Eurodollar Rate.
INDEMNITY: Customary and appropriate provisions relating to
indemnity and related matters in a form reasonably
satisfactory to the Arranger, the Administrative Agent
and the Lenders.
GOVERNING LAW AND The Company will submit to the non-exclusive
JURISDICTION: jurisdiction and venue of the federal and state courts
of the State of New York and shall waive any right to
trial by jury. New York law shall govern the Loan
Documents.
The foregoing is intended to summarize certain basic terms of the
Facilities. It is not intended to be a definitive list of all of the
requirements of the Lenders in connection with the Facilities.
<PAGE> 19
SCHEDULE I
Indicative Pricing Grid (a)
(basis points)
<TABLE>
<CAPTION>
Revolving Facility and Term Loan A Facility Term Loan B Facility
- ----------------------------------------------------------------------------------------------------------------
Total Debt/ Eurodollar Base Rate Commitment Eurodollar Base Rate
EBITDA Margin Margin Fee Margin Margin
Ratio
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Greater than 225.0 125.0 50.0 275.0 175.0
4.25:1
- ----------------------------------------------------------------------------------------------------------------
Greater than 200.0 100.0 50.0 250.0 150.0
3.75:1 and
less than or
equal to
4.25:1
- ----------------------------------------------------------------------------------------------------------------
Greater than 175.0 75.0 37.5 250.0 150.0
3.25:1 and
less than or
equal to
3.75:1
- ----------------------------------------------------------------------------------------------------------------
Greater than 150.0 50.0 37.5 250.0 150.0
2.75:1 and
less than or
equal to
3.25:1
- ----------------------------------------------------------------------------------------------------------------
Greater than 137.5 37.5 25.0 250.0 150.0
2.25:1 and
less than or
equal to
2.75:1
- ----------------------------------------------------------------------------------------------------------------
Less than or 125.0 25.0 25.0 225.0 125.0
equal to
2.25:1
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(a) If the Facilities are rated below BB by Standard & Poor's Ratings Group
or below Ba2 by Moody's Investors Service, Inc., the Eurodollar Margin
and the Base Rate Margin increase by 25 basis points throughout the grid.
