EXHIBIT 1(a)
United Rentals, Inc.
Common Stock, $.01 par value
Underwriting Agreement
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February ___, 1999
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Xxxxxxx, Xxxxx & Co.,
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
United Rentals, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
1,832,000 shares and, at the election of the Underwriters, up to 960,000
additional shares of Common Stock (the "Common Stock"), of the Company and the
stockholder of the Company named in Schedule II hereto (the "Selling
Stockholder") proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 4,568,000 shares of Common Stock. The
aggregate of 6,400,000 shares to be sold by the Company and the Selling
Stockholder is herein called the "Firm Shares" and the aggregate of 960,000
additional shares to be sold by the Company is herein called the "Optional
Shares". The Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Shares".
It is understood and agreed to by all parties that the Company, Xxxxxxx
Xxxxx International, Xxxxxxxxx, Lufkin & Xxxxxxxx International, the Selling
Stockholder, Ayr, Inc., a California corporation ("Ayr"), and Xxxxxxx X.
Xxxxxxx are concurrently entering into an agreement (the "International
Underwriting Agreement") providing for the sale by the Company and the Selling
Stockholder of up to a total of 1,840,000 shares of Common Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Xxxxxxx Xxxxx International and
Xxxxxxxxx, Lufkin & Xxxxxxxx International are acting as lead managers.
Anything herein or therein to the contrary notwithstanding, the respective
closings under this Agreement and the International Underwriting Agreement are
hereby expressly made conditional on one another. The Underwriters hereunder
and the International Underwriters are simultaneously entering into an agreement
between U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Common Stock between the two syndicates. Two forms of prospectus are to be used
in connection with the offering and sale of shares of Common Stock contemplated
by the foregoing, one relating to the Shares hereunder and the other relating to
the International Shares. The latter form of prospectus will be identical to
the former except for certain substitute pages as included in the registration
statement and amendments thereto as mentioned below. Except as used in Sections
2, 3, 4, 9 and 11 herein, and except as the context may otherwise require,
references hereinafter to the Shares shall include
all the shares of Common Stock which may be sold pursuant to either this
Agreement or the International Underwriting Agreement, and references herein to
any prospectus whether in preliminary or final form, and whether as amended or
supplemented, shall include both the U.S. and the international versions
thereof.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-
71775) (the "Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared effective
by the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement or document incorporated by reference therein
has heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part
of the Initial Registration Statement at the time it was declared effective and
(ii) the documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial Registration
Statement became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement).
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and
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regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through Xxxxxxx, Sachs & Co. expressly
for use therein or by a Selling Stockholder expressly for use in the preparation
of the answers therein to Item 7 of Form S-3.
(iii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein.
(iv) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the answers therein to Item 7 of
Form S-3.
(v) The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are
independent certified public accountants with respect to the Company and its
subsidiaries within the meaning of Regulation S-X under the Act.
(vi) Each of the historical financial statements included
in the Registration Statement, together with related schedules and notes,
present fairly (on a consolidated basis where so indicated) the financial
condition of the entity or entities to which such financial statement
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purports to relate (the "Reported Entity") at the date(s) indicated and the
statement of operations (or income or earnings as indicated in the applicable
financial statement) and cash flows and (in the case of a Reported Entity for
which a statement of stockholders' equity is included) stockholders' equity (and
partners' capital if so indicated in the applicable financial statement) of the
Reported Entity for the period(s) specified; said financial statements have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as
otherwise indicated in such financial statements). Any supporting schedules
included in the Registration Statement present fairly in accordance with GAAP
the information required to be stated therein. The selected historical financial
information and the summary historical financial information included in the
Registration Statement present fairly the information shown therein and, in the
case of historical financial data or information of the Company, have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement. The pro forma financial statements and
the related notes thereto included in the Registration Statement present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(vii) The Company has not taken or caused to be taken and
will not take or cause to be taken, either directly or indirectly, any action
designed to cause or result in, or which action constitutes or which might
reasonably be expected to constitute, the stabilization or manipulation of the
market price of any security in contravention of any applicable law, including
but not limited to those actions prohibited by Section 9(a) of the Exchange Act,
the rules and regulations thereunder and Regulation M promulgated by the
Commission.
(viii) Neither the Company nor any of the Subsidiaries (as
defined below) has sustained since the date of the latest financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree which would be material to the Company and the Subsidiaries
taken as a whole, otherwise than as reserved for as disclosed in the Company's
financial statements or financial statements of certain Subsidiaries included in
the Prospectus; and since the respective dates as of which information is given
in the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise (a "Material Adverse Effect"), whether
or not arising in the ordinary course of business, (B) there has not been any
change in the capital stock of the Company (other than the issuance of Common
Stock pursuant to outstanding stock options) or increase in the long-term debt
(other than accretion or scheduled repayments thereof) of the Company and the
Subsidiaries taken as a whole, (C) there have been no transactions entered into
by the Company or any of the Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and the
Subsidiaries considered as one enterprise, and (D) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
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(ix) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement and the
International Underwriting Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not cause a Material
Adverse Effect.
(x) Each subsidiary of the Company (each, a "Subsidiary")
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Prospectus, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (except for any security
interest or pledge contemplated by the Credit Agreement dated September 29, 1998
among the Company, United Rentals, United Rentals of Canada, Inc. and Bank of
America National Trust and Savings Association ("B of A"), as U.S. Agent, Bank
of America Canada, as Canadian Agent, and various financial institutions (the
"Credit Agreement") and the Term Loan Agreement dated July 10, 1998 between the
Company, certain financial institutions and B of A, as agent, as amended by the
First Amendment to the Term Loan Agreement, dated September 29, 1998 (the "Term
Loan Agreement")); none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of any
security holder of such Subsidiary. The only Subsidiaries of the Company (other
than inactive Subsidiaries) are the Subsidiaries listed in a certificate of
officers of the Company to be delivered to the Purchaser prior to the Time of
Delivery and each Subsidiary of the Company which constitutes a "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X under the
Act); provided, however, that such determination shall be made by reference to
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the Company's pro forma financial statements as permitted by Rule 3-05(b)(3) of
Regulation S-X (each, a "Significant Subsidiary"), is marked with a "*" in such
certificate.
(xi) The Company has an authorized capitalization as set
forth in the Prospectus. As of the date hereof, there are [ ] shares of common
stock, par value $0.01 per share (the "Common Stock") outstanding. The shares of
issued and outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive or
other similar rights of any security holder of the Company.
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(xii) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the Company.
(xiii) The Shares and the International Shares to be issued
and sold by the Company to the Underwriters hereunder and under the
International Underwriting Agreement have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform to
the description of the Common Stock contained in the Prospectus.
(xiv) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Common Stock and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair in all material respects.
(xv) Neither the Company nor any of its Subsidiaries is
in violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them may be bound, or to which any of
the property or assets of the Company or any of its Subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults that would
not result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the International Underwriting Agreement and
any other agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions contemplated hereby
or thereby or in the Prospectus and the consummation of the transactions
contemplated herein and in the Prospectus and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
a Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, the Agreements and Instruments
except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, would not result in a Material
Adverse Effect, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of their assets
or properties. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its Subsidiaries.
(xvi) No labor dispute with the employees of the Company or
any of its Subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of its
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Subsidiaries' principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xvii) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any Subsidiary thereof which is required to be
disclosed in the Prospectus (other than as will be disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the consummation
of this Agreement and the International Underwriting Agreement or the
performance by the Company of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or any Subsidiary
thereof is a party or of which any of their respective property or assets is the
subject which are not described in the Prospectus including ordinary routine
litigation incidental to the business, would not reasonably be expected to
result in a Material Adverse Effect.
(xviii) To the knowledge of the Company, the representations
and warranties made by each of the 97 companies that have been acquired by the
Company (collectively, the "Acquired Companies") and the selling stockholders in
the respective agreements pursuant to which the Company acquired the Acquired
Companies did not as of the respective dates thereof contain any inaccuracies
that might, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xix) There are no contracts or documents which are
required to be described in the Prospectus which will not be so described.
(xx) The Company and its Subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
Subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by
the Company of its obligations hereunder or by the Company in connection with
the offering, issuance or sale of the Shares hereunder or the consummation of
the transactions contemplated by this Agreement and the International
Underwriting Agreement, except (i) the registration under the Act of the Shares
and the International Shares, (ii) such as may be required under foreign or
state securities or blue sky laws in connection with the purchase and
distribution of the Shares and the International Shares by the Underwriters and
the International
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Underwriters and (iii) such as may be required after the Time of Delivery
pursuant to the Company's periodic reporting requirements on its Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K to
be filed with the Commission under Sections 13 and 15(d), respectively, of the
Exchange Act.
(xxii) The Company and its Subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure to so possess such Government
Licenses would not, singly or in the aggregate, have a Material Adverse Effect;
the Company and its Subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have, singly or in the
aggregate, a Material Adverse Effect; and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(xxiii) The Company and its Subsidiaries have good and
marketable title to all real property described in the Prospectus as owned by
the Company and its Subsidiaries and good title to all other properties
described in the Prospectus as owned by them, in each case, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are pursuant to the Credit Agreement
and the Term Loan Agreement as described in the Prospectus or (b) do not, singly
or in the aggregate, materially interfere with the use made and proposed to be
made of such property by the Company or any of its Subsidiaries; and all of the
leases and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company or any
of its Subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease, which claim, if upheld, would result in a Material
Adverse Effect.
(xxiv) Neither the Company nor any Subsidiary is, or upon
the issuance and sale of the Shares as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus will be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(xxv) Except as described in the Prospectus or except as
would not, singly or in the aggregate, result in a Material Adverse Effect: (A)
neither the Company nor any of its Subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation thereof,
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including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) neither the Company nor any of its Subsidiaries is lacking any
permits, authorizations and approvals required under any applicable
Environmental Laws or are in violation of the requirements of such Environmental
Laws, (C) there are no pending or, to the best knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its Subsidiaries and (D) to the knowledge of the Company there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxvi) Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and market-related data
included in the Prospectus are not based on or derived from sources that are
reliable and accurate in all material respects.
(xxvii) The Company and each of its Subsidiaries have filed
all necessary federal, state, local and foreign income, payroll, franchise and
other tax returns (after giving effect to extensions) and have paid all taxes
shown as due thereon (except where the failure to so file or pay would not,
singly or in the aggregate, have a Material Adverse Effect), and there is no tax
deficiency that has been, or to the knowledge of the Company is likely to be,
asserted against the Company, any of its Subsidiaries or any of their properties
or assets that would result in a Material Adverse Effect, except for taxes that
are being contested in good faith by appropriate proceedings and with respect to
which the Company has established adequate reserves in accordance with GAAP.
(xxviii) Neither the Company nor any of its Subsidiaries is or
has ever been a Personal Holding Company within the meaning of Section 542 of
the Internal Revenue Code of 1986, as amended.
(xxix) Neither the Company nor any Subsidiary has received
notice from any insurer providing insurance coverage for the Company and its
Subsidiaries or agent of such insurer that capital improvements or other
expenditures will have to be made in order to continue present insurance
coverage, except such as would not reasonably be expected, singularly or in the
aggregate, to have a Material Adverse Effect.
(xxx) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded
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as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxxi) Other than pursuant to this Agreement and the
International Underwriting Agreement, there are no contracts, agreements or
understandings between either the Company or its Subsidiaries and any person
that give rise to a valid claim against the Company, any of its Subsidiaries or
the Underwriters for a brokerage commission, finder's fee or other like payment
relating to the transactions contemplated hereby.
(xxxii) No person or entity has the legal right by contract
or otherwise to require registration under the Act of shares of capital stock or
other securities convertible into capital stock of the Company solely because of
the filing or effectiveness of the Registration Statement and the consummation
of the transactions contemplated by this Agreement and the International
Underwriting Agreement (such rights are hereinafter referred to as "Registration
Rights").
(xxxiii) Neither the Company nor any of its Subsidiaries has
violated any provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not have a
Material Adverse Effect.
(xxxiv) Any certificate signed by any officer of the Company
or any of its Subsidiaries delivered to the Underwriters or to counsel for the
Underwriters pursuant to this Agreement or the International Underwriting
Agreement shall be deemed a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
(xxxv) With respect to the information systems of the
Company and its Subsidiaries, the Company does not believe that the Year 2000
Problem will have a Material Adverse Effect or result in any material loss or
interference with the Company's business or operations. In addition, the Company
has no reason to believe that, with respect to the information systems of any
third parties with which the Company or any of its Subsidiaries has a material
relationship, the Year 2000 Problem will have a Material Adverse Effect or
result in any material loss or interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems of
any kind will not, in the case of dates or time periods occurring after December
31, 1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
(b) Each of the Selling Stockholder and Xxxxxxx X. Xxxxxxx, jointly and
severally, represents and warrants to, and agrees with, each of the Underwriters
that:
10
(i) No consent, approval, authorization or order is required for
the execution and delivery by such Selling Stockholder of this Agreement, the
International Underwriting Agreement, the Power of Attorney or the Custody
Agreement hereinafter referred to, or for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, except such as have been obtained
under the Act and such as may be required under state securities or Blue Sky
laws or securities laws of any jurisdiction outside the United States in
connection with the purchase and distribution of such Shares by the Underwriters
and the International Underwriters; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the International Underwriting
Agreement, the Power-of-Attorney and the Custody Agreement and to sell, assign,
transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder;
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and under the International Underwriting Agreement, and
the compliance by such Selling Stockholder with all of its obligations under
this Agreement, the International Underwriting Agreement, the Power of Attorney
and the Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, nor will such action result in any violation of
the provisions of [name governing instrument of Xxxxxxx Foundation], any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder, except that no representation is made under this paragraph
(ii) as to any violation under any state securities or Blue Sky laws or
securities laws of any jurisdiction outside the United States in connection with
the purchase and distribution of the Shares by the Underwriters and the
International Underwriters;
(iii) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling Stockholder will
have, good and valid title to the Shares to be sold by such Selling Stockholder
hereunder or under the International Underwriting Agreement, free and clear of
all liens, encumbrances, equities or claims; and, upon delivery of such Shares
and payment therefor pursuant hereto, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters;
(iv) The Selling Stockholder and Xxxxxxx X. Xxxxxxx will comply
with the terms of the letter agreement, dated February 4, 1999, among the
Selling Stockholder, Ayr and Xxxxxxx X. Xxxxxxx addressed to Xxxxxxx, Xxxxx &
Co.;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or
11
supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein, such Preliminary Prospectus and the Registration Statement did, and
the Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder and under the
International Underwriting Agreement have been placed in custody under a Custody
Agreement, in the form heretofore furnished to you (the "Custody Agreement"),
duly executed and delivered by such Selling Stockholder to O'Melveny & Xxxxx
LLP, as custodian (the "Custodian"), and such Selling Stockholder has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to
you (the "Power of Attorney"), appointing the persons indicated in Schedule II
hereto, and each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this and the
International Underwriting Agreement on behalf of such Selling Stockholder, to
authorize the delivery of the Shares to be sold by such Selling Stockholder
hereunder and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement, the
International Underwriting Agreement and the Custody Agreement;
(ix) The Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder and the International Underwriter
pursuant to the International Underwriting Agreement; the arrangements made by
such Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Stockholder hereunder shall
not be terminated by operation of law, whether by the death or incapacity of any
individual Selling Stockholder or, in the case of an estate or trust, by the
death or incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the dissolution of
such partnership or corporation, or by the occurrence of any other event; if any
individual Selling Stockholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other such
event should occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of the Selling
Stockholder in accordance with the terms and conditions of this Agreement, the
International Underwriting Agreement and the Custody Agreement; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be
12
as valid as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of whether or not the Custodian, the Attorneys-in-
Fact, or any of them, shall have received notice of such death, incapacity,
termination, dissolution or other event; and
(x) The sale of the Shares by the Selling Stockholder is not
subject to the preemptive or other similar rights of any securityholder of the
Company arising under any applicable contract of such Selling Stockholder.
(c) Ayr represents and warrants to, and agrees with, each of the
Underwriters that:
(i) No consent, approval, authorization or order is required for
the execution and delivery by Ayr of this Agreement and the International
Underwriting Agreement and Ayr has full right, power and authority to enter into
this Agreement and the International Underwriting Agreement;
(ii) Ayr will comply with the terms of the letter agreement, dated
February 4, 1999, among the Selling Stockholder, Ayr and Xxxxxxx X. Xxxxxxx
addressed to Xxxxxxx, Sachs & Co.l and
(iii) The representations and warranties of the Selling Stockholder
and Xxxxxxx X. Xxxxxxx contained in Section 1(b) are true and correct.
2. Subject to the terms and conditions herein set forth, (a) each of the
Company and the Selling Stockholder agrees, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from each of the Company and the Selling Stockholder,
at a purchase price per share of $..........., the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Firm Shares to be sold by each of the Company and the
Selling Stockholder as set forth opposite their respective names in Schedule II
hereto by a fraction, the numerator of which is the aggregate number of Firm
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Firm Shares to be purchased by all of the Underwriters from
the Company and the Selling Stockholder hereunder and (b) in the event and to
the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company, as and to the extent indicated in Schedule II hereto, hereby
grants to the Underwriters the right to purchase at their election up to 960,000
Optional Shares, at the purchase
13
price per share set forth in the paragraph above, for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholder shall be delivered by or on
behalf of the Company and the Selling Stockholder to Xxxxxxx, Xxxxx & Co.,
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company and the Custodian to Xxxxxxx, Sachs & Co., at
least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
............., 1999 or such other time and date as Xxxxxxx, Sachs & Co., the
Company and the Selling Stockholder may agree upon in writing, and, with respect
to the Optional Shares, 9:30 a.m., New York time, on the date specified by
Xxxxxxx, Xxxxx & Co., in the written notice given by Xxxxxxx, Sachs & Co., of
the Underwriters' election to purchase such Optional Shares, or such other time
and date as Xxxxxxx, Xxxxx & Co., the Company and the Selling Stockholder may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(l) hereof, will be delivered at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location
prior to such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.
5. The Company agrees with each of the Underwriters:
14
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the last Time of Delivery which shall be disapproved by
you promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus and each amendment
or supplement thereto in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the date of the
Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary or desirable during such same period to
amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the
15
Exchange Act, to notify you and upon your request to file such documents
and to prepare and furnish without charge to the Underwriters and to any
dealer in securities as many copies as you may reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Shares at any time nine months or more after the time of issue
of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the International Underwriting Agreement, any shares of
any class of common stock of the Company or any other securities that are
convertible into, or exercisable or exchangeable for, or that represent the
right to receive, common stock of the Company, without your prior written
consent. The foregoing agreement will not limit the Company's ability to
(i) grant stock options under the existing stock option plans or issue
shares upon the exercise of stock options granted pursuant to such plans,
(ii) issue shares upon exercise or conversion of outstanding options,
warrants and convertible securities, (iii) issue shares, warrants or
convertible securities as consideration for acquisitions, provided that the
number of shares, warrants or convertible securities (calculated on a
common stock equivalent basis in the case of warrants and convertible
securities) that may be issued as consideration for acquisitions may not
exceed 5,000,000 unless the recipients of such excess shares, warrants or
convertible securities agree with the Company (which agreement may not be
amended without the prior written consent of Xxxxxxx, Xxxxx & Co.) to be
subject to the foregoing lock-up agreement with respect to such excess
shares, warrants or convertible securities or (iv) issue shares upon the
exercise of any warrants or convertible securities issued pursuant to the
preceding clause, provided that such shares will be subject to the
foregoing lock-up to the same extent, if any, as the warrants or
convertible securities pursuant to which such shares were issued;
(f) Not to be or become, at any time prior to the expiration of two
years after the last Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the 1940
Act;
16
(g) During a period of five years from the date of the Prospectus, to
furnish to you copies of all reports or other communications (financial or
other) furnished to stockholders of the Company generally, and to deliver
to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which the Common Stock or any class of securities of
the Company is listed; and (ii) such additional public information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement and the International Underwriting
Agreement in the manner specified in the Prospectus under the caption "Use
of Proceeds";
(i) To use its best efforts to list the Shares on the New York Stock
Exchange (the "Exchange"); and
(j) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company and the Selling Stockholder covenant and agree with one
another and with the Underwriter that (a) the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the
International Underwriting Agreement, the Agreement between Syndicates, the
Selling Agreements, the International Underwriting Agreement, the Agreement
between Syndicates, the Selling Agreements, the Blue Sky and Legal Investment
Memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees and expenses in connection with listing the
Shares on the Exchange; (v) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the costs and charges of any transfer agent and registrar, (viii) the fees
and expenses of counsel for the Selling Stockholder in an amount not
17
to exceed $30,000 and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section and (b) Selling Stockholder will pay or cause to be
paid all costs and expenses incident to the performance of such Selling
Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Stockholder in excess of $30,000, (ii) the fees and expenses of the
Attorneys-in-Fact and the Custodian, and (iii) all expenses and taxes incident
to the sale and delivery of the Shares to be sold by such Selling Stockholder to
the Underwriters hereunder. In connection with clause (c) (iii) of the preceding
sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New York State stock transfer tax,
and the Selling Stockholder agrees to reimburse Xxxxxxx, Sachs & Co. for
associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that the Company shall bear, and the Selling Stockholder shall not be
required to pay or to reimburse the Company for, any other cost incurred by the
Company for matters not directly relating to the sale and purchase of the Shares
pursuant to this Agreement, and that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Shares by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters hereunder, and under the
International Underwriting Agreement, as to the Shares to be delivered at each
Time of Delivery, shall be subject, in their discretion, to the condition that
all representations and warranties and other statements of the Company and of
the Selling Stockholder, Ayr and Xxxxxxx X. Xxxxxxx herein are, at and as of
such Time of Delivery, true and correct, the condition that the Company and the
Selling Stockholder shall have performed all of its and their obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, shall have furnished to you such opinion or opinions, dated
such Time of Delivery, with respect to the matters as you may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(c) Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP, counsel for the Company,
shall have furnished to you their written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto;
18
(d) Weil, Gotshal & Xxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect set forth in Annex
III hereto;
(e) O'Melveny & Xxxxx LLP, counsel for the Selling Stockholder, shall
have furnished to you their written opinion with respect to the Selling
Stockholder, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Stockholder and constitute valid and
binding agreements of such Selling Stockholder in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally (including
without limitation, fraudulent conveyance laws) and by general principles of
equity, including without limitation, concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law;
(ii) This Agreement and the International Underwriting Agreement
have been duly executed and delivered by or on behalf of such Selling
Stockholder; and the sale of the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement and the compliance
by such Selling Stockholder with its obligations under this Agreement, the
International Underwriting Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, (A) any statute, or (B)
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such Selling
Stockholder is subject that has been identified as being material to such
Selling Stockholder on a certificate provided to such counsel by such Selling
Stockholder, nor will such action result in any violation of the provisions of
[name governing instrument of Xxxxxxx Foundation] or any order, rule or
regulation of any California, New York, Delaware or federal court or
governmental agency or body having jurisdiction over such Selling Stockholder or
the property of such Selling Stockholder that has been identified by such
Selling Stockholder on a certificate provided to such counsel;
(iii) No consent, approval, authorization or order of any
California, New York, Delaware or federal governmental authority that such
counsel has, in the exercise of customary professional diligence, recognized as
applicable to the Selling Stockholder or transactions of the type contemplated
by this Agreement, the International Underwriting Agreement, the Custody
Agreement and the Power of Attorney is required for the consummation of the
transactions contemplated by this Agreement or the International Underwriting
Agreement in connection with the Shares to be sold by such Selling Stockholder
hereunder, except such as have been obtained under the Act and such as may be
required under state securities or Blue Sky laws or securities laws of
jurisdictions outside the United States in connection with the purchase and
distribution of such Shares by the Underwriters and the International
Underwriters; and
19
(iv) Assuming that the Underwriters and International
Underwriters purchased the Shares without notice of any adverse claim, the
Underwriters and the International Underwriters will acquire such Shares free
and clear of any adverse claim.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(f) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, each
accounting firm whose report is included or incorporated by reference in
the Prospectus shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto;
(g) (i) Neither the Company nor any of the Subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, which would be material to
the Company and the Subsidiaries taken as a whole otherwise than as set
forth or contemplated in the Prospectus or reserved for as disclosed in the
Company's financial statements or financial statements of certain
Subsidiaries included in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus there shall not
have been any change in the capital stock or long-term debt (other than
accretion thereof and other than borrowings in the ordinary course of
business under the Credit Facility with respect to working capital
requirements for the ongoing operation of the Company and the Subsidiaries)
of the Company and the Subsidiaries taken as a whole or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results
of operations of the Company and the Subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in Clause (i) or (ii), is in the
judgment of Xxxxxxx, Sachs & Co. so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in
the manner contemplated in this Agreement and the International
Underwriting Agreement and in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it
20
has under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange or on the National Association of
Securities Dealers Automated Quotation System; (ii) a suspension or
material limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of Xxxxxxx, Xxxxx & Co.
makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus;
(j) The Shares at such Time of Delivery shall have been, subject to
official notice of issuance, duly listed on the Exchange;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(l) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholder, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholder, respectively, herein
at and as of such Time of Delivery, as to the performance by the Company
and the Selling Stockholder of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to
such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsections (a) and (g) of this Section.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
21
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) The Selling Stockholder and Xxxxxxx X. Xxxxxxx, jointly and
severally, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling
Stockholder expressly for use therein; and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred. Notwithstanding anything herein to the contrary, the
aggregate liability of the Selling Stockholder and Xxxxxxx X. Xxxxxxx
pursuant to this Section will be limited to an amount equal to the total
proceeds (before deducting underwriting discounts and commissions) received
by such Selling Stockholder pursuant to this Agreement and the
International Underwriting Agreement.
(c) Each Underwriter will indemnify and hold harmless the Company, the
Selling Stockholder and Xxxxxxx X. Xxxxxxx against any losses, claims,
damages or liabilities to which the Company, such Selling Stockholder or
Xxxxxxx X. Xxxxxxx may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through
Xxxxxxx, Xxxxx & Co. expressly for use therein; and will reimburse the
Company and the Selling Stockholder for any legal or other expenses
reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify
22
the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under
such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act,
by or on behalf of any indemnified party. An indemnifying party shall not
be required to indemnify an indemnified party hereunder with respect to any
settlement or compromise of, or consent to entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder if (i) such
settlement, compromise or consent is entered into or made or given by the
indemnified party without the consent of the indemnifying party; and (ii)
the indemnifying party has not unreasonably withheld or delayed any such
consent.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received, in case of the
Company, the Selling Stockholder and Xxxxxxx X. Xxxxxxx, by the Company and
the Selling Stockholder on the one hand and, in the case of the
Underwriters, the Underwriters on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required under subsection (d) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of, in the case of the
Company, the Selling Stockholder and Xxxxxxx X. Xxxxxxx, the Company and
the Selling Stockholder on the one hand and, in the case of the
Underwriters, the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof),
23
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholder bear to the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or Xxxxxxx X.
Xxxxxxx on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder, Xxxxxxx X. Xxxxxxx and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this subsection (e)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (e)
shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(e), no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by it
and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (e) to contribute are several
in proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company, the Selling Stockholder and
Xxxxxxx X. Xxxxxxx under this Section 8 shall be in addition to any
liability which the Company, the Selling Stockholder and Xxxxxxx X. Xxxxxxx
may otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section 8 shall be
in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company and the Selling Stockholder and to
each person, if any, who controls the Company or the Selling Stockholder
within the meaning of the Act. The Company, the Selling Stockholder and
Xxxxxxx X. Xxxxxxx have and may enter into other agreements amongst
themselves with respect to the indemnity obligations hereunder.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms
24
contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Shares, then the
Company and the Selling Stockholder shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and
the Selling Stockholder that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholder notify you that they
have so arranged for the purchase of such Shares, you or the Company and
the Selling Stockholder shall have the right to postpone such Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and
the Company agrees to file promptly any amendments to the Registration
Statement or the Prospectus which in your opinion may thereby be made
necessary. The term "Underwriter" as used in this Agreement and the
International Underwriting Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement or the International Underwriting Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholder as provided in subsection (a) above,
the aggregate number of such Shares which remains unpurchased does not
exceed one-eleventh of the aggregate number of all the Shares to be
purchased at such Time of Delivery, then the Company and the Selling
Stockholder shall have the right to require each non-defaulting Underwriter
to purchase the number of Shares which such Underwriter agreed to purchase
hereunder and under the International Underwriting Agreement at such Time
of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder and under the International
Underwriting Agreement) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the
Company and the Selling Stockholder as provided in subsection (a) above,
the aggregate number of such Shares which remains unpurchased exceeds one-
eleventh of the aggregate number of all of the Shares to be purchased at
such Time of Delivery, or if the Company and the Selling Stockholder shall
not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement and the International Underwriting
Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Company and the Selling
Stockholder to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or
the Selling Stockholder, except for the expenses to be borne by the Company
and the Selling Stockholder and the Underwriters as provided in Section 6
hereof and the indemnity and
25
contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholder, Ayr, Xxxxxxx X.
Xxxxxxx and the several Underwriters, as set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or the Selling Stockholder, Ayr or
Xxxxxxx X. Xxxxxxx or any officer or director or controlling person of the
Company, the Selling Stockholder or Ayr and shall survive delivery of and
payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholder as provided herein, the Company and the
Selling Stockholder pro rata (based on the number of Shares to be sold by the
Company and such Selling Stockholder hereunder), will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company and the Selling Stockholder shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you; and in all
dealings with the Selling Stockholder hereunder and under the International
Underwriting Agreement, you and the Company shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of such Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for such
Selling Stockholder.
All statements, requests, notices and agreements hereunder and under the
International Underwriting Agreement shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission
to you in care of Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 0/0xx/ Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Registration Department; if to the Selling Stockholder
shall be delivered or sent by mail, telex or facsimile transmission to counsel
for such Selling Stockholder at its address set forth in Schedule II hereto; and
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary, with a copy to Xxxxx X. Xxxxxx, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Stockholder by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
26
13. This Agreement and the International Underwriting Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Company
and the Selling Stockholder and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company, the Selling Stockholder or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement and the
International Underwriting Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and the Selling Stockholder. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company and the Selling Stockholder for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
27
Any person executing and delivering this Agreement as Attorney-in-Fact for the
Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
UNITED RENTALS, INC.
By:
----------------------------
Name:
Title:
XXXXXXX FOUNDATION
By:
----------------------------
Name:
Title: Attorney-in-Fact
-------------------------------
Xxxxxxx X. Xxxxxxx
AYR, INC.
By:____________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
By:
----------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
28
SCHEDULE I
Total Number of
Number of Optional
Firm Shares Shares to
to be be
Purchased Purchased
if
Maximum
Option Exercised
------------- ----------------
Underwriter
Xxxxxxx, Xxxxx & Co.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
[Names of other Underwriters]
------------- ----------------
Total 6,400,000 960,000
----- ============= ================
29
SCHEDULE II
Total Number of Optional
Number Shares to be
of Sold if
Firm Shares Maximum Option
to be Sold Exercised
-------------- ------------------
The Company................. 1,832,000 960,000
The Selling Stockholder(s): 4,568,000
Xxxxxxx Foundation (a)
-------------- ------------------
Total....................... 6,400,000 960,000
============== ==================
-------------
(a) This Selling Stockholder is represented by O'Melveny & Xxxxx LLP and
has appointed Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxxx, and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
30
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
i. We are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
ii. In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Prospectus or Registration Statement comply as to form in all
material respects with the applicable requirements of the Act and
the related published rules and regulations thereunder, and, if
applicable, we have made a review in accordance with standards
established by the American Institute of Certified Public Accoun-
tants of the unaudited, consolidated interim financial
statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial
statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been furnished to the
Underwriters hereto;
iii. We have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus as indicated in their reports
thereon copies of which have been separately furnished to the
Underwriters and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in
paragraph (vi)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published rules and regulations, nothing came to
our attention that caused us to believe that the unaudited
condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
iv. The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated
financial statements for such five fiscal years;
I-1
v. We have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter
nothing came to our attention as a result of the foregoing
procedures that caused them to believe that this information does
not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
vi. On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial
statements included in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to our attention that
caused us to believe that:
(1) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the
unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus;
(2) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(3) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (1) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (2)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial
statements included in the Prospectus;
I-2
(4) any unaudited pro forma consolidated condensed financial
statement included in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of those statements;
(5) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which
were outstanding on the date of the latest financial
statements included in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by
the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus
except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(6) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (5) there were any decreases in
consolidated net revenues or operating profit or the total
or per share amounts of consolidated net income or other
items specified by the Underwriters, or any in creases in
any items specified by the Underwriters, in each case as
compared with the comparable period of the preceding year
and with any other period of corresponding length specified
by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
vii. In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified
by the Underwriters, which are derived from the general
accounting records of the Company and its subsidiaries, which
appear in the Prospectus, and have
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compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
I-4
ANNEX II
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 7(c)
As to various questions of fact material to our opinion, we have relied
upon the certificates of officers and upon certificates of public officials.
With regard to the due incorporation of corporations (other than the Company)
and the good standing of corporations (other than the Company), we have (subject
to the next sentence) relied entirely upon certificates of public officials.
With regard to the tax good standing of certain corporations (other than the
Company), we have relied solely upon a certificate of an officer of such
corporation to the effect that the corporation has filed the most recent annual
report required by the law of such jurisdiction and that all franchise taxes
required to be paid under such law have been paid. We have also examined such
corporate documents and records and other certificates, and have made such
investigations of law, as we have deemed necessary in order to render the
opinion hereinafter set forth. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies. We have also assumed that all documents
examined by us have been duly and validly authorized, executed and delivered by
each of the parties thereto other than the Company.
i. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of
Delaware.
ii. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations
under the Underwriting Agreement and the International
Underwriting Agreement.
iii. The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
iv. The Company has an authorized capitalization as set forth in the
Prospectus. As of the date hereof, there were [ ] shares of
common stock, par value $.01 per share (the "Common Stock")
outstanding. The shares of issued and outstanding common stock
of the Company have been duly authorized and validly issued and
are fully paid and non-assessable; and none of the outstanding
shares of capital stock of the Company was issued in violation of
any preemptive or other similar rights of any security holder of
the Company arising by statute or the Company's certificate of
incorporation or
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by-laws or, to the best of our knowledge (after due inquiry), any
other preemptive or other similar rights of any security holder
of the Company.
v. Each Significant Subsidiary is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.
vi. Each Significant Subsidiary has been duly incorporated and has
corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectus. Except as otherwise disclosed in the Prospectus, all
of the issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued and is
fully paid and non-assessable and, to the best of our knowledge,
is owned by the Company, directly or through Subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of
capital stock of any Significant Subsidiary was issued in
violation of the preemptive or similar rights of any security
holder of such Significant Subsidiary arising pursuant to statute
or such Subsidiary's certificate of incorporation or by-laws or,
to the best of our knowledge, any other preemptive or other
similar rights of any security holder of such Significant
Subsidiary.
vii. The Underwriting Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by
the Company.
viii.If any documents are incorporated by reference in the
Registration Statement, such documents (other than the financial
statements and supporting schedules therein, as to which no
opinion need be rendered), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of
the Commission thereof.
ix. To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which
the Company or any Subsidiary is a party, or to which the
property or assets of the Company or any Subsidiary thereof is
subject, before or brought by any court or governmental agency or
body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reason ably
be expected to materially and adversely affect the consummation
of the
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transactions contemplated in the Underwriting Agreement and the
International Underwriting Agreement or the performance by the
Company of its obligations thereunder or the transactions
contemplated by the Prospectus;
x. The information in the Prospectus under "Business--Environmental
Regulation," to the extent that it constitutes summaries of
matters of law, has been reviewed by us and is correct in all
material respects. The statements set forth in the Prospectus
under the caption "Description of Capital Stock," insofar as they
purport to constitute a summary of the terms of the Stock, are
accurate summaries in all respects of such terms.
xi. To the best of our knowledge (after due inquiry), neither the
Company nor any Subsidiary is in violation of its charter or by-
laws.
xii. To the best of our knowledge, neither the Company nor any
Subsidiary thereof is in default in the due performance or
observance of, or is in violation of, any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Prospectus or incorporated by reference therein which violations
or defaults are required to be described in the Prospectus and
are not so described or would, individually or in the aggregate,
be reasonably likely to have a Material Adverse Effect or effect
the validity of the Shares.
xxxx.Xx filing, authorization, approval, consent or order of any court
or governmental authority or agency (other than such as may be
required under the applicable securities laws of the various
jurisdictions in which the Shares will be offered or sold, as to
which we need express no opinion) is required by the Company in
connection with the due authorization, execution and delivery of
the Underwriting Agreement or the International Underwriting
Agreement or in connection with the offering, issuance, sale or
delivery of the Shares and to the Underwriters and the
International Underwriters or the resale thereof by the
Underwriters and the International Underwriters in accordance
with the Underwriting Agreement and the International
Underwriting Agreement, except for filings and other actions
required under or pursuant to the Act, the Exchange Act, and
other federal or state securities or "blue sky" laws and the
rules of the New York Stock Exchange, as to which we express no
opinion.
xiv. The execution, delivery and performance of the Underwriting
Agreement and the International Underwriting Agreement, and the
consummation of the transactions contemplated in the Underwriting
Agreement and the International Underwriting Agreement and in
the Prospectus and compliance by the
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Company with its obligations under the Underwriting Agreement and
the International Underwriting Agreement, (A) after reasonable
investigation, do not and will not (subject to the next
sentence), whether with or without the giving of notice or lapse
of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(xv) of the
Underwriting Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary thereof pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument,
known to us, to which the Company or any of its Subsidiaries is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any Subsidiary is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any Subsidiary is
subject (except for such conflicts, breaches or defaults,
Repayment Events or liens, charges or encumbrances that would not
have a Material Adverse Effect), (B) result in any violation of
the provisions of the charter or by-laws of the Company or any
Subsidiary, or (C) to the best of our knowledge (after due
inquiry), result in any violation of the provisions of any
applicable law, statute, rule or regulation of the United States
of America or included in the Delaware General Corporate Law
(except we express no opinion as to "blue sky" laws), judgment,
order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations. No opinion is
rendered pursuant to clause (A) of the preceding sentence with
respect to the Credit Agreement, the Term Loan Agreement, the
Participation Agreement, dated as of December 31, 1998, among
U.S. Rentals, Inc., the Company, United Rentals (North America),
Inc. and Deutsche Bank AG and certain of its affiliates ( the
"Participation Agreement"), the Indenture governing the Company's
9 1/2% Senior Subordinated Notes due 2008 (the "9 1/2% Notes
Indenture"), the Indenture governing the Company's 8.80% Senior
Subordinated Notes due 2008 (the "8.80% Notes Indenture") or the
Indenture governing the 9.25% Senior Subordinated Notes due 2009
(the "9.25% Notes Indenture") (or any agreement or instrument
entered into or executed by the Company or any Subsidiary
pursuant to the Credit Agreement, the Term Loan Agreement, the
Participation Agreement, the 9 1/2% Notes Indenture, the 8.80%
Notes Indenture or the 8.25% Notes Indenture, or as contemplated
thereby).
xv. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are
defined in the 1940 Act.
xvi. No person or entity has the legal right by contract or otherwise
to require registration under the Act of shares of capital stock
or other securities convertible into capital stock of the Company
solely because of the filing or effectiveness of the Registration
Statement and the consummation of the
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transactions contemplated by the Underwriting Agreement and the
International Underwriting Agreement.
xvii. The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to
such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder.
In addition, we have participated in conferences with officers and
representatives of the Company, counsel to the Underwriters, representatives of
the independent accountants for the Company and the Underwriters at which the
contents of the Registration Statement and related matters were discussed.
Although we have not undertaken, except as otherwise indicated in this opinion,
to investigate or verify independently, and do not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus, except for those referred to in Clause (x)
above, on the basis of the information that we gained in the course of the
performance of such services and our representation of the Company, we confirm
to you that nothing that came to our attention in the course of such review or
representation has caused us to believe that (i) as of the effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (except for financial statements and schedules
and other financial data included or incorporated by reference therein, if any,
as to which we make no statement), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that as of its date
or the date hereof, the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein, if any, as to which such counsel need make
no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented Prospectus was issued or at the Time of Delivery,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(ii) that there are any franchise agreements, indentures, mortgages, loan
agreements, notes, leases or other contracts or instruments required to be
described or referred to in the Prospectus that are not described or referred to
in the Prospectus or that any descriptions of or references to any of the
foregoing are not correct in all material respects.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). Such counsel may in addition rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation
II-5
Law of the State of Delaware, upon the opinions of counsel reasonably
satisfactory to counsel to the Underwriters.
II-6
ANNEX III
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 7(d)
i. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and
has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as described
in the Prospectus and to enter into and perform its obligations
under the Underwriting Agreement and the International
Underwriting Agreement.
ii. The Company has an authorized capitalization as set forth in the
Prospectus, and the Shares being delivered at such Time of
Delivery have been duly authorized and, when issued and delivered
as contemplated by the Underwriting Agreement and the
International Underwriting Agreement against payment of the
consideration therefor set forth in the Underwriting Agreement
and the International Underwriting Agreement, will be validly
issued, fully paid and non-assessable; and the Shares conform to
the description of the Stock contained in the Prospectus;
iii. The execution, delivery and performance of the Underwriting
Agreement and the International Underwriting Agreement by the
Company have been duly authorized by all necessary corporate
action on the part of the Company. The Underwriting Agreement
and the International Underwriting Agreement have been duly and
validly executed and delivered by the Company.
iv. The statements contained in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and
Results of Operations - Certain Information Concerning the Credit
Facility and Other Indebtedness" and "Description of Capital
Stock" insofar as they purport to describe provisions of the
Common Stock, the Shares or matters of federal or New York or
Delaware corporate law, constitute a fair and accurate summary
thereof in all material respects.
v. No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Delaware corporate or
federal governmental authority is required in connection with the
execution and delivery by the Company of the Underwriting
Agreement and the International Underwriting Agreement or the
consummation by the Company of the transactions contemplated
thereby, except for filings and other actions required under or
pursuant to the Act, the Exchange Act, and other federal or state
securities
III-1
or "blue sky" laws and the rules of the New York Stock Exchange,
as to which we express no opinion.
vi. The Company is not an "investment company" nor an entity
"controlled" by an "investment company ," as such terms are
defined in the 1940 Act.
vii. The execution and delivery of the Company of the Underwriting
Agreement and the International Underwriting Agreement, the
consummation of the transactions contemplated thereby and by the
Prospectus and compliance by the Company with its obligations
under the Underwriting Agreement and the International
Underwriting Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or a default or Repayment Event
(as defined in Section 1(xv) of the Underwriting Agreement)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
or any of its Subsidiaries pursuant to, the Financing Documents
(as defined below), except for such conflicts, breaches,
defaults, Repayment Events, liens, charges or encumbrances that
would not reasonably be expected to have a Material Adverse
Effect. As used above, the term "Financing Documents" means,
collectively: (a) the Credit Agreement, dated as of September
29, 1998, among the Company, United Rentals (North America), Inc.
("URNA"), United Rentals of Canada, Inc., various financial
institutions, Bank of America National Trust and Savings
Association ("BofA"), as U.S. agent, and Bank of America Canada,
as Canadian agent; (b) the Term Loan Agreement, dated as of July
10, 1998 and as amended as of September 29, 1998, among the
Company, URNA, various financial institutions, and BofA, as
agent; (c) the Participation Agreement, dated as of December 31,
1998, among U.S. Rentals, Inc., the Company, URNA and Deutsche
Bank AG and certain of its affiliates; (d) the Indenture, dated
as of May 22, 1998, among URNA, its subsidiaries party thereto,
and State Street Bank and Trust Company (the "Trustee") relating
to URNA's 9.5% senior subordinated notes due 2008; (e) the
Indenture, dated as of August 12, 1998, among URNA, its
subsidiaries party thereto, and the Trustee relating to URNA's
8.8% senior subordinated notes due 2008; (f) the Indenture, dated
as of December 15, 1998, among URNA, its subsidiaries party
thereto, and the Trustee relating to URNA's 9.25% senior
subordinated notes due 2009 and (g) any agreement or instrument
which was entered into or executed by the Company or any such
Subsidiary as required under or contemplated by any Financing
Document.
We have participated in conferences with directors, officers and other
representatives of the Company, representatives of the Underwriters and its
counsel and representatives of the independent public accountants for the
Company in connection with the preparation of the
III-2
Registration Statement and although we have not independently verified and are
not passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except to the extent specified in paragraph iv above) no facts have
come to our attention which lead us to believe that the Registration Statement,
as of its effective date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, at any time
from the date thereof through such Time of Delivery, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading (it being
understood that we express no view with respect to the financial statements and
related notes and the other financial and accounting data included or
incorporated by reference in the Registration Statement or the Prospectus).
The opinions expressed herein are limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
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