EXHIBIT 99.1
SECOND AMENDMENT dated as of September 30, 2002
(this "Amendment"), among UNITED RENTALS , INC.
("Holdings"), UNITED RENTALS (NORTH AMERICA), INC. (the
"U.S. Borrower"), UNITED RENTALS OF CANADA, INC. ("UR
Canada"), UNITED RENTALS OF NOVA SCOTIA (NO. 1), ULC, a Nova
Scotia unlimited liability company ("UR Nova Scotia (No. 1)"
and, together with the U.S. Borrower and UR Canada, the
"Borrowers"), the lenders party hereto, JPMORGAN CHASE BANK
(formerly known as THE CHASE MANHATTAN BANK), as U.S.
administrative agent (in such capacity, the "U.S.
Administrative Agent"), and X.X. XXXXXX BANK CANADA
(formerly known as XXX XXXXX XXXXXXXXX XXXX XX XXXXXX), as
Canadian administrative agent (in such capacity, the
"Canadian Administrative Agent" and, together with the U.S.
Administrative Agent, the "Administrative Agents").
A. Reference is made to the Amended and Restated Credit Agreement dated
as of April 20, 2001 (as amended by the First Amendment dated as of October 2,
2001, among Holdings, UR Nova Scotia (No. 1), the U.S. Borrower, UR Canada, the
lenders party thereto, the U.S. Administrative Agent and the Canadian
Administrative Agent and as further amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among Holdings, the U.S. Borrower,
UR Canada, the lenders party thereto, the U.S. Administrative Agent and the
Canadian Administrative Agent. Capitalized terms used but not otherwise defined
herein have the meanings assigned to them in the Credit Agreement.
B. Holdings and the Borrowers have requested that the Required Lenders
and the Issuing Bank amend certain provisions of the Credit Agreement. The
Required Lenders and the Issuing Bank are willing to agree to such amendments on
the terms and subject to the conditions of this Amendment.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Section 1.01 of the Credit Agreement. (a) The
definition of the term "Consolidated Net Income" in Section 1.01 of the
Credit Agreement is hereby deleted in its entirety and replaced with
the following:
""Consolidated Net Income" means, with respect to Holdings and its
Subsidiaries for any period, the net income (or loss) of Holdings and its
Subsidiaries for such period, excluding (a) any extraordinary gains during
such period, (b) if such period includes the Fiscal Quarter ending June
30, 2001, (i) up to $27,000,000 of financing fees incurred and written-off
in such Fiscal Quarter as a result of the Transactions and (ii) up to
$40,000,000 of charges taken in such Fiscal Quarter related to store
closings and work force reductions, (c) any non-cash charges during such
period attributable to the impairment of goodwill, (d) any non-cash
charges during such period attributable to the amortization of deferred
stock compensation, (e) any non-cash expenses during such period
attributable to stock options and warrants with respect to Equity
Interests in Holdings and (f) up to $40,000,000 of charges related to
store closings and work force reductions initiated during any Fiscal
Quarter ending on or after September 30, 2002 through March 31, 2003."
(b) The definition of the term "Net Worth" in Section 1.01 of the Credit
Agreement is hereby amended by inserting immediately following the text
"Consolidated Net Income" in the fifth line of such definition the text "and the
non-cash charges attributable to the impairment of goodwill (net of any tax
benefits relating to such charges) referred to in clause (c) of the definition
of Consolidated Net Income".
(c) The definition of the term "Hedging Agreement" in Section 1.01 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following:
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""Hedging Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing
risk or value or any similar transaction or any combination of these
transactions; provided that no (a) phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of Holdings or the
Subsidiaries or (b) stock options, warrants or other agreements (including
acquisition agreements) providing for the issuance of Equity Interests or
of stock options, warrants or other rights to acquire Equity Interests
shall be a Hedging Agreement."
SECTION 2. Amendment to Section 2.05 of the Credit Agreement. Section
2.05 of the Credit Agreement is hereby amended by deleting the amount
"$100,000,000" in paragraph (b) thereof and replacing it with the amount
"$175,000,000".
SECTION 3. Amendments to Article VI of the Credit Agreement. (a)
Section 6.01 of the Credit Agreement is hereby amended by deleting
paragraph (a) thereof in its entirety and replacing it with the
following:
"(a) Minimum Interest Coverage Ratio. Holdings will not permit
the Interest Coverage Ratio for any Computation Period ending during any period
set forth below to be less than the ratio set forth opposite such period:
Period Ratio
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On or before June 30, 2002 1.75 to 1.0
July 1, 2002 through 1.50 to 1.0
December 31, 2003
January 1, 2004 and thereafter 1.75 to 1.0
(b) Section 6.02 of the Credit Agreement is hereby amended by deleting
paragraph (m) thereof in its entirety and replacing it with the following:
"(m) Hedging Obligations incurred to (a) hedge or mitigate risks to which
Holdings or any Subsidiary has exposure or (b) effectively cap, collar or
exchange interest rates (from fixed to floating rates, from one floating
rate to another floating rate, from floating to fixed rates or otherwise)
with respect to any interest-bearing liability or investment of Holdings
or any Subsidiary; provided that, in the case of sub-clause (b) of this
paragraph (m), at all times prior to September 30, 2003, after giving
effect to all Hedging Agreements entered into pursuant to this clause (m),
at least 50% of the aggregate outstanding principal amount of (i) Term
Loans, Incremental Term Loans, Senior Notes, Subordinated Debt and QuIPS
Debentures plus (ii) other senior notes, subordinated notes and term loans
of Holdings and its Subsidiaries incurred pursuant to Section 6.02(b) of
the Credit Agreement is effectively subject to fixed rates of interest;
provided further that, notwithstanding anything in this Agreement to the
contrary, (A) Holdings will not, and will not permit any Subsidiary to,
incur any Hedging Obligations except as provided in this clause (m), (B)
the only Hedging Obligations that Holdings and its Subsidiaries may incur
pursuant to this clause (m) (1) with respect to Equity Interests of
Holdings and its Subsidiaries and the QuIPS Preferred Securities will be
for purposes of protection from changes in the price of Holdings's common
stock and (2) with respect to Subordinated Debt, Senior Notes or QuIPS
Debentures will be those permitted by sub-clause (b) above and (C)
Holdings and its Subsidiaries will not incur any Hedging Obligations for
speculative purposes."
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(c) Section 6.04 of the Credit Agreement is hereby amended by inserting
the text "QuIPS Preferred Securities," immediately following the text "Equity
Interests," in clause (vi) of the proviso in the first sentence of such Section.
SECTION 4. Representations and Warranties. Each of Holdings and the
Borrowers hereby represents and warrants to and agrees with each Lender and the
Administrative Agents that:
(a) The representations and warranties set forth in Article III of the
Credit Agreement are true and correct in all material respects with the
same effect as if made on the Second Amendment Effective Date (as defined
below), except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and
warranties are true and correct as of such earlier date.
(b) Each of Holdings and the Borrowers has the requisite power and
authority to execute, deliver and perform its obligations under this
Amendment and to perform its obligations under the Credit Agreement as
amended by this Amendment.
(c) The execution, delivery and performance by each of Holdings and the
Borrowers of this Amendment and the performance by each of Holdings and
the Borrowers of the Credit Agreement, as amended by this Amendment, (i)
does not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority, except such as have
been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Loan Documents, (ii) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of Holdings or any Subsidiary or any order of any
Governmental Authority, (iii) will not violate or result in a default
under any indenture, agreement or other instrument binding upon Holdings
or any Subsidiary or its assets that is material to Holdings and its
Subsidiaries, taken as a whole, or give rise to a right thereunder to
require any payment to be made by Holdings or any Subsidiary and (iv) will
not result in the creation or imposition of any Lien on any asset of
Holdings or any Subsidiary, except Liens created under the Loan Documents.
(d) This Amendment has been duly executed and delivered by each of
Holdings and the Borrowers. Each of this Amendment and the Credit
Agreement, as amended by this Amendment, constitutes a legal, valid and
binding obligation of each of Holdings and the Borrowers, enforceable
against each of Holdings and the Borrowers in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.
(e) As of the Second Amendment Effective Date, no Default has occurred
and is continuing.
SECTION 5. Conditions to Effectiveness. This Amendment shall become
effective as of the date of the satisfaction in full of the following conditions
precedent (the "Second Amendment Effective Date"):
(a) The Administrative Agents shall have received (a) duly executed
counterparts hereof that, when taken together, bear the authorized
signatures of Holdings, the Borrowers, the Administrative Agents, the
Required Lenders and the Issuing Bank and (b) the amendment fees required
to be paid by Holdings and the Borrowers pursuant to Section 8 hereof,
provided that the representations and warranties set forth in Article III
of the Credit Agreement are true and correct in all material respects as
of the date that the last of such counterparts is received, except to the
extent such representations and warranties expressly relate to an earlier
date.
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(b) The Administrative Agents shall have received all other amounts due
and payable under this Amendment and the Credit Agreement on or prior to
the Second Amendment Effective Date, including, to the extent invoiced,
all reasonable out-of-pocket costs and expenses of the Administrative
Agents (including, without limitation, the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx, counsel for the Administrative
Agents).
SECTION 6. Credit Agreement. Except as specifically stated herein, the
Credit Agreement shall continue in full force and effect in accordance with the
provisions thereof.
SECTION 7. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 8. Amendment Fee. In consideration of the agreements of the
Lenders contained in this Amendment, Holdings and the Borrowers agree to pay
promptly to the Administrative Agents, for the account of each Lender that
delivers an executed counterpart of this Amendment at or prior to 5:00 p.m., New
York time, on September 30, 2002, an amendment fee in an amount equal to 0.125%
of the sum of such Lender's Revolving Commitment and outstanding Term Loans;
provided that such fee shall not be payable unless and until all conditions to
the effectiveness of this Amendment as provided in Section 5 hereof (other than
payment of such amendment fee) shall have been satisfied.
SECTION 9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall constitute but one instrument. Delivery of an executed
counterpart of a signature page of this Amendment by telecopy shall be effective
as delivery of a manually executed counterpart of this Amendment.
SECTION 10. Expenses. Holdings and the Borrowers agree to reimburse the
Administrative Agents for their out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Xxxxx, counsel for the Administrative Agents.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date first above
written.
UNITED RENTALS, INC.,
by
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Name:
Title:
UNITED RENTALS (NORTH AMERICA), INC.,
by
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Name:
Title:
UNITED RENTALS OF CANADA, INC.,
by
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Name:
Title:
UNITED RENTALS OF NOVA SCOTIA
(NO. 1), ULC,
by
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Name:
Title:
JPMORGAN CHASE BANK, individually and
as U.S. Administrative Agent and
Issuing Bank,
by
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Name:
Title:
SIGNATURE PAGE to SECOND AMENDMENT
dated as of September 30, 2002,
to the Credit Agreement
Name of Institution:
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By:
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Name:
Title:
SIGNATURE PAGE to SECOND AMENDMENT
dated as of September 30, 2002,
to the Credit Agreement
Name of Institution:
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By:
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Name:
Title:
By:
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Name:
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