EXHIBIT 10(a)
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CREDIT AGREEMENT
dated as of October 8, 1997
among
UNITED RENTALS, INC.,
VARIOUS FINANCIAL INSTITUTIONS
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
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Arranged by BANCAMERICA XXXXXXXXX XXXXXXXX
|| TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.......................................................1
1.1 Definitions........................................................1
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING AND CONVERSION PROCEDURES..............................12
2.1 Commitments.......................................................12
2.1.1 Loan Commitment............................................12
2.1.2 L/C Commitment.............................................12
2.2 Loan Procedures...................................................13
2.2.1 Various Types of Loans.....................................13
2.2.2 Borrowing Procedures.......................................13
2.2.3 Procedures for Conversion of Type of Loan..................13
2.3 Letter of Credit Procedures.......................................14
2.3.1 L/C Applications...........................................14
2.3.2 Participation in Letters of Credit.........................14
2.3.3 Reimbursement Obligations..................................15
2.3.4 Limitation on BofA's Obligations...........................15
2.3.5 Funding by Banks to BofA...................................15
2.4 Commitments Several...............................................16
2.5 Certain Conditions................................................16
SECTION 3 NOTES EVIDENCING LOANS...........................................16
3.1 Notes.............................................................16
3.2 Recordkeeping.....................................................16
SECTION 4 INTEREST.........................................................17
4.1 Interest Rates....................................................17
4.2 Interest Payment Dates............................................17
4.3 Interest Periods..................................................17
4.4 Setting and Notice of Eurodollar Rates............................18
4.5 Computation of Interest...........................................18
SECTION 5 FEES.............................................................18
5.1 Non-Use Fee.......................................................18
5.2 Letter of Credit Fees.............................................19
5.3 Arrangement and Agent's Fees......................................19
5.4 Closing Fees......................................................19
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SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS......................................................19
6.1 Reduction or Termination of the Commitments.......................19
6.2 Voluntary Prepayments.............................................20
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES..................20
7.1 Making of Payments................................................20
7.2 Application of Certain Payments...................................20
7.3 Due Date Extension................................................21
7.4 Setoff............................................................21
7.5 Proration of Payments.............................................21
7.6 Taxes.............................................................21
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS.................................................23
8.1 Increased Costs...................................................23
8.2 Basis for Determining Interest Rate Inadequate
or Unfair.........................................................24
8.3 Changes in Law Rendering Eurodollar Loans Unlawful................25
8.4 Funding Losses....................................................25
8.5 Right of Banks to Fund through Other Offices......................26
8.6 Discretion of Banks as to Manner of Funding.......................26
8.7 Mitigation of Circumstances; Replacement of
Affected Bank.....................................................26
8.8 Conclusiveness of Statements; Survival of Provisions..............27
SECTION 9 WARRANTIES.......................................................27
9.1 Organization, etc.................................................27
9.2 Authorization; No Conflict........................................27
9.3 Validity and Binding Nature.......................................28
9.4 Information.......................................................28
9.5 No Material Adverse Change........................................28
9.6 Litigation and Contingent Liabilities.............................28
9.7 Ownership of Properties; Liens....................................29
9.8 Subsidiaries......................................................29
9.9 Pension and Welfare Plans.........................................29
9.10 Investment Company Act............................................30
9.11 Public Utility Holding Company Act................................30
9.12 Regulation U......................................................30
9.13 Taxes.............................................................30
9.14 Solvency, etc.....................................................30
9.15 Environmental Matters.............................................30
9.16 Year 2000 Problem.................................................30
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SECTION 10 COVENANTS.......................................................31
10.1 Reports, Certificates and Other Information.......................31
10.1.1 Audit Report..............................................31
10.1.2 Quarterly Reports.........................................31
10.1.3 Monthly Reports...........................................32
10.1.4 Compliance Certificates...................................32
10.1.5 Reports to SEC and to Shareholders........................32
10.1.6 Notice of Default, Litigation and ERISA Matters...........32
10.1.7 Subsidiaries..............................................33
10.1.8 Management Reports........................................33
10.1.9 Projections...............................................34
10.1.10 Other Information........................................34
10.2 Books, Records and Inspections....................................34
10.3 Insurance.........................................................34
10.4 Compliance with Laws; Payment of Taxes and Liabilities............34
10.5 Maintenance of Existence, etc.....................................35
10.6 Financial Covenants...............................................35
10.6.1 Minimum Net Worth.........................................35
10.6.2 Maximum Leverage..........................................35
10.6.3 Minimum Interest Coverage.................................35
10.6.4 Funded Debt to Cash Flow Ratio.............................36
10.6.5 Senior Debt to Tangible Assets.............................36
10.7 Limitations on Debt...............................................36
10.8 Liens.............................................................37
10.9 Operating Leases..................................................38
10.10 Restricted Payments...............................................38
10.11 Mergers, Consolidations, Sales....................................38
10.12 Modification of Organizational Documents..........................39
10.13 Use of Proceeds...................................................39
10.14 Further Assurances................................................40
10.15 Transactions with Affiliates......................................40
10.16 Employee Benefit Plans............................................40
10.17 Environmental Laws................................................40
10.18 Unconditional Purchase Obligations................................40
10.19 Inconsistent Agreements...........................................40
10.20 Business Activities...............................................41
10.21 Advances and Other Investments....................................41
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.......................42
11.1 Initial Loan......................................................42
11.1.1 Notes.....................................................42
11.1.2 Resolutions...............................................42
11.1.3 Consents, etc.............................................42
11.1.4 Incumbency and Signature Certificates.....................42
11.1.5 Intercompany Guaranty.....................................43
11.1.6 Security Agreement........................................43
11.1.7 Pledge Agreements.........................................43
11.1.8 Opinions of Counsel for the Company and the
Guarantors................................................43
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11.1.9 Other.....................................................43
11.2 Conditions........................................................43
11.2.1 Compliance with Warranties, No Default, etc...............43
11.2.2 Confirmatory Certificate..................................44
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT..............................44
12.1 Events of Default.................................................44
12.1.1 Non-Payment of the Loans, etc.............................44
12.1.2 Non-Payment of Other Debt.................................45
12.1.3 Other Material Obligations................................45
12.1.4 Bankruptcy, Insolvency, etc...............................45
12.1.5 Non-Compliance with Provisions of This
Agreement.................................................46
12.1.6 Warranties................................................46
12.1.7 Pension Plans.............................................46
12.1.8 Judgments.................................................46
12.1.9 Invalidity of Intercompany Guaranty, etc..................46
12.1.10 Invalidity of Collateral Documents, etc...................47
12.1.11 Change in Control.........................................47
12.2 Effect of Event of Default........................................47
SECTION 13 THE AGENT.......................................................48
13.1 Appointment and Authorization.....................................48
13.2 Delegation of Duties..............................................48
13.3 Liability of Agent................................................49
13.4 Reliance by Agent.................................................49
13.5 Notice of Default.................................................49
13.6 Credit Decision...................................................50
13.7 Indemnification...................................................50
13.8 Agent in Individual Capacity......................................52
13.9 Successor Agent; Assignment of Agency.............................52
13.10 Withholding Tax...................................................52
13.11 Collateral Matters................................................54
SECTION 14 GENERAL.........................................................55
14.1 Waiver; Amendments................................................55
14.2 Confirmations.....................................................55
14.3 Notices...........................................................55
14.4 Computations......................................................56
14.5 Regulation U......................................................56
14.6 Costs, Expenses and Taxes.........................................56
14.7 Subsidiary References.............................................57
14.8 Captions..........................................................57
14.9 Assignments; Participations.......................................57
14.9.1 Assignments...............................................57
14.9.2 Participations............................................58
14.10 Governing Law.....................................................59
14.11 Counterparts......................................................59
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14.12 Successors and Assigns............................................60
14.13 Indemnification by the Company....................................60
14.14 Forum Selection and Consent to Jurisdiction.......................61
14.15 Waiver of Jury Trial..............................................61
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ANNEX I
SCHEDULE I Pricing Schedule
SCHEDULE 9.6(a) Litigation and Contingent Liabilities
SCHEDULE 9.6(b) Contingent Payments
SCHEDULE 9.7 Properties
SCHEDULE 9.8 Subsidiaries
SCHEDULE 10.7(c) Existing Equipment Debt
SCHEDULE 10.7(g) Other Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11 Key Executives
SCHEDULE 14.2 Addresses for Notices
EXHIBIT A Form of Note
(Section 3.1)
EXHIBIT B Form of Compliance Certificate
(Section 10.1.3)
EXHIBIT C Form of Intercompany Guaranty
(Section 1)
EXHIBIT D Form of Security Agreement
(Section 1)
EXHIBIT E Form of Company Pledge Agreement
(Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement
(Section 11.1.7)
EXHIBIT G Form of Subordination Language
(Section 1)
EXHIBIT H Form of Assignment Agreement
(Section 14.9)
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CREDIT AGREEMENT
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This CREDIT AGREEMENT, dated as of October 8, 1997 (as amended or otherwise
modified from time to time, this "Agreement"), is entered into among UNITED
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RENTALS, INC., a Delaware corporation (the "Company"), the financial
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institutions that are or may from time to time become parties hereto (together
with their respective successors and assigns, the "Banks") and BANK OF AMERICA
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NATIONAL TRUST AND SAVINGS ASSOCIATION (in its individual capacity, "BofA"), as
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agent for the Banks.
In consideration of the premises and the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
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following meanings (such definitions to be applicable to both the singular and
plural forms of such terms):
Affected Bank means any Bank that has given notice to the Company (which
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has not been rescinded) of (i) any obligation by the Company to pay any amount
pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any circumstances of
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the nature described in Section 8.2 or 8.3.
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Affiliate of any Person means (i) any other Person which, directly or
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indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means BofA in its capacity as agent for the Banks hereunder and any
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successor thereto in such capacity.
Agent-Related Persons means BofA and any successor agent arising under
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Section 13.9, together with their respective Affiliates (including, in the case
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of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
Agreement - see the Preamble.
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Alternate Reference Rate means at any time the greater of (a) the Federal
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Funds Rate plus 0.5% and (b) the Reference Rate.
Arranger means BancAmerica XXXXXXXXX XXXXXXXX, a Delaware corporation.
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Assignment Agreement - see Section 14.9.1.
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Bank - see the Preamble.
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BofA - see the Preamble.
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Business Day means any day on which BofA is open for commercial banking
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business in Chicago, New York and San Francisco and, in the case of a Business
Day which relates to a Eurodollar Loan, on which dealings are carried on in the
interbank eurodollar market.
Capital Lease means, with respect to any Person, any lease of (or other
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agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
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maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by Xxxxx'x Investors Service, Inc., (c)
any certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers acceptance, maturing not more than one year after such time,
or overnight Federal Funds transactions that are issued or sold by a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with any Bank (or other
commercial banking institution of the stature referred to in clause (c)) which
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(i) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses (a) through (c) and (ii) has a market value at
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the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.
Code means the Internal Revenue Code of 1986, as amended from time to time.
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Collateral Documents means the Company Pledge Agreement, each Subsidiary
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Pledge Agreement, the Security Agreement and any
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other agreement pursuant to which the Company or any Guarantor grants collateral
to the Agent for the benefit of the Banks.
Commitment Amount - see Section 2.1.1.
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Commitments means the Loan Commitment and the L/C Commitment.
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Company - see the Preamble.
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Company Pledge Agreement means a pledge agreement between the Company and
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the Agent, in the form of Exhibit E, as amended or otherwise modified from time
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to time.
Computation Period means each of the following periods: (i) the Fiscal
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Quarter ending March 31, 1998; (ii) the period of two Fiscal Quarters ending
June 30, 1998; (iii) the period of three Fiscal Quarters ending September 30,
1998; and (iv) each period of four Fiscal Quarters ending on the last day of a
Fiscal Quarter on or after December 31, 1998.
Consolidated Net Income means, with respect to the Company and its
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Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
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period.
Contingent Payment means any payment that has been (or is required to be)
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made under any of the following circumstances:
(a) such payment is required to be made by the Company or any
Subsidiary in connection with the purchase of any asset or business, where
the obligation of the Company or the applicable Subsidiary to make such
payment (or the amount thereof) is contingent upon the financial or other
performance of such asset or business on an ongoing basis (e.g., based on
revenues or similar measures of performance);
(b) such payment is required to be made by the Company or any
Subsidiary in connection with the achievement of any particular business
goal (excluding employee compensation and bonuses in the ordinary course of
business);
(c) such payment is required to be made by the Company or any
Subsidiary under circumstances similar to those described in clause (a) or
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(b) or provides substantially the same economic incentive as would a
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payment described in clause (a) or (b); or
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(d) such payment is required to be made by the Company or any
Subsidiary in connection with the purchase of any
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real estate, where the obligation to make such payment is contingent on any
event or condition (other than customary closing conditions for a purchase
of real estate).
Controlled Group means all members of a controlled group of corporations
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and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
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Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (including Contingent Payments and
Holdbacks but excluding trade accounts payable in the ordinary course of
business), (d) all indebtedness secured by a Lien on the property of such
Person, whether or not such indebtedness shall have been assumed by such Person
(it being understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face amount
of such indebtedness or the fair market value of all property of such Person
securing such indebtedness), (e) all obligations, contingent or otherwise, with
respect to the face amount of all letters of credit (whether or not drawn) and
banker's acceptances issued for the account of such Person (including the
Letters of Credit), (f) net liabilities of such Person under all Hedging
Obligations and (g) all Guaranties of such Person.
Disposal - see the definition of "Release".
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Dollar and the sign "$" mean lawful money of the United States of America.
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Effective Date - see Section 11.1.
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Environmental Claims means all claims, however asserted, by any
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governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes, common
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law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements
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with, any governmental authority, in each case relating to environmental,
health, safety and land use matters.
ERISA means the Employee Retirement Income Security Act of 1974, as
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amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
Eurocurrency Reserve Percentage means, with respect to any Eurodollar Loan
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for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate maximum
reserve requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of such Board of Governors
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate determined by
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reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin - see Schedule I.
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Eurodollar Office means with respect to any Bank the office or offices of
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such Bank which shall be making or maintaining the Eurodollar Loans of such Bank
hereunder or such other office or offices through which such Bank determines its
Eurodollar Rate. A Eurodollar Office of any Bank may be, at the option of such
Bank, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any Interest
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Period, the rate per annum at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of BofA two Business Days prior to
the beginning of such Interest Period by major banks in the interbank eurodollar
market as at or about 10:00 A.M., Chicago time, for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an amount
equal or comparable to the amount of the Eurodollar Loan of BofA for such
Interest Period.
Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
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Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
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(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
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Federal Funds Rate means, for any day, the rate set forth in the weekly
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statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Financial Letter of Credit means any Letter of Credit determined by BofA to
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be a "financial guaranty-type Standby Letter of Credit" as defined in footnote
13 to Appendix A to the Risk Based Capital Guidelines issued by the Comptroller
of the Currency (or in any successor regulation, guideline or ruling by any
applicable banking regulatory authority).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of the Company and its Subsidiaries,
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which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1997") refer to the Fiscal Year ending on December 31 of
such calendar year.
Floating Rate Loan means any Loan which bears interest at or by reference
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to the Alternate Reference Rate.
Floating Rate Margin - see Schedule I.
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Funded Debt means all Debt of the Company and its Subsidiaries, excluding
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(i) contingent obligations in respect of undrawn letters of credit and
Guaranties (except, in each case, to the extent constituting Guaranties in
respect of Funded Debt of a Person other than the Company or any Subsidiary),
(ii) Hedging Obligations and (iii) Debt of the Company to Subsidiaries and Debt
of Subsidiaries to the Company or to other Subsidiaries.
Funded Debt to Cash Flow Ratio means, as of the last day of any Fiscal
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Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) Consolidated Net Income for
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the period of four Fiscal Quarters ending on the last day of such Fiscal Quarter
plus, to the extent deducted in determining such Consolidated Net Income,
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Interest Expense, income tax expense, depreciation and amortization for such
period. For purposes of calculating the Funded Debt to Cash Flow Ratio, clause
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(ii) of the preceding sentence shall be calculated on a pro forma basis in
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accordance with Article 11 of Regulation S-X of the SEC.
GAAP means generally accepted accounting principles set forth from time to
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time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.1.
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Guarantor means, on any day, each Subsidiary that has executed a
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counterpart of the Intercompany Guaranty on or prior to that day (or is required
to execute a counterpart of the Intercompany Guaranty on that date).
Guaranty means any agreement, undertaking or arrangement by which any
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Person guarantees, endorses or otherwise becomes or is contingently liable upon
(by direct or indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to or otherwise to invest in a debtor, or otherwise to
assure a creditor against loss) any indebtedness, obligation or other liability
of any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Guaranty shall (subject to any limitation set forth therein) be deemed to be the
principal amount of the debt, obligation or other liability supported thereby.
Hedging Obligations means, with respect to any Person, all liabilities of
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such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
Holdback means an unsecured, non-interest-bearing obligation of the Company
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or any Subsidiary to pay a portion of the purchase price for any purchase or
other acquisition permitted hereunder which matures within nine months of the
date of such purchase or other acquisition.
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Immaterial Law means any provision of any Environmental Law the violation
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of which will not (a) violate any judgment, decree or order which is binding
upon the Company or any Subsidiary, (b) result in or threaten any injury to
public health or the environment or any material damage to the property of any
Person or (c) result in any liability or expense (other than any de minimis
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liability or expense) for the Company or any Subsidiary; provided that no
provision of any Environmental Law shall be an Immaterial Law if the Agent has
notified the Company that the Required Banks have determined in good faith that
such provision is material.
Including means including without limiting the generality of any
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description preceding such term, and other forms of the verb "to include" have
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correlative meanings.
Intercompany Guaranty means a guaranty in the form of Exhibit C, as amended
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or otherwise modified from time to time.
Interest Coverage Ratio means the ratio of (a) Consolidated Net Income
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before deducting Interest Expense and income tax expense for any Computation
Period to (b) Interest Expense for such Computation Period.
Interest Expense means for any period the consolidated interest expense of
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the Company and its Subsidiaries for such period (including all imputed interest
on Capital Leases and before giving effect to any capitalization of interest but
excluding amortization of deferred financing costs).
Interest Period - see Section 4.3.
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Investment means, relative to any Person, (a) any loan or advance made by
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such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of the Company or any of its
Subsidiaries), (b) any Guaranty of such Person, (c) any ownership or similar
interest held by such Person in any other Person and (d) deposits and the like
relating to prospective acquisitions of businesses (excluding deposits placed in
escrow pursuant to bona fide arrangements that provide for the return of such
deposits to the Company in the event that the related transaction is not
consummated for any reason by a date certain).
L/C Application means, with respect to any request for the issuance of a
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Letter of Credit, a letter of credit application in the form being used by BofA
at the time of such request for the type of letter of credit requested.
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L/C Commitment means the commitment of BofA to issue, and of each Bank to
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participate in, Letters of Credit pursuant to Section 2.1.2.
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Letter of Credit - see Section 2.1.2.
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Lien means, with respect to any Person, any interest granted by such Person
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in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Commitment means the commitment of the Banks to make Loans pursuant to
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Section 2.1.1.
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Loan Documents means this Agreement, the Notes, the Intercompany Guaranty,
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the L/C Applications and the Collateral Documents.
Loans - see Section 2.1.1.
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Margin Stock means any "margin stock" as defined in Regulation U of the
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Board of Governors of the Federal Reserve System.
Material Adverse Effect means (a) a material adverse change in, or a
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material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as such term is
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defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.
Net Worth means the Company's consolidated stockholders' equity (including
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preferred stock accounts).
Non-Financial Letter of Credit means any Letter of Credit other than a
------------------------------
Financial Letter of Credit.
Note - see Section 3.1.
---- -----------
Operating Lease means any lease of (or other agreement conveying the right
---------------
to use) any real or personal property by the
-9-
Company or any Subsidiary, as lessee, other than (i) any Capital Lease or (ii)
any lease with a remaining term of six months or less which is not renewable
solely at the option of the lessee.
PBGC means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any Bank, the percentage specified
----------
opposite such Bank's name on Annex I hereto, reduced (or increased) by
-------
subsequent assignments pursuant to Section 14.9.1.
--------------
Person means any natural person, corporation, partnership, trust, limited
------
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Reference Rate means, for any day, the rate of interest in effect for such
--------------
day as publicly announced from time to time by BofA in Chicago, Illinois, as its
"reference rate." (The "reference rate" is a rate set by BofA based upon
various factors, including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.) Any change
in the reference rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change.
Required Banks means Banks having Percentages aggregating 66-2/3% or more.
--------------
SEC means the Securities and Exchange Commission.
---
Security Agreement means a Security Agreement in the form of Exhibit D, as
------------------ ---------
amended or otherwise modified from time to time.
Seller Subordinated Debt means unsecured indebtedness of the Company that:
------------------------
(a) is subordinated, substantially upon the terms set forth in
Exhibit G or other terms that are more favorable to
---------
-10-
the Agent and the Banks, in right of payment to the payment in full in cash
of the Loans and all other amounts owed under the Loan Documents (whether
or not matured or due and payable), including amounts required to provide
cash collateral for the Letters of Credit; and
(b) represents all or part of the purchase price payable by the
Company in connection with a transaction described in Section 10.11(c).
----------------
Senior Debt means all Funded Debt of the Company and its Subsidiaries other
-----------
than Subordinated Debt.
Stated Amount means, with respect to any Letter of Credit at any date of
-------------
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means (i) Seller Subordinated Debt and (ii) any other
-----------------
unsecured indebtedness of the Company which (x) is owed to Persons other than
officers, employees, directors or Affiliates of the Company, (y) has no
amortization prior to December 31, 2001 and (z) has subordination terms and
covenants approved by the Required Banks, the approval of which shall not be
unreasonably withheld.
Subsidiary means, with respect to any Person, a corporation of which such
----------
Person and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of the Company.
Subsidiary Pledge Agreement means each pledge agreement substantially in
---------------------------
the form of Exhibit F issued by any Subsidiary, whether pursuant to Section
--------- -------
11.1.7 or Section 10.14, as each may be amended or otherwise modified from time
------ -------------
to time.
Tangible Assets means at any time all assets of the Company and its
---------------
Subsidiaries excluding all Intangible Assets. For purposes of the foregoing,
---------
"Intangible Assets" means goodwill, patents, trade names, trademarks,
------------------
copyrights, franchises, experimental expense, organization expense and any other
assets that are properly classified as intangible assets in accordance with
GAAP.
Termination Date means the earlier to occur of (a) October 8, 2000, or such
----------------
later date to which the Termination
-11-
Date may be extended at the request of the Company and with the consent of each
Bank or (b) such other date on which the Commitments shall terminate pursuant to
Section 6 or 12.
--------- --
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
------------------------- -------------
borrowings under this Agreement are as follows: Floating Rate Loans or
borrowings and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues uncured,
--------------------------
will, with lapse of time or notice or both, constitute an Event of Default.
Welfare Plan means a "welfare plan", as such term is defined in Section
------------
3(1) of ERISA.
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT, BORROWING AND
CONVERSION PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
-----------
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 Loan Commitment. Each Bank will make loans on a revolving basis
---------------
("Loans") from time to time before the Termination Date in such Bank's
-------
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the aggregate principal amount of all
--------
Loans which all Banks shall be committed to have outstanding at any one time
shall not exceed the excess, if any, of (a) $30,000,000, as such amount may be
reduced from time to time pursuant to Section 6.1 (as so reduced, the
-----------
"Commitment Amount"), over (b) the Stated Amount of all outstanding Letters of
------------------
Credit.
2.1.2 L/C Commitment. (a) BofA will issue standby letters of credit, in
--------------
each case containing such terms and conditions as are permitted by this
Agreement and are reasonably satisfactory to BofA (each, a "Letter of Credit"),
----------------
at the request of and for the account of the Company or any Subsidiary from time
to time before the Termination Date and (b) as more fully set forth in Section
-------
2.3.5, each Bank agrees to purchase a participation in each such Letter of
-----
Credit; provided that the aggregate Stated Amount of all Letters of Credit shall
--------
not at any time exceed the lesser of (i) $10,000,000 and (ii) the excess, if
any, of the Commitment Amount over the aggregate principal amount of all
outstanding Loans.
-12-
2.2 Loan Procedures.
---------------
2.2.1 Various Types of Loans. Each Loan shall be either a Floating Rate
----------------------
Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall specify
----
in the related notice of borrowing or conversion pursuant to Section 2.2.2 or
-------------
2.2.3. Eurodollar Loans having the same Interest Period are sometimes called a
-----
"Group" or collectively "Groups". Floating Rate Loans and Eurodollar Loans may
----- ------
be outstanding at the same time, provided that (i) not more than eight different
--------
Groups of Loans shall be outstanding at any one time and (ii) the aggregate
principal amount of each Group of Eurodollar Loans shall at all times be at
least $1,000,000 and an integral multiple of $500,000. All borrowings,
conversions and repayments of Loans shall be effected so that each Bank will
have a pro rata share (according to its Percentage) of all types and Groups of
Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice or
--------------------
telephonic notice (followed immediately by written confirmation thereof) to the
Agent of each proposed borrowing not later than (a) in the case of a Floating
Rate borrowing, 9:00 A.M., Chicago time, on the proposed date of such borrowing,
and (b) in the case of a Eurodollar borrowing, 10:00 A.M., Chicago time, at
least two Business Days prior to the proposed date of such borrowing. Each such
notice shall be effective upon receipt by the Agent, shall be irrevocable, and
shall specify the date, amount and type of borrowing and, in the case of a
Eurodollar borrowing, the initial Interest Period therefor. Promptly upon
receipt of such notice, the Agent shall advise each Bank thereof. Not later
than 1:00 p.m., Chicago time, on the date of a proposed borrowing, each Bank
shall provide the Agent at the office specified by the Agent with immediately
available funds covering such Bank's Percentage of such borrowing and, so long
as the Agent has not received written notice that the conditions precedent set
forth in Section 11 with respect to such borrowing have not been satisfied (and
----------
does not have knowledge of any default in the payment of any principal, interest
or fees to be paid to the Agent for the account of the Banks), the Agent shall
pay over the requested amount to the Company on the requested borrowing date.
Each borrowing shall be on a Business Day. Each Floating Rate borrowing shall
be in an aggregate amount of at least $300,000 and an integral multiple of
$100,000.
2.2.3 Procedures for Conversion of Type of Loan. Subject to the
-----------------------------------------
provisions of Section 2.2.1, the Company may convert all or any part of any
-------------
outstanding Loan into a Loan of a different type by giving written notice or
telephonic notice (followed immediately by written confirmation thereof) to the
Agent not later than (a) in the case of conversion into a Floating Rate Loan,
10:00 A.M., Chicago time, on the proposed date of such conversion, and (b) in
the case of a conversion into a Eurodollar
-13-
Loan, 9:00 A.M., Chicago time, at least two Business Days prior to the proposed
date of such conversion. Each such notice shall be effective upon receipt by
the Agent, shall be irrevocable, and shall specify the date and amount of such
conversion, the Loan to be so converted, the type of Loan to be converted into
and, in the case of a conversion into a Eurodollar Loan, the initial Interest
Period therefor. Promptly upon receipt of such notice, the Agent shall advise
each Bank thereof. Subject to Section 2.5, such Loan shall be so converted on
-----------
the requested date of conversion. Each conversion shall be on a Business Day.
Each conversion of a Eurodollar Loan on a day other than the last day of an
Interest Period therefor shall be subject to the provisions of Section 8.4.
-----------
2.3 Letter of Credit Procedures.
---------------------------
2.3.1 L/C Applications. The Company shall give notice to the Agent
----------------
(which shall promptly inform BofA) of the proposed issuance of each Letter of
Credit on a Business Day which is at least three Business Days (or such lesser
number of days as the Agent and BofA shall agree in any particular instance)
prior to the proposed date of issuance of such Letter of Credit. Each such
notice shall be accompanied by an L/C Application, duly executed by the Company
(together with any Subsidiary for the account of which the related Letter of
Credit is to be issued) and in all respects satisfactory to the Agent and BofA,
together with such other documentation as the Agent or BofA may request in
support thereof, it being understood that each L/C Application shall specify,
among other things, the date on which the proposed Letter of Credit is to be
issued, the expiration date of such Letter of Credit (which shall not be later
than the Termination Date) and whether such Letter of Credit is to be
transferable in whole or in part. So long as BofA has not received written
notice that the conditions precedent set forth in Section 11 with respect to the
----------
issuance of such Letter of Credit have not been satisfied (and does not have
knowledge of any default in the payment of any principal, interest or fees to be
paid to the Agent for the account of the Banks), BofA shall issue such Letter of
Credit on the requested issuance date.
2.3.2 Participation in Letters of Credit. Concurrently with the issuance
----------------------------------
of each Letter of Credit, BofA shall be deemed to have sold and transferred to
each other Bank, and each other Bank shall be deemed irrevocably and
unconditionally to have purchased and received from BofA, without recourse or
warranty, an undivided interest and participation, to the extent of such other
Bank's Percentage, in such Letter of Credit and the Company's reimbursement
obligations with respect thereto. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be BofA's
"participation" therein. BofA hereby agrees, upon request of any
-14-
Bank, to deliver to such Bank a list of all outstanding Letters of Credit,
together with such information related thereto as such Bank may reasonably
request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
-------------------------
irrevocably agrees to reimburse BofA for each payment or disbursement made by
BofA under any Letter of Credit honoring any demand for payment made by the
beneficiary thereunder, in each case on the date that such payment or
disbursement is made. Any amount not reimbursed on the date of such payment or
distribution shall bear interest from and including the date of such payment or
disbursement to but not including the date that BofA is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Alternate
Reference Rate from time to time in effect plus the Floating Rate Margin
----
(determined as set forth in Schedule I) from time to time in effect plus 2%.
---------- ----
BofA shall notify the Company whenever any demand for payment is made under any
Letter of Credit by the beneficiary thereunder; provided, however, that the
-------- -------
failure of BofA to so notify the Company shall not affect the rights of BofA or
the Banks in any manner whatsoever.
2.3.4 Limitation on BofA's Obligations. In determining whether to pay
--------------------------------
under any Letter of Credit, BofA shall have no obligation to the Company or any
Bank other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and appear to comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by BofA under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence and willful misconduct,
shall not impose upon BofA any liability to the Company or any Bank and shall
not reduce or impair the Company's reimbursement obligations set forth in
Section 2.3.3 or the obligations of the Banks pursuant to Section 2.3.5.
------------- -------------
2.3.5 Funding by Banks to BofA. If BofA makes any payment or
------------------------
disbursement under any Letter of Credit and the Company has not reimbursed BofA
in full for such payment or disbursement by 11:00 A.M., Chicago time, on the
date of such payment or disbursement, or if any reimbursement received by BofA
from the Company is or must be returned or rescinded upon or during any
bankruptcy or reorganization of the Company or otherwise, each other Bank shall
be obligated to pay to BofA, in full or partial payment of the purchase price of
its participation in such Letter of Credit, its pro rata share (according to its
Percentage) of such payment or disbursement (but no such payment shall diminish
the obligations of the Company under Section 2.3.3), and the Agent shall
-------------
promptly notify each other Bank thereof. Each other Bank irrevocably and
unconditionally agrees to so pay to the Agent in immediately available funds for
BofA's account the
-15-
amount of such other Bank's Percentage of such payment or disbursement. If and
to the extent any Bank shall not have made such amount available to the Agent by
2:00 P.M., Chicago time, on the Business Day on which such Bank receives notice
from the Agent of such payment or disbursement (it being understood that any
such notice received after noon, Chicago time, on any Business Day shall be
deemed to have been received on the next following Business Day), such Bank
agrees to pay interest on such amount to the Agent for BofA's account forthwith
on demand for each day from and including the date such amount was to have been
delivered to the Agent to but excluding the date such amount is paid, at a rate
per annum equal to (a) for the first three days after demand, the Federal Funds
Rate from time to time in effect and (b) thereafter, the Alternate Reference
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Agent such other Bank's
Percentage of any such payment or disbursement.
2.4 Commitments Several. The failure of any Bank to make a requested
-------------------
Loan on any date shall not relieve any other Bank of its obligation to make a
Loan on such date, but no Bank shall be responsible for the failure of any other
Bank to make any Loan to be made by such other Bank.
2.5 Certain Conditions. Notwithstanding any other provision of this
------------------
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and BofA shall have
no obligation to issue any Letter of Credit, if an Event of Default or Unmatured
Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
-----
note (as amended, supplemented, replaced or otherwise modified from time to
time, each a "Note") substantially in the form set forth in Exhibit A, with
---- ---------
appropriate insertions, payable to the order of such Bank in an amount equal to
such Bank's Percentage of the Loan Commitment (or, if less, in the aggregate
unpaid principal amount of such Bank's Loans).
3.2 Recordkeeping. Each Bank shall record in its records, or at its
-------------
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
-16-
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
--------------
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan is a Floating Rate Loan, at a rate
per annum equal to the sum of the Alternate Reference Rate from time to
time in effect plus the Floating Rate Margin (determined as set forth in
Schedule I) from time to time in effect; and
----------
(b) at all times while such Loan is a Eurodollar Loan, at a rate per
annum equal to the sum of the Eurodollar Rate (Reserve Adjusted) applicable
to each Interest Period for such Loan plus the Eurodollar Margin
(determined as set forth in Schedule I) from time to time in effect;
----------
provided, however, that at any time an Event of Default exists, the interest
-------- -------
rate applicable to each Loan shall be increased by 2%.
4.2 Interest Payment Dates. Accrued interest on each Floating Rate Loan
----------------------
shall be payable in arrears on the last day of each calendar month and at
maturity. Accrued interest on each Eurodollar Loan shall be payable on the last
day of each Interest Period relating to such Loan (and, in the case of a
Eurodollar Loan with a six-month Interest Period, on the three-month anniversary
of the first day of such Interest Period) and at maturity. After maturity,
accrued interest on all Loans shall be payable on demand.
4.3 Interest Periods. Each "Interest Period" for a Eurodollar Loan shall
----------------
commence on the date such Eurodollar Loan is made or converted from a Floating
Rate Loan, or on the expiration of the immediately preceding Interest Period for
such Eurodollar Loan, and shall end on the date which is one, two, three or six
months thereafter, as the Company may specify:
(a) in the case of an Interest Period which commences on the date a
Eurodollar Loan is made or converted from a
-17-
Floating Rate Loan, in the related notice of borrowing or conversion
pursuant to Section 2.2.2 or 2.2.3, or
------------- -----
(b) in the case of a succeeding Interest Period with respect to any
Eurodollar Loan, by written notice or telephonic notice (followed
immediately by written confirmation thereof) to the Agent not later than
10:00 A.M., Chicago time, at least three Business Days prior to the first
day of such succeeding Interest Period, it being understood that (i) each
such notice shall be effective upon receipt by the Agent and (ii) if the
Company fails to give such notice, such Loan shall automatically become a
Floating Rate Loan at the end of its then-current Interest Period.
Each Interest Period that begins on the last day of a calendar month (or on a
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Each Interest Period which would otherwise end on a
day which is not a Business Day shall end on the immediately succeeding Business
Day (unless such immediately succeeding Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day). The Company may not select any Interest
Period for a Loan which would end after the scheduled Termination Date.
4.4 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
--------------------------------------
Rate for each Interest Period shall be determined by the Agent, and notice
thereof shall be given by the Agent promptly to the Company and each Bank. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Bank, deliver to the
Company or such Bank a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.
4.5 Computation of Interest. Interest shall be computed for the actual
-----------------------
number of days elapsed on the basis of a year of 360 days. The applicable
interest rate for each Floating Rate Loan shall change simultaneously with each
change in the Alternate Reference Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Agent for the account
-----------
of each Bank a non-use fee, for the period from and including the Effective Date
to but excluding the Termination Date, at the rate per annum in effect from time
to time pursuant to Schedule I of the daily average of the unused amount of such
----------
-18-
Bank's Percentage of the Commitment Amount. For purposes of calculating usage
under this Section, the Commitment Amount shall be deemed used to the extent of
the aggregate principal amount of all outstanding Loans plus the undrawn amount
of all Letters of Credit. Such non-use fee shall be payable in arrears on the
last day of each calendar quarter and on the Termination Date for any period
then ending for which such non-use fee shall not have theretofore been paid.
The non-use fee shall be computed for the actual number of days elapsed on the
basis of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the Agent
---------------------
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each Letter of Credit in an amount equal to the rate
per annum in effect from time to time pursuant to Schedule I of the undrawn
----------
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); provided that the rate applicable to each
--------
Letter of Credit shall be increased by 2% at any time that an Event of Default
exists. Such letter of credit fee shall be payable in arrears on the last day of
each calendar quarter and on the Termination Date for the period from and
including the date of the issuance of each Letter of Credit to but excluding the
date such payment is due or, if earlier, the date on which such Letter of Credit
expired or was terminated.
(b) In addition, with respect to each Letter of Credit, the Company agrees
to pay to BofA, for its own account, (i) such fees and expenses as BofA
customarily requires in connection with the issuance, negotiation, processing
and/or administration of letters of credit in similar situations and (ii) a
letter of credit fee in the amount separately agreed to by the Company and BofA.
5.3 Arrangement and Agent's Fees. The Company agrees to pay to the
----------------------------
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company and the Agent.
5.4 Closing Fees. On the Effective Date, the Company shall pay to the
------------
Agent for the account of each Bank a closing fee in an amount equal to 0.25% of
such Bank's Percentage of the Commitment Amount.
SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS; PREPAYMENTS.
6.1 Reduction or Termination of the Commitments. The Company may from
-------------------------------------------
time to time on at least five Business Days' prior written notice received by
the Agent (which shall promptly advise each Bank thereof) permanently reduce the
Commitment
-19-
Amount to an amount not less than the sum of the aggregate unpaid principal
amount of the Loans and the aggregate Stated Amount of all Letters of Credit.
Any such reduction shall be in an amount not less than $5,000,000 or a higher
integral multiple of $1,000,000. The Company may at any time on like notice
terminate the Commitments upon payment in full of all Loans and all other
obligations of the Company hereunder and cash collateralization in full,
pursuant to documentation in form and substance reasonably satisfactory to the
Banks, of all obligations arising with respect to the Letters of Credit. All
reductions of the Commitment Amount shall reduce the Commitments pro rata among
the Banks according to their respective Percentages.
6.2 Voluntary Prepayments. The Company may from time to time prepay the
---------------------
Loans in whole or in part, provided that (a) the Company shall give the Agent
--------
(which shall promptly advise each Bank) notice thereof not later than 10:00 A.M.
(Chicago time) on the day of such prepayment, specifying the Loans to be prepaid
and the date and amount of prepayment, (b) each partial prepayment shall be in a
principal amount of at least $100,000 and an integral multiple of $100,000 and
(c) any prepayment of a Eurodollar Loan on a day other than the last day of an
Interest Period therefor shall be subject to Section 8.4.
-----------
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
------------------
Notes, and of all non-use fees and Letter of Credit fees, shall be made by the
Company to the Agent in immediately available funds at the office specified by
the Agent not later than noon, Chicago time, on the date due; and funds received
after that hour shall be deemed to have been received by the Agent on the next
following Business Day. The Company hereby authorizes and instructs the Agent
to charge any demand deposit account of the Company maintained with BofA for the
amount of any such payment on the due date therefor, and (subject to there being
a sufficient balance in such account for such purpose) the Agent agrees to do
so, provided that the Agent's failure to so charge such account shall in no way
--------
affect the obligation of the Company to make any such payment. The Agent shall
promptly remit to each Bank or other holder of a Note its share of all such
payments received in collected funds by the Agent for the account of such Bank
or holder.
All payments under Section 8.1 shall be made by the Company directly to the
-----------
Bank entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
-------------------------------
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the
-20-
Agent shall determine in its discretion. Concurrently with each remittance to
any Bank of its share of any such payment, the Agent shall advise such Bank as
to the application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
------------------
respect to any of the Notes, or of non-use fees or Letter of Credit fees, falls
due on a day which is not a Business Day, then such due date shall be extended
to the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Agent, each Bank and each other
------
holder of a Note have all rights of set-off and bankers' lien provided by
applicable law, and in addition thereto, the Company agrees that at any time (a)
any payment or other amount owing by the Company under this Agreement is then
due to the Agent, any Bank or any such holder or (b) any Unmatured Event of
Default under Section 12.1.4 with respect to the Company or any Event of Default
--------------
exists, the Agent, each Bank and each such holder may apply to the payment of
such payment or other amount (or, in the case of clause (b), to any obligations
----------
of the Company hereunder, whether or not then due) any and all balances,
credits, deposits, accounts or moneys of the Company then or thereafter with the
Agent, such Bank or such holder.
7.5 Proration of Payments. If any Bank shall obtain any payment or other
---------------------
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of or interest on any Note (or on account of its
participation in any Letter of Credit) in excess of its pro rata share of
payments and other recoveries obtained by all Banks on account of principal of
and interest on Notes (or such participation) then held by them, such Bank shall
purchase from the other Banks such participation in the Notes (or sub-
participation in Letters of Credit) held by them as shall be necessary to cause
such purchasing Bank to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
-------- -------
payment or other recovery is thereafter recovered from such purchasing Bank, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery.
7.6 Taxes. All payments of principal of, and interest on, the Loans and
-----
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever
-21-
imposed by any taxing authority, but excluding franchise taxes and taxes imposed
on or measured by any Bank's net income or receipts (all non-excluded items
being called "Taxes"). If any withholding or deduction from any payment to be
-----
made by the Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
-----------
the account of any Bank shall be deemed a payment by the Company.
Upon the request from time to time of the Company or the Agent, each Bank
that is organized under the laws of a jurisdiction other than the United States
of America shall execute and deliver to the Company and the Agent one or more
(as the Company or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.
-22-
The obligations of the Company under this Section 7.6 are subject to the
-----------
limitation set out in Section 14.9.1.
--------------
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
---------------
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such Bank) to
any tax, duty or other charge with respect to its Eurodollar Loans, its
Note or its obligation to make Eurodollar Loans, or shall change the basis
of taxation of payments to any Bank of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in respect
of its Eurodollar Loans or its obligation to make Eurodollar Loans (except
for changes in the rate of tax on the overall net income of such Bank or
its Eurodollar Office imposed by the jurisdiction in which such Bank's
principal executive office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve (including any
reserve imposed by the Board of Governors of the Federal Reserve System,
but excluding any reserve included in the determination of interest rates
pursuant to Section 4), special deposit or similar requirement against
---------
assets of, deposits with or for the account of, or credit extended by any
Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System, to
impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect thereto, then within 10 days after demand by such Bank
(which demand shall be accompanied by a statement setting forth the basis for
such demand, a copy of which shall be furnished to the Agent), the Company shall
pay
-23-
directly to such Bank such additional amount as will compensate such Bank for
such increased cost or such reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder (including such Bank's obligations under the
Loan Commitment or the L/C Commitment) or under any Letter of Credit to a level
below that which such Bank or such controlling Person could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
or such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then from
time to time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand, a copy of
which shall be furnished to the Agent), the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
Person for such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
--------------------------------------------------------
respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank eurodollar market for such Interest
Period, or the Agent otherwise reasonably determines (which determination
shall be binding and conclusive on the Company) that by reason of
circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable Eurodollar
Rate; or
(b) Banks having an aggregate Percentage of 30% or more advise the
Agent that the Eurodollar Rate (Reserve Adjusted) as determined by the
Agent will not adequately and fairly reflect the cost to such Banks of
maintaining or funding such Loans for such Interest Period (taking into
account any amount to which such Banks may be entitled under Section 8.1)
-----------
or that the making or funding of Eurodollar Loans has become impracticable
as a result of an event occurring after the date of this Agreement which in
the opinion of such Banks materially affects such Loans;
-24-
then the Agent shall promptly notify the other parties thereof and, so long as
----
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Floating Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In the event
--------------------------------------------------
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or convert into
Eurodollar Loans (but shall make Floating Rate Loans concurrently with the
making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Floating Rate Loan. Each Floating Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "Affected Loan") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
--------------
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain any Eurodollar Loan), as reasonably determined by such
Bank, as a result of (a) any payment, prepayment or conversion of any Eurodollar
Loan of such Bank on a date other than the last day of an Interest Period for
such Loan (including any conversion pursuant to Section 8.3) or (b) any failure
-----------
of the Company to borrow or convert any Loan on a date specified therefor in a
notice of borrowing or conversion pursuant to this Agreement. For this purpose,
all notices to the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
-25-
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it
--------------------------------------------
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
--------
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
-------------------------------------------
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
---------------------------------------------------------
Bank shall promptly notify the Company and the Agent of any event of which it
has knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence
----------- ---
of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any
----------- ---
Bank has given notice of any such event described in clause (i) or (ii) above
---------- ----
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the Company of) any event described in clause (i) or (ii) of the
---------- ----
preceding sentence and such designation will not, in such Bank's sole judgment,
be otherwise disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace such
Affected Bank as a party to this Agreement with one or more other bank(s) or
financial institution(s) reasonably satisfactory to the Agent (and upon notice
from the Company such Affected Bank shall assign pursuant to an Assignment
Agreement, and without recourse or warranty, its Commitment, its Loans, its
Note, its participation in Letters of Credit, and all of its other rights and
obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
-26-
share of all accrued and unpaid non-use fees and Letter of Credit fees, any
amounts payable under Section 8.4 as a result of such Bank receiving payment of
-----------
any Eurodollar Loan prior to the end of an Interest Period therefor and all
other obligations owed to such Affected Bank hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
----------------------------------------------------
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
----------- --- --- ---
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
------------ ---
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce BofA to issue Letters of Credit and to induce the Agent and the
Banks to enter into this Agreement and to induce the Banks to make Loans and
purchase participation in Letters of Credit hereunder, the Company warrants to
the Agent and the Banks that:
9.1 Organization, etc. The Company is a corporation duly organized,
------------------
validly existing and in good standing under the laws of the State of Delaware;
each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; and the Company and
each Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by the
--------------------------
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
Loan Document to which it is a party and the performance by each of the Company
and each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
-27-
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each other
---------------------------
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and each Loan Document to which any Guarantor is a party is, or upon
the execution and delivery thereof by such Guarantor will be, the legal, valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms.
9.4 Information. All information heretofore or contemporaneously
-----------
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results).
9.5 No Material Adverse Change. Since October 1, 1997, there has been no
--------------------------
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole.
9.6 Litigation and Contingent Liabilities. (a) No litigation
-------------------------------------
(including derivative actions), arbitration proceeding, labor controversy or
governmental investigation or proceeding is pending or, to the Company's
knowledge, threatened against the Company or any Subsidiary which might
reasonably be expected to have a Material Adverse Effect, except as set forth in
Schedule 9.6(a). Other than any liability incident to such litigation or
---------------
proceedings, neither the Company nor any Subsidiary has any material contingent
liabilities not listed in such Schedule 9.6(a) or 9.6(b).
--------------- ------
-28-
(b) Schedule 9.6(b) sets out descriptions of all arrangements existing on
---------------
the Effective Date pursuant to which the Company or any Subsidiary may be
required to pay any Contingent Payment.
9.7 Ownership of Properties; Liens. Except as set forth on Schedule 9.7,
------------------------------ ------------
each of the Company and each Subsidiary owns good and marketable title to all of
its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and material claims (including
material infringement claims with respect to patents, trademarks, copyrights and
the like) except as permitted pursuant to Section 10.8.
------------
9.8 Subsidiaries. The Company has no Subsidiaries except those listed in
------------
Schedule 9.8.
------------
9.9 Pension and Welfare Plans. (a) During the twelve-consecutive-month
-------------------------
period prior to the date of the execution and delivery of this Agreement or the
making of any Loan hereunder, (i) no steps have been taken to terminate any
Pension Plan and (ii) no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a lien under Section 302(f) of ERISA.
No condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by the Company of any material
liability, fine or penalty. The Company has no contingent liability with
respect to any post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Subtitle B of Title I
of ERISA.
(b) All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by the Company or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
-29-
9.10 Investment Company Act. Neither the Company nor any Subsidiary is
----------------------
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
9.11 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
9.12 Regulation U. The Company is not engaged principally, or as one of
------------
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
-----
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any Person
--------------
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.
9.15 Environmental Matters. The Company conducts in the ordinary course
---------------------
of business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that, except as specifically
disclosed in Schedule 9.15, such Environmental Laws and Environmental Claims
-------------
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
9.16 Year 2000 Problem. The Company and its Subsidiaries have reviewed
-----------------
the areas within their business and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the "Year 2000 Problem" (that is, the risk that computer applications used by
-30-
the Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent
-------------------------------------------
and each Bank:
10.1.1 Audit Report. Promptly when available and in any event within 90
------------
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by Ernst & Young or other independent auditors of recognized
standing selected by the Company and reasonably acceptable to the Required
Banks, together with a written statement from such accountants to the effect
that in making the examination necessary for the signing of such annual audit
report by such accountants, they have not become aware of any Event of Default
or Unmatured Event of Default that has occurred and is continuing or, if they
have become aware of any such event, describing it in reasonable detail; (b)
consolidating balance sheets of the Company and its Subsidiaries as of the end
of such Fiscal Year and consolidating statements of earnings and cash flows for
the Company and its Subsidiaries for such Fiscal Year, certified by the Chief
Financial Officer or the Vice President, Finance of the Company; and (c)
commencing with the Fiscal Year ending December 31, 1998, a copy of an annual
agreed-upon procedures report on the equipment fleet of the Company and its
Subsidiaries for such Fiscal Year as performed by the Company's independent
auditors.
10.1.2 Quarterly Reports. Promptly when available and in any event
-----------------
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the end of such Fiscal Quarter, together
with consolidated and consolidating statements of earnings and consolidated
statements of cash flow for such Fiscal Quarter and for the period beginning
with
-31-
the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer or the Vice President, Finance
of the Company.
10.1.3 Monthly Reports. Promptly when available and in any event within
---------------
30 days after the end of each of the first two months of each Fiscal Quarter,
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such month, together with consolidated statements of earnings for such month and
for the period beginning with the first day of the Fiscal Year and ending on the
last day of such month, certified by the Chief Financial Officer or the Vice
President, Finance of the Company.
10.1.4 Compliance Certificates. Contemporaneously with the furnishing of
-----------------------
a copy of each annual audit report pursuant to Section 10.1.1 and of each set of
--------------
quarterly statements pursuant to Section 10.1.2, a duly completed compliance
--------------
certificate in the form of Exhibit B, with appropriate insertions, dated the
---------
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer or the Vice President, Finance of the Company, containing a
computation of each of the financial ratios and restrictions set forth in
Section 10.6 and to the effect that such officer has not become aware of any
------------
Event of Default or Unmatured Event of Default that has occurred and is
continuing or, if there is any such event, describing it and the steps, if any,
being taken to cure it.
10.1.5 Reports to SEC and to Shareholders. Promptly upon the filing or
----------------------------------
sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to the Agent
or any Bank upon request therefor); copies of all registration statements of the
Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other communications made to security holders
generally concerning material developments in the business of the Company or any
Subsidiary.
10.1.6 Notice of Default, Litigation and ERISA Matters. Immediately upon
-----------------------------------------------
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which has
been instituted or, to the knowledge of the Company, is threatened against
the Company
-32-
or any Subsidiary or to which any of the properties of any thereof is
subject which, if adversely determined, might reasonably be expected to
have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled Group
or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may
be terminated, or that any such plan is or may become insolvent;
(d) any cancellation or material change in any insurance maintained by
the Company or any Subsidiary;
(e) any event (including any violation of any Environmental Law or the
assertion of any Environmental Claim) which might reasonably be expected to
have a Material Adverse Effect; or
(f) any setoff, claims (including, with respect to the environmental
claims) withholdings or other defenses to which any of the Collateral, or
the Banks' rights with respect to the Collateral, are subject.
10.1.7 Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
10.1.8 Management Reports. Promptly upon the request of the Agent or any
------------------
Bank, copies of all detailed financial and management reports submitted to the
Company by independent auditors in connection with each annual or interim audit
made by such auditors of the books of the Company.
-33-
10.1.9 Projections. As soon as practicable and in any event within 60
-----------
days after the commencement of each Fiscal Year, financial projections for the
Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Effective Date or otherwise in a manner satisfactory to the Agent.
10.1.10 Other Information. From time to time such other information
-----------------
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
------------------------------
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof whether or not any representative of the
Company or any Subsidiary is present), and to examine (and, at the expense of
the Company or the applicable Subsidiary, photocopy extracts from) any of its
books or other corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
---------
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon request of the
Agent or any Bank, furnish to the Agent or such Bank a certificate setting forth
in reasonable detail the nature and extent of all insurance maintained by the
Company and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
------------------------------------------------------
and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on
-34-
any of its property; provided, however, that the foregoing shall not require the
-------- -------
Company or any Subsidiary to pay any such tax or charge so long as it shall
contest the validity thereof in good faith by appropriate proceedings and shall
set aside on its books adequate reserves with respect thereto in accordance with
GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject
------------------------------
to Section 10.11) cause each Subsidiary to maintain and preserve, (a) its
-------------
existence and good standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary (except in
those instances in which the failure to be qualified or in good standing does
not have a Material Adverse Effect).
10.6 Financial Covenants.
-------------------
10.6.1 Minimum Net Worth. Not permit its Net Worth at the end of any
-----------------
month to be less than the sum of (a) $45,000,000 plus (b) 75% of the sum of
----
Consolidated Net Income plus any extraordinary gains during the period beginning
on October 1, 1997 and ending on the last day of the most recently-ended Fiscal
Quarter (provided that, if the sum of Consolidated Net Income plus any
--------
extraordinary gains is less than zero for any Fiscal Quarter, for purposes of
this Section 10.6.1 such sum will be deemed to have been zero for such quarter)
--------------
plus (c) 100% of the net proceeds of any equity issued by the Company or any of
----
its Subsidiaries (on a consolidated basis) after October 1, 1997.
10.6.2 Maximum Leverage. Not permit (a) the ratio of (i) Funded Debt to
----------------
(ii) Funded Debt plus Net Worth to exceed 0.60 to 1.0 at any time; and (b) the
----
ratio of (i) Senior Debt to (ii) Funded Debt plus Net Worth to exceed the
----
applicable ratio set forth below during any period set forth below:
FISCAL SENIOR DEBT TO FUNDED DEBT
------ --------------------------
QUARTER ENDING: PLUS NET WORTH RATIO
--------------- ---------------------
Effective Date through 12/31/98 0.55 to 1.0
1/1/99 through 12/31/99 0.50 to 1.0
1/1/2000 and thereafter 0.45 to 1.0
10.6.3 Minimum Interest Coverage. Not permit the Interest Coverage Ratio
-------------------------
for any Computation Period to be less than the applicable ratio set forth below:
COMPUTATION INTEREST
PERIOD ENDING: COVERAGE RATIO
-------------- --------------
3/31/98 through 12/31/98 1.5 to 1.0
3/31/99 through 12/31/99 2.0 to 1.0
-35-
3/31/2000 and thereafter 2.25 to 1.0.
10.6.4 Funded Debt to Cash Flow Ratio. Not permit the Funded Debt to Cash
------------------------------
Flow Ratio as of the last day of any Fiscal Quarter to exceed the applicable
ratio set forth below:
FISCAL FUNDED DEBT TO
QUARTER ENDING: CASH FLOW RATIO
-------------- ---------------
12/31/97 through 12/31/98 3.50 to 1.0
3/31/99 through 12/31/99 3.25 to 1.0
3/31/2000 and thereafter 3.00 to 1.0.
10.6.5 Senior Debt to Tangible Assets. Not permit the ratio of (i) Senior
------------------------------
Debt to (ii) Tangible Assets to exceed the applicable ratio set forth below
during any period set forth below:
SENIOR DEBT TO
PERIOD: TANGIBLE ASSETS RATIO:
------ ---------------------
Effective Date through 12/31/98 1.25 to 1.0
1/1/99 and thereafter 1.00 to 1.0.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
-------------------
incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C Applications and the
Letters of Credit;
(b) unsecured Debt of the Company (excluding Contingent Payments and Seller
Subordinated Debt); provided that the aggregate principal amount of all
--------
such unsecured Debt (other than Holdbacks) shall not at any time exceed
$3,000,000;
(c) Debt in respect of Capital Leases or arising in connection with the
acquisition of equipment that, in each case, either is identified in
Schedule 10.7(c) or is incurred, or assumed in connection with an asset
----------------
purchase permitted by Section 10.11, after the date hereof (it being
-------------
understood that for purposes of this Section 10.7 Debt of any Person which
------------
becomes a Subsidiary after the date hereof shall be deemed to be incurred,
and equipment of such Person shall be deemed to be acquired, on the date
such Person becomes a Subsidiary so long as such Debt is not incurred in
contemplation of such Person becoming a Subsidiary), and refinancings of
any such Debt so long as the terms applicable to such refinanced Debt are
no less favorable to the Company or the applicable Subsidiary than the
terms in effect immediately prior to such refinancing, provided that
--------
-36-
the aggregate amount of all such Debt at any time outstanding shall not
exceed $3,000,000;
(d) Debt of Subsidiaries owed to the Company;
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt; provided that the aggregate principal amount of all
--------
Seller Subordinated Debt at any time outstanding shall not exceed
$7,500,000;
(g) other Debt, not of a type described in clause (c), outstanding on the
----------
date hereof and listed in Schedule 10.7(g); and
----------------
(h) Contingent Payments, provided that the Company shall not, and shall not
--------
permit any Subsidiary to, incur any obligation to make Contingent Payments
the maximum possible amount of which exceeds $6,250,000 in the aggregate
for all Contingent Payments at any time outstanding.
For purposes of the foregoing, a Contingent Payment shall be deemed to be
"outstanding" from the time that the Company or any Subsidiary enters into the
agreement containing the obligation to make such Contingent Payment until such
time as either such Contingent Payment has been made in full or it has become
certain that such Contingent Payment will never have to be made.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
-----
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens of
carriers, warehousemen, mechanics and materialmen and other similar Liens
imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds,
bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price
of property or services, and, in each case, for which it maintains adequate
reserves;
-37-
(c) Liens identified in Schedule 10.8;
-------------
(d) Liens securing Debt permitted by clause (c) of Section 10.7 (and
---------- ------------
attaching only to the property being leased (in the case of Capital Leases)
or the purchase price for which was or is being financed by such Debt (in
the case of other Debt));
(e) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding $250,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or irregularities
in title and other similar Liens not interfering in any material respect
with the ordinary conduct of the business of the Company or any Subsidiary;
and
(g) Liens in favor of the Agent arising under the Loan Documents.
10.9 Operating Leases. Not, and not permit any Subsidiary to, be party
----------------
to Operating Leases requiring rental payments in excess of $2,000,000 in the
aggregate (excluding intercompany leases) in any Fiscal Year for the Company and
its Subsidiaries taken as a whole.
10.10 Restricted Payments. Not, and not permit any Subsidiary to, (a)
-------------------
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt or (e) set aside funds for any of the foregoing; provided that
--------
(i) any Subsidiary may declare and pay dividends to the Company or to any other
wholly-owned Subsidiary; and (ii) so long as (x) no Event of Default or
Unmatured Event of Default exists or would result therefrom and (y) the
aggregate amount of all purchases of stock, warrants or units since October 1,
1997 does not exceed $12,000,000, the Company may purchase its common stock or
warrants, or units issued in respect thereof, from time to time on terms
consistent with those set forth under the heading "Certain Agreements Relating
to the Outstanding Securities" in the Company's Private Placement Memorandum
dated September 12, 1997.
10.11 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
------------------------------
to, be a party to any merger or consolidation, or
-38-
purchase or otherwise acquire all or substantially all of the assets or any
stock of any class of, or any partnership or joint venture interest in, any
other Person, or, except in the ordinary course of its business (including sales
of equipment consistent with industry practice), sell, transfer, convey or lease
all or any substantial part of its assets, or sell or assign with or without
recourse any receivables, except for (a) any such merger or consolidation, sale,
transfer, conveyance, lease or assignment of or by any wholly-owned Subsidiary
into the Company or into, with or to any other wholly-owned Subsidiary; (b) any
such purchase or other acquisition by the Company or any wholly-owned Subsidiary
of the assets or stock of any wholly-owned Subsidiary; (c) any such purchase or
other acquisition by the Company or any wholly-owned Subsidiary of the assets or
stock of any other Person where (1) such assets (in the case of an asset
purchase) are for use, or such Person (in the case of a stock purchase) is
engaged, solely in the equipment rental and related businesses; (2) immediately
before or after giving effect to such purchase or acquisition, no Event of
Default or Unmatured Event of Default shall have occurred and be continuing; and
(3) either (i) the aggregate consideration to be paid by the Company and its
Subsidiaries (including any Debt assumed or issued in connection therewith, the
amount thereof to be calculated in accordance with GAAP) in connection with such
purchase or other acquisition (or any series of related acquisitions) is less
than $10,000,000 or (ii) (x) the Company is in pro forma compliance with all the
financial ratios and restrictions set forth in Section 10.6 and (y) unless after
------------
giving effect to such purchase or acquisition the pro forma Funded Debt to Cash
--- -----
Flow Ratio will be less than 1.25 to 1.0, the Required Lenders have consented to
such purchase or acquisition; and (d) sales and dispositions of assets
(including the stock of Subsidiaries) so long as the net book value of all
assets sold or otherwise disposed of in any Fiscal Year does not exceed 5% of
the net book value of the consolidated assets of the Company and its
Subsidiaries as of the last day of the preceding Fiscal Year.
10.12 Modification of Organizational Documents. Not permit the
----------------------------------------
Certificate of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which might
reasonably be expected to materially adversely affect the interests of the
Banks.
10.13 Use of Proceeds. Use the proceeds of the Loans solely to finance
---------------
the Company's working capital, for acquisitions permitted by Section 10.11, for
-------------
capital expenditures and for other general corporate purposes; and not use or
permit any proceeds of any Loan to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying" any Margin Stock.
-39-
10.14 Further Assurances. Take, and cause each Subsidiary to take, such
------------------
actions as the Agent or the Required Banks may reasonably request from time to
time (including the execution and delivery of guaranties, security agreements,
pledge agreements, financing statements and other documents, the filing or
recording of any of the foregoing, and the delivery of stock certificates and
other collateral with respect to which perfection is obtained by possession) to
ensure that (i) the obligations of the Company hereunder and under the other
Loan Documents are secured by substantially all of the assets (other than real
property) of the Company and guaranteed by all of the Subsidiaries (including,
promptly upon the acquisition or creation thereof, any Subsidiary acquired or
created after the date hereof) by execution of a counterpart of the Intercompany
Guaranty and (ii) the obligations of each Guarantor under the Intercompany
Guaranty are secured by substantially all of the assets (other than real
property) of such Guarantor.
10.15 Transactions with Affiliates. Not, and not permit any Subsidiary
----------------------------
to, enter into, or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates (other than the Company and its
Subsidiaries) which is on terms which are less favorable than are obtainable
from any Person which is not one of its Affiliates.
10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to
----------------------
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.17 Environmental Laws. The Company shall, and shall cause each
------------------
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws (other than Immaterial Laws).
10.18 Unconditional Purchase Obligations. Not, and not permit any
----------------------------------
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets or businesses.
10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to,
-----------------------
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document or (b) would prohibit the Company or any Subsidiary
-40-
from granting to the Agent, for the benefit of the Banks, a Lien on any of its
assets.
10.20 Business Activities. Not, and not permit any Subsidiary to, engage
-------------------
in any line of business other than the equipment rental business and businesses
reasonably related thereto.
10.21 Advances and Other Investments. Not, and not permit any Subsidiary
------------------------------
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries identified in Schedule 9.8;
------------
(b) equity Investments in Subsidiaries acquired after the Effective Date in
transactions permitted as acquisitions of stock or assets pursuant to
Section 10.11;
-------------
(c) in the ordinary course of business, contributions by the Company to the
capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in any
Subsidiary or by any of the Subsidiaries in the Company, by way of
intercompany loans, advances or guaranties, all to the extent permitted by
Section 10.7;
------------
(e) Guaranties permitted by Section 10.7;
------------
(f) good faith deposits made in connection with prospective acquisitions of
stock or assets permitted by Section 10.11;
-------------
(g) loans to officers and employees not exceeding (i) $100,000 in the
aggregate to any single individual or (ii) $300,000 in the aggregate for all
such individuals; and
(h) Cash Equivalent Investments;
provided, however, that (x) any Investment which when made complies with the
-------- -------
requirements of the definition of the term "Cash Equivalents" may continue to be
----------------
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; and (y) no Investment otherwise permitted by clause (b),
----------
(c), (d), (e), (f) or (g) shall be permitted to be made if, immediately before
--- --- --- --- ---
or after giving effect thereto, any Event of Default or Unmatured Event of
Default shall have occurred and be continuing.
-41-
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of BofA to issue Letters
of Credit is subject to the following conditions precedent:
11.1 Initial Loan. The obligation of each Bank to make its initial Loan
------------
and of BofA to issue any Letter of Credit, whichever first occurs, is, in
addition to the conditions precedent specified in Section 11.2, subject to the
------------
conditions precedent (and the date on which all such conditions precedent have
been satisfied or waived in writing by the Banks is called the "Effective Date")
--------------
that the Agent shall have received (a) all amounts which are then due and
payable pursuant to Section 5 and (to the extent billed) Section 14.6, (b)
--------- ------------
evidence, reasonably satisfactory to the Agent, that the Company has received
cash proceeds of not less than $52,000,000 from the issuance of equity and (c)
all of the following, each duly executed and dated the Effective Date (or such
earlier date as shall be satisfactory to the Agent), in form and substance
satisfactory to the Agent, and each (except for the Notes, of which only the
originals shall be signed) in sufficient number of signed counterparts to
provide one for each Bank:
11.1.1 Notes. The Notes.
-----
11.1.2 Resolutions. Certified copies of resolutions of the Board of
-----------
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to Section 11.1.5, 11.1.6 or 11.1.7 authorizing or
-------------- ------ ------
ratifying the execution, delivery and performance by such Subsidiary of each
Loan Document to which such Subsidiary is a party.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
--------------
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this Section 11.
----------
11.1.4 Incumbency and Signature Certificates. A certificate of the
-------------------------------------
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it
being understood that the Agent and each Bank
-42-
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).
11.1.5 Intercompany Guaranty. The Intercompany Guaranty executed by each
---------------------
Subsidiary (if any) as of the Effective Date.
11.1.6 Security Agreement. The Security Agreement executed by the Company
------------------
and each Subsidiary (if any) as of the Effective Date, together with evidence,
satisfactory to the Agent, that all filings necessary to perfect the Agent's
Lien on any collateral granted under the Security Agreement have been duly made
and are in full force and effect.
11.1.7 Pledge Agreements. The Company Pledge Agreement and pledge
-----------------
agreements, substantially in the form of Exhibit F, issued by each Subsidiary
---------
(if any) as of the Effective Date that in turn has one or more Subsidiaries, in
each case together with all collateral and other items required to be delivered
in connection therewith.
11.1.8 Opinions of Counsel for the Company and the Guarantors. The
------------------------------------------------------
opinions of (a) Weil, Gotshal & Xxxxxx LLP, special counsel to the Company, and
(b) Xxxxx X. Xxxxxx, counsel to the Company.
11.1.9 Other. Such other documents as the Agent or any Bank may
-----
reasonably request.
11.2 Conditions. The obligation (a) of each Bank to make each Loan and
----------
(b) of BofA to issue each Letter of Credit is subject to the following further
conditions precedent that:
11.2.1 Compliance with Warranties, No Default, etc. Both before and
--------------------------------------------
after giving effect to any borrowing and the issuance of any Letter of Credit
(but, if any Event of Default of the nature referred to in Section 12.1.2 shall
--------------
have occurred with respect to any other Debt, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties of the Company and the
Guarantors set forth in this Agreement (excluding Sections 9.6 and 9.8) and
------------ ---
the other Loan Documents shall be true and correct in all material respects
with the same effect as if then made (except to the extent stated to relate
to an earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
(b) except as disclosed by the Company to the Agent and the Banks
pursuant to Section 9.6,
-----------
-43-
(i) no litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation or
proceeding shall be pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries which might
reasonably be expected to have a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any litigation
(including derivative actions), arbitration proceeding, labor
controversy or governmental investigation or proceeding disclosed
pursuant to Section 9.6 which might reasonably be expected to have a
-----------
Material Adverse Effect; and
(c) no Event of Default or Unmatured Event of Default shall have then
occurred and be continuing, and neither the Company nor any of its
Subsidiaries shall be in violation of any law or governmental regulation or
court order or decree where such violation or violations singly or in the
aggregate might reasonably be expected to have a Material Adverse Effect.
11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank,
------------------------
the Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 11.2.1 (it being understood that each request by the Company
--------------
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in Section 11.2.1 will be satisfied at the time of the making of such Loan or
--------------
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
-----------------
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
------------------------------
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest, fee, reimbursement obligation with respect
to any Letter of Credit or other amount payable by the Company hereunder or
under any other Loan Document.
-44-
12.1.2 Non-Payment of Other Debt. Any default shall occur under the
-------------------------
terms applicable to any Debt of the Company or any Subsidiary (excluding
Holdbacks) in an aggregate amount (for all such Debt so affected) exceeding
$375,000 and such default shall (a) consist of the failure to pay such Debt when
due (subject to any applicable grace period), whether by acceleration or
otherwise, or (b) accelerate the maturity of such Debt or permit the holder or
holders thereof, or any trustee or agent for such holder or holders, to cause
such Debt to become due and payable prior to its expressed maturity; or any
default of the type referred to in clause (a) or (b) above shall occur under the
---------- ---
terms of any Holdback owed by the Company or any Subsidiary in an aggregate
amount (for all Holdbacks so affected) exceeding $3,000,000, provided that no
--------
amount payable in respect of any Holdback shall be deemed to be in default to
the extent that the obligation to pay such amount is being contested by the
Company or the applicable Subsidiary in good faith and by appropriate
proceedings and appropriate reserves have been set aside in respect of such
amount.
12.1.3 Other Material Obligations. Default in the payment when due, or
--------------------------
in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary
----------------------------
becomes insolvent or generally fails to pay, or admits in writing its inability
or refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary dissolution, not under any
bankruptcy or insolvency law, of a Subsidiary), is commenced in respect of the
Company or any Subsidiary, and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary, or remains for 60 days
-45-
undismissed; or the Company or any Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by
------------------------------------------------
the Company to comply with or to perform any covenant set forth in Sections 10.5
-------------
through 10.13, 10.15 or 10.16; or (b) failure by the Company to comply with or
----- ----- -----
to perform any other provision of this Agreement (and not constituting an Event
of Default under any of the other provisions of this Section 12) and continuance
----------
of such failure described in this clause (b) for 30 days (or, in the case of
----------
Section 10.14, five Business Days) after notice thereof to the Company from the
-------------
Agent, any Bank or the holder of any Note.
12.1.6 Warranties. Any warranty made by the Company herein is breached
----------
or is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company to
the Agent or any Bank in connection herewith is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
-------------
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $375,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $375,000.
12.1.8 Judgments. Final judgments which exceed an aggregate of $375,000
---------
shall be rendered against the Company, or any Subsidiary and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Intercompany Guaranty, etc. The Intercompany
-----------------------------------------
Guaranty shall cease to be in full force and effect with respect to any
Guarantor, any Guarantor shall fail (subject to any applicable grace period) to
comply with or to perform any applicable provision of the Intercompany Guaranty,
or any Guarantor (or any Person by, through or on behalf of such Guarantor)
shall contest in any manner the validity, binding nature or enforceability of
the Intercompany Guaranty with respect to such Guarantor.
-46-
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
----------------------------------------
shall cease to be in full force and effect with respect to the Company or any
Guarantor, the Company or any Guarantor shall fail (subject to any applicable
grace period) to comply with or to perform any applicable provision of any
Collateral Document to which such entity is a party, or the Company or any
Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within
-----------------
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended, but excluding the executive managers of the Company as of the Effective
Date) shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under such Act) of 25% or more of the outstanding shares of common
stock of the Company; (b) during any 24-month period, individuals who at the
beginning of such period constituted the Company's Board of Directors (together
with any new directors whose election by the Company's Board of Directors or
whose nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds of the directors who either were directors at
beginning of such period or whose election or nomination was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company; or (c) a period of 30 consecutive days shall have
elapsed during which any two of the individuals named in Schedule 12.1.11 shall
----------------
have ceased to hold executive offices with the Company at least equal in
seniority to their present offices, as set out in such Schedule 12.1.11,
----------------
excluding any such individual who has been replaced by another individual or
---------
individuals reasonably satisfactory to the Required Banks (it being understood
that any such replacement individual shall be deemed added to Schedule 12.1.11
----------------
on the date of approval thereof by the Required Banks).
12.2 Effect of Event of Default. If any Event of Default described in
--------------------------
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
--------------
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Agent cash collateral in an amount equal
to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the Agent cash
-47-
collateral in amount equal to the outstanding face amount of all Letters of
Credit, whereupon the Commitments (if they have not theretofore terminated)
shall immediately terminate and/or all Notes and all other obligations hereunder
shall become immediately due and payable and/or the Company shall immediately
become obligated to deliver to the Agent cash collateral in an amount equal to
the face amount of all Letters of Credit, all without presentment, demand,
protest or notice of any kind. The Agent shall promptly advise the Company of
any such declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default
of any event described in Section 12.1.1 or Section 12.1.4 may be waived by the
-------------- --------------
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this Section 12 may be waived by the written
----------
concurrence of the Required Banks. Any cash collateral delivered hereunder
shall be held by the Agent (without liability for interest thereon) and applied
to obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may elect.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. Each Bank hereby irrevocably
-----------------------------
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
------------
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
13.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
-48-
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
-----------------
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, confirmation from the Banks of their obligation to indemnify the
Agent against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the
-49-
Agent shall have received written notice from a Bank or the Company referring to
this Agreement, describing such Event of Default or Unmatured Event of Default
and stating that such notice is a "notice of default". The Agent will notify
the Banks of its receipt of any such notice. The Agent shall take such action
with respect to such Event of Default or Unmatured Event of Default as may be
requested by the Required Banks in accordance with Section 12; provided,
---------- --------
however, that unless and until the Agent has received any such request, the
-------
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Banks.
13.6 Credit Decision. Each Bank acknowledges that none of the Agent-
---------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereafter taken, including any review of the affairs of the Company
and its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated
---------------
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however,
-------- -------
-50-
that no Bank shall be liable for any payment to the Agent-Related Person of any
portion of the Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or out-
of-pocket expenses (including reasonable fees of attorneys for the Agent
(including the allocable costs of internal legal services and all disbursements
of internal counsel)) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive repayment of the Loans,
cancellation of the Notes, any foreclosure under, or any modification, release
or discharge of, any or all of the Collateral Documents, any termination of this
Agreement and the resignation or replacement of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities" shall
------------ -----------------------
mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loan and the termination, resignation or replacement of the
Agent or the replacement of any Bank) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or the Commitments or the use of the
proceeds thereof, whether or not any Agent-Related Person, any Bank or any of
their respective officers, directors, employees, counsel, agents or attorneys-
in-fact is a party thereto.
-51-
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
----------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to their Loans, BofA and its Affiliates shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though BofA were not the Agent, and the terms "Bank" and
"Banks" include BofA and its Affiliates, to the extent applicable, in their
individual capacities.
13.9 Successor Agent; Assignment of Agency. The Agent may, and at the
-------------------------------------
request of the Required Banks shall, resign as Agent upon 30 days' notice to the
Banks. If the Agent resigns under this Agreement, the Required Banks shall,
with (so long as no Event of Default exists) the consent of the Company (which
shall not be unreasonably withheld or delayed), appoint from among the Banks a
successor agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any
---------- ------------- -----
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above.
13.10 Withholding Tax.
---------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding
-52-
tax under Sections 1441 or 1442 of the Code, such Bank agrees to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed
Internal Revenue Service ("IRS") Forms 1001 and W-8 before the payment
---
of any interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such Bank
and in each succeeding taxable year of such Bank during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such
Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of such obligations of the Company hereunder. To the
extent of such percentage amount, the Agent will treat such Bank's IRS Form
1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations of
the Company to such Bank hereunder, such Bank agrees to undertake sole
responsibility for complying with the
-53-
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
--------------
Agent may withhold from any interest payment to such Bank not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including reasonable fees of attorneys for the Agent (including the
allocable costs of internal legal services and all disbursements of
internal counsel)). The obligation of the Banks under this subsection shall
survive the repayment of the Loans, cancellation of the Notes, any
termination of this Agreement and the resignation or replacement of the
Agent.
13.11 Collateral Matters. The Banks irrevocably authorize the Agent, at
------------------
its option and in its discretion, to release any Lien granted to or held by the
Agent under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Company hereunder
and the expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (iii) subject to Section 14.1, if approved,
------------
authorized or ratified in writing by the Required Banks. Upon request by the
Agent at any time, the Banks will confirm in writing the Agent's authority to
release particular types or items of collateral pursuant to this Section 13.11.
-------------
-54-
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent, any Bank or
------------------
any other holder of a Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude other or further exercise thereof,
or the exercise of any other right, power or remedy. No amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement or the
Notes shall in any event be effective unless the same shall be in writing and
signed and delivered by Banks having an aggregate Percentage of not less than
the aggregate Percentage expressly designated herein with respect thereto or, in
the absence of such designation as to any provision of this Agreement or the
Notes, by the Required Banks, and then any such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given. No amendment, modification, waiver or consent shall
change the Percentage of any Bank without the consent of such Bank. No
amendment, modification, waiver or consent shall (i) extend or increase the
amount of the Commitments, (ii) extend the date for payment of any principal of
or interest on the Loans or any fees payable hereunder, (iii) reduce the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, (iv) release the Intercompany Guaranty (other than with respect to a
Guarantor which ceases to be a Subsidiary as a result of a transaction permitted
hereunder) or all or substantially all of the collateral granted under the
Collateral Document or (v) reduce the aggregate Percentage required to effect an
amendment, modification, waiver or consent without, in each case, the consent of
all Banks. No provisions of Section 13 or other provision of this Agreement
----------
affecting the Agent in its capacity as such shall be amended, modified or waived
without the consent of the Agent.
14.2 Confirmations. The Company and each holder of a Note agree from
-------------
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Section 2.2, all notices
------- -----------
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 14.2 or at such
-------------
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or
-55-
certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes
of Section 2.2, the Agent shall be entitled to rely on telephonic instructions
-----------
from any person that the Agent in good faith believes is an authorized officer
or employee of the Company, and the Company shall hold the Agent and each Bank
harmless from any loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
------------
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
--------
notifies the Agent that the Company wishes to amend any covenant in Section 10
----------
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Section 10 for such purpose), then the Company's
----------
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
------------
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
-------------------------
reasonable out-of-pocket costs and expenses of the Agent (including the
reasonable fees and charges of counsel for the Agent and of local counsel, if
any, who may be retained by said counsel) in connection with the preparation,
execution, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (including any amendments,
supplements or waivers to any Loan Documents), and all reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees, court costs and other
legal expenses and allocated costs of staff counsel) incurred by the Agent and
each Bank after an Event of Default in connection with the enforcement of this
Agreement, the other Loan Documents or any such other documents. Each Bank
agrees to reimburse the Agent for such Bank's pro rata share (based on its
respective Percentage) of any such costs and expenses of the Agent not paid by
the Company. In addition, the Company agrees to pay, and to save the Agent and
the Banks harmless from all liability for, (a)
-56-
any stamp or other taxes (excluding income taxes and franchise taxes based on
net income) which may be payable in connection with the execution and delivery
of this Agreement, the borrowings hereunder, the issuance of the Notes or the
execution and delivery of any other Loan Document or any other document provided
for herein or delivered or to be delivered hereunder or in connection herewith
and (b) any fees of the Company's auditors in connection with any reasonable
exercise by the Agent and the Banks of their rights pursuant to Section 10.2.
------------
All obligations provided for in this Section 14.6 shall survive repayment of the
------------
Loans, cancellation of the Notes and any termination of this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating to
---------------------
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
--------
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
---------------------------
14.9.1 Assignments. Any Bank may, with the prior written consents of the
-----------
Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee"), all or any fraction of such Bank's
--------
Loans and Commitments (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Bank's Loans and Commitments)
in a minimum aggregate amount equal to the lesser of (i) the assigning Bank's
remaining aggregate Commitments and (ii) $5,000,000; provided, however, that (a)
-------- -------
no assignment and delegation may be made to any Person if, at the time of such
assignment and delegation, the Company would be obligated to pay any greater
amount under Section 7.6 or Section 8 to the Assignee than the Company is then
----------- ---------
obligated to pay to the assigning Bank under such Sections (and if any
assignment is made in violation of the foregoing, the Company will not be
required to pay the incremental amounts) and (b) the Company and the Agent shall
be entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned and delegated to an Assignee until the date when
all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the Agent
and the assigning Bank shall agree) shall have passed after written notice
of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee, shall
-57-
have been given to the Company and the Agent by such assigning Bank and the
Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"),
--------- --------------------
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Loan Commitment and, if the assigning Bank has retained a Loan
Commitment hereunder, a replacement Note in the principal amount of the Loan
Commitment retained by the assigning Bank (such Note to be in exchange for, but
not in payment of, the predecessor Note held by such assigning Bank). Each such
Note shall be dated the effective date of such assignment. The assigning Bank
shall xxxx the predecessor Note "exchanged" and deliver it to the Company.
Accrued interest on that part of the predecessor Note being assigned shall be
paid as provided in the Assignment Agreement. Accrued interest and fees on that
part of the predecessor Note not being assigned shall be paid to the assigning
Bank. Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
--------------
be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
--------------
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
--------------
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such
-58-
Bank, the Commitments of such Bank, the direct or participation interest of such
Bank in any Letter of Credit or any other interest of such Bank hereunder (any
Person purchasing any such participating interest being herein called a
"Participant"). In the event of a sale by a Bank of a participating interest to
------------
a Participant, (x) such Bank shall remain the holder of its Note for all
purposes of this Agreement, (y) the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Bank had not sold such participation and shall be paid
directly to such Bank. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any of the events (excluding the events
described in clause (v) thereof) described in the penultimate sentence of
----------
Section 14.1. Each Bank agrees to incorporate the requirements of the preceding
------------
sentence into each participation agreement which such Bank enters into with any
Participant. The Company agrees that if amounts outstanding under this
Agreement and the Notes are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement, any
Note and with respect to any Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement or such Note; provided that such right of setoff shall be subject
--------
to the obligation of each Participant to share with the Banks, and the Banks
agree to share with each Participant, as provided in Section 7.5. The Company
-----------
also agrees that each Participant shall be entitled to the benefits of Section
-------
7.6 and Section 8 as if it were a Bank (provided that no Participant shall
--- ---------
receive any greater compensation pursuant to Section 7.6 or Section 8 than would
----------- ---------
have been paid to the participating Bank if no participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract
-------------
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent, the Banks and
any other holder of a Note expressed herein or in any other Loan Document shall
be in addition to and not in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on
-59-
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Agreement. When counterparts executed by all of the parties hereto shall
have been lodged with the Agent (or, in the case of any Bank as to which an
executed counterpart shall not have been so lodged, the Agent shall have
received confirmation from such Bank of execution of a counterpart hereof by
such Bank), this Agreement shall become effective as of the date hereof, and at
such time the Agent shall notify the Company and each Bank.
14.12 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Company.
------------------------------
(a) In consideration of the execution and delivery of this Agreement by the
Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent,
each Bank and each of the officers, directors, employees, Affiliates and agents
of the Agent and each Bank (each a "Bank Party") free and harmless from and
----------
against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including reasonable attorneys' fees and charges and
allocated costs of staff counsel (collectively, for purposes of this Section
-------
14.13, called the "Indemnified Liabilities"), incurred by the Bank Parties or
----- -----------------------
any of them as a result of, or arising out of, or relating to (i) any tender
offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each
-60-
of the Indemnified Liabilities which is permissible under applicable law.
Nothing set forth above shall be construed to relieve any Bank Party from any
obligation it may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
-------------
repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of any or all of the Collateral Documents and
any termination of this Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
-------------------------------------------
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
-------- -------
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH BANK
--------------------
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
-61-
sDelivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By
---------------------------------------
Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By
---------------------------------------
Title
------------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as a Bank
By
---------------------------------------
Title
------------------------------------
-62-
ANNEX I
Portion of
Bank Commitment Amount Percentage
---- ----------------- ----------
Bank of America National
Trust and Savings Association $30,000,000 100%
----------- ---
TOTALS $30,000,000 100%
SCHEDULE I
PRICING SCHEDULE
The Floating Rate Margin, the Eurodollar Margin, the rate per annum
applicable for non-use fees and the rate per annum applicable for letter of
credit fees for Financial Letters of Credit and Non-Financial Letters of Credit,
respectively, shall be determined in accordance with the table below and the
other provisions of this Schedule I.
----------
XXXXX X XXXXX XX XXXXX XXXXX XXXXX
XXX IV V
---------------------------------------------------------------
Rate for
Non-Use Fee 0.375% 0.375% 0.375% 0.375% 0.375%
Eurodollar Margin 2.500% 2.250% 2.000% 1.750% 1.500%
Floating Rate
Margin 0.250% 0.250% 0 0 0
Rate for
Non-Financial LC 1.250% 1.125% 1.000% 0.875% 0.750%
Fee
Rate for
Financial LC Fee 2.500% 2.250% 2.000% 1.750% 1.500%
Level I applies when the Funded Debt to Cash Flow Ratio is equal to or
-------
greater than 3.25 to 1.0.
Level II applies when the Funded Debt to Cash Flow Ratio is equal to or
--------
greater than 2.75 to 1.0 but less than 3.25 to 1.0.
Level III applies when the Funded Debt to Cash Flow Ratio is equal to or
---------
greater than 2.25 to 1.0 but less than 2.75 to 1.0.
Level IV applies when the Funded Debt to Cash Flow Ratio is equal to or
--------
greater than 1.75 to 1.0 but less than 2.25 to 1.0.
Level V applies when the Funded Debt to Cash Flow Ratio is less than 1.75
-------
to 1.0.
The applicable Level shall be adjusted, to the extent applicable, 45 days
(or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days) after
the end of each Fiscal Quarter based on the Funded Debt to Cash Flow Ratio as of
the last day of such Fiscal Quarter; provided that if the Company fails to
--------
deliver the financial statements required by Section 10.1.1 or 10.1.2, as
-------------- ------
applicable, and the related certificate required by Section 10.1.4 by the 45th
--------------
day (or, if applicable, the 90th day)
1
after any Fiscal Quarter, Level I shall apply until such financial statements
are delivered. Notwithstanding the foregoing, the applicable Level shall be
Level IV at all times prior to March 31, 1998.
-2-
SCHEDULE 12.1.11
KEY EXECUTIVES
Name Current Office(s)
---- ---------------------------------
Xxxxxxx X. Xxxxxx Chairman, Chief Executive
Officer
and Director
Xxxx X. Xxxxx Vice Chairman, Secretary,
Director and Chief Acquisition
Officer
Xxxxxxx X. Xxxxx Chief Financial Officer
Xxxxxx X. Xxxxx Vice President, Finance
1
SCHEDULE 14.2
ADDRESSES FOR NOTICES
UNITED RENTALS, INC.
--------------------
Four Xxxxxxxxx Xxxxxx xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
---------------------------------
Agency Management Services
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
----------------------------------
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
FIRST AMENDMENT
THIS FIRST AMENDMENT dated as of October 17, 1997 (this "Amendment") is to
the Credit Agreement (the "Credit Agreement") dated as of October 8, 1997 among
UNITED RENTALS, INC. (the "Company"), various financial institutions and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as Agent (in such
capacity, the "Agent"). Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as defined in the Credit Agreement.
WHEREAS, the Company, BofA and the Agent have entered into the Credit
Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement to (a) add
Comerica Bank and BankBoston, N.A. (collectively the "New Banks") as "Banks"
thereunder and (b) reflect the increase of the Commitment to $55,000,000;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1 AMENDMENT. Effective on (and subject to the occurrence of) the
---------
First Amendment Effective Date (as defined below), the Credit Agreement shall be
amended in accordance with Sections 1.1 through 1.3 below.
------------ ---
1.1 Amount of Loan Commitment. Section 2.1.1 is amended by deleting the
-------------------------
amount "$30,000,000" therein and substituting the amount "$55,000,000" therefor.
1.2 Annex I. Annex I is amended in its entirety by substituting the
-------
attached Annex I therefor.
-------
1.3 Schedule 14.2. Schedule 14.2 is amended in its entirety by
-------------
substituting the attached Schedule 14.2 therefor.
-------------
SECTION 2 REPRESENTATIONS AND WARRANTIES. The Company represents and
------------------------------
warrants to the Agent and the Banks that (a) the representations and warranties
made in Section 9 (excluding Section 9.8) of the Credit Agreement are true and
correct in all material respects on and as of the First Amendment Effective Date
with the same effect as if made on and as of the First Amendment Effective Date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they were true and correct in all material respects
as of such earlier date); (b) no Event of Default or Unmatured Event of Default
exists or will result from the execution and delivery of this Amendment; (c) no
event or circumstance has occurred since the Effective Date that has resulted,
or would reasonably be expected to result, in a Material Adverse Effect; (d) the
execution and delivery by the Company of this Amendment and the New Notes (as
defined below), and the performance by the Company of its obligations under the
Credit Agreement as amended hereby (as so amended, the "Amended Credit
Agreement") and the New Notes, (i) are within the corporate powers of the
Company, (ii) have been duly authorized by all necessary corporate action, (iii)
have received all necessary governmental approval and (iv) do not and will not
contravene or conflict with any provision of law or of the charter or by-laws of
the Company or of any indenture, loan agreement or other contract, order or
decree which is binding upon the Company; and (e) each of the Amended Credit
Agreement and each New Note is the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
SECTION 3 EFFECTIVENESS. The amendments set forth in Section 1 above
------------- ---------
shall become effective, as of the day and year first above written, on such date
(the "First Amendment Effective Date") when the Agent shall have received (i) a
counterpart of this Amendment executed by each of the parties hereto (or, in the
case of any party other than the Company from which the Agent has not received a
counterpart hereof, facsimile confirmation of the execution of a counterpart
hereof by such party), (ii) a new Note for each Bank (collectively the "New
Notes") and (iii) the opinions of Weil, Gotshal & Xxxxxx LLP, special counsel to
the Company and the Guarantors (if any), substantially in the form of Exhibit A
---------
hereto, and Xxxxx X. Xxxxxx, counsel to the Company and the Guarantors (if any),
substantially in the form of Exhibit B hereto.
---------
SECTION 4 ADDITION OF BANKS. On the First Amendment Effective Date, each
-----------------
New Bank shall become a "Bank" under and for all purposes of the Credit
Agreement, shall be bound by the Credit Agreement, and shall be entitled to the
benefits of the Credit Agreement and each other Loan Document, and each Bank
shall have a portion of the Commitment and a Percentage in the amount and
percentage set forth on Annex I hereto. Each New Bank agrees that all fees
-------
accrued under the Credit Agreement prior to the First Amendment Effective Date
are the property of BofA. By its signature below, BofA confirms that (except
pursuant hereto) it has not sold or otherwise encumbered any of its rights or
obligations under the Credit Agreement prior to the syndication thereof pursuant
to this Amendment.
-2-
SECTION 5 MISCELLANEOUS.
-------------
5.1 Continuing Effectiveness, etc. As herein amended, the Credit
------------------------------
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the First Amendment Effective Date, all
references in the Credit Agreement, the Notes, each other Loan Document and any
similar document to the "Credit Agreement" or similar terms shall refer to the
Amended Credit Agreement.
5.2 Counterparts. This Amendment may be executed in any number of
------------
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
5.3 Expenses. The Company agrees to pay the reasonable costs and expenses
--------
of the Agent (including reasonable attorney's fees and changes) in connection
with the preparation, execution and delivery of this Amendment.
5.4 Governing Law. This Amendment shall be a contract made under and
-------------
governed by the internal laws of the State of Illinois applicable to contracts
made and to be performed entirely within such State.
5.5 Successors and Assigns. This Amendment shall be binding upon the
----------------------
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-3-
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By_____________________________
Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By_____________________________
Title__________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By_____________________________
Title__________________________
-4-
COMERICA BANK
By_____________________________
Title__________________________
BANKBOSTON, N.A.
By_____________________________
Title__________________________
-5-
ANNEX I
COMMITMENTS
Bank Portion of Commitment Amount Percentage
---- ---------------------------- ----------
Bank of America National $25,000,000.00 45.454545454%
Trust Savings Association
Comerica Bank $15,000,000.00 27.272727273%
BankBoston, N.A. $15,000,000.00 27.272727273%
TOTAL $55,000,000.00 100.000000000%
-6-
SCHEDULE 14.2
ADDRESSES FOR NOTICES
UNITED RENTALS, INC.
--------------------
Four Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
as Agent
Agency Management Services
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
as a Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
COMERICA BANK
-------------
One Detroit Center
6th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
BANKBOSTON, N.A.
----------------
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
-2-
SECOND AMENDMENT AND CONSENT
THIS SECOND AMENDMENT AND CONSENT dated as of October 24, 1997 (this
"Amendment") is to the Credit Agreement (as previously amended, the "Credit
Agreement") dated as of October 8, 1997 among UNITED RENTALS, INC. (the
"Company"), various financial institutions and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION ("BofA"), as Agent (in such capacity, the "Agent").
Unless otherwise defined herein, terms defined in the Credit Agreement are used
herein as defined in the Credit Agreement.
WHEREAS, the Company, the Banks and the Agent have entered into the Credit
Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement in certain
respects as set forth below;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1 AMENDMENT. Effective on (and subject to the occurrence of) the
---------
Second Amendment Effective Date (as defined below), Section 10.9 of the Credit
Agreement shall be amended by deleting the amount "$2,000,000" therein and
substituting therefor the amount "$3,500,000".
SECTION 2 CONSENT. Notwithstanding any provision of Section 10.11 of the
-------
Credit Agreement to the contrary, the Required Banks agree that the Company may
make the acquisitions described on Schedule I hereto so long as the aggregate
----------
consideration paid in respect of each such acquisition does not exceed the
amount set forth on Schedule I opposite such acquisition.
----------
SECTION 3 REPRESENTATIONS AND WARRANTIES. The Company represents and
------------------------------
warrants to the Agent and the Banks that (a) the representations and warranties
made in Section 9 (excluding Section 9.8) of the Credit Agreement are true and
correct in all material respects on and as of the Second Amendment Effective
Date with the same effect as if made on and as of the Second Amendment Effective
Date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they were true and correct in all material
respects as of such earlier date); (b) no Event of Default or Unmatured Event of
Default exists or will result from the execution and delivery of this Amendment;
(c) no event or circumstance has occurred since the Effective Date that has
resulted, or would reasonably be expected to result, in a
Material Adverse Effect; (d) the execution and delivery by the Company of this
Amendment, and the performance by the Company of its obligations under the
Credit Agreement as amended hereby (as so amended, the "Amended Credit
Agreement"), (i) are within the corporate powers of the Company, (ii) have been
duly authorized by all necessary corporate action, (iii) have received all
necessary governmental approval and (iv) do not and will not contravene or
conflict with any provision of law or of the charter or by-laws of the Company
or of any indenture, loan agreement or other contract, order or decree which is
binding upon the Company; and (e) the Amended Credit Agreement is the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
SECTION 4 EFFECTIVENESS. The amendment set forth in Section 1 above, and
------------- ---------
the consent set forth in Section 2 above, shall become effective, as of the day
---------
and year first above written, on such date (the "Second Amendment Effective
Date") when the Agent shall have received a counterpart of this Amendment
executed by the Company, the Agent and the Required Banks (or, in the case of
any party other than the Company from which the Agent has not received a
counterpart hereof, facsimile confirmation of the execution of a counterpart
hereof by such party).
SECTION 5 MISCELLANEOUS.
-------------
5.1 Continuing Effectiveness, etc. As herein amended, the Credit
------------------------------
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the Second Amendment Effective Date, all
references in the Credit Agreement, the Notes, each other Loan Document and any
similar document to the "Credit Agreement" or similar terms shall refer to the
Amended Credit Agreement.
5.2 Counterparts. This Amendment may be executed in any number of
------------
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
5.3 Expenses. The Company agrees to pay the reasonable costs and expenses
--------
of the Agent (including reasonable attorney's fees and changes) in connection
with the preparation, execution and delivery of this Amendment.
-2-
5.4 Governing Law. This Amendment shall be a contract made under and
-------------
governed by the internal laws of the State of Illinois applicable to contracts
made and to be performed entirely within such State.
5.5 Successors and Assigns. This Amendment shall be binding upon the
----------------------
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-3-
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED RENTALS, INC.
By_____________________________
Title__________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By_____________________________
Title__________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By_____________________________
Title__________________________
COMERICA BANK
By_____________________________
Title__________________________
BANKBOSTON, N.A.
By_____________________________
Title__________________________
-4-
SCHEDULE I
-5-
