UNITED RENTALS, INC.
Common Stock, $.01 par value
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Underwriting Agreement
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Exhibit 1.1
, 2001
Xxxxxxx, Xxxxx & Co.,
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The stockholder of United Rentals, Inc., a Delaware corporation (the
"Company"), named in Schedule I hereto (the "Selling Stockholder") proposes,
subject to the terms and conditions stated herein, to sell to the Underwriters
named in Schedule II hereto (the "Underwriters") an aggregate of 9,000,000
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of the
Company and, at the election of the Underwriters, up to 1,350,000 additional
shares of Common Stock. The 9,000,000 shares to be sold by the Selling
Stockholder are herein called the "Firm Shares" and the 1,350,000 additional
shares to be sold by the Selling Stockholder are herein called the "Optional
Shares". The Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Shares".
1. (a) The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(1) A registration statement on Form S-3 (File No. 333-64662) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, for each of the other Underwriters, have been declared
effective by the Commission in such form, other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore been
filed with the Commission; and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at the time it was
declared effective; and (ii) the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time such
part of the Initial Registration Statement became effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively called
the "Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement);
(2) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein or by the Selling
Stockholder expressly for use in the preparation of the answers therein to
Item 7 of Form S-3;
(3) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be,
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conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and as of such date none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(4) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein or
by the Selling Stockholder expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(5) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are independent
certified public accountants with respect to the Company and its
subsidiaries within the meaning of Regulation S-X under the Act;
(6) Each of the historical financial statements included in the
Registration Statement, together with related schedules and notes, present
fairly (on a consolidated basis where so indicated) the financial condition
of the entity or entities to which such financial statement purports to
relate (the "Reported Entity") at the date(s) indicated and the statement
of operations (or income or earnings as indicated in the applicable
financial statement) and cash flows and (in the case of a Reported Entity
for which a statement of stockholders' equity is included) stockholders'
equity (and partners' capital if so indicated in the applicable financial
statement) of the Reported Entity for the period(s) specified; said
financial statements have been prepared in conformity with generally
3
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as otherwise indicated in such
financial statements). Any supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected historical
financial information and the summary historical financial information
included in the Registration Statement present fairly the information shown
therein and, in the case of historical financial data or information of the
Company, have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement;
(7) The Company has not taken or caused to be taken and will not take
or cause to be taken, either directly or indirectly, any action designed to
cause or result in, or which action constitutes or which might reasonably
be expected to constitute, the stabilization or manipulation of the market
price of any security in contravention of any applicable law, including but
not limited to those actions prohibited by Section 9(a) of the Exchange
Act, the rules and regulations thereunder and Regulation M promulgated by
the Commission;
(8) Neither the Company nor any of the Subsidiaries (as defined below)
has sustained since the date of the latest financial statements included or
incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree which would be material to the Company and the
Subsidiaries taken as a whole, otherwise than as reserved for as disclosed
in the Company's financial statements; and since the respective dates as of
which information is given in the Prospectus, except as otherwise stated
therein, (i) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise
(a "Material Adverse Effect"), whether or not arising in the ordinary
course of business; (ii) there has not been any change in the capital stock
of the Company (other than the issuance of Common Stock issued pursuant to
outstanding stock options) or increase in the long-term debt (other than
accretion or scheduled repayments thereof and other than borrowing under
the Company's existing revolving credit facility made in the ordinary
course of business) of the Company and the Subsidiaries taken as a whole;
(iii) there have been no transactions entered into by the Company or any of
the Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and the Subsidiaries
considered as one enterprise; and (iv) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock;
(9) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement; and the Company is
duly qualified as a
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foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
cause a Material Adverse Effect;
(10) Each subsidiary of the Company that is a corporation or
partnership (each, a "Subsidiary") has been duly organized and is validly
existing as a corporation or limited partnership in good standing under the
laws of the jurisdiction of its organization, has corporate or partnership
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation or limited partnership to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as otherwise
disclosed in the Prospectus, all of the issued and outstanding capital
stock of each such Subsidiary that is a corporation has been duly
authorized and validly issued, is fully paid and non-assessable and all of
the outstanding partnership interests of each such Subsidiary that is a
limited partnership has been issued in accordance with the applicable
limited partnership law; all of such outstanding capital stock and
partnership interests of each such Subsidiary is owned by the Company,
directly or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (except for any
security interest or pledge contemplated by the Amended and Restated Credit
Agreement, dated as of April 20, 2001, among the Company, United Rentals
(North America), Inc. ("URNA"), various financial institutions and The
Chase Manhattan Bank, as U.S. Administrative Agent (the "Credit
Agreement")); none of the outstanding shares of capital stock or
partnership interests of any Subsidiary was issued in violation of the
preemptive or similar rights of any security holder of such Subsidiary. The
only Subsidiaries of the Company (other than inactive Subsidiaries) are the
Subsidiaries listed in a certificate of officers of the Company to be
delivered to Xxxxxxx, Xxxxx & Co. prior to the Time of Delivery and each
Subsidiary of the Company which constitutes a "significant subsidiary" (as
such term is defined in Rule 1-02 of Regulation S-X under the Act) (each, a
"Significant Subsidiary"), is marked with a "*" in such certificate;
(11) The Company has an authorized capitalization as set forth in the
Prospectus. As of , 2001, there were shares of Common Stock
outstanding. The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
security holder of the Company;
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(12) This Agreement has been duly authorized, executed and delivered
by the Company;
(13) The Shares sold by the Selling Stockholder to the Underwriters
hereunder have been duly and validly authorized and are duly and validly
issued and fully paid and non-assessable and conform to the description of
the Common Stock contained in the Prospectus;
(14) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Common Stock and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair in
all material respects;
(15) Neither the Company nor any of its Subsidiaries is in violation
of its charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them may be bound, or to which
any of the property or assets of the Company or any of its Subsidiaries is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and any other
agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Prospectus and the consummation of the
transactions contemplated herein and in the Prospectus and compliance by
the Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singly or in the aggregate, would not result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or
any of their assets or properties. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
Subsidiaries;
(16) No labor dispute with the employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is imminent, and
the
6
Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of its Subsidiaries' principal
suppliers, manufacturers, customers or contractors, which, in either
case, may reasonably be expected to result in a Material Adverse
Effect;
(17) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary thereof
which is required to be disclosed in the Prospectus (other than as
will be disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the consummation of this
Agreement or the performance by the Company of its obligations
hereunder. The aggregate of all pending legal or governmental
proceedings to which the Company or any Subsidiary thereof is a party
or of which any of their respective property or assets is the subject
which are not described in the Prospectus including ordinary routine
litigation incidental to the business, would not reasonably be
expected to result in a Material Adverse Effect;
(18) There are no contracts or documents which are required to be
described in the Prospectus which will not be so described;
(19) The Company and its Subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade
names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them,
and neither the Company nor any of its Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property or
of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company
or any of its Subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in
a Material Adverse Effect;
(20) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder or by the
Company in connection with the offering, issuance or sale of the
Shares hereunder or the consummation of the transactions contemplated
by this Agreement; except (i) the registration under the Act of the
Shares; (ii) such as may be required under foreign or state securities
or blue sky laws in connection with the purchase and distribution of
the Shares by the Underwriters; and (iii) such as may be required
after the Time of Delivery pursuant to the Company's periodic
reporting requirements on its Annual Report
7
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports an
Form 8-K to be filed with the Commission under Sections 13 and 15(d),
respectively, of the Exchange Act;
(21) The Company and its Subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, except where the failure to so
possess such Government Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not have, singly or in the aggregate, a Material Adverse
Effect; and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect;
(22) The Company and its Subsidiaries have good and marketable
title to all real property described in the Prospectus as owned by the
Company and its Subsidiaries and good title to all other properties
described in the Prospectus as owned by them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (i) are
pursuant to or permitted by the Credit Agreement as described in the
Prospectus or (ii) do not, singly or in the aggregate, materially
interfere with the use made and proposed to be made of such property
by the Company or any of its Subsidiaries; and all of the leases and
subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the
Company or any of its Subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or
any Subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease, which claim, if upheld,
would result in a Material Adverse Effect;
(23) Neither the Company nor any Subsidiary is, or upon the sale
of the Shares as herein contemplated will be, an "investment company"
or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act");
(24) Except as described in the Prospectus or except as would
not, singly or in the aggregate, result in a Material Adverse Effect:
(i) neither the
8
Company nor any of its Subsidiaries is in violation of any
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment
(including ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including laws and regulations
relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental
Laws"); (ii) neither the Company nor any of its Subsidiaries is
lacking any permits, authorizations and approvals required under
any applicable Environmental Laws or are in violation of the
requirements of such Environmental Laws; (iii) there are no
pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries;
and (iv) to the knowledge of the Company there are no events or
circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its Subsidiaries
relating to Hazardous Materials or any Environmental Laws;
(25) Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and
market-related data included in the Prospectus are not based on
or derived from sources that are reliable and accurate in all
material respects;
(26) The Company and each of its Subsidiaries have filed all
necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to
extensions) and have paid all taxes shown as due thereon (except
where the failure to so file or pay would not, singly or in the
aggregate, have a Material Adverse Effect), and there is no tax
deficiency that has been, or to the knowledge of the Company is
likely to be, asserted against the Company, any of its
Subsidiaries or any of their properties or assets that would
result in a Material Adverse Effect, except for taxes that are
being contested in good faith by appropriate proceedings and with
respect to which the Company has established adequate reserves in
accordance with GAAP;
(27) Neither the Company nor any of its Subsidiaries is or
has ever been a Personal Holding Company within the meaning of
Section 542 of the Internal Revenue Code of 1986, as amended;
(28) Neither the Company nor any Subsidiary has received
notice from any insurer providing insurance coverage for the
Company and its Subsidiaries or agent of such insurer that
capital improvements or other expenditures will have to
9
be made in order to continue present insurance coverage, except such
as would not reasonably be expected, singularly or in the aggregate,
to have a Material Adverse Effect;
(29) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences;
(30) Other than pursuant to this Agreement, there are no
contracts, agreements or understandings between either the Company or
its Subsidiaries and any person that give rise to a valid claim
against the Company, any of its Subsidiaries or the Underwriters for a
brokerage commission, finder's fee or other like payment relating to
the transactions contemplated hereby;
(31) No person or entity has the legal right by contract or
otherwise to require registration under the Act of shares of capital
stock or other securities convertible into capital stock of the
Company solely because of the filing or effectiveness of the
Registration Statement and the consummation of the transactions
contemplated by this Agreement (such rights are hereinafter referred
to as "Registration Rights"), except for any such rights that have
been waived in writing;
(32) Neither the Company nor any of its Subsidiaries has violated
any provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect; and
(33) Any certificate signed by any officer of the Company or any
of its Subsidiaries delivered to the Underwriters or to counsel for
the Underwriters pursuant to this Agreement shall be deemed a
representation and warranty by the Company to the Underwriters as to
the matters covered thereby.
(b) Each of the Selling Stockholder and Xxxxxxx X. Xxxxxxx, jointly
and severally, represents and warrants to, and agrees with, each of the
Underwriters that:
(1) No consent, approval, authorization or order is required for
the execution and delivery by such Selling Stockholder of this
Agreement, the Power of Attorney or the Custody Agreement hereinafter
referred to, or for the sale and delivery of the Shares to be sold by
such Selling Stockholder hereunder, except such as have been obtained
under the Act and such as may be required under state
10
securities or Blue Sky laws or securities laws of any jurisdiction
outside the United States in connection with the purchase and
distribution of such Shares by the Underwriters; and such Selling
Stockholder has full right, power and authority to enter into this
Agreement, the Power-of-Attorney and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder;
(2) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of
its obligations under this Agreement, the Power of Attorney and the
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound
or to which any of the property or assets of such Selling Stockholder
is subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation, any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder, except that no representation is made under this
paragraph (2) as to any violation under any state securities or Blue
Sky laws or securities laws of any jurisdiction outside the United
States in connection with the purchase and distribution of the Shares
by the Underwriters;
(3) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold
by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters;
(4) The Selling Stockholder and Xxxxxxx X. Xxxxxxx will comply
with the terms of the letter agreement, dated July 3, 2001, among the
Selling Stockholder, Ayr, Inc., a California Corporation ("Ayr"), the
Xxxxxxx Foundation and Xxxxxxx X. Xxxxxxx addressed to Xxxxxxx, Xxxxx
& Co.;
(5) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(6) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity
11
with written information furnished to the Company by such Selling
Stockholder expressly for use therein, such Preliminary Prospectus and
the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(7) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you, prior to
or at the Time of Delivery (as hereinafter defined), a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(8) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and
delivered by such Selling Stockholder to Xxxxxx, Xxxxxx & Xxxxx LLP,
as custodian (the "Custodian"), and such Selling Stockholder has duly
executed and delivered a Power of Attorney, in the form heretofore
furnished to you (the "Power of Attorney"), appointing the persons
indicated in Schedule I hereto, and each of them, as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement on behalf of such
Selling Stockholder, to authorize the delivery of the Shares to be
sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement;
(9) The Shares represented by the certificates held in custody
for such Selling Stockholder under the Custody Agreement are subject
to the interests of the Underwriters hereunder; the arrangements made
by such Selling Stockholder for such custody, and the appointment by
such Selling Stockholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable; the obligations of the
Selling Stockholder hereunder shall not be terminated by operation of
law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by
the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Stockholder
or any such executor or trustee should die or become incapacitated, or
if any such estate or trust should be terminated, or if any such
partnership or corporation should be dissolved, or if any other such
event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by
12
or on behalf of the Selling Stockholder in accordance with the terms and
conditions of this Agreement and the Custody Agreement; and actions taken
by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as
valid as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event; and
(10) The sale of the Shares by the Selling Stockholder is not subject
to the preemptive or other similar rights of any securityholder of the
Company arising under any applicable contract of such Selling Stockholder.
(c) Ayr represents and warrants to, and agrees with, each of the
Underwriters that:
(1) No consent, approval, authorization or order is required for the
execution and delivery by Ayr of this Agreement and Ayr has full right,
power and authority to enter into this Agreement;
(2) Ayr will comply with the terms of the letter agreement, dated July
3, 2001, among the Selling Stockholder, Ayr, the Xxxxxxx Foundation and
Xxxxxxx X. Xxxxxxx addressed to Xxxxxxx, Xxxxx & Co.; and
(3) The representations and warranties of the Selling Stockholder and
Xxxxxxx X. Xxxxxxx contained in Section 1(b) are true and correct.
2. Subject to the terms and conditions herein set forth, (a) the Selling
Stockholder agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder, at a purchase price per share of $ , the number of Firm Shares (to
be adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares to be sold by the Selling
Stockholder as set forth opposite its name in Schedule I hereto by a fraction,
the numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
II hereto and the denominator of which is the aggregate number of Firm Shares to
be purchased by all of the Underwriters from the Selling Stockholder hereunder;
and (b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Selling Stockholder
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Selling Stockholder, at the
purchase price per share set forth in clause (a) of this Section 2, that portion
of the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule II hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
13
The Selling Stockholder, as and to the extent indicated in Schedule II
hereto, hereby grants to the Underwriters the right to purchase at their
election up to 1,350,000 Optional Shares, at the purchase price per share set
forth in the paragraph above, for the sole purpose of covering over-allotments
in the sale of the Firm Shares. Any such election to purchase Optional Shares
may be exercised only by written notice from you to the Selling Stockholder,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Attorneys-in-Fact otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Selling Stockholder shall be delivered by or on behalf of the
Selling Stockholder to Xxxxxxx, Sachs & Co., through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Custodian to Xxxxxxx, Xxxxx & Co., at least forty-eight hours in advance. The
Selling Stockholder will cause the certificates representing the Shares to be
made available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto at the office of
Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York time, on , 2001 or such other time and
date as Xxxxxxx, Xxxxx & Co., the Company and the Selling Stockholder may agree
upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York
time, on the date specified by Xxxxxxx, Sachs & Co., in the written notice given
by Xxxxxxx Xxxxx & Co., of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxxxx, Sachs & Co., the Company and the
Selling Stockholder may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(l) hereof, will be delivered at the offices of Cravath,
Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location prior to
such Time of Delivery, at which meeting the final drafts of the
14
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus prior to the last Time of Delivery which shall be disapproved by
you promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with copies of the Prospectus and each amendment
or supplement thereto in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at any
time prior to the expiration of nine months after the date of the
Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus
as then amended or supplemented would include
15
an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, to notify you and upon your request to
file such documents and to prepare and furnish without charge to the
Underwriters and to any dealer in securities as many copies as you may
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect
such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Prospectus complying with Section 10(a)(3) of
the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any shares of any class of common
stock of the Company or any other securities that are convertible
into, or exercisable or exchangeable for, or that represent the right
to receive, common stock of the Company, without your prior written
consent. The foregoing agreement will not limit the Company's ability
to (i) make equity or equity-based awards pursuant to existing written
compensation plans; (ii) issue shares upon exercise or conversion of
outstanding options, warrants and convertible securities; (iii) issue
shares, warrants or convertible securities as consideration for
acquisitions, provided that the number of shares, warrants or
convertible securities (calculated on a common stock equivalent basis
in the case of warrants and convertible securities) that may be issued
as consideration for acquisitions may not exceed 5,000,000 unless the
recipients of such excess shares, warrants or convertible securities
agree with the Company (which agreement may not be amended without the
prior written consent of Xxxxxxx, Sachs & Co.) to be subject to the
foregoing lock-up agreement with respect to such excess shares,
warrants or convertible securities; or (iv) issue shares upon the
exercise of any warrants or convertible securities issued pursuant to
the preceding clause provided that such shares will be subject to the
foregoing lock-up to the same extent, if any, as the warrants or
convertible securities pursuant to which such shares were issued;
16
(f) Not to be or become, at any time prior to the expiration of two
years after the last Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the 1940
Act;
(g) During a period of five years from the date of the Prospectus, to
furnish to you copies of all reports or other communications (financial or
other) furnished to stockholders of the Company generally, and to deliver
to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
securities exchange on which the Common Stock or any class of securities of
the Company is listed; and (ii) such additional public information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission); and
(h) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
6. The Company and the Selling Stockholder covenant and agree with one
another and with the Underwriter that (a) the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, the Blue
Sky and Legal Investment Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the cost of
preparing stock certificates; (vi) the costs and charges of any transfer agent
and registrar; (vii) the fees and expenses of counsel for the Selling
Stockholder in an amount not to exceed $30,000; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section; and (b) Selling Stockholder
will pay or cause to
17
be paid all costs and expenses incident to the performance of such Selling
Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Stockholder in excess of $30,000; (ii) the fees and expenses of the
Attorneys-in-Fact and the Custodian; and (iii) all expenses and taxes incident
to the sale and delivery of the Shares to be sold by such Selling Stockholder to
the Underwriters hereunder. The Selling Stockholder shall also reimburse the
Company for travel expenses to the extent required by the letter agreement dated
as of July 3, 2001, among the Company, Xxxxxxx X. Xxxxxxx, the Selling
Stockholder, the Xxxxxxx Foundation and Ayr. In connection with clause (b)(iii)
of the second preceding sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New York
State stock transfer tax, and the Selling Stockholder agrees to reimburse
Xxxxxxx, Sachs & Co. for associated carrying costs if such tax payment is not
rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that the Company shall bear, and the Selling
Stockholder shall not be required to pay or to reimburse the Company for, any
other cost incurred by the Company for matters not directly relating to the sale
and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section 6 and in Sections 8 and 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Shares by them, and any
advertising expenses connected with any offers they may make. In connection with
clause (a)(viii) of the first sentence of this Section 6, Xxxxxxx, Xxxxx & Co.
agrees to pay one-half of the cost of chartering private jet service for travel
by the Company and Xxxxxxx, Sachs & Co. to road show presentations in connection
with the offering.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholder, Ayr and Xxxxxxx X. Xxxxxxx herein
are, at and as of such Time of Delivery, true and correct, the condition that
the Company and the Selling Stockholder shall have performed all of its and
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Cravath, Swaine & Xxxxx, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to the matters as you may reasonably request, and such counsel
shall
18
have received such papers, and information as they may reasonably request
to enable them to pass upon such matters;
(c) Xxxxxxxxxx Xxxxxxxxx & Xxxxxx LLP, counsel for the Company, shall
have furnished to you their written opinion, dated such time of Delivery,
in form and substance satisfactory to you, to the effect set forth in Annex
II hereto;
(d) Weil, Gotshal & Xxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect set forth in Annex
III hereto;
(e) Xxxxxx, Xxxxxx & Xxxxx LLP, counsel for the Selling Stockholder,
shall have furnished to you their written opinion with respect to the
Selling Stockholder, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms, except as may be
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting
creditors' rights generally (including without limitation,
fraudulent conveyance laws) and by general principles of
equity, including without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and
the possible unavailability of specific performance or
injunctive relief, regardless of whether considered in a
proceeding in equity or at law;
(ii) This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and
the compliance by such Selling Stockholder with its
obligations under this Agreement, the Power-of-Attorney and
the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, (A)
any statute; or (B) any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject that has been
identified as being material to such Selling Stockholder on
a certificate provided to such counsel by such Selling
Stockholder, nor will such action result in any violation of
19
the provisions of the Articles of Incorporation or any
order, rule or regulation of any California, New York,
Delaware or federal court or governmental agency or
body having jurisdiction ever such Selling Stockholder
or the property of such Selling Stockholder that has
been identified by such Selling Stockholder on a
certificate provided to such counsel;
(iii) No consent, approval, authorization or order of any
California, New York, Delaware or federal governmental
authority that such counsel has, in the exercise of
customary professional diligence, recognized as
applicable to the Selling Stockholder or transactions
of the type contemplated by this Agreement, the Custody
Agreement and the Power of Attorney is required for the
consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by
such Selling Stockholder hereunder, except such as have
been obtained under the Act and such as may be required
under state securities or Blue Sky laws or securities
laws of jurisdictions outside the United States in
connection with the purchase and distribution of such
Shares by the Underwriters; and
(iv) Assuming that the Underwriters purchased the Shares
without notice of any adverse claim, the Underwriters
will acquire such Shares free and clear of any adverse
claim.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(f) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, each accounting firm whose report is included or
incorporated by reference in the Prospectus shall have furnished to
you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto;
(g) (i) Neither the Company nor any of the Subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or
20
decree, which would be material to the Company and the Subsidiaries taken
as a whole otherwise than as set forth or contemplated in the Prospectus or
reserved for as disclosed in the Company's financial statements or
financial statements of certain Subsidiaries included in the Prospectus;
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt (other than accretion thereof and other than borrowings in
the ordinary course of business under the Credit Facility with respect to
working capital requirements for the ongoing operation of the Company and
the Subsidiaries) of the Company and the Subsidiaries taken as a whole or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of Xxxxxxx, Sachs & Co. so material
and adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in this Agreement and
in the Prospectus;
(h) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act; and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange or on the National Association of
Securities Dealers Automated Quotation System; (ii) a suspension or
material limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of Xxxxxxx, Xxxxx & Co.
makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in this Agreement and in the
Prospectus;
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(k) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholder, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the
21
Selling Stockholder, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholder
of all of their respective obligations hereunder to be performed at or
prior to such time of Delivery, and as to such other matters as you may
reasonably request, and the Company shall have furnished or caused to be
furnished certificates as to the matters set forth in subsections (a) and
(g) of this Section.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein.
(b) The Selling Stockholder and Xxxxxxx X. Xxxxxxx, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder expressly
for use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred. Notwithstanding anything herein to the contrary, the aggregate
liability of the Selling Stockholder and Xxxxxxx X. Xxxxxxx pursuant to this
Section will be limited to an amount equal to the total proceeds (before
deducting underwriting discounts and commissions) received by such Selling
Stockholder pursuant to this Agreement.
22
(c) Each Underwriter will indemnify and hold harmless the Company, the
Selling Stockholder and Xxxxxxx X. Xxxxxxx against any losses, claims, damages
or liabilities to which the Company, such Selling Stockholder or Xxxxxxx X.
Xxxxxxx may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx
& Co. expressly for use therein; and will reimburse the Company and the Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying partly shall, without the written consent of the indemnified
partly, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim; and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. An
indemnifying party shall not be required to indemnify an indemnified party
hereunder with respect to any settlement or compromise of, or consent to entry
of any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder if (i)
such settlement, compromise or consent is entered into or made or
23
given by the indemnified party without the consent of the indemnifying party;
and (ii) the indemnifying party has not unreasonably withheld or delayed any
such consent.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received, in case of the Company, the Selling Stockholder and Xxxxxxx X.
Xxxxxxx, by the Company and the Selling Stockholder on the one hand and, in the
case of the Underwriters, the Underwriters on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (d) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of, in the case of the Company, the Selling
Stockholder and Xxxxxxx X. Xxxxxxx, the Company and the Selling Stockholder on
the one hand and, in the case of the Underwriters, the Underwriters on the other
in connection with the statement or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholder or
Xxxxxxx X. Xxxxxxx on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholder, Xxxxxxx X. Xxxxxxx and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the
24
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company, the Selling Stockholder and Xxxxxxx X.
Xxxxxxx under this Section 8 shall be in addition to any liability which the
Company, the Selling Stockholder and Xxxxxxx X. Xxxxxxx may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and the
Selling Stockholder and to each person, if any, who controls the Company or the
Selling Stockholder within the meaning of the Act. The Company, the Selling
Stockholder and Xxxxxxx X. Xxxxxxx have and may enter into other agreements
amongst themselves with respect to the indemnity obligations hereunder.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholder shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholder that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholder notify you that they have so arranged
for the purchase of such Shares, you or the Company and the Selling Stockholder
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholder shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
25
which such arrangements have not been made; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholder shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company and the Selling Stockholder to sell
the Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Stockholder, except
for the expenses to be borne by the Company and the Selling Stockholder and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Selling Stockholder, Ayr, Xxxxxxx X.
Xxxxxxx and the several Underwriters, as set forth in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or the Selling Stockholder, Ayr or
Xxxxxxx X. Xxxxxxx or any officer or director or controlling person of the
Company, the Selling Stockholder or Ayr, and shall survive delivery of and
payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Selling Stockholder as provided herein, the Selling Stockholder will reimburse
the Underwriters through you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Selling Stockholder shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you; and in all
dealings with the Selling Stockholder hereunder, you and the Company shall be
entitled to act and rely upon any statement, request, notice or agreement on
behalf of such Selling Stockholder made or given by any or all of the
Attorneys-in-Fact for such Selling Stockholder.
26
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you in care of Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; if to the
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to Xxxxxx, Xxxxxx & Xxxxx LLP, counsel for such Selling Stockholder
at 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000; and
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary, with a copy to Xxxxx X. Xxxxxx, 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; provided, however, that any notice
to an Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Stockholder by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholder and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company, the Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us eight counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and the Selling Stockholder. (It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters (U.S. Version), the form of
which shall be submitted to the Company and the Selling Stockholder for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
27
Any person executing and delivering this Agreement as Attorney-in-Fact for the
Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
UNITED RENTALS, INC.
By:
--------------------------------------
Name:
Title:
THE XXXXXXX MUSIC FOUNDATION
By:
--------------------------------------
Name:
Title: As Attorney-in-Fact acting
on behalf of the Selling
Stockholder named above.
XXXXXXX X. XXXXXXX
By:
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
AYR, INC.
By:
--------------------------------------
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
By:
-----------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
28
SCHEDULE I
Number of Optional
Total Number of Shares to be Sold if
Firm Shares Maximum Option
to be Sold Exercised
--------------- --------------------
The Xxxxxxx Music Foundation(a) 9,000,000 1,350,000
Total ............................. 9,000,000 1,350,000
(a) This Selling Stockholder is represented by Xxxxxx, Xxxxxx & Xxxxx LLP
and has appointed and , and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
29
SCHEDULE II
Number of Optional
Shares to be
Total Number of Purchased
Firm Shares if Maximum
Underwriter To be Purchased Option Exercised
----------- --------------- -----------------
Xxxxxxx, Sachs & Co.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
Deutsche Bank Alex. Xxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Total ....................................
30
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
1. We are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
2. In our opinion, the consolidated financial statements and financial
statement schedules audited by us and included in the Prospectus or
Registration Statement comply as to form in all material respects with
the applicable requirements of the Act and the related published rules
and regulations thereunder, and, if applicable, we have made a review
in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited, consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Underwriters
hereto;
3. We have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have
been separately furnished to the Underwriters and on the basis of
specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph 6(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations, nothing came to our
attention that caused us to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
4. The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
5. We have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to
our attention as a result of the foregoing procedures that caused them
to
believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
6. On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to our
attention that caused us to believe that:
(i) the unaudited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all
material respects with the applicable accounting
requirements of the Securities Act and the related published
Rules and Regulations and are not in conformity with
generally accepted accounting principles applied on the
basis substantially consistent with the basis for the
unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus;
(ii) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(iii) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (i) and
any unaudited income statement data and balance sheet items
included in the prospectus and referred to in Clause (ii)
were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements
included in the Prospectus;
(iv) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of those statements;
(v) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stork upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares
I-2
and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial
statements included in the Prospectus) or any increase in
the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by
the Underwriters, or any increases in any items specified by
the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus
except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vi) for the period from the date of the latest financial statements
included in the Prospectus to the specified date referred to
in Clause (v) there were any decreases in consolidated net
revenues or operating profit or the total or per share
amounts of consolidated net income or other items specified
by the Underwriters, or any increases in any items specified
by the Underwriters, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Underwriters, except in each case for decreases or increases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
7. In addition to the examination referred to in their report(s) included
in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs 3 and
6 above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, and have compared certain of such amounts,
percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in
agreement.
I-3
ANNEX II
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 7(c)
As to various questions of fact material to our opinion, we have relied
upon the certificates of officers and upon certificates of public officials.
With regard to the due incorporation of corporations (other than the Company)
and the good standing of corporations (other than the Company), we have (subject
to the next sentence) relied entirely upon certificates of public officials.
With regard to the tax good standing of certain corporations (other than the
Company), we have relied solely upon a certificate of an officer of such
corporation to the effect that the corporation has filed the most recent annual
report required by the law of such jurisdiction and that all franchise taxes
required to be paid under such law have been paid. We have also examined such
corporate documents and records and other certificates, and have made such
investigations of law, as we have deemed necessary in order to render the
opinion hereinafter set forth. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all documents
submitted to us as copies. We have also assumed that all documents examined by
us have been duly and validly authorized, executed and delivered by each of the
parties thereto other than the Company.
In this opinion, (i) "Significant Subsidiary" means United Rentals
Northwest, Inc., an Oregon corporation, United rentals Gulf, Inc., a Delaware
corporation, and United Equipment Rentals Gulf, L.P., a Texas limited
partnership, and (ii) "Corporate Significant Subsidiary" means each Significant
Guarantor other than United Equipment Rentals Gulf, L.P.
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
4. The Company has an authorized capitalization as set forth in the
Prospectus. As of the date hereof, there were shares of common stock,
par value $.01 per share (the "Common Stock") outstanding. At the time
of their issuance, the shares of issued and outstanding common stock
of the Company were duly authorized and validly issued and were fully
paid and non-
II-1
assessable; and none of the outstanding shares of capital stock of the
Company were issued in violation of any preemptive or other similar
rights of any security holder of the Company arising by statute or the
Company's certificate of incorporation or by-laws or, to the best of
our knowledge (after due inquiry), any other preemptive or other
similar rights of any security holder of the Company.
5. Each Corporate Significant Subsidiary is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
6. Each Corporate Significant Subsidiary has been duly incorporated and
has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus.
Except as otherwise disclosed in the Prospectus, all of the issued and
outstanding capital stock of each Significant Subsidiary has been duly
authorized and validly issued and is fully paid and non-assessable
and, to the best of our knowledge, is owned by the Company, directly
or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (except as
contemplated by the Credit Agreement). None of the outstanding shares
of capital stock of any Significant Subsidiary was issued in violation
of the preemptive or similar rights of any security holder of such
Significant Subsidiary arising pursuant to statute or such
Subsidiary's certificate of incorporation or by-laws or, to the best
of our knowledge, any other preemptive or other similar rights of any
security holder of such Significant Subsidiary.
7. United Equipment Rentals Gulf, L.P., is duly organized and validly
existing as a limited partnership under the laws of the State of Texas
and is duly qualified as a foreign limited partnership to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect. Except as otherwise disclosed in the
Prospectus, all partnership interests in such partnership have been
duly issued in accordance with the Texas Revised Limited Partnership
Act and, to the best of our knowledge, are owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except
as contemplated by the Credit Agreement).
8. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
9. If any documents are incorporated by reference in the Registration
Statement, such documents (other than the financial statements and
supporting schedules therein, as to which no opinion need be
rendered), when they were filed with the Commission, complied as to
form in all
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material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereof.
10. To the best of our knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the
Company or any Subsidiary is a party, or to which the property or
assets of the Company or any Subsidiary thereof is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the consummation of the transactions contemplated
in the Underwriting Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by the
Prospectus.
11. The information in the Prospectus under "Business-Environmental and
Safety Regulations," to the extent that it constitutes summaries of
matters of law, has been reviewed by us and is correct in all material
respects. The statements set forth in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to constitute
a summary of the terms of the Stock, are accurate summaries in all
respects of such terms.
12. To the best of our knowledge (after due inquiry), neither the Company
nor any Subsidiary is in violation of its charter or by-laws.
13. To the best of our knowledge, neither the Company nor any Subsidiary
thereof is in default in the due performance or observance of, or is
in violation of, any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is
described or referred to in the Prospectus or incorporated by
reference therein which violations or defaults are required to be
described in the Prospectus and are not so described or would,
individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect or effect the validity of the Shares.
14. No filing, authorization, approval, consent or order of any court or
governmental authority or agency (other than such as may be required
under the applicable securities laws of the various jurisdictions in
which the Shares will be offered or sold, as to which we need express
no opinion) is required by the Company in connection with the due
authorization, execution and delivery of the Underwriting Agreement or
in connection with the offering, issuance, sale or delivery of the
Shares to the Underwriters or the resale thereof by the Underwriters
in accordance with the Underwriting Agreement, except for filings and
other actions required under or pursuant to the Act, the Exchange Act,
and other federal or state securities or "blue sky" laws and the rules
of the New York Stock Exchange, as to which we express no opinion.
15. The execution, delivery and performance of the Underwriting Agreement,
and the consummation of the transactions contemplated in the
Underwriting Agreement and in the Prospectus and compliance by the
Company with its obligations under the Underwriting Agreement, (i)
after reasonable investigation, do not and will not (subject to the
next sentence),
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whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event
(as defined in Section 1(a)(15) of the Underwriting Agreement) under
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary thereof pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any
Subsidiary is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any
Subsidiary is subject (except for such conflicts, breaches or
defaults, Repayment Events or liens, charges or encumbrances that
would not have a Material Adverse Effect); (ii) result in any
violation of the provisions of the charter or by-laws of the Company
or any Subsidiary; or (iii) to the best of our knowledge (after due
inquiry), result in any violation of the provisions of any applicable
law, statute, rule or regulation of the United States of America or
included in the Delaware General Corporate Law or Delaware Revised
Uniform Limited Partnership Act (except we express no opinion as to
"blue sky" laws), judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations. No opinion is rendered
pursuant to clause (i) of the preceding sentence with respect to
(collectively, the "Excluded Agreements"): (a) any agreement relating
to any indebtedness or proposed indebtedness described in the
Company's Report of Form 10-K for the year ended December 31, 2000
under "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Certain Information Concerning the Credit
Facility and Other Indebtedness" (excluding the indebtedness described
in the paragraph that begins "Other Debt") or in any Report on 10-Q
incorporated in the Prospectus under "Recent Financing Transactions";
(ii) Master Lease Agreement, dated as of December 17, 1999, between
United Rentals (North America), Inc. and UR (NA) 1999 Trust, as
amended by the amendment thereto dated as of December 27, 2000, and
(iii) Master Lease Agreement, dated as of June 30, 2000, between
United Rentals (North America), Inc. and UR (NA) 2000 Trust, as
amended by the amendment thereto dated as of December 27, 2000.
16. The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
17. To the best of our knowledge, no person or entity has the legal right
to require registration under the Act of shares of capital stock or
other securities convertible into capital stock of the Company solely
because of the filing or effectiveness of the Registration Statement
and the consummation of the transactions contemplated by the
Underwriting Agreement (except for such rights that have been waived
in writing).
18. The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
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schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act and the rules and regulations thereunder.
In addition, we have participated in conferences with officers and
representatives of the Company, counsel to the Underwriters, representatives of
the independent accountants for the Company and the Underwriters at which the
contents of the Registration Statement and related matters were discussed.
Although we have not undertaken, except as otherwise indicated in this opinion,
to investigate or verify independently, and do not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus, except for those referred to in Clause
(10) above, on the basis of the information that we gained in the course of the
performance of such services and our representation of the Company, we confirm
to you that nothing that came to our attention in the course of such review or
representation has caused us to believe that (i) as of the effective date, the
Registration Statement or any further amendment thereto made by the Company
prior to such Time of Delivery (except for financial statements and schedules
and other financial data included or incorporated by reference therein, if any,
as to which we make no statement), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that as of its date
or the date hereof, the Prospectus or any amendment or supplement thereto
(except for financial statements and schedules and other financial data included
or incorporated by reference therein, if any, as to which such counsel need make
no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented Prospectus was issued or at the Time of Delivery,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; or
(ii) that there are any franchise agreements, indentures, mortgages, loan
agreements, notes, leases or other contracts or instruments required to be
described or referred to in the Prospectus that are not described or referred to
in the Prospectus or that any descriptions of or references to any of the
foregoing are not correct in all material respects.
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991). Such counsel may in addition rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation Law
of the State of Delaware, upon the opinions of counsel reasonably satisfactory
to counsel to the Underwriters.
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ANNEX III
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 7(d)
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as described in the Prospectus
and to enter into and perform its obligations under the Underwriting
Agreement.
2. The authorized capital stock of the Company is as set forth in the
Prospectus under the caption "Description of Capital Stock." All of
the Shares have been duly authorized and validly issued and are fully
paid and nonassessable. The Shares conform to the description of the
Common Stock set forth in the Prospectus.
3. The execution, delivery and performance of the Underwriting Agreement
by the Company have been duly authorized by all necessary corporate
action on the part of the Company. The Underwriting Agreement has been
duly and validly executed and delivered by the Company.
4. The statements contained in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources--Certain
Information Concerning Our Credit Facility" and "Description of
Capital Stock", insofar as they purport to describe the provisions of
the capital stock of the Company or matters of federal, New York or
Delaware corporate law, constitute a fair and accurate summary thereof
in all material respects.
5. No consent, approval, waiver, license or authorization or other action
by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with the execution
and delivery by the Company of the Underwriting Agreement or the
consummation by the Company of the transactions contemplated thereby,
except for filings and other actions required under or pursuant to the
Act and the Exchange Act and the rules and regulations promulgated
thereunder, any other federal or state securities or "blue sky" laws,
and the rules of the New York Stock Exchange, as to which we express
no opinion.
6. The Company is not an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the 1940 Act.
7. The execution and delivery by the Company of the Underwriting
Agreement, the consummation of the transactions contemplated thereby
and by the Prospectus and compliance by the Company with its
obligations under the Underwriting Agreement do not and will not,
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whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or a default or Repayment
Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its Subsidiaries pursuant to, the Financing Documents (as
defined below) or any agreement or instrument which was entered into
or executed by the Company or any such Subsidiary as required under
any of the Financing Documents, except for such conflicts, breaches,
defaults, Repayment Events, liens, charges or encumbrances that would
not reasonably be expected to have a Material Adverse Effect. As used
above, the term "Financing Documents" means, collectively: (i) the
Amended and Restated Credit Agreement, dated as of April 20, 2001,
among the Company, United Rentals (North America), Inc. ("URNA"),
United Rentals of Canada, Inc., various financial institutions and The
Chase Manhattan Bank, as U.S. Administrative Agent; (ii) the
Indenture, dated as of May 22, 1998, among URNA, its subsidiaries
party thereto and State Street Bank and Trust Company as Trustee
relating to URNA's 9 1/2% senior subordinated notes due 2008; (iii)
the Indenture, dated as of August 12, 1998, among URNA, its
subsidiaries party thereto and State Street Bank and Trust Company as
Trustee relating to URNA's 8.8% senior subordinated notes due 2008;
(iv) the Indenture, dated as of December 15, 1998, among URNA, its
subsidiaries party thereto and State Street Bank and Trust Company as
Trustee relating to URNA's 9 1/4% senior subordinated notes due 2009;
(v) the Indenture, dated as of March 23, 1999, among URNA, its
subsidiaries party thereto and The Bank of New York as Trustee
relating to URNA's 9% senior subordinated notes due 2009; (vi) the
Indenture, dated as of April 20, 2001, among URNA, its subsidiaries
party thereto and The Bank of New York as Trustee relating to URNA's
10 3/4% senior notes due 2008; and (vii) any agreement or instrument
which was entered into or executed by the Company or any such
Subsidiary pursuant to or as required under any Financing Document.
We have participated in conferences with directors, officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and, although we have not independently verified and are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except to the extent specified in paragraph 4 above), no facts have
come to our attention which lead us to believe that the Registration Statement,
on the effective date thereof, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading, or that the Prospectus,
on the date thereof or on the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that we express no view with respect to the
financial statements and related notes, the financial statement schedules and
the other financial and accounting data included or incorporated by reference in
the Registration Statement or Prospectus).
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The opinions expressed herein are limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
hereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent.
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