<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
--------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission file number 1-12623
-------
U.S. RENTALS, INC.
------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 94-3061974
-------- ----------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1581 Cummins Drive, Ste. 155, Modesto, California 95358
- --------------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(209) 544-9000
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 month (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
Yes [x] No [ ]
There were 30,759,975 shares of common stock, $.01 per value, outstanding
at April 27, 1998.
- --------------------------------------------------------------------------------
<PAGE>
U.S. RENTALS, INC.
TABLE OF CONTENTS
-----------------
PART I: Financial Information
- -------------------------------
ITEM 1. Financial Statements
Balance Sheets -
March 31, 1998 and December 31, 1997............... 3
Statements of Operations -
Three months ended March 31, 1998 and 1997......... 4
Statements of Cash Flows -
Three months ended March 31, 1998 and 1997......... 5
Statement of Changes in Stockholders' Equity -
Three months ended March 31, 1998.................. 6
Notes to Financial Statements -
March 31, 1998..................................... 7
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 9
PART II: Other Information
- ---------------------------
ITEM 1. Legal Proceedings................................... 13
ITEM 2. Changes in Securities............................... 13
ITEM 3. Defaults Upon Senior Securities..................... 13
ITEM 4. Submission of Matters to a Vote of Security Holders. 13
ITEM 5. Other Information................................... 13
ITEM 6. Exhibits and Reports on Form 8-K.................... 13
Signatures.......................................................... 14
<PAGE>
U.S. RENTALS, INC.
BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 6,344 $ 3,104
Accounts receivable, net 61,533 60,906
Inventories 17,234 17,379
Rental equipment, net 441,202 390,598
Property and equipment, net 83,575 78,014
Goodwill, net 25,378 23,114
Prepaid expenses and other assets 14,656 12,696
------------ ------------
Total assets $649,922 $585,811
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other liabilities $ 74,744 $ 75,048
Note payable to related party 21,000 17,000
Notes payable, other 259,200 203,300
Deferred taxes 24,769 25,077
------------ ------------
Total liabilities 379,713 320,425
------------ ------------
Stockholders' equity:
Common stock, $.01 par value-
authorized 100,000,000 shares; issued
and outstanding 30,759,975 shares as of
March 31, 1998 and 30,748,975 as of
December 31, 1997 308 307
Paid-in capital 244,461 244,211
Retained earnings 25,440 20,868
------------ ------------
Total stockholders' equity 270,209 265,386
------------ ------------
Total liabilities and stockholders' equity $649,922 $585,811
============ ============
</TABLE>
Page 1
<PAGE>
U.S. RENTALS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
----------- ------------
<S> <C> <C>
Revenues:
Rental revenue $ 92,641 $ 65,330
Rental equipment sales 13,066 7,201
Merchandise and new equipment sales 14,811 8,450
----------- -----------
Total revenues 120,518 80,981
----------- -----------
Cost of revenues:
Rental equipment expense 22,000 17,498
Rental equipment depreciation 21,445 14,313
Cost of rental equipment sales 6,288 3,385
Cost of merchandise and new equipment sales 10,851 6,494
Direct operating expense 33,377 21,183
----------- -----------
Total cost of revenues 93,961 62,873
----------- -----------
Gross profit 26,557 18,108
Selling, general and administrative expense 11,426 7,550
Non-rental depreciation 3,725 1,929
Amortization of goodwill 75 3
Termination cost of deferred compensation agreements - 20,290
----------- -----------
Operating income 11,331 (11,664)
Other expense, net - (473)
Interest expense, net (3,402) (1,553)
Related party interest (expense) income, net (284) 52
----------- -----------
Income before income taxes and extraordinary item 7,645 (13,638)
Income tax expense 3,073 9,112
----------- -----------
Income (loss) before extraordinary item 4,572 (22,750)
Extraordinary item, net of tax benefit of $995 - 1,511
----------- -----------
Net income (loss) $ 4,572 $ (24,261)
=========== ===========
Basic and diluted net income (loss) before extraordinary item per share $ 0.15 $ (0.90)
----------- -----------
Basic and diluted extraordinary item per share $ - $ (0.06)
----------- -----------
Basic and diluted net income (loss) per share $ 0.15 $ (0.96)
----------- -----------
Basic weighted average shares outstanding 30,751,868 25,144,579
=========== ===========
Diluted weighted average shares outstanding 31,526,109 25,144,579
=========== ===========
</TABLE>
Page 2
<PAGE>
U.S. RENTALS, INC.
STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
---------- ----------
<S> <C> <C>
Operating activities:
Net income (loss) $ 4,572 $ (24,261)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 25,245 16,465
Gain on sale of equipment (7,032) (3,902)
Principal adjustment on notes receivable - (146)
Provision for doubtful accounts 2,127 1,472
Deferred taxes (308) 7,638
Interest income not collected - (294)
Interest expense not paid - 495
Loss on early extinguishment of debt - 2,506
Changes in operating assets and liabilities
Accounts receivable (2,409) (5,695)
Inventories 585 147
Prepaid expenses and other assets 75 (516)
Accounts payable and other liabilities (304) (160)
---------- ----------
Net cash provided by (used in) operating activities 22,551 (6,251)
---------- ----------
Investing activities:
Acquisition of rental operations (8,070) (1,757)
Purchases of rental equipment (75,426) (28,253)
Proceeds from sale of rental equipment 13,066 7,201
Purchases of property and equipment, net (9,032) (6,046)
Funding of notes receivable, net - 221
---------- ----------
Net cash used in investing activities (79,462) (28,634)
---------- ----------
Financing activities:
Proceeds from (payments on) line of credit, net 56,000 (58,267)
Payments on senior notes - (92,506)
Payments on other obligations, net (100) (100)
Proceeds from related party note payable 4,000 -
Proceeds from issuance of common stock, net of
issuance costs 251 185,950
Cash retained by the Predecessor in connection with
Recapitalization - (998)
Dividends paid - (1,905)
---------- ----------
Net cash provided by financing activities 60,151 32,174
---------- ----------
Net increase (decrease) in cash 3,240 (2,711)
Cash at beginning of period 3,104 2,906
---------- ----------
Cash at end of period $ 6,344 $ 195
========== ==========
Supplemental non-cash flow information:
Distribution of net assets to stockholder $ 3,221
==========
</TABLE>
Page 3
<PAGE>
U.S. RENTALS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Additional Total
Common Paid-in Retained Stockholders'
Shares Stock Capital Earnings Equity
-------------- ----------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 30,748,975 $ 307 $ 244,211 $ 20,868 $ 265,386
Net income -- -- 4,572 4,572
Stock options exercised 11,000 1 219 -- 220
Income tax benefit from stock
options exercised -- 31 -- 31
-------------- ------------ -------------- ------------- --------------
Balance at March 31, 1998 30,759,975 $ 308 $ 244,461 $ 25,440 $ 270,209
============== ============ ============== ============= ==============
</TABLE>
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
1. INTRODUCTION
The Registrant's initial public offering ("IPO") was declared effective on
February 20, 1997. Prior to the IPO, the equipment rental business was operated
by Ayr, Inc., a California corporation (the "Predecessor") that was treated as
an S corporation under the Internal Revenue Code. The Registrant did not have
any operations prior to its IPO. Prior to the closing of the IPO, the
Predecessor transferred substantially all of its operating assets and associated
liabilities to the Registrant in exchange for 20,748,975 shares of Common Stock
of the Registrant, representing all of the Registrant's outstanding capital
stock prior to the IPO. The Predecessor retained only non-operating assets and
liabilities, including approximately $25.7 million of notes receivable from
related parties and approximately $24.4 million of notes payable to related
parties. These transactions are referred to as the "Recapitalization" in this
report.
Unless otherwise indicated, the "Company" means the Predecessor prior to the IPO
and the Registrant on or after the IPO.
2. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results of operations for the interim periods are not necessarily indicative of
the results that may be expected for a full year.
3. BANK DEBT AND LONG-TERM OBLIGATIONS
Bank debt and long-term obligations consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---- ----
<S> <C> <C>
Notes payable:
Revolving line of credit, interest payable monthly
at money market rates (6.09% at March 31,
1998 and 6.03% to 6.34% at December 31, 1997) $259,000 $203,000
</TABLE>
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
<TABLE>
<S> <C> <C>
Notes payable related to the purchase of certain
businesses, imputed interest averaging 7%,
due through 1999 200 300
-------- --------
259,200 203,300
Note payable to related party:
Demand note payable to the majority stockholder
of Predecessor interest at a variable rate,
payable monthly. 5.90% at March 31, 1998
and December 31, 1997 21,000 17,000
-------- --------
$280,200 $220,300
======== ========
</TABLE>
On February 26, 1997, the Company repaid the bank notes, revolving line of
credit and senior notes utilizing proceeds from its IPO. The early
extinguishment of debt generated an extraordinary loss of $1,511,000 (net of
income tax benefit of $995,000).
On February 26, 1997, the Company entered into a $300,000,000 unsecured line of
credit with a bank maturing no later than February 25, 2002. The Company
believes it is in compliance with all covenants in the credit agreement.
4. INCOME TAXES
Income tax expense consists of the following:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1998 1997
---- ----
<S> <C> <C>
One-time charge for cumulative deferred taxes as
of the date of the IPO as if the Company had
always been subject to taxes as a C corporation $ - $7,520
Income tax provision for the period subsequent to
the IPO 3,073 1,592
------ ------
$3,073 $9,112
====== ======
</TABLE>
5. SUBSEQUENT EVENT
On April 28, 1998, the Company completed a $252 million private placement of
senior unsecured notes. The notes accrue interest at rates ranging from 6.71% to
6.93%. Interest is payable semi-annually on October 28th and April 28th.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FIRST QUARTER 1998 VS. FIRST QUARTER 1997
RESULTS OF OPERATIONS
Revenues. Total revenues for the three months ended March 31, 1998 increased
48.8% to $120.5 million from $81.0 million for the same period in 1997. Rental
revenue increased 41.8% to $92.6 million or 76.9% of total revenues for the
three months ended March 31, 1998, as compared to $65.3 million or 80.7% of
total revenues for the same period in 1997. Of the $27.3 million increase in
rental revenue, $18.2 million was due primarily to 44 new locations which were
added subsequent to December 31, 1996. The remaining increase of approximately
$9.1 million was due to increased equipment rental fleet at existing locations.
Rental revenue as a percentage of total revenue decreased due to the Company's
efforts to take advantage of opportunities in the used equipment sales and
merchandise and new equipment sales markets. In addition to the above, severe
weather conditions along the West Coast related to El Nino have slowed
construction activity which caused a less than expected rental volume. Used
rental equipment sales increased 81.4% to $13.1 million or 10.8% of total
revenues for the three months ended March 31, 1998 from $7.2 million or 8.9% of
total revenues for the same period in 1997 due to increased customer demand,
increased sales efforts across the nation and alternative financing sources for
customers such as various leasing programs. Merchandise and new equipment sales
increased 75.3% for the first three months ended March 31, 1998 to $14.8 million
or 12.3% of total revenues as compared to $8.5 million or 10.4% of total
revenues for the same period in 1997. This increase was primarily due to the
increase in the related rental revenue, expansion of product line within resale
showrooms, as well as a 55% increase in the number of operating locations since
December 31, 1996.
Gross Profit. Gross profit for the three months ended March 31, 1998
increased 46.7% to $26.6 million from $18.1 million for the same period in 1997
primarily due to increased rental revenue and certain economies achieved through
the Company's continued investment in new equipment. Gross profit from rentals
increased 46.8% to $49.2 million for the three month ended March 31, 1998 from
$33.5 million for the same period in 1997 as a result of higher rental volume.
Rental gross profit as a percent of rental revenue increased to 53.1% for the
three months ended March 31, 1998 from 51.3% for the same period in 1997. This
increase was due primarily to a 41.8% increase in rental revenue partially
offset by an increase in rental equipment expense of 25.7% due to the impact of
increased rental volume. Gross profit from sales of used rental equipment
increased 77.6% to $6.8 million from $3.8 million for the same period in 1997
due to increased demand for used equipment, but decreased as a percent of such
sales due to the mix of sales toward later model equipment. Gross profit from
sales of merchandise and new equipment increased 102.5% for the three months
ended March 31, 1998 as compared to the same period in 1997 due to the impact of
increased rental volume on the sale of merchandise, a concerted effort to expand
the product line and resale showrooms, and an increase in new equipment sales
and customer volume. Gross profit on the sale of merchandise and new equipment
also increased as a percentage of total revenue. Gross profit was negatively
impacted by an increase in direct operating expenses for the three months ended
March 31, 1998 which increased 57.6% to $33.4 million as compared to $21.2
million for the same period in 1997. The increase reflects staffing and
facilities costs resulting from an increased number of rental yards and higher
maintenance costs necessary to support the increased size of the rental fleet.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
Selling, General and Administrative Expense. Selling, general and
administrative expense for the three months ended March 31, 1998 increased 51.3%
to $11.4 million compared to $7.6 million for the same period in 1997. The
increase was primarily due to higher advertising, bad debt and profit sharing
expense for the three months ended March 31, 1998 as compared to the same period
in 1997. As a percentage of total revenue, selling, general and administrative
expense increased slightly to 9.4% for the three months ended March 31, 1998
from 9.3% for the same period in 1997. The small increase relates to
efficiencies in operations and realizing certain economies of scale related to
the increase in the number of locations as described above.
Termination cost of deferred compensation agreements. Other operating
expense for the three months ended March 31, 1997 consists of a one-time
compensation expense related to the termination of the Predecessor's deferred
incentive compensation agreements just prior to the Initial Public Offering
(IPO) in February 1997.
Other Expense, net. Substantially all other income and expense items for the
three months ended March 31, 1997 are related to investments and charitable
contributions made at the direction of the majority stockholder of the
Predecessor prior to the IPO. No such expense was incurred by the Company in
the current quarter.
Interest Expense, net. Interest expense increased 119.1% to $3.4 million for
the three months ended March 31, 1998 from $1.6 million for the same period in
1997. The increase was primarily the result of higher average debt outstanding
under the credit facility during the three months ended March 31, 1998 as
compared to same period of 1997. The increase in average debt outstanding was
the result of the Company's significant investment in capital expenditures.
Income Taxes. Prior to its IPO, the Company was taxed as an S corporation for
federal and state purposes. In February 1997, the Company incurred a one-time
$7.5 million deferred tax charge to reflect the recognition of a deferred tax
liability relating to federal and state income taxes as if the Company had been
taxed as a C corporation rather than as an S corporation since inception.
Subsequent to February 26, 1997, the Company's income was taxed as a C
corporation at an effective rate from 40.0 TO 40.2%.
LIQUIDITY AND CAPITAL RESOURCES
The Company received net proceeds of $186.0 million from the sale of
10,000,000 shares of its common stock on February 26, 1997. A portion of the
net proceeds from the IPO was used to repay all of the senior notes and
borrowings under the Company's prior credit facility. In conjunction with the
IPO, the Company entered into a new credit facility which provides availability
of up to $300.0 million with its existing lenders (the "Credit Facility").
The Company has primarily used cash to purchase rental equipment and acquire
and start-up rental yards. The Company historically has financed its cash
requirements primarily through net cash provided by operating activities and
borrowings under its Credit Facility. In addition to the Company's Credit
Facility, the Company completed a $252.0 million private placement of senior
unsecured notes on April 28, 1998. The Company believes that cash flow from
operations, availability under its Credit Facility and the debt offering will be
sufficient to support its operations, expansion and liquidity requirements for
at least the next 12 months.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1998
For the first quarter of 1998, the Company's operating activities before
changes in operating assets and liabilities provided net cash flow of $24.6
million for the three months ended March 31, 1998 as compared to $.1 million for
the same period in 1997. The $24.5 million increase was primarily due to the
absence of the termination cost of deferred compensation agreements which were
paid during the first quarter of 1997.
Net cash used in investing activities was $79.5 million for the three months
ended March 31, 1998 as compared to $29.4 million for the same period in 1997
due to increased purchases of rental equipment, acquisition of one rental
operation, and investment in property and equipment, partially offset by
increased sales of used rental equipment. The increase in rental fleet relates
to newly opened or acquired yards and the continued expansion of rental fleet at
existing locations. Rental equipment purchases for the three months ended March
31, 1998 were $75.4 million as compared to $28.3 million for the same period in
1997.
Net cash provided by financing activities was $60.1 million for the three
months ended March 31, 1998 as compared to $32.2 million for the same period in
1997. The principal causes for the variation between periods was the receipt of
the net proceeds on borrowings under the Company's Credit Facility and proceeds
from a note payable to a related party.
Certain Risk Factors That May Impact Future Operating Results
Statements in this report may contain forward-looking statements that
represent the Company's expectations or beliefs concerning future events,
including but not limited to the sufficiency of the Company's cash to meet
expected capital expenditures and interest expense.
The Company cautions that these statements are qualified by important factors
that could cause actual results to differ from those in the forward-looking
statements: The Company's ability to acquire or start more rental yards and the
timing, pricing and related costs of the acquisitions and openings, the
effective integration of the acquired business and new yards, variations in
seasonal rental patterns principally due to the effect of weather on
construction activity, increased competition due to larger companies expanding
into previously less competitive markets, the cyclical nature of the equipment
rental industry, the timing and financing of capital expenditures for fleet
expansions, and general economic conditions in the Company's markets including
the possible impact of interest rate fluctuations. In addition, the market
price of the Company's common stock could be subject to significant variation
due to fluctuations in the Company's operating results, changes in earnings
estimates by securities analysts and other factors.
Fluctuations in Quarterly Operating Results. The Company has experienced
fluctuations in operating results in interim periods in certain geographic
regions due to seasonality. Weather conditions, such as El Nino, sometimes
affect quarterly revenues. As a result, the Company may not learn of revenue
shortfalls until late in the quarter. The Company's operating expenses are based
in part on its expectations for future revenues and
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1998
are relatively fixed in the short term. Any revenue shortfall below expectations
could have an immediate and significant adverse effect on results of operations.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1998
PART II. OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1998.
10.1 Amended revolving note payable to Richard D. Colburn.
10.2 Private placement of senior unsecured notes.
27.1 Financial data schedule.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. RENTALS, INC.
(Registrant)
Date: April 30 , 1998 By: /s/ JOHN S. MCKINNEY
--------------- -------------------------
John S. McKinney
Vice President
Chief Financial Officer
<PAGE>
EXHIBIT 10.1
REVOLVING CREDIT NOTE
$21,000,000.00 Modesto, California
March 10, 1998
FOR VALUE RECEIVED, the undersigned, a Delaware corporation ("Maker"),
promises to pay to Richard D. Colburn or order ("Holder"), at Beverly Hills,
California, or at such other place as may be designated in writing by Holder,
within four (4) days after written demand, the principal balance plus accrued
interest on an amount up to twenty-one million dollars ($21,000,000) as
represented by advances, repayments and readvances.
Draws upon this Revolving Credit Note may be made in whole or in part as
requested by Holder from time to time. Interest thereon from the date thereof
shall accrue on the outstanding principal balance at the same rate charged by
Bank of America to the Company under the credit agreement between the bank and
the Company dated February 26, 1997. Changes in the rate hereunder shall be
effective as of the first day of each calendar month, but in no event shall
interest accrue at a rate in excess of the maximum rate of interest allowable
under California law. Interest shall be payable monthly.
Principal and interest are payable in lawful money of the United States.
If action be instituted on this note, the undersigned corporation promises to
pay such sum as the court may fix as attorney's fees.
IN WITNESS THEREOF, the undersigned has executed this Note on the above date.
U.S. RENTALS, INC.
BY /s/John S. McKinney
------------------------
John S. McKinney
Chief Financial Officer
<PAGE>
EXHIBIT 10.2
================================================================================
U.S. Rentals, Inc.
$252,000,000
$47,000,000 6.71% Series A Senior Notes due April 28, 2006
$165,000,000 6.86% Series B Senior Notes due April 28, 2008
$40,000,000 6.93% Series C Senior Notes due April 28, 2010
______________
Note Purchase Agreement
_____________
Dated as of April 1, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
(Not a part of the Agreement)
<TABLE>
<CAPTION>
Section Heading Page
<C> <S> <C>
Section 1. Authorization of Notes.......................................... 1
Section 2. Sale and Purchase of Notes...................................... 1
Section 3. Closing......................................................... 2
Section 4. Conditions to Closing........................................... 2
Section 4.1. Representations and Warranties.................................. 2
Section 4.2. Performance; No Default......................................... 2
Section 4.3. Compliance Certificates......................................... 3
Section 4.4. Opinions of Counsel............................................. 3
Section 4.5. Purchase Permitted By Applicable Law, Etc....................... 3
Section 4.6. Sale of Other Notes............................................. 3
Section 4.7. Payment of Special Counsel Fees................................. 3
Section 4.8. Private Placement Number........................................ 3
Section 4.9. Changes in Corporate Structure.................................. 4
Section 4.10. Funding Instructions............................................ 4
Section 4.11. Proceedings and Documents....................................... 4
Section 5. Representations and Warranties of the Company................... 4
Section 5.1. Organization; Power and Authority............................... 4
Section 5.2. Authorization, Etc.............................................. 4
Section 5.3. Disclosure...................................................... 5
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates 5
Section 5.5. Financial Statements............................................ 6
Section 5.6. Compliance with Laws, Other Instruments, Etc.................... 6
Section 5.7. Governmental Authorizations, Etc................................ 6
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders....... 6
Section 5.9. Taxes........................................................... 7
Section 5.10. Title to Property; Leases....................................... 7
Section 5.11. Licenses, Permits, Etc.......................................... 7
Section 5.12. Compliance with ERISA........................................... 8
</TABLE>
<PAGE>
<TABLE>
<C> <S> <C>
Section 5.13. Private Offering by the Company................................. 8
Section 5.14. Use of Proceeds; Margin Regulations............................. 9
Section 5.15. Existing Indebtedness; Future Liens............................. 9
Section 5.16. Foreign Assets Control Regulations, Etc......................... 9
Section 5.17. Status under Certain Statutes................................... 9
Section 5.18. Notes Rank Pari Passu........................................... 10
Section 5.19. Environmental Matters........................................... 10
Section 6. Representations of the Purchaser................................ 10
Section 6.1. Purchase for Investment......................................... 10
Section 6.2. Source of Funds................................................. 11
Section 7. Information as to the Company................................... 12
Section 7.1. Financial and Business Information.............................. 12
Section 7.2. Officer's Certificate........................................... 15
Section 7.3. Inspection...................................................... 16
Section 8. Prepayment of the Notes......................................... 17
Section 8.1. Required Prepayments............................................ 17
Section 8.2. Optional Prepayments with Make-Whole Amount..................... 17
Section 8.3. Change in Control............................................... 17
Section 8.4. Allocation of Partial Prepayments............................... 19
Section 8.5. Maturity; Surrender, Etc........................................ 20
Section 8.6. Purchase of Notes............................................... 20
Section 8.7. Make-Whole Amount............................................... 20
Section 9. Affirmative Covenants........................................... 21
Section 9.1. Compliance with Law............................................. 21
Section 9.2. Insurance....................................................... 22
Section 9.3. Maintenance of Properties....................................... 22
Section 9.4. Payment of Taxes and Claims..................................... 22
Section 9.5. Corporate Existence, Etc........................................ 22
Section 9.6. Nature of Business.............................................. 23
Section 9.7. Notes to Rank Pari Passu........................................ 23
Section 10. Negative Covenants.............................................. 23
Section 10.1. Consolidated Net Worth.......................................... 23
Section 10.2. Fixed Charges Coverage Ratio.................................... 23
Section 10.3. Limitations on Indebtedness..................................... 23
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Section 10.4. Limitation on Liens............................................. 24
Section 10.5. Mergers, Consolidations and Sales of Assets..................... 26
Section 10.6. Transactions with Affiliates.................................... 30
Section 11. Events of Default............................................... 30
Section 12. Remedies on Default, Etc........................................ 32
Section 12.1. Acceleration.................................................... 32
Section 12.2. Other Remedies.................................................. 33
Section 12.3. Rescission...................................................... 33
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc............... 33
Section 13. Registration; Exchange; Substitution of Notes................... 34
Section 13.1. Registration of Notes........................................... 34
Section 13.2. Transfer and Exchange of Notes.................................. 34
Section 13.3. Replacement of Notes............................................ 34
Section 14. Payments on Notes............................................... 35
Section 14.1. Place of Payment................................................ 35
Section 14.2. Home Office Payment............................................. 35
Section 15. Expenses, Etc................................................... 35
Section 15.1. Transaction Expenses............................................ 35
Section 15.2. Survival........................................................ 36
Section 16. Survival of Representations and Warranties; Entire Agreement.... 36
Section 17. Amendment and Waiver............................................ 36
Section 17.1. Requirements.................................................... 36
Section 17.2. Solicitation of Holders of Notes................................ 37
Section 17.3. Binding Effect, Etc............................................. 37
Section 17.4. Notes Held by Company, Etc...................................... 37
Section 18. Notices......................................................... 38
Section 19. Reproduction of Documents....................................... 38
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Section 20. Confidential Information........................................ 38
Section 21. Substitution of Purchaser....................................... 39
Section 22. Miscellaneous................................................... 40
Section 22.1. Successors and Assigns.......................................... 40
Section 22.2. Payments Due on Non-Business Days............................... 40
Section 22.3. Severability.................................................... 40
Section 22.4. Construction.................................................... 40
Section 22.5. Counterparts.................................................... 40
Section 22.6. Governing Law................................................... 41
Signature............................................................................. 41
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Schedule A - Information Relating To Purchasers
Schedule B - Defined Terms
Schedule 4.9 - Changes in Corporate Structure
Schedule 5.4 - Subsidiaries of the Company and Ownership of Subsidiary Stock
Schedule 5.5 - Financial Statements
Schedule 5.11 - Patents, etc.
Schedule 5.14 - Use of Proceeds
Schedule 5.15 - Existing Indebtedness
Exhibit 1A - Form of 6.71% Series A Senior Notes due April 28, 2006
Exhibit 1B - Form of 6.86% Series B Senior Notes due April 28, 2008
Exhibit 1C - Form of 6.93% Series C Senior Notes due April 28, 2010
Exhibit 4.4(a) - Form of Opinion of Special Counsel for the Company
Exhibit 4.4(b) - Form of Opinion of Special Counsel for the Purchasers
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U.S. RENTALS, INC.
1581 CUMMINS DRIVE, SUITE 155
MODESTO, CALIFORNIA 95358
$47,000,000 6.71% Series A Senior Notes due April 28, 2006
$165,000,000 6.86% Series B Senior Notes due April 28, 2008
$40,000,000 6.93% Series C Senior Notes due April 28, 2010
Dated as of April 1, 1998
To Each of the Purchasers listed
in the attached Schedule A:
Ladies and Gentlemen:
U.S. Rentals, Inc., a Delaware corporation (the "Company"), agrees with you
as follows:
Section 1. Authorization of Notes.
The Company will authorize the issue and sale of $252,000,000 aggregate
principal amount of its Senior Notes as follows: $47,000,000 6.71% Series A
Senior Notes due April 28, 2006, $165,000,000 6.86% Series B Senior Notes due
April 28, 2008, and $40,000,000 6.93% Series C Senior Notes due April 28, 2010
(respectively, the "Series A Notes", the "Series B Notes" and the "Series C
Notes", and collectively, the "Notes"), such terms to include any such notes
issued in substitution therefor pursuant to SECTION 13 of this Agreement or the
Other Agreements (as hereinafter defined). The Series A Notes shall be
substantially in the form set out in EXHIBIT 1A, the Series B Notes shall be
substantially in the form set out in EXHIBIT 1B, and the Series C Notes shall be
substantially in the form set out in EXHIBIT 1C, in each case with such changes
therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in SCHEDULE B; references
to a "SCHEDULE" or an "EXHIBIT" are, unless otherwise specified, to a SCHEDULE
or an EXHIBIT attached to this Agreement.
Section 2. Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in SECTION 3, Notes in the principal amount and of the Series
specified opposite your name in SCHEDULE A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into
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this Agreement, the Company is entering into separate Note Purchase Agreements
(the "Other Agreements") identical with this Agreement with each of the other
purchasers named in SCHEDULE A (the "Other Purchasers"), providing for the sale
at such Closing to each of the Other Purchasers of Notes in the principal amount
and of the Series specified opposite its name in SCHEDULE A. Your obligation
hereunder, and the obligations of the Other Purchasers under the Other
Agreements, are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder.
Section 3. Closing.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Chapman and Cutler, 111 W. Monroe
Street, Chicago, Illinois 60603, at 10:00 a.m. Chicago time, at a closing (the
"Closing") on April 28, 1998 or on such other Business Day thereafter on or
prior to April 30, 1998 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes to
be purchased by you in the form of a single Note (or such greater number of
Notes in denominations of at least $500,000 as you may request) dated the date
of the Closing and registered in your name (or in the name of your nominee),
against delivery by you to the Company or its order of immediately available
funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
1233-1-13468 at Bank of America, Concord, California, ABA/Routing Number 121-
000-358. If at the Closing the Company shall fail to tender such Notes to you
as provided above in this SECTION 3, or any of the conditions specified in
SECTION 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
Section 4. Conditions to Closing.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue
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and sale of the Notes (and the application of the proceeds thereof as
contemplated by SCHEDULE 5.14), no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that would have
been prohibited by SECTIONS 10.3, 10.4, 10.5 or 10.6 hereof had such SECTIONS
applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in SECTIONS 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreements.
Section 4.4. Opinions of Counsel. You shall have received opinions in
form and substance satisfactory to you, dated the date of the Closing (a) from
O'Melveny & Myers LLP, counsel for the Company, covering the matters set forth
in EXHIBIT 4.4(A) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to you) and (b)
from Chapman and Cutler, your special counsel in connection with such
transactions, substantially in the form set forth in EXHIBIT 4.4(B) and covering
such other matters incident to such transactions as you may reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, Etc. On the date of
the Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
SCHEDULE A.
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Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
SECTION 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each Series of the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
SCHEDULE 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in SCHEDULE 5.5.
Section 4.10. Funding Instructions. At least three Business Days prior to
the date of the Closing, you shall have received written instructions executed
by a Responsible Officer of the Company directing the manner of the payment of
funds and setting forth (1) the name and address of the transferee bank, (2)
such transferee bank's ABA number, (3) the account name and number into which
the purchase price for the Notes is to be deposited, and (4) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.
Section 4.11. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the
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corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other Agreements and
the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agents, Salomon Smith
Barney, BancAmerica Robertson Stephens, and NationsBanc Montgomery Securities
LLC, have delivered to you and each Other Purchaser a copy of a Confidential
Memorandum, dated March 1998 (the "Memorandum"), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. This Agreement, the Schedules hereto, the Memorandum, the
documents, certificates or other writings delivered to you by or on behalf of
the Company in connection with the transactions contemplated hereby and the
financial statements listed in SCHEDULE 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum,
or in one of the documents, certificates or other writings identified therein,
or in the financial statements listed in SCHEDULE 5.5, since December 31, 1997,
there has been no change in the financial condition, operations, business,
properties or prospects of the Company or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents, certificates and
other writings delivered to you by or on behalf of the Company specifically for
use in connection with the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) SCHEDULE 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the
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Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers. Schedule 5.4 also identifies those Subsidiaries
which have been designated Restricted Subsidiaries and those Subsidiaries which
constitute Material Subsidiaries at the date of the Closing.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in SCHEDULE 5.4 as being owned by
the Company and its Restricted Subsidiaries have been validly issued, are fully
paid and nonassessable and are owned by the Company or another Restricted
Subsidiary free and clear of any Lien (except as otherwise disclosed in SCHEDULE
5.4).
(c) Each Restricted Subsidiary identified in SCHEDULE 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Restricted Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it transacts and
proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement (other than the agreements listed on SCHEDULE
5.4 and customary limitations imposed by corporate law statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its Restricted
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on SCHEDULE 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(i) contravene, result
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in any breach of, or constitute a default under, or result in the creation of
any Lien in respect of any property of the Company or any Restricted Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Restricted Subsidiary is bound or by
which the Company or any Restricted Subsidiary or any of their respective
properties may be bound or affected, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Restricted Subsidiary or (iii) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Restricted
Subsidiary or any property of the Company or any Restricted Subsidiary in any
court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) The Company is not in default in the payment of principal or interest
on any indebtedness for borrowed money described in SCHEDULE 5.15. Neither the
Company nor any Restricted Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries have
filed all tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Restricted Subsidiary, as the case may
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be, has established adequate reserves in accordance with GAAP. The Company knows
of no basis for any other tax or assessment that could reasonably be expected to
have a Material Adverse Effect. The charges, accruals and reserves on the books
of the Company and its Subsidiaries in respect of Federal, state or other taxes
for all fiscal periods are adequate. The Federal income tax liabilities of the
Company and its Restricted Subsidiaries have been determined by the Internal
Revenue Service and paid for all fiscal years up to and including the fiscal
year ended December 31, 1993. The Federal income tax liabilities of AYR, Inc.
(formerly known as USR Holdings, Inc.), a California corporation and predecessor
to the Company, have been determined by the Internal Revenue Service and paid
for all fiscal years up to and including the fiscal year ended December 31,
1992.
Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in SECTION 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement.
All leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. Except as disclosed in SCHEDULE
5.11,
(a) the Company and its Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, service mark, trademark, trade name or other
right owned or used by the Company or any of its Restricted Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred
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any liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in Section
3 of ERISA), and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this SECTION 5.12(E) is made in reliance
upon and subject to the accuracy of your representation in SECTION 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than you, the
Other Purchasers and not more than 110 other Institutional Investors, each of
which has been offered the Notes at a private sale for investment. Neither the
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Company nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Notes to the registration requirements
of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in SCHEDULE 5.14. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens. (a) SCHEDULE 5.15 sets
forth a complete and correct list of all outstanding Indebtedness of the Company
and its Restricted Subsidiaries as of April 27, 1998, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Indebtedness of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default, and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in SCHEDULE 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
SECTION 10.4.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
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Section 5.17. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an "investment company" registered or required to be
registered subject to regulation under the Investment Company Act of 1940, as
amended, or is subject to regulation under the Public Utility Holding Company
Act of 1935, as amended, or the Federal Power Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all other senior unsecured Indebtedness (actual or contingent) of the Company,
including, without limitation, all senior unsecured Indebtedness of the Company
described in SCHEDULE 5.15 hereto.
Section 5.19. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them in a manner contrary to any Environmental Laws or
has disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws, in each case in any manner that could reasonably be
expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
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Section 6. Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof; provided that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE") 95-
60 (issued July 12, 1995) and there is no employee benefit plan, treating
as a single plan all plans maintained by the same employer or employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan exceed ten percent (10%) of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus,
as set forth in the NAIC Annual Statement filed with your state of
domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment fund, within the meaning of PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the Company in writing
pursuant to this paragraph (b), no employee benefit plan or group of plans
maintained by the same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by
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such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part l(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a Person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
of such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (e); or
(f) the Source is an insurance company separate account maintained
solely in connection with the fixed contractual obligations of the
insurance company under which the amounts payable, or credited, to an
employee benefit plan (or its related trust) and to any participant or
beneficiary of such plan (including any annuitant) are not affected in any
manner by the investment performance of the separate account; or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that you or such
transferee are relying on any representation contained in paragraph (b), (c) or
(e) above, the Company shall deliver on the date of Closing and, if it is
legally able to do so, on the date of any applicable transfer a certificate,
which shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii)
with respect to any plan identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As used in this
SECTION 6.2, the terms "employee benefit plan", "governmental plan", "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
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Section 7. Information as to the Company.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 45 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of:
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments; provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this SECTION 7.1(A) so
long as such Forms 10-Q contain quarterly statements reflecting the financial
position and results of operations of the Company and its Subsidiaries for such
quarters;
(b) Annual Statements -- within 90 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by:
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(1) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in
all material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(2) a certificate of such accountants stating that they
have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any condition or
event that then constitutes a Default or an Event of Default
under SECTION 10.1, 10.2, 10.3 or 10.4(J), and, if they are
aware that any such condition or event then exists, specifying
the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly
or indirectly, for any failure to obtain knowledge of any
Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did
not make such an audit),
provided that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in clause
(2) above, shall be deemed to satisfy the requirements of this SECTION
7.1(B) so long as such annual reports to shareholders and its annual
reports on Forms 10-K together contain annual statements reflecting the
financial position and results of operations of the Company and its
Subsidiaries for such years;
(c) SEC and Other Reports -- promptly upon their becoming available,
one copy of (i) each financial statement, report, notice or proxy statement
sent by the Company or any Restricted Subsidiary to public securities
holders generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto filed by the
Company or any Restricted Subsidiary with the Securities and Exchange
Commission, and (iii) all press releases relating to financial matters and
other statements
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made available generally by the Company or any Subsidiary to the public, in
each case concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action with respect to
a claimed default of the type referred to in SECTION 11(F), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as
defined in Section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions,
if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to
have a Material Adverse Effect;
(f) Additional Reporting Requirement. If at any time any
Unrestricted Subsidiary individually or Unrestricted Subsidiaries
collectively have assets equal to or exceeding 10% or more of Consolidated
Total Assets or contribute operating income
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(determined in accordance with GAAP) equal to or greater than 10% of
operating income of the Company and its consolidated Subsidiaries and the
Company shall have furnished the holders of the Notes financial information
pursuant to paragraphs (a) and (b) above by providing the Form 10-Q or Form
10-K respectively, then and in such event the Company shall, within the
respective periods provided in paragraphs (a) and (b) above, furnish to the
holders of the Notes financial statements of the character and for the
dates and periods as in said paragraphs (a) and (b) provided on the basis
of the Company and its Restricted Subsidiaries and in the case of financial
statements provided pursuant to paragraph (a) above, certified as correct
and complete by an authorized officer of the Company, and in the case of
financial statements provided pursuant to paragraph (b) above, accompanied
by a report thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect that the
consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Company and its Restricted
Subsidiaries as of the end of the fiscal year being reported on and the
consolidated results of the operations and cash flows for said year in
conformity with GAAP and that the examination of such accountants in
connection with such financial statements has been conducted in accordance
with generally accepted auditing standards and that such audit provides a
reasonable basis for such opinion in the circumstances;
(g) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Restricted Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to time
may be reasonably requested by any such holder of Notes, including without
limitation, such information as is required by Rule 144A under the
Securities Act to be delivered to the prospective transferee of any Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to SECTION 7.1(A) or SECTION 7.1(B)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of SECTION 10.1 through SECTION 10.5
hereof, inclusive, during the quarterly
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or annual period covered by the statements then being furnished (including
with respect to each such SECTION, where applicable, the calculations of
the maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such SECTIONS, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of the Company
and its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor (and, for this purpose,
such Institutional Investors agree to coordinate any exercise of their right to
conduct the visits and inspections described below):
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Restricted
Subsidiaries with the Company's officers and (with the consent of the
Company, which consent will not be unreasonably withheld) its independent
public accountants, and all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Restricted Subsidiary, to examine all
their respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its Restricted Subsidiaries), all at such times and as
often as may be requested.
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Section 8. Prepayment of the Notes.
Section 8.1. Required Prepayments. No regularly scheduled prepayment of
principal of the Notes is required prior to their date of maturity.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 2% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date (which shall be a Business Day) with
respect to such principal amount. The Company will give each holder of Notes
written notice of each optional prepayment under this SECTION 8.2 not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each Note held by such
holder to be prepaid (determined in accordance with SECTION 8.4), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Change in Control. (a) Notice of Change in Control or
Control Event. The Company will, within five Business Days after any Responsible
Officer has knowledge of the occurrence of any Change in Control or Control
Event, give written notice of such Change in Control or Control Event to each
holder of Notes unless notice in respect of such Change in Control (or the
Change in Control contemplated by such Control Event) shall have been given
pursuant to subparagraph (b) of this Section. If a Change in Control has
occurred, such notice shall contain and constitute an offer to prepay Notes as
described in subparagraph (c) of this Section and shall be accompanied by the
certificate described in subparagraph (g) of this Section.
(b) Condition to Company Action. The Company will not take any action
that consummates or finalizes a Change in Control unless (i) at least 30 days
prior to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section, accompanied by the certificate described in
subparagraph (g) of this Section, and (ii) contemporaneously with such action,
it prepays all Notes required to be prepaid in accordance with this Section.
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(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section shall be an offer to prepay, in
accordance with and subject to this Section, all, but not less than all, the
Notes held by each holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (a) of this Section, such date shall be not
less than 30 days and not more than 120 days after the date of such offer (if
the Proposed Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the first Business Day after the 45th day after the
date of such offer).
(d) Acceptance. A holder of Notes may accept the offer to prepay made
pursuant to this Section by causing a notice of such acceptance to be delivered
to the Company not later than 15 days after receipt by such holder of the most
recent offer of prepayment. A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section shall be deemed to constitute a
rejection of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section shall be at 100% of the principal amount of such Notes, together with
interest on such Notes accrued to the date of prepayment, but without Make-Whole
Amount or other premium. The prepayment shall be made on the Proposed
Prepayment Date except as provided in subparagraph (f) of this Section.
(f) Deferral Pending Change in Control. The obligation of the Company to
prepay Notes pursuant to the offers required by subparagraph (c) and accepted in
accordance with subparagraph (d) of this Section is subject to the occurrence of
the Change in Control in respect of which such offers and acceptances shall have
been made. In the event that such Change in Control has not occurred on the
Proposed Prepayment Date in respect thereof, the prepayment shall be deferred
until, and shall be made on, the date on which such Change in Control occurs.
The Company shall keep each holder of Notes reasonably and timely informed of
(i) any such deferral of the date of prepayment, (ii) the date on which such
Change in Control and the prepayment are expected to occur, and (iii) any
determination by the Company that efforts to effect such Change in Control have
ceased or been abandoned (in which case the offers and acceptances made pursuant
to this Section in respect of such Change in Control shall be deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
SECTION 8.3; (iii) the principal amount of each Note offered to be prepaid;
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(iv) the interest that would be due on each Note offered to be prepaid, accrued
to the Proposed Prepayment Date; (v) that the conditions of this Section have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.
(h) Certain Definitions. "Change in Control" shall be deemed to have
occurred if any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act), other than the Colburn Control Group,
(i) become the "beneficial owners" (as such term is used in Rule
13d-3 under the Exchange Act as in effect on the date of the Closing),
directly or indirectly, of more than 50% of the total voting power of all
classes then outstanding of the Company's voting stock, or
(ii) acquire after the date of the Closing (x) the power to elect,
appoint or cause the election or appointment of at least a majority of
the members of the board of directors of the Company, through beneficial
ownership of the capital stock of the Company or otherwise, or (y) all or
substantially all of the properties and assets of the Company.
"Control Event" means:
(i) the execution by the Company or any of its Subsidiaries or
Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events which,
individually or in the aggregate, may reasonably be expected to result in
a Change in Control,
(ii) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is
used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange Act as in
effect on the date of the Closing) to the holders of the common stock of
the Company, which offer, if accepted by the requisite number of holders,
would result in a Change in Control.
"Colburn Control Group" shall mean, collectively, any or all of: (a)
Richard D. Colburn, (b) any spouse and lineal descendants of Richard D. Colburn,
(c) the estate of one or more of the Persons named in clauses (a) or (b) above,
(d) each trust in respect of which one or
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more of the Persons described in clauses (a), (b) or (c) above (1) are the
principal beneficiaries or (2) constitute a majority of the trustees with voting
power over such trust, and (e) any organization described in Section 501 of the
Code to the extent of any shares transferred by any of the Persons described in
clauses (a), (b), (c) or (d) above.
(i) All calculations contemplated in this SECTION 8.3 involving the capital
stock of any Person shall be made with the assumption that all convertible
Securities of such Person then outstanding and all convertible Securities
issuable upon the exercise of any warrants, options and other rights outstanding
at such time were converted at such time and that all options, warrants and
similar rights to acquire shares of capital stock of such Person were exercised
at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to SECTION 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes of all Series
at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment. All prepayments made pursuant to SECTION 8.3 or SECTION 10.5 shall
be applied only to the Notes of the holders who have elected to participate in
such prepayment.
Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this SECTION 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal; provided that the Make-
Whole Amount may in no event be less
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than zero. For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to SECTION 8.2 or has become or is
declared to be immediately due and payable pursuant to SECTION 12.1, as the
context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page PX1" or other appropriate page of the Bloomberg
Financial Markets Services Screen (or such other display as may replace
Page PX1 or other appropriate page on the Bloomberg Financial Markets
Services Screen) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or (b) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date. Such
implied yield will be determined, if necessary, by (i) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the average life closest to and
greater than the Remaining Average Life and (2) the actively traded U.S.
Treasury security with the average life closest to and less than the
Remaining Average Life.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest day) obtained by dividing
(a) such Called Principal into (b) the sum of the products obtained by
multiplying (i) the principal component of each Remaining Scheduled Payment
with respect to such Called Principal
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by (ii) the number of years (calculated to the nearest day) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date; provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to SECTION 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
SECTION 8.2 or has become or is declared to be immediately due and payable
pursuant to SECTION 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
ERISA and all Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
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Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times; provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and
will cause each of its Subsidiaries to, file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Company or any Subsidiary; provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if (a) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (b) the nonpayment of all such
taxes and assessments and claims in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. Subject to SECTION 10.5,
the Company will at all times preserve and keep in full force and effect its
corporate existence. Subject to SECTION 10.5, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of
its Restricted Subsidiaries (unless merged into the Company or a Restricted
Subsidiary) and all rights and franchises of the Company and its Restricted
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.
Section 9.6. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business (as described in the Memorandum), taken on a consolidated
basis, which would then be engaged in by the Company and its Restricted
Subsidiaries would be substantially changed from the general nature of the
business engaged in by the Company and its Restricted Subsidiaries on the date
of this Agreement.
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Section 9.7. Notes to Rank Pari Passu. The Notes are and at all
times shall remain direct and unsecured obligations of the Company ranking pari
passu as against the assets of the Company with all other Notes from time to
time issued and outstanding hereunder without any preference among themselves
and pari passu with all other present and future unsecured Indebtedness (actual
or contingent) of the Company which is not expressed to be subordinate or junior
in rank to any other unsecured Indebtedness of the Company.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are
outstanding:
Section 10.1. Consolidated Net Worth. The Company will at all
times keep and maintain Consolidated Net Worth at an amount not less than the
sum of (a) $200,000,000 plus (b) 75% of the aggregate amount of Net Proceeds of
Capital Stock computed on a cumulative basis for each of the elapsed fiscal
quarters ending after December 31, 1997.
Section 10.2. Fixed Charges Coverage Ratio. The Company will as
at the end of each fiscal quarter keep and maintain the ratio of Consolidated
Income Available for Fixed Charges for the immediately preceding four fiscal
quarters to Consolidated Fixed Charges for such fiscal period at not less than
1.50 to 1.00.
Section 10.3. Limitations on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, create, assume, guarantee
or otherwise incur or in any manner become liable in respect of any
Indebtedness, except:
(1) Indebtedness evidenced by the Notes;
(2) Indebtedness of a Restricted Subsidiary to the Company or to a
Wholly-owned Restricted Subsidiary; and
(3) Indebtedness of the Company and Indebtedness of any of its
Restricted Subsidiaries, provided that at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving effect thereto
and to the application of the proceeds thereof (i) the ratio of
Consolidated Indebtedness to Consolidated Net Worth would not exceed 2.5 to
1.0, and (ii) in the case of (x) Indebtedness of the Company secured by
Liens permitted under SECTION 10.4(J) and (y) Indebtedness of Restricted
Subsidiaries (except Indebtedness held by the Company or another Wholly-
owned Restricted Subsidiary and Indebtedness secured by Liens described
under SECTION 10.4(F), (G), (H) or (I)), the aggregate amount of all such
Indebtedness then outstanding shall not exceed 25% of Consolidated Net
Worth.
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(b) Indebtedness issued or incurred in accordance with the limitations
of SECTION 10.3(A)(1) and existing Indebtedness described in SCHEDULE 5.15
hereto may be renewed, extended or refunded, without increase in principal
amount remaining unpaid at the time of such renewal, extension or refunding,
provided that (i) at the time of any such renewal, extension or refunding and
after giving effect thereto, no Default or Event of Default would exist and (ii)
any renewal, extension or refunding of the Notes shall be accomplished in
accordance with the applicable provisions of this Agreement. It is understood
and agreed that this provision shall not in any way create any obligation on the
part of any holder to consent to, or consider a request for, any extension,
renewal or refunding.
(c) Any Person which becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this SECTION 10.3 be deemed to have created,
assumed or incurred at the time it becomes a Restricted Subsidiary all
Indebtedness of such Person existing immediately after it becomes a Restricted
Subsidiary.
Section 10.4. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
except:
(a) Liens for taxes and assessments or governmental charges or
levies and Liens securing claims or demands of mechanics and materialmen,
provided that payment thereof is not at the time required by SECTION 9.4;
(b) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Restricted Subsidiary shall at any time
in good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like general nature,
in any such case incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case, the
obligation secured is not
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overdue or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Restricted Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly
situated and which do not in any event materially impair their use in the
operation of the business of the Company and its Restricted Subsidiaries;
(e) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to another Wholly-owned Restricted Subsidiary;
(f) Liens existing as of the date of Closing and described on
SCHEDULE 5.15 hereto;
(g) Liens created or incurred after the date of Closing given to
secure the payment of the purchase price or cost of construction incurred
in connection with the acquisition or purchase of property (or any
improvement thereto) useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary, provided that (1) the
Lien shall attach solely to the property or improvement thereon acquired or
purchased, (2) such Lien shall have been created or incurred within 270
days of the date of acquisition, purchase or completion of construction of
such property, (3) at the time of acquisition, purchase or construction of
such property, the aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such property, whether or not assumed by the Company or
a Restricted Subsidiary, shall not exceed an amount equal to 100% of the
total purchase price of such property, (4) in the case of the creation or
incurrence of any Capitalized Lease, the fixed asset which is the subject
thereof if previously owned by the Company or a Restricted Subsidiary shall
have been sold or otherwise disposed of within the limitations provided in
SECTION 10.5(B)(3) and (5) all such Indebtedness shall have been incurred
within the limitations provided in SECTION 10.3(A)(3)(I);
(h) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Company or a Restricted
Subsidiary or its becoming a Restricted Subsidiary, or any Lien existing on
any property acquired by the Company or any Restricted Subsidiary at the
time such property is so acquired (whether or not the Indebtedness secured
thereby shall have been assumed), provided that (1) no such Lien shall have
been created or assumed in contemplation of such consolidation or merger or
such Person's becoming a Restricted Subsidiary or such acquisition of
property, (2) each
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such Lien shall extend solely to the item or items of property so acquired
and, if required by the terms of the instrument originally creating such
Lien, other property which is an improvement to or is acquired for specific
use in connection with such acquired property, and (3) all such
Indebtedness shall have been incurred within the limitations provided in
SECTION 10.3(a)(3)(i);
(i) Liens incurred in connection with any renewals, extensions or
refundings of any Indebtedness secured by Liens described in SECTION
10.4(f), (g) or (h), provided that no additional property is encumbered and
there is no increase in the aggregate principal amount of Indebtedness
secured thereby; and
(j) Liens created or incurred after the date of Closing given to
secure Indebtedness of the Company or any Restricted Subsidiary, in
addition to the Liens permitted by the preceding clauses (a) through (i)
hereof, provided that all Indebtedness secured by such Liens shall have
been incurred within the limitations provided in SECTION 10.3(A)(3)(I) and
(II).
Section 10.5. Mergers, Consolidations and Sales of Assets. (a) The Company
will not, and will not permit any Restricted Subsidiary to, consolidate with or
be a party to a merger with any other Person, or sell, lease or otherwise
dispose of all or substantially all of its assets; provided that:
(1) any Restricted Subsidiary may (x) merge or consolidate with or
into or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to, the Company or a Wholly-
owned Restricted Subsidiary so long as in any merger or consolidation
involving (i) the Company, the Company shall be the surviving or continuing
corporation and (ii) a Wholly-owned Restricted Subsidiary, the Wholly-owned
Restricted Subsidiary shall be the surviving or continuing corporation and
(y) convey, transfer or lease all or substantially all of its assets to any
Person in compliance with the provisions of SECTION 10.5(B)(3) or (C)(3);
and
(2) the Company may consolidate or merge with or into any other
corporation if,
(i) the surviving or continuing corporation is the Company;
provided that at the time of such consolidation or merger and
immediately after giving effect thereto, no Default or Event of
Default would exist, or
(ii) the successor corporation is not the Company, then the
corporation which results from such consolidation or merger (the
"surviving corporation")
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(x) shall be a solvent corporation organized and existing under
the laws of the United States of America or any state thereof or
the District of Columbia, (y) shall have executed and delivered
to each holder of the Notes its assumption of the due and
punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the
due and punctual performance and observation of all of the
covenants in the Notes, this Agreement and the Other Agreements
to be performed or observed by the Company and an opinion of
counsel reasonably satisfactory to such holders to the effect
that the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid and
binding contract and agreement of the surviving corporation
enforceable in accordance with its terms, except as enforcement
of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles, and at the time of such consolidation or
merger and immediately after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the surviving
corporation would be permitted by the provisions of SECTION
10.3(A)(3)(I) to incur at least $1.00 of additional Indebtedness.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease (as lessor), transfer, abandon or otherwise dispose
of assets (except assets (including, without limitation, rental equipment
inventory) sold in the ordinary course of business for fair market value) to any
Person; provided that the foregoing restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets of
the Company to a Wholly-owned Restricted Subsidiary or of a Restricted
Subsidiary to the Company or a Wholly-owned Restricted Subsidiary;
(2) the sale of accounts receivable for fair market value,
without recourse to the Company or any Restricted Subsidiary, to a bank or
other financial institution or to the Company or any Wholly-owned
Restricted Subsidiary or to any other Person in a transaction involving a
bank or other financial institution; or
(3) the sale of assets for cash or other property to a Person or
Persons (other than an Affiliate) if all of the following conditions are
met:
(i) such assets (valued at net book value) do not, together
with all other assets of the Company and its Restricted Subsidiaries
previously disposed of during the immediately preceding 12 calendar
month period (other than in the ordinary course of business or as
provided in (1) or (2) above), exceed 10% of
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Consolidated Total Assets, determined as of the end of the immediately
preceding fiscal year;
(ii) in the opinion of a Responsible Officer of the Company,
the sale is for fair value and is in the best interests of the
Company; and
(iii) immediately after the consummation of the transaction
and after giving effect thereto, no Default or Event of Default would
exist;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the proceeds of which were or are applied
within one year of the date of sale of such assets to either (A) the
acquisition of fixed assets or other property (including, without
limitation, rental equipment inventory) useful and intended to be used in
the operation of the business of the Company and its Restricted
Subsidiaries as described in SECTION 9.6 hereof or (B) the prepayment at
100% of the principal amount thereof, together with interest accrued to the
date of such prepayment, but without Make-Whole Amount or other premium, on
a pro rata basis, of Senior Funded Indebtedness of the Company. It is
understood and agreed by the Company that: (A) any holder of the Notes may
decline any such offer of prepayment, (B) the failure of any such holder to
accept or decline any such offer of prepayment shall be deemed to be an
election by such holder to decline such prepayment, and (C) if such offer
is so accepted, the proceeds so offered towards the prepayment of the Notes
and accepted shall be prepaid. In the event any holder of Senior Funded
Indebtedness of the Company declines any such offer of prepayment, the
Company shall offer, on a pro rata basis, the proceeds so declined to the
holders of Senior Funded Indebtedness of the Company accepting the offer of
prepayment. To the extent such holders of Senior Funded Indebtedness shall
decline such payments, the Company and its Restricted Subsidiaries may use
the remaining amount of such declined proceeds for general corporate
purposes and such declined proceeds shall be deemed to have been applied to
the prepayment of Senior Funded Indebtedness for the purpose of the
immediately preceding proviso. If and to the extent the Senior Funded
Indebtedness being prepaid shall be with respect to a revolving credit or
similar credit facility providing the Company with the right to obtain
loans or other extensions of credit from time to time, such amount being so
applied shall permanently reduce the availability of credit under such
credit facility by an amount not less than the amount of such proceeds so
applied to the prepayment of such Indebtedness.
Computations pursuant to this SECTION 10.5(B) shall include dispositions
made pursuant to SECTION 10.5(c) and computations pursuant to SECTION 10.5(c)
shall include dispositions made pursuant to this SECTION 10.5(b).
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(c) The Company will not, and will not permit any Restricted Subsidiary
to, sell, pledge or otherwise dispose of any shares of the stock (including as
"stock" for the purposes of this SECTION 10.5(C) any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
of a Restricted Subsidiary (said stock, options, warrants and other Securities
herein called "Subsidiary Stock") or any Indebtedness of any Restricted
Subsidiary, nor will any Restricted Subsidiary issue, sell, pledge or otherwise
dispose of any shares of its own Subsidiary Stock to any Person, provided that
the foregoing restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company or a Wholly-owned
Restricted Subsidiary; or
(3) the sale or other disposition at any one time to a Person (other
than directly or indirectly to an Affiliate) of the entire Investment of
the Company and its other Restricted Subsidiaries in any Restricted
Subsidiary if all of the following conditions are met:
(i) the assets (valued at net book value) of such Restricted
Subsidiary do not, together with all other assets of the Company and
its Restricted Subsidiaries previously disposed of during the
immediately preceding 12 calendar month period (other than in the
ordinary course of business or as provided in (1) or (2) above),
exceed 10% of Consolidated Total Assets, determined as of the end of
the immediately preceding fiscal year;
(ii) in the opinion of a Responsible Officer of the Company,
the sale is for fair value and is in the best interests of the
Company;
(iii) immediately after the consummation of the transaction
and after giving effect thereto, such Restricted Subsidiary shall
have no Indebtedness of or continuing Investment in the capital
stock of the Company or of any Restricted Subsidiary and any such
Indebtedness or Investment shall have been discharged or acquired,
as the case may be, by the Company or a Restricted Subsidiary; and
(iv) immediately after the consummation of the transaction
and after giving effect thereto, no Default or Event of Default
would exist;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the proceeds of which were or are applied
within one year of the date of sale of such assets to either (A) the
acquisition of fixed assets or other property
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(including, without limitation, rental equipment inventory) useful and
intended to be used in the operation of the business of the Company and its
Restricted Subsidiaries as described in SECTION 9.6 or (B) the prepayment
at 100% of the principal amount thereof, together with interest accrued to
the date of such prepayment, but without Make-Whole Amount or other
premium, on a pro rata basis, of Senior Funded Indebtedness of the Company.
It is understood and agreed by the Company that: (A) any holder of the
Notes may decline any such offer of prepayment, (B) the failure of any such
holder to accept or decline any such offer of prepayment shall be deemed to
be an election by such holder to decline such prepayment, and (C) if such
offer is so accepted, the proceeds so offered towards the prepayment of the
Notes and accepted shall be prepaid. In the event any holder of Senior
Funded Indebtedness of the Company declines any such offer of prepayment,
the Company shall offer, on a pro rata basis, the proceeds so declined to
the holders of Senior Funded Indebtedness of the Company accepting the
offer of prepayment. To the extent such holders of Senior Funded
Indebtedness shall decline such payments, the Company and its Restricted
Subsidiaries may use the remaining amount of such declined proceeds for
general corporate purposes and such declined proceeds shall be deemed to
have been applied to the prepayment of Senior Funded Indebtedness for the
purpose of the immediately preceding proviso. If and to the extent the
Senior Funded Indebtedness being prepaid shall be with respect to a
revolving credit or similar credit facility providing the Company with the
right to obtain loans or other extensions of credit from time to time, such
amount being so applied shall permanently reduce the availability of credit
under such credit facility by an amount not less than the amount of such
proceeds so applied to the prepayment of such Indebtedness.
Computations pursuant to this SECTION 10.5(C) shall include dispositions
made pursuant to SECTION 10.5(B) and computations pursuant to SECTION 10.5(B)
shall include dispositions made pursuant to this SECTION 10.5(C).
Section 10.6. Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, enter into or be a party to any
Material transaction or Material group of related transactions with any
Affiliate, other than the Company or a Restricted Subsidiary (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
course of and pursuant to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Restricted Subsidiary than would obtain in a
comparable arm's-length transaction with a Person other than an Affiliate.
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Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-
Whole Amount, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with
any term contained in SECTIONS 10.1 through 10.5, both inclusive, or
SECTION 7.1(D); or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs (a),
(b) and (c) of this SECTION 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of
such default from any holder of a Note (any such written notice to be
identified as a "notice of default" and to refer specifically to this
paragraph (d) of SECTION 11); or
(e) any representation or warranty made in writing by or on behalf
of the Company or by any officer of the Company in this Agreement or in any
writing furnished in connection with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date
as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $10,000,000 beyond
any period of grace provided with respect thereto, or (ii) the Company or
any Restricted Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Indebtedness in an aggregate
outstanding principal amount of at least $10,000,000 or of any mortgage,
indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Indebtedness
has become, or has been declared, due and payable before its stated
maturity or before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Indebtedness
to
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convert such Indebtedness into equity interests), the Company or any
Restricted Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount of at least
$10,000,000; or
(g) the Company or any Material Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Material Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part
of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its Material Subsidiaries, or any such petition
shall be filed against the Company or any of its Material Subsidiaries and
such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 (excluding for purposes of such
determination such amount of any insurance proceeds paid by or on behalf of
the Company or any of its Material Subsidiaries in respect of such judgment
or judgments or unconditionally acknowledged in writing to be payable by
the insurance carrier that issued the related insurance policy) are
rendered against one or more of the Company and its Material Subsidiaries
and any one or more of such judgments aggregating in excess of $5,000,000
are not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the expiration
of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be
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filed with the PBGC or the PBGC shall have instituted proceedings under
ERISA Section 4042 to terminate or appoint a trustee to administer any Plan
or the PBGC shall have notified the Company or any ERISA Affiliate that a
Plan may become a subject of any such proceedings, (iii) the aggregate
"amount of unfunded benefit liabilities" (within the meaning of Section
4001(a)(18) of ERISA) under all Plans, determined in accordance with Title
IV of ERISA, shall exceed $5,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Company
or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
Company or any Restricted Subsidiary establishes or amends any employee
welfare benefit plan that provides post-employment welfare benefits in a
manner that would increase the liability of the Company or any Restricted
Subsidiary thereunder; and any such event or events described in clauses
(i) through (vi) above, either individually or together with any other such
event or events, could reasonably be expected to have a Material Adverse
Effect.
As used in SECTION 11(J), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
Section 12. Remedies on Default, Etc.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of SECTION 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause (vi) of
paragraph (g) by virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of SECTION
11 has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.
Upon any Note's becoming due and payable under this SECTION 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon and (ii) the Make-Whole
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Amount determined in respect of such principal amount (to the full extent
permitted by applicable law), shall all be immediately due and payable, in each
and every case without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the parties hereto agree,
that each holder of a Note has the right to maintain its investment in the Notes
free from repayment by the Company (except as herein specifically provided for),
and that the provision for payment of a Make-Whole Amount by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Notes have
become or have been declared immediately due and payable under SECTION 12.1, the
holder of any Note at the time outstanding may proceed to protect and enforce
the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of any
of the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of SECTION 12.1, the
holders of not less than 66 2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
SECTION 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this SECTION 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc.
No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under SECTION 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such
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<PAGE>
holder incurred in any enforcement or collection under this SECTION 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of
any Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of, and of the same Series as, the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of EXHIBIT 1. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than $500,000; provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in SECTION 6.2; provided that the Company
shall not be required to effect such transfer if the Company is legally unable
to deliver the certificate described in the last paragraph of SECTION 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of
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any Note (which evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is,
or is a nominee for, an original Purchaser or another holder of a Note with
a minimum net worth of at least $50,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on, and of the same Series as, such lost, stolen, destroyed or mutilated
Note or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to SECTION 14.2, payments
of principal, Make-Whole Amount, if any, and interest becoming due and payable
on the Notes shall be made in Modesto, California at the principal office of the
Company in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in SECTION
14.1 or in such Note to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your name in SCHEDULE
A, or by such other method or at such other address as you shall have from time
to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to SECTION 14.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to SECTION
13.2. The Company will afford the benefits of this SECTION 14.2 to any
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Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this SECTION 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the
transactions contemplated hereby are consummated, the Company will pay all costs
and expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by you and each Other
Purchaser or holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a holder of any Note, and (b)
the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save you
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other than those
retained by you).
Section 15.2. Survival. The obligations of the Company under this
SECTION 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
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Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of SECTION 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of SECTION 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or change the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of SECTIONS 8,
11(A), 11(B), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this SECTION 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any holder of Notes as consideration
for or as an inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding even if such holder
did not consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver
consented to as provided in this SECTION 17 applies equally to all holders of
Notes and is binding upon them and upon each future holder of any Note and upon
the Company without regard to whether such Note has been marked to indicate such
amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between the Company and
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the holder of any Note nor any delay in exercising any rights hereunder or under
any Note shall operate as a waiver of any rights of any holder of such Note. As
used herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose
of determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in SCHEDULE A, or at such other address
as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof (or by telefacsimile to 209-544-6756) to the attention
of Chief Financial Officer, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this SECTION 18 will be deemed given only when actually received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and
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other information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original document
so reproduced. The Company agrees and stipulates that, to the extent permitted
by applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
SECTION 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
Section 20. Confidential Information.
For the purposes of this SECTION 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing when received by you as being
confidential information of the Company or such Subsidiary; provided that such
term does not include information that (a) was publicly known or otherwise known
to you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to you under
SECTION 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you; provided that you may deliver or disclose Confidential
Information to (i) your directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this SECTION 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this SECTION 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this SECTION 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate
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(w) to effect compliance with any law, rule, regulation or order applicable to
you, (x) in response to any subpoena or other legal process, (y) in connection
with any litigation to which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this SECTION 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this SECTION 20.
Section 21. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this SECTION
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
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Section 22.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall (to the full
extent permitted by law) not invalidate or render unenforceable such provision
in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
* * * * *
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If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
U.S. Rentals, Inc.
By
[Title]
Accepted as of April _____, 1998
[Variation]
By ________________________
Its
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Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
METROPOLITAN LIFE INSURANCE COMPANY Series A Series B Series C
One Madison Avenue --- $17,000,000 ---
New York, New York 10010
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds for receipt not later than 1:00
p.m. (New York time) on the date such payment is due (identifying each payment
as "U.S. Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2",
principal, premium or interest) to:
The Chase Manhattan Bank, N.A.
ABA #021000021
33 East 23rd Street
New York, New York 10010
for credit to: Metropolitan Life Insurance Company
Account Number 002-2-410591
with name and address of bank from which wire transfer was sent, a contact name
and telephone number.
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed to:
Schedule A
(to Note Purchase Agreement)
<PAGE>
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07961-0633
Attention: Private Placements Unit
Fax Number: (973) 254-3050
with a copy to:
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010-3690
Attention: Legal Department - Area 6H
Facsimile: (212) 578-3916
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-5581829
A-2
<PAGE>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
SECURITY FIRST LIFE INSURANCE COMPANY Series A Series B Series C
c/o Metropolitan Life Insurance Company -- $20,000,000 --
334 Madison Avenue
Convent Station, New Jersey 07961
Attention: Private Placements Unit
Facsimile: (973) 254-3050
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds for receipt not later than 1:00
p.m. (New York time) on the date such payment is due (identifying each payment
as "U.S. Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2",
principal, premium or interest) to:
BK of NYC/CTR/BBK
ABA #021000018
IOC 565-Inst'l Custody 328175
for the account of Security First Life Insurance Company
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 54-0696644
A-3
<PAGE>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
TEXAS LIFE INSURANCE COMPANY Series A Series B Series C
900 Washington Avenue -- $3,000,000 --
Waco, Texas 76701
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds for receipt not later than 1:00
p.m. (New York time) on the date such payment is due (identifying each payment
as "U.S. Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2",
principal, premium or interest) to:
The Chase Manhattan Bank
ABA #021000021
Account: SSG Private Income Processing
Account Number: 900-9-000200
Attention: Joseph Pipperato
Notices
All notices and communications with respect to payments and written confirmation
of each such payment to be addressed to:
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07961
Attention: Private Placements Unit
Telecopy Number: (973) 254-3050
with a copy to:
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10008
Attention: Joseph Pipperato
Telecopy Number: (212) 623-6422
A-4
<PAGE>
and to:
Texas Life Insurance Company
900 Washington Avenue
Waco, Texas 76701
Attention: Virginia Crunk
Telecopy Number: (254) 754-4880
All other notices shall be sent to:
Metropolitan Life Insurance Company
334 Madison Avenue
Convent Station, New Jersey 07961
Attention: Private Placements Unit
Telecopy Number: (973) 254-3050
and to:
Texas Life Insurance Company
900 Washington Avenue
Waco, Texas 76701
Attention: Virginia Crunk
Telecopy Number: (254) 754-4880
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 74-0940890
A-5
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
<S> <C> <C> <C>
JEFFERSON-PILOT LIFE INSURANCE COMPANY Series A Series B Series C
P. O. Box 21008 -- $15,000,000 --
Greensboro, North Carolina 27420
Attention: Securities Administration - 3630
Telefacsimile: (336) 691-3025
Overnight Mail Address:
100 North Greene Street
Greensboro, North Carolina 27401
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.93% Series C Senior Notes due 2010, PPN 90341* AJ 8, principal,
interest or premium") to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment, to be addressed to:
Jefferson-Pilot Life Insurance Company
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
with duplicate notice to Jefferson-Pilot Life Insurance Company at the address
first provided above.
All notices and communications other than those in respect to payments to be
addressed as first provided above.
A-6
<PAGE>
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-0359860
A-7
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
<S> <C> <C> <C>
ALEXANDER HAMILTON LIFE INSURANCE Series A Series B Series C
COMPANY OF AMERICA
P. O. Box 21008 -- $15,000,000 --
Greensboro, North Carolina 27420
Attention: Securities Administration - 3630
Telefacsimile: (336) 691-3025
Overnight Mail Address:
100 North Greene Street
Greensboro, North Carolina 27401
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
interest or premium") to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment, to be addressed to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
P. O. Box 19266
Newark, New Jersey 07195
Attention: P&I Department
with duplicate notice to Alexander Hamilton Life Insurance Company of America at
the address first provided above.
All notices and communications other than those in respect to payments to be
addressed as first provided above.
A-8
<PAGE>
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-1311063
A-9
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
<S> <C> <C> <C>
AMERICAN GENERAL ANNUITY INSURANCE COMPANY Series B Series C Series A
c/o American General Corporation
P. O. Box 3247 -- $10,000,000 --
Houston, Texas 77253-3247
Attention: Investment Research Department, A37-01
Facsimile Number: (713) 831-1366
Overnight Mailing Address:
2929 Allen Parkway
Houston, Texas 77019-2155
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, principal, interest or
premium, if any") to:
State Street Bank and Trust Company (ABA #011000028)
Boston, Massachusetts 02101
Re: American General Annuity Insurance Company
AC-7215-132-7
OBI=PPN Number and description of payment
Fund Number: WE1B
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
American General Life Insurance Company and WE1B
c/o State Street Bank and Trust Company
Insurance Services Custody (WES2S)
105 Rosemont Road
Westwood, MA 02090
Facsimile Number: (781) 302-8005
A-10
<PAGE>
Duplicate payment notices and all other correspondences to:
American General Life Insurance Company
c/o American General Corporation
Attention: Investment Research Department, A37-01
P. O. Box 3247
Houston, Texas 77253-3247
Overnight Mailing Address:
2929 Allen Parkway, A37-01
Houston, Texas 77019-2155
Facsimile Number: (713) 831-1366
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 75-0770838
A-11
<PAGE>
<TABLE>
<CAPTION>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
<S> <C> <C> <C>
THE FRANKLIN LIFE INSURANCE COMPANY Series A Series B Series C
c/o American General Corporation -- $10,000,000 --
P. O. Box 3247
Houston, Texas 77253-3247
Attention: Investment Research Department, A37-01
Facsimile Number: (713) 831-1366
Overnight Mailing Address:
2929 Allen Parkway
Houston, Texas 77019-2155
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, principal, premium or
interest") to:
State Street Bank and Trust Company (ABA #011000028)
Boston, Massachusetts 02101
Re: The Franklin Life Insurance Company
AC-2492-440-9
OBI=PPN Number and description of payment
Fund Number PA 37
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
The Franklin Life Insurance Company and PA 37
c/o State Street Bank and Trust Company
Insurance Services WES2S
105 Rosemont Road
Westwood, MA 02090
Facsimile Number: (781) 302-8005
Duplicate payment notices and all other correspondences to be addressed as first
provided above.
A-12
<PAGE>
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 37-0281650
A-13
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
ALL AMERICAN LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o American General Corporation -- $5,000,000 --
Attention: Investment Research Department, A37-01
P.O. Box 3247
Houston, Texas 77253-3247
Facsimile Number: (713) 831-1366
Overnight Mail Address:
2929 Allen Parkway
Houston, Texas 77019-2155
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
State Street Bank and Trust Company
ABA #011000028
Boston, Massachusetts 02101
Re: All American Life Insurance Company
AC-0082-332-8
OBI=PPN # and description of payment
Fund Number PA 78
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
All American Life Insurance Company and PA 78
c/o State Street Bank and Trust Company
Insurance Services WES2S
105 Rosemont Road
Westwood, Massachusetts 02090
Facsimile Number: (781) 302-8005
Duplicate payment notices and all other correspondences to be addressed as first
provided above.
A-14
<PAGE>
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 36-2148702
A-15
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
CONNECTICUT GENERAL LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o CIGNA Investments, Inc. $6,500,000 $3,000,000 --
900 Cottage Grove Road 3,500,000
Hartford, Connecticut 06152-2307 3,000,000
Attention: Private Securities Division - S-307
Fax: 860-726-7203
</TABLE>
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=U.S. Rentals, Inc.; [description of security; interest rate; maturity
date; PPN; due date and application (as among principal, premium and
interest of the payment being made); contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities - S-307
Operations Group
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
A-16
<PAGE>
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
A-17
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Series A Series B Series C
<S> <C> <C> <C>
on behalf of one or more separate accounts $2,000,000 $3,000,000 --
c/o CIGNA Investments, Inc. 2,000,000
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: 860-726-7203
</TABLE>
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=U.S. Rentals, Inc.; [description of security; interest rate; maturity
date; PPN; due date and application (as among principal, premium and
interest of the payment being made); contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities - S-307
Operations Group
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
A-18
<PAGE>
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: 212-552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division - S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: 860-726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
A-19
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
LIFE INSURANCE COMPANY OF NORTH AMERICA Series A Series B Series C
<S> <C> <C> <C>
c/o CIGNA Investments, Inc. -- $2,000,000 --
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Attention: Private Securities Division - S-307
Fax: (860) 726-7203
</TABLE>
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/AC=9009001802
ABA #021000021
OBI=U.S. Rentals, Inc.; 6.86% Series B Senior Notes due 2008; PPN 90341# AH
2; [due date and application (as among principal, premium and interest of
the payment being made); contact name and phone.]
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Securities Processing S-309
900 Cottage Grove Road
Hartford, Connecticut 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities S-307
Operations Group
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: (860) 726-7203
A-20
<PAGE>
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P. O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
Fax: (212) 552-3107/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Investments, Inc.
Attention: Private Securities Division S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
Fax: (860) 726-7203
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 13-3574027
A-21
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
PACIFIC LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
700 Newport Center Drive -- $5,000,000 --
Newport Beach, California 92658-9000 $5,000,000
Attention: Fixed Income Securities Department $5,000,000
Telephone: (714) 640-3379 $5,000,000
Facsimile: (714) 640-3199 $5,000,000
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
Chase Manhattan Bank, N.A.
ABA #021-000-021
A/C = 900-9-002206
BBK = Chase Manhattan Bank/SSTO
A/C Name: Pacific Life General Account
A/C Number: 47363300
Regarding: Security Description and PPN
Notes should be sent to:
The Chase Manhattan Bank, N.A.
4 New York Plaza, 11th Floor
New York, NY 10004
Attention: David Calderon/Account #89930705
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment,
to be addressed:
The Chase Manhattan Bank, N.A.
P.O. Box 456, Wall Street Station
New York, New York 10005
A-22
<PAGE>
With a copy to:
Pacific Life Insurance Company
Attention: Securities Administration
700 Newport Center Drive
Newport Beach, California 92660-6379
Name of Nominee in which Notes are to be issued: ATWELL & CO
General Taxpayer I.D. Number: 95-1079000
A-23
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
1295 State Street -- $14,000,000 --
Springfield, Massachusetts 01111
Attention: Securities Investment Division
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
Citibank, N.A. (ABA #021000089)
111 Wall Street
New York, New York 10043
for credit to: MassMutual Long Term Pool Account Number 4067-3488
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3878.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-24
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
1295 State Street -- $6,000,000 --
Springfield, Massachusetts 01111
Attention: Securities Investment Division
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
Chase Manhattan Bank, N.A. (ABA #021000021)
4 Chase MetroTech Center
New York, New York 10081
for credit to: MassMutual Pension Management Account No. 910-2594018
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3878.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-25
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
One American Row -- -- $10,000,000
Hartford, Connecticut 06115
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.93% Series C Senior Notes due 2010, principal, premium or
interest") to:
ABA #021 000 021
Chase Manhattan Bank, N.A
New York, New York
Account Number: 900 9000 200
Account Name: Income Processing
Reference: Phoenix Home Life Account #G05143
OBI=U.S. Rentals, Inc., PPN=__________, RATE=____%, DUE=___________
(include principal and interest breakdown and premium, if any)
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed:
Phoenix Home Life Mutual Insurance Company
c/o Phoenix Duff & Phelps, Inc.
56 Prospect Street
P. O. Box 150480
Hartford, Connecticut 06115-0480
Attention: Private Placements Division
Telecopier Number: (860) 403-5451
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0493340
A-26
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
One American Row -- -- $10,000,000
Hartford, Connecticut 06115
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.93% Series C Senior Notes due 2010, principal, premium or
interest") to:
ABA #021 000 021
Chase Manhattan Bank, N.A
New York, New York
Account Number: 900 9000 200
Account Name: Income Processing
Reference: Phoenix Home Life Account #G07185
OBI=U.S. Rentals, Inc., PPN=__________, RATE=____%, DUE=___________
(include principal and interest breakdown and premium, if any)
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed:
Phoenix Home Life Mutual Insurance Company
c/o Phoenix Duff & Phelps, Inc.
56 Prospect Street
P. O. Box 150480
Hartford, Connecticut 06115-0480
Attention: Private Placements Division
Telecopier Number: (860) 403-5451
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0493340
A-27
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
8515 East Orchard Road, 3rd floor, Tower 2 $15,000,000 -- --
Englewood, Colorado 80111
Attention: Corporate Finance Investments
Telecopier: (303) 689-6193
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.71% Series A Senior Notes due 2006, PPN 90341* AG 4, principal,
premium or interest") to:
ABA #091-000-019
NW MPLS/TRUST CLEARING
Account Number 08-40-245
Attention: Account Number 12468800
Notices
All notices of payments, on or in respect of the Notes and written confirmation
of each such payment to:
Norwest Bank Minnesota, N.A.
733 Marquette Avenue, Investors Building, 5th Floor
Minneapolis, Minnesota 55479-0047
Attention: Income Collections
Telecopier: (612) 667-3331
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 84-0467907
A-28
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o Transamerica Investment Services -- $10,000,000 --
1150 South Olive Street, Suite 2700
Los Angeles, California 90015
Attention: Kevin Hickam
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston, Massachusetts
ABA 011001234
Acct#: 12-526-1
FFC: Cost Center 1253
Transamerica Occidental Life Insurance Company
Account Segment: UNI
Account No. TRAF 1505102
Ref: Cusip and Description
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
and all account statements, to:
Transamerica Life Companies
P. O. Box 2101 - Securities Accounting
Los Angeles, California 90051-0101
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 95-1060502
A-29
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o Transamerica Investment Services -- -- $5,000,000
1150 South Olive Street, Suite 2700
Los Angeles, California 90015
Attention: Kevin Hickam
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.93% Series C Senior Notes due 2010, PPN 90341* AJ 8, principal,
premium or interest") to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston, Massachusetts
ABA 011001234
Acct#: 12-526-1
FFC: Cost Center 1253
Transamerica Occidental Life Insurance Company
Account Segment: TRAD
Account No. TRAF 1505112
Ref: Cusip and Description
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
and all account statements, to:
Transamerica Life Companies
P. O. Box 2101 - Securities Accounting
Los Angeles, California 90051-0101
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 95-1060502
A-30
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
ALLSTATE LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
3075 Sanders Road, STE G3A $10,000,000 -- --
Northbrook, Illinois 60062-7127
Attention: Private Placements Department
Telephone Number: (847) 402-4394
Telecopier Number: (847) 402-3092
</TABLE>
Payments
All payments on or in respect of the Notes to be made by Fedwire transfer of
immediately available funds (identifying each payment with name of the Issuer
(and the Credit, if any), the Private Placement Number preceded by "DPP" and the
payment as principal, interest or premium) in the exact format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = U.S. Rentals, Inc.
OBI = DPP - 90341* AG 4 --
Payment Due Date (MM/DD/YY) --
P ______ (enter "P" and the amount of principal being remitted,
for example, P5000000.00) --
I ______ (enter "I" and the amount of interest being remitted,
for example, I225000.00)
Notices
All notices of scheduled payments and written confirmation of each such payment,
to be addressed:
Allstate Insurance Company
Investment Operations--Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
A-31
<PAGE>
All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 36-2554642
A-32
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
HARTFORD LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o The Hartford Investment Management Company -- $5,000,000 --
c/o Investment Department - Private Placement
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8884
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
interest or premium") to:
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
ABA #021000021
CHASE NYC/CUST
A/C #900-9-000200 for F/C/T Hartford Acct G06641 - CRC
Attention: Bond Interest/Principal - U.S. Rentals, Inc.
PPN #_________
Prin $_________ Int $_________
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, and written confirmation of each such payment,
to be addressed:
The Hartford Investment Management Company
c/o Portfolio Support
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8876
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0974148
A-33
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
HARTFORD LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o The Hartford Investment Management Company -- $2,000,000 --
c/o Investment Department - Private Placement
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8884
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
interest or premium") to:
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
ABA #021000021
CHASE NYC/CUST
A/C #900-9-000200 for F/C/T Hartford Acct. G06641 - LCA
Attention: Bond Interest/Principal - U.S. Rentals, Inc.
PPN #_________
Prin $_________ Int $_________
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, and written confirmation of each such payment,
to be addressed:
The Hartford Investment Management Company
c/o Portfolio Support
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8876
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0974148
A-34
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
HARTFORD CASUALTY INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
c/o The Hartford Investment Management Company -- $3,000,000 --
c/o Investment Department - Private Placement
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8884
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
interest or premium") to:
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
ABA #021000021
CHASE NYCUST
A/C #900-9-000200 for F/C/T Hartford Acct G06233 - CAS
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, and written confirmation of each such payment,
to be addressed:
The Hartford Investment Management Company
c/o Portfolio Support
P. O. Box 1744
Hartford, Connecticut 06144-1744
Telefacsimile: (860) 297-8876
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0294398
A-35
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Principal Amount of
Notes to Be Purchased
SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY Series A Series B Series C
<S> <C> <C> <C>
401 Livingston Lane -- $7,000,000 --
Jackson, Mississippi 39213
Attention: Carol Robertson
</TABLE>
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.86% Series B Senior Notes due 2008, PPN 90341* AH 2, principal,
premium or interest") to:
Wachovia Bank of North Carolina
301 North Main Street
Winston-Salem, North Carolina 27150-1013
ABA #053100494
For further credit to: Account #8730-007153
Southern Farm Bureau Life Insurance Company
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment, to be addressed as first provided above.
All other communications, including Waivers, Amendments, Consents and financial
information should be sent to:
Southern Farm Bureau Life Insurance Company
P. O. Box 78
Jackson, Mississippi 39205
Attention: Investment Department
or by overnight delivery to:
1401 Livingston Lane
Jackson, Mississippi 39213
A-36
<PAGE>
Contact Person: Carol Robertson, CFA
Telephone: (601) 981-7422 extension 506
Facsimile: (601) 981-3605
or Dottie Carlisle
Telephone: (601) 981-7422 extension 800
Facsimile: (601) 981-3605
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 64-0283583
A-37
<PAGE>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
AMERUS LIFE INSURANCE COMPANY Series A Series B Series C
699 Walnut Street
Suite 1700 -- $5,000,000 --
Des Moines, Iowa 50309
Attention: Steve Sweeney
Telephone: (515) 362-3542
Fax: (515) 283-3434
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
Bankers Trust Company (ABA #021001033)
New York, New York
Credit Account #99911145
For Further Credit Account #097446
AmerUs Life Insurance Co.
Ref: Issue name, coupon, maturity date
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
AmerUs Life Insurance Company
699 Walnut Street
Suite 1700
Des Moines, Iowa 50309
Attention: Dan Owens
Telephone: (515) 283-3431
Facsimile: (515) 283-3434
All Other Communications to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: Salkeld & Co.
Salkeld & Co. Taxpayer I.D. Number: 13-6065491
A-38
<PAGE>
AmerUs Taxpayer I.D. Number: 42-0175020
A-39
<PAGE>
Principal Amount of
Name and Address of Purchaser Notes to Be Purchased
UNITED FARM FAMILY LIFE INSURANCE COMPANY Series A Series B Series C
225 South East Street
Indianapolis, Indiana 46202 $5,000,000 -- --
Attention: Steven B. Ratliff
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as U.S.
Rentals, Inc., 6.71% Series A Senior Notes due 2006, PPN 90341* AG 4, principal
or interest") to:
Northern CHGO/Trust
ABA #071-0001-52
Credit wire acct. #5186041000
Ref ELL and Co
Acct. #26-30866
Re: U.S. Rentals, Inc.
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: ELL and Co
Taxpayer I.D. Number 35-1097117
A-40
<PAGE>
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation or other entity of which the
Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"Agreements" shall mean, collectively, this Agreement and the Other
Agreements.
"Business Day" means (a) for the purposes of SECTION 8.7 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Los Angeles, California
are required or authorized to be closed.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Change in Control" is defined in SECTION 8.3(H).
"Closing" is defined in SECTION 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Colburn Control Group" is defined in SECTION 8.3(H).
"Company" means U.S. Rentals, Inc., a Delaware corporation.
B-1
<PAGE>
"Confidential Information" is defined in SECTION 20.
"Consolidated Fixed Charges" for any period shall mean on a consolidated
basis the sum of (a) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Restricted Subsidiaries
pursuant to Long-Term Leases, and (b) all Interest Expense on all Indebtedness
(including the interest component of Rentals on Capitalized Leases) of the
Company and its Restricted Subsidiaries payable during such period.
"Consolidated Funded Indebtedness" means, as of any date of determination,
the total of all Funded Indebtedness of the Company and its Restricted
Subsidiaries outstanding on such date, after eliminating all offsetting debits
and credits between the Company and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with GAAP.
"Consolidated Income Available for Fixed Charges" for any period shall mean
the sum of (a) Consolidated Net Income during such period plus (b) (to the
extent deducted in determining Consolidated Net Income): (i) all provisions for
any Federal, state or other income taxes made by the Company and its Restricted
Subsidiaries during such period, (ii) Consolidated Fixed Charges during such
period, and (iii) all transaction expenses (including offering expenses and debt
prepayment premiums) associated with an Initial Public Offering of common stock
of the Company or any Restricted Subsidiary during such period.
"Consolidated Indebtedness" means, as of any date of determination, the
total of all Indebtedness of the Company and its Restricted Subsidiaries
outstanding on such date, after eliminating all offsetting debits and credits
between the Company and its Restricted Subsidiaries and all other items required
to be eliminated in the course of the preparation of consolidated financial
statements of the Company and its Restricted Subsidiaries in accordance with
GAAP.
"Consolidated Net Income" for any period shall mean the gross revenues of
the Company and its Restricted Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
B-2
<PAGE>
(c) net earnings and losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Restricted Subsidiary,
realized by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the Company
or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of the
Company or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from
income arising during such period; and
(l) any other extraordinary gain or loss.
"Consolidated Net Worth" means as of the date of any determination thereof,
(a) the amount of the capital stock accounts (net of treasury stock,
at cost, and any Redeemable Preferred Stock) plus (or minus in the case of
a deficit) the surplus and
B-3
<PAGE>
retained earnings of the Company and its Restricted Subsidiaries as
determined in accordance with GAAP, minus
(b) to the extent included in clause (a), all amounts properly
attributable to Minority Interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Consolidated Total Assets" shall mean as of the date of any determination
thereof total assets of the Company and its Restricted Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Control Event" is defined in SECTION 8.3(H).
"Default" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"Default Rate" means that rate of interest that is the greater of (i) 1%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 1% over the rate of interest publicly announced by Bank of
America NT&SA in San Francisco, California as its "base" or "prime" rate.
"Designated Member of the European Community" shall mean any one of the
following jurisdictions: Belgium, Denmark, France, Germany, Luxembourg, The
Netherlands, Switzerland and the United Kingdom.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under Section 414
of the Code.
"Event of Default" is defined in SECTION 11.
B-4
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Funded Indebtedness" means, with respect to any Person, all Indebtedness
of such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary,
or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property or
assets constituting security therefor,
(b) to advance or supply funds (1) for the purchase or payment of
such Indebtedness or obligation, or (2) to maintain working capital or any
balance sheet or
B-5
<PAGE>
income statement condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation,
(c) to lease property or to purchase Securities or other property or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or
(d) otherwise to assure the owner of the Indebtedness or obligation
of the primary obligor against loss in respect thereof. For the purposes
of all computations made under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to
the principal amount of such Indebtedness for borrowed money which has been
guaranteed, and a Guaranty in respect of any other obligation or liability
or any dividend shall be deemed to be Indebtedness equal to the maximum
aggregate amount of such obligation, liability or dividend.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances, including all substances listed in or regulated
in any Environmental Law that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, regulated, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to SECTION
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of Redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capitalized Leases;
B-6
<PAGE>
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (d) hereof.
Indebtedness of any Person shall include all obligations of such Person of
the character described in clauses (a) through (e) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"Initial Public Offering" shall mean any primary offer or sale of any of
the common stock of the Company or any Restricted Subsidiary for which
registration is required pursuant to Section 5 of the Securities Act.
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 2% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Interest Expense" of the Company and its Restricted Subsidiaries for any
period shall mean all interest and all amortization of debt discount and expense
on any particular Indebtedness (including, without limitation, payment-in-kind,
zero coupon and other like Securities) for which such calculations are being
made.
"Investments" means all investments, in cash or by delivery of property,
made directly or indirectly in any property or assets or in any Person, whether
by acquisition of shares of capital stock, Indebtedness or other obligations or
Securities or by loan, advance, capital contribution or otherwise; provided that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property.
B-7
<PAGE>
For the purposes of this Agreement, the Company or a Subsidiary shall be deemed
to be the owner of any property which it has acquired or holds subject to a
conditional sale agreement, Capitalized Lease or other arrangement pursuant to
which title to the property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall constitute a Lien.
"Long-Term Lease" shall mean any lease of real or personal property (other
than a Capitalized Lease) having an original term, including any period for
which the lease may be renewed or extended at the option of the lessor, of more
than one year.
"Make-Whole Amount" is defined in SECTION 8.7.
"Material" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets, properties or
prospects of the Company and its Restricted Subsidiaries taken as a whole, or
(b) the ability of the Company to perform its obligations under this Agreement
and the Notes, or (c) the validity or enforceability of this Agreement or the
Notes.
"Material Subsidiary" shall mean any Restricted Subsidiary which, as of the
date of any determination thereof, has shareholders' equity which constitutes
10% or more of Consolidated Net Worth as of the end of the immediately preceding
fiscal quarter of the Company.
"Memorandum" is defined in SECTION 5.3.
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Wholly-owned
Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority
Interests constituting preferred stock at the voluntary or involuntary
liquidating value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital and
surplus applicable thereto adjusted, if necessary, to reflect any changes from
the book value of such common stock required by the foregoing method of valuing
Minority Interests in preferred stock.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA).
B-8
<PAGE>
"NAIC" means the National Association of Insurance Commissioners or any
successor thereto.
"Net Proceeds of Capital Stock" shall mean, with respect to any period,
cash proceeds (net of all costs and out-of-pocket expenses in connection
therewith, including, without limitation, placement, underwriting and brokerage
fees and expenses), received by the Company and its Restricted Subsidiaries
during such period, from the sale of all capital stock (other than Redeemable
capital stock) of the Company, including in such net proceeds:
(a) the net amount paid upon issuance and exercise during such
period of any right to acquire any capital stock, or paid during such
period to convert a convertible debt Security to capital stock (but
excluding any amount paid to the Company upon issuance of such convertible
debt Security); and
(b) any amount paid to the Company upon issuance of any convertible
debt Security issued after December 31, 1997 and thereafter converted to
capital stock during such period.
"Notes" is defined in SECTION 1.
"Officer's Certificate" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"Other Agreements" is defined in SECTION 2.
"Other Purchasers" is defined in SECTION 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
B-9
<PAGE>
"Preferred Stock" shall mean in respect of any corporation, shares of the
capital stock of such corporation which are entitled to preference or priority
over any other shares of the capital stock of such corporation in respect of (a)
payment of dividends or (b) distribution of assets upon liquidation, or both.
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"Proposed Prepayment Date" is defined in SECTION 8.3(C).
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"Redeemable" shall mean, with respect to the capital stock of any Person,
each share of such Person's capital stock that is:
(a) redeemable, payable or required to be purchased or otherwise
retired or extinguished, or convertible into Indebtedness of such Person
(i) at a fixed or determinable date, whether by operation of sinking fund
or otherwise, (ii) at the option of any Person other than such Person, or
(iii) upon the occurrence of a condition not solely within the control of
such Person; or
(b) convertible into other Redeemable capital stock.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company, any of its Subsidiaries, or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
B-10
<PAGE>
"Restricted Subsidiary" shall mean any Subsidiary (a) which is organized
under the laws of the United States or any State thereof, Canada or any Province
thereof, any Designated Member of the European Community or Mexico; (b) which
conducts substantially all of its business and has substantially all of its
assets within the United States, Canada, any Designated Member of the European
Community or Mexico; (c) of which more than 80% (by number of votes) of the
Voting Stock is beneficially owned, directly or indirectly, by the Company
and/or any Restricted Subsidiary; and (d) which is designated as a Restricted
Subsidiary on SCHEDULE 5.4 attached hereto or is designated as such in writing
by the Company to each of the holders of the Notes, provided, however, that no
Unrestricted Subsidiary may be designated as a Restricted Subsidiary and no
Restricted Subsidiary may be designated as an Unrestricted Subsidiary if, at the
time of such action and after giving effect thereto: (i) the Company would not
be permitted by the provisions of SECTION 10.3(A)(3)(I) to incur at least $1.00
of additional Indebtedness, or (ii) a Default or Event of Default would exist,
and provided, further, that no Unrestricted Subsidiary shall at any time after
the date of Closing be designated a Restricted Subsidiary if such Unrestricted
Subsidiary (w) shall have twice been previously designated a Restricted
Subsidiary or (x) shall have been designated as an Unrestricted Subsidiary
within three years prior to such date, and no Restricted Subsidiary shall at any
time after the date of Closing be designated as an Unrestricted Subsidiary if
such Restricted Subsidiary (y) shall have twice been previously designated as an
Unrestricted Subsidiary or (z) shall have been designated as a Restricted
Subsidiary within three years prior to such date.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act.
"Senior Financial Officer" means the chief executive officer, president,
chief operating officer, chief financial officer or treasurer of the Company.
"Senior Funded Indebtedness" means all Consolidated Funded Indebtedness,
other than Funded Indebtedness which by its express terms is subordinated in
right of payment or security in any respect to the Indebtedness evidenced by the
Notes.
"Subsidiary" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such
B-11
<PAGE>
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Company.
"Subsidiary Stock" is defined in SECTION 10.5(C).
"Unrestricted Subsidiary" means any Subsidiary which is not a Restricted
Subsidiary.
"Voting Stock" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-owned Restricted
Subsidiaries at such time.
B-12
<PAGE>
[FORM OF SERIES A NOTE]
U.S. RENTALS, INC.
6.71% Series A Senior Note due April 28, 2006
No. [_________] [Date]
$[____________] PPN 90341* AG 4
For Value Received, the undersigned, U.S. Rentals, Inc. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [________________], or registered assigns,
the principal sum of [________________] Dollars on April 28, 2006, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.71% per annum from the date hereof,
payable semiannually, on the 28th day of April and October in each year,
commencing with the April 28 or October 28 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 7.71% or (ii) 1.00% over the rate of interest
publicly announced by Bank of America NT&SA from time to time in San Francisco,
California as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Modesto, California or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of the Notes of three series of Senior Notes (herein
called the "Notes") issued pursuant to separate Note Purchase Agreements, dated
as of April 1, 1998 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in SECTION 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in SECTION 6.2 of the Note Purchase
Agreements.
EXHIBIT 1A
(to Note Purchase Agreement)
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE WHICH WOULD REQUIRE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
U.S. RENTALS, INC.
By
[Title]
1A-2
<PAGE>
[FORM OF SERIES B NOTE]
U.S. RENTALS, INC.
6.86% Series B Senior Note due April 28, 2008
No. [_________] [Date]
$[____________] PPN 90341* AH 2
For Value Received, the undersigned, U.S. Rentals, Inc. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [________________], or registered assigns,
the principal sum of [________________] Dollars on April 28, 2008, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.86% per annum from the date hereof,
payable semiannually, on the 28th day of April and October in each year,
commencing with the April 28 or October 28 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 7.86% or (ii) 1.00% over the rate of interest
publicly announced by Bank of America NT&SA from time to time in San Francisco,
California as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Modesto, California or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of the Notes of three series of Senior Notes (herein
called the "Notes") issued pursuant to separate Note Purchase Agreements, dated
as of April 1, 1998 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in SECTION 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in SECTION 6.2 of the Note Purchase
Agreements.
EXHIBIT 1B
(to Note Purchase Agreement)
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE WHICH WOULD REQUIRE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
U.S. RENTALS, INC.
By
[Title]
1B-2
<PAGE>
[FORM OF SERIES C NOTE]
U.S. RENTALS, INC.
6.93% Series C Senior Note due April 28, 2010
No. [_________] [Date]
$[____________] PPN 90341* AJ 8
For Value Received, the undersigned, U.S. Rentals, Inc. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [________________], or registered assigns,
the principal sum of [________________] Dollars on April 28, 2010, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 6.93% per annum from the date hereof,
payable semiannually, on the 28th day of April and October in each year,
commencing with the April 28 or October 28 next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 7.93% or (ii) 1% over the rate of interest publicly
announced by Bank of America NT&SA from time to time in San Francisco,
California as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Modesto, California or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of the Notes of three series of Senior Notes (herein
called the "Notes") issued pursuant to separate Note Purchase Agreements, dated
as of April 1, 1998 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in SECTION 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in SECTION 6.2 of the Note Purchase
Agreements.
EXHIBIT 1C
(to Note Purchase Agreement)
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE WHICH WOULD REQUIRE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
U.S. RENTALS, INC.
By
[Title]
1C-2
<PAGE>
SCHEDULE 4.9
CHANGES IN CORPORATE STRUCTURE
None
<PAGE>
SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK
RESTRICTED SUBSIDIARIES
1. U.S. Rentals, S. de R.L. de C.V.
Jurisdiction of Incorporation: Mexico
Percentage of Shares of Capital Stock owned by the Company: 99%
2. Provisto, S. de R.L. de C.V.
Jurisdiction of Incorporation: Mexico
Percentage of Shares of Capital Stock owned by the Company: 99%
UNRESTRICTED SUBSIDIARIES
None
MATERIAL SUBSIDIARIES
None
AFFILIATES
1. Ayr, Inc., formerly known as USR Holdings, Inc., a California corporation,
owns approximately 67% of the outstanding capital stock of the Company.
2. A revocable grantor trust under an Amended Trust Agreement of Richard D.
Colburn dated December 12, 1977, as amended, owns 100% of the outstanding
capital stock of Ayr, Inc.
3. Richard D. Colburn
DIRECTORS
Richard D. Colburn
William F. Berry
<PAGE>
John S. McKinney
James P. Miscoll
Robert D. Paulson
Keith W. Renken*
* In addition, Jeremiah H.B. Kean has been nominated to serve as a Director.
The election (as well as the re-election of the other six directors) will
occur at the Company's Annual Meeting on May 7, 1998.
SENIOR OFFICERS
William F. Berry President and Chief Executive Officer
John S. McKinney Vice President - Finance, Chief Financial
Officer and Assistant Secretary
William F. Locklin Vice President and Region Manager
Steven E. Nadelman Vice President and Region Manager
Vincent J. Nardi Vice President and Region Manager
Grace M. Crickette Vice President - Risk Management
David A. Vasquez Treasurer, Assistant Secretary
5.4-2
<PAGE>
SCHEDULE 5.5
FINANCIAL STATEMENTS
1. Balance Sheets of the Company dated December 31, 1996, December 31, 1997
and March 31, 1998.
2.. Statements of Operations for the years ended December 31, 1995, 1996 and
1997 and the three months ended March 31, 1998.
3. Statements of Stockholders' Equity for the years ended December 31, 1995,
1996 and 1997.
4. Statements of Cash Flows for the years ended December 31, 1995, 1996 and
1997.
<PAGE>
SCHEDULE 5.11
PATENTS, TRADEMARKS, COPYRIGHTS, ETC.
The Company has registered its name "U.S. Rentals" as a service mark with
the U.S. Patent and Trademark Office. A Florida company violated the Company's
rights in its registered service mark by conducting business under the name U.S.
Rentals. A lawsuit brought by the Company was settled in early 1998, and as a
result of such settlement, the Florida company agreed to cease using the name
U.S. Rentals.
<PAGE>
SCHEDULE 5.14
USE OF PROCEEDS
The Company will use the proceeds of the sale of the Notes to pay down the
Company's outstanding indebtedness under its current Revolving Credit Facility.
<PAGE>
SCHEDULE 5.15
EXISTING INDEBTEDNESS
1. $276,000,000 outstanding under the Company's $300,000,000 Revolving Credit
Facility which is currently scheduled to mature on February 25, 2002. This
Indebtedness is unsecured.
2. $21,000,000 outstanding under a $21,000,000 Revolving Credit Note dated
March 10, 1998, in favor of Richard D. Colburn, with interest payable
monthly at an interest rate tied to the Company's Revolving Credit
Facility. This Indebtedness is unsecured.
3. $200,000 in the form of unsecured notes related to the purchase of certain
businesses, with imputed interest averaging 7%, due through 1999.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 6,344
<SECURITIES> 0
<RECEIVABLES> 61,533
<ALLOWANCES> 0
<INVENTORY> 17,234
<CURRENT-ASSETS> 0
<PP&E> 441,202
<DEPRECIATION> 0
<TOTAL-ASSETS> 649,922
<CURRENT-LIABILITIES> 379,713
<BONDS> 0
0
0
<COMMON> 308
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 649,922
<SALES> 92,641
<TOTAL-REVENUES> 120,518
<CGS> 17,139
<TOTAL-COSTS> 93,961
<OTHER-EXPENSES> 15,226
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,402
<INCOME-PRETAX> 7,645
<INCOME-TAX> 3,073
<INCOME-CONTINUING> 4,572
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,572
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
