RISK FACTORS
Investing in the notes involves risks. You should carefully consider the risks described below and the risk factors incorporated by reference
herein, as well as the other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus, before you invest in the notes. Certain risks related to
us and our business are contained in the section titled "Item 1ARisk Factors" and elsewhere in our Annual Report, which is
incorporated by reference in this prospectus supplement and the accompanying prospectus (and in any of our annual or quarterly reports for a subsequent year or quarter that we file with the SEC and
that are so incorporated). See "Where You Can Find More Information" on page S-ii of this prospectus supplement and in the accompanying
prospectus for information about how to obtain a copy of these documents. The risks and uncertainties described below and incorporated by reference into this prospectus supplement and the accompanying
prospectus are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any
of these risks actually occurs, our business, financial condition and results of operations could be materially affected. In that case, the value of the notes could decline substantially.
Risks Relating to Our Indebtedness
Our significant indebtedness exposes us to various risks.
As of September 30, 2019, on an as adjusted basis after giving effect to the issuance of the notes and guarantees, expected borrowings
of approximately $282 million under the ABL Facility, and the assumed application of the net proceeds therefrom as described under "Use of
Proceeds," our total indebtedness was $11.7 billion ($11.8 billion principal amount). Our substantial indebtedness could adversely affect our business, results of
operations and financial condition in a number of ways by, among other things:
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increasing our vulnerability to, and limiting our flexibility to plan for, or react to, adverse economic, industry or competitive developments;
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making it more difficult to pay or refinance our debts as they become due during periods of adverse economic, financial market or industry
conditions;
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requiring us to devote a substantial portion of our cash flow to debt service, reducing the funds available for other purposes, including
funding working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes, or otherwise constraining our financial flexibility;
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restricting our ability to move operating cash flows to Holdings. URNA's payment capacity is restricted under the covenants in our ABL
Facility, our Term Loan Facility and the indentures governing URNA's outstanding indebtedness;
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affecting our ability to obtain additional financing for working capital, acquisitions or other purposes, particularly since substantially all
of our assets are subject to security interests relating to existing indebtedness;
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decreasing our profitability or cash flow;
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causing us to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes
in market or industry conditions;
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causing us to be disadvantaged compared to competitors with less debt and lower debt service requirements;
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resulting in a downgrade in our credit rating or the credit ratings of any of the indebtedness of our subsidiaries which could increase the
cost of further borrowings;
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requiring our debt to become due and payable upon a change in control; and
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limiting our ability to borrow additional monies in the future to fund working capital, capital expenditures and other general corporate
purposes.
A
portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, an increase in market interest rates would increase our
interest expense and our debt service obligations. As of September 30, 2019, on an as adjusted basis, after giving effect to the issuance of the notes and guarantees, expected borrowings of
approximately $282 million under the ABL Facility, and the assumed application of the net proceeds therefrom, we had $3.8 billion of indebtedness that bears interest at variable rates,
representing 33% of our total indebtedness.
To service our indebtedness, including the notes, we will require a significant amount of cash and our
ability to generate cash depends on many factors beyond our control.
We depend on cash on hand and cash flows from operations to make scheduled debt payments. To a significant extent, our ability to do so is
subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not be able to generate sufficient cash flow from operations to repay
our indebtedness when it becomes due and to meet our other cash needs. If we are unable to service our indebtedness and fund our operations, we will have to adopt an alternative strategy that may
include:
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reducing or delaying capital expenditures;
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limiting our growth;
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seeking additional capital;
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selling assets; or
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restructuring or refinancing our indebtedness.
Even
if we adopt an alternative strategy, the strategy may not be successful and we may continue to be unable to service our indebtedness and fund our operations.
We may not be able to refinance our indebtedness on favorable terms, if at all. Our inability to refinance
our indebtedness, including the notes, could materially and adversely affect our liquidity and our ongoing results of operations.
Our ability to refinance indebtedness will depend in part on our operating and financial performance, which, in turn, is subject to prevailing
economic conditions and to financial, business, legislative, regulatory and other factors beyond our control. In addition, prevailing interest rates or other factors at the time of refinancing could
increase our interest expense. A refinancing of our indebtedness could also require us to comply with more onerous covenants and further restrict our business operations. Our inability to refinance
our indebtedness or to do so upon attractive terms could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows, and make us vulnerable to
adverse industry and general economic conditions.
We may be able to incur substantially more debt and take other actions that could diminish our ability to
make payments on our indebtedness, including the notes, when due, which could further exacerbate the risks associated with our current level of indebtedness.
Despite our indebtedness level, we may be able to incur substantially more indebtedness in the future and such indebtedness may be secured
indebtedness. The terms of the indenture governing the notes will not prohibit us from incurring unsecured debt and the limitation on incurring secured debt is
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subject
to important limitations, qualifications and exceptions. The indentures or agreements governing our current indebtedness permit us to recapitalize our debt or take a number of other actions,
any of which could diminish our ability to make payments on our indebtedness when due and further exacerbate the risks associated with our current level of indebtedness. If new debt is added to our or
any of our existing and future subsidiaries' current debt, the related risks that we now face could intensify and we may not be able to meet all our debt obligations, including repayment of the notes
in whole or in part. If we incur any secured debt with first-priority lien obligations, that secured debt will be effectively senior to the notes to the extent of the value of the assets securing such
debt and if we incur any additional indebtedness that ranks equally with the notes, the holders of that debt will be entitled to share ratably with the holders of the notes in any proceeds distributed
in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of our business.
If we are unable to satisfy the financial covenants or comply with other covenants in certain of our debt
agreements, our lenders could elect to terminate the agreements and require us to repay the outstanding borrowings, or we could face other substantial costs.
We rely on our ABL Facility and accounts receivable securitization facility to provide liquidity for our business, including to fund capital
expenditures, acquisitions, operating expenses and other liquidity needs. The only financial covenant that currently exists under the ABL Facility is the fixed charge coverage ratio. Subject to
certain limited exceptions specified in the ABL Facility, the fixed charge coverage ratio covenant under the ABL Facility will only apply in the future if specified availability under the ABL Facility
falls below 10 percent of the maximum revolver amount under the ABL Facility. When certain conditions are met, cash and cash equivalents and borrowing base collateral in excess of the ABL
Facility size may be included when calculating specified availability under the ABL Facility. As of September 30, 2019, specified availability under the ABL Facility exceeded the required
threshold and, as a result, this financial maintenance covenant was inapplicable. Under our accounts receivable securitization facility, we are required, among other things, to maintain certain
financial tests relating to: (i) the default ratio; (ii) the delinquency ratio; (iii) the dilution ratio; and (iv) days sales outstanding. The accounts receivable
securitization facility also requires us to comply with the fixed charge coverage ratio under the ABL Facility, to the extent the ratio is applicable under the ABL Facility. If we are unable to
satisfy these financial covenants under the ABL Facility or the financial tests under the accounts receivable securitization facility or comply with any of the other relevant covenants under the
applicable agreement, the lenders could elect to terminate the ABL Facility and/or the accounts receivable securitization facility and require us to repay outstanding borrowings. In such event, unless
we are able to refinance the indebtedness coming due and replace the ABL Facility and/or the accounts receivable securitization facility, we would likely not have sufficient liquidity for our business
needs and would be forced to adopt an alternative strategy as described above. Even if we adopt an alternative strategy, the strategy may not be successful and we may not have sufficient liquidity to
service our debt and fund our operations. Future debt arrangements we enter into may contain similar provisions.
Restrictive covenants in certain of the agreements and instruments governing our indebtedness may adversely
affect our financial and operational flexibility.
In addition to financial covenants, various other covenants in the ABL Facility, Term Loan Facility, accounts receivable securitization
facility and the other agreements governing our debt impose significant operating and financial restrictions on us and our restricted subsidiaries. Such covenants include, among other things,
limitations on: (i) liens; (ii) indebtedness; (iii) mergers, consolidations and acquisitions; (iv) sales, transfers and other dispositions of assets; (v) loans and
other investments; (vi) dividends and other distributions, stock repurchases and redemptions and other restricted payments; (vii) dividends, other payments and other matters affecting
subsidiaries; (viii) transactions
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with
affiliates; and (ix) issuances of preferred stock of certain subsidiaries. Future debt agreements we enter into may include similar provisions.
These
restrictions may also make more difficult or discourage a takeover of us, whether favored or opposed by our management and/or our Board of Directors.
Our
ability to comply with these covenants may be affected by events beyond our control, and any material deviations from our forecasts could require us to seek waivers or amendments of
covenants or alternative sources of financing, or to reduce expenditures. We cannot guarantee that such waivers, amendments or alternative financing could be obtained or, if obtained, would be on
terms acceptable to us.
A
breach of any of the covenants or restrictions contained in these agreements could result in an event of default. Such a default could allow our debt holders to accelerate repayment
of the related debt, as well as any other debt to which a cross-acceleration or cross-default provision applies, and/or to declare all borrowings outstanding under these agreements to be due and
payable. If our debt is accelerated, our assets may not be sufficient to repay such debt, including the notes.
The indenture governing the notes will contain negative covenants that provide limited protection.
The indenture governing the notes will contain limited covenants that restrict our ability and the ability of our restricted subsidiaries to
incur liens on our assets and enter into certain mergers with or into, or sell substantially all of our assets to, another person. The covenants for the notes do not include limitations on
indebtedness, restricted payments, asset sales and the use of proceeds therefrom, affiliate transactions and certain other covenants that are included in our existing debt. As a result, the notes will
not prevent us from taking a number of actions that may increase risk from the perspective of noteholders. In addition, breaches of covenants under our existing debt will only result in a default
under the notes if the holders or lenders of that debt accelerate repayment of such debt. The limited covenants in the notes also contain exceptions that will allow us and our subsidiaries to incur
significant amounts of additional secured indebtedness. Among other actions, we could increase the size of the ABL Facility significantly, or incur other secured facilities. See
"Description of the NotesCertain Covenants." In light of these exceptions, holders of the notes may be effectively subordinated to new
lenders to the extent of the value of collateral pledged to secure first-priority lien obligations owed to such lenders.
The amount of borrowings permitted under our ABL Facility may fluctuate significantly, which may adversely
affect our liquidity, results of operations and financial position.
The amount of borrowings permitted at any time under our ABL Facility is limited to a periodic borrowing base valuation of the collateral
thereunder. As a result, our access to credit under our ABL Facility is potentially subject to significant fluctuations depending on the value of the borrowing base of eligible assets as of any
measurement date, as well as certain discretionary rights of the agent in respect of the calculation of such borrowing base value. The inability to borrow under our ABL Facility may adversely affect
our liquidity, results of operations and financial position.
We rely on available borrowings under the ABL Facility and the accounts receivable securitization facility
for cash to operate our business, which subjects us to market and counterparty risk, some of which is beyond our control.
In addition to cash we generate from our business, our principal existing sources of cash are borrowings available under the ABL Facility and
the accounts receivable securitization facility. If our access to such financing was unavailable or reduced, or if such financing were to become significantly more expensive for any reason, we may not
be able to fund daily operations, which would cause material harm to our business or could affect our ability to operate our business as a going concern. In
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addition,
if certain of our lenders experience difficulties that render them unable to fund future draws on the facilities, we may not be able to access all or a portion of these funds, which could
have similar adverse consequences.
Risks Relating to the Notes
None of URNA's foreign subsidiaries, unrestricted subsidiaries, subsidiaries that are foreign subsidiary
holding companies or subsidiaries of foreign subsidiaries will be guarantors with respect to the notes, unless URNA determines otherwise, therefore, any claims you may have in respect of the notes
will be structurally subordinated to the liabilities of those subsidiaries.
None of URNA's foreign subsidiaries, unrestricted subsidiaries or subsidiaries that are foreign subsidiary holding companies or subsidiaries of
foreign subsidiaries will guarantee the notes, unless URNA determines otherwise. If any of such non-guarantor subsidiaries becomes insolvent, liquidates, reorganizes, dissolves or otherwise winds up,
holders of its indebtedness and its trade creditors generally will be entitled to payment on their claims from the assets of such subsidiary before any of those assets would be made available to us.
Consequently, your claims in respect of the notes will be structurally subordinated to all of the existing and future liabilities, including trade payables, of URNA's non-guarantor subsidiaries. In
addition, because the liens on the Notes Collateral include pledges of a portion of the stock (or equivalent equity interest) of our foreign subsidiaries which are directly owned by our U.S.
restricted subsidiaries, the validity of those pledges under local law, if applicable, and the ability of the holders of the notes to proceed against that collateral under local law, to the extent
applicable, may be limited by such local law, which limitations may or may not affect such liens. The indenture governing the notes will not prohibit URNA from having subsidiaries that are not
guarantors in the future.
The
non-guarantor subsidiaries accounted for approximately 8% of our total revenues for the year ended December 31, 2018 and approximately 9% of our total revenues for the nine
months ended September 30, 2019. As of September 30, 2019, the non-guarantor subsidiaries held approximately 8% of our rental equipment.
The
indenture will not limit the incurrence of indebtedness and issuance of preferred stock of or by our subsidiaries.
In
addition, the indenture will not impose any limitation on the incurrence by such subsidiaries of liabilities that are not considered indebtedness under the indenture.
A portion of our operations is currently conducted through URNA's subsidiaries and URNA will depend in part
on distributions from these subsidiaries in order to pay amounts due on the notes. Certain provisions of law or contractual restrictions could limit distributions from URNA's subsidiaries.
A portion of our operations is conducted through URNA's subsidiaries. The effect of this structure is that URNA will depend in part on the
earnings of its subsidiaries, and the payment or other distribution to it of these earnings, in order to meet its obligations under the notes and its other debt. Provisions of law, such as those
requiring that dividends be paid only from surplus, could limit the ability of URNA's subsidiaries to make payments or other distributions to it. Furthermore, these subsidiaries could in certain
circumstances agree to contractual restrictions on their ability to make distributions. These restrictions could also render the subsidiary guarantors financially or contractually unable to make
payments under their guarantees of the notes.
Holdings' primary asset is its equity interest in URNA.
The notes will be guaranteed by Holdings. However, substantially all of Holdings' net worth is attributable to the stock of URNA owned by
Holdings and all of its operations are conducted through
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URNA.
Consequently, the Holdings guarantee will not give holders of the notes a claim to significant assets other than those to which they already have a claim as URNA's direct creditors.
Furthermore, substantially all of Holdings' assets are subject to a security interest in favor of the lenders under the ABL Facility and a security interest in favor of the lenders under the Term Loan
Facility, which gives these lenders a first-priority claim to such assets.
A guarantee by a subsidiary guarantor could be voided if the subsidiary guarantor fraudulently transferred
the guarantee at the time it incurred the indebtedness, which could result in the holders of the notes being able to rely only on URNA and Holdings to satisfy claims.
A guarantee by one of our subsidiary guarantors that is found to be a fraudulent transfer may be voided under the fraudulent transfer laws
described below. The application of these laws requires the making of complex factual determinations and estimates as to which there may be different opinions and views.
In
general, federal and state fraudulent transfer laws provide that a guarantee by a subsidiary guarantor can be voided, or claims under a guarantee by a subsidiary guarantor may be
subordinated to all other debts of that subsidiary guarantor if, among other things, at the time it incurred the indebtedness evidenced by its guarantee:
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the subsidiary guarantor intended to hinder, delay or defraud any present or future creditor; or
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the subsidiary guarantor received less than reasonably equivalent value or fair consideration for the incurrence of the guarantee; and
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was insolvent or rendered insolvent by reason of such incurrence;
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was engaged in a business or transaction for which the subsidiary guarantor's remaining assets constituted unreasonably small capital; or
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intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.
In
addition, any payment by that subsidiary guarantor under a guarantee could be voided and required to be returned to the subsidiary guarantor or to a fund for the benefit of the
creditors of the subsidiary guarantor.
The
measures of insolvency for purposes of fraudulent transfer laws vary depending upon the governing law. Generally, a subsidiary guarantor would be considered insolvent
if:
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the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;
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the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing
debts, including contingent liabilities, as they become absolute and mature; or
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it could not pay its debts as they become due.
We
cannot predict:
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what standard a court would apply in order to determine whether a subsidiary guarantor was insolvent as of the date it issued the guarantee or
whether, regardless of the method of valuation, a court would determine that the subsidiary guarantor was insolvent on that date; or
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whether a court would determine that the payments under the guarantee constituted fraudulent transfers or conveyances on other grounds.
In
the event that the guarantee of the notes by a subsidiary guarantor is voided as a fraudulent conveyance, holders of the notes would effectively be subordinated to all indebtedness
and other liabilities of that subsidiary guarantor.
If we experience a change of control during a period when the change of control offer to purchase provisions
under the indenture apply, URNA will be required to make an offer to repurchase the notes. However, URNA may be unable to do so due to lack of funds or covenant restrictions.
If we experience a "change of control" (which such term will be defined in the indenture governing the notes) during a period when the change
of control offer to purchase provisions under the indenture apply, URNA will be required to make an offer to repurchase all outstanding notes at the applicable percentage of their principal amount,
plus accrued but unpaid interest, if any, to the date of repurchase. However, URNA may be unable to do so because:
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URNA might not have enough available funds, particularly since a change of control could cause part or all of our other indebtedness to become
due; and
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the agreements governing the ABL Facility would, and other indebtedness may, prohibit URNA from repurchasing the notes, unless we were able to
obtain a waiver or refinance such indebtedness.
A
failure to make an offer to repurchase the notes upon a change of control would give rise to an event of default under the indenture governing the notes and could result in an
acceleration of amounts due thereunder. Any such default and acceleration under the indenture governing the notes could trigger a cross-default under our and URNA's other indebtedness. In addition,
any such default under the indenture governing the notes would trigger a default under the ABL Facility (which could result in the acceleration of all indebtedness under the ABL Facility) and a
termination event under our accounts receivable securitization facility. A change of control (as defined in the agreement governing the ABL Facility and the agreement governing the Term Loan
Facility), in and of itself, is also an event of default under the agreement governing the ABL Facility and the agreement governing the Term Loan Facility, which would entitle our lenders to
accelerate all amounts owing thereunder. In the event of any such acceleration, there can be no assurance that we will have enough cash to repay our outstanding indebtedness, including the notes. In
addition, such acceleration could cause a default under the notes.
The
offer to purchase provisions under the indenture will not apply during any period when the notes are rated investment grade by both S&P and Moody's or, in certain circumstances,
another nationally recognized statistical rating agency selected by us, provided that at such time no default under the indenture has occurred and is continuing.
A downgrade, suspension or withdrawal of the rating assigned by a rating agency to our debt securities could
cause the liquidity or market value of the notes to decline significantly and increase our cost of borrowing.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. In general, rating agencies base their
ratings on many quantitative and qualitative factors, including, but not limited to, capital adequacy, liquidity, asset quality, business mix and quality of earnings, and, as a result, we may not be
able to maintain our current credit ratings.
Credit
rating agencies continually review their ratings for the companies that they follow, including us. Borrowing under the ABL Facility and Term Loan Facility, as well as the future
incurrence of additional secured or additional unsecured indebtedness, may cause the rating agencies to reassess the ratings assigned to our debt securities. Any such action may lead to a downgrade of
any
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rating
assigned to the notes or in the assignment of a rating for the notes that is lower than might otherwise be the case. Real or anticipated changes in our credit ratings could cause the liquidity
or market value of the notes to decline significantly.
There
can be no assurance that the ratings assigned by S&P and Moody's to the notes will remain for any given period of time or that these ratings will not be lowered or withdrawn
entirely by a rating agency if, in that rating agency's judgment, future circumstances relating to the basis of the rating, such as adverse changes in our company, so warrant. Credit ratings are not a
recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. Neither we nor any underwriter undertakes any
obligation to maintain the ratings or to advise holders of the notes of any changes in ratings. Each agency's rating should be evaluated independently of any other agency's rating.
There may be no public market for the notes.
We do not intend to apply for listing of the notes on any securities exchange or any automated dealer quotation system. The underwriters have
advised us that they presently intend to make a market in the notes. The underwriters are not obligated, however, to make a market in the notes, and may discontinue any such market-making at any time
at their sole discretion. In addition, any market-making activity will be subject to the limits imposed by securities laws. Accordingly, we cannot assure you as
to:
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the liquidity or sustainability of any market for the notes;
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your ability to sell the notes; or
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the price at which you would be able to sell your notes.
If
a market for the notes does exist, it is possible that you will not be able to sell your notes at a particular time or that the price that you receive when you sell will be
favorable. It is also possible that any trading market that does exist for the notes will not be liquid. Future trading prices of the notes will depend on many factors,
including:
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our operating performance, financial condition and prospects, or the operating performance, financial condition and prospects of companies in
the equipment rental industry generally;
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the interest of securities dealers in making a market for the notes;
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prevailing interest rates; and
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the market for similar securities.
Historically,
the market for non-investment grade debt has been subject to disruptions that have caused volatility in prices. If a market for the notes exists, it is possible that the
market for the notes will be subject to disruptions and price volatility. Any disruptions may have a negative effect on holders of the notes, regardless of our operating performance, financial
condition and prospects.
Certain of the covenants that will be contained in the indenture and, if requested by us, the subsidiary
guarantees, will not be applicable during any period when the notes are rated investment grade by S&P and Moody's or, in certain circumstances, another rating agency selected by us.
The covenants that will be contained in the indenture governing the notes requiring us to provide subsidiary guarantees, to give further
assurances and to make an offer to repurchase the notes upon the occurrence of a change of control will not apply to us during any period when the notes are rated investment grade by both S&P and
Moody's or, in certain circumstances, another nationally recognized statistical rating agency selected by us, provided that at such time no default under the indenture has occurred and is continuing.
There can be no assurance that the notes will ever be rated
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investment
grade, or that if they are rated investment grade, the notes will maintain such ratings. Please see "Description of the NotesCertain
CovenantsEffectiveness of Covenants."
During
any period when the notes are rated investment grade by both S&P and Moody's or, in certain circumstances, another nationally recognized statistical rating agency selected by us,
provided that at such time no default under the indenture has occurred and is continuing, we may request to release the guarantee of any subsidiary guarantor or the liens on the collateral owned by
such guarantor or by the issuer. In the event that the guarantee of the notes by a subsidiary guarantor is released, holders of the notes would effectively be subordinated to all indebtedness and
other liabilities of that subsidiary guarantor. Please see "Description of the NotesGuarantees."
The notes will be effectively subordinated to URNA's and each guarantor's indebtedness under the ABL Facility
and the Term Loan Facility and such other indebtedness secured by a first lien on the collateral, in each case to the extent of the value of the assets securing such indebtedness.
Our ABL Facility and Term Loan Facility are both secured by a first-priority lien on certain of our assets. The notes and guarantees will be
secured on a second priority basis by liens on substantially all of our assets that secure any first-priority lien obligations, subject to permitted liens and certain exceptions, including exceptions
for assets and equity held by foreign subsidiaries and stock of any subsidiaries to the extent the equity of such subsidiaries shall have a value in excess of 20 percent of the aggregate
principal amount of the notes. As a result, there is collateral that secures the ABL Facility and the Term Loan Facility that does not secure the notes. In addition, the notes will be effectively
junior to indebtedness secured by liens on assets that do not constitute Notes Collateral, to the extent of the value of such assets. Our first lien creditors will be entitled to receive proceeds from
the realization of value of the assets securing such indebtedness to repay such indebtedness in full before the holders of the notes will be entitled to any recovery from such assets. As a result, the
notes will be effectively subordinated to our indebtedness under the ABL Facility, the Term Loan Facility and our other first lien indebtedness to the extent of the value of the collateral. The
indenture governing the notes will permit URNA and the guarantors to incur additional first lien indebtedness in the future. Holders or lenders of additional first lien indebtedness, or an agent or
representative acting on their behalf, may accede to, and benefit from, the intercreditor agreement without the consent of the holders of the notes or the trustee or the collateral agent for the
notes. See the section titled "Description of the NotesSecurity." In addition, the ABL Facility, the Term Loan Facility or other first lien
indebtedness may be refinanced or replaced and the lenders or holders of the refinancing or replacement indebtedness will benefit from the intercreditor agreement, provided that the accession of the
representative for the lenders or holders of such refinancing or replacement indebtedness complies with the applicable provisions of the intercreditor agreement in connection with such accession.
Further,
certain other secured creditors may also have permitted liens on the collateral which rank senior to the liens thereon that will secure our obligations under the notes and the
guarantees. Consequently, the notes will also be effectively subordinated to such indebtedness to the extent of the value of the assets securing such indebtedness. The effect of this effective
subordination is that, in the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding involving us or a subsidiary, the assets of the affected entity could not be used to
pay you until after all secured first-priority claims against the affected entity have been fully paid.
As
of September 30, 2019, on an as adjusted basis after giving effect to the issuance of the notes and guarantees, expected borrowings of approximately $282 million under
the ABL Facility, and the assumed application of the net proceeds therefrom as described under "Use of Proceeds," our total indebtedness was
$11.7 billion ($11.8 billion principal amount), and:
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URNA and the guarantors of the notes had outstanding an aggregate principal amount of $1.9 billion of indebtedness secured by a
first-priority lien outstanding and $1.8 billion of borrowing capacity under the ABL Facility, subject to, among other things, their maintenance of a sufficient borrowing base under such
facility;
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URNA and the guarantors of the notes had outstanding an aggregate principal amount of $990 million of indebtedness secured by a
first-priority lien outstanding under the Term Loan Facility; and
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URNA and the guarantors of the notes had outstanding an aggregate of $113 million of indebtedness under finance leases secured by assets
that do not constitute collateral securing the ABL Facility or the Term Loan Facility.
Under
the terms of the agreements governing URNA's debt, URNA may incur additional secured indebtedness on a basis prior to the notes.
The value of the Notes Collateral may not be sufficient to satisfy our obligations under the notes.
No appraisal of the value of the Notes Collateral has been made in connection with this offering, and the fair market value of the Notes
Collateral will be subject to fluctuations based on factors that include, among others, general economic conditions and similar factors. The amount to be received upon a sale of the Notes Collateral
would be dependent on numerous factors including, but not limited to, the actual fair market value of the Notes Collateral at such time, the timing and the manner of the sale and the availability of
buyers. By its nature, portions of the Notes Collateral may be illiquid and may have no readily ascertainable market value. In the event of a foreclosure, liquidation, bankruptcy or similar
proceeding, the Notes Collateral may not be sold in a timely or orderly manner and the proceeds from any sale or liquidation of this Notes Collateral may not be sufficient to pay our obligations under
the notes.
To
the extent that liens, security interests and other rights granted to other parties (including the lenders under the ABL Facility and the lenders under the Term Loan Facility)
encumber assets owned by us, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of the Notes Collateral
and the ability of the trustee under the indenture governing the notes, the collateral agent or the holders of the notes to realize or foreclose on the Notes Collateral. Consequently, we cannot assure
investors in the notes that liquidating the Notes Collateral would produce proceeds in an amount sufficient to pay any amounts due under the notes after also satisfying the obligations to pay any
creditors with prior claims on the Notes Collateral. In addition, under the intercreditor agreement among the collateral agent and the agent under the ABL Facility and the agent under the Term Loan
Facility, the right of the lenders to exercise remedies with respect to the Notes Collateral could delay liquidation of the Notes Collateral. Bankruptcy laws and other laws relating to foreclosure and
sale also could substantially delay or prevent the ability of the trustee, the collateral agent or any holder of the notes to obtain the benefit of any Notes Collateral. Such delays could have a
material adverse effect on the value of the Notes Collateral.
As
described under "Description of the NotesSecurityGenerally," certain categories of our assets are excluded
from the Notes Collateral. Excluded assets include certain items of our property, including:
-
-
any rights, titles or interests of a grantor in any contract if, under the terms of such contract or any requirement of law with respect
thereto, the valid grant of a security interest to the collateral agent is prohibited;
-
-
certain voting ownership or equity interests of our domestic and foreign subsidiaries, joint ventures and non-wholly owned subsidiaries;
-
-
certain "intent-to-use" trademark or service mark applications;
-
-
certain property that is subject to a lien securing purchase money or sale/leaseback indebtedness; and
-
-
any fee interest or leasehold interest in real property.
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If
the proceeds of any sale of Notes Collateral are not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the
sale of the Notes Collateral) would have only an unsecured claim against URNA's and the guarantors' remaining assets.
The terms of the indenture governing the notes and the intercreditor agreement will permit, without the
consent of the holders of the notes, various releases of the Notes Collateral, amendments and waivers with respect to the collateral documents, and changes with respect to who controls actions with
respect to the Notes Collateral, that could be adverse to such holders.
The rights of the holders of the notes with respect to the Notes Collateral will be substantially limited by the terms of the indenture
governing the notes and the intercreditor agreement.
Under the intercreditor agreement, at any time that obligations secured by a first-priority lien on the Notes Collateral, including the ABL Facility and the Term Loan Facility, are outstanding,
certain actions that may be taken with respect to (or in respect of) the Notes Collateral, including the ability to cause the commencement of enforcement proceedings against the Notes Collateral and
to control the conduct of such proceedings, the release of Notes Collateral from the liens securing the notes, and waivers, amendments and consents in respect of the collateral documents will be at
the direction of the holders of the obligations secured by first-priority liens on the Notes Collateral (in each case, subject to certain exceptions) and the holders of the notes may be adversely
affected by such actions. See the section titled "Description of the NotesIntercreditor Agreement."
In
addition, because the holders of the indebtedness secured by first-priority liens on the Notes Collateral will control the disposition of the Notes Collateral, such holders could
decide not to proceed against the Notes Collateral, regardless of whether there is a default under the documents governing such indebtedness or under the indenture governing the notes. The
intercreditor agreement will contain certain provisions benefiting holders of indebtedness under the ABL Facility and the Term Loan Facility, including provisions limiting the ability of the trustee
and the collateral agent from objecting following the filing of a bankruptcy petition to a number of important matters regarding the Notes Collateral and financing to be provided to us. After such
filing, the value of the Notes Collateral could materially deteriorate and holders of the notes could be unable to raise an objection. In addition, the right of holders of obligations secured by
first-priority liens to foreclose upon and sell the Notes Collateral upon the occurrence of an event of default also would be subject to limitations under applicable bankruptcy laws if we or any of
our subsidiaries become subject to a bankruptcy proceeding.
The
Notes Collateral will also be subject to any and all exceptions, defects, encumbrances, liens and other imperfections as may be accepted by the lenders under the ABL Facility, the
Term Loan Facility and other creditors that have the benefit of first-priority liens on such collateral from time to time, whether on or after the date the notes and guarantees are issued. The
existence of any such exceptions, defects, encumbrances, liens and other imperfections could adversely affect the value of the Notes Collateral as well as the ability of the collateral agent to
realize or foreclose on such collateral.
The Notes Collateral may be diluted under certain circumstances.
The indenture governing the notes, the credit agreement governing the ABL Facility and the credit agreement governing the Term Loan Facility
will permit us to incur, and our guarantors to incur or guarantee, additional indebtedness subject to, in the case of the ABL Facility and the Term Loan Facility, compliance with the restrictive
covenants and any mandatory repayment requirement thereunder. Subject to compliance with our restrictive covenants, including a limitation on permitted liens under the indenture governing the notes,
such additional indebtedness may be secured by a first-priority lien on the Notes Collateral that would be senior to the liens securing the notes and the guarantees or a second-priority lien on the
Notes Collateral that would be pari passu with the liens securing the notes and the guarantees. Any issuance of such additional indebtedness that is
secured by the Notes Collateral would dilute the value of the Notes Collateral to the extent of the aggregate
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principal
amount of such additional debt issued. In addition, after the date of this offering, the notes will temporarily share the same collateral with the $1.0 billion principal amount of our
45/8% Senior Secured Notes due 2023 prior to their redemption date.
The indenture governing the notes will permit us to incur additional indebtedness secured by second-priority
liens on the Notes Collateral that will be pari passu with the liens securing the notes and the guarantees, and under such circumstances, after the discharge of first lien obligations, the rights of
the holders of the notes under the collateral documents to control actions with respect to the Notes Collateral could be adversely affected.
The indenture governing the notes will permit us to incur additional indebtedness secured by a second-priority lien on the Notes Collateral
that will be pari passu with the liens securing the notes and the guarantees. Under such circumstances, a representative or representatives on behalf of
the holders of any such other indebtedness would become party to the collateral documents and the intercreditor agreement. Prior to the discharge of first lien obligations, the intercreditor agreement
will permit the representative of the holders of any first lien obligations to take certain actions with respect to the Notes Collateral, including commencing and controlling enforcement proceedings
against the Notes Collateral. Following the discharge of first lien obligations, the collateral documents provide that, to the extent a representative or representatives on behalf of the holders of
additional indebtedness secured by a second-priority lien on the Notes Collateral has become party thereto, such actions will be at the direction of the representative of the holders of the largest
outstanding principal amount of indebtedness secured by a second-priority lien on the Notes Collateral (which may not be the representative of the holders of the notes) until (1) our
obligations under such indebtedness is discharged (which discharge will not include certain refinancings of such indebtedness) or (2) 90 days after the occurrence of an event of default
under the agreement governing the next largest outstanding principal amount of indebtedness secured by a second priority lien on the Notes Collateral, if the representative of the holders of such next
largest outstanding principal amount of indebtedness complies with certain notice requirements. However, even if the representative of the holders of such next largest outstanding principal amount of
indebtedness gains the right to take such actions under the circumstances described above, such representative must stop doing so (and those powers with respect to the Notes Collateral would revert to
the representative of the holders of the largest outstanding principal amount of indebtedness secured by a second-priority lien on the Notes Collateral) if, among other things, the representative of
the holders of the largest outstanding principal amount of indebtedness secured by a second priority lien on the Notes Collateral has directed the collateral agent to commence and is diligently
pursuing enforcement action with respect to the Notes Collateral, such representative or the collateral agent is subject to limitations on giving directions or commencing or pursuing enforcement
actions under the intercreditor agreement, or the grantor of the security interest in that Notes Collateral is then a debtor under or with respect to (or otherwise subject to) an insolvency or
liquidation proceeding. As such, if we incur additional indebtedness secured by a second-priority lien on the Notes Collateral in the future, the representative for the holders of such additional
indebtedness, rather than the representative of the holders of the notes, could be entitled to
exercise such rights under the collateral documents. Under such circumstances, the interest of the holders of the notes could be adversely affected.
Certain actions in respect of defaults taken under the indenture governing the notes by beneficial owners
with short positions in excess of their interests in the notes will be disregarded.
By acceptance of the notes, each holder of the notes agrees, in connection with any notice of Event of Default (as defined under
"Description of the NotesCertain Definitions"), notice of acceleration or instruction to the trustee to provide a notice of Event of
Default, notice of acceleration or take any other action (a "Noteholder Direction"), to (i) deliver a written representation to us and the trustee that such holder and any of its affiliates
acting in concert with it in connection with its
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investment
in the notes (other than screened affiliates) are not (or, in the case such holder is DTC or its nominee, that such holder is being instructed solely by beneficial owners that (together
with such affiliates) are not) Net Short (as defined under "Description of the NotesCertain Definitions") and (ii) provide us with
such other information as we may reasonably request from time to time in order to verify the accuracy of such holder's representation within five business days of request therefor. These restrictions
may impact a holder's ability to participate in Noteholder Directions if it is unable to make such a representation.
We will in most cases have control over the Notes Collateral, and the sale of particular assets by us could
reduce the pool of assets securing the notes and the guarantees.
The collateral documents will allow us to remain in possession of, retain exclusive control over, freely operate, and collect, invest and
dispose of any income from, the Notes Collateral, with certain limited exceptions. To the extent we sell or take actions that reduce the value of the Notes Collateral, it will reduce the pool of
assets securing the notes and the guarantees.
There are circumstances other than repayment or discharge of the notes under which the Notes Collateral will
be released automatically, without your consent or the consent of the trustee.
Under various circumstances, all or a portion of the Notes Collateral may be released, including:
-
-
as to any collateral that is sold, transferred or otherwise disposed of by us or any guarantor in a transaction not prohibited by the indenture
and the collateral documents;
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-
with respect to the collateral owned by any guarantor, upon the release of the guarantee of such guarantor in accordance with the terms of the
indenture;
-
-
upon receipt of the consent of holders of the requisite percentage of the notes;
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-
if and to the extent required by the provisions of the intercreditor agreement; and
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-
upon our request, during any period when the notes are rated investment grade by both S&P and Moody's or, in certain circumstances, another
rating agency selected by us, provided at such time no default under the indenture has occurred and is continuing.
In
addition, the guarantee of a guarantor will be released in connection with a sale of such guarantor in a transaction not prohibited by the indenture.
The
indenture will also permit us, under certain circumstances, to designate one or more of our restricted subsidiaries that is a guarantor of the notes as an unrestricted subsidiary.
If we designate a guarantor as an unrestricted subsidiary as permitted by the indenture, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of
the notes by such subsidiary or any of its subsidiaries will be released under the indenture. Designation of an unrestricted subsidiary will reduce the aggregate value of the Notes Collateral to the
extent that liens on the assets of the unrestricted subsidiary and its subsidiaries are released. In addition, the creditors of the unrestricted subsidiary and its subsidiaries will have a
structurally senior claim on the assets of such unrestricted subsidiary and its subsidiaries. See the section titled "Description of the Notes."
The Notes Collateral will be subject to casualty risks, which may limit your ability to recover as a secured
creditor for losses of the Notes Collateral and which may have an adverse impact on our operations and results.
We maintain insurance or otherwise insure against hazards in a manner that we believe is appropriate and customary for our business. There are,
however, certain losses that may be uninsurable, not economically insurable, in whole or in part, or we have decided not to insure against.
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Insurance
proceeds may not compensate us fully for our losses. If there is a complete or partial loss of any of the Notes Collateral, the insurance proceeds may not be sufficient to satisfy all of the
secured obligations, including the notes and the guarantees.
In
the event of a total or partial loss to any of our facilities, certain items of equipment and inventory may not be easily replaced, if at all. Accordingly, even though there may be
insurance coverage, the extended period needed to manufacture replacement units or inventory could cause significant delays and any such delay could further decrease the value of the Notes Collateral.
Your security interests in certain items of present and future Notes Collateral may not be perfected.
The security interests will not be perfected with respect to certain items of Notes Collateral that cannot be perfected by the filing of
financing statements in each debtor's jurisdiction of organization, the delivery of possession of certificated securities or the filing of a notice of security
interest with the U.S. Patent and Trademark Office or the U.S. Copyright Office or certain other conventional methods to perfect security interests in the United States or are otherwise determined to
be immaterial by us in certain circumstances or where intellectual property is unregistered and registration is necessary for the perfection of a security interest. Security interests in Notes
Collateral such as deposit accounts and securities accounts, which require additional actions to perfect liens on such accounts, may not be perfected or may not have priority with respect to the
security interests of other creditors. To the extent that the security interests in any items of Notes Collateral are unperfected, the rights of the holders of the notes with respect to such Notes
Collateral will be equal to the rights of our general unsecured creditors in the event of any bankruptcy filed by or against us under applicable U.S. federal bankruptcy laws.
Rights of holders of notes in the Notes Collateral may be adversely affected by the failure to perfect
security interests in certain collateral acquired in the future.
The Notes Collateral will include assets, both tangible and intangible, whether now owned or acquired or arising in the future. Applicable law
requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. There can be
no assurance that the trustee or the collateral agent will monitor, or that we will inform the trustee or the collateral agent of, the future acquisition of property and rights that constitute Notes
Collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired property. The trustee and the collateral agent have no obligation to monitor
the acquisition of additional property or rights that constitute Notes Collateral or the perfection of any security interest therein. Such failure to perfect may result in the loss of the security
interest in such after-acquired property or the priority of the security interest securing the notes and guarantees against third parties.
In
addition, the security interest of the collateral agent for the notes will be subject to practical challenges generally associated with the realization of security interests in
collateral. For example, the collateral agent may need to obtain the consent of third parties and make additional filings. If we are unable to obtain these consents or make these filings, the security
interests may be invalid and the holders of the notes will not be entitled to the collateral or any recovery with respect to the collateral. The collateral agent may not be able to obtain any such
consent. Further, the consents of any third parties may not be given when required to facilitate a foreclosure on such collateral. Accordingly, the collateral agent may not have the ability to
foreclose upon those assets, and the value of the Notes Collateral may significantly decrease.
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Lien searches have not been conducted in all jurisdictions.
As of the date of this Prospectus Supplement, we have not conducted lien searches on the Notes Collateral in all jurisdictions in which the
Notes Collateral is located. These lien searches, if conducted, could have revealed a prior lien or multiple prior liens on the Notes Collateral and these liens may prevent or inhibit the collateral
agent from foreclosing on the liens securing the notes and may impair the value of the Notes Collateral. We cannot guarantee that lien searches, if conducted in such jurisdictions, would not have
revealed any prior liens on the Notes Collateral or that there are no unpermitted liens in such jurisdictions. Any prior lien could be significant, could compete with the security interests in favor
of the notes and could have an adverse effect on the ability of the collateral agent to realize or foreclose upon the Notes Collateral.
The pledge of stock, other equity interests or other securities of URNA's subsidiaries that secures the
notes, subject to certain exceptions, will automatically be deemed to not be a part of the Notes Collateral to the extent and for so long as that pledge would require the filing of separate financial
statements with the SEC for that subsidiary. As a result, the notes could be secured by less collateral than URNA's first-priority lien obligations.
The notes will be secured by a pledge of the stock, other equity interests and other securities of certain of URNA's subsidiaries, including
the capital stock of certain of URNA's foreign subsidiaries held by subsidiary guarantors. Under SEC regulations in effect as of the date of this offering, if the par value, book value as carried by
URNA or market value, whichever is greatest, of the stock, equity interests or other securities of a subsidiary pledged as part of the collateral is greater than or equal to 20% of the aggregate
principal amount of the notes then outstanding, such subsidiary would be required to provide separate financial statements to the SEC. Any stock, equity interests and other securities of any of URNA's
subsidiaries will be excluded from the Notes Collateral for so long as, and to the extent that, the pledge of such stock, equity interests or other securities to secure the notes would cause such
subsidiary to be required to file separate financial statements with the SEC pursuant to Rule 3-16 of Regulation S-X under the Securities Act or another similar rule. As a result,
holders of the notes could lose a portion or all of their security interest in the stock, equity interests or other securities of those subsidiaries during that period. It may be more difficult,
costly and time-consuming for holders of the notes to foreclose on the assets of a subsidiary than to foreclose on its stock, equity interests or other securities, so the proceeds realized upon any
such foreclosure could be significantly less than those that would have been received upon any sale of the stock, equity interests or other securities of such subsidiary. As a result of the foregoing,
the notes could be secured by less collateral than URNA's first-priority lien indebtedness. URNA currently expects that this limitation will apply to the pledge of capital stock of United Rentals of
Canada, Inc., United Rentals Highway Technologies Gulf, LLC and United Rentals International B.V., the holding company of our European business.
Rights of holders of notes in the Notes Collateral may be adversely affected by bankruptcy proceedings.
The right and ability of the collateral agent to repossess and dispose of the Notes Collateral upon an event of default is likely to be
significantly impaired (or at a minimum delayed) by federal bankruptcy law if bankruptcy proceedings are commenced by or against URNA or a guarantor. This could be true even if bankruptcy proceedings
are commenced after the collateral agent has repossessed and disposed of the Notes Collateral. Under the U.S. Bankruptcy Code, a secured creditor, such as the collateral agent, is prohibited from
repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without prior bankruptcy court approval, which may not be given. Moreover,
bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable
debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to circumstances, but it is intended in general to
protect the value of the secured creditor's interest in the collateral and may include cash
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payments
or the granting of additional or replacement security or claims, if, and at such time as, the court in its discretion determines, for any diminution in the value of the collateral as a result
of the stay of repossession or disposition or any use of the collateral by the debtor during the pendency of the bankruptcy case.
In
view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the notes could be delayed following commencement of a bankruptcy
case, whether or when the collateral agent would repossess or dispose of the Notes Collateral, or whether or to what extent holders of the notes would be compensated for any delay in payment or loss
of value of the Notes Collateral through the requirements of "adequate protection," or what the holders of the notes would ultimately receive in the bankruptcy case on account of their claims.
Furthermore, in the event the bankruptcy court determines that the value of the collateral is not sufficient to repay all amounts due on the notes, the holders of the notes would have "under-secured
claims" as to the difference. Federal bankruptcy laws do not permit the payment or accrual of interest, costs and attorneys' fees for "under-secured claims" during the debtor's bankruptcy case.
Any future pledge of collateral might be voidable in bankruptcy.
Any future pledge of collateral in favor of the collateral agent for the notes might be voidable by the pledgor (as debtor in possession) or by
its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits the holders of the notes
to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge, or, in certain
circumstances, a longer period.
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DESCRIPTION OF THE NOTES
We will issue the 3.875% Senior Secured Notes due 2027 (the "Notes") under an indenture (the "Indenture"), dated as of November 4, 2019,
among us, the Guarantors and Wells Fargo Bank, National Association, as trustee (in such capacity, the "Trustee") and collateral agent (in such capacity, the "Notes Collateral Agent").
The
terms of the Notes will include those expressly set forth in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Notes Collateral Documents referred to below under the caption "Security" will define the terms of the
agreements that will secure the Notes and the guarantees thereof and the Intercreditor Agreement referred to below under the caption "Intercreditor
Agreement" will define the relationship between holders of the Notes and any other Second Lien Secured Parties, on the one hand, and the First Lien Secured Parties, on the
other hand. The following description is a summary of the material provisions of the Notes, the Indenture, the Notes Collateral Documents and the Intercreditor Agreement and does not purport to be
complete. This summary is subject to and is qualified by reference to all of the provisions of the Notes, the Indenture, the Notes Collateral Documents and the Intercreditor Agreement, including the
definitions of certain terms used in the Indenture. We urge you to read these documents because they, and not this description, define your rights as a holder of the Notes. Copies of the Indenture,
the principal Notes Collateral Documents and the Intercreditor Agreement are available as set forth below under "Additional Information."
Certain
terms used in this description are defined under the caption "Certain Definitions." Defined terms used in this
description but not defined under "Certain Definitions" will have the meanings assigned to them in the Indenture. Unless the context
otherwise requires, references to "Notes" include the Notes offered hereby and any Additional Notes (as defined below). In this description, the words
"Company," "we" and "our" refer only to United Rentals (North America), Inc. and not to any of its subsidiaries.
Brief Description of the Notes
The Notes will be:
-
-
general obligations of the Company;
-
-
pari passu in right of payment with all existing and future senior Indebtedness of the Company;
-
-
secured on a second-priority basis by Liens on substantially all of the Company's assets that secure any First Lien Obligations, subject to
Permitted Liens and certain exceptions;
-
-
secured on a pari passu basis by Liens on certain of the Company's assets that secure any other
Second Lien Obligations (including obligations in respect of the Existing Senior Secured Notes (as defined below in
"SecurityGenerally")), subject to Permitted Liens;
-
-
effectively junior to all existing and future First Lien Obligations to the extent of the value of the Collateral;
-
-
effectively junior to any other existing and future Indebtedness of the Company that is secured by the Company's assets that do not constitute
Collateral, to the extent of the value of such assets;
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senior in right of payment to any existing and future Subordinated Indebtedness of the Company; and
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guaranteed by Holdings and the Subsidiary Guarantors.
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The
Company's Subsidiaries, with limited exceptions, are "Restricted Subsidiaries." As of and for the nine months ended September 30, 2019, the Unrestricted Subsidiaries
represented 7% of Holdings' total assets and had immaterial revenue. Under the circumstances described below in the definition of "Unrestricted Subsidiary," the Company will be permitted to designate
certain of its other Subsidiaries
as "Unrestricted Subsidiaries." The Company's Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. The Company's Unrestricted Subsidiaries will not
guarantee the Notes.
As
of September 30, 2019, on an as adjusted basis, after giving effect to the issuance of the Notes and the guarantees (the "Guarantees"), borrowings of approximately
$282 million under the ABL Credit Agreement and the assumed application of the net proceeds therefrom as described under "Use of Proceeds," the
Notes would have ranked (1) effectively junior to approximately $3.0 billion of our secured obligations, comprised of (i) $1.9 billion of the Company's outstanding
borrowings under the ABL Credit Agreement (excluding $1.8 billion of additional borrowing capacity, net of outstanding letters of credit of $57 million), (ii) $990 million
of the Company's borrowings under the Term Credit Agreement, (iii) $105 million in finance leases and (iv) our guarantee obligations in respect of $8 million of finance
leases of our Subsidiary Guarantors; (2) equally in right of payment with approximately $7.1 billion principal amount of our other senior unsecured obligations, comprised of
$800 million principal amount of 51/2% Senior Notes due 2025, $750 million principal amount of 45/8% Senior Notes due 2025, $1.0 billion principal
amount of 57/8% Senior Notes due 2026, $1.1 billion principal amount of 61/2% Senior Notes due 2026, $1.0 billion principal amount of 51/2%
Senior Notes due 2027, $1.7 billion principal amount of 47/8% Senior Notes due 2028 and $750 million principal amount of 51/4% Senior Notes due 2030; and
(3) effectively junior to (i) $925 million of outstanding borrowings by our special purpose vehicle in connection with the Existing Securitization Facility,
(ii) $22 million of outstanding borrowings under our ABL Credit Agreement by the Company's Subsidiaries that are not Guarantors and (iii) $7 million of finance leases of
our Subsidiaries that are not Guarantors. Most of our U.S. receivable assets have been sold to our special purpose vehicle in connection with our Existing Securitization Facility (the accounts
receivable in the collateral pool being the lenders' only source of payment under that facility). See "Capitalization."
Principal, Maturity and Interest
The Company will issue the Notes in this offering in an aggregate principal amount of $750,000,000. The Notes will mature on
November 15, 2027. The Company will be permitted to issue additional Notes under the Indenture (the "Additional Notes"). The Notes offered hereby and any Additional Notes will rank equally and
be treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers to purchase. Any Additional Notes will be secured by the Collateral, equally and
ratably, with the Notes. Interest on the Notes will accrue at the rate of 3.875% per annum and will be payable semiannually in arrears on November 15 and May 15 of each year, to the
holders of record of Notes at the close of business on November 1 and May 1, respectively, immediately preceding such interest payment date, except that the last payment of interest will
be made on November 15, 2027, to the holders of record of Notes at the close of business on November 15, 2027. The first interest payment with respect to the Notes will be made on
May 15, 2020.
Interest
on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of the Indenture. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
The
Notes will be issued only in registered form without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. Principal of, premium, if any, and
interest on the Notes will be payable, and the Notes will be transferable, at the designated corporate trust office or agency of the Trustee in the City of New York maintained for such purposes. In
addition, interest may be paid at the option of the Company by check mailed to the person entitled thereto as shown on the
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security
register. No service charge will be made for any transfer, exchange or redemption of Notes, except in certain circumstances for any tax or other governmental charge that may be imposed in
connection therewith.
Initial
settlement for the Notes will be made in same-day funds. The Notes are expected to trade in the Same-Day Funds Settlement System of The Depository Trust Company ("DTC") until
maturity, and secondary market trading activity for the Notes will therefore settle in same-day funds.
Guarantees
Holdings and the Subsidiary Guarantors will fully and unconditionally guarantee, on a senior basis, jointly and severally, to each holder of
the Notes, the Trustee and the Notes Collateral Agent, the full and prompt performance of the Company's obligations under the Indenture, such Notes and the Notes Collateral Documents, including the
payment of principal of, premium, if any, and interest on the Notes. Such guarantees will be secured on a second-priority basis by Liens on substantially all of the Guarantors' assets that secure the
First Lien Obligations, subject to Permitted Liens and certain exceptions, including those described under "Security." Subject to limited
exceptions, the Subsidiary Guarantors are the current and future Domestic Restricted Subsidiaries of the Company, other than (unless otherwise determined by the Company) any Foreign Subsidiary Holding
Company or Subsidiary of a Foreign Subsidiary.
The
obligations of each Subsidiary Guarantor will be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor
and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in
respect of the obligations of such other Subsidiary Guarantor under its guarantee or pursuant to its contribution obligations under the Indenture, will result in the obligations of such Subsidiary
Guarantor under the guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law. See "Risk FactorsRisks Relating to the
NotesA guarantee by a subsidiary guarantor could be voided if the subsidiary guarantor fraudulently transferred the guarantee at the time it incurred the indebtedness, which could result
in the holders of the notes being able to rely only on URNA and Holdings to satisfy claims."
Each
Subsidiary Guarantor that makes a payment under its guarantee of the Notes will be entitled to a contribution from each other Subsidiary Guarantor of the Notes in an amount equal
to such other Subsidiary Guarantor's pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with
GAAP. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the holders of the Notes under any
Guarantee; provided, however, that during a Default, the right to receive payment in respect of such
right of contribution shall be suspended until the payment in full of all guaranteed obligations under the Indenture.
Each
guarantee of the Notes will be:
-
-
a general obligation of that Guarantor;
-
-
pari passu in right of payment with all existing and future senior Indebtedness of that
Guarantor;
-
-
secured on a second-priority basis by Liens on substantially all of that Guarantor's assets that secure any First Lien Obligations, subject to
Permitted Liens and certain exceptions;
-
-
secured on a pari passu basis by Liens on certain of that Guarantor's assets that secure any other Second Lien Obligations (including
obligations in respect of the Existing Senior Secured Notes), subject to Permitted Liens;
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-
-
effectively junior to existing and future First Lien Obligations to the extent of the value of the Collateral;
-
-
effectively junior to any other existing and future Indebtedness of that Guarantor that is secured by such Guarantor's assets that do not
constitute Collateral, to the extent of the value of such assets; and
-
-
senior in right of payment to any existing and future Subordinated Indebtedness of that Guarantor.
As
of September 30, 2019, on an as adjusted basis, after giving effect to the issuance of the Notes and the Guarantees, borrowings of approximately $282 million under the
ABL Credit Agreement and the assumed application of the net proceeds therefrom as described under "Use of Proceeds," the Guarantees would have ranked
(1) effectively junior to approximately $3.0 billion of the Guarantors' secured obligations, comprised of (i) guarantee obligations of the Guarantors in respect of
$1.9 billion of the Company's outstanding borrowings under the ABL Credit Agreement (excluding $1.8 billion of additional borrowing capacity, net of outstanding letters of credit of
$57 million), (ii) guarantee obligations of the Guarantors in respect of $990 million of the Company's borrowings under the Term Credit Agreement, (iii) guarantee
obligations in respect of $105 million in the Company's finance leases and (iv) $8 million of finance leases of our Subsidiary Guarantors; (2) equally in right of payment
with approximately $7.1 billion principal amount of our other senior unsecured obligations, comprised of $800 million principal amount of 51/2% Senior Notes due 2025,
$750 million principal amount of 45/8% Senior Notes due 2025, $1.0 billion principal amount of 57/8% Senior Notes due 2026, $1.1 billion principal
amount of 61/2% Senior Notes due 2026, $1.0 billion principal amount of 51/2% Senior Notes due 2027, $1.7 billion principal amount of 47/8%
Senior Notes due 2028 and $750 million principal amount of 51/4% Senior Notes due 2030; and (3) effectively junior to (i) $925 million of outstanding
borrowings by our special purpose vehicle in connection with the Existing Securitization Facility, (ii) $22 million of outstanding borrowings under our ABL Credit Agreement by the
Company's Subsidiaries that are not Guarantors and (iii) $7 million of finance leases of our Subsidiaries that are not Guarantors. See
"Capitalization."
The
Subsidiaries that are not Guarantors accounted for $289 million, or 7%, and $263 million, or 8%, of our adjusted EBITDA for the year ended December 31, 2018 and
the nine months ended September 30, 2019, respectively. The Subsidiaries that are not Guarantors accounted for $660 million, or 8%, and $593 million, or 9%, of our total revenues
for the year ended December 31, 2018 and the nine months ended September 30, 2019, respectively. The Subsidiaries that are not Guarantors accounted for $3.0 billion, or 15%, of
our total assets, and $1.2 billion, or 8%, of our total liabilities as of September 30, 2019.
The
Indenture will not contain limitations on the amount of additional Indebtedness or preferred stock that the Company and its Subsidiaries may incur or issue. The amount of any such
Indebtedness or preferred stock could be substantial and, subject to the limitations set forth in the covenants described under "Certain
CovenantsLimitation on Liens," any such Indebtedness may be secured Indebtedness.
The
guarantee of a Subsidiary Guarantor will be released:
-
(1)
-
upon
the sale or other disposition (including by way of consolidation or merger) of all of the Capital Stock of such Subsidiary Guarantor to a Person that is not
(either before or after giving effect to such transaction) the Company or a Restricted Subsidiary; provided such sale or disposition is (i) not
prohibited by the Indenture or (ii) pursuant to any exercise of any secured creditor remedies by the First Lien Designated Agent in respect of any First Lien Obligations but only to the extent
that
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Security
Generally
On the Issue Date, the Trustee will become party to the Existing Notes Security Agreement as an "Additional Second Lien Agent" pursuant to a
supplement in accordance with the terms of that agreement, and accordingly the Notes will become "Additional Second Lien Obligations" thereunder. Under the terms of the Existing Notes Security
Agreement and the supplement, the Notes Collateral Agent (for the benefit of the Notes Collateral Agent, the Trustee and the holders of the Notes) will have valid and perfected Liens on the Collateral
that are second in priority to the Liens securing First Lien Obligations on the Collateral, subject to Permitted Liens and certain other exceptions, including exceptions for assets and equity held by
Foreign Subsidiaries, Excluded Stock Collateral (as defined below) and certain other Excluded Assets (as defined below). As a result, there will be collateral that secures the Obligations under the
ABL Credit Agreement and the Term Credit Agreement that does not secure the Notes. The Notes Collateral Documents will secure the payment and performance when due of all of the Indenture Obligations
of the Company and the Guarantors. Pending completion of the redemption of the 45/8% Senior Secured Notes due 2023 (the "Existing Senior Secured Notes") (as described under
"Use of Proceeds"), the Notes Collateral Documents also secure the payment and performance when due of all obligations of the Company and the Guarantors
under the Existing Senior Secured Notes. Subject to the terms described below under "Release of Collateral" and
"Limitation on Collateral Consisting of Subsidiary Securities", the Notes will be secured on a second-priority basis by Liens on
substantially all of our assets that secure any First Lien Obligations, subject to Permitted Liens and certain exceptions, including exceptions for assets and equity held by Foreign Subsidiaries,
Excluded Stock Collateral and certain other Excluded Assets. To the extent any assets are released or not included in the collateral for the ABL Credit Agreement or the Term Credit Agreement, the
Collateral will not include such assets.
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On
the Issue Date, the Trustee and the Notes Collateral Agent will also enter into an amendment and restatement of the Existing Notes Security Agreement, which pursuant to its terms
will become effective and amend and restate the Existing Notes Security Agreement upon completion of the redemption of the Existing Senior Secured Notes. The Notes Security Agreement will amend and
restate the Existing Notes Security Agreement to, among other things, (i) replace references and terms derived from the indenture for the Existing Senior Secured Notes with references and terms
derived from the Indenture and (ii) conform terms and definitions to the terms described herein and, where appropriate, to those included in the Company's Third Amended and Restated U.S.
Security Agreement, dated as of February 15, 2019, entered into in connection with the ABL Credit Agreement.
By
their acceptance of the Notes, the holders of the Notes will consent and agree to be bound by the terms of, and will authorize the entry by Wells Fargo Bank, National Association, as
Trustee on behalf of the holders of the Notes and as Notes Collateral Agent on behalf of the Second Lien Secured Parties, into the supplement, the Notes Security Agreement and any other related Notes
Collateral
Documents, and any amendments, restatements or modifications to the Notes Collateral Documents. By their acceptance, the holders of the Notes will also authorize and direct the Notes Collateral Agent
to perform its obligations and exercise its rights under the supplement, the Notes Security Agreement and any other related Notes Collateral Documents in accordance therewith.
The
Collateral will not include, among other things, the following property and assets of the Company and the Guarantors (collectively, the "Excluded Assets"):
-
(1)
-
any
rights, titles or interests of a Grantor in any instrument, permit, general intangible, lease, license or agreement to which such Grantor is a party (other than
any of the foregoing with or by any other Grantor or any Subsidiary or other controlled affiliate of a Grantor) or any of its right, title or interest thereunder to the extent, but only to the extent,
that a grant of a security interest therein to the Notes Collateral Agent would, under the terms of such instrument, permit, general intangible, lease, license or agreement, result in a breach of the
terms of, or constitute a default under, or result in the abandonment, invalidation or unenforceability of or create a right of termination in favor of or require the consent (which has not been
obtained or waived) of any other party under, such instrument, permit, general intangible, lease, license or agreement, provided that the foregoing
exclusion shall not be construed to apply to the extent any such term is ineffective or unenforceable under the Uniform Commercial Code (including Sections 9-406, 9-407, 9-408 or 9-409) or any
other applicable law so that no breach, default, abandonment, invalidity or unenforceability would occur;
-
(2)
-
any
asset to the extent the granting of a security interest therein to the Notes Collateral Agent is prohibited by applicable law or would require the consent,
approval, license or authorization of any governmental authority or other third party (except a Grantor or any Subsidiary or other controlled affiliate of a Grantor) that has not been obtained or
waived; provided that the foregoing exclusion shall not be construed to apply to the extent any such prohibition or requirement for consent, approval,
license or authorization is ineffective or unenforceable under the Uniform Commercial Code (including Sections 9-406, 9-407, 9-408 or 9-409) or any other applicable law;
-
(3)
-
any
of the outstanding voting equity or other voting ownership interests of a Foreign Subsidiary or Foreign Subsidiary Holding Company in excess of 65% of the voting
power of all classes of equity or other ownership interests of such Foreign Subsidiary or Foreign Subsidiary Holding Company entitled to vote;
-
(4)
-
any
"intent-to-use" United States of America based trademark or service mark application until such time that a statement of use has been filed with the United
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Pursuant
to the terms of the Notes Collateral Documents, the Collateral will be pledged to (1) the Credit Agreement Agent and each other First Lien Agent, on a first-priority
basis, for the ratable benefit of the applicable First Lien Secured Parties to secure the First Lien Obligations owed to such First Lien Secured Parties and (2) the Notes Collateral Agent, on a
second-priority basis, for the benefit of the applicable Second Lien Secured Parties to secure the Second Lien Obligations owed to such Second Lien Secured Parties. The Second Lien Obligations will
constitute claims separate and apart from (and of a different class from) the First Lien Obligations. The Liens on the Collateral securing the Second Lien Obligations will be junior and subordinate to
the Liens on the Collateral securing First Lien Obligations.
The
Company and the Guarantors will be able to issue Additional Notes and incur other Second Lien Obligations in the future (each of which will be secured by the Collateral, equally and
ratably, with the Notes) and incur additional First Lien Obligations in the future. The amount of such additional Indebtedness will be limited by the covenants described under
"Certain CovenantsLimitation on Liens." The amount of such additional Indebtedness could be significant.
Subject
to the terms of the Second Lien Documents, the First Lien Documents and the Intercreditor Agreement, the Company and the Guarantors will have the right to remain in possession
and retain exclusive control of the Collateral, to freely operate the Collateral and to collect, invest and dispose of any income therefrom, as well as to exercise any voting and other consensual
rights pertaining to the Collateral.
Limitation on Collateral Consisting of Subsidiary Securities
The stock, other Capital Stock and other securities of a Subsidiary of the Company otherwise constituting Collateral will constitute Collateral
for the benefit of the holders of the Notes only to the extent that such stock, Capital Stock and other securities can secure the Notes without Rule 3-16 of Regulation S-X under the
Securities Act (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other
governmental agency). In the event that Rule 3-16 of Regulation S-X under the Securities Act (or any such other law, rule or regulation) requires or is amended, modified or interpreted
by the SEC (or such other governmental agency) to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC
(or such other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiary's stock, Capital Stock or other securities secure the Notes, then the stock,
Capital Stock and other securities of such Subsidiary shall automatically be deemed not to be part of the Collateral for the benefit of the holders of the Notes (but only to the extent necessary to
cause such financial statement requirement not to be applicable with respect to such Subsidiary) and such excluded portion of the stock, Capital Stock and other securities is referred to as the
"Excluded Stock Collateral." This limitation will not apply to the collateral securing the First Lien Obligations under the ABL Credit Agreement and the Term Credit Agreement.
However,
if Rule 3-16 of Regulation S-X under the Securities Act (or such other law, rule or regulation) is thereafter amended, modified or interpreted by the SEC (or such
other governmental agency) to permit (or is replaced with another rule or regulation, or any law, rule or regulation is adopted, which would permit) such Subsidiary's stock, Capital Stock and other
securities to secure the Notes in excess of the amount then pledged without filing with the SEC (or such other governmental agency) of separate financial statements of such Subsidiary, then the stock,
Capital Stock and other securities of such Subsidiary shall automatically be deemed to be a part of the Collateral for the benefit of the holders of the Notes (but only to the extent not resulting in
such financial statement
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requirement
becoming applicable with respect to such Subsidiary), unless otherwise constituting Excluded Assets.
In
accordance with the limitations described in the two immediately-preceding paragraphs, the Collateral for the benefit of the holders of the Notes will include stock, other Capital
Stock and other securities of certain existing and future Subsidiaries of the Company only to the extent that the applicable value of such stock, other Capital Stock and other securities (on a
Subsidiary-by-Subsidiary basis) is less than 20% of the aggregate principal amount of the Notes outstanding. As a result, the portion of the stock, other Capital Stock and other securities of
Subsidiaries constituting Collateral for the benefit of the holders of the Notes may decrease or increase as described above. We currently expect that this limitation would apply to pledges of capital
stock of United Rentals of Canada, Inc., United Rentals Highway Technologies Gulf, LLC and United Rentals International B.V., the holding company of our European business. See
"Risk FactorsRisks Related to the NotesThe pledge of stock, other equity interests or other securities of URNA's subsidiaries that secures the notes,
subject to certain exceptions, will automatically be deemed to not be a part of the Notes Collateral to the extent and for so long as that pledge would require the filing of separate financial
statements with the SEC for that subsidiary. As a result, the notes could be secured by less collateral than URNA's first-priority lien obligations."
Release of Collateral
The priority of the security interests in the Collateral and related creditors rights, including when the Notes Collateral Agent's Liens on the
Collateral will be released, are set forth in the Intercreditor Agreement described below. See "Intercreditor Agreement." In addition, the
Indenture provides that the Notes Collateral Agent's Liens on the Collateral will no longer secure the Indenture Obligations, and the right of the holders of the Notes to the benefits and proceeds of
the Notes Collateral Agent's Liens on the Collateral will terminate and be discharged, in each case, automatically and without the need for any further action by any Person:
-
(1)
-
in
whole, upon the full and final payment and performance of the Obligations of the Company and the Guarantors under the Indenture, the Notes and the guarantees
thereof;
-
(2)
-
in
whole, upon Legal Defeasance or Covenant Defeasance with respect to the Indenture pursuant to the provisions set forth under the caption
"Legal Defeasance and Covenant Defeasance" or discharge of the Indenture in accordance with the provisions set forth under the caption
"Satisfaction and Discharge;"
-
(3)
-
in
whole or in part, as applicable, upon receipt of the consent of holders of the requisite percentage of the Notes set forth below under the caption
"Amendments and Waivers;"
-
(4)
-
in
part, as to any Collateral that is sold, transferred or otherwise disposed of by the Company or any Guarantor in a transaction or other circumstance not
prohibited by the Indenture and the Notes Collateral Documents at the time of such sale, transfer or disposition;
-
(5)
-
in
whole, with respect to the Collateral owned by a Guarantor, upon the release of the guarantee of such Guarantor in accordance with the terms of the Indenture;
-
(6)
-
in
whole or in part, with respect to any property or asset of the Company or a Guarantor that is or becomes Excluded Assets under the terms of the Notes Collateral
Documents;
-
(7)
-
in
whole or in part, if and to the extent required by the provisions of the Intercreditor Agreement; or
-
(8)
-
at
the Company's request, during any Suspension Period.
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Upon the release of the Collateral, the Trustee or the Notes Collateral Agent, at the Company's expense and upon the written request of the Company
accompanied
by an officers' certificate and opinion of counsel confirming that all applicable conditions precedent under the Indenture, Notes Collateral Documents and Intercreditor Agreement have been met, shall
promptly cause to be released and reconveyed to the Company or the Guarantors, as the case may be, the released Collateral and shall execute, deliver or acknowledge any instruments or releases that
are necessary or appropriate to evidence the release from the Liens created by the Notes Collateral Documents of any Collateral permitted to be released pursuant to the Indenture or the Notes
Collateral Documents.
To
the extent required by law, the Company will cause Trust Indenture Act §313(b), relating to reports, and Trust Indenture Act §314(d), relating to the release
of property or securities or relating to the substitution therefor of any property or securities to be subjected to the Lien of the Notes Collateral Documents, to be complied with. Any certificate or
opinion required by Trust Indenture Act §314(d) may be made by an officer of the Company except in cases where Trust Indenture Act §314(d) requires that such certificate
or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected or reasonably satisfactory to the Trustee. Any release of Collateral
permitted as described
under "Release of Collateral" will be deemed not to impair the Liens under the Indenture or the Notes Collateral Documents in contravention
thereof.
Notwithstanding
anything to the contrary in the preceding paragraph, the Company will not be required to comply with all or any portion of Trust Indenture Act §314(d) if it
determines, in good faith based on advice of counsel, that under the terms of Trust Indenture Act §314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its
staff, including "no action" letters or exemptive orders, all or any portion of Trust Indenture Act §314(d) is inapplicable to the released Collateral.
Administration of Security
The Notes Collateral Documents and the Collateral will be administered by the Notes Collateral Agent for the benefit of the Second Lien Secured
Parties.
Enforcement of Security
The Notes Collateral Documents will contain procedures with respect to the coordination of instructions from the Applicable Authorized Second
Lien Representative for the Second Lien Obligations with respect to the Liens in the Collateral of the Second Lien Secured Parties. The Notes Collateral Agent shall act in relation to the Collateral
in accordance with the instructions of the Applicable Authorized Second Lien Representative. Any Person entitled to instruct the Notes Collateral Agent to exercise any right or remedy with respect to
the Collateral may give or refrain from giving instructions to the Notes Collateral Agent to exercise or refrain from exercising the Collateral as it sees fit in accordance with the other provisions
of the Notes Collateral Documents.
Notwithstanding
the above, the rights of the Notes Collateral Agent and each other Second Lien Secured Party shall, prior to the Discharge of First Lien Obligations, be subject to the
provisions of the Intercreditor Agreement.
Additional Second Lien Obligations Arrangements
If the Company or any Guarantor incurs any Additional Second Lien Obligations, the Additional Second Lien Agent with respect to the holders of
such Additional Second Lien Obligations shall enter into a joinder to the Notes Collateral Documents and the Intercreditor Agreement, in each case in substantially the form provided therein or
otherwise reasonably acceptable to the Notes Collateral Agent, and thereafter the relationship between the Notes Secured Parties and the applicable
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Additional
Second Lien Secured Parties will be governed by the Notes Collateral Documents as described below.
Under
the Notes Collateral Documents, the Notes Secured Parties and each of the Additional Second Lien Secured Parties will be represented by their respective Authorized Second Lien
Representative. The Notes Collateral Documents provide for the priorities and other relative rights among the Notes Secured Parties and the Additional Second Lien Secured Parties, including, among
other things, that, subject to the discussion set forth in the section "Enforcement of Security" above:
-
(1)
-
notwithstanding
the date, time, method, manner or order of grant, attachment or perfection of any Liens on the Collateral securing the Second Lien Obligations, the
Liens securing all such Second Lien Obligations shall be of equal priority; and
-
(2)
-
the
obligations in respect of the Second Lien Obligations may be increased, extended, renewed, replaced, restated, supplemented, repaid, restructured, refunded,
refinanced or otherwise amended from time to time, in each case, to the extent permitted by the Second Lien Documents,
provided that, notwithstanding the above, it is the intention of the Second Lien Secured Parties of each series of Second Lien Obligations that such
Second Lien Secured Parties (and not the Second Lien
Secured Parties of any other series of Second Lien Obligations) bear the risk of any determination by a court of competent jurisdiction that (x) any of the Second Lien Obligations of such
series are unenforceable under applicable law or are subordinated to any other obligations (other than another series of Second Lien Obligations), (y) any of the Second Lien Obligations of such
series do not have an enforceable security interest in any of the Collateral securing any other series of Second Lien Obligations and/or (z) any intervening security interest exists securing
any other obligations (other than another series of Second Lien Obligations) on a basis ranking prior to the security interest of such series of Second Lien Obligations but junior to the security
interest of any other series of Second Lien Obligations (any such condition referred to in the foregoing clauses (x), (y) or (z) with respect to any series of Second Lien
Obligations, an "Impairment" of such series). In the event of any Impairment with respect to any series of Second Lien Obligations, the results of such Impairment shall be borne solely by the holders
of such series of Second Lien Obligations, and the rights of the holders of such series of Second Lien Obligations (including, without limitation, the right to receive distributions in respect of such
series of Second Lien Obligations pursuant to terms of the Notes Collateral Documents) set forth in the Notes Collateral Documents shall be modified to the extent necessary so that the effects of such
Impairment are borne solely by the holders of the series of such Second Lien Obligations subject to such Impairment. Additionally, in the event the Second Lien Obligations of any series are modified
pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such Second Lien Obligations or the Second Lien Documents governing
such Second Lien Obligations shall refer to such obligations or such documents as so modified.
Subject
to the discussion set forth in the section "Enforcement of Security" above, the Notes Collateral Documents also, as
between the Notes Secured Parties and the Additional Second Lien Secured Parties, provide that only the Applicable Authorized Second Lien Representative has the right to direct the Notes Collateral
Agent in conducting foreclosures and in taking other actions with respect to the Collateral, and the Authorized Second Lien Representatives of other Second Lien Obligations have no right to take
actions with respect to the Collateral. The Trustee will be the Applicable Authorized Second Lien Representative unless the Indenture Obligations do not represent the largest principal amount
outstanding of any then outstanding Second Lien Obligations represented by any Authorized Second Lien Representative, at which point the Authorized Second Lien Representative for the Second Lien
Obligations representing the largest principal amount outstanding of any then outstanding Second Lien Obligations represented by any Authorized Second Lien Representative shall become the Applicable
Authorized Second Lien Representative, as certified by the Company to the
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Notes
Collateral Agent in an officers' certificate. Following a Larger Second Lien Holder Event, the Authorized Second Lien Representative for the Second Lien Obligations that constitutes the largest
principal amount of any then outstanding Second Lien Obligations represented by any Authorized Second Lien Representative will become the Applicable Authorized Second Lien Representative. The
Applicable Authorized Second Lien Representative will remain as such until the earlier of (1) the occurrence of a subsequent Larger Second Lien Holder Event and (2) the Non-Controlling
Authorized Second Lien Representative Enforcement Date (such earlier date, the "Applicable Authorized Agent Date"). After the Applicable Authorized Agent Date, the Applicable Authorized Second Lien
Representative will be (1) if such Applicable Authorized Agent Date occurred because of a Larger Second Lien Holder Event, as determined above, or (2) if such Applicable Authorized Agent
Date occurred because of the Non-Controlling Authorized Second Lien Representative Enforcement Date, the Major Non-Controlling Authorized Second Lien Representative.
Subject
to the discussion set forth in the section entitled "Enforcement of Security" above, the Applicable Authorized
Second Lien Representative will have the sole right to instruct the Notes Collateral Agent to act or refrain from acting with respect to the Collateral, and the Notes Collateral Agent shall not follow
any instructions with respect to such Collateral from any other Person. No Authorized Second Lien Representative of any Second Lien Obligations (other than the Applicable Authorized Second Lien
Representative) will instruct the Notes Collateral Agent to commence any judicial or non-judicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar
official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interests in or realize upon,
or take any other action available to it in respect of, the Collateral.
Notwithstanding
the equal priority of the Liens securing the Second Lien Obligations, the Notes Collateral Agent, acting on the instructions of the Applicable Authorized Second Lien
Representative, may deal with the Collateral as if such Notes Collateral Agent had a senior Lien on such Collateral. No Authorized Second Lien Representative of any Second Lien Obligations (other than
the Applicable Authorized Second Lien Representative) may contest, protest or object to any foreclosure proceeding or action brought by the Notes Collateral Agent (acting on the instructions of the
Applicable Authorized Second Lien Representative) or Applicable Authorized Second Lien Representative. The Trustee and each other Authorized Second Lien Representative will agree that it will not
accept any Lien on any Collateral for the benefit of the Second Lien Secured Parties (other than on cash proceeds of any Second Lien Obligations deposited into escrow or otherwise segregated pending
the use thereof or funds deposited for the discharge or defeasance of any Second Lien Obligations) other than pursuant to the Notes Collateral Documents. Each Second Lien Secured Party, including the
Notes Secured Parties by acceptance thereof, will be deemed to have agreed that it will not contest or support any other person in contesting, in any proceeding (including any insolvency or
liquidation proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any other Second Lien Secured Party in all or any part of the Collateral, or any of the
provisions of the Notes Collateral Documents or any joinders related thereto; provided that nothing in the Notes Collateral Documents shall be construed
to prevent or impair the rights of any of the Notes Collateral Agent or any Authorized Second Lien Representative to enforce the Notes Collateral Documents.
Subject
to the discussion set forth in the section entitled "Enforcement of Security" above, if an event of default has
occurred and is continuing under any Indebtedness, and the Notes Collateral Agent is taking action to enforce rights in respect of any Collateral, or any distribution is made with respect to any
Collateral in any bankruptcy case of the Company or any Guarantor, the proceeds of any sale, collection or other liquidation of any such Collateral by the Notes Collateral Agent or any other Second
Lien Secured Party, as applicable, will, subject to the provisions of the Intercreditor Agreement, be applied among the Second Lien Obligations covered by the Notes Collateral Documents to the payment
in full of such Second Lien Obligations on a ratable basis, after payment of all amounts
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owing
to the Notes Collateral Agent and the other Authorized Second Lien Representatives, in their capacity as such.
None
of the Second Lien Secured Parties may institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Notes Collateral Agent or any
other Second Lien Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Collateral. In addition, none of the Second Lien
Secured Parties may seek to have any Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Collateral. If any Second Lien Secured Party obtains possession of any
Collateral or realizes any proceeds or payment in respect thereof, in each case, as a result of the enforcement of remedies, subject to the provisions of the Intercreditor Agreement, at any time prior
to the discharge of the other Second Lien Obligations, then it must hold such Collateral, proceeds or payment in trust for the other Second Lien Secured Parties and promptly transfer such Collateral,
proceeds or payment to the Notes Collateral Agent to be distributed in accordance with the Notes Collateral Documents.
Notwithstanding
the above provisions of this section, the rights of the Notes Collateral Agent and each other Second Lien Secured Party shall, prior to the Discharge of First Lien
Obligations, be subject to the provisions of the Intercreditor Agreement.
Sufficiency of Collateral
No appraisals of any Collateral have been prepared in connection with the offering of the Notes. The value of the Collateral at any time will
depend on market and other economic conditions, including the availability of suitable buyers for the Collateral. In the event of a foreclosure, liquidation, bankruptcy or similar proceeding, no
assurance can be given that the proceeds from any sale or liquidation of the Collateral will be sufficient to pay any of the Company's obligations under the Notes or any of the Guarantors' obligations
under guarantees of the Notes, in full or at all.
In
addition, because a portion of the Collateral may in the future consist of pledges of a portion of the capital stock of certain of our Foreign Subsidiaries, the validity of those
pledges under applicable foreign law, and the ability of the holders of the Notes to realize upon that Collateral under applicable foreign law, to the extent applicable, may be limited by such law,
which limitations may or may not affect such Liens.
If
the proceeds of any of the Collateral were not sufficient to repay all amounts due on the Notes, the holders of the Notes (to the extent not repaid from the proceeds of the sale of
the Collateral) would have only an unsecured claim against the remaining assets of the Company and the Guarantors. See "Risk FactorsRisks Relating to the
NotesThe value of the Notes Collateral may not be sufficient to satisfy our obligations under the notes."
Certain Bankruptcy Limitations
The right of any Agent to take possession and dispose of the Collateral following an event of default is likely to be significantly impaired by
applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or against the Company or any Guarantor prior to such Agent having taken possession and disposed of the Collateral.
Under
the Bankruptcy Code, a secured creditor is prohibited from taking its security from a debtor in a bankruptcy case, or from disposing of security taken from such debtor, without
bankruptcy court approval. Moreover, the Bankruptcy Code permits the debtor in certain circumstances to continue to retain and to use collateral owned as of the date of the bankruptcy filing (and the
proceeds, products, offspring, rents or profits of such collateral) even though the debtor is in default under the applicable debt instruments provided that the secured creditor is given "adequate
protection." The meaning of the term "adequate protection" may vary according to circumstances. In view of the lack of a precise definition of the term "adequate protection" and the broad
discretionary
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powers
of a bankruptcy court, it is impossible to predict how long payments under the Notes could be delayed following commencement of a bankruptcy case, whether or when the Agent could repossess or
dispose of the Collateral, or whether or to what extent holders of the Notes would be compensated for any delay in payment or loss of value of the Collateral through the requirement of "adequate
protection."
Furthermore,
in the event a U.S. bankruptcy court determines that the value of the Collateral (after giving effect to any First Lien Obligations and any Permitted Liens) is not
sufficient to repay all amounts due on the Notes and any other Obligations secured on a pari passu basis with the Notes pursuant to the Notes Security
Agreement, the holders of the Notes and any other Obligations secured on a pari passu basis with the Notes pursuant to the Notes Security Agreement
would hold secured claims to the extent of the value of the Collateral (after giving effect to any First Lien Obligations and any Permitted Liens) and would hold unsecured claims with respect to any
shortfall. Applicable U.S.
bankruptcy laws permit the payment and/or accrual of post-petition interest, costs and attorneys' fees during a debtor's bankruptcy case only to the extent the claims are oversecured or the debtor is
solvent at the time of reorganization. In addition, if the Company or any Guarantor were to become the subject of a bankruptcy case, the bankruptcy court, among other things, may avoid certain
prepetition transfers made by the entity that is the subject of the bankruptcy filing, including, without limitation, transfers held to be preferences or fraudulent conveyances under applicable law.
Intercreditor Agreement
On the Issue Date, the Trustee will become party to the Existing Intercreditor Agreement pursuant to a joinder agreement (the "Joinder") to the
Existing Intercreditor Agreement, as acknowledged by the Company and the Guarantors (collectively, the "Grantors"). On the Issue Date, the Trustee and the Notes Collateral Agent will also enter into
an amendment and restatement of the Existing Intercreditor Agreement, which pursuant to its terms will become effective and amend and restate the Existing Intercreditor Agreement upon completion of
the redemption of the Existing Senior Secured Notes. The Intercreditor Agreement will amend and restate the Existing Intercreditor Agreement to, among other things, (i) replace references and
terms derived from the indenture for the Existing Senior Secured Notes with references and terms derived from the Indenture and (ii) conform terms and definitions to those included under the
caption "Intercreditor Agreement" in the Description of the Notes.
By
their acceptance of the Notes, the holders of the Notes will consent and agree to be bound by the terms of, and will authorize the entry by Wells Fargo Bank, National Association, as
Trustee on behalf of the holders of the Notes (such holders, together with the Notes Collateral Agent, the "Notes Secured Parties"), into the Joinder, the Intercreditor Agreement, any Acceptable
Intercreditor Agreement and any amendments, restatements or modifications to the foregoing in accordance with the terms thereof. By their acceptance, the holders of the Notes will also authorize and
direct the Notes Collateral Agent to perform its obligations and exercise its rights under the Joinder, the Intercreditor Agreement and any Acceptable Intercreditor Agreement in accordance therewith.
The Intercreditor Agreement sets forth the rights and obligations of each of the Notes Secured Parties with respect to the assets of the Grantors that secure the Grantors' obligations to such Notes
Secured Parties.
The
aggregate amount of the First Lien Obligations secured by the Collateral outstanding on the Issue Date may, subject to the limitations set forth in the Intercreditor Agreement, be
increased. In addition, the Grantors may incur Additional First Lien Obligations and Additional Second Lien Obligations after the Issue Date, subject to the limitations set forth in the Intercreditor
Agreement. All or a portion of the First Lien Obligations secured by the Collateral consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding
at any time or from time to time may, subject to the limitations set forth in the Intercreditor Agreement, be increased or reduced and subsequently reborrowed and such obligations may, subject to the
limitations
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set
forth in the Intercreditor Agreement, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, refinanced or otherwise amended or modified from time to
time, all without affecting the priorities of the Liens securing the First Lien Obligations or the provisions of the Intercreditor Agreement defining the relative rights of the parties thereto. The
Lien priorities provided for in the Intercreditor Agreement shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal,
restatement or refinancing of either any First Lien Obligations or any Second Lien Obligations, in each case secured by the Collateral, by the release of any Collateral or of any guarantees securing
any secured obligations or by any action that any representative or secured party may take or fail to take in respect of any Collateral.
Priority of Liens
Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Second Lien Obligations
granted on the Collateral or of any Liens securing the First Lien Obligations granted on the Collateral and notwithstanding any provision of the Uniform Commercial Code, or any other applicable law or
the Second Lien Documents, each Second Lien Agent (including the Notes Collateral Agent) on behalf of itself and each applicable Second Lien Secured Party (including each Notes Secured Party), and
each First Lien Agent (including the Credit Agreement Agent), on behalf of itself and each applicable First Lien Secured Party (including each Credit Agreement Secured Party), will agree
that:
-
(1)
-
any
Lien in respect of all or any portion of the Collateral held by or on behalf of any Second Lien Agent or any Second Lien Secured Party that secures all or any
portion of the Second Lien Obligations shall in all respects be junior and subordinate to the Liens in favor of any First Lien Agent and any First Lien Secured Party in all or such portion of the
Collateral securing all or any portion of the First Lien Obligations, unless and until the Discharge of First Lien Obligations has occurred; and
-
(2)
-
any
Lien in respect of all or any portion of the Collateral held by or on behalf of any First Lien Agent or any First Lien Secured Party that secures all or any
portion of the First Lien Obligations shall in all respects be senior and prior to any Liens in favor of any Second Lien Agent or any Second Lien Secured Party in all or such portion of the Collateral
securing all or any portion of the Second Lien Obligations, unless and until the Discharge of First Lien Obligations has occurred.
Waiver of Right to Contest Liens
Under the Intercreditor Agreement, each Second Lien Agent, for itself and on behalf of each applicable Second Lien Secured Party, and each
First Lien Agent, for itself and on behalf of each applicable First Lien Secured Party, will agree that it will not (and waives any right to) directly or indirectly contest, or assist or support any
other Person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the validity, priority, enforceability or perfection of a Lien held, or purported to be held, by or
on behalf of any of the First Lien Secured Parties in the Collateral securing all or any portion of the First Lien Obligations or by or on behalf of any of the Second Lien Secured Parties in the
Collateral securing all or any portion of the Second Lien Obligations, respectively, or the provisions of the Intercreditor Agreement; provided that
nothing in the Intercreditor Agreement shall be construed to prevent or impair the rights of any First Lien Agent or Second Lien Agent to enforce the Intercreditor Agreement. Until the Discharge of
First Lien Obligations has occurred, each Second Lien Agent, for itself and on behalf of each applicable Second Lien Secured Party, will waive any and all rights it or the Second Lien Secured Parties
may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any First Lien Agent or any First Lien Secured Party seeks to enforce its Liens in
any Collateral in respect of any
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First
Lien Obligations. The foregoing will not be construed to prohibit any Second Lien Agent or any Second Lien Secured Party from enforcing the provisions of the Intercreditor Agreement.
No New Liens
The Intercreditor Agreement will also provide that until the date upon which the Discharge of First Lien Obligations shall have occurred, the
Company shall not, and shall not permit any Guarantor to: (a) grant or permit any additional Liens on any property (other than on cash proceeds of any Second Lien Obligations deposited into
escrow or otherwise segregated pending the use thereof or funds deposited for the discharge or defeasance of any Second Lien Obligations) to secure any Second Lien Obligations unless it has granted or
concurrently grants a Lien on such property to secure the First Lien Obligations; or (b) except as otherwise provided in any of the Second Lien Documents with respect to exclusions from or
limitations on the Collateral securing any Second
Lien Obligations, grant or permit any additional Liens on any property (other than on cash proceeds of any First Lien Obligations deposited into escrow or otherwise segregated pending the use thereof
or funds deposited for the discharge or defeasance of any First Lien Obligations) to secure any First Lien Obligations unless it has granted or concurrently grants a Lien on such property to secure
the Second Lien Obligations.
Similar Liens and Agreements.
It
is the intention that, except as provided in the Intercreditor Agreement or as may otherwise be provided in any First Lien Documents, the Collateral securing the
Second Lien Obligations not be more expansive than the collateral securing the First Lien Obligations. The Intercreditor Agreement also will provide that upon request by the First Lien Designated
Agent, the Applicable Authorized Second Lien Representative and each other Second Lien Agent will cooperate in good faith from time to time in order to determine the specific items included in the
Collateral securing the Second Lien Obligations and the steps taken to perfect the Liens thereon and the identity of the respective Persons obligated under the Second Lien Documents.
Remedies Standstill
Each Second Lien Agent, for and on behalf of itself and each applicable Second Lien Secured Party, will agree that, from the date of
effectiveness of the Intercreditor Agreement until the date upon which the Discharge of First Lien Obligations shall have occurred, except as otherwise provided in the Intercreditor Agreement,
(i) the First Lien Agents and the First Lien Secured Parties shall have the sole and exclusive right to enforce, collect or realize on any Collateral securing any First Lien Obligations or
exercise any right or remedy with respect to any Collateral securing any First Lien Obligations and (ii) no Second Lien Agent or any Second Lien Secured Party will commence or continue the
exercise of any secured creditor remedies with respect to any of the Collateral securing any Second Lien Obligations without the written consent of each of the First Lien Agents, and will not take,
receive or accept any proceeds of any Collateral securing any Second Lien Obligations.
Notwithstanding
the foregoing provision or any other provision of the Intercreditor Agreement, nothing contained in the Intercreditor Agreement will be construed to prevent any Second
Lien Agent or any Second Lien Secured Party from (i) filing a claim or statement of interest with respect to any Second Lien Obligations owed to it in any insolvency or bankruptcy proceeding
commenced by or against any Grantor, (ii) taking any action (not adverse to the priority status of the Liens of any First Lien Agent or any other First Lien Secured Party on any Collateral
securing any of the First Lien Obligations or the rights of any First Lien Agent or any other First Lien Secured Party to commence or continue the exercise of any secured creditor remedies in respect
thereof) in order to create, perfect, preserve or
protect (but not enforce) its rights in, and perfection and priority of its Lien on, any Collateral, (iii) filing any necessary or responsive pleadings in opposition to any motion, adversary
proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the
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claim
or Lien of such Second Lien Agent or Second Lien Secured Party, (iv) filing any pleadings, objections, motions, or agreements which assert rights available to unsecured creditors of any
Grantor arising under any insolvency or bankruptcy proceeding or applicable non-bankruptcy law; provided that in the event any Second Lien Agent or any
Second Lien Secured Party becomes a judgment lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subordinated
to the Liens securing First Lien Obligations on the same basis as the other Liens securing the Second Lien Obligations are so subordinated to the Liens securing First Lien Obligations under the
Intercreditor Agreement or (v) voting on any plan of reorganization or filing any proof of claim in any insolvency or bankruptcy proceeding of any Grantor; provided that each Second Lien Agent, for
and on behalf of itself and each applicable Second Lien Secured Party, agrees that neither it nor any other
Second Lien Secured Party shall take any action or vote against any plan of reorganization which provides for the satisfaction in full in cash of all Second Lien Obligations on or prior to the
effective date of such plan of reorganization, in each case of (i) through (v) above to the extent such action is not inconsistent with the express terms of the Intercreditor Agreement.
Waiver of Right of Marshalling
The Intercreditor Agreement will provide that, prior to the Discharge of First Lien Obligations, each Second Lien Agent, for and on behalf of
itself and each applicable Second Lien Secured Party, agrees not to assert or enforce any right of marshalling accorded to a junior lienholder, as against the First Lien Secured Parties. Following the
Discharge of First Lien Obligations, the Second Lien Agents and other Second Lien Secured Parties may assert their right under the Uniform Commercial Code or otherwise to any proceeds remaining
following a sale or other disposition of the Collateral.
Payments Over
The Intercreditor Agreement will also provide that (i) so long as the Discharge of First Lien Obligations has not occurred, any
Collateral or proceeds thereof received by any Second Lien Agent or any Second Lien Secured Party in connection with the exercise of any right or remedy (including set off) relating to any Collateral
shall be segregated and held in trust and forthwith paid over to the First Lien Designated Agent (and/or its designees) for the benefit of the First Lien Secured Parties in the same form as received,
with any necessary endorsements or as a court of competent jurisdiction may otherwise direct and (ii) the First Lien Agents will be authorized to make any such endorsements as agent for any
Second Lien Secured Party, which authorization will be coupled with an interest and irrevocable until such time as the Intercreditor Agreement is terminated in accordance with the terms thereof.
Insurance
Proceeds of Collateral will include insurance proceeds and, therefore, the terms of the Intercreditor Agreement will govern the ultimate
disposition of casualty insurance proceeds. The Second Lien Agents and the First Lien Agents shall each be named as additional insured or loss payee, as applicable, with respect to all insurance
policies relating to the Collateral to the extent required in the applicable Second Lien Documents and First Lien Documents. The First Lien Designated Agent shall, prior to the Discharge of First Lien
Obligations, have the sole and exclusive right (subject to the rights of the Company and any Guarantor under the applicable First Lien Documents), as against any Second Lien Agent, to adjust
settlement of insurance claims in the event of any covered loss, theft or destruction of Collateral and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of
condemnation) affecting any Collateral. To the extent the applicable documents require payment of proceeds of insurance or any such award to any of the Agents, all proceeds of such insurance or award,
as applicable, shall be remitted, (i) first, prior to the Discharge of First Lien Obligations, to the First Lien Designated Agent, (ii) second, prior to the Discharge of Second Lien
Obligations, to the Notes Collateral Agent (or any successor collateral agent under the Notes Collateral
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and (iii) third, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Second Lien
Agent or any Second Lien Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of the Intercreditor Agreement, it shall pay such
proceeds over to the First
Lien Designated Agent (and/or its designees) in accordance with the provisions described above under "Payments Over."
Application of Proceeds
The Intercreditor Agreement will provide that all Collateral and proceeds thereof received by any First Lien Secured Party or Second Lien
Secured Party in connection with a sale or disposition of such Collateral upon the exercise of any secured creditor remedies in respect thereof or upon the occurrence of an event of default under any
of the First Lien Documents shall be remitted as follows:
first, to the First Lien Designated Agent to be applied to the First Lien Obligations (including, without limitation, all costs and
expenses of the First Lien Agents in connection with the exercise of any secured creditor remedies) in accordance with the applicable First Lien Documents,
second, if and to the extent the Discharge of First Lien Obligations shall have occurred, to the Notes Collateral Agent (or any successor
collateral agent under the Notes Collateral Documents) to be applied to the Indenture Obligations and any other Second Lien Obligations (including, without limitation, all costs and expenses of the
Second Lien Agents in connection with the exercise of any secured creditor remedies) in accordance with the applicable Second Lien Documents, and
third, after the Discharge of First Lien Obligations shall have occurred and Discharge of Second Lien Obligations shall have occurred,
the balance, if any, shall be remitted to the Grantors or as a court of competent jurisdiction may direct.
Turnover of Collateral
The Intercreditor Agreement will also provide that following the Discharge of First Lien Obligations, the relevant First Lien Agents shall
deliver to the Notes Collateral Agent (or any successor collateral agent under the Notes Collateral Documents) or shall execute such documents as the Notes Collateral Agent (or any successor
collateral agent under the Notes Collateral Documents) may reasonably request to enable the Notes Collateral Agent (or any successor collateral agent under the Notes Collateral Documents) to have
control over any Collateral still in any First Lien
Agent's possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct.
Release of Liens and Modifications of Second Lien Collateral Documents
The Intercreditor Agreement will also provide that:
-
(1)
-
if
the First Lien Agents or First Lien Secured Parties release their Lien on any Collateral securing the First Lien Obligations (other than (i) a release of
Liens governed by the provisions described in clause (2) below or (ii) in connection with, or in anticipation of a Discharge of First Lien Obligations), the corresponding Liens on such
Collateral securing the Second Lien Obligations and the Second Lien Agents' and the Second Lien Secured Parties' Liens with respect to such Collateral will terminate and be released automatically and
without further action; and
-
(2)
-
in
the event of (A) any private or public sale of all or any portion of the Collateral in connection with any exercise of any secured creditor remedies by the
First Lien Designated Agent in respect of any First Lien Obligations, or (B) any sale, transfer or
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disposition of all or any portion of the Collateral, so long as such sale, transfer or other disposition under this clause (B) is not prohibited by the Indenture Documents, irrespective
of whether an event of default has occurred under any First Lien Documents or any Second Lien Documents, each Second Lien Agent will agree, on behalf of itself and each applicable Second Lien Secured
Party that, so long as such Second Lien Agent, for the benefit of the applicable Second Lien Secured Parties, shall retain a Lien on the proceeds of such sale, transfer or other disposition (to the
extent that such proceeds are not applied to the First Lien Obligations as provided in the provision described above under "Application of
Proceeds"), such sale, transfer or disposition will be free and clear of the Liens on such Collateral (but not the proceeds thereof to the extent that such proceeds are not
applied to the First Lien Obligations as provided in the provision described above under
"Application of Proceeds") securing the Second Lien Obligations and the Second Lien Agents' and the Second Lien Secured Parties' Liens with
respect to such Collateral (but not the proceeds thereof to the extent that such proceeds are not applied to the First Lien Obligations as provided in the provision described above under
"Application of Proceeds") so sold, transferred, or disposed shall terminate and be automatically released without further action
concurrently with, but only to the same extent as, the release of the First Lien Secured Parties' Liens on such Collateral and, upon the sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Restricted Subsidiary pursuant to any exercise of any secured creditor remedies
by the First Lien Designated Agent in respect of any First Lien Obligations, the Second Lien Secured Parties shall release the guarantees in respect of the Second Lien Obligations of such Subsidiary
Guarantor but only to the extent that the First Lien Secured Parties release the guarantees in respect of the First Lien Obligations of such Subsidiary Guarantor.
In
furtherance of, and subject to, the foregoing, upon delivery to each Second Lien Agent of a notice from any First Lien Agent stating that any release of Liens securing or supporting
the First Lien Obligations has become effective (or shall become effective upon each Second Lien Agent's release) each Second Lien Agent, on behalf of each applicable Second Lien Secured Party, will
promptly, at the Company's expense, execute any and all Lien releases or other documents reasonably requested by any First Lien Agent or the Company in connection therewith. So long as the Discharge
of First Lien Obligations has not occurred, each Second Lien Agent, for itself and on behalf of each applicable Second Lien Secured Party, will appoint the First Lien Designated Agent and any officer
or agent of the First Lien Designated Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Second Lien
Agent and in the name of such Second Lien Agent or in the First Lien Designated Agent's own name, from time to time, in the First Lien Designated Agent's sole discretion, for the purposes of carrying
out the terms of this paragraph and the paragraph immediately above, to take any and all appropriate action and to execute, deliver and file any and all documents and instruments as may be necessary
or desirable to accomplish the purposes of this paragraph and the paragraph immediately above, including any financing statements, termination statements, endorsements, assignments, releases or other
documents or instruments of transfer or release (which appointment, being coupled with an interest, is irrevocable).
In
the event the First Lien Agents or the requisite First Lien Secured Parties each enter into any amendment, waiver or consent with the relevant Grantor(s) in respect of the same or
similar provisions of any of their respective First Lien Collateral Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any
such First Lien Collateral Documents or changing in any manner the rights of any of the First Lien Agents, the First Lien Secured Parties and the Grantors thereunder, then such amendment, waiver or
consent shall apply
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automatically
to any comparable provision of the Comparable Second Lien Collateral Documents without the consent of any Second Lien Agent or any Second Lien Secured Party and without any
action by any Second Lien Agent, any Second Lien Secured Party or the Grantors, provided, that (A) no such amendment, waiver or consent shall
have the effect of imposing additional duties on any Second Lien Agent without its consent and (B) notice of such amendment, waiver or consent shall have been given to the Second Lien Agents
(although the failure to give any such notice shall in no way affect the effectiveness of any such amendment, waiver or consent).
Notwithstanding
the foregoing, in the event of the release of the First Lien Agents' Liens on all or substantially all of the Collateral (other than when such release occurs in
connection with the First Lien Designated Agent's foreclosure upon, or other exercise of rights and remedies with respect to, such Collateral), no release of the Liens on such Collateral securing the
Second Lien Obligations and the Second Lien Agents' and the Second Lien Secured Parties' Liens with respect to such Collateral will be made unless (a) the sale or other disposition of such
Collateral is permitted under the Second Lien Documents or (b) (x) consent to release of such second-priority Liens has been given by the requisite percentage(s) or number(s) of the Second Lien
Secured Parties, as provided for in the applicable Second Lien Documents, and (y) the Company has delivered an officers' certificate to the First Lien Agents and the Second Lien Agents
certifying that all such consents have been obtained.
Insolvency and Bankruptcy Proceedings
DIP Financing. If any Grantor shall be subject to any insolvency or bankruptcy proceeding at any
time prior to the Discharge of First Lien
Obligations, and if such Grantor as debtor-in-possession moves for the approval of any financing under Section 364 of the Bankruptcy Code to be provided by one or more lenders or any order for
the use of cash collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with
similar effect under any foreign Debtor Relief Laws) (each, a "DIP Financing"), then each Second Lien Agent, on behalf of itself and each applicable Second Lien Secured Party, will agree that it will
raise no objection and will not contest or support any objection to such DIP Financing or use of cash collateral or to the Liens securing the same on the grounds of a failure to provide "adequate
protection" for the Liens securing any Second Lien Obligations or on any other grounds (and, other than as permitted below in "No Contest; Adequate
Protection", will not request any adequate protection solely as a result of such DIP Financing or use of cash collateral) and, to the extent the Liens securing the First Lien
Obligations under the First Lien Documents are subordinated or pari passu with such DIP Financing (a "Senior DIP Financing"), will subordinate its Liens
in the Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto), so long as (i) the First Lien Designated Agent or First Lien Secured Parties holding a
majority of the First Lien Obligations shall have consented (or not objected) to such DIP Financing, (ii) the Second Lien Agent retains its Liens on the Collateral to secure the applicable
Second Lien Obligations (in each case, including proceeds thereof arising after the commencement of the case under any Debtor Relief Laws) with the same priority as existed prior to the commencement
of the case under the subject Debtor Relief Laws (except that the Liens in favor of the Second Lien Secured Parties will be junior in priority to the Liens securing any Senior DIP Financing and the
Liens securing the
First Lien Obligations), and (iii) if the First Lien Secured Parties (or any subset thereof) are granted adequate protection in respect of the Collateral in the form of a Lien on additional
collateral and/or superpriority claims against the Company and/or Guarantors' bankruptcy estates, as the case may be, then each Second Lien Agent, on behalf of itself and each applicable Second Lien
Secured Party, may seek or request adequate protection in the form of a Lien (which shall be junior in priority to the Liens securing First Lien Obligations and the Liens securing any Senior DIP
Financing (and all Obligations relating thereto)) on the same additional collateral and/or superpriority claims against the Company and/or Guarantors' bankruptcy estates (which shall be subordinated
to any superpriority claim granted to the First Lien Secured Parties in respect of the First Lien Obligations and any superpriority claim granted in respect of any Senior DIP Financing), as the case
may be, as provided in "No Contest; Adequate Protection" below.
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Relief From Stay. Until the Discharge of First Lien Obligations has occurred, each Second Lien
Agent, on behalf of itself and each applicable Second
Lien Secured Party, will agree not to seek relief from the automatic stay or any other stay in any insolvency or bankruptcy proceeding in respect of any portion of the Collateral without each First
Lien Agent's express written consent.
No Contest; Adequate Protection. Each Second Lien Agent, on behalf of itself and each applicable
Second Lien Secured Party, will agree that, prior
to the Discharge of First Lien Obligations, (i) none of them shall seek or accept any form of adequate protection under any or all of §361, §362, §363,
§364 or §507(b) of the Bankruptcy Code with respect to any Collateral, except as otherwise set forth in this "No Contest; Adequate
Protection" or as may be consented to in writing by each of the First Lien Agents and (ii) none of them shall contest (or support any other Person contesting)
(x) any request by any First Lien Agent or any First Lien Secured Party for adequate protection of its interest in the Collateral (unless in
contravention of the Intercreditor Agreement) or (y) any objection by any First Lien Agent or any First Lien Secured Party to any motion, relief, action or proceeding based on a claim by such
First Lien Agent or such First Lien Secured Party that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an insolvency or
bankruptcy proceeding).
Notwithstanding
the foregoing provisions in this "No Contest; Adequate Protection," in any insolvency or bankruptcy
proceeding:
-
(i)
-
if
the First Lien Secured Parties (or any subset thereof) are granted adequate protection in respect of the Collateral in the form of additional collateral and/or
superpriority claims against the Company and/or Guarantors' bankruptcy estates, as the case may be, then the First Lien Agents, on behalf of itself and each applicable First Lien Secured Party, will
agree that each Second Lien Agent on behalf of itself and each applicable Second Lien Secured Party, may seek, request or accept (and the First Lien Secured Parties will not oppose such request or
acceptance of) adequate protection with respect to its interests in the Collateral in the form of a Lien on the same additional collateral and/or superpriority claims against the Company and/or
Guarantors' bankruptcy estates, as the case may be, which Lien will be subordinated to the Liens securing the First Lien Obligations and the Liens securing any Senior DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens of the Second Lien Agents on the Collateral and which superpriority claim will be subordinated to the superpriority claim granted to
the First Lien Secured Parties in respect of the First Lien Obligations and any superpriority claim granted in respect of any Senior DIP Financing; provided,
however, that each Second Lien Agent shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and each applicable Second
Lien Secured Party, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash,
debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims; and
-
(ii)
-
if
any Second Lien Agent or any Second Lien Secured Party is granted (including pursuant to clause (i) above) adequate protection in respect of the
Collateral in the form of additional collateral and/or superpriority claims against the Company and/or Guarantors' bankruptcy estates, as the case may be, then such Second Lien Agent or Second Lien
Secured Party, will agree as a condition to such a grant, that each First Lien Agent on behalf of the applicable First Lien Secured Parties and the holders of any Obligations under a DIP Financing (or
any agent or representative thereof), shall be granted a Lien on the same additional collateral and/or superpriority claims against the Company and/or Guarantors' bankruptcy estates, as the case may
be, as security
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for
the First Lien Obligations and the DIP Financing (and all Obligations relating thereto) with such Liens securing the First Lien Obligations and any Senior DIP Financing (and all Obligations
relating thereto) to be senior in priority to the Liens securing the Second Lien Obligations on the same basis as the other Liens of the First Lien Agents (and the holders of any Obligations under any
Senior DIP Financing (or any agent or representative thereof)) on the Collateral and which superpriority claim will be senior to the superpriority claim granted to the Second Lien Secured Parties in
respect of the Second Lien Obligations; provided, however, that each Second Lien Agent shall have
irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and each applicable Second Lien Secured Party, in any stipulation and/or order granting such
adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date
of such plan equal to the allowed amount of such claims.
If,
in any insolvency proceeding, debt obligations of the reorganized Company secured by Liens upon any property of the reorganized Company are distributed pursuant to a plan of
reorganization or similar dispositive restructuring plan, both on account of any First Lien Obligations and on account of any Second Lien Obligations, then, to the extent the debt obligations
distributed on account of such First Lien Obligations and on account of such Second Lien Obligations are secured by Liens upon the same property, the provisions of the Intercreditor Agreement will
survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.
Asset Sales. Each Second Lien Agent will agree, on behalf of itself and each applicable Second Lien
Secured Party, that it will not oppose any sale
consented to by any First Lien Agent of any Collateral securing any First Lien Obligations pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable
to any insolvency or bankruptcy proceeding or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws) so long as each Second Lien Agent, on behalf
of itself and each applicable Second Lien Secured Party, shall retain a Lien on the proceeds of such sale (to the extent such proceeds are not applied to the First Lien Obligations in accordance with
the provision described above under "Application of Proceeds").
Refinancings and Additional Indebtedness
All or any portion of the First Lien Obligations and all or any portion of the Second Lien Obligations may be refinanced or replaced, in whole
or in part, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under the First Lien Documents and Second Lien
Documents) of, the First Lien Secured Parties or the Second Lien Secured Parties, all without affecting the Lien priorities provided for in the Intercreditor Agreement; provided, however, that the
lenders providing or holders of any such refinancing or replacement indebtedness (or an authorized agent or trustee on their
behalf) bind themselves in writing to the terms of the Intercreditor Agreement pursuant to such documents or agreements (including amendments or supplements to the Intercreditor Agreement) as any
Agent shall reasonably request and in the form set forth in the Intercreditor Agreement or otherwise in form and substance reasonably acceptable to the First Lien Designated Agent.
In
addition, if at any time in connection with or after the Discharge of First Lien Obligations, the Company or any other Grantor enters into any replacement of the applicable First
Lien Documents secured by all or a portion of the Collateral on a first-priority basis (subject to Permitted Liens and certain exceptions), then no such prior Discharge of First Lien Obligations shall
be deemed to have occurred for all purposes of the Intercreditor Agreement, the First Lien Documents and the Second
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Lien
Documents, and the Obligations under such replacement First Lien Documents shall automatically be treated as First Lien Obligations for all purposes of the Intercreditor Agreement, including for
purposes of the Lien priorities and rights in respect of the Collateral (or such portion thereof) set forth therein. During the period that no First Lien Documents are in existence, the Second Lien
Obligations will be secured by a first-priority lien in the Collateral, subject to Permitted Liens.
In
addition, to the extent then permitted under the First Lien Documents and Second Lien Documents, the Company may designate Additional First Lien Debt or additional Second Lien Debt,
all without affecting the Lien priorities provided for in the Intercreditor Agreement; provided that the lenders providing or holders of any such
indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of the Intercreditor Agreement pursuant to such documents or agreements (including amendments
or supplements to the Intercreditor Agreement) as any Agent shall reasonably request and in the form set forth in the Intercreditor Agreement or otherwise in form and substance reasonably acceptable
to the First Lien Designated Agent.
In
connection with any refinancing or replacement or additional incurrence contemplated by this section, the Intercreditor Agreement may be amended at the request and sole expense of
the Company, and without the consent of any First Lien Secured Parties or Second Lien Secured Parties, (a) to add parties (or any authorized agent or trustee therefor) providing any such
refinancing or replacement or additionally incurred Indebtedness in compliance with the First Lien Documents, the Second Lien Documents and the Intercreditor Agreement, (b) to establish that
Liens on any Collateral securing such refinancing or replacement Indebtedness shall have the same priority (or junior priority) as the Liens on any Collateral securing the Indebtedness being
refinanced or replaced, all on the terms provided for herein immediately prior to such refinancing or replacement, and (c) to establish that Liens on any Collateral securing such additionally
incurred First Lien Obligations or Second Lien Obligations shall have the same priority (or junior priority) as the Liens on any Collateral securing First Lien Obligations or Second Lien Obligations,
as the case may be, existing immediately prior to such additional incurrence, all on the terms provided for herein immediately prior to such additional incurrence.
Upon
any provision of refinancing or replacement First Lien Obligations or Second Lien Obligations or of additional extensions of credit, the First Liens Agents and the Second Lien
Agents shall be entitled to rely conclusively on the determination of the Company that such refinancing, replacement or additional extensions of credit do not violate the provisions of the First Lien
Documents or the Second Lien Documents if such determination is set forth in an officers' certificate delivered to such party, the First Liens Agents and the Second Lien Agents; provided, however, that
such determination will not affect whether or not the Company or other applicable Grantor has complied with its undertakings in
the First Lien Documents or the Second Lien Documents.
Optional Redemption
Except as set forth below, we will not be entitled to redeem the Notes at our option prior to November 15, 2022.
The
Notes will be redeemable at our option, in whole or in part, at any time on or after November 15, 2022 at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date), if
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redeemed
during the twelve-month period beginning on November 15 of each of the years indicated below:
|
|
|
|
|
Year
|
|
Redemption Price
|
|
2022
|
|
|
101.938
|
%
|
2023
|
|
|
101.292
|
%
|
2024
|
|
|
100.646
|
%
|
2025 and thereafter
|
|
|
100.000
|
%
|
In
addition, at any time, or from time to time, on or prior to November 15, 2022, we may, at our option, use the net cash proceeds of one or more Equity Offerings to redeem up to
an aggregate of 40.0% of the principal amount of the Notes at a redemption price equal to 103.875% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to the
redemption date; provided, however, that (1) at least 50.0% of the aggregate principal amount of
Notes issued on the Issue Date (excluding Notes held by the Company and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption and (2) the redemption occurs
within 120 days of the consummation of any such Equity Offering.
Prior
to November 15, 2022, we will be entitled at our option to redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes
plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, the redemption date (subject to the right of holders on the relevant record date to receive interest due on the relevant
interest payment date).
Mandatory Redemption
The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.
Selection and Notice of Redemption
In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption will be made on a pro rata
basis (subject to the rules of DTC) unless otherwise required by law or applicable stock exchange requirements; provided, however, that such Notes shall
only be redeemable in principal amounts of $2,000 or an integral multiple of $1,000 in excess thereof. Notice of
redemption shall be delivered electronically or mailed by first-class mail to each holder of the Notes to be redeemed at its registered address, at least 10 but not more than 60 days before the
redemption date, except that redemption notices may be delivered electronically or mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance or
a satisfaction and discharge of the Notes.
Notices
of redemption may be subject to the satisfaction of one or more conditions precedent established by us in our sole discretion. If a redemption is subject to satisfaction of one
or more conditions precedent, such notice shall describe each such condition, and if applicable, shall state that, in the Company's discretion, the redemption date may be delayed until such time
(including more than 60 days after the date the notice of redemption was delivered) as any or all conditions shall be satisfied, or such redemption may not occur and such notice may be
rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed. In addition, we may provide in any notice of
redemption for the Notes that payment of the redemption price and the performance of our obligations with respect to such redemption may be performed by another Person.
If
any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in a
principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon surrender for cancellation of the original Note. Notes called for redemption become due
on the date
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fixed
for redemption. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption, unless we default in the payment of the redemption price.
We
may, at our option, elect to redeem the Notes pursuant to more than one type of redemption described under the caption "Optional
Redemption" on a concurrent basis.
Change of Control
Upon the occurrence of a Change of Control after the Issue Date, we shall be obligated to make an offer to purchase all of the then outstanding
Notes (a "Change of Control Offer"), on a business day (the "Change of Control Purchase Date") not more than 60 nor less than 10 days following the delivery to each holder of the Notes of a
notice of the Change of Control (a "Change of Control Notice"). The Change of Control Offer shall be at a purchase price in cash (the "Change of Control Purchase Price") equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, thereon to the Change of Control Purchase Date, subject to the rights of holders of the Notes on the relevant record date to receive interest
due on the relevant interest payment date. We shall be required to purchase all Notes tendered pursuant to the Change of Control Offer and not withdrawn.
In
order to effect such Change of Control Offer, we shall, not later than the 30th day after the Change of Control, deliver the Change of Control Notice to each holder of the
Notes, which notice shall govern the terms of the Change of Control Offer and shall state, among other things, (i) that a Change of Control has occurred and that such holder has the right to
require the Company to purchase such holder's Notes at the Change of Control Purchase Price, (ii) the date which shall be the Change of Control Purchase Date and (iii) the procedures
that holders of the Notes must follow to accept the Change of Control Offer. The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws or regulations are applicable to a Change of Control Offer and the repurchase of Notes pursuant thereto. The provisions described above that require the Company to
make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the Indenture are applicable.
Notwithstanding
anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditioned upon the consummation of such Change of Control, if
a definitive agreement is in place for the Change of Control at the time the Change of Control Offer is made.
The
Company will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer or (2) notice of redemption for all outstanding Notes has been given pursuant to the Indenture as described above under the caption
"Optional Redemption," unless and until there is a default in payment of the applicable redemption price.
The
use of the term "all or substantially all" in provisions of the Indenture such as clause (b) of the definition of "Change of Control" and under
"Consolidation, Merger, Sale of Assets, etc." has no clearly established meaning under New York law (which governs the Indenture) and has
been the subject of limited judicial interpretation in only a few jurisdictions. Accordingly, there may be a degree of uncertainty in ascertaining whether any particular transaction would involve a
disposition of "all or substantially all" of the assets of a person, which uncertainty should be considered by prospective purchasers of Notes.
The
provisions under the Indenture set forth above relating to the Company's obligations to make a Change of Control Offer may, prior to the occurrence of a Change of Control, be waived
or modified with the consent of the holders of a majority in principal amount of the then outstanding
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Notes
issued under the Indenture. Following the occurrence of a Change of Control, any change, amendment or modification in any material respect of the obligation of the Company to make and consummate
a Change of Control Offer may only be effected with the consent of each holder of the Notes affected thereby. See "Amendments and Waivers."
We
will not be subject to the provisions described under this section during any Suspension Period. See "Certain CovenantsEffectiveness
of Covenants" below for applicability during a Suspension Period.
Certain Covenants
Effectiveness of Covenants. The Indenture contains covenants including, among others, the covenants
described below.
During
any period of time that: (a) the Notes have Investment Grade Ratings from both Rating Agencies, and (b) no Default has occurred and is continuing under the
Indenture (the occurrence of the events described in the foregoing clauses (a) and (b) being collectively referred to as a "Suspension Event"), the Company and its Restricted
Subsidiaries will not be subject to the covenants described under the headings "Additional Subsidiary Guarantors" and
"Further Assurances" and the provision described under the heading "Change of
Control" (collectively, the "Suspended Covenants").
In
the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of time as a result of the foregoing, and on
any subsequent date (the "Reversion Date") one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating,
then the Company and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the Indenture with respect to future events.
The
period of time between the occurrence of a Suspension Event and the Reversion Date is referred to in this description as the "Suspension Period."
In
the event that during the Suspension Period, a transaction is announced or the Company enters into an agreement to effect a transaction, in each case that would result in a Change of
Control, and either (a) one or both of the Rating Agencies indicate that if consummated, such transaction (alone or together with any related transactions) would cause such Rating Agency to
withdraw its Investment Grade Rating or downgrade the rating assigned to the Notes below an Investment Grade Rating or (b) one or both of the Rating Agencies withdraws its Investment Grade
Rating or downgrades the rating assigned to the Notes below an Investment Grade Rating within 60 days following the consummation of such transaction (which period shall be extended so long as
the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies as a result of such transaction) and such Rating Agency announces, publicly
confirms or informs the Trustee upon the Company's written request that the withdrawal or reduction was the result of such transaction, then the Company and its Restricted Subsidiaries will be subject
to the provision described under the heading "Change of Control" under the Indenture with respect to such transaction and the obligations
under the provision described under the heading "Change of Control" will be reinstated until the occurrence of a Suspension Event.
Upon
the Reversion Date, the obligation to grant guarantees pursuant to the covenant described under the heading "Additional Subsidiary
Guarantors" will be reinstated (and the Reversion Date will be deemed to be the date on which any guaranteed Indebtedness was incurred for purposes of the covenant described
under the heading "Additional Subsidiary Guarantors"). In
addition, any guarantees or liens on Collateral that were terminated as described under "Guarantees" and
"SecurityRelease of Collateral" will be required to be reinstated reasonably
promptly to the extent such guarantees or liens on Collateral would otherwise be required to be provided under the Indenture.
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Notwithstanding
that the Suspended Covenants may be reinstated, no Default or Event of Default will be deemed to have occurred as a result of any failure to comply with the Suspended
Covenants during any Suspension Period and the Company and any subsidiary will be permitted, following a Reversion Date, without causing a Default or Event of Default or breach of any of the Suspended
Covenants (notwithstanding the reinstatement thereof) under the Indenture, to honor, comply with or otherwise perform any contractual commitments or obligations entered into during a Suspension Period
following a Reversion Date and to consummate the transactions contemplated thereby.
There
can be no assurance that the Notes will ever achieve or maintain Investment Grade Ratings.
Limitation on Liens. The Company will not, and will not permit any Subsidiary Guarantor to create,
incur, assume or suffer to exist any Lien (each,
a "Subject Lien") securing any Indebtedness on any asset of the Company or any Subsidiary Guarantor now owned or hereafter acquired, unless:
-
(1)
-
in
the case of Subject Liens on any Collateral, (i) such Subject Lien is expressly junior in priority to the Liens on the Collateral securing the Notes (or a
Guarantee in the case of Liens on assets of a Subsidiary Guarantor) or (ii) such Subject Lien is a Permitted Lien; and
-
(2)
-
in
the case of any Subject Lien on any asset or property that is not Collateral, (i) the Notes (or a Guarantee in the case of Liens on assets of a Subsidiary
Guarantor) are secured by a Lien on such assets (which shall be on a second lien basis, if the Subject Lien secures First Lien Obligations) until such time as such obligations are no longer secured by
such Subject Lien or (ii) such Subject Lien is a Permitted Lien.
Any
Lien created for the benefit of the holders of the Notes pursuant to the preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Subject Lien that gave rise to the obligation to secure the Notes and the Guarantees.
For
the purposes of determining compliance with, and the outstanding principal amount of Indebtedness secured by a Lien for purposes of, this covenant, in the event that such Lien meets
the criteria of more than one type of Permitted Lien, the Company, in its sole discretion, will classify, and may from time to time reclassify, such Lien and only be required to include the amount and
type of Indebtedness secured by such Lien in one or a combination of Permitted Liens; provided that Liens securing Indebtedness outstanding on the Issue
Date under the ABL Credit Agreement and the Term Credit Agreement shall be treated as incurred pursuant to clause (b) of the definition of "Permitted Liens".
Except
as provided in the following paragraph with respect to Liens securing Indebtedness denominated in a foreign currency, the amount of any Indebtedness secured by a Lien outstanding
as of any date will be:
-
(1)
-
the
accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
-
(2)
-
the
principal amount of the Indebtedness, in the case of any other Indebtedness; and
-
(3)
-
in
respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
-
(a)
-
the
Fair Market Value of such assets at the date of determination; and
-
(b)
-
the
amount of the Indebtedness of the other Person.
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For
purposes of determining compliance with any dollar-denominated restriction on the incurrence of Liens securing Indebtedness denominated in a foreign currency, the dollar-equivalent
principal amount of such Indebtedness secured by Liens pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in
the case of term Indebtedness secured by Liens, or first committed, in the case of revolving credit Indebtedness secured by Liens; provided that
(x) the dollar-equivalent principal amount of any such Indebtedness secured by Liens outstanding on the Issue Date shall be calculated based on the relevant currency exchange rate in effect on
the Issue Date, (y) if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency (or in a different currency from such Indebtedness so being incurred), and
such refinancing would cause the applicable dollar-denominated restriction on Liens to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such
dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness secured by Liens, calculated as described in the following
sentence, does not exceed (i) the outstanding or committed principal amount (whichever is higher) of such Indebtedness being refinanced plus (ii) the aggregate amount of fees,
underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing and (z) the dollar-equivalent principal amount of Indebtedness secured by Liens
denominated in a foreign currency and incurred pursuant to a Credit Facility shall be calculated based on the relevant currency exchange rate in effect on, at the Company's option, (i) the
Issue Date, (ii) any date on which any of the respective commitments under such Credit Facility shall be reallocated between or among facilities or subfacilities thereunder, or on which such
rate is otherwise calculated for any purpose thereunder or (iii) the date of such incurrence. The principal amount of any Indebtedness secured by Liens incurred to refinance other Indebtedness,
if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness
is denominated that is in effect on the date of such refinancing.
Additional Subsidiary Guarantors. The Company will cause each Domestic Restricted Subsidiary, other
than (unless otherwise determined by the
Company) any Foreign Subsidiary Holding Company or Subsidiary of a Foreign Subsidiary, that guarantees any Indebtedness of the Company or any other Restricted Subsidiary incurred pursuant to the ABL
Credit Agreement or the Term Credit Agreement to, within a reasonable time thereafter, execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Domestic Restricted Subsidiary
will guarantee payment of the Notes on the same terms and conditions as those set forth in the Indenture, subject to any limitations that apply to the guarantee of Indebtedness giving rise to the
requirement to guarantee the Notes. Any such Domestic Restricted Subsidiary will, substantially concurrently with the execution of such Guaranty Agreement, pledge all of its existing and future assets
constituting Collateral to secure its guarantee, and the Company will cause all of the Capital Stock in such Domestic Restricted Subsidiary owned by the Company or a Subsidiary Guarantor, to the
extent constituting Collateral, to be pledged to secure the Notes and the guarantees thereof. This covenant shall not apply to any of the Company's Subsidiaries that have been properly designated as
an Unrestricted Subsidiary.
Further Assurances. The Company shall promptly execute and deliver, or cause to be promptly
executed and delivered to the Notes Collateral Agent
such documents and agreements, and shall promptly take or cause to be taken such actions, as the Notes Collateral Agent may, from time to time, reasonably request to grant, preserve, protect or
perfect the Liens created or intended to be created by the Notes Collateral Documents or the validity, effectiveness or priority of any such Lien, subject to the limitations set forth in the
Indenture, the Notes Collateral Documents and the Intercreditor Agreement.
Upon
the exercise by the Trustee or any holder of the Notes of any power, right, privilege or remedy under the Indenture, any of the Notes Collateral Documents or the Intercreditor
Agreement
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which
requires any consent, approval, recording, qualification or authorization of any governmental authority, the Company will use its commercially reasonable efforts to execute and deliver all
applications, certifications, instruments and other documents and papers that may be reasonably required from the Company for such governmental consent, approval, recording, qualification or
authorization.
Reporting Requirements. For so long as the Notes are outstanding, whether or not the Company is
subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with the SEC (if permitted by SEC practice and applicable law and regulations) the annual reports, quarterly reports and other
documents which the Company would have been required to file with the SEC pursuant to such Section 13(a) or 15(d) or any successor provision thereto if the Company were so subject, such
documents to be filed with the SEC on or prior to the respective dates (the "Required Filing Dates") by which the Company would have been required so to file such documents if the Company were so
subject. If, notwithstanding the preceding sentence, filing such documents by the Company with the SEC is not permitted by SEC practice or applicable law or regulations, the Company shall transmit (or
cause to be transmitted) electronically or by mail to all holders of the Notes, as their names and addresses appear in the Note register, copies of such documents within 30 days after the
Required Filing Date (or make such documents available on a website maintained by the Company or Holdings).
Consolidation, Merger, Sale of Assets, etc.
The Company will not, directly or indirectly, in any transaction or series of transactions, merge or consolidate with or into, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets as an entirety to, any Person or Persons, and the Company will not permit any Restricted
Subsidiary to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease
or other disposition of all or substantially all of the properties and assets of the Company or the Company and its Restricted Subsidiaries, taken as a whole, to any other person or persons, unless at
the time and after giving effect thereto:
-
(a)
-
either:
-
(i)
-
if
the transaction or transactions is a merger or consolidation, the Company or such Restricted Subsidiary, as the case may be, shall be the surviving person of such
merger or consolidation; or
-
(ii)
-
the
Person formed by such consolidation or into which the Company, or such Restricted Subsidiary, as the case may be, is merged or to which the properties and
assets of the Company or such Restricted Subsidiary, as the case may be, substantially as an entirety, are transferred (any such surviving person or transferee person being the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume pursuant to a supplemental
indenture and such other necessary agreements reasonably satisfactory to the Trustee and the Notes Collateral Agent all the obligations of the Company or such Restricted Subsidiary, as the case may
be, under the Notes, the Indenture, the Notes Collateral Documents and the Intercreditor Agreement; and
-
(b)
-
immediately
after giving effect to such transaction or series of transactions on a pro forma basis (including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing.
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In
connection with any consolidation, merger, transfer, lease, assignment or other disposition contemplated hereby, the Company shall deliver, or cause to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an officers' certificate and an opinion of counsel, each stating that such consolidation, merger, transfer, lease, assignment or other
disposition and the supplemental indenture in respect thereof comply with the requirements under the Indenture.
Upon
any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Company in
accordance with the immediately preceding paragraphs, the successor person formed by such consolidation or into which the Company or a Restricted Subsidiary, as the case may be, is merged or the
successor person to which such sale, assignment, conveyance, transfer, lease or disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company
under the Notes, the Indenture, the Notes Collateral Documents and the Intercreditor Agreement with the same effect as if such successor had been named as the Company in the Notes, the Indenture, the
Notes Collateral Documents and the Intercreditor Agreement and, except in the case of a lease, the Company or such Restricted Subsidiary shall be released and discharged from its obligations
thereunder.
The
Indenture will provide that for all purposes of the Indenture and the Notes (including the provision of this covenant and the covenants described in
"Certain CovenantsLimitation on Liens"), Subsidiaries of any surviving person shall, upon such transaction or series of
related transactions, become Restricted Subsidiaries unless and until designated as Unrestricted Subsidiaries.
Events of Default
The following will be "Events of Default" under the Indenture:
-
(i)
-
default
in the payment of the principal of or premium, if any, when due and payable, on any of the Notes (at Stated Maturity, upon optional redemption, required
purchase or otherwise);
-
(ii)
-
default
in the payment of an installment of interest, if any, on any of the Notes, when due and payable, for 30 days;
-
(iii)
-
default
in the performance of, or breach of, the provisions set forth under "Consolidation, Merger, Sale of Assets,
etc.";
-
(iv)
-
failure
to comply with any of its obligations in connection with a Change of Control (other than a default with respect to the failure to purchase the Notes), for a
period of 30 days after written notice of such failure has been given to the Company by the Trustee or the holders of at least 30.0% in aggregate principal amount of the outstanding Notes;
-
(v)
-
default
in the performance of, or breach of, any covenant or agreement of the Company or the Guarantors under the Indenture (other than a default in the performance
or breach of a covenant or agreement which is specifically dealt with in clause (i), (ii), (iii) or (iv)) and such default or breach shall continue for a period of 60 days after
written notice has been given, by certified mail:
-
(x)
-
to
the Company by the Trustee; or
-
(y)
-
to
the Company and the Trustee by the holders of at least 30.0% in aggregate principal amount of the outstanding Notes;
-
(vi)
-
default
or defaults under one or more agreements, instruments, mortgages, bonds, debentures or other evidences of Indebtedness under which the Company or any
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Significant
Subsidiary then has outstanding Indebtedness in excess of $200.0 million, in each case, either individually or in the aggregate, and either:
-
(a)
-
such
Indebtedness is already due and payable in full; or
-
(b)
-
such
default or defaults have resulted in the acceleration of the maturity of such Indebtedness; provided that no
Default or Event of Default will be deemed to occur with respect to any such accelerated Indebtedness that is paid or is otherwise acquired or retired within 20 business days after such acceleration;
-
(vii)
-
one
or more judgments, orders or decrees of any court or regulatory or administrative agency of competent jurisdiction for the payment of money in excess of
$200.0 million, in each case, either individually or in the aggregate, shall be entered against the Company or any Significant Subsidiary or any of their respective properties and shall not be
discharged and there shall have been a period of 90 days after the date on which any period for appeal has expired and during which a stay of enforcement of such judgment, order or decree,
shall not be in effect;
-
(viii)
-
the
entry of a decree or order by a court having jurisdiction in the premises:
-
(A)
-
for
relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under the Bankruptcy Code or any other federal, state or
foreign bankruptcy, insolvency, reorganization or similar law;
-
(B)
-
adjudging
the Company or any Significant Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the
Company or any Significant Subsidiary under the Bankruptcy Code or any other similar federal, state or foreign law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or any Significant Subsidiary or of any substantial part of any of their properties, or ordering the winding-up or liquidation of any of their affairs, and the
continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;
-
(ix)
-
the
institution by the Company or any Significant Subsidiary of a voluntary case or proceeding under the Bankruptcy Code or any other similar federal, state or
foreign law or any other case or proceedings to be adjudicated a bankrupt or insolvent, or the consent by the Company or any Significant Subsidiary to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary in any involuntary case or proceeding under the Bankruptcy Code or any other similar federal, state or foreign law or to the institution of
bankruptcy or insolvency proceedings against the Company or any Significant Subsidiary, or the filing by the Company or any Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under the Bankruptcy Code or any other similar federal, state or foreign law, or the consent by it to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of any of the Company or any Significant Subsidiary or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due;
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-
(x)
-
any
of the guarantees of the Notes by a Guarantor that is a Significant Subsidiary ceases to be in full force and effect or any of such guarantees is declared to be
null and void and unenforceable or any of such guarantees is found to be invalid or any of the Guarantors denies its liability under its guarantee (other than by reason of release of a Guarantor in
accordance with the terms of the Indenture) and such event continues for 10 business days; or
-
(xi)
-
(a)
any of the Notes Collateral Documents shall cease for any reason to be in full force and effect (other than in accordance with its terms or the terms hereof),
or the Company or a Guarantor that is a Significant Subsidiary, in each case that is a party to any of the Notes Collateral Documents shall so assert in writing, or (b) the Lien created by any
of the Notes Collateral Documents, shall cease to be perfected and enforceable in accordance with its terms with respect to any significant portion of the Collateral (other than in connection with any
termination of such Lien in respect of any Collateral as permitted by the Indenture or by any of the Notes Collateral Documents), and such failure of such Lien to be perfected and enforceable shall
have continued unremedied for a period of 20 business days.
If an Event of Default (other than those covered by clause (viii) or (ix) above with respect to the Company or any Restricted Subsidiary
that is a
Significant Subsidiary) shall occur and be continuing, the Trustee, by notice to the Company, or the holders of at least 30.0% in aggregate principal amount of the Notes then outstanding, by written
notice to the Trustee and the Company, in each case specifying in such notice the respective Event of Default and that such notice is a "notice of acceleration," may declare the principal of, premium,
if any, and accrued and unpaid interest, if any, on all of the outstanding Notes due and payable immediately; provided that a notice of Event of Default
may not be given with respect to any action taken, and reported publicly or to holders, more than two years prior to such notice of Event of Default.
Any
notice of Event of Default, notice of acceleration or instruction to the Trustee to provide a notice of Event of Default, notice of acceleration or to take any other action (a
"Noteholder Direction") provided by any one or more holders (each a "Directing Holder") must be accompanied by a written representation from each such holder to the Company and the Trustee that such
holder is not (or, in the case such holder is DTC or its nominee, that such holder is being instructed solely by beneficial owners that have represented to such holder that they are not) Net Short (a
"Position Representation"), which representation, in the case of a Noteholder Direction relating to a notice of Event of Default shall be deemed repeated at all times until the resulting Event of
Default is cured or otherwise ceases to exist or the Notes are accelerated. In addition, each Directing Holder must, at the time of providing a Noteholder Direction, provide the Company with such
other information as the Company may reasonably request from time to time in order to verify the accuracy of such Directing Holder's Position Representation within five business days of request
therefor (a "Verification Covenant"). In any case in which the holder is DTC or its nominee, any Position Representation or Verification Covenant required hereunder shall be provided by the beneficial
owner of the Notes in lieu of DTC or its nominee.
If,
following the delivery of a Noteholder Direction, but prior to acceleration of the Notes, the Company determines in good faith that there is a reasonable basis to believe a
Directing Holder was, at any relevant time, in breach of its Position Representation and provides to the Trustee evidence that the Company has filed papers with a court of competent jurisdiction
seeking a determination that such Directing Holder was, at such time, in breach of its Position Representation and seeking to invalidate any Event of Default that resulted from the applicable
Noteholder Direction, the cure period with respect to such Event of Default shall be automatically stayed pending a final and non-appealable determination of a court of competent jurisdiction on such
matter. If, following the delivery of a Noteholder Direction, but prior to acceleration of the Notes, the Company provides to the Trustee an
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officers'
certificate stating that a Directing Holder failed to satisfy its Verification Covenant, the cure period with respect to any Event of Default that resulted from the applicable Noteholder
Direction shall be automatically stayed pending satisfaction of such Verification Covenant. Any breach of the Position Representation shall result in such holder's participation in such Noteholder
Direction being
disregarded; and, if, without the participation of such holder, the percentage of Notes held by the remaining holders that provided such Noteholder Direction would have been insufficient to validly
provide such Noteholder Direction, such Noteholder Direction shall be void ab initio, with the effect that such Event of Default shall be deemed never
to have occurred.
If
an Event of Default specified in clause (viii) or (ix) above with respect to the Company or any Restricted Subsidiary that is a Significant Subsidiary, occurs and is
continuing, then the principal of, premium, if any, accrued and unpaid interest, if any, on all the outstanding Notes shall become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any holder of the Notes.
After
a declaration of acceleration under the Indenture, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of a majority in
aggregate principal amount of the outstanding Notes, by written notice to the Company and the Trustee, may rescind such declaration if:
-
(a)
-
the
Company or any Guarantor has paid or deposited with the Trustee a sum sufficient to pay:
-
(i)
-
all
sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel;
-
(ii)
-
all
overdue interest on all the Notes;
-
(iii)
-
the
principal of and premium, if any, on any Notes which have become due otherwise than by such declaration of acceleration and interest thereon at the rate borne
by the Notes; and
-
(iv)
-
to
the extent that payment of such interest is lawful, interest upon overdue interest and overdue principal at the rate borne by the Notes which has become due
otherwise than by such declaration of acceleration;
-
(b)
-
the
rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and
-
(c)
-
all
Events of Default, other than the non-payment of principal of and premium, if any, and interest on the Notes that has become due solely by such declaration of
acceleration, have been cured or waived.
The
holders of a majority in aggregate principal amount of the outstanding Notes may on behalf of the holders of all the Notes waive any past defaults under the Indenture, except a
default in the payment of the principal of and premium, if any, or interest on any Note, or in respect of a covenant or provision which under the Indenture cannot be modified or amended without the
consent of the holder of each Note outstanding.
No
holder of any of the Notes has any right to institute any proceeding with respect to the Indenture or any remedy thereunder, unless the holders of at least 30.0% in aggregate
principal amount of the outstanding Notes have made written request to the Trustee, and offered indemnity satisfactory to the Trustee, to institute such proceeding as Trustee under the Notes and the
Indenture, the Trustee has failed to institute such proceeding within 45 days after receipt of such notice and the Trustee, within such 45-day period, has not received directions inconsistent
with such written request by
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holders
of a majority in aggregate principal amount of the outstanding Notes. Such limitations do not apply, however, to a suit instituted by a holder of a Note for the enforcement of the payment of
the principal of and premium, if any, or interest on such Note on or after the respective due dates expressed in such Note.
During
the existence of an Event of Default, the Trustee is required to exercise such rights and powers vested in it under the Indenture and use the same degree of care and skill in its
exercise thereof as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. Subject to the provisions of the Indenture relating to the duties of the
Trustee, whether or not an Event of Default shall occur and be continuing, the Trustee under the Indenture is not under any obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the holders of the Notes unless such holders shall have offered to the Trustee security or indemnity satisfactory to it. Subject to certain provisions concerning the
rights of the Trustee, the holders of a majority in aggregate principal amount of the outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the Trustee under the Indenture.
If
a Default or an Event of Default occurs and is continuing and is known to the Trustee, the Trustee shall deliver to each holder of the Notes notice of the Default or Event of Default
within 90 days after obtaining knowledge thereof. Except in the case of a Default or an Event of Default in payment of principal of and premium, if any, or interest on any Notes, the Trustee
may withhold the notice to the holders of such Notes if the Trustee, in good faith, determines that withholding the notice is in the interest of the holders of the Notes.
The
Company is required to furnish to the Trustee annual statements as to the performance by the Company of its and its Restricted Subsidiaries' obligations under the Indenture and the
Notes Collateral Documents and as to any default in such performance.
No Liability for Certain Persons
No director, officer, employee or stockholder of Holdings or the Company, nor any director, officer or employee of any Subsidiary Guarantor, as
such, will have any liability for any obligations of the Company or any Guarantor under the Notes, the guarantees thereof, the Indenture or the Notes Collateral Documents based on or by reason of such
obligations or their creation. Each holder by accepting a Note waives and releases all such liability. The foregoing waiver and release are an integral part of the consideration for the issuance of
the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws.
Legal Defeasance and Covenant Defeasance
The Company may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an officers' certificate, elect to
have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their guarantees of such Notes ("Legal Defeasance") except
for:
-
(1)
-
the
rights of holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are
due from the trust referred to below;
-
(2)
-
the
Company's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security payments held in trust;
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-
(3)
-
the
rights, powers, trusts, duties and immunities of the Trustee, and the Company's and the Guarantors' obligations in connection therewith; and
-
(4)
-
the
Legal Defeasance and Covenant Defeasance provisions of the Indenture.
In
addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants (including its
obligation to make Change of Control Offers) that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants will not constitute a Default or
Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events)
described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes.
In
order to exercise either Legal Defeasance or Covenant Defeasance:
-
(1)
-
the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the Notes, cash in U.S. dollars, non-callable U.S. Government
Obligations, or a combination of cash in U.S. dollars and non-callable U.S. Government Obligations, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on, the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to such stated date for payment or to a particular redemption date;
-
(2)
-
in
the case of Legal Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (a) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
-
(3)
-
in
the case of Covenant Defeasance, the Company must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of
the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
-
(4)
-
no
Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party
or by which the Company or any Guarantor is bound;
-
(5)
-
such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other
than the Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;
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-
(6)
-
the
Company must deliver to the Trustee an officers' certificate stating that the deposit was not made by the Company with the intent of preferring the holders of
the Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and
-
(7)
-
the
Company must deliver to the Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange
of the Notes as expressly provided for in the Indenture) as to all outstanding Notes when:
-
(i)
-
either:
-
(a)
-
all
the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or repaid and the Notes for whose payment
money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for
cancellation; or
-
(b)
-
all
the Notes not theretofore delivered to the Trustee for cancellation (except lost, stolen or destroyed Notes which have been replaced or paid) have become due and
payable, will become due and payable at their stated maturity within one year, or will become due and payable within one year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of and premium, if any, and interest on the Notes to the date of deposit (in the
case of the Notes that have become due and payable) or to the maturity or redemption date, as the case may be, together with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may be;
-
(ii)
-
the
Company has paid all other sums payable under the Indenture by the Company; and
-
(iii)
-
the
Company has delivered to the Trustee an officers' certificate and an opinion of counsel stating that all conditions precedent under the Indenture relating to
the satisfaction and discharge of such Indenture have been complied with.
Amendments and Waivers
From time to time, the Company, the Trustee and the Notes Collateral Agent may, without the consent of the holders of any outstanding Notes,
enter into any additional or supplemental Notes Collateral Documents or amend, modify, waive or supplement the Indenture, the Notes, the Guarantees, the Notes Collateral Documents or the Intercreditor
Agreement for certain specified purposes, including:
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the
Indenture and in the Notes or such Guarantor's Guarantee and to evidence the assumption of obligations under the Indenture and a Guarantee;
(ii) to
add to the covenants of the Company or a Guarantor for the benefit of the holders of the Notes, or to surrender any right or power herein conferred upon the Company
or a Guarantor;
(iii) to
comply with any requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;
(iv) to
cure any ambiguity, omission or mistake, to correct or supplement any provision in the Indenture which may be defective or inconsistent with any other provision
therein, or to make any other provisions with respect to matters or questions arising under the Indenture which shall not be inconsistent with the provisions of the Indenture;
(v) to
make any change that does not adversely affect the rights of the holders of the Notes;
(vi) to
conform any provision of the Indenture, the Notes Collateral Documents or the Intercreditor Agreement to any provision under the heading
"Description of the Notes";
(vii) to
add Guarantees or Collateral, or release or discharge Guarantees or Collateral from the Lien of the Indenture or the Notes Collateral Documents, in accordance with
the terms of the Indenture, the Notes Collateral Documents or the Intercreditor Agreement, as applicable;
(viii) to
effect such amendments and modifications to the extent necessary to reflect the incurrence of any Additional First Lien Obligations or Additional Second Lien
Obligations permitted under the Indenture and the Notes Collateral Documents;
(ix) to
provide for uncertificated Notes in addition to or in place of certificated Notes;
(x) to
make such provisions as necessary (as determined in good faith by the Company) for the issuance of Additional Notes;
(xi) to
evidence and provide for the acceptance and appointment under the Indenture of a successor Trustee pursuant to the requirements thereof or to provide for the
accession by the Trustee to any Notes Collateral Document;
(xii) to
enter into any other amendments, modifications, waivers or supplements to the Notes Collateral Documents or the Intercreditor Agreement permitted to be entered
into without (or not requiring) the consent of holders of the Notes pursuant to the terms thereof; or
(xiii) to
enter into any Acceptable Intercreditor Agreement and any amendment, modification, waiver or supplement thereto permitted to be entered into without (or not
requiring) the consent of holders of the Notes pursuant to the terms thereof.
Other
amendments, modifications of or waivers or supplements to the Indenture, the Notes, the Guarantees, the Notes Collateral Documents or the Intercreditor Agreement, including the
release of any Guarantee or Collateral not otherwise provided for, may be made by the Company, the Trustee and the Notes Collateral Agent with the consent of the holders of a majority of the aggregate
principal amount of the outstanding Notes; provided, that without the consent of at least two-thirds in aggregate principal amount of Notes then
outstanding, an amendment, modification or waiver may not (x) effect a release of all or substantially all of the Collateral from the Liens securing the Indenture Obligations, except in
accordance with the terms of the Indenture, the Notes Collateral Documents or the Intercreditor Agreement, as applicable or (y) change or alter the priority of the Liens securing the
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Indenture
Obligations or the ranking of any guarantee of the Notes, in each case, in any way adverse to the holders of the Notes in any material respect, other than, in each case, as provided under
the terms of the Indenture, the Notes Collateral Documents or the Intercreditor Agreement, as applicable.
Notwithstanding
the foregoing, no such modification or amendment may, without the consent of the holder of each outstanding Note affected thereby:
-
(i)
-
reduce
the principal amount of, extend the fixed maturity of or alter the redemption provisions of, the Notes;
-
(ii)
-
change
the currency in which any Notes or any premium, or the interest thereon is payable;
-
(iii)
-
reduce
the percentage in principal amount of outstanding Notes that must consent to an amendment, supplement or waiver or consent to take any action under the
Indenture, the Notes or the Notes Collateral Documents;
-
(iv)
-
impair
the right to institute suit for the enforcement of any payment on or with respect to the Notes;
-
(v)
-
waive
a default in payment with respect to the Notes; or
-
(vi)
-
reduce
or change the rate or time for payment of interest on the Notes.
The Trustee
The Indenture will provide that, except during the continuance of an Event of Default, the Trustee thereunder will perform only such duties as
are specifically set forth in the Indenture. If an Event of Default has occurred and is continuing, the Trustee will exercise such rights and powers vested in it under the Indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs.
The
Indenture and provisions of the Trust Indenture Act incorporated by reference therein contain limitations on the rights of the Trustee thereunder, should it become a creditor of the
Company, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in
other transactions; provided, however, that if it acquires any conflicting interest (as defined in the
Trust Indenture Act) it must eliminate such conflict or resign.
We
maintain banking and lending relationships in the ordinary course of business with the Trustee and its affiliates.
Governing Law
The Indenture and the Notes will be governed by the laws of the State of New York, without regard to the principles of conflicts of law.
Additional Information
Anyone who receives this prospectus supplement may obtain a copy of the Indenture, the principal Notes Collateral Documents and the
Intercreditor Agreement without charge by writing to United Rentals, Inc., 100 First Stamford Place, Suite 700, Stamford, CT 06902, Attention: Corporate Secretary.
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Book-Entry, Delivery and Form
The Notes will be issued in the form of one or more registered global notes (the "Global Notes"). The Global Notes will be deposited upon
issuance with the Trustee as custodian for DTC, in New York, New York, and registered in the name of DTC or its nominee, in each case, for credit to an account of a direct or indirect participant in
DTC as described below.
Except
as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in
the Global Notes may not be exchanged for definitive notes in certificated form ("Certificated Notes") except in the limited circumstances described below. See
"Exchange of Global Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in
the Global Notes will not be entitled to receive physical delivery of notes in certificated form.
Transfers
of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time
to time. The transferor shall also provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including
without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on any such information provided to it and shall have no responsibility to
verify or ensure the accuracy of such information.
Depository Procedures
The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and
procedures are solely within the control of the respective settlement systems and are subject to changes by them. The Company takes no responsibility for these operations and procedures and urges
investors to contact the system or their participants directly to discuss these matters.
DTC
has advised the Company that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to
facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities
such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants.
The
ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC
has also advised the Company that, pursuant to procedures established by it:
-
(1)
-
upon
deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the underwriters with portions of the principal amount of the Global
Notes; and
-
(2)
-
ownership
of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained
by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).
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Investors
in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold
their interests therein indirectly through organizations which are Participants in such system. All interests in a Global Note may be subject to the procedures and requirements of DTC. The laws of
some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such
Persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which in turn act on behalf of the Indirect Participants, the ability of a Person having beneficial
interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
Except
as described below, owners of interests in the Global Notes will not have Notes registered in their names, will not receive physical delivery of Notes in certificated form and
will not be considered the registered owners or "holders" thereof under the Indenture for any purpose.
Payments
in respect of the principal of, and interest and premium, if any on, a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the
registered holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the Notes, including the Global Notes, are registered as the
owners of the Notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any
responsibility or liability for:
-
(1)
-
any
aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the
Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global
Notes; or
-
(2)
-
any
other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.
DTC
has advised the Company that its current practice, upon receipt of any payment in respect of securities such as the Notes (including principal and interest), is to credit the
accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment on such payment date. Each relevant Participant is credited
with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect
Participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and
will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of the Participants or the Indirect Participants in
identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.
Transfers
between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds.
DTC
has advised the Company that it will take any action permitted to be taken by a holder of the Notes only at the direction of one or more Participants to whose account DTC has
credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its
Participants.
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None of the Company, the Trustee and any of their respective agents will have any responsibility for the performance by DTC or its participants or
indirect
participants of their respective obligations under the rules and procedures governing their operations.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated Notes if:
-
(1)
-
DTC
(a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency
registered under the Exchange Act and, in either case, the Company fails to appoint a successor depositary;
-
(2)
-
the
Company in its discretion at any time determines not to have all the Notes represented by Global Notes; or
-
(3)
-
a
default entitling the holders of the Notes to accelerate the maturity thereof has occurred and is continuing.
Any
Global Note that is exchangeable as above is exchangeable for Certificated Notes issuable in authorized denominations and registered in such names as DTC shall direct. In connection
with any proposed transfer outside the book entry only system, the Company or DTC shall be required to provide or cause to be provided to the Trustee all information necessary to allow the Trustee to
comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on any
such information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Same Day Settlement and Payment
The Company will make payments in respect of the Notes represented by the Global Notes (including principal, premium, if any, and interest) by
wire transfer of immediately available funds to the accounts specified by DTC or its nominee. The Company will make all payments of principal, interest and premium, if any, with respect to
Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such account is specified, by mailing a check to each
such holder's registered address. The Notes represented by the Global Notes are expected to be eligible to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading
activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any Certificated Notes will also be settled in
immediately available funds.
Certain Definitions
"ABL Credit Agreement" means the Third Amended and Restated Credit Agreement, dated as of
February 15, 2019, among the Company and certain of its Subsidiaries, as Borrowers, Holdings and certain of its Subsidiaries, as Guarantors, Bank of America, N.A., as agent, U.S. swingline
lender and letter of credit issuer, Bank of America, N.A. (acting through its London branch), as ROW swingline lender, Bank of America, N.A. (acting through its Canada branch), as Canadian swingline
lender, Bank of America Merrill Lynch International, Designated Activity Company, as French swingline lender, and the lenders and other financial institutions party thereto, together with the related
documents (including any term loans and revolving loans thereunder, any guarantees and any security documents, instruments and agreements executed in connection therewith), as amended, extended,
renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any credit
agreement that has been designated in writing by the Company to the First Lien Agents and the Second Lien Agents under the Intercreditor Agreement as the "ABL Credit Agreement" for purposes of the
Intercreditor Agreement, the Indenture and the Notes Collateral Documents incurred to refinance or replace, in
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whole
or in part, the borrowings and commitments at any time outstanding or permitted to be outstanding under such credit agreement or a successor credit agreement, whether by the same or any other
lender or holder of Indebtedness or group of lenders or holders of Indebtedness and whether to the same obligor or different obligors and whether for the same or a different amount (including an
increased amount) or on the same or different terms, conditions, covenants and other provisions.
"Acceptable Intercreditor Agreement" means an intercreditor agreement between the Notes Collateral Agent and one or more persons or
representatives of persons (other than Holdings or any of its Subsidiaries) benefitting from a Lien on any Collateral containing customary terms and conditions for comparable transactions, which shall
be in form and substance reasonably acceptable to the Notes Collateral Agent; provided that any intercreditor agreement between the Notes Collateral
Agent and one or more persons or representatives of persons (other than Holdings or any of its Subsidiaries) benefitting from a Lien on any Collateral that is intended to be senior to the Notes
Collateral Agent's Lien having terms that the Company determines in good faith are substantially consistent with, or not materially less favorable, taken as a whole, to the Notes Secured Parties than,
the terms of the Intercreditor Agreement (as amended, restated, modified or replaced in accordance with its terms) shall be deemed to be reasonably acceptable to the Notes Collateral Agent.
"Acquired Indebtedness" means Indebtedness of a person:
-
(a)
-
assumed
in connection with an Asset Acquisition from such person; or
-
(b)
-
existing
at the time such person becomes a Subsidiary of any other person and not incurred in connection with, or in contemplation of, such Asset Acquisition or such
person becoming a Subsidiary.
"Additional First Lien Agent" means any agent, trustee or representative of the holders of Additional First Lien Obligations who
(a) is appointed as the First Lien Agent (for purposes related to the administration of the security documents related thereto) pursuant to a credit agreement or other agreement governing such
Additional First Lien Obligations, together with its successors in such capacity, and (b) has become a party to the Intercreditor Agreement either directly or by executing a joinder in the form
required under the Intercreditor Agreement or such other form that is reasonably acceptable to the First Lien Designated Agent.
"Additional First Lien Agreement" means any Credit Facility evidencing or governing Additional First Lien Debt, in each case in respect
of which an Additional First Lien Agent has become a party to the Intercreditor Agreement either directly or by executing a joinder in the form required under the Intercreditor Agreement or such other
form that is reasonably acceptable to the First Lien Designated Agent.
"Additional First Lien Debt" means Indebtedness secured by a Lien incurred pursuant to clause (b) of the definition of "Permitted
Liens" (other than Indebtedness under the ABL Credit Agreement, but including Indebtedness under the Term Credit Agreement) that is intended to be secured on a pari
passu basis with any other First Lien Obligation (for the avoidance of doubt, such Indebtedness may be expressly subordinated in right of payment (or in priority of application
of proceeds of Collateral) to any other First Lien Obligation, including in the form of a "last-out" tranche); provided, that (i) such
Indebtedness has been designated by the Company in an officers' certificate delivered to the First Lien Agents and Second Lien Agents as "Additional First Lien Debt" for the purposes of the
Intercreditor Agreement which certificate shall include a certification by an officer of the Company that such Additional First Lien Debt is Additional First Lien Obligations permitted to be so
incurred in accordance with any First Lien Documents and any Second Lien Documents and (ii) any agent, trustee or representative of the holders of the First Lien Obligations related to such
Additional First Lien Debt shall have executed a joinder to the Intercreditor Agreement in the form provided therein or such other form that is reasonably acceptable to the First Lien
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Designated
Agent; provided, further, that no Indenture Obligations may be designated as Additional First Lien Debt.
"Additional First Lien Obligations" means (i) any Obligations with respect to any Additional First Lien Agreement, (ii) all
reimbursement obligations (if any) and interest thereon with respect to any letter of credit or similar instruments issued pursuant to any Additional First Lien Agreement and (iii) all Hedging
Obligations, cash management obligations and similar bank product obligations between the Company and/or any of the Guarantors, on the one hand, and any person that was a lender, agent for the lenders
or holder of Obligations under any Additional First Lien Agreement at the time the agreement governing such obligations was entered into (or any affiliate of any person that was a lender, agent for
the lenders or holder of Obligations under any Additional First Lien Agreement at the time the agreement governing such obligations was entered into), on the other hand, to the extent that such
obligations are secured by Liens on the Collateral, and all fees, expenses and other amounts payable from time to time in connection therewith; provided,
however, for the avoidance of doubt, none of the Credit Agreement Obligations shall constitute Additional First Lien Obligations.
"Additional Second Lien Agent" means any agent, trustee or representative of the holders of Additional Second Lien Obligations who
(a) is appointed as the Second Lien Agent (for purposes related to the administration of the security documents related thereto) pursuant to a credit agreement or other agreement governing such
Additional Second Lien Obligations, together with its successors in such capacity and (b) has become a party to the Intercreditor Agreement either directly or by executing a joinder in the form
required under the Intercreditor Agreement or such other form that is reasonably acceptable to the First Lien Designated Agent.
"Additional Second Lien Agreement" means any Credit Facility evidencing or governing Second Lien Debt (other than any Indenture
Document), in each case in respect of which an Additional Second Lien Agent has become a party to the Intercreditor Agreement either directly or by executing a joinder in the form required under the
Intercreditor Agreement or such other form that is reasonably acceptable to the First Lien Designated Agent.
"Additional Second Lien Obligations" means (i) any Obligations with respect to any Additional Second Lien Agreement,
(ii) all reimbursement obligations (if any) and interest thereon with respect to any letter of credit or similar instruments issued pursuant to any Additional Second Lien Agreement and
(iii) all Hedging Obligations, cash management obligations and similar bank product obligations between the Company and/or any of the Guarantors, on the one hand, and any person that was a
lender, agent for the lenders or holder of Obligations under any Additional Second Lien Agreement at the time the agreement governing such obligations was entered into (or any affiliate of any person
that was a lender, agent for the lenders or holder of Obligations under any Additional Second Lien Agreement at the time the agreement governing such obligations was entered into), on the other hand,
to the extent that such obligations are secured by Liens on the Collateral, and all fees, expenses and other amounts payable from time to time in connection therewith; provided, however, for the
avoidance of doubt, none
of the Indenture Obligations or First Lien Obligations shall constitute Additional Second Lien Obligations.
"Additional Second Lien Secured Parties" means any Additional Second Lien Agent, the lenders and letter of credit issuer(s) party to any
Additional Second Lien Agreement and any other Person holding any Additional Second Lien Obligation or to whom any Additional Second Lien Obligation is at any time owing.
"Adjusted Treasury Rate" means, with respect to any redemption date, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors
of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the
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caption
"Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after November 15, 2022, yields for the
two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month, except that if the period from the redemption date to November 15, 2022 is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year shall be used) or (ii) if such release (or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third business day immediately preceding the redemption date, plus 0.50%.
"Affiliate" means, with respect to any specified Person, any other Person directly or indirectly Controlling or Controlled by or under
direct or indirect common Control with such specified Person.
"Agents" means, collectively, the First Lien Agents and the Second Lien Agents.
"Applicable Authorized Second Lien Representative" means (i) initially the Largest Second Lien Holder at such time,
(ii) thereafter, subject to clause (iii) below, upon the occurrence of a Larger Second Lien Holder Event, the Authorized Second Lien Representative in respect of the Second Lien
Obligations with the then largest principal amount outstanding, and (iii) from and after the Non-Controlling
Authorized Second Lien Representative Enforcement Date, the Major Non-Controlling Authorized Second Lien Representative.
"Applicable Premium" means with respect to any Notes at any redemption date, the greater of
-
(1)
-
1.00%
of the principal amount of such Notes; and
-
(2)
-
the
excess of (a) the present value at such redemption date of (i) the redemption price of the Notes on November 15, 2022, set forth in the
table appearing above under the caption "Optional Redemption" plus (ii) all required
remaining scheduled interest payments due on such Notes through November 15, 2022 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the
Adjusted Treasury Rate as of such redemption date, over (b) the principal amount of such Notes on such redemption date.
"Asset Acquisition" means:
-
(a)
-
an
Investment by the Company or any Restricted Subsidiary in any other Person pursuant to which such Person shall become a Restricted Subsidiary, or shall be merged
with or into the Company or any Restricted Subsidiary or a transaction pursuant to which the Company or a Restricted Subsidiary merges with or into any other Person and such Person assumes the
obligations of the Company or such Restricted Subsidiary, as applicable, as described under "Consolidation, Merger, Sale of Assets, etc.";
or
-
(b)
-
the
acquisition by the Company or any Restricted Subsidiary of the assets of any Person which constitute all or substantially all of the assets of such Person, any
division or line of business of such Person or any other properties or assets of such Person.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at
the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capitalized Lease
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Obligation,
the amount of Indebtedness represented thereby shall be determined in accordance with the definition of "Capitalized Lease Obligation."
"Authorized Second Lien Representative" means (i) in the case of any Indenture Obligations, the Trustee and (ii) in the
case of any Additional Second Lien Obligations, the applicable Additional Second Lien Agent.
"Average Life to Stated Maturity" means, with respect to any Indebtedness, as at any date of determination, the quotient obtained by
dividing:
-
(i)
-
the
sum of the products of:
-
(a)
-
the
number of years from such date to the date or dates of each successive scheduled principal payment (including, without limitation, any sinking fund requirements)
of such Indebtedness; and
-
(b)
-
the
amount of each such principal payment; by
-
(ii)
-
the
sum of all such principal payments.
"BakerCorp Acquisition" means the acquisition by the Company of BakerCorp International Holdings, Inc. as contemplated by the
Agreement and Plan of Merger, dated as of June 30, 2018, by and among Holdings, UR Merger Sub IV Corporation and BakerCorp International Holdings, Inc., as amended from time to time.
"BakerCorp Transactions" means (a) the BakerCorp Acquisition and (b) any other transactions contemplated in connection with
the BakerCorp Acquisition and any other financing transactions in connection with the BakerCorp Acquisition.
"Bankruptcy Code" means Title 11, United States Code.
"BlueLine Acquisition" means the acquisition by Holdings of Vander Holding Corporation and its subsidiaries, as contemplated by the
Agreement and Plan of Merger, dated as of September 10, 2018, by and among Holdings, UR Merger Sub V Corporation, Vander Holding Corporation and Platinum Equity Advisors, LLC, solely in
its capacity as the initial Holder Representative thereunder, as amended from time to time.
"BlueLine Transactions" means (a) the BlueLine Acquisition, (b) the issuance of debt securities in connection with the
BlueLine Acquisition and (c) any other transactions contemplated in connection with the BlueLine Acquisition and any other financing transactions in connection with the BlueLine Acquisition.
"Board of Directors" means the board of directors of a company or its equivalent, including managers of a limited liability company,
general partners of a partnership or trustees of a business trust, or any duly authorized committee thereof.
"Capital Stock" means, with respect to any person, any and all shares, interests, participations, rights in or other equivalents (however
designated) of such person's capital stock or equity participations, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible
into such capital stock and, including, without limitation, with respect to partnerships, limited liability companies or business trusts, ownership interests (whether general or limited) and any other
interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, such partnerships, limited liability companies or business
trusts.
"Capitalized Lease Obligation" means any obligation under a lease of (or other agreement conveying the right to use) any property
(whether real, personal or mixed) that is required to be classified and accounted for as a finance lease under GAAP, and, for the purpose of the Indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at such date, determined
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in
accordance with GAAP; provided that, notwithstanding the foregoing, in no event will any lease that would have been categorized as an operating lease
as determined in accordance with GAAP prior to giving effect to the Accounting Standards Codification Topic 842, Leases, or any other changes in GAAP
subsequent to the Issue Date, be considered a Capitalized Lease Obligation for purposes of the Indenture.
"Cash Equivalents" means, at any time:
-
(a)
-
any
evidence of Indebtedness, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof;
-
(b)
-
commercial
paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-1 by S&P or P-1 by Moody's;
-
(c)
-
any
certificate of deposit (or time deposits represented by such certificates of deposit), guaranteed investment certificates or bankers acceptance, maturing not
more than one year after such time, or overnight Federal Funds transactions that are issued or sold by a commercial banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than $500.0 million;
-
(d)
-
any
repurchase agreement entered into with any commercial banking institution of the stature referred to in clause (c) which:
-
(i)
-
is
secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c); and
-
(ii)
-
has
a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such commercial banking institution
thereunder;
-
(e)
-
investments
in short-term asset management accounts managed by any bank party to a Credit Facility which are invested in indebtedness of any state or municipality of
the United States or of the District of Columbia and which are rated under one of the two highest ratings then obtainable from S&P or by Moody's or investments of the types described in
clauses (a) through (d) above; and
-
(f)
-
investments
in funds investing primarily in investments of the types described in clauses (a) through (e) above;
provided, that, in the case of any Investment by any Foreign Subsidiary of Holdings, "Cash Equivalents" shall also include:
(A) direct obligations of the sovereign nation (or any agency thereof) in which such Foreign Subsidiary is organized and is conducting business or in obligations fully and unconditionally
guaranteed by such sovereign nation (or any agency thereof) (or, in the case of a Foreign Subsidiary organized under the laws of a member state of the European Union, any other sovereign nation (or
agency thereof) in the European Union), in each case maturing within a year after such date and having, at the time of the acquisition thereof, a rating equivalent to at least "A2" from S&P and at
least "P2" from Moody's, (B) investments of the type and maturity described in clauses (a) through (f) above of non-U.S. obligors, which investments or obligors (or the parents of
such obligors) have ratings described in such clauses or equivalent ratings from comparable non-U.S. rating agencies and (C) shares of money market mutual or similar funds substantially all of
the assets of which are invested in assets otherwise satisfying the requirements of this definition (including this paragraph).
"Change of Control" means the occurrence of any of the following events:
-
(a)
-
any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rules 13d-3 and
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13d-5
under the Exchange Act), directly or indirectly, of more than 50.0% of the total Voting Stock of the Company or Holdings (other than, in the case of the Company, Holdings or a wholly owned
Subsidiary of Holdings);
-
(b)
-
the
Company or Holdings consolidates with, or merges with or into, another Person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its properties and assets as an entirety to any Person (other than (1) with respect to the Company, to Holdings, a wholly owned Subsidiary of Holdings or a Subsidiary
Guarantor and (2) with respect to Holdings, to a wholly owned Subsidiary of Holdings, the Company or a Subsidiary Guarantor, or any Person that consolidates with, or merges with or into, the
Company or Holdings), in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company or Holdings is converted into or exchanged for cash, securities or other
property, other than any such transaction involving a merger or consolidation where:
-
(i)
-
the
outstanding Voting Stock of the Company or Holdings is converted into or exchanged for Voting Stock (other than Redeemable Capital Stock) of the surviving or
transferee corporation; and
-
(ii)
-
immediately
after such transaction no "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding Holdings or any
wholly owned Subsidiary of Holdings, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership"
of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50.0% of the total
Voting Stock of the surviving or transferee corporation; or
-
(c)
-
the
Company is liquidated or dissolved or adopts a plan of liquidation.
"Collateral" means all property and assets in which Liens are from time to time purported to be granted to secure the Indenture
Obligations pursuant to the Notes Collateral Documents.
"Comparable Second Lien Collateral Document" means, in relation to any Collateral subject to any Lien created under any First Lien
Collateral Document, those Second Lien Collateral Documents that create a Lien on substantially the same Collateral, granted by the same Grantor.
"Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity most nearly
equal to the period from the redemption date to November 15, 2022 that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of a maturity most nearly equal to November 15, 2022.
"Comparable Treasury Price" means, with respect to any redemption date, if clause (ii) of the definition of "Adjusted Treasury
Rate" is applicable, the average of three, or such lesser number as is given to the Company, Reference Treasury Dealer Quotations for such redemption date.
"Consolidated Cash Flow Available for Fixed Charges" means, with respect to any Person for any period:
-
(i)
-
the
sum of, without duplication, the amounts for such period, taken as a single accounting period, of:
-
(a)
-
Consolidated
Net Income;
-
(b)
-
Consolidated
Non-cash Charges;
-
(c)
-
Consolidated
Interest Expense;
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-
(d)
-
Consolidated
Income Tax Expense;
-
(e)
-
any
fees, expenses or charges related to the Transactions, the RSC Merger Transactions, the National Pump Transactions, the NES Transactions, the Neff Transactions,
the BakerCorp Transactions, the BlueLine Transactions or to any Equity Offering, Investment, merger, acquisition, disposition, consolidation, recapitalization or the incurrence or repayment of
Indebtedness (including any refinancing or amendment of any of the foregoing) (whether or not consummated or incurred);
-
(f)
-
the
amount of any restructuring charges or reserves (which shall include retention, severance, systems establishment cost, excess pension charges, contract
termination costs, including future lease commitments, costs related to start up, closure, relocation or consolidation of facilities, costs to relocate employees, consulting fees, one time information
technology costs, one time branding costs and losses on the sale of excess fleet from closures); provided, however, that the aggregate amount of such
charges or reserves added to Consolidated Cash Flow Available for Fixed Charges for any period pursuant to
this clause (f) (when taken together with any amounts added pursuant to clause (g) below) shall not exceed the greater of 20.0% of Consolidated Cash Flow Available for Fixed Charges of
such Person for such period; and
-
(g)
-
the
amount of net cost savings and synergies projected by the Company in good faith to be realized (which shall be calculated on a pro forma basis as though such
cost savings or synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such cost savings
or synergies are reasonably identifiable and supportable, (B) such actions have been taken or are to
be taken within 24 months after the date of determination to take such action and (C) the aggregate amount of any cost savings and synergies added pursuant to this clause (g)
(when taken together with any amounts added pursuant to clause (f) above) shall not exceed 20.0% of Consolidated Cash Flow Available for Fixed Charges for such period, less
-
(ii)
-
(x)
non-cash items increasing Consolidated Net Income and (y) all cash payments during such period relating to non-cash charges that were added back in
determining Consolidated Cash Flow Available for Fixed Charges in the most recent Four Quarter Period (as defined below).
"Consolidated Current Liabilities" as of the date of determination means the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries which may properly be classified
as current liabilities (including taxes accrued as estimated), on a consolidated basis, after eliminating:
-
(1)
-
all
intercompany items between the Company and any Restricted Subsidiary; and
-
(2)
-
all
current maturities of long-term Indebtedness, all as determined in accordance with GAAP consistently applied.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any person, the ratio of the aggregate amount of Consolidated Cash Flow
Available for Fixed Charges of such person for the four full fiscal quarters, treated as one period, for which financial information in respect thereof is available immediately preceding the date of
the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (such four full fiscal quarter period being referred to herein as the "Four
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Quarter
Period") to the aggregate amount of Consolidated Fixed Charges of such person for the Four Quarter Period.
The
Consolidated Fixed Charge Coverage Ratio shall be calculated after giving pro forma effect to:
-
(a)
-
the
incurrence, repayment, defeasance, retirement or discharge of any Indebtedness by the Company and its Restricted Subsidiaries since the first day of the Four
Quarter Period as if such Indebtedness was incurred, repaid, defeased, retired or discharged at the beginning of the Four Quarter Period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during the Four Quarter Period or such shorter period for which such
facility was outstanding (or, if such facility was created after the end of the Four Quarter Period, based upon the average daily balance of such Indebtedness during the period from the date of
creation of such facility to the date of such calculation or such shorter period)); and
-
(b)
-
any
sale or other disposition of assets (including any disposal, abandonment or discontinuance of operations), other than in the ordinary course of business, or
Asset Acquisition occurring since the first day of the Four Quarter Period (including to the date of calculation) as if such acquisition or disposition occurred at the beginning of such Four Quarter
Period.
For
purposes of this definition, whenever pro forma effect is to be given to any Investment, acquisition, disposition or other transaction, or the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense associated with any Indebtedness incurred or repaid, repurchased, redeemed, defeased or otherwise acquired, retired or discharged in connection
therewith, the pro forma calculations in respect thereof (including without limitation in respect of anticipated cost savings or synergies relating to any such Investment, acquisition, disposition or
other transaction that have been or are expected to be realized) shall be as determined in good faith by the chief financial officer or an authorized officer of the Company. If any Indebtedness bears
a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate Protection Agreement applicable to such Indebtedness). If any Indebtedness bears, at the option of the Company or a
Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Company or such Restricted Subsidiary may designate. If any Indebtedness that is being given
pro forma effect was incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the
applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Company to
be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP, subject to the definition of Capitalized Lease Obligation hereunder.
If
such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third person, the above clause shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or such Subsidiary had directly incurred or otherwise assumed such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any person for any period, the sum of, without duplication, the amounts for such
period of:
-
(i)
-
Consolidated
Interest Expense; and
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-
(ii)
-
the
aggregate amount of dividends and other distributions paid in cash during such period in respect of Redeemable Capital Stock of such person and its Restricted
Subsidiaries on a consolidated basis.
"Consolidated Income Tax Expense" means, with respect to any person for any period, the provision for federal, state, local and foreign
taxes (whether or not paid, estimated or accrued) based on income, profits or capitalization of such person and its Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any person for any period, without duplication, the sum of:
-
(i)
-
the
interest expense, net of any interest income, of such person and its Restricted Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation:
-
(a)
-
any
amortization of debt discount;
-
(b)
-
the
net payments made or received under Interest Rate Protection Obligations (including any amortization of discounts);
-
(c)
-
the
interest portion of any deferred payment obligation;
-
(d)
-
all
commissions, discounts and other fees and charges owed with respect to letters of credit, bankers' acceptance financing or similar facilities; and
-
(e)
-
all
accrued interest; and
-
(ii)
-
the
interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such person and its Restricted Subsidiaries during
such period as determined on a consolidated basis in accordance with GAAP, less
-
(iii)
-
to
the extent otherwise included in such interest expense referred to in clause (i) above, the amortization or write-off of financing costs, commissions,
fees and expenses.
"Consolidated Net Income" means, with respect to any person, for any period, the consolidated net income (or loss) of such person and its
Restricted Subsidiaries for such period as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income, by excluding, without duplication:
-
(i)
-
any
extraordinary, unusual or non-recurring gain, loss, expense or charge (including without limitation fees, expenses and charges associated with the RSC Merger
Transactions, the National Pump Transactions, the NES Transactions, the Neff Transactions, the BakerCorp Transactions, the BlueLine Transactions or any merger, acquisition, disposition or
consolidation after March 9, 2012);
-
(ii)
-
(A)
the portion of net income of such person and its Restricted Subsidiaries allocable to minority interests in unconsolidated persons or to Investments in
Unrestricted Subsidiaries to the extent that cash dividends or distributions have not actually been received by such person or one of its Restricted Subsidiaries and (B) the portion of net loss
of such person and its Restricted Subsidiaries allocable to minority interests in unconsolidated persons or to Investments in Unrestricted Subsidiaries shall be included to the extent of the aggregate
investment of the Company or any Restricted Subsidiary in such person;
-
(iii)
-
gains
or losses in respect of any sales or other dispositions of assets outside the ordinary course of business by such person or one of its Restricted
Subsidiaries (net of fees and expenses relating to the transaction giving rise thereto), on an after-tax basis;
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-
(iv)
-
the
net income of any Restricted Subsidiary of such person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of
that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental
regulations applicable to that Restricted Subsidiary or its stockholders (other than (x) restrictions that have been waived or otherwise released, (y) restrictions pursuant to the Notes
or Indenture and (z) restrictions in effect on the Issue Date with respect to a Restricted Subsidiary and other restrictions with respect to such Restricted Subsidiary that taken as a whole are
not materially less favorable to the holders than such restrictions in effect on the Issue Date);
-
(v)
-
any
gain or loss realized as a result of the cumulative effect of a change in accounting principles;
-
(vi)
-
the
write-off of any issuance costs incurred by the Company in connection with the refinancing or repayment of any Indebtedness;
-
(vii)
-
any
net after-tax gain (or loss) attributable to the early repurchase, extinguishment or conversion of Indebtedness, Hedging Obligations or other derivative
instruments (including any premiums paid);
-
(viii)
-
any
non-cash income (or loss) related to the recording of the Fair Market Value of any Hedging Obligations;
-
(ix)
-
any
unrealized gains or losses in respect of Currency Agreements;
-
(x)
-
(a)
any non-cash compensation deduction as a result of any grant of stock or stock-related instruments to employees, officers, directors or members of management and
(b) any cash charges associated with the rollover, acceleration or payout on stock or stock-related instruments by management of Holdings, the Company, or any of their Subsidiaries in
connection with the RSC Merger Transactions, the National Pump Transactions, the NES Transactions, the Neff Transactions, the BakerCorp Transactions, the BlueLine Transactions or any other merger,
acquisition, disposition or consolidation;
-
(xi)
-
any
income (or loss) from discontinued operations;
-
(xii)
-
any
unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of any Person denominated in a currency
other than the functional currency of such Person;
-
(xiii)
-
to
the extent covered by insurance and actually reimbursed, or, so long as the Company has made a determination that there exists reasonable evidence that such
amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact
reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to
liability or casualty events or business interruption; provided that, to the extent included in Consolidated Net Income in a future period,
reimbursements with respect to expenses excluded from the calculation of Consolidated Net Income pursuant to this clause (xiii) shall be excluded from Consolidated Net Income in such period up
to the amount of such excluded expenses;
-
(xiv)
-
any
non-cash charge, expense or other impact attributable to application of the purchase method of accounting (including the total amount of depreciation and
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"Consolidated Net Tangible Assets" as of any date of determination, means the total amount of assets (less the sum of goodwill and other
intangibles, net) which would appear on a consolidated balance sheet of the Company and its consolidated Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, and after
giving effect to the acquisition or disposal of any property or assets consummated on or prior to such date and after deducting therefrom Consolidated Current Liabilities and, to the extent otherwise
included, the amounts of:
-
(1)
-
minority
interests in consolidated Subsidiaries held by Persons other than the Company or a Restricted Subsidiary;
-
(2)
-
treasury
stock;
-
(3)
-
cash
set apart and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such
obligation is not reflected in Consolidated Current Liabilities; and
-
(4)
-
Investments
in and assets of Unrestricted Subsidiaries.
"Consolidated Non-cash Charges" means, with respect to any person for any period, the aggregate depreciation, amortization (including
amortization of goodwill and other intangibles) and other non-cash expenses of such person and its Restricted Subsidiaries reducing Consolidated Net Income of such person and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss).
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"Control" when used with respect to any specified Person means the power to direct the management and
policies of
such Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms "Controlling" and "Controlled" have meanings correlative to the foregoing.
"Credit Agreement Agent" means Bank of America, N.A., as agent under the ABL Credit Agreement, together with its successors and assigns
in such capacity (or, in the case of a refinancing or replacement in full of the ABL Credit Agreement, the Person serving at such time as the "Agent", "Administrative Agent", "Collateral Agent" or
other similar representative of the lenders under the ABL Credit Agreement, together with its successors and assigns in such capacity); provided, that
if the ABL Credit Agreement is refinanced or replaced in full by two or more credit agreements, the "Agent", "Administrative Agent", "Collateral Agent" or other similar representative of the lenders
under each of the credit agreements shall select one Person from amongst themselves to serve as Credit Agreement Agent.
"Credit Agreement Collateral Documents" means any agreement, document or instrument pursuant to which a Lien is granted by the Company or
a Guarantor to secure any Credit Agreement Obligations or under which rights or remedies with respect to any such Lien are governed, as the same may be amended, supplemented or otherwise modified from
time to time.
"Credit Agreement Documents" means (a) the ABL Credit Agreement and each of the other agreements, documents or instruments
evidencing, governing or securing any Credit Agreement Obligations (including any Credit Agreement Collateral Document) and (b) any other related documents or instruments executed and delivered
pursuant to any Credit Agreement Document described in clause (a) above evidencing, governing or securing any Obligations thereunder, in each case, as amended, restated, modified, renewed,
refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
"Credit Agreement Obligations" means (i) any Obligations with respect to the ABL Credit Agreement, (ii) all reimbursement
obligations (if any) and interest thereon with respect to any letter of credit or similar instruments issued pursuant to the ABL Credit Agreement and (iii) all Hedging Obligations, cash
management obligations and similar bank product obligations (including, without limitation, Designated Bank Product Obligations (as defined in the ABL Credit Agreement)) between the Company and/or any
of the Guarantors, on the one hand, and any person that was a lender, agent for the lenders or holder of Obligations under the ABL Credit Agreement at the time the agreement governing such obligations
was entered into (or any affiliate of any person that was a lender, agent for the lenders or holder of Obligations under the ABL Credit Agreement at the time the agreement governing such obligations
was entered into), on the other hand, to the extent that such obligations are secured by Liens on the Collateral, and all fees, expenses and other amounts payable from time to time in connection
therewith.
"Credit Agreement Secured Parties" means the Credit Agreement Agent, the lenders and letter of credit issuer(s) party to the ABL Credit
Agreement and any other Person holding any Credit Agreement Obligation or to whom any Credit Agreement Obligation is at any time owing.
"Credit Facility" means one or more debt facilities or agreements (including the ABL Credit Agreement and the Term Credit Agreement),
commercial paper facilities, securities purchase agreements, indentures or similar agreements, in each case, providing for revolving loans, term loans, receivables financing (including through the
sale of receivables to lenders or other purchasers or to special purpose entities formed to borrow from such lenders or other purchasers against such receivables), notes, debentures, letters of
credit, the issuance and sale of securities or other debt financing, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith and in
each case, as amended, extended, renewed, restated,
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supplemented
or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any agreements, indentures or
other instruments (and related documents) governing any form of Indebtedness incurred to refinance or replace, in whole or in part, the borrowings and commitments at any time outstanding or permitted
to be outstanding under such facility or agreement or successor facility or agreement whether by the same or any other lender or holder of Indebtedness or group of lenders or holders of Indebtedness
and whether the same obligor or different obligors and whether for the same or a different amount (including an increased amount) or on the same or different terms, conditions, convenants and other
provisions.
"Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement with respect to currency
values.
"Debtor Relief Law" means any bankruptcy, insolvency or debtor relief law.
"Default" means any event that is, or after notice or passage of time or both would be, an Event of Default.
"Derivative Instrument" with respect to a Person, means any contract, instrument or other right to receive payment or delivery of cash or
other assets to which such Person or any Affiliate of such Person that is acting in concert with such Person in connection with such Person's investment in the Notes (other than a Screened Affiliate)
is a party (whether or not requiring further performance by such Person), the value and/or cash flows of which (or any material portion thereof) are materially affected by the value and/or performance
of the Notes and/or the creditworthiness of the Company and/or any one or more of the Guarantors (the "Performance References").
"Discharge of Credit Agreement Obligations" means (a) payment in full in cash of the principal of and interest (including interest
accruing on or after the commencement of any bankruptcy, insolvency or liquidation proceeding, whether or not such interest would be allowed in such bankruptcy, insolvency or liquidation proceeding)
and premium, if any, on all indebtedness (including all reimbursement obligations in respect of, if any, letters of credit) outstanding under the ABL Credit Agreement, (b) payment in full in
cash of all other Credit Agreement Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal (including reimbursement obligations in respect of, if
any, letters of credit), interest and premium, if any, are paid (except for contingent indemnities and cost and reimbursement obligations, in each case, to the extent no claim has been made and except
as otherwise provided in clauses (c) and (d) of this definition), (c) termination or collateralization (in accordance with the terms of the ABL Credit Agreement) of, if any, all letters
of credit issued under the ABL Credit Agreement, (d) termination or collateralization (in accordance with the terms of the applicable documents governing such arrangements or pursuant to
arrangements
that are otherwise acceptable to the relevant counterparty) of all hedging arrangements, cash management arrangements and other bank product arrangements the obligations under or respect to which
constitute Credit Agreement Obligations, and, in the case of a termination, payment in full in cash of all unpaid obligations in respect thereof upon such termination, and (e) termination of,
if any, all commitments under the ABL Credit Agreement; provided that the Discharge of Credit Agreement Obligations shall not be deemed to have occurred
if such payments are made with the proceeds of other Credit Agreement Obligations that constitute an exchange or replacement for or a refinancing of such Credit Agreement Obligations.
"Discharge of First Lien Obligations" means (a) payment in full in cash of the principal of and interest (including interest
accruing on or after the commencement of any bankruptcy, insolvency or liquidation proceeding, whether or not such interest would be allowed in such bankruptcy, insolvency or liquidation proceeding)
and premium, if any, on all indebtedness (including all reimbursement obligations in respect of, if any, letters of credit) outstanding under each of the First Lien Documents, (b) payment in
full in cash of all other First Lien Obligations that are due and payable or otherwise
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accrued
and owing at or prior to the time such principal (including reimbursement obligations in respect of, if any, letters of credit), interest and premium, if any, are paid (except for contingent
indemnities and cost and reimbursement obligations, in each case, to the extent no claim has been made and except as otherwise provided in clauses (c) and (d) of this definition),
(c) termination or collateralization (in accordance with the terms of the applicable First Lien Documents) of, if any, all letters of credit issued under any of the First Lien Documents,
(d) termination or collateralization (in accordance with the terms of the applicable documents governing such arrangements or pursuant to arrangements that are otherwise acceptable to the
relevant counterparty) of all hedging arrangements, cash management arrangements and other bank product arrangements the obligations under or respect to which constitute First Lien Obligations, and,
in the case of a termination, payment in full in cash of all unpaid obligations in respect thereof upon such termination, and (e) termination of, if any, all commitments under all of the First
Lien Documents; provided that the Discharge of First Lien Obligations shall not be deemed to have occurred if such payments are made with the proceeds
of other First Lien Obligations that constitute an exchange or replacement for or a refinancing of such First Lien Obligations.
"Discharge of Second Lien Obligations" means, except to the extent provided in the Intercreditor Agreement, (a) payment in full in
cash of the principal of and interest (including interest accruing on or after the commencement of any bankruptcy, insolvency or liquidation proceeding, whether or not such interest would be allowed
in such bankruptcy, insolvency or liquidation proceeding) and premium, if any, on all indebtedness (including all reimbursement obligations in respect of, if any, letters of credit) outstanding under
the Second Lien Documents, (b) payment in full in cash of all other Second Lien Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal
(including reimbursement obligations in respect of, if any, letters of credit), interest and premium, if any, are paid (except for contingent indemnities and cost and reimbursement obligations, in
each case, to the extent no claim has been made and except as otherwise provided in clauses (c) and
(d) of this definition), (c) termination or collateralization (in accordance with the terms of the applicable Second Lien Documents) of, if any, all letters of credit issued by any Second Lien
Secured Parties, (d) termination or collateralization (in accordance with the terms of the applicable documents governing such arrangements or pursuant to arrangements that are otherwise
acceptable to the relevant counterparty) of all hedging arrangements, cash management arrangements and other bank product arrangements the obligations under or respect to which constitute Second Lien
Obligations, and, in the case of a termination, payment in full in cash of all unpaid obligations in respect thereof upon such termination, and (e) termination of, if any, all commitments under
the Second Lien Documents; provided that the Discharge of Second Lien Obligations shall not be deemed to have occurred if such payments are made with
the proceeds of other Second Lien Obligations that constitute an exchange or replacement for or a refinancing of such Second Lien Obligations.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary other than a Foreign Subsidiary.
"Equipment Securitization Transaction" means any sale, assignment, pledge or other transfer (a) by the Company or any Subsidiary
of the Company of rental fleet equipment, (b) by any ES Special Purpose Vehicle of leases or rental agreements between the Company and/or any Subsidiary of the Company, as lessee, on the one
hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such rental fleet equipment and lease receivables arising under such leases and rental agreements and (c) by
the Company or any Subsidiary of the Company of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto,
all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers' repurchase programs or
guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto and (iii) any collateral, guarantees, credit enhancement or other property or
claims
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supporting
or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables.
"Equity Offering" means a private or public sale for cash after the Issue Date by (1) the Company of its common Capital Stock
(other than Redeemable Capital Stock and other than to a Subsidiary of the Company) or (2) Holdings of its Capital Stock (other than to the Company or a Subsidiary of the Company) to the extent
that the net proceeds therefrom are contributed to the common equity capital of the Company.
"ES Special Purpose Vehicle" means a trust, bankruptcy remote entity or other special purpose entity which is a Subsidiary of the Company
or Holdings (or, if not a Subsidiary of the Company or Holdings, the common equity of which is wholly owned, directly or indirectly, by the Company or Holdings) and
which is formed for the purpose of, and engages in no material business other than, acting as a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith,
owning the rental fleet equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of Equipment Securitization
Transaction, and pledging or transferring any of the foregoing or interests therein).
"Event of Default" has the meaning set forth under "Events of Default"
herein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the ABL Credit Agreement
and the Term Credit Agreement) in existence on the Issue Date, until such amounts are repaid.
"Existing Intercreditor Agreement" means the Intercreditor Agreement, dated as of March 9, 2012, among the Notes Collateral Agent,
the Existing Trustee, the Credit Agreement Agent and the agent under the Term Credit Agreement, as amended or supplemented from time to time prior to the Issue Date.
"Existing Notes Security Agreement" means the Amended and Restated Security Agreement, dated as of March 26, 2015 (effective as of
April 13, 2015), among the Company and the Guarantors in favor of the Notes Collateral Agent, as amended or supplemented from time to time prior to the Issue Date.
"Existing Securitization Facility" means the receivables facility established pursuant to the Third Amended and Restated Receivables
Purchase Agreement, dated as of September 24, 2012, among United Rentals Receivables LLC II, as seller, Holdings, as collection agent, Liberty Street Funding LLC, as a purchaser,
Gotham Funding Corporation, as a purchaser, PNC Bank, National Association, as purchaser agent for itself and as a bank, MUFG Bank, Ltd., as a purchaser agent and as a bank, SunTrust Bank, as
purchaser agent for itself and as a bank, The Toronto-Dominion Bank, as purchaser agent for itself and as a bank, and The Bank of Nova Scotia, as administrative agent, as a bank and as a purchaser
agent, as amended, modified or supplemented from time to time, and the other Transaction Documents under and as defined therein.
"Existing Trustee" means Wells Fargo Bank, National Association, in its capacity as trustee under the indenture for the Existing Senior
Secured Notes and its successors and assigns in such capacity.
"Fair Market Value" means, with respect to any asset, the fair market value of such asset as determined by the Board of Directors of the
Company in good faith, whose determination shall be conclusive and,
in the case of assets with a Fair Market Value in excess of $500.0 million, evidenced by a resolution of the Board of Directors of the Company.
"First Lien Agents" means, collectively, the Credit Agreement Agent and each Additional First Lien Agent.
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"First Lien Collateral Documents" means, collectively, (a) the Credit Agreement Collateral Documents and (b) any agreement,
document or instrument pursuant to which a Lien is granted by the Company or a Guarantor to secure any Additional First Lien Obligations or under which rights or remedies with respect to any such Lien
are governed.
"First Lien Designated Agent" means (i) at all times prior to the Discharge of Credit Agreement Obligations, the Credit Agreement
Agent and (ii) on and after the Discharge of Credit Agreement Obligations, such agent or trustee as is designated "First Lien Designated Agent" by the First Lien Secured Parties holding a
majority in principal amount of the First Lien Obligations then outstanding.
"First Lien Documents" means, collectively, (a) the Credit Agreement Documents and (b) each Additional First Lien Agreement
and each of the other agreements, documents or instruments evidencing, governing or securing any Additional First Lien Obligations and any other related documents or instruments executed and delivered
pursuant to the foregoing.
"First Lien Obligations" means, collectively, the Credit Agreement Obligations and the Additional First Lien Obligations; provided that no Indenture Obligations may be
First Lien Obligations.
"First Lien Secured Parties" means, collectively, (a) the Credit Agreement Secured Parties and (b) any Additional First
Lien Agent, the lenders and letter of credit issuer(s) party to any Additional First Lien Agreement, and any other Person holding any Additional First Lien Obligation or to whom any Additional First
Lien Obligation is at any time owing.
"Foreign Subsidiary" means any Restricted Subsidiary not created or organized under the laws of the United States or any state thereof or
the District of Columbia.
"Foreign Subsidiary Holding Company" means any Subsidiary the primary assets of which consist of Capital Stock in (i) one or more
Foreign Subsidiaries or (ii) one or more Foreign Subsidiary Holding Companies.
"Fuel Hedging Agreement" means any forward contract, swap, option, hedge or other similar financial agreement designed to protect against
fluctuations in fuel prices.
"GAAP" means generally accepted accounting principles set forth in the Financial Accounting Standards Board codification (or by agencies
or entities with similar functions of comparable stature and authority within the U.S. accounting profession) or in rules or interpretative releases of the SEC applicable to SEC registrants; provided
that (a) if at any time the SEC permits or requires U.S. domiciled companies subject to the reporting requirements of the Exchange Act
to use IFRS in lieu of GAAP for financial reporting purposes, the Company may irrevocably elect by written notice to the Trustee to so use IFRS in lieu of GAAP and, upon any such notice, references
herein to GAAP shall thereafter be construed to mean (i) IFRS for periods beginning on and after the date of such notice or a later date as specified in such notice as in effect on such date
and (ii) for prior periods, GAAP as defined in the first sentence of this definition and (b) GAAP is determined as of the date of any calculation or determination required hereunder; provided
that (x) the Company, on any date, may, by providing notice thereof to the Trustee, elect to establish that GAAP shall mean GAAP as in
effect on such date and (y) any such election, once made, shall be irrevocable. The Company shall give notice of any such election to the Trustee and the holders of the Notes.
"guarantee" means, as applied to any obligation:
-
(i)
-
a
guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation; and
-
(ii)
-
an
agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages
in the
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event
of nonperformance) of all or any part of such obligation, including, without limiting the foregoing, the payment of amounts available to be drawn down under letters of credit of another person.
The
term "guarantee" used as a verb has a corresponding meaning.
"Guarantor" means Holdings and each Subsidiary Guarantor.
"Guaranty Agreement" means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor
guarantees the Company's obligations with respect to the Notes on the terms provided for in the Indenture.
"Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Protection Agreement, Currency
Agreement or Fuel Hedging Agreement.
"Holdings" means United Rentals, Inc., a Delaware corporation, and any permitted successor or assign.
"IFRS" means International Financial Reporting Standards and applicable accounting requirements set by the International Accounting
Standards Board or any successor thereto (or the Financial Accounting Standards Board or any successor to such Board, or the SEC, as the case may be), as in effect from time to time.
"Indebtedness" means, with respect to any person, without duplication:
-
(a)
-
the
principal amount of all liabilities of such person for borrowed money or for the deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities incurred in the ordinary course of business;
-
(b)
-
the
principal amount of all obligations of such person evidenced by bonds, notes, debentures or other similar instruments;
-
(c)
-
all
indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even if the
rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the
ordinary course of business;
-
(d)
-
all
Capitalized Lease Obligations of such person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such person;
-
(e)
-
all
Indebtedness referred to in the preceding clauses of other Persons, the payment of which is secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (the amount of such obligation being deemed to be the lesser of the value of such property or asset (as determined in good faith by the
Company) or the amount of the obligation so secured);
-
(f)
-
all
guarantees of Indebtedness referred to in this definition by such Person;
-
(g)
-
all
Redeemable Capital Stock of such Person (which shall be valued at the greater of its voluntary or involuntary maximum fixed repurchase price (as defined below)
excluding accrued dividends);
-
(h)
-
all
obligations under or in respect of Hedging Obligations of such Person (the amount of any such obligation to be equal at any time to the termination value of such
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provided, however, that Indebtedness shall not include:
-
(x)
-
any
holdback or escrow of the purchase price of property, services, businesses or assets; or
-
(y)
-
any
contingent payment obligations incurred in connection with the acquisition of assets or businesses, which are contingent on the performance of the assets or
businesses so acquired.
For
purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Redeemable Capital Stock, such fair market value shall be determined in good faith
by the issuer of such Redeemable Capital Stock.
"Indenture Documents" means (a) the Indenture, the Notes, the guarantees thereof, the Notes Collateral Documents and each of the
other agreements, documents or instruments evidencing or governing any Indenture Obligations and (b) any other related documents or instruments executed and delivered pursuant to any Indenture
Document described in clause (a) above evidencing or governing any Obligations thereunder, in each case, as amended, restated, modified, renewed, refunded, replaced
(whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.
"Indenture Obligations" means all Obligations in respect of the Notes or arising under the Indenture Documents or any of them. Indenture
Obligations shall include all interest accrued (or which would, absent the commencement of an insolvency or liquidation proceeding, accrue) after the commencement of an insolvency or liquidation
proceeding in accordance with and at the rate specified in the relevant Indenture Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding
(including all amounts accruing on or after the commencement of an insolvency or liquidation proceeding, or that would have accrued or become due but for the effect of an insolvency or liquidation
proceeding and irrespective of whether a claim for all or any portion of such amounts is allowable or allowed in such insolvency or liquidation proceeding).
"Intercreditor Agreement" means the Amended and Restated Intercreditor Agreement, dated as of the Issue Date and effective upon
completion of the redemption of the Existing Senior Secured Notes, among the Notes Collateral Agent, the Existing Trustee, the Credit Agreement Agent and the agent under the Term Credit Agreement, as
amended or supplemented from time to time.
"Interest Rate Protection Agreement" means, with respect to any person, any arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include without limitation, interest rate swaps, caps, floors,
collars and similar agreements.
"Interest Rate Protection Obligations" means the obligations of any person pursuant to any Interest Rate Protection Agreements.
"Investment" means, with respect to any Person, any loan or other extension of credit (including, without limitation, a guarantee) or
capital contribution to any other Person (by means of
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any
transfer of cash or other property or any payment for property or services for consideration of Indebtedness or Capital Stock of any other Person), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of indebtedness issued by any other Person. The amount of any Investment outstanding at any time shall be the original cost
of
such Investment, reduced (at the Company's option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB (or the
equivalent) by S&P, or an equivalent rating by any other Rating Agency.
"Issue Date" means November 4, 2019.
"Larger Second Lien Holder Event" means as of any date of determination, the date when the applicable Second Lien Obligations held by the
Largest Second Lien Holder, as the case may be, on such date ceases to represent the largest principal amount outstanding of any then outstanding Second Lien Obligations represented by any Authorized
Second Lien Representative.
"Largest Second Lien Holder" means initially, the Trustee, and from time to time thereafter, the Authorized Second Lien Representative in
respect of the Second Lien Obligations representing the largest principal amount outstanding of any then outstanding Second Lien Obligations represented by any Authorized Second Lien Representative,
as certified by the Company to the Notes Collateral Agent in an officers' certificate.
"Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim,
or preference or priority or other encumbrance upon or with respect to any property of any kind. A Person shall be deemed to own subject to a Lien any property which such person has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale agreement, finance lease or other title retention agreement.
"Long Derivative Instrument" means a Derivative Instrument (i) the value of which generally increases, and/or the payment or
delivery obligations under which generally decrease, with positive changes to the Performance References and/or (ii) the value of which generally decreases, and/or the payment or delivery
obligations under which generally increase, with negative changes to the Performance References.
"Major Non-Controlling Authorized Second Lien Representative" means following a Non-Controlling Authorized Second Lien Representative
Enforcement Date, the Authorized Second Lien Representative in respect of the Second Lien Obligations with the then second largest principal amount outstanding.
"Maturity Date" means November 15, 2027.
"Moody's" means Moody's Investors Service, Inc. and any successor to its rating agency business.
"National Pump Acquisition" means the acquisition of assets contemplated by the Asset Purchase Agreement, effective as of March 7,
2014, by and among the Company, United Rentals of Canada, Inc., LD Services, LLC, National Pump & Compressor Ltd., Canadian Pump & Compressor, Ltd., Gulfco
Industrial Equipment, L.P. and the Owners named therein, as amended from time to time.
"National Pump Transactions" means (a) the National Pump Acquisition, (b) the issuance of debt securities in connection
with the National Pump Acquisition and (c) any other transactions contemplated in connection with the National Pump Acquisition and any other financing transactions in connection with the
National Pump Acquisition.
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"Neff Acquisition" means the acquisition by the Company of Neff Corporation contemplated by the
Agreement and
Plan of Merger, dated as of August 16, 2017, by and among the Company, UR Merger Sub III Corporation and Neff Corporation, as amended from time to time.
"Neff Transactions" means (a) the Neff Acquisition, (b) the issuance of debt securities in connection with the Neff
Acquisition and (c) any other transactions contemplated in connection with the Neff Acquisition and any other financing transactions in connection with the Neff Acquisition.
"NES Acquisition" means the acquisition of assets contemplated by the Agreement and Plan of Merger, dated as of January 25, 2017,
by and among NES Rentals Holdings II, Inc., the Company, UR Merger Sub II Corporation and Diamond Castle Holdings, LLC, as the Stockholder Representative named therein, as amended from
time to time.
"NES Transactions" means (a) the NES Acquisition, (b) the issuance of debt securities in connection with the NES
Acquisition and (c) any other transactions contemplated in connection with the NES Acquisition and any other financing transactions in connection with the NES Acquisition.
"Net Short" means, with respect to a holder or beneficial owner, as of a date of determination, either (i) the value of its Short
Derivative Instruments exceeds the sum of the (x) the value of its Notes plus (y) the value of its Long Derivative Instruments as of such date of determination or (ii) it is
reasonably expected that such would have been the case were a Failure to Pay or Bankruptcy Credit Event (each as defined in the 2014 International Swaps and Derivatives Association, Inc. Credit
Derivatives Definitions) to have occurred with respect to the Company or any Guarantor immediately prior to such date of determination.
"Non-Controlling Authorized Second Lien Representative Enforcement Date" means, the date that is 90 days (throughout which 90-day
period the Major Non-Controlling Authorized Second Lien Representative was not the Applicable Authorized Second Lien Representative) after the occurrence of (a) an "Event of Default" under and
as defined in the terms of the relevant Indebtedness and (b) the Notes Collateral Agent's and each other Authorized Second Lien Representative's receipt of written notice from such Major
Non-Controlling Authorized Second Lien Representative certifying that (i) such Authorized Second Lien Representative is the Major Non- Controlling Authorized Second Lien Representative and that
an "Event of Default", with respect to such Indebtedness, has occurred and is continuing and (ii) such Indebtedness is currently due and payable in full (whether as a result of acceleration
thereof or otherwise) in accordance with the terms of such Indebtedness; provided that the Non-Controlling Authorized Second Lien Representative
Enforcement Date shall be stayed and shall not occur and shall be deemed not to have occurred with respect to any Collateral (1) at any time the Applicable Authorized Second Lien Representative
has directed the Notes Collateral Agent to commence and is pursuing any enforcement action with respect to such Collateral with reasonable diligence in light of the then existing circumstances, taking
into account any limitations on such actions under the Intercreditor Agreement or any Acceptable Intercreditor Agreement, (2) at any time a Grantor that has granted a security interest in such
Collateral is then a debtor under or with respect to (or otherwise subject to) any insolvency or liquidation proceeding or (3) if the Applicable Authorized Second Lien Representative or the
Notes Collateral Agent is subject to limitations on giving directions or commencing or pursuing enforcement actions under the Intercreditor Agreement or any Acceptable Intercreditor Agreement.
"Notes Collateral Documents" means the Notes Security Agreement, any intellectual property security agreement, any other agreement,
document or instrument pursuant to which a Lien is granted by the Company or a Guarantor to secure any Indenture Obligations or under which rights or remedies with respect to any such Lien are
governed, as the same may be amended, supplemented or otherwise modified from time to time.
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"Notes Security Agreement" means the Second Amended and Restated Security Agreement, dated as of the Issue Date and effective upon
completion of the redemption of the Existing Senior Secured Notes, among the Company and the Guarantors in favor of the Notes Collateral Agent, as amended, amended and restated or supplemented from
time to time in accordance with its terms.
"Obligations" means, with respect to any Indebtedness, any principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any nature and all other amounts payable thereunder or in respect thereof.
"Permitted Liens" means:
-
(a)
-
any
Lien existing as of the Issue Date;
-
(b)
-
Liens
securing Indebtedness incurred by the Company and Restricted Subsidiaries pursuant to Credit Facilities; provided, however, that, immediately after giving
effect to any such incurrence, the aggregate principal
amount of all Indebtedness secured by Liens pursuant to this clause (b) and then outstanding shall not exceed the greater of (i) $8.7 billion and (ii) 85.0% of Consolidated
Net Tangible Assets; provided, further, that such Liens on any Collateral are subject to the terms of
the Intercreditor Agreement or an Acceptable Intercreditor Agreement;
-
(c)
-
any
Lien securing Acquired Indebtedness created prior to (and not created in connection with, or in contemplation of) the assumption of such Acquired Indebtedness
by the Company or any Restricted Subsidiary, if such Lien does not attach to any property or assets of the Company or any Restricted Subsidiary other than the property or assets subject to the Lien
prior to such assumption (plus improvements, accessions, proceeds or dividends or distributions in respect thereof);
-
(d)
-
Liens
in favor of the Company or a Restricted Subsidiary;
-
(e)
-
Liens
on and pledges of the assets or Capital Stock of any Unrestricted Subsidiary securing any Indebtedness or other obligations of such Unrestricted Subsidiary and
Liens on the Capital Stock or assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries incurred to finance the working capital of such Foreign Subsidiaries;
-
(f)
-
Liens
for taxes not delinquent or statutory Liens for taxes, the nonpayment of which, individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on the Company and its Restricted Subsidiaries or that are being contested in good faith by appropriate proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant to GAAP;
-
(g)
-
statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent for a period of more than 60 days or being contested in good faith and by appropriate proceedings;
-
(h)
-
Liens
incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government or other contracts, performance and return-of-money bonds and other similar
obligations (in each case, exclusive of obligations for the payment of borrowed money);
-
(i)
-
(A)
mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any developer, landlord or other third
party on property over
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which
the Company or any Restricted Subsidiary has easement rights or on any leased property and subordination or similar agreements relating thereto and (B) any condemnation or eminent domain
proceedings affecting any real property;
-
(j)
-
judgment
Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review or appeal of
such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;
-
(k)
-
easements,
rights-of-way, zoning restrictions, utility agreements, covenants, restrictions and other similar charges, encumbrances or title defects or leases or
subleases granted to others, in respect of real property not interfering in the aggregate in any material respect with the ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries;
-
(l)
-
any
interest or title of a lessor under any Capitalized Lease Obligation or operating lease;
-
(m)
-
Liens
securing Indebtedness arising from (i) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is
extinguished within five business days of incurrence and (ii) customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased
or rented in the ordinary course of business;
-
(n)
-
Liens
securing Indebtedness of the Company or any Restricted Subsidiary under equipment purchase or lines of credit, or for Capitalized Lease Obligations or Purchase
Money Obligations; provided that, the aggregate principal amount of all Indebtedness secured by Liens pursuant to this clause (n) at any time
outstanding shall not exceed the greater of $765.0 million and 7.5% of Consolidated Net Tangible Assets, if such Indebtedness has been incurred to finance the construction, purchase or lease
of, or repairs, improvements or additions to, property, plant or equipment of the Company or any Restricted Subsidiary; provided, however, that the Lien
may not extend to any other property owned by the Company or any Restricted Subsidiary at the time the Lien is incurred (other
than assets and property affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be incurred more than 180 days after the later of
the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;
-
(o)
-
Liens
securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit
and products and proceeds thereof;
-
(p)
-
Liens
securing refinancing Indebtedness of:
-
(x)
-
the
Company, to the extent the proceeds thereof are used to renew, refund, refinance, amend, extend, defease or discharge:
-
(A)
-
the
Notes,
-
(B)
-
any
Existing Indebtedness secured by Liens,
-
(C)
-
any
Acquired Indebtedness secured by Liens pursuant to clause (c) of this definition; or
-
(D)
-
any
Indebtedness secured by Liens pursuant to clauses (dd) or (ee) of this definition; and
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-
(y)
-
any
Restricted Subsidiary, to the extent the proceeds thereof are used to renew, refund, refinance, amend, extend, defease or discharge:
-
(A)
-
the
Notes,
-
(B)
-
any
Existing Indebtedness secured by Liens,
-
(C)
-
any
Acquired Indebtedness secured by Liens pursuant to clause (c) of this definition; or
-
(D)
-
any
Indebtedness secured by Liens pursuant to clauses (dd) or (ee) of this definition; provided, however, that:
-
(1)
-
the
principal amount of Indebtedness secured by a Lien pursuant to this clause (p) (or, if such Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness) shall not exceed the sum of the principal amount of
Indebtedness so refinanced, plus the amount of any accrued and unpaid interest and any premium required to be paid in connection with such refinancing pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing by means of a tender offer or privately negotiated purchase, plus the amount of expenses in
connection therewith, plus an amount equal to any existing commitment unutilized and letters of credit undrawn thereunder; and
-
(2)
-
in
the case of Indebtedness incurred by the Company secured by Liens pursuant to this clause (p) to refinance Subordinated Indebtedness, such Indebtedness;
-
(I)
-
has
no scheduled principal payment prior to the 91st day after the Maturity Date; and
-
(II)
-
has
an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Notes issued under the Indenture;
-
(q)
-
Liens
encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its
Restricted Subsidiaries, including rights of offset and set-off;
-
(r)
-
Liens
securing (i) Hedging Obligations entered into in the ordinary course of business and not for speculative purposes and (ii) First Lien
Obligations (other than Hedging Obligations) of the type specified in clause (iii) of the definition of "Credit Agreement Obligations", "Additional First Lien Obligations" or "Additional Second
Lien Obligations";
-
(s)
-
customary
Liens on assets of a Special Purpose Vehicle arising in connection with a Securitization Transaction;
-
(t)
-
any
interest or title of a lessor, sublessor, licensee or licensor under any lease, sublease, sublicense or license agreement not prohibited by the Indenture;
-
(u)
-
Liens
attaching solely to cash earnest money deposits in connection with any letter of intent or purchase agreement in connection with an acquisition permitted under
the terms of the Indenture;
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-
(v)
-
Liens
on cash set aside at the time of the incurrence of any Indebtedness or government securities purchased with such cash, in either case to the extent that such
cash or government securities prefund the payment of interest on such Indebtedness and are held in an escrow account or similar arrangement to be applied for such purpose;
-
(w)
-
Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;
-
(x)
-
any
encumbrance or restriction (including, but not limited to, put and call agreements) with respect to Capital Stock of any joint venture or similar arrangement
pursuant to any joint venture or similar agreement;
-
(y)
-
Liens
on insurance proceeds or unearned premiums incurred in the ordinary course of business in connection with the financing of insurance premiums;
-
(z)
-
Liens
created in favor of the Trustee for the Notes as provided in the Indenture;
-
(aa)
-
Liens
arising by operation of law in the ordinary course of business;
-
(bb)
-
Liens
on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third
party relating to such property or assets;
-
(cc)
-
Liens
relating to pooled deposit or sweep accounts to permit satisfaction of overdraft, cash pooling or similar obligations incurred in the ordinary course of
business;
-
(dd)
-
Liens
incurred by the Company or any Restricted Subsidiary; provided that at the time any such Lien is incurred, the
obligations secured by such Lien, when added to all other obligations secured by Liens incurred pursuant to this clause (dd), shall not exceed the greater of $765.0 million and 7.5% of
Consolidated Net Tangible Assets; and
-
(ee)
-
Liens
securing Indebtedness; provided that on the date of the incurrence of such Indebtedness after giving effect to
such incurrence (or on the date of the initial borrowing of such Indebtedness after giving pro forma effect to the incurrence of the entire committed amount of such Indebtedness, in which case such
committed amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause), no Default or Event of Default shall have occurred and
be continuing and the Senior Secured Indebtedness Leverage Ratio shall not exceed 4.00:1.00.
For
purposes of determining compliance with this definition, (x) a Lien need not be incurred solely by reference to one category of
Permitted Liens described in this definition but may be incurred under any combination of such categories (including in part under one such category and in part under any other such category),
(y) in the event that a Lien (or any portion thereof) meets the criteria of one or more of such categories of Permitted Liens, the Company shall, in its
sole discretion, classify or reclassify such Lien (or any portion thereof) in any manner that complies with this definition, and (z) in the event that a
portion of Indebtedness secured by a Lien could be classified as secured in part pursuant to clause (ee) above (giving effect to the incurrence of such portion of such Indebtedness), the Company, in
its sole discretion, may classify such portion of such Indebtedness (and any Obligations in respect thereof) as having been secured pursuant to clause (ee) above and thereafter the remainder of such
Indebtedness as having been secured pursuant to one or more of the other clauses of this definition.
If
any Lien securing Indebtedness is incurred in connection with the refinancing of Indebtedness and the Lien securing the Indebtedness being refinanced was initially incurred in
reliance on a basket measured by reference to a percentage of Consolidated Net Tangible Assets at the time of incurrence, and such refinancing would cause the percentage of Consolidated Net Tangible
Assets
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restriction
to be exceeded if calculated based on the Consolidated Net Tangible Assets on the date of such refinancing, such percentage of Consolidated Net Tangible Assets restriction shall not be
deemed to be exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, plus the aggregate amount of fees,
underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing. The principal amount of Indebtedness
outstanding secured by Liens shall be determined after giving effect to the application of proceeds of any such Indebtedness to refinance any such other Indebtedness.
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof.
"Purchase Money Obligations" means any Indebtedness incurred to finance or refinance the acquisition, leasing, construction or
improvement of property (real or personal) or assets (including Capital Stock), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock
of any person owning such property or assets, or otherwise; provided that such Indebtedness is incurred within 180 days after such acquisition.
"Quotation Agent" means a Reference Treasury Dealer selected by the Company.
"Rating Agencies" mean Moody's and S&P or if Moody's or S&P or both shall not make a rating on the Notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected by the Company which shall be substituted for Moody's or S&P or both, as the case may be.
"Receivables Securitization Transaction" means any sale, discount, assignment, conveyance, participation, contribution to capital, grant
of security interest in, pledge or other transfer by the Company or any Subsidiary of the Company of accounts receivable, lease receivables or other payment obligations owing to the Company or such
Subsidiary of the Company or any interest in any of the foregoing, together in each case with any collections and other proceeds thereof, any collection or deposit account related thereto, and any
collateral, guarantees or other property or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables.
"Redeemable Capital Stock" means any class or series of Capital Stock that, either by its terms, by the terms of any security into which
it is convertible or exchangeable or by contract or otherwise, is or upon the happening of an event or passage of time would be, required to be redeemed prior to the Maturity Date or is redeemable at
the option of the holder thereof at any time prior to the Maturity Date, or is convertible into or exchangeable for debt securities at any time prior to the Maturity Date; provided, however, that Capital Stock shall not constitute Redeemable Capital Stock solely because the
holders thereof have the right to require the Company to repurchase or redeem such Capital Stock upon the occurrence of a "change of control" or an "asset sale".
"Reference Treasury Dealer" means each of three nationally recognized investment banking firms selected by the Company that are primary
U.S. Government securities dealers.
"Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Quotation Agent by
such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day immediately preceding such redemption date.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an Unrestricted Subsidiary.
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"RS Special Purpose Vehicle" means a trust, bankruptcy remote entity or other special purpose entity which is a Subsidiary of the Company
or Holdings (or, if not a Subsidiary of the Company or Holdings, the common equity of which is wholly owned, directly or indirectly, by the Company or Holdings) and which is formed for the purpose of,
and engages in no material business other than, acting as an issuer or a depositor in a Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease
receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein).
"RSC Merger" means the merger of RSC Holdings Inc. with and into Holdings, as effected on and subsequent to April 30, 2012.
"RSC Merger Transactions" means the transactions necessary to effect the RSC Merger, including (a) the RSC Merger, (b) the
merger of all of the U.S. Subsidiaries of RSC Holdings Inc. and their successors in interest into one or more Subsidiaries of Holdings, (c) the mergers of one or more U.S. Subsidiaries
of Holdings into one or more other U.S. Subsidiaries of Holdings, (d) the merger, amalgamation, consolidation and/or liquidation of RSC Holdings Inc.'s Foreign Subsidiaries into one or
more Foreign Subsidiaries of the Company, (e) the issuance of debt securities and borrowings under the ABL Credit Agreement in connection with the RSC Merger, (f) the amendment and
increase of the ABL Credit Agreement in connection with the RSC Merger, (g) the amendment and refinancing of the Existing Securitization Facility in connection with the RSC Merger and
(h) any other transactions contemplated in connection with the RSC Merger and any other financing transactions in connection with the RSC Merger.
"S&P" means Standard & Poor's Ratings Services and any successor to its rating agency business.
"Sale/Leaseback Transaction" means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Issue Date
or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a person and the Company or a Restricted Subsidiary leases it
from such person.
"Screened Affiliate" means any Affiliate of a holder (i) that makes investment decisions independently from such holder and any
other Affiliate of such holder that is not a Screened Affiliate, (ii) that has in place customary information screens between it and such holder and any other Affiliate of such holder that is
not a Screened Affiliate and such screens prohibit the sharing of information with respect to the Company or its Subsidiaries, (iii) whose investment policies are not directed by such holder or
any other Affiliate of such holder that is acting in concert with such holder in connection with its investment in
the Notes, and (iv) whose investment decisions are not influenced by the investment decisions of such holder or any other Affiliate of such holder that is acting in concert with such holders in
connection with its investment in the Notes.
"SEC" means the Securities and Exchange Commission.
"Second Lien Agents" means, collectively, the Notes Collateral Agent and each Additional Second Lien Agent.
"Second Lien Collateral Documents" means, collectively, (a) the Notes Collateral Documents and (b) any agreement, document
or instrument pursuant to which a Lien is granted by the Company or a Guarantor to secure any Additional Second Lien Obligations or under which rights or remedies with respect to any such Lien are
governed.
"Second Lien Debt" means Indebtedness secured by a Lien incurred pursuant to clause (b), (dd) or (ee) of the definition of
"Permitted Liens" that is to be equally and ratably secured with any other Second Lien Obligation; provided that (i) such Indebtedness has been
designated by the Company in an officers' certificate delivered to the First Lien Agents and Second Lien Agents as "Second Lien
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Debt"
for the purposes of the Intercreditor Agreement which certificate shall include a certification by an officer of the Company that such Additional Second Lien Obligations are Additional Second
Lien Obligations permitted to be so incurred in accordance with any First Lien Documents and any Second Lien Documents and (ii) any agent, trustee or representative of the holders of the Second
Lien Obligations related to such Second Lien Debt shall have executed a joinder to the Notes Collateral Documents and the Intercreditor Agreement in the respective forms provided therein or such other
form that is reasonably acceptable to the First Lien Designated Agent.
"Second Lien Documents" means, collectively, (a) the Indenture Documents and (b) each Additional Second Lien Agreement and
each of the other agreements, documents or instruments evidencing, governing or securing any Additional Second Lien Obligations and any other related documents or instruments executed and delivered
pursuant to any of the foregoing.
"Second Lien Obligations" means, collectively, the Indenture Obligations and the Additional Second Lien Obligations.
"Second Lien Secured Parties" means, collectively, the Notes Secured Parties and the Additional Second Lien Secured Parties.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Transaction" means an Equipment Securitization Transaction or a Receivables Securitization Transaction.
"Senior Secured Indebtedness Leverage Ratio" means, with respect to any Person, on any date of determination, a ratio (i) the
numerator of which is the aggregate principal amount (or accreted value, as the case may be) of Indebtedness that is secured by a Lien of such Person and its Restricted Subsidiaries on a consolidated
basis outstanding on such date, less the amount of cash and Cash Equivalents that would be stated on the consolidated balance sheet of such Person and held by such Person or its Restricted
Subsidiaries, as determined in accordance with GAAP, as of the date of determination, and (ii) the denominator of which is the Consolidated Cash Flow Available for Fixed Charges of such Person
for the four full fiscal quarters, treated as one period, for which financial information in respect thereof is available immediately preceding the date of such calculation, in each case calculated
with the pro forma adjustments as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of "Consolidated Fixed Charge Coverage Ratio."
"Short Derivative Instrument" means a Derivative Instrument (i) the value of which generally decreases, and/or the payment or
delivery obligations under which generally increase, with positive changes to the Performance References and/or (ii) the value of which generally increases, and/or the payment or delivery
obligations under which generally decrease, with negative changes to the Performance References.
"Significant Subsidiary" of any person means a Restricted Subsidiary of such person which would be a significant subsidiary of such
person as determined in accordance with the definition in Rule 1-02(w) of Article 1 of Regulation S-X promulgated by the SEC and as in effect on the Issue Date.
"Special Purpose Vehicle" means an ES Special Purpose Vehicle or an RS Special Purpose Vehicle.
"Stated Maturity" means, when used with respect to any Note or any installment of interest thereon, the date specified in such Note as
the fixed date on which the principal of such Note or such installment of interest is due and payable, and when used with respect to any other Indebtedness, means the date specified in the instrument
governing such Indebtedness as the fixed date on which the principal of such Indebtedness, or any installment of interest thereon, is due and payable.
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"Subordinated Indebtedness" means, with respect to a person, Indebtedness of such person (whether outstanding on the Issue Date or
thereafter incurred) which is subordinate or junior in right of payment to the Notes or a guarantee of the Notes by such person, as the case may be, pursuant to a written agreement to that effect.
"Subsidiary" means, with respect to any person:
-
(i)
-
a
corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such person, by one or more Subsidiaries of such person or by such
person and one or more Subsidiaries thereof; and
-
(ii)
-
any
other person (other than a corporation), including, without limitation, a partnership, limited liability company, business trust or joint venture, in which such
person, one or more Subsidiaries thereof or such person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, has a majority ownership interest entitled
to vote in the election of directors, managers or trustees thereof (or other person performing similar functions).
For
purposes of this definition, any directors' qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a
Subsidiary.
"Subsidiary Guarantors" means each of the Company's Domestic Restricted Subsidiaries that executes a subsidiary guarantee in accordance
with the provisions of the Indenture, and their respective successors and assigns.
"Term Credit Agreement" means the Credit and Guaranty Agreement, dated as of October 31, 2018, among Holdings, the Company, each
subsidiary of the Company party thereto, the lenders from time to time party thereto and Bank of America, N.A., as agent, together with the related documents (including any guarantees and any security
documents, instruments and agreements executed in connection therewith), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to
amount, terms, conditions, covenants and other provisions) from time to time, and any credit agreement that has been designated in writing by the
Company to the First Lien Agents and the Second Lien Agents under the Intercreditor Agreement as the "Term Credit Agreement" for purposes of the Intercreditor Agreement, the Indenture and the Notes
Collateral Documents incurred to refinance or replace, in whole or in part, the borrowings and commitments at any time outstanding or permitted to be outstanding under such credit agreement or a
successor credit agreement, whether by the same or any other lender or holder of Indebtedness or group of lenders or holders of Indebtedness and whether to the same obligor or different obligors and
whether for the same or a different amount (including an increased amount) or on the same or different terms, conditions, covenants and other provisions.
"Transactions" means the issuance of the Notes and the Guarantees.
"Unrestricted Subsidiary" means (a) United Rentals Receivables LLC II and any other Special Purpose Vehicles and
(b) each Subsidiary of the Company designated as such by the Company from time to time; provided that a Subsidiary shall only be designated as an
Unrestricted Subsidiary pursuant to this clause (b) if the Company has also designated such Subsidiary as an "Unrestricted Subsidiary" (or any substantially similar designation) pursuant to the
ABL Credit Agreement and any debt securities of the Company then outstanding that provides for designation of an "Unrestricted Subsidiary" or a substantially similar term. As of the Issue Date, United
Rentals Receivables LLC II is the only Unrestricted Subsidiary.
"U.S. Government Obligations" means securities that are (a) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or (b) obligations
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of
a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which are unconditionally guaranteed as full faith and credit
obligations of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S.
Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.
"Voting Stock" means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect a majority of the board of directors,
managers or trustees of any person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any
contingency).
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