2
Promissory Note (Interest)
Promissory Note (Interest)
THE ISSUANCE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS AND THIS NOTE MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER OR OTHER DISPOSITION HAS BEEN REGISTERED UNDER THE
ACT AND SUCH LAWS OR AN EXEMPTION UNDER THE ACT AND SUCH LAWS IS
AVAILABLE FOR ITS TRANSFER OR OTHER DISPOSITION.
UNITED RENTALS (NORTH AMERICA), INC.
PROMISSORY NOTE
$20,000,000
September 28, 2000
UNITED RENTALS (NORTH AMERICA), INC., a Delaware corporation
("Maker"), for value received, hereby promises to pay to the order of
W.R. CARPENTER NORTH AMERICA, INC. ("Payee") the principal amount of
$20,000,000 and to pay interest computed on the basis of a 365-day year
on the principal amount from time to time remaining unpaid hereon, at a
rate per annum equal to ten and two-tenths percent (10.2%) from the
date hereof. If an Event of Default (as defined below) has occurred
and is continuing, any outstanding unpaid principal hereof and any
unpaid interest thereon shall bear interest, payable on demand, at the
rate of twelve and two-tenths percent (12.2%) per annum, or such lower
rate as then may be the maximum rate permitted by applicable law;
provided, however, that upon the cessation or cure of such Event of
Default, if no other Event of Default is then continuing, this Note
shall again bear interest at the rate of ten and two-tenths percent
(10.2%) per annum.
Definitions
Capitalized terms not defined herein shall have the meaning
assigned to those terms in the Purchase Agreement defined below. When
used in this Note, the following terms shall have the respective
meanings specified herein or in the Section referred to:
"Affiliate" means any entity or other person that, directly or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with another person and includes the
power to direct or cause the direction of the management and policies
of a person, whether through the ownership of securities, by contract
or otherwise.
"Amortizing Note" means that certain Promissory Note dated the
date hereof, executed by Maker, and payable to Payee in the original
principal amount of $20,000,001.
"Business Day" means a day other than a Saturday or Sunday on
which banks in New York, New York are open for the conduct of regular
banking activities.
"Change of Control" means either (a) the consummation of any
transaction or series of any related transactions (including without
limitation, by way of merger) the result of which is that any "person"
(as defined in Section 13(d) of the Securities Exchange Act of 1934
"(Exchange Act")) or "group" (as defined in Sections 13(d)(3) and
14(d)(2) of the Exchange Act, but excluding any affiliate of Maker or
Guarantor as of the date hereof) becomes the "beneficial owner" (as
defined in Rule 13(d)(3) and 13(d)(5) under the Exchange Act) of more
than fifty-one percent (51%) of the voting power of the common stock of
Guarantor or (b) the common stock of Guarantor shall cease to be listed
for trading on a national securities exchange.
"Eligible Assignee" means any of the following: (a) a
publicly-traded bank or financial institution organized under the laws
of the United States of America or any state thereof, or Japan, Canada,
the United Kingdom, the Netherlands, Switzerland, or Germany, having
assets of not less than U.S. $95 billion, (b) an investment company
organized under the laws of any state in the United States of America
and registered as a broker dealer or an investment adviser with the
Securities and Exchange Commission that, at the time of such transfer,
has assets under management of $2.0 billion or more, (c) an insurance
company rated A or better by A.M. Best, or (d) any other entity which
is an "accredited investor" (as defined in Regulation D under the
Securities Act of 1933, as amended) which extends credit or buys loans
as one of its businesses including, but not limited to, insurance
companies, mutual funds, and finance companies.
"Guarantor" means United Rentals, Inc. and its successors.
"Initial Interest Payment Date" means the tenth (10th)
business day after the date on which Maker receives from Payee all
Pre-Closing Date Tax Returns (as defined in the Purchase Agreement)
that Payee is required to deliver to Maker pursuant to the Purchase
Agreement.
"Maker" includes its successors and any accommodation party,
endorser, guarantor, or other surety of this Note.
"Mandatory Prepayment Amount" means an amount of principal
outstanding hereunder at the time of a Mandatory Prepayment Event equal
to the product of (a) 0.1 (as adjusted in order to apply the Mandatory
Prepayment Amount on a pro rata basis between this Note and the
Amortizing Note) multiplied by (b) the net proceeds to United in excess
of $125,000,000 from such Mandatory Prepayment Event. In no event
shall the Mandatory Prepayment Amount exceed the principal amount
outstanding hereunder at the date of a Mandatory Prepayment Event.
"Mandatory Prepayment Event" means a public offering by
Guarantor of shares of common stock or preferred stock, which stock is
listed or to be listed for trading on any national securities exchange,
in which the aggregate net proceeds to Guarantor of such public
offering exceed $125,000,000 (without cumulating the net proceeds of
any other public offering). Notwithstanding the foregoing, a Mandatory
Prepayment Event shall not include any offering relating solely to the
sale of securities to participants in a stock plan of Guarantor,
relating to a corporate reorganization or other transaction under Rule
145 of the Securities Act of 1933, an offering in which the only common
stock being registered is common stock issuable upon conversion of debt
securities or other convertible securities that are also being
registered or an offering effected in connection with an acquisition of
a business or businesses by Maker or Guarantor.
"Maturity Date" means September 28, 2005.
"Maximum Legal Rate" means the maximum rate (or, if the
context so permits or requires, an amount calculated at such rate) of
interest from time to time permitted under federal, state, or local
laws now or hereafter applicable to this Note, after taking into
account, to the extent required by applicable law, any and all relevant
payments, charges deemed to be interest (whether or not so
characterized by the parties), and calculations.
"Payee" includes its successors, permitted assigns, and
subsequent holders of this Note.
"Purchase Agreement" means that certain Stock Purchase
Agreement dated as of September 28, 2000, by and among Horizon High
Reach, Inc., Payee, and Maker.
"Senior Credit Agreements" means (a) that certain Amended and
Restated Term Loan Agreement dated as of May 12, 2000, executed by
Maker, Bank of America, N.A., as Administrative Agent, Fleet National
Bank, as Documentation Agent, and the Lenders defined therein, and (b)
that certain Amended and Restated Term Loan Agreement dated as of May
12, 2000, executed by United Rentals, Inc., Maker, Bank of America,
N.A., as Administrative Agent, Goldman Sachs Credit Partners L.P., as
Syndication Agent, and the Lenders defined therein, as such loan
agreements may be modified, amended, renewed, extended, restated, or
replaced from time to time.
Payment
(a) The unpaid principal of and interest upon this Note shall be
due and payable as follows:
(i) Interest shall be payable quarterly as it accrues, commencing
on the Initial Interest Payment Date with respect to interest on the
principal amount hereof for the period from the date hereof through the
last day of December, March, June, or September (as applicable)
occurring prior to the Initial Interest Payment Date and continuing
thereafter on the last day of each December, March, June, and September
of each calendar year during the term of this Note, through and
including the Maturity Date.
(ii) The unpaid principal of and interest on this Note shall be
finally due and payable on the Maturity Date.
(b) All payments of principal and interest of this Note shall be
made by Maker to Payee in immediately available funds in coin or
currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts
delivered to Payee's account number 4090261393 at Union Bank of
California, N.A., ABA No. 121000497 (or such other account or address
as specified by notice to Maker) no later than 1:00 p.m. (New York, New
York time) on the day when due. Payments made to Payee by Maker
hereunder shall be applied first to accrued interest and then to
principal in the inverse order of maturity.
(c) Should the principal of, or any installment of the principal
of or interest on, this Note become due and payable on any day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable with respect to
such extension.
Voluntary Prepayment
The principal amount of this Note may be prepaid, in full or
in part, at any time, and from time to time, without notice or penalty,
together with payment of interest accrued on the amount of principal
being prepaid, through the date of such prepayment. All such partial
prepayments shall be applied first to any outstanding interest accrued
but unpaid and then the balance, if any, shall be applied to the unpaid
principal balance.
Mandatory Prepayment
The principal amount of this Note shall be prepaid in the
event of a Mandatory Prepayment Event in an amount equal to the
Mandatory Prepayment Amount, together with all accrued but unpaid
interest thereon. Such prepayment shall be made on or before the tenth
(10th) Business Day after the date on which United actually receives
the proceeds of the offering that constitutes the Mandatory Prepayment
Event. Notwithstanding Maker's obligation as set forth herein, Payee
shall not have any claim or right to receive from United the net
proceeds received by United in an offering that constitutes a Mandatory
Prepayment Event and that triggers Maker's prepayment obligations under
this Note.
Waiver
No delay or omission on the part of Payee in the exercise of
any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy preclude
any other or further exercise thereof or the exercise of any other
right or remedy. There can be no waiver by Payee of any right or
remedy under this Note which is not in writing signed by Payee.
Maker (and any accommodation parties, endorsers, and
guarantors hereof) hereby waives demand, presentment, notice of
non-payment or dishonor, notice of intent to accelerate, notice of
acceleration, diligence in collecting, grace, protest and notice of
protest, and consents to all extensions without notice for any period
or periods of time and partial payments, before or after maturity,
without prejudice to Payee.
Costs of Collection
Maker agrees to pay on demand all out-of-pocket costs and
expenses, including, without limitation reasonable attorney's fees,
actually incurred by Payee in endeavoring to enforce the rights of
Payee hereunder; provided however, that Maker shall not be obligated to
pay such costs and expenses incurred by Payee in wrongfully
accelerating payment or otherwise wrongfully seeking to enforce its
rights hereunder.
Event of Default
(a) The occurrence of any one or more of the following events
shall constitute an event of default hereunder (an "Event of Default"):
(i) Any payment of principal or interest or other sums on this
Note shall not be paid when due and Maker fails to pay this amount
within five (5) days after receipt by Maker of written notice from
Payee to the effect that a payment is past due.
(ii) Any failure to perform or other default or breach of any
representation, warranty, covenant, agreement, or obligation of Maker
in the Purchase Agreement, provided that Payee first delivers written
notice to Maker identifying in reasonable detail the failure to
perform, other default, or breach and Maker does not cure such failure
to perform, other default, or breach within thirty (30) days of Maker's
receipt of such notice.
(iii) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker (A)
commences a voluntary case or proceeding; (B) fails to timely
controvert or acquiesces in writing to or consents to any petition
filed against it or to the entry of any order for relief against it in
an involuntary case or proceeding; (C) takes advantage of any law
relating to its own bankruptcy, insolvency, reorganization, winding up,
liquidation, composition, or readjustment of debts; (D) consents to the
appointment of a trustee, receiver, assignee, liquidator, or similar
official; (E) makes an assignment for the benefit of its creditors; (F)
admits in writing its inability to pay, or is generally not paying, its
debts as they become due; or (G) takes any corporate or other action
for the purpose of authorizing or effecting any of the foregoing.
(iv) If a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against Maker in an
involuntary case or proceeding, (B) appoints a trustee, receiver,
assignee, liquidator, or similar official for Maker or all,
substantially all, or a substantial part of Maker's assets or
properties, or (C) orders the liquidation of Maker, and in each case
the order or decree is not dismissed within 60 days.
(v) Maker shall dissolve or otherwise cease to exist, or cease to
operate and conduct its business in substantially the same manner as on
the date hereof, other than dissolution pursuant to any merger after
which the successor continues to operate Maker's business in
substantially the same manner as on the date hereof.
(vi) Any default under the Senior Credit Agreements which has not
been waived by the parties thereto, the effect of which has been to
cause the acceleration of the principal outstanding under the Senior
Credit Agreements.
(vii) A Change of Control shall occur.
(b) Upon the occurrence of an Event of Default hereunder (unless
all Events of Default have been cured by Maker or waived by Payee),
Payee may, at its option (i) declare the entire unpaid principal
balance of this Note, together with all accrued interest thereon,
immediately due and payable regardless of any prior forbearance, and
(ii) exercise any and all rights and remedies available to it under
this Note and applicable law, including, without limitation, the right
to collect from Maker all sums due on this Note.
Compliance with Law
This Note is given to Payee under the Purchase Agreement as
part of the purchase price and consideration paid by Maker for the
Stock being purchased thereunder. All agreements between Maker and
Payee, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason
of demand or acceleration of the maturity hereof or otherwise, shall
interest be contracted for, charged, received, paid or agreed to be
paid to Payee in excess of the Maximum Legal Rate. If, from any
circumstance whatsoever, interest would otherwise be payable to Payee
in excess of the Maximum Legal Rate, or unearned interest would
otherwise be payable in violation of applicable law, the interest
payable to Payee shall be reduced to the maximum amount permitted under
applicable law; and, if from any circumstance, Payee shall ever receive
anything of value deemed interest by applicable law in excess of the
Maximum Legal Rate, an amount equal to any excess interest shall be
applied to the reduction of the principal hereof and not to the payment
of interest, and any excess shall be refunded to one or more of Maker.
All interest paid or agreed to be paid to Payee shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full period until payment in full of the
principal so that the interest for such full period shall not exceed
the Maximum Legal Rate. This section shall control this Note and any
other agreements between Maker and Payee, notwithstanding any provision
to the contrary herein or therein.
Successors and Assigns
Any rights or obligations of Maker under this Note may be
assigned, delegated, or otherwise transferred to any entity that
controls Maker or succeeds to Maker's interests in the business without
the prior written consent of Payee. Payee may assign, pledge, transfer
or participate its rights under this Note to an Eligible Assignee.
Subject to the preceding sentences, this Note shall be binding upon and
inure to the benefit of Maker and Payee and their respective heirs,
legal representatives and successors, and permitted assigns. After the
Resolution Date, at the option of Payee or its assigns, Maker agrees
(i) to issue Payee (or its assigns) an amended and restated Note in the
amount of the principal amount hereof (but otherwise containing the
terms and conditions set forth herein) upon surrender of this note to
Maker, and (ii) to do such further acts and execute such further
documents as Payee or its permitted assigns may reasonably request to
confirm the obligations of Maker set forth herein.
Miscellaneous
(a) This Note shall be governed by and construed in accordance
with the laws of the State of New York.
(b) MAKER HEREBY AGREES THAT ANY ACTION, SUIT, OR OTHER PROCEEDING
WITH RESPECT TO THIS NOTE MAY BE BROUGHT BY PAYEE IN ANY COURT OF
COMPETENT JURISDICTION SITTING IN NEW YORK, NEW YORK OR SAN FRANCISCO,
CALIFORNIA. MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY SUCH COURT AND HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY DEFENSE OF ANY INCONVENIENT FORUM, TO THE
MAINTENANCE OF ANY ACTION OR PROCEEDING IN ANY SUCH COURT, ANY
OBJECTION TO VENUE WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING, AND
ANY RIGHT OF JURISDICTION ON ACCOUNT OF THE PLACE OF RESIDENCE OR
DOMICILE OF ANY OTHER PARTY TO THE PURCHASE AGREEMENT. MAKER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES AND WILL WAIVE ANY AND ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR OTHER PROCEEDING
INSTITUTED WITH RESPECT TO THIS NOTE.
(c) The paragraph headings used in this Note are for convenience
of reference only, and shall not affect the meaning or interpretation
of this Note.
[Remainder of Page Intentionally Left Blank;
Signature Page Follows.]
<PAGE>
UNITED RENTALS (NORTH AMERICA), INC.
By:_____________________________________
John N. Milne, Vice Chairman
Guaranty
The Guarantor hereby unconditionally guarantees the punctual
payment when due, whether at stated maturity, by acceleration or
otherwise, of all amounts owing under this Note now or hereafter
existing, whether for principal, interest, fees, expenses or otherwise
(the "Guaranteed Obligation"), and agrees to pay any and all reasonable
expenses (including reasonable attorneys' fees and expenses) incurred
by Payee in enforcing any rights under this Guaranty.
The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of, and the Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following: (i) any lack of validity or
enforceability of this Note; and (ii) any other circumstance
(including, without limitation, any statute of limitations) that might
otherwise constitute a defense available to, or a discharge of, Maker.
This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Guaranteed
Obligation is rescinded or must otherwise be returned by Payee upon the
insolvency, bankruptcy or reorganization of the Maker or otherwise, all
as though such payment had not been made. The Guarantor hereby waives
promptness, diligence, notice of acceptance, and any other notice with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Payee exhaust any right or take any action against
the Maker.
The Guarantor hereby represents and warrants to Payee that the
Guarantor has, independently and without reliance upon the Payee, and
based on such documents and information as Guarantor has deemed
appropriate, made its own credit analysis and decision to enter into
this Guaranty.
UNITED RENTALS, INC.:
By:___________________________
John N. Milne, Vice Chairman
