EXHIBIT 10(c)
UNITED RENTALS, INC.
SERIES B PERPETUAL CONVERTIBLE PREFERRED STOCK,
$.01 Par Value
PREFERRED STOCK PURCHASE AGREEMENT
July 16, 1999
United Rentals, Inc.
Four Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxxxxx, XX 00000
July 16, 1999
To the Purchasers listed on the signature page
Dear Sirs:
United Rentals, Inc., a Delaware corporation (the "Company"), agrees
with the entities who are signing this Agreement as Purchasers (together, the
"Purchasers") as follows:
1. Authorization of Stock. The Company will authorize the issue and
sale of 500,000 shares of its Series B Perpetual Convertible Preferred Stock,
$.01 par value, to be designated as its "Series B Perpetual Convertible
Preferred Stock" (the "Stock"), of which 450,000 shares are designated as Class
B-1 Convertible Preferred Stock (the "B-1 Preferred Stock") and 50,000 shares
are designated as Class B-2 Convertible Preferred Stock (the "B-2 Preferred
Stock"). The relative rights, preferences and limitations of the Stock,
including, without limitation, the right to convert Shares into shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), will be
as set forth in the form of the Certificate of Designation of the Stock of the
Company attached as Exhibit A hereto (the "Certificate of Designation").
Certain capitalized terms used in this Agreement are defined in Section 9;
references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement and references to a "section"
are, unless otherwise specified, to one of the sections of this Agreement.
2. Sale and Purchase of Stock. The Company will issue and sell to
the Purchasers and, subject to the terms and conditions of this Agreement, the
Purchasers will purchase from the Company, at the Closing provided for in
section 3, 5252 shares of B-1 Preferred Stock and 44,748 shares of B-2 Preferred
Stock (collectively, the "Shares") at a purchase price of $1,000 per share.
3. Closing; Payment of Purchase Price. The sale of the Shares to be
purchased by the Purchasers shall take place at the offices of X'Xxxxxxxx Graev
&
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Karabell, LLP at 10:00 a.m., New York City time, at a closing (the "Closing")
on the later of (a) the first Business Day after the conditions to closing set
forth in Section 4 (other than those to be satisfied at the Closing, which shall
be satisfied or waived at the Closing) have been satisfied or waived by the
party entitled to waive such condition) or (b) the first to occur of (i) the
163rd day after the date of this Agreement, (ii) the 10/th/ Business Day after
the Company gives notice to Purchasers that the Company's Debt to Total
Capitalization Ratio first equals or exceeds 0.6 , and (iii) the 10/th/ Business
Day after the Company gives notice to Purchasers that the volume-weighted
average of the closing price of the Company's Common Stock on the New York Stock
Exchange for the preceding 20 trading days shall have exceeded $30.00 per share,
or on such other Business Day thereafter or prior to such date as may be agreed
upon by the Company and the Purchasers. The Company's Debt to Total
Capitalization Ratio shall mean an amount determined by dividing (A) the sum of
the Company's and its subsidiaries' funded debt, consisting of notes, capital
leases, debentures (other than those issued to subsidiaries) and bank debt, less
cash and cash equivalents, by (B) the total capitalization (funded debt,
preferred stock of a subsidiary trust and stockholders' equity, less cash and
cash equivalents) of the Company and its subsidiaries, all as set forth on a
month end consolidated balance sheet of the Company prepared in accordance with
generally accepted accounting principles.
The names in which the Company will register the shares of the Stock to be
purchased at the Closing are as set forth in Exhibit 1. At the Closing, the
Company will deliver to the Purchasers the Shares to be purchased by the
Purchasers in the form of such number of certificates representing such Shares
as the Purchasers may reasonably request, dated the date of the Closing and
registered in the names aforesaid, and the Purchasers jointly and severally
shall deliver to the Company or its order immediately available funds in the
amount of the purchase price for such Shares. If at the Closing the Company
shall fail to tender to the Purchasers the Shares to be purchased by the
Purchasers, as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to the Purchasers'
reasonable satisfaction, the Purchasers shall, at their election, be relieved of
all further obligations under this Agreement, without thereby waiving any other
rights the Purchasers may have by reason of such failure or such nonfulfillment.
If at the Closing, Purchasers shall fail to tender to the Company the purchase
price for the Shares, as provided above in this Section 3, other than on account
of any of the conditions specified in section 4 not having been fulfilled to the
Purchasers' satisfaction or on account of the breach by the Company of any of
its obligations under this Agreement, the Company shall, at its election, be
relieved of all further obligations under this Agreement, without thereby
waiving any other rights the Company may have by reason of such failure.
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4. Conditions to Closing. The Purchasers' obligation to purchase
and pay for the Shares to be sold to the Purchasers at the Closing is subject to
the fulfillment to their reasonable satisfaction, prior to or concurrently with
the Closing, of the following conditions:
4.1. Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be in all material
respects correct when made and at the time of the Closing, except as affected by
the consummation of the transactions contemplated by this Agreement.
4.2. Performance; No Default. The Company shall have performed and
complied in all material respects with all agreements and conditions contained
in this Agreement required to be performed or complied with by it prior to or at
the Closing.
4.3. Compliance Certificates. The Company shall have delivered to the
Purchasers an Officers' Certificate, dated the date of the Closing, certifying
that the conditions specified in sections 4.1 and 4.2 have been fulfilled.
4.4. Opinion of Counsel. The Purchasers shall have received the
favorable opinions, dated the date of the Closing and reasonably satisfactory in
substance and form to the Purchasers from Weil, Gotshal & Xxxxxx, counsel for
the Company and , if necessary, local counsel for the Company, substantially in
the form set forth in Exhibits B and C and covering such other matters incident
to the transactions contemplated by this Agreement as the Purchasers or their
counsel may reasonably request.
4.5. Certificate of Designation. The Certificate of Designation shall
have been duly filed under the laws of the State of Delaware, and the Restated
Certificate of Incorporation of the Company, as amended by the Certificate of
Designation, shall be in full force and effect, and shall not have been
otherwise amended or modified.
4.6. Registration Rights Agreement. The Purchasers shall have
received a fully executed counterpart of the Registration Rights Agreement
substantially in the form set out in Exhibit D (the "Registration Rights
Agreement"), such agreement shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived.
4.7. No Actions Pending. There shall be no suit, action,
investigation, inquiry or other proceeding by any Governmental Authority or any
other Person or any other legal or administrative proceeding pending or to the
knowledge of
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the Company threatened which questions the validity or legality of the
transactions contemplated by this Agreement, or seeks damages in connection
therewith.
4.8. Compliance with Securities Laws. The offering and sale by the
Company, at or prior to the Closing, of the Shares pursuant to this Agreement
shall have been made in compliance with all applicable requirements of federal
and state securities laws and the Purchasers shall have received evidence
thereof in form and substance reasonably satisfactory to the Purchasers.
4.9. Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to the Purchasers and their counsel, and the Purchasers and their
counsel shall have received all such counterpart originals or certified or other
copies of such documents as the Purchasers or their counsel may reasonably
request.
4.10. Reservation of Common Stock. The shares of Common Stock
initially issuable upon conversion of the Stock shall have been duly authorized
and reserved for issuance upon conversion of the Stock.
4.11. Payment of Fees and Expenses. The Company shall have paid the
Purchasers on or before the Closing (a) a fee equal to 1% of the purchase price
of the Stock and (b) the costs and expenses provided for in Section 10 hereof,
provided that the Purchasers shall have provided to the Company a statement of
its estimated costs and expenses at least one Business Day prior to the
Closing.
4.12. HSR Act. Any waiting period (and any extension thereof) under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, applicable
to this Agreement and the transactions contemplated hereby shall have expired or
been terminated.
5. Representations and Warranties. Except as disclosed in Exhibit
E, the Company represents and warrants that:
5.1. Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into and perform all of its obligations under this Agreement
and each of the Collateral Agreements to which it is a party, to issue and sell
the Shares to be issued and sold at the Closing and to carry out the
transactions contemplated hereby or thereby.
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5.2. Subsidiaries. Exhibit E correctly lists as to each Subsidiary of
the Company on the date of this Agreement (a) its name, (b) the jurisdiction of
its incorporation and (c) the percentage of its issued and outstanding shares
owned by the Company or by another Subsidiary of the Company (specifying such
other Subsidiary), as the case may be. Each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own and operate its properties and to carry on its business as
now conducted and as proposed to be conducted. All the outstanding shares of
capital stock of each Subsidiary of the Company are validly issued, fully paid
and nonassessable, and all such shares indicated in Exhibit E as owned by the
Company or by a Subsidiary of the Company are so owned beneficially and of
record by the Company or by such Subsidiary, as the case may be, free and clear
of any Lien except as indicated in Exhibit E.
5.3. Qualification. Each of the Company and its Subsidiaries is duly
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction (other than the jurisdiction of its incorporation)
in which the nature of its activities or the character of the properties it owns
or leases makes such qualification necessary and in which the failure so to
qualify would have a Material Adverse Effect. A "Material Adverse Effect" shall
mean any effect that is materially adverse to the properties, business, results
of operations or financial condition of the Company and its Subsidiaries taken
as a whole.
5.4. Business; Financial Statements. The Company has delivered to the
Purchasers complete and correct copies of the audited consolidated balance
sheets of the Company and its Subsidiaries as of December 31, 1998 and December
31, 1997, and the related audited supplemental consolidated statements of
operations, stockholders' equity and cash flows of the Company and its
Subsidiaries for the years ended December 31, 1998, 1997 and 1996. Such audited
financial statements are hereinafter referred to as the "Financial Statements."
The Financial Statements are accompanied by the report of Ernst & Young LLP,
which state that the Financial Statements have been prepared in accordance with
GAAP consistently applied throughout the periods involved (except as otherwise
specified therein) and present fairly the financial position of the corporations
to which they relate as of the respective dates specified and the results of
their operations and changes in financial position for the respective periods
specified, and that the audit by such accountants of the Financial Statements
has been made in accordance with generally accepted auditing standards. The
Company has also delivered to the Purchasers complete and correct copies of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
March 31, 1999, and the related unaudited consolidated statement of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
three month period ended on such date. Such unaudited financial statements are
hereinafter referred to as the "Unaudited Statements." The Unaudited Statements
have been
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prepared in accordance with GAAP consistently applied throughout the periods
involved (except as otherwise specified therein) and present fairly the
financial position of the Company and its Subsidiaries as of the respective
dates specified, and the results of their operations and changes in cash flows
for the respective periods specified. As of the date of this Agreement, the
Purchasers are not aware that this representation is incorrect in any material
respect.
5.5. Changes, etc. Since March 31, 1999, neither the Company nor any
of the Subsidiaries has sustained 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 financials
statements; and there has not been any change in the capital stock of the
Company or increase in the long-term debt (other than accretion or scheduled
repayments thereof) of the Company and the Subsidiaries taken as a whole, or any
material adverse change which has had a Material Adverse Effect, in each case
otherwise than as set forth on Exhibit E.
5.6. Capital Stock and Related Matters. At the time of the Closing
and after giving effect to the transactions contemplated by this Agreement, the
authorized capital stock of the Company will consist of (a) 500,000,000 shares
of Common Stock, of which approximately 71,500,000 shares will be outstanding,
(b) 300,000 shares of Series A Perpetual Convertible Preferred Stock, of which
300,000 shares are outstanding, (c) 450,000 shares of B-1 Preferred Stock, of
which 105,252 shares will be outstanding, (d) 50,000 shares of B-2 Preferred
Stock, of which 44, 748 shares will be outstanding and (e) 4,200,000 shares of
Preferred Stock, undesignated as to terms, none of which are outstanding. The
Company is obligated to issue Common Stock on conversion of debentures held by
United Rentals Trust I, a business trust organized under Delaware law. The
Common Stock and the Stock are hereinafter collectively referred to as "Capital
Stock". All of the outstanding shares of Capital Stock are, and at the Closing
will be, validly issued and outstanding, fully paid and non-assessable. Except
as set forth above and on Exhibit E, the Company has no outstanding stock or
securities convertible into or exchangeable for any shares of its Capital Stock,
or any outstanding rights (either preemptive or other) to subscribe for or to
purchase, or any outstanding options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any outstanding
calls, commitments or claims of any character relating to, any Capital Stock or
any stock or securities convertible into or exchangeable for any Capital Stock
of the Company. Except as set forth on Exhibit E, the Company is not subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Capital Stock or any convertible securities, rights or
options of the type described in the preceding sentence. Neither the Company nor
any of its Subsidiaries is a party to, or has knowledge of, any agreement
(except as set forth on Exhibit E) restricting the
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transfer of any shares of the Company's Capital Stock which would affect the
transferability of the Common Stock issuable upon conversion of the Stock.
5.7. Tax Returns and Payments. The Company and each of the
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 the 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 United States generally accepted accounting
principles.
5.8. Indebtedness of the Company. Exhibit F correctly describes all
secured and unsecured Indebtedness of the Company and its Subsidiaries (other
than intercompany items) outstanding, or for which the Company or one of its
Subsidiaries has commitments, which is individually in excess of $5,000,000
("Significant Indebtedness") (excluding operating leases), on the date of this
Agreement. The secured and unsecured Indebtedness of the Company and its
Subsidiaries (other than intercompany items, and other than Significant
Indebtedness) outstanding, or for which the Company or one of its Subsidiaries
has commitments does not in the aggregate exceed $2,000,000,000 on the date of
this agreement. Neither the Company nor any of its Subsidiaries is in default
with respect to any Indebtedness or any instrument or agreement relating
thereto, except for such defaults as would not, either in any case or in the
aggregate, have a Material Adverse Effect.
5.9. Title to Properties; Liens. The Company and each of the
Subsidiaries have good and marketable title to all real property (other than
property which is leased) material to the conduct of the business of the Company
and the Subsidiaries, taken as a whole, and good and marketable title to all
personal property (other than property which is leased) material to the conduct
of the business of the Company and the Subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such as are
described on Exhibit E or such as do not in the aggregate have a Material
Adverse Effect; and any real property and buildings held under lease by the
Company and the Subsidiaries, material to the conduct of the business of the
Company and the Subsidiaries, taken as a whole, are held by them under valid,
subsisting and enforceable leases with such exceptions as are described on
Exhibit E and except for such other exceptions as do not have a Material Adverse
Effect.
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5.10. Litigation, etc. There is no action, proceeding or
investigation pending or (to the knowledge of the Company) threatened (or any
basis therefor known to the Company) which questions the validity of this
Agreement, the Shares or any action taken or to be taken pursuant to this
Agreement, the Shares or the Collateral Agreements. Other than as set forth on
Exhibit E, there are no legal or governmental proceedings pending to which the
Company or any of the Subsidiaries is a party or of which any property of the
Company or the Subsidiaries is the subject, which if determined adversely to the
Company or any of the Subsidiaries, would individually or in the aggregate have
a Material Adverse Effect; and, to the Company's knowledge, no such proceedings
which would in the aggregate have a Material Adverse Effect are threatened or
contemplated by governmental authorities or threatened by others.
5.11. Compliance with Other Instruments, etc. Neither the Company
nor any of its Subsidiaries is in violation of any term of its certificate or
articles of incorporation or by-laws, and neither the Company nor any of its
Subsidiaries is in violation of any term of any agreement or instrument to which
it is a party or by which it is bound or any term of any applicable law,
ordinance, rule or regulation of any Governmental Authority or any term of any
applicable order, judgment or decree of any court, arbitrator or Governmental
Authority, the consequences of which violation could reasonably be expected to
have a Material Adverse Effect. The compliance by the Company with all of the
provisions of this Agreement and the Registration Rights Agreement, the
execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement, the issuance by the Company of the Common Stock
upon the conversion of the Shares, and the compliance with the terms of the
Certificate of Designation will not conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement (provided the consent of
the Company's lending banks must be obtained before the Company makes an offer
to purchase under Section 5 of the Certificate of Designation) or other
agreement or instrument to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries is bound or to which
any of the property or assets of the Company or any of the Subsidiaries is
subject, or constitute a Repayment Event thereunder, nor will such actions
result in any violation of the provisions of the certificate of incorporation or
bylaws of the Company or any of the Subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries or any of their
properties except in each case as would not, individually or in the aggregate
have a Material Adverse Effect. Except as set forth on Exhibit E, the
execution, delivery and performance by the Company of this Agreement and the
transactions contemplated hereby will not subject the Company to or accelerate
any obligation to make payments to any Person.
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5.12. Governmental Consents, etc. Except as required under the HSR
Act, no consent, approval or authorization of, or declaration or filing with,
any Governmental Authority on the part of the Company is required for the valid
execution and delivery of this Agreement, the valid offer, issue, sale and
delivery of the Shares pursuant to this Agreement or the valid issue and
delivery of shares of Common Stock issuable upon conversion of the Stock.
Except for (a) the requirements of the HSR Act and applicable state securities
or blue sky laws, and (b) consents, approvals, filings or notices that will be
given or made at or prior to the time of the Closing, neither the Company nor
any of its Subsidiaries is required to obtain any consent, approval or
authorization of, or to make any declaration or filing with, any Governmental
Authority as a condition to the valid execution, delivery or performance of any
of the Collateral Agreements or the consummation of the transactions
contemplated thereby.
5.13. Offering of Securities. Neither the Company nor any Person
acting on its behalf has offered the Stock or any similar securities of the
Company to, or solicited any offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any Person or Persons other
than the Purchasers in such manner as would subject the offering, issuance or
sale of any of the Stock to the provisions of Section 5 of the Securities Act.
Neither the Company nor any Person acting on behalf of the Company has taken or
will take any action which would subject the offering, issuance or sale of any
of the Stock to the provisions of Section 5 of the Securities Act.
5.14. Certain Fees. Except for the fee payable by the Company to
Xxxxxxx Xxxxx & Co., the amount of which will be disclosed to the Purchasers in
writing prior to the Closing, no broker's or finder's fees or commissions will
be payable by the Company with respect to the transactions contemplated by this
Agreement and the Collateral Agreements, and the Company hereby indemnifies the
Purchasers against and agrees that it will hold the Purchasers harmless from any
claim, demand or liability for broker's or finder's fees alleged to have been
incurred at the instance of the Company or any Person acting on behalf of or at
the request of the Company or any agent of the Company in connection with any of
the transactions contemplated by this Agreement and the Collateral Agreements,
and from any expenses, including reasonable legal fees, arising in connection
with any such claim, demand or liability.
5.15. Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
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5.16. Disclosure. None of this Agreement, the Financial Statements,
the Annual Report on Form 10K for the year ended December 31, 1998, any document
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") since the Annual Report on
Form 10K for the year ended December 31, 1998, or the Unaudited Statements,
contains (in each case, as of its date) any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading.
5.17. Enforceability. This Agreement and the Registration Rights
Agreement have been duly authorized and when validly executed and delivered by
the Company (assuming the due authorization, execution and delivery thereof by
the other parties thereto) will constitute the valid and binding obligations of
the Company, enforceable in accordance with their respective terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
5.18. Integration. Neither the Company nor any affiliate (as such
term is defined in Rule 501(b) under the Securities Act) has, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Shares, in a manner that would
require the registration of the Securities under the Securities Act.
5.19. Manipulation. Prior to the date hereof, neither the Company
nor any of its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the sale of the Shares.
5.20. Acquired Companies. To the best knowledge of the Company, the
representations and warranties made by each of the Acquired Companies (as
defined in Section 9) and the selling stockholders in the respective agreements
pursuant to which the Company or another Subsidiary acquired the Acquired
Companies did not as of the respective dates thereof contain any inaccuracies
that would, singly or in the aggregate, have a Material Adverse Effect.
5.21. Intellectual Property. The Company and the 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
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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 the
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
the 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.
5.22. Government Licenses. The Company and the 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 the 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 when 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
the 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.
5.23. Environmental Laws. Except as described on Exhibit E or except
as would not, singly or in the aggregate, result in a Material Adverse Effect:
(a) neither the Company nor any of the 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, 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 the 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
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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 the 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 the Subsidiaries relating to Hazardous Materials
or any Environmental Laws.
5.24. Insurance. Neither the Company nor any Subsidiary has received
notice from any insurer providing insurance coverage for the Company and the
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 could not reasonably be expected, singularly or in the
aggregate, to have a Material Adverse Effect.
5.25. Internal Controls. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorization; (b) transactions are recorded as necessary
(i) to permit preparation of financial statements in conformity with generally
accepted accounting principles and (ii) to maintain accountability for assets;
(c) access to assets is permitted only in accordance with management's general
or specific authorization; and (d) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any material differences. Any exceptions to this
representation would not render the representation in Section 5.4 incorrect in
any material respect or have a Material Adverse Effect.
5.26. ERISA. Neither the Company nor any of the 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. If any plan subject to ERISA is adopted, the execution
and delivery of this Agreement and the sale of the Securities will not involve
any non-exempt prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code of 1986, as amended.
5.27. Year 2000 Compliance. With such exceptions as would not have a
Material Adverse Effect, the Company has been advised by its vendors (and has no
reason to believe that such advice is not correct) that as of the date of this
Agreement, all Date Data and Date-Sensitive Systems used by the Company and its
Subsidiaries are Year 2000 Compliant. "Date-Sensitive System" means any
software, microcode or hardware system or component, including any electronic or
13
electronically controlled system or component, that uses or processes any Date
Data and that is installed, in development or on order by the Company or any of
its subsidiaries for their internal use or for the use of third parties, or
which the Company or any of its subsidiaries sell, lease, license, assign or
otherwise provide to any third party. "Year 2000 Compliant" means (i) with
respect to Date Data, that such data is in proper format and accurate for all
dates, including for those before, on and after December 31, 1999 and (ii) with
respect to Date-Sensitive Systems, that each such system accurately processes
all Date Data, including for dates before, on and after December 31, 1999,
without loss of any functionality or performance, including but not limited to
calculating, comparing, sequencing, storing and displaying such Date Data
(including all leap year considerations), when used as a stand-alone system or
in combination with other software or hardware.
6. Investment Representations. The Purchasers understand that
neither the Shares nor any Common Stock issuable upon conversion, if any, of the
Shares has been registered under the Securities Act and that the certificates
for the Shares and such Common Stock will bear a legend to that effect. The
Purchasers also understand that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act, based in part
upon their representations contained in this Agreement. The Purchasers hereby
represent and warrant as follows:
6.1. Acquisition for Own Account. The Purchasers are acquiring the
Shares for their own account for investment and not with a view toward
distribution in a manner which would violate the Securities Act.
6.2. Ability to Protect Own Interests. The Purchasers represent that
by reason of their business or financial experience, or the business and
financial experience of their management, the Purchasers have the capacity to
protect their own interests in connection with the transaction contemplated in
this Agreement. The Purchasers are not a corporation formed for the specific
purpose of consummating this transaction.
6.3. Accredited Investor. The Purchasers represent that they are an
"accredited investor" as that term is defined in Regulation D promulgated under
the Securities Act.
6.4. Access to Information. The Purchasers have been given access to
all Company documents, records, and other information, have received physical
delivery of all those which the Purchasers have requested, and have had adequate
opportunity to ask questions of, and receive answers from, the Company's
officers, employees, agents, accountants, and representatives concerning the
Company's business, operations, financial condition, assets, liabilities, and
all other matters relevant to its investment in the Shares.
14
6.5. No Brokers. Purchasers represent and warrant to the Company that
no broker's or finder's fees or commissions will be payable by the Purchasers
with respect to the transactions contemplated by this Agreement and the
Collateral Agreements, and the Purchasers hereby jointly and severally indemnify
and hold the Company harmless from any claim, demand or liability for broker's
or finder's fees alleged to have been incurred at the instance of the
Purchasers, their affiliates or agents or any Person acting on behalf of or at
the request of the Purchasers, their affiliates or agents.
6.6. Compliance with Laws. Purchasers and their transferees will
comply with all filing and other reporting obligations under all Requirements of
Law which shall be applicable to Purchasers with respect to the Shares and to
the Common Stock issuable or issued on conversion of the Shares.
7. Affirmative Covenants. The Company covenants that from and after
the date of this Agreement through the Closing and thereafter (provided that the
covenants in Sections 7.1 and 7.2 shall continue only so long as the Purchasers
own at least 25,000 Shares or 1,000,000 shares of Common Stock which have been
acquired upon conversion of any Shares):
7.1. Exchange Act and Securities Act Filings. The Company will
deliver to the Purchasers, within three Business Days of their filing with the
Securities and Exchange Commission, all documents filed by it with the
Securities and Exchange Commission pursuant to the Securities Act or the
Exchange Act, including exhibits thereto.
7.2. Certificates; Other Information. The Company will deliver to the
Purchasers: (a) promptly upon receipt thereof, copies of all final reports
submitted to the Company or any of its Subsidiaries by independent certified
public accountants in connection with each annual or interim audit of the books
of the Company or any of its Subsidiaries made by such accountants, including,
without limitation, any final comment letter submitted by such accountants to
management in connection with their annual audit; (b) promptly upon their
becoming available, copies of all financial statements, reports, notices and
proxy statements sent or made available generally by the Company to all of its
security holders in their capacity as such or by any Subsidiary of the Company
to its security holders; and (c) promptly upon their becoming available, copies
of all financial statements and reports (other than financial information and
reports which the Company reasonably deems confidential) which are sent or made
available by the Company to all of its directors in their capacity as such.
15
7.3. Books and Records. The Company will, and will cause each of its
Subsidiaries to keep proper books of record and account in which entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities
7.4. Notices. The Company will, within 48 hours of occurrence, give
notice to the Purchasers: (a) of any (i) default or event of default under any
instrument or other agreement of the Company or any of its Subsidiaries which
default or event of default would have a Material Adverse Effect or (ii)
litigation, investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority, which in any
such case, if adversely determined, could reasonably be expected to have a
Material Adverse Effect; and (b) of any litigation or proceeding affecting the
Company or any of its Subsidiaries (i) in which the amount claimed is $2,000,000
or more and not covered by insurance or covered by reserves on the Company's
balance sheet, or (ii) in which injunctive or similar relief is sought which if
obtained could reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this section 7.4 shall be accompanied by
a statement of the chief executive officer or chief financial officer of the
Company setting forth details of the occurrence referred to therein and stating
what action the Company proposes to take with respect thereto.
7.5. Reservation of Common Stock. The Company will at all times
reserve and keep available, solely for issuance and delivery upon conversion of
the Stock, the number of shares of Common Stock from time to time issuable upon
conversion of all shares of the Stock at the time outstanding. All shares of
Common Stock issuable upon conversion of the Stock shall be duly authorized and,
when issued upon such conversion, shall be validly issued, fully paid and non-
assessable.
7.6. Availability of Information. The Company will comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act and will
comply with all other public information reporting requirements of the
Securities and Exchange Commission (including Rule 144 promulgated by the
Securities and Exchange Commission under the Securities Act) from time to time
in effect and relating to the availability of an exemption from the Securities
Act for the sale of any Restricted Securities. The Company will also reasonably
cooperate with each holder of any Restricted Securities in supplying such
information as may be necessary for such holder to complete and file any
information reporting forms presently or hereafter required by the Securities
and Exchange Commission as a condition to the availability of an exemption from
the Securities Act for the sale of any Restricted Securities.
16
7.7. Public Announcements. Attached hereto is the text of the press
releases which the parties shall issue publicly to announce the execution of
this Agreement.
7.8. [omitted]
8. Registration, Transfer and Substitution of Certificates for
Stock.
8.1. Stock Register; Ownership of Stock. (a) The Company will keep at
its principal office a register in which the Company will provide for the
registration of the stock and the registration of transfers or conversion of the
Stock. The Company may treat the Person in whose name any of the Shares or
shares issued upon conversion of any of the Stock are registered on such
register as the owner thereof and the Company shall not be affected by any
notice to the contrary. All references in this Agreement to a "holder" of any
Shares or shares issued upon conversion of any of the Stock shall mean the
Person in whose name such Shares or shares issued upon conversion of any of the
Stock are at the time registered on such register.
(b) Upon the surrender of any certificate for Stock, properly
endorsed, for registration of transfer or for conversion at the office of the
Company maintained pursuant to subdivision (a) of this section 8.1, the Company
at its expense will (subject to compliance with section 8.2 hereof, if
applicable) execute and deliver to or upon the order of the holder thereof (i) a
new certificate or certificates for the same aggregate number of shares of Stock
less the number of shares of Stock being converted, if any, in the name of such
holder or as such holder (upon payment by such holder of any applicable transfer
taxes) may direct, and (ii) a certificate or certificates for the number of
shares of Common Stock to be issued upon conversion of the shares of Stock so
surrendered.
8.2. Replacement of Certificates. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificate representing shares of Stock or Common Stock issued upon the
conversion of shares of Stock and, in the case of any such loss, theft or
destruction of any certificate representing shares of Stock or Common Stock
issued upon the conversion of shares of Stock held by a Person other than the
Purchasers, upon delivery of indemnity reasonably satisfactory to the Company in
form and amount or, in the case of any such mutilation, upon surrender of such
certificate representing shares of Stock or Common Stock issued upon the
conversion of shares of Stock for cancellation at the office of the Company
maintained pursuant to subdivision (a) of section 8.1 hereof, the Company at its
expense will execute and deliver, in lieu thereof, a new certificate
representing shares of Stock or Common Stock of like tenor.
17
8.3. Restrictive Legends. Except as otherwise permitted by this
section 8, each certificate for Stock (including each certificate for Stock
issued upon the transfer of any certificate for Stock) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares represented by this Certificate and any shares
of Common Stock issuable upon conversion of any such shares have
not been registered under the Securities Act of 1933 and may not
be transferred in the absence of such registration or an
exemption therefrom under such Act. Such shares and any such
shares of Common Stock may be transferred only in compliance with
the conditions specified in the Preferred Stock Purchase
Agreement dated July 16, 1999 between United Rentals, Inc. (the
"Company") and the purchasers identified therein. A complete and
correct copy of such Agreement is available for inspection at the
principal office of the Company and will be furnished without
charge to the holder of such shares upon written request."
Except as otherwise permitted by this section 8, each certificate for Common
Stock issued upon the conversion of any of the Stock, and each certificate
issued upon the transfer of any such Common Stock, shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
transferred in the absence of such registration or an exemption
therefrom under such Act. Such shares may be transferred only in
compliance with the conditions specified in the Preferred Stock
Purchase Agreement dated July 16, 1999 between United Rentals,
Inc. (the "Company") and the purchasers identified therein. A
complete and correct copy of such Agreement is available for
inspection at the principal office of the Company and will be
furnished without charge to the holder of such shares upon
written request."
8.4. Notice of Proposed Transfer; Opinions of Counsel. Prior to any
transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act, the holder thereof
will give written notice to the Company of such holder's intention to effect
such transfer and to comply in all other respects with this section 8.4. Each
such notice shall describe the manner and circumstances of the proposed transfer
and shall be accompanied by an opinion of counsel for such holder, which counsel
and opinion shall each be reasonably satisfactory to the Company, that the
proposed transfer may be effected without registration of such shares of
Restricted Securities under the Securities Act. Such
18
holder shall thereupon be entitled to transfer such shares in accordance with
the terms of the notice delivered by such holder to the Company. Each
certificate representing such shares issued upon or in connection with such
transfer shall bear the restrictive legends required by section 8.3, unless the
related restrictions on transfer shall have ceased and terminated as to such
shares pursuant to section 8.5 hereof.
8.5. Termination of Restrictions. The restrictions imposed by this
section 8 upon the transferability of Restricted Securities shall cease and
terminate as to any particular Restricted Securities when such restrictions are
no longer required in order to insure compliance with the Securities Act.
Whenever such restrictions shall cease and terminate as to any Restricted
Securities, the holder thereof shall be entitled to receive from the Company,
without expense (other than applicable transfer taxes, if any), new certificates
for such securities of like tenor not bearing the applicable legends required by
section 8.3 hereof.
9. Definitions.
9.1. Certain Defined Terms. As used in this Agreement the following
terms have the following respective meanings:
Acquired Companies: The companies United Rentals, Inc. has acquired
------------------
since its formation in September 1997.
Affiliate: With reference to any Person, a spouse of such Person, any
---------
relative (by blood, adoption or marriage) of such Person within the second
degree, any director, officer or employee of such Person, any other Person of
which such Person is a member, director, officer or employee, and any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person.
Business Day: Any day except a Saturday, a Sunday, or any day on
------------
which banking institutions in New York, New York are required or authorized by
law or other governmental action to be closed.
Capital Stock: As defined in section 5.6 of this Agreement.
-------------
Certificate of Designation: As defined in section 1 of this
--------------------------
Agreement.
Closing: As defined in section 3 of this Agreement.
-------
Closing Date: The date of the Closing.
------------
19
Code: The Internal Revenue Code of 1986, as amended from time to
----
time.
Collateral Agreements: The Registration Rights Agreement and the
---------------------
Certificate of Designation.
Common Stock: As defined in section 1 of this Agreement.
------------
Company: As defined in the introduction to this Agreement.
-------
Exchange Act: At any time, the Securities Exchange Act of 1934 as then
------------
in effect or any similar federal statute then in effect, and any reference to a
particular section of such Act shall be deemed to include a reference to the
comparable section, if any, in any such similar federal statute.
Financial Statements: As defined in section 5.4 of this Agreement.
--------------------
GAAP: Generally accepted accounting principles set forth in the
----
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and in statements by the Financial Accounting
Standards Board or in such other statement by such other entity as may be
approved by a significant segment of the accounting profession; and the
requisite that such principles be applied on a consistent basis shall mean that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
Governmental Authority: Any nation or government, any state or other
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Indebtedness: With respect to any Person, at a particular time (a)
------------
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property, (b) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn thereunder,
(c) all liabilities secured by any Lien on any property owned by such Person, to
the extent attributable to such Person's interest in such property, even though
such Person has not assumed or become liable for the payment thereof, and (d)
lease obligations of such Person which, in accordance with GAAP, should be
capitalized; but excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms and which are not
overdue for a period of more than 60 days or, if overdue for more than 60 days,
as to which a dispute exists and adequate reserves in conformity with GAAP have
been established on the books of such Person. The term "Indebtedness" shall not
include amounts which have not been drawn under credit facilities,
notwithstanding that such amounts when drawn will automatically be secured by an
existing Lien.
20
Lien: Any mortgage, pledge, hypothecation, assignment, security
----
interest, lien, charge or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effects as
any of the foregoing, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction). For the purposes of this Agreement, the Company or one of its
Subsidiaries shall be deemed to be the owner of any property which it has placed
in trust for the benefit of the holders of Indebtedness of the Company or its
Subsidiaries which Indebtedness is deemed to be extinguished under GAAP but for
which the Company or its Subsidiaries remain legally liable, and such trust
shall be deemed to be a Lien.
Majority in Interest: At any time, the holders of a majority, by
--------------------
number of shares, of the outstanding Shares and the outstanding shares of Common
Stock issued upon conversion of any Shares, such majority to be determined by
reference to the number of shares of Common Stock into which all outstanding
Shares are at the time convertible.
Officers' Certificate: As to the Company, a certificate executed on
---------------------
behalf of the Company by its Chief Executive Officer, and any one of its Vice
Chairman, Chief Acquisition Officer, or Chief Financial Officer.
Person: An individual, a partnership, a joint venture, a corporation,
------
a limited liability company, a trust, an unincorporated organization or a
government or any department or agency thereof.
Registration Rights Agreement: As defined in section 4.6 of this
-----------------------------
Agreement.
Repayment Event: 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 the Subsidiaries.
Requirement of Law: As to any Person, the Certificate of
------------------
Incorporation and by-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
21
Restricted Securities: All of the following: (a) any certificates for
---------------------
Stock bearing the applicable legend or legends referred to in section 8.3
hereof, (b) any shares of Common Stock which have been issued upon the
conversion of any of the Stock and which are evidenced by a certificate or
certificates bearing the applicable legend or legends referred to in such
section and (c) unless the context otherwise requires, any shares of Common
Stock which are at the time issuable upon the conversion of Stock and which,
when so issued, will be evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such section.
Securities Act: At any time, the Securities Act of 1933 as then in
--------------
effect or any similar federal statute then in effect, and any reference to a
particular section of such Act shall be deemed to include a reference to the
comparable section, if any, in any such similar federal statute.
Securities and Exchange Commission: The U.S. Securities and Exchange
----------------------------------
Commission, or any other federal agency at the time administering the Securities
Act or the Exchange Act, whichever is the relevant statute for the particular
purpose.
Shares: As defined in section 1 of this Agreement.
------
Stock: As defined in section 1 of this Agreement.
-----
Subsidiaries: With respect to any Person, any corporation with respect
------------
to which more than 50% of the outstanding shares of stock of each class having
ordinary voting power (other than stock having such power only by reason of the
happening of a contingency) is at the time owned by such Person or by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person.
Any of the above-defined terms may, unless the context otherwise
requires, be used in the singular or plural depending on the reference.
9.2. Accounting Terms. As used in this Agreement, and in any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in section 9.1 and accounting terms
partly defined in said section 9.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
9.3. Other Provisions Regarding Definitions: (1) Unless otherwise
defined therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate, report or other document made or
delivered pursuant to this Agreement.
22
(1) The words "hereof", "herein", and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
10. Expenses, etc. Whether or not the transactions contemplated by
this Agreement shall be consummated, the Company will pay all of its expenses in
connection with such transactions and in connection with any amendments or
waivers (whether or not the same become effective) under or in respect of this
Agreement or the Shares purchased by the Purchasers hereunder, including,
without limitation: (a) the cost and expenses of reproducing this Agreement and
the Shares purchased by the Purchasers, of furnishing all opinions of counsel
for the Company (including any opinions requested by the Purchasers' special
counsel as to any legal matter arising hereunder) and all certificates on behalf
of the Company, and of the Company's performance of and compliance with all
agreements and conditions contained herein to be performed or complied with by
it; and (b) the cost (other than any applicable stock transfer taxes) of
delivering to their principal office, insured to their satisfaction, the Shares
sold to the Purchasers hereunder and any Shares delivered to the Purchasers upon
any substitution of Shares pursuant to section 8 and of the Purchasers
delivering any Shares, insured to their satisfaction, upon any such
substitution. In addition, if the transactions contemplated hereby have been
consummated, the Company shall pay 50% of the reasonably itemized out-of-pocket
expenses incurred by the Purchasers in connection with such transactions
(including the fees and disbursements of their counsel), provided that the
Company's liability under this sentence shall not exceed $100,000. Reference is
made to Section 5 of this Agreement for certain agreements among the parties
regarding the fees, if any, of brokers and finders.
11. Adjustment of Terms. Notwithstanding the provisions of this
Agreement and the Certificate of Designation for the Series B Preferred Stock,
if the Company shall agree, on or before December 15, 1999, to issue to any
person or persons (other than (a) in connection with the acquisition of a
business or the acquisition of assets to be used in its business or (b) in a
bona fide underwritten public offering) more than $50 million aggregate
liquidation preference of a series of convertible preferred stock, then the
Company shall give to Purchasers not less than 15 business days' prior notice of
such proposed issuance, and the Purchasers shall be entitled at the closing of
such issuance to exchange their shares of Series B Preferred Stock for shares of
the newly issued convertible preferred stock, with the Series B Preferred Stock
valued at its liquidation amount.
12. Survival of Representations and Warranties and Indemnification;
Certain Limitations. The Company's indemnification obligations and all
representations and warranties contained in this Agreement shall survive the
execution and delivery of this Agreement, any investigation at any time made by
the
23
Purchasers or on their behalf, and the purchase of the Shares by the Purchasers
under this Agreement and any conversion of any of the Stock or any disposition
of any shares of Common Stock issued upon conversion of any of the Stock;
provided that all such representations and warranties (and the indemnities in
respect thereof with respect to claims not made prior to such date) shall expire
120 days after the Closing, provided that the Company's indemnification
obligations relating to the Company's obligations created under Section 11 shall
expire April 15, 2000 after the Closing. No written (except as explicitly stated
therein) or oral statements made by or on behalf of the Company, other than in
this Agreement, the Collateral Agreements and the exhibits hereto and thereto,
shall constitute representations or warranties within the meaning of this
Agreement. In no event shall Purchasers be entitled to the remedy of rescission.
13. Amendments and Waivers. Any term of this Agreement may be
amended or modified and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and (a) in the case
of any such action prior to the Closing, the Purchasers; and (b) in the case of
any other such action, a Majority in Interest.
14. Notices, etc. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing and
shall be delivered, or mailed by first-class mail, postage pre-paid, addressed,
(a) if to the Purchasers, at the address set forth at the beginning of this
Agreement, or at such other address as the Purchasers shall have furnished to
the Company in writing, or (b) if to any other holder of any Shares or shares of
Common Stock into which any of the Shares have been converted, at such address
as such other holder shall have furnished to the Company in writing, or, until
any such other holder so furnishes to the Company an address, then to and at the
address of the last holder of such Shares or shares of Common Stock into which
such Shares have been converted who has furnished an address to the Company, or
(c) if to the Company at the address of the Company set forth at the beginning
of this Agreement, to the attention of its President, or at such other address,
or to the attention of such other officer, as the Company shall have furnished
to the Purchasers and each such other holder in writing.
15. Indemnification. (a) The Company shall indemnify, defend and
hold harmless the Purchasers, their affiliates, partners, officers, employees
and agents (each, an "Indemnified Person") from and against any and all losses,
liabilities, damages, judgments, settlements and expenses (including interest
and penalties recovered by a third party with respect thereto and reasonable
attorneys' fees and expenses and reasonable accountants' fees and expenses
incurred in the investigation or defense of any of the same or in asserting,
preserving or enforcing any of rights hereunder), that arise out of:
24
(i) any breach by the Company of any of its representations,
warranties or covenants contained in this Agreement or in the Registration
Rights Agreement; or
(ii) any litigation, investigation or proceeding instituted by any
Governmental Agency or any other Person with respect to this Agreement or the
collateral Agreements or the transactions contemplated hereby or thereby and
requiring the Purchasers participation or involvement, excluding, however, any
such litigation, investigation or proceeding which arises solely from the acts
or omissions of Purchasers or their affiliates.
(b) The Purchasers shall give the Company prompt notice of any third-party
claim that may give rise to any indemnification obligation under this Section 14
and the Company shall (except as set forth below) have the right to assume and
control the defense (at its expense) and settlement of any such claim through
the Company's own counsel or through other counsel reasonably acceptable to the
Purchasers. The Purchasers may retain additional counsel at their own expense.
If, under applicable standards of professional conduct, a conflict with respect
to any significant issue between the Purchasers and the Company exists in
respect of such third-party claim, the Company shall not assume the defense of
such claim and shall also pay the reasonable fees and expenses of one counsel
selected by Purchasers in respect of such claim. Notwithstanding the foregoing,
without the Purchasers' consent, the Company will not settle any action or
proceeding which does not provide the Purchasers a full, unconditional release
from all liability with respect to such claim by each claimant or plaintiff in a
form acceptable to the Purchasers' counsel, nor will the Company consent to any
injunctive or other non-monetary relief affecting any Indemnified Person.
16. Termination. This Agreement may be terminated (a) by the mutual
written consent of the Purchasers and the Company at any time or (b) by the
Purchasers or the Company if the Closing shall not have been consummated on or
before February 15, 2000; provided, however, that the right to terminate this
Agreement pursuant to (b) of this Section 16 shall not be available to any party
whose failure to perform any of its obligations under this Agreement results in
the failure to consummate the transactions by such time.
17. Miscellaneous. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns and
affiliates of the parties hereto, whether so expressed or not, and, in
particular, shall inure to the benefit of and be enforceable by any holder or
holders at the time of the Shares or shares of Common Stock into which any of
the Shares have been converted; except as aforesaid, this Agreement shall not
inure to the benefit of any third party. This Agreement embodies the entire
agreement and understanding between the Purchasers and the Company and
supersedes all prior agreements and understandings
25
relating to the subject matter hereof. This Agreement shall be construed and
enforced in accordance with and governed by the law of the State of New York
without regard to the principles regarding conflicts of laws. The headings in
this Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
26
If the Purchasers are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and return one
of the same to the Company, whereupon this letter shall become a binding
agreement between the Purchasers and the Company.
Very truly yours,
UNITED RENTALS, INC.
By:_______________________
Title:
The foregoing Agreement is hereby
agreed to as of the date thereof.
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners,
its General Partner
By:______________________
Name:
Title: General Partner
xxxvii
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of ____ ___, 1999, among United
Rentals, Inc., a Delaware corporation (the "Company"), Xxxxxxx X. Xxxxxx and the
other undersigned parties hereto (the "Holders").
1. Introduction. The Company is a party to the Stock Purchase Agreement
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(the "Stock Purchase Agreement") set forth in Exhibit A pursuant to which the
Company has agreed, among other things, to issue to the Holders the number of
shares of its Class B-1 Perpetual Convertible Preferred Stock, par value $.01
per share ("B-1 Preferred") and Class B-2 Perpetual Convertible Preferred Stock,
par value $.01 per share ("B-2 Preferred" and collectively with the B-1
Preferred, the "Preferred Stock") which is set forth on such Exhibit. Pursuant
to the terms of the Certificate of Designation with respect to the Preferred
Stock (the "Certificate of Designation"), the Preferred Stock is convertible
into shares of the Company's common stock, par value $.01 per share (the "Common
Stock"). Certain capitalized terms used in this Agreement are defined in section
3 hereof; references to sections shall be to sections of this Agreement.
2. Registration under Securities Act, etc.
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2.1 Registration on Request.
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(a) Request. At any time or from time to time, upon the written
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request of one or more Initiating B-2 Holders, requesting that the Company
effect the registration under the Securities Act of all or part of such
Initiating B-2 Holders' Registrable Securities, and specifying the intended
method of disposition thereof, the Company will promptly give written notice of
such requested registration to all registered holders of Registrable Securities,
and thereupon the Company will, subject to the terms of this Agreement, use its
best efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been
so requested to register by such Initiating B-2 Holders for disposition in
accordance with the intended method of disposition stated in such request;
(ii) all other Registrable Securities the holders of which
shall have made a written request to the Company for registration thereof
within 15 days after the giving of such written notice by the Company
(which request shall specify the intended method of disposition of such
Registrable Securities); and
(iii) all shares of Common Stock which the Company or other
holders of the Company's Common Stock having registration rights may
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elect to register in connection with the offering of Registrable Securities
pursuant to this section 2.1,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities and the
additional shares of Common Stock, if any so to be registered; provided, that
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the Company shall not be required to effect any registration requested by
Initiating B-2 Holders pursuant to this section 2.1 (x) on more than one
occasion and (y) unless the Holders have requested to sell at least 500,000
shares of Registrable Securities or shares of Registrable Securities to be sold
have a fair market value (based upon the closing price of such Registrable
Securities quoted on the securities exchange or over-the-counter quotation
system on which such Registrable Securities are listed or quoted, as the case
may be, on the trading day immediately preceding any request pursuant to this
section 2.1) of at least $25 million.
(b) Registration Statement Form. Registrations under this
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section 2.1 shall be on such appropriate registration form of the Commission as
shall permit the disposition of such Registrable Securities in accordance with
the intended method or methods of disposition specified in their request for
such registration and as shall be permitted under the Securities Act; provided,
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that such form shall not indicate that the securities to be registered
thereunder are to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act.
(c) Expenses. The Company will pay all Registration Expenses in
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connection with any registration requested pursuant to this section 2.1 by any
Initiating B-2 Holders. All other expenses (including underwriting discounts
and commissions and transfer taxes, if any) in connection with each other
registration requested under this section 2.1 shall be allocated pro rata among
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all Persons on whose behalf securities of the Company are included in such
registration, on the basis of the respective amounts of the securities then
being registered on their behalf.
(d) Effective Registration Statement. A registration requested
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pursuant to this section 2.1 shall not be deemed to have been effected (i)
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unless a registration statement with respect thereto has become effective,
provided that a registration which does not become effective after the Company
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has filed a registration statement with respect thereto solely by reason of the
refusal to proceed of the Initiating B-2 Holders (other than a refusal to
proceed based upon the written advice of counsel relating to a matter with
respect to the Company) shall be deemed to have been effected by the Company at
the request of such Initiating B-2 Holders unless the Initiating B-2 Holders
shall have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration becomes
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subject to any stop order, injunction or other order or requirement of the
Commission or other governmental agency or court for any reason, other than by
reason of some act or
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omission by such Initiating B-2 Holders with respect thereto, (iii) if the
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conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with such registration are not satisfied,
other than by reason of some act or omission by such Initiating B-
2 Holders or (iv) if the sale of the securities is not consummated due to the
lack of agreement between the Initiating B-2 Holders and the underwriters with
respect to the underwriting discount on the securities to be sold.
(e) Selection of Underwriters. If a requested registration
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pursuant to this section 2.1 involves an underwritten offering, the managing or
lead underwriter shall be selected by the Company and shall be reasonably
acceptable to the holders of at least a majority (by number of shares) of the
Registrable Securities as to which registration has been requested, which shall
not unreasonably withhold its acceptance of any such underwriters, and any co-
managing and co-lead underwriters shall be selected by the Company.
(f) Priority in Requested Registrations. If a requested
registration pursuant to this section 2.1 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a copy to
each holder of Registrable Securities requesting registration) that, in its
opinion, the number of securities requested to be included in such registration
(including Common Stock of the Company or other Persons which are not
Registrable Securities) exceeds the number which can be sold in such offering
within a price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such registration, the Company will
include in such registration, to the extent of the number which the Company is
so advised can be sold in such offering, (i) first, Registrable Securities
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requested to be included in such registration by the holder or holders of
Registrable Securities, pro rata among such holders requesting such registration
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on the basis of the number of such securities requested to be included by such
holders, (ii) second, Common Stock the Company proposes to sell and (iii) third,
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Common Stock of the Company held by other Persons having registration rights
proposed to be included in such registration by the holders thereof.
Notwithstanding the foregoing, in connection with any requested registration
pursuant to this section 2.1, the Company shall in all events be entitled to
register and sell up to 25% of the total number of shares of Common Stock to be
registered; provided, that if the Company registers and sells in excess of 33.3%
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of the total number of shares of Common Stock to be registered, the request for
registration pursuant to this section 2.1 shall not be deemed to have been
effected.
2.2 Incidental Registration.
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(a) Right to Include Registrable Securities. If the Company at
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any time proposes to register any of its securities under the Securities Act
(other than by a registration on Form S-4 or any successor form, Form S-8, or
any successor form thereto,
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relating to a stock option plan, stock purchase plan, managing directors' plan,
savings or similar plan and other than pursuant to section 2.1), whether or not
for sale for its own account, it will each such time give prompt written notice
to all holders of Registrable Securities of its intention to do so and of such
holders' rights under this section 2.2. Upon the written request of any such
holder made within 10 Business Days after the receipt of any such notice (which
request shall specify the number of Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company will, subject to the terms of this Agreement, use its best efforts to
effect the registration under the Securities Act of all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register, provided that if,
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at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each holder
of Registrable Securities and, thereupon, (i) in the case of a determination not
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to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any holder or holders of Registrable Securities
entitled to do so to request that such registration be effected as a
registration under section 2.1, and (ii) in the case of a determination to delay
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registering, shall be permitted to delay registering any Registrable Securities,
for the same period as the delay in registering such other securities. No
registration effected under this section 2.2 shall relieve the Company of its
obligation to effect any registration upon request under section 2.1, nor shall
any such registration hereunder be deemed to have been effected pursuant to
section 2.1. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this section
2.2.
(b) Priority in Incidental Registrations. If the Company at any
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time proposes to register any of its securities under the Securities Act as
contemplated by this section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities use its best efforts to arrange for such underwriters
to include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters, provided that if
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the managing underwriter of such underwritten offering shall inform the holders
of the Registrable Securities requesting such registration and the holders of
any Common Stock of the Company which shall have exercised, in respect of such
underwritten offering, registration rights comparable to the rights under this
section
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2.2, by letter of its belief that inclusion in such underwritten distribution of
all or a specified number of such Registrable Securities or of such other
securities of the Company so requested to be included would interfere with the
successful marketing of the securities so being registered (other than such
Registrable Securities and other Common Stock of the Company so requested to be
included) by the underwriters (such writing to state the basis of such belief
and the approximate number of such Registrable Securities and shares of Common
Stock so requested to be included which may be included in such underwritten
offering without such effect), then the Company may, upon written notice to all
holders of such Registrable Securities and of such other shares of Common Stock
of the Company so requested to be included, exclude pro rata from such
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underwritten offering (if and to the extent stated by such managing underwriter
to be necessary to eliminate such effect) the number of such Registrable
Securities and shares of such other Common Stock so requested to be included the
registration of which shall have been requested by each holder of Registrable
Securities and by the holders of such other Common Stock so that the resultant
aggregate number of such Registrable Securities and of such other shares of
Common Stock so requested to be included which are included in such underwritten
offering shall be equal to the approximate number of shares stated in such
managing underwriter's letter.
2.3 Registration Procedures. If and whenever the Company is required
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to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in sections 2.1 and 2.2, the Company shall,
as expeditiously as possible:
(i) prepare and (in the case of a registration pursuant to
section 2.1, such filing to be made within 45 days after the initial
request of one or more Initiating B-2 Holders or in any event as soon
thereafter as possible) file with the Commission the requisite registration
statement to effect such registration (including such audited financial
statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter use its best efforts to
cause such registration statement to become and remain effective, provided
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however that the Company may discontinue any registration of its securities
which are not Registrable Securities (and, under the circumstances
specified in section 2.2(a), its securities which are Registrable
Securities) at any time prior to the effective date of the registration
statement relating thereto, provided further that before filing such
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registration statement or any amendments thereto, the Company will furnish
to the counsel selected by the holders of Registrable Securities which are
to be included in such registration copies of all such documents proposed
to be filed, which documents will be subject to the review, but not the
prior approval, of such counsel;
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(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until the earlier of such time as all of such
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement or (i) in the case of a registration pursuant to section 2.1, the
expiration of 180 days after such registration statement becomes effective,
or (ii) in the case of a registration pursuant to section 2.2, the
expiration of 90 days after such registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities
covered by such registration statement and each underwriter, if any, of the
securities being sold by such seller such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller and underwriter, if any, may reasonably request;
(iv) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities laws or blue sky laws of such
jurisdictions as any seller thereof and any underwriter of the securities
being sold by such seller shall reasonably request, to keep such
registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller and underwriter to
consummate the disposition in such jurisdictions of the securities owned by
such seller, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this
subdivision (iv) be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;
(v) use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
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(vi) furnish to each seller of Registrable Securities a
signed counterpart, addressed to such seller and the underwriters, if any,
of:
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if
such registration includes an underwritten public
offering, an opinion dated the date of the closing
under the underwriting agreement), reasonably
satisfactory in form and substance to such seller, and
(y) a "comfort" letter (or, in the case of any such
Person which does not satisfy the conditions for
receipt of a "comfort" letter specified in Statement on
Auditing Standards No. 72, an "agreed upon procedures"
letter), dated the effective date of such registration
statement (and, if such registration includes an
underwritten public offering, a letter of like kind
dated the date of the closing under the underwriting
agreement), signed by the independent public
accountants who have certified the Company's financial
statements included in such registration statement,
covering substantially the same matters with respect to
such registration statement (and the prospectus
included therein) and, with respect to events
subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the
underwriters in underwritten public offerings of
securities (with, in the case of an "agreed upon
procedures" letter, such modifications or deletions as
may be required under Statement on Auditing Standards
No. 35) and, in the case of the accountants' letter,
such other financial matters, and, in the case of the
legal opinion, such other legal matters, as such seller
(or the underwriters, if any) may reasonably request;
(vii) notify the holders of Registrable Securities and the
managing underwriter or underwriters, if any, promptly and confirm such
advice in writing promptly thereafter:
(a) when the registration statement, the prospectus
or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed, and, with
respect
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to the registration statement or any post-effective amendment
thereto, when the same has become effective;
(b) of any request by the Commission for amendments
or supplements to the registration statement or the prospectus or for
additional information;
(c) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement or
the initiation of any proceedings by any Person for that purpose;
(d) if at any time the representations and
warranties of the Company made as contemplated by section 2.4 below
cease to be true and correct;
(e) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
any Registrable Securities for sale under the securities or blue sky
laws of any jurisdiction or the initiation or threat of any proceeding
for such purpose; and
(viii) notify each seller of Registrable Securities covered
by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon the
discovery that, or upon the happening of any event as a result of which,
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under
which they were made, and at the request of any such seller promptly
prepare and furnish to such seller and each underwriter, if any, a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include 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 in the light of the circumstances under which they were made;
(ix) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the registration statement at
the earliest possible moment;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its
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security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder, and will furnish to each such seller at least five business
days prior to the filing thereof a copy of any amendment or supplement to
such registration statement or prospectus and shall not file any thereof to
which any such seller shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects with
the requirements of the Securities Act or of the rules or regulations
thereunder;
(xi) subject to the provisions of section 2.5, make
available for inspection by a representative or representatives of the
holders of Registrable Securities to be included in such registration
statement, any underwriter participating in any disposition pursuant to the
registration statement and any attorney or accountant retained by such
selling holders or underwriter (each, an "Inspector"), all financial and
other records, pertinent corporate documents and properties of the Company
(the "Records"), and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such Inspector in
connection with such registration in order to permit a reasonable
investigation within the meaning of Section 11 of the Securities Act;
(xii) provide and cause to be maintained a transfer agent
and registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement;
(xiii) enter into such agreements and take such other
actions as sellers of such Registrable Securities holding 51% of the shares
so to be sold or any underwriter shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities,
including, without limitation, causing members of senior management of the
Company to participate in customary "road-show" activities;
(xiv) use its best efforts to list all Registrable
Securities covered by such registration statement on any securities
exchange on which any of the securities of the same class as the
Registrable Securities are then listed; and
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(xv) use its best efforts to provide a CUSIP number for
the Registrable Securities, not later than the effective date of the
registration statement.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
The Company will not file any registration statement or amendment thereto
or any prospectus or any supplement thereto (including such documents
incorporated by reference and proposed to be filed after the initial filing of
the registration statement) to which the holders of at least a majority of the
Registrable Securities covered by such registration statement or the underwriter
or underwriters, if any, shall reasonably object, provided that the Company may
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file such document in a form required by law or upon the advice of its counsel.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
occurrence of any event of the kind described in subdivision (viii) of this
section 2.3, such holder will forthwith discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of this
section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
such holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the period mentioned in paragraph (ii) of
this section 2.3 shall be extended by the length of the period from and
including the date when each seller of any Registrable Securities covered by
such registration statement shall have received such notice to the date on which
each such seller has received the copies of the supplemented or amended
prospectus contemplated by paragraph (viii) of this section 2.3.
If any such registration statement refers to any holder of Registrable
Securities by name or otherwise as the holder of any securities of the Company,
then such holder shall have the right to require (i) the insertion therein of
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language, in form and substance satisfactory to such holder, to the effect that
the holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such holder
will assist in meeting any future financial requirements of the Company, or (ii)
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in the event that such reference to such holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force and
a written opinion
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from counsel to the holder to such effect is delivered to the Company, the
deletion of the reference to such holder.
2.4 Underwritten Offerings.
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(a) Requested Underwritten Offerings. If requested by the
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underwriters for any underwritten offering by holders of Registrable Securities
pursuant to a registration requested under section 2.1, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to be satisfactory in substance and form to the Company, each such
holder and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
this type, including, without limitation, indemnities at least as broad as those
provided in section 2.6. The holders of the Registrable Securities will
cooperate with the Company in the negotiation of the underwriting agreement and
will give consideration to the reasonable suggestions of the Company regarding
the form thereof, provided that nothing herein contained shall diminish the
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foregoing obligations of the Company. The holders of Registrable Securities to
be distributed by such underwriters shall be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations and warranties
or agreements regarding such holder, such holder's Registrable Securities and
such holder's intended method of distribution and any other representation
required by law.
(b) Incidental Underwritten Offerings. The holders of
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Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters and may,
at their option, require that any or all of the representations and warranties
by, and the other agreements on the part of, the Company to and for the benefit
of such underwriters shall also be made to and for the benefit of such holders
of Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. Any such
holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law.
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(c) Holdback Agreements.
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(i) So long as a holder of Registrable Securities and its
Affiliates own Common Stock and/or Preferred Stock convertible into Common
Stock exceeding 5% of the Common Stock of the Company outstanding
(including Common Stock issuable upon conversion of the Preferred Stock) or
such holder has designated a member of the board of directors of the
Company pursuant to paragraph 6(ii) of the Certificate of Designation for
the Series A Preferred Stock which director continues to serve on such
board, such holder of Registrable Securities agrees, by acquisition of such
Registrable Securities, (x) if so required by the managing underwriter, not
to sell, make any short sale of, loan, grant any option for the purchase
of, effect any public sale or distribution of or otherwise dispose of any
Common Stock or Registrable Securities not to be sold in an underwritten
offering pursuant to section 2.1 or 2.2, during the 30 days prior to the
anticipated consummation of such underwritten offering and 90 days after
the applicable underwritten registration pursuant to section 2.1 or 2.2 has
become effective, except as part of such underwritten registration and (y)
in connection with any acquisition by or merger with the Company which is
accounted for under generally accepted accounting principles as a pooling
of interest, upon the request of the Company, not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public sale
or distribution of or otherwise dispose of any Common Stock or Registrable
Securities, for the period commencing 30 days before the effective date of
such acquisition or merger until the publication of the Company's financial
results covering a period of at least 30 days following such acquisition or
merger which is sufficient in accordance with Accounting Series Release No.
135, or such shorter period if consistent with the requirements for pooling
of interests accounting treatment. Notwithstanding clause (x) of the
foregoing sentence and subject to clause (y), during any period described
above, each holder of Registrable Securities subject to the foregoing
sentence shall be entitled to sell securities in a private sale so long as
the purchaser of such securities agrees to be bound by the restrictions set
forth above to the same extent as the seller for the remainder of the
applicable period.
(ii) The Company agrees if so required by the managing
underwriter (x) not to sell, make any short sale of, loan, grant any option
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for the purchase of, effect any public sale or distribution of or otherwise
dispose of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the 30 days
prior to and the 90 days after any underwritten registration pursuant to
section 2.1 has become effective, except as part of such underwritten
registration and except in connection with (A) a merger or acquisition by
the Company in which securities of the Company are issued
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directly to shareholders of the target entity or sellers of assets in
exchange for shares of such target entity or such assets or (B) a stock
option plan, stock purchase plan, managing directors' plan, savings or
similar plan, or an acquisition of a business, merger or exchange of stock
for stock, provided that no such agreement pursuant to this clause (x)
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shall prevent the Company from fulfilling its obligations pursuant to
section 2.1 or 2.2, subject to the provisions of section 2.7 and (y) to use
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its reasonable best efforts to cause each director and executive officer of
the Company and any holder (other than the Holders) of its equity
securities or any securities convertible into or exchangeable or
exercisable for any of such equity securities, in each case purchased from
the Company at any time after the date of this Agreement (other than in a
public offering and other than securities issued to employees who are not
directors or executive officers of the Company pursuant to an employee
benefit plan or similar arrangement) to agree not to sell, make any short
sale of, loan, grant any option for the purchase of, effect any public sale
or distribution of or otherwise dispose of such securities during such
period, it being understood that no action is required by the Company
pursuant to this clause (y) until the managing underwriter requests.
(d) Participation in Underwritten Offerings. No Person (other
---------------------------------------
than the Company, which will be subject to and governed by the other terms and
provisions of this Agreement) may participate in any underwritten offering
hereunder unless such Person (i) agrees to sell such Person's securities on the
-
basis provided in any underwriting arrangements approved, subject to the terms
and conditions hereof, by the holders of a majority of Registrable Securities to
be included in such underwritten offering and (ii) completes and executes all
--
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters other than representations and
warranties or agreements regarding such holder, such holder's Registrable
Securities and such holder's intended method of distribution and any other
representation required by law.
2.5 Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each amendment thereof or
supplement thereto, and will give each of them such access to its books and
records (collectively, the "Records") and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who
40
have certified its financial statements as shall be necessary, in the opinion of
such holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act; provided, that Records
--------
which the Company determines, in good faith, to be confidential and which it
notifies such holder, underwriter, counsel or accountant are confidential shall
not be disclosed by such Person (other than to any holder of Registrable
Securities) unless (a) such Records have become generally available to the
public or (b) the disclosure of such Records may be may be necessary or, in the
case of clause (z) below, appropriate (x) in compliance with any law, rule,
regulation or order applicable to any such holder, underwriter, counsel or
accountant, (y) in response to any subpoena or other legal process or (z) in
connection with any litigation to which such holder, underwriter, counsel or
accountant is a party, and such Person shall sign an agreement to such effect
that shall be customary in form and reasonably acceptable to the Company.
2.6 Indemnification.
---------------
(a) Indemnification by the Company. In the event of any
------------------------------
registration of any securities of the Company under the Securities Act pursuant
to this Agreement, the Company will, and hereby does agree to, indemnify and
hold harmless in the case of any registration statement filed pursuant to
section 2.1 or 2.2, the holder of any Registrable Securities covered by such
registration statement, its directors and officers, each Person, if any, who
controls such holder within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such holder
or any such director or officer or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the case of any preliminary
prospectus, final prospectus or summary prospectus, in light of the
circumstances under which they were made, not misleading, and the Company will
reimburse such holder and each such director, officer, and controlling person
for any legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
--------
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the
41
Company by or on behalf of such holder specifically for use therein. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, underwriter
or controlling person and shall survive the transfer of such securities by such
holder.
(b) Indemnification by the Sellers. As a condition to including
------------------------------
any Registrable Securities in any registration statement filed pursuant to
section 2.3, the Company shall have received from each seller of Registrable
Securities a written undertaking satisfactory to it from the prospective seller
of such Registrable Securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this section
2.6) the Company, each director of the Company, each officer of the Company and
each other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such seller
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Any such indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Company or
any such director, officer or controlling person and shall survive the transfer
of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an
----------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this section 2.6,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
--------
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this section 2.6, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified 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
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof. No indemnifying party shall, without the
consent
42
of the indemnified party, consent to entry of any judgment or enter into any
settlement of any such action which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation. No
indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that
---------------------
specified in the preceding subdivisions of this section 2.6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any governmental
authority, other than the Securities Act.
(e) Contribution. If the indemnification provided for in the
------------
preceding subdivisions of this section 2.6 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability referred to
therein, then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such expense, loss, claim, damage or liability (i) in such
-
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the holder or other Person, as the case may be, on
the other from the distribution of the Registrable Securities or (ii) if the
--
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the holder or other Person, as the case may be, on the other
in connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder or other Person, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers
pursuant to the Stock Purchase Agreements bear to the gain, if any, realized by
the selling holder or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the holder or other Person, as the case may be, on the other shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the holder or by the other Person and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, provided that the foregoing
--------
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such indemnified party by reason of
the provisions contained in the first
43
sentence of subdivision (a) of this section 2.6, and in no event shall the
obligation of any indemnifying party to contribute under this subdivision (e)
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under subdivisions
(a) or (b) of this section 2.6 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this subdivision (e) were
determined by pro rata allocation (even if the holders and any underwriters were
--- ----
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth in the preceding sentence and subdivision (C) of this
section 2.6, 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 subdivision (e), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
-
proceeds received by such holder from the sale of Registrable Securities or (ii)
--
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
2.7 Suspension of Registration. Notwithstanding anything to the
--------------------------
contrary contained herein, the Company will not be required to file any
registration statement pursuant to section 2.1(a) or furnish any supplement to a
prospectus pursuant to section 2.3(viii) during any of the following periods:
(i) 30 days prior to the anticipated consummation of a public offering by the
Company of its securities and 90 days subsequent to the consummation of such
public offering where, in the good faith judgment of the managing underwriter or
underwriters thereof, such filing or furnishing of such supplement would have an
adverse effect on such offering, (ii) if such filing or furnishing of such
supplement is prohibited by applicable law, (iii) if the filing of such
registration statement or furnishing of such supplement would require the
Company to disclose a material financing, acquisition or other corporate
development, and the proper officers of the Company shall have determined in
good faith that such disclosure is not in the best interest of the Company or
(iv) during the period described in section 2.4(c)(ii), provided that the
--------
Company may not delay the filing of any registration statement or
44
furnishing of such supplement pursuant to this section 2.7 for more than an
aggregate of 135 days in any twelve-month period; and provided, further, that
-------- -------
any such delay pursuant to this section 2.7 shall not in the aggregate exceed
135 days in any twelve-month period. Notwithstanding the foregoing, in the case
of a public offering by any holder of the Company's capital stock (the "Selling
Holder") pursuant to rights granted by the Company to such holder similar to
section 2.1, no delay in the filing of a registration statement or the
furnishing of a supplement pursuant to clause (i) of the immediately preceding
sentence shall be for a time period longer than any similar time period for
delay imposed on such Selling Holder pursuant to the agreement with the Company
granting such Selling Holder registration rights. Upon the expiration of the
period described in clause (iii) of the first sentence of this section 2.7, the
Company shall give prompt notice to all holders of Registrable Securities and
shall promptly file any registration statement requested to be filed pursuant to
2.1(a) and furnish any prospectus supplement required to be furnished pursuant
to section 2.3(viii).
2.8 Other Agreements. The Company shall not enter into any agreement
----------------
or instrument which would conflict with or result in a breach or violation of
any of the terms or provisions of this Agreement. In addition, the Company shall
not enter into any agreement or instrument with any Person (other than any
Holder or its Affiliates) which grant such Person rights similar to those in
section 2.1 unless such agreement permits the holders of Registrable Securities
to exercise their rights pursuant to section 2.2 hereof in connection with any
registration statement filed pursuant to which such Person will sell securities
of the Company.
3. Tag-Along Notice. Pursuant to that certain Amended and Restated
----------------
Registration Rights Agreement (the "Amended and Restated Registration Rights
Agreement") dated as of _________, 1999 among the Company, Xxxxxx and Apollo,
certain Tag-Along Rights (as defined in the Amended and Restated Registration
Rights Agreement) were granted to Apollo. The Holders hereby acknowledge that
they do not have any such Tag-Along Rights. The Company and Xxxxxx hereby agree
to give copies of all notices sent to Apollo pursuant to Section 3 of the
Amended and Restated Registration Rights Agreement to Chase. Unless otherwise
specified herein, copies of all notices given by Xxxxxx pursuant to section
3.1(a) and 3.1(b) of the Amended and Restated Registration Rights Agreement
shall be given by facsimile transmission to each of (i) Xxxxx Xxxxxxx at (212)
662-3101 and (ii) Xxxxxxxxxxx Xxxxxxxx at (000) 000-0000, or in each case such
other facsimile number or to the attention of such other Person as Apollo shall
have furnished to Xxxxxx.
4. Definitions. As used herein, unless the context otherwise requires,
-----------
the following terms have the following respective meanings:
45
Affiliate: With respect to any entity, any other entity directly or
---------
indirectly controlling or controlled by, or under direct or indirect
common control with, such specified entity. For purposes of this
definition, the term "control" means (i) the power to direct the
management and policies of an entity, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
contract or otherwise or (ii) without limiting the foregoing, the
beneficial ownership of 50% or more of the voting power of the voting
common equity of such entity (on a fully diluted basis).
Apollo: Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV,
-------
L.P. and their Affiliates, collectively.
Beneficial Ownership or Beneficially Owned: With respect to any
-------------------- ------------------
person, any securities with respect to which such person is deemed to
have "beneficial ownership" as defined in rule 13d-3 under the
Securities Exchange Act of 1934, as amended. For purposes of this
Agreement only, any holder of Preferred Stock shall be deemed to be
the beneficial owner of any shares of Common Stock of the Company
issuable upon conversion of such Preferred Stock.
Business Day: Any day except a Saturday, Sunday or nationally
------------
recognized holiday in the State of New York, United States of America.
Chase: Chase Equity Associates, L.P. and its Affiliates.
-----
Commission: The Securities and Exchange Commission or any other
----------
Federal agency at the time administering the Securities Act.
Common Stock: As defined in section 1.
------------
Company: As defined in the introductory paragraph of this Agreement.
-------
Exchange Act: The Securities Exchange Act of 1934, or any similar
------------
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934 shall
include a reference to the comparable section, if any, of any such
similar Federal statute.
Holders: As defined in the introductory paragraph of this Agreement.
-------
Holder's Counsel: A single counsel (if any) designated by the holders
----------------
of not less than 25% of the aggregate principal amount of the
Registrable
46
Securities to be sold pursuant to section 2.1 or 2.2; provided,
--------
however, that if more than one counsel is so designated, the Holder's
-------
Counsel shall be the designee of the holders that are holding the
greater percentage of the Registrable Securities.
Initiating B-2 Holders: Any holder or holders of B-2 Preferred
----------------------
holding at least 50% of the B-2 Preferred issued and outstanding on
the date hereof, and initiating a request pursuant to section 2.1 for
the registration of all or part of such holder's or holders' B-2
Preferred; provided, that any shares of B-2 Preferred converted into
shares of B-1 Preferred shall be deemed to be shares of B-2 Preferred
for purposes of this definition.
Xxxxxx: Xxxxxxx X. Xxxxxx.
------
Person: A corporation, an association, a partnership, an
------
organization, business, an individual, a governmental or political
subdivision thereof or a governmental agency.
Preferred Stock: As defined in section 1.
---------------
Registrable Securities: The Common Stock or any other securities
----------------------
issuable upon conversion of the Preferred Stock issued pursuant to the
Stock Purchase Agreement and any securities issued or issuable with
respect to any such Common Stock by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise which the
holders thereof are entitled to receive. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (a) a registration statement with respect
-
to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement, (b) they shall have been
-
distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (c) they shall have been
-
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company
and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state
law then in force, or (d) they shall have ceased to be outstanding.
-
Registration Expenses: All expenses incident to the Company's
---------------------
performance of or compliance with section 2, including, without
limitation, (a) all Commission and any NASD registration and filing
fees and expenses, (b) all fees and expenses in connection with the
registration
47
or qualification of the Registrable Securities for offering and sale
under the State securities and blue sky laws and, in the case of an
underwritten offering, determination of their eligibility for
investment under the laws of such jurisdictions as the managing
underwriter or underwriters may designate, including reasonable fees
and disbursements, if any, of counsel for the underwriters in
connection with such registrations or qualifications and
determination, (c) all expenses relating to the preparation, printing,
distribution and reproduction of the registration statement required
to be filed hereunder, each prospectus included therein or prepared
for distribution pursuant hereto, each amendment or supplement to the
foregoing, the expenses of preparing the Registrable Securities for
delivery and the expenses of printing or producing any underwriting
agreement(s) among underwriters and "Blue Sky" or legal investment
memoranda, any selling agreements and all other documents in
connection with the offering, sale or delivery of Registrable
Securities to be disposed of, (d) messenger, telephone and delivery
expenses of the Company, (e) fees and expenses of any transfer agent
and registrar with respect to the Registrable Securities and any
escrow agent or custodian, (f) internal expenses of the Company
(including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting
duties), (g) fees, disbursements and expenses of counsel and
independent certified public accountants of the Company (including the
expenses of any opinions or "cold comfort" letters required by or
incident to such performance and compliance), (h) fees, disbursements
and expenses of any "qualified independent underwriter" engaged for
acting in such capacity, (i) fees, expenses and disbursements of any
other persons retained by the Company, including special experts
retained by the Company in connection with such registration, (k) all
fees and expenses incurred in connection with the qualification of the
shares of Common Stock constituting Registrable Securities for
quotation on the Nasdaq National Market, any over-the-counter market,
or the listing of such shares on any securities exchange and (l) in
the case of an underwritten offering, the reasonable fees,
disbursements and expenses of a single counsel retained by the Holders
to represent them in connection with such offering (the selection of
such counsel by such Holders to be made in the same manner as is
provided in the definition of the terms "Holders' Counsel").
Securities Act: The Securities Act of 1933, or any similar Federal
--------------
statute, and the rules and regulations of the Commission thereunder,
all as of the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a
reference to the comparable section, if any, of any such similar
Federal statute.
48
Stock Purchase Agreements: As defined in section 1.
-------------------------
5. Rules 144 and 144A. The Company shall timely file the reports
------------------
required to be filed by it under the Securities Act and the Exchange Act
(including but not limited to the reports under sections 13 and 15(d) of the
Exchange Act referred to in subparagraph (c) of Rule 144 adopted by the
Commission under the Securities Act) and the rules and regulations adopted by
the Commission thereunder (or, if the Company is not required to file such
reports, will, upon the request of any holder of Registrable Securities, make
publicly available other information) and will take such further action as any
holder of Registrable Securities or any broker facilitating such sale may
reasonably request, all to the extent (i) required from time to time to enable
such holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
-
under the Securities Act, as such Rule may be amended from time to time, or (b)
-
any similar rule or regulation hereafter adopted by the Commission. The Company
shall also provide such information and otherwise use all reasonable commercial
efforts to cooperate with any holder of Registrable Securities in connection
with any other sale by such holder pursuant to another exemption under the
Securities Act, in each case to the extent such information or other action by
the Company may be necessary to effect such sale pursuant to the applicable
exemption. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder any information to be delivered or filed in
connection with the requirements of this Section 5.
6. Amendments and Waivers. This Agreement may be amended and the Company
----------------------
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of 50% or more of the shares of Registrable Securities and, in the case
of any such amendment, action or omission to act in respect of the first
sentence of Section 5, the written consent of each holder affected thereby.
Each holder of any Registrable Securities at the time or thereafter outstanding
shall be bound by any consent authorized by this section 6, whether or not such
Registrable Securities shall have been marked to indicate such consent.
7. Nominees for Beneficial Owners. In the event that any Registrable
------------------------------
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
49
8. Notices. Except as otherwise provided in this Agreement, all notices,
-------
requests and other communications to any Person provided for hereunder shall be
in writing and shall be given to such Person (a) in the case of a party hereto
-
other than the Company, addressed to such party in the manner set forth in the
applicable Stock Purchase Agreement or at such other address as such party shall
have furnished to the Company in writing, or (b) in the case of any other holder
-
of Registrable Securities, at the address that such holder shall have furnished
to the Company in writing, or, until any such other holder so furnishes to the
Company an address, then to and at the address of the last holder of such
Registrable Securities who has furnished an address to the Company, or (c) in
-
the case of the Company or Xxxxxx, at Four Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000 to the attention of its Chief Executive Officer, with a copy
to Xxxxx X. Xxxxxx at 000 Xxxxx Xxxxxx, 00/xx/ xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or at such other address, or to the attention of such other officer, as the
Company shall have furnished to each holder of Registrable Securities at the
time outstanding. Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such communication is deposited
-
in the mails with first class postage prepaid, addressed as aforesaid or (ii) if
--
given by any other means (including, without limitation, by air courier), when
delivered at the address specified above, provided that any such notice, request
--------
or communication to any holder of Registrable Securities shall not be effective
until received.
9. Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. In addition, the provisions of this Agreement which are
for the benefit of the parties hereto other than the Company shall also be for
the benefit of and enforceable by any subsequent holder of any Registrable
Securities that acknowledges such assignment in writing and agrees to the terms
hereof.
10. Descriptive Headings. The descriptive headings of the several
--------------------
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
-------------
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAW
12. Counterparts. This Agreement may be executed simultaneously in any
------------
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
13. Entire Agreement. This Agreement embodies the entire agreement and
----------------
understanding between the Company and each other party hereto relating to the
subject
50
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter. This Agreement amends and restates the Prior Agreement in
its entirety.
14. SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
--------------------------
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY THEREOF. THE
COMPANY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF TO THE COMPANY BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN
RECEIPT REQUESTED, TO THE COMPANY AT ITS ADDRESS SPECIFIED IN SECTION 7. THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND THE COMPANY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
----- --- ----------
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS.
15. Severability. If any provision of this Agreement, or the application
------------
of such provisions to any Person or circumstance, shall be held invalid, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
51
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
UNITED RENTALS, INC.
By:____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
Holders:
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capital Partners,
its general partner
By:__________________________
Name:
Title: General Partner
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