Promissory Note (Amortizing)
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
$20,000,001 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
$20,000,001, as such amount may be adjusted under Section 1.2(c) of the
Purchase Agreement (the "Adjusted Principal Amount") and to pay interest
computed on the basis of a 365-day year on the Adjusted 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.
"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 later to occur of (a) the date on which Maker receives an
executed certificate from Payee (in substantially the form set forth on
Exhibit A attached hereto), confirming the Adjusted Principal Amount and
(b) 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.
"Interest Note" that certain Promissory Note dated the date
hereof, executed by Maker, payable to the order of Payee in the original
principal amount of 20,000,000.
"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 Interest
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 Adjusted Principal Amount 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) Principal shall be paid in fourteen (14)
quarterly installments each equal to seven and fourteen one-hundredths
percent (7.14%) of the Adjusted Principal Amount, together with accrued
interest thereon, commencing on June 30, 2002, and continuing thereafter
on the last day of each June, September, December, and March of each
calendar year during the term of this Note, with a final payment of all
unpaid principal and interest thereon 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 not assign, pledge, collaterally
assign, or otherwise transfer any of its rights under this Note to any
lender or other person; provided that, at any time after the date which is
twelve (12) months after the Resolution Date, 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 date which is thirty-six (36) months 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 Adjusted
Principal Amount (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.
Setoff
In addition to and not in lieu of any other remedy available to
Maker, upon notice to Payee, Maker may set off any amount (a) to which it
may be entitled under Article 6 of the Purchase Agreement, or (b) under an
agreement executed by Maker and Payee pursuant to which Payee will
purchase equipment from Maker, against amounts otherwise payable to Payee
hereunder. The exercise of such right of setoff by Maker in good faith,
whether or not ultimately determined to be justified, will not constitute
an Event of Default hereunder.
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: ______________________________ rman
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
<PAGE>
Promissory Note (Amortizing)
EXHIBIT A
Form of Adjusted Principal Amount Certificate
This Closing Payment Adjustment Certificate is for the purpose of
modifying and amending that certain Promissory Note (the "Promissory
Note") dated September 28, 2000, executed by United Rentals (North
America), Inc., a Delaware corporation ("Maker"), payable to W.R.
Carpenter North America, Inc. or permitted assigns ("Payee"), in the
original principal amount of Twenty Million and One Dollars ($20,000,001),
to reflect Payee's Adjusted Principal Amount. Except as otherwise defined
herein, capitalized terms used herein shall have the meanings set forth in
the Promissory Note. Modification and amendment of the Promissory Note
hereby is made pursuant to Section 1.2(c) of the Purchase Agreement.
Based upon the recitals set forth above and the promises
contained herein, the Adjusted Principal Amount of the Promissory Note
shall be $_____________, as of September 28, 2000, based upon the
following calculations:
Adjustment Calculation
(Capitalized terms used in this chart shall have the meanings set forth
in the Purchase Agreement. The amounts set forth below represent Payee's
pro rata portions of the line items included in the chart.)
Aggregate Original Note Amount $ ____________________
Minus Equipment Adjustment
(Schedule 1 hereto) $(____________________)
Plus/Minus Closing Payment
Adjustment (Schedule 2 hereto) $____________________
Adjusted Principal Amount $____________________
Except for the modification and amendment of the Promissory Note
to reflect Payee's Adjusted Principal Amount as expressly set forth
herein, the Promissory Note is unchanged.
This Closing Payment Adjustment Certificate has been executed and
delivered as of _______________, ____, to be effective as of
______________________, 2000.
MAKER
UNITED RENTALS (NORTH AMERICA), INC.,
a Delaware corporation
By:
Name:
Title:
ACKNOWLEDGED:
W.R. CARPENTER NORTH AMERICA, INC.
By: ______________________________
Graham D. Croot, Chief Financial Officer
