CREDIT AGREEMENT Dated as of June 9, 2008 among

Exhibit 10(ss)

 

EXECUTION COPY

CREDIT AGREEMENT

Dated as of June 9, 2008

among

THE FINANCIAL INSTITUTIONS NAMED HEREIN

as the Lenders

and

BANK OF AMERICA, N.A.

as Agent, U.S. Swingline Lender and Letter of Credit Issuer

BANK OF AMERICA, N.A. (acting through its Canada Branch)

as Canadian Swingline Lender and as a Canadian Funding Bank

and

UBS SECURITIES LLC

as the Syndication Agent

UBS AG CANADA BRANCH

as a Canadian Funding Bank

and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agent

WACHOVIA CAPITAL FINANCE CORPORATION (CANADA)

as a Canadian Funding Bank

and

WELLS FARGO BANK, N.A.

as Co-Documentation Agent

and

UNITED RENTALS (NORTH AMERICA), INC.

and certain of its Subsidiaries

as the U.S. Borrowers

UNITED RENTALS, INC.

and certain of its Subsidiaries

as the Guarantors

UNITED RENTALS OF CANADA, INC.

and UNITED RENTALS ALBERTA HOLDING, LP

as the Canadian Borrowers

UNITED RENTALS FINANCING LIMITED PARTNERSHIP

as the Specified Loan Borrower

and

BANC OF AMERICA SECURITIES LLC and

UBS SECURITIES LLC

as the Joint Lead Arrangers

and

BANC OF AMERICA SECURITIES LLC

UBS SECURITIES LLC and

WACHOVIA CAPITAL MARKETS, LLC

as the Joint Book Managers

TABLE OF CONTENTS

 

 

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CREDIT AGREEMENT

This Credit Agreement dated as of June 9, 2008, among the financial institutions from time to time parties hereto (such financial institutions, together with their respective successors and assigns, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”), Bank of America, N.A., with an office at 335 Madison Avenue, New York, New York 10017, as Agent, U.S. Swingline Lender and Letter of Credit Issuer, Bank of America, N.A. (acting through its Canada branch), with an office at 200 Front Street West, Toronto, Ontario, M5V 3L2, as Canadian Swingline Lender and as a Canadian Funding Bank, UBS Securities LLC, as the syndication agent (in its capacity as the syndication agent, the “ Syndication Agent ”), UBS AG Canada Branch, as a Canadian Funding Bank, Wachovia Bank, National Association, as a co-documentation agent (in its capacity as a co-documentation agent, a “ Co-Documentation Agent ”), Wachovia Capital Finance Corporation (Canada), as a Canadian Funding Bank, Wells Fargo Bank, N.A., as a co-documentation agent (in its capacity as a co-documentation agent, a “ Co-Documentation Agent ”), United Rentals, Inc., a Delaware corporation, with offices at Five Greenwich Office Park, Greenwich, Connecticut 06831 (“ Holdings ”), United Rentals (North America), Inc., a Delaware corporation, with offices at Five Greenwich Office Park, Greenwich, Connecticut 06831 (the “ Company ”), each Subsidiary that is listed on Schedule 1.2 (the “ U.S. Subsidiary Borrowers ” and, together with the Company, the “ U.S. Borrowers ”), United Rentals of Canada, Inc., a company formed under the federal laws of Canada (“ URC ”), United Rentals Alberta Holding, LP (“ URA ” and, together with URC, the “ Canadian Borrowers ”), United Rentals Financing Limited Partnership, a Delaware partnership (the “ Specified Loan Borrower ”) and the Guarantors (as defined below) party hereto.

W I T N E S S E T H :

WHEREAS, the Borrowers have requested that the U.S. Lenders make available a revolving credit facility, portions of which may be used from time to time by the U.S. Borrowers and the Specified Loan Borrower, in each case on the terms and conditions specified herein;

WHEREAS, the Borrowers have requested that the Canadian Lenders make available a revolving credit facility, which may be used from time to time by the Canadian Borrowers, in each case on the terms and conditions specified herein;

WHEREAS, all Obligations incurred pursuant hereto are and shall continue to be secured by, among other things, the Security Agreements and the other Loan Documents, in each case as and to the extent set forth herein and therein; and

WHEREAS, each of the U.S. Guarantors has agreed to guarantee the Obligations of each of the Borrowers, and each of the Canadian Guarantors has agreed to guarantee the Obligations of each Canadian Borrower.

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this Agreement, and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Defined Terms . As used in this Agreement, the following terms shall have the meanings specified below:

“ 1  ⁷ / 8 % Convertible Senior Subordinated Note Indenture ” means that certain Indenture dated October 31, 2003 among United Rentals, the Company, as guarantor, and The Bank of New York, as Trustee, as amended, modified and supplemented from time to time prior to the date hereof.

“ 1  ⁷ / 8 % Convertible Senior Subordinated Notes ” means the 1  ⁷ / 8 % Convertible Senior Subordinated Notes due 2023 issued by the Company pursuant to the 1  ⁷ / 8 % Convertible Senior Subordinated Note Indenture.

“ 6  ¹ / 2 % QUIPS ” means the 6  ¹ / 2 % Convertible Subordinated Debentures due 2028 issued by United Rentals pursuant to the 6  ¹ / 2 % Convertible QUIPS Debenture Indenture.

“ 6  ¹ / 2 % QUIPS Debenture Indenture ” means that certain Indenture dated as of August 5, 1998 between United Rentals Holdings, Inc. and The Bank of New York, as Trustee, as amended, modified and supplemented from time to time prior to the date hereof.

“ 6  ¹ / 2 % Senior Note Indenture ” means that certain Indenture dated as of February 17, 2004 among the Company, the guarantors named therein and The Bank of New York, as Trustee, as amended, modified and supplemented from time to time prior to the date hereof.

“ 6  ¹ / 2 % Senior Notes ” means the 6  ¹ / 2 % Senior Notes due 2012 issued by the Company pursuant to the 6  ¹ / 2 % Senior Note Indenture.

“ 7% Senior Subordinated Note Indenture ” means that certain Indenture dated as of January 28, 2004 among the Company, the guarantors named therein and The Bank of New York, as Trustee, as amended, modified and supplemented from time to time prior to the date hereof.

“ 7% Senior Subordinated Notes ” means the 7% Senior Subordinated Notes due 2014 issued by the Company pursuant to the 7% Senior Subordinated Note Indenture.

“ 7  ³ / 4 % Senior Subordinated Note Indenture ” means that certain Indenture dated November 12, 2003 among the Company, the guarantors named therein, and The Bank of New York, as Trustee as amended, modified and supplemented from time to time prior to the date hereof.

“ 7  ³ / 4 % Senior Subordinated Notes ” means the 7  ³ / 4 % Senior Subordinated Notes due 2013 issued by the Company pursuant to the 7  ³ / 4 % Senior Subordinated Note Indenture.

“ Accommodation Payment ” has the meaning specified in Section 4.14 .

 

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“ Accounts ” means, with respect to each Obligor and its Subsidiaries, all of such Obligor’s or such Subsidiary’s now owned or hereafter acquired or arising accounts, as defined in the UCC or the PPSA, as applicable, and Leases, including any rights to payment for the sale or lease of goods or rendition of services, whether or not they have been earned by performance, all Progress Billings, and all rentals, lease payments and other monies due and to become due under any Lease.

“ Account Debtor ” means each Person obligated in any way on or in connection with an Account, Chattel Paper or General Intangibles (including a payment intangible).

“ Acquisition Consideration ” means the sum of cash and notes disbursed or issued to sellers under a Permitted Acquisition plus funded debt of the sellers or the Target assumed (or, in the case of the Target, retained) by the Borrowers and their respective Subsidiaries (including, if applicable, the Target) to the extent permitted by the Agreement.

“ Affiliate ” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person or which owns, directly or indirectly, twenty-five percent (25%) or more of the outstanding equity interests of such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise. Without limiting the generality of the foregoing, when used with respect to the Agent or any Lender or Canadian Funding Bank, the term “Affiliate” shall include any “authorized foreign bank” for purposes of the Income Tax Act (Canada) of such Person.

“ Agent ” means Bank of America, N.A., as the agent for the Lenders under this Agreement, or any successor agent.

“ Agent Advances ” means the U.S. Agent Advances and Canadian Agent Advances, as the context requires.

“ Agent’s Liens ” means the Liens in the Collateral granted to the Agent, for the benefit of the Secured Parties, pursuant to the Agreement and the other Loan Documents.

“ Agent-Related Persons ” means the Agent, together with its Affiliates, and the officers, directors, employees, counsel, representatives, agents and attorneys-in-fact of the Agent and such Affiliates.

“ Aggregate Canadian Revolver Outstandings ” means, at any date of determination and without duplication, the Equivalent Amount in Dollars of the unpaid principal balance of Canadian Revolving Loans.

“ Aggregate Canadian Revolver Outstandings Funded On U.S. Borrowing Base ” means, at any date of determination and without duplication, (a) the Aggregate Canadian Revolver Outstandings, minus (b) the lesser of (i) the Maximum Canadian Revolver Amount and (ii) the Canadian Borrowing Base.

 

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“ Aggregate Revolver Outstandings ” means, at any date of determination and without duplication, the Equivalent Amount in Dollars of the sum of (a) the Aggregate U.S. Revolver Outstandings and (b) the Aggregate Canadian Revolver Outstandings.

“ Aggregate U.S. Revolver Outstandings ” means, at any date of determination and without duplication, the Equivalent Amount in Dollars of the sum of (a) the unpaid principal balance of U.S. Revolving Loans and Specified Loans, (b) one hundred percent (100%) of the aggregate undrawn face amount of all outstanding Letters of Credit, and (c) the aggregate amount of any unpaid reimbursement obligations in respect of Letters of Credit.

“ Agreement ” means this Credit Agreement, as from time to time amended, modified or restated.

“ Agreement Date ” means the date of the Agreement.

“ Allocable Amount ” has the meaning specified in Section 4.14 .

“ Anti-Terrorism Laws ” means any Executive Order administered by the U.S. Treasury Department Office of Foreign Asset Control (OFAC), and the Proceeds of Crime Act.

“ Applicable Margin ” means a percentage equal to (a) (i) with respect to the U.S. Revolving Loans that are Base Rate Loans, 1.75% and (ii) with respect to the Canadian Revolving Loans that are Canadian Prime Rate Loans, 1.75% and (b) (i) with respect to U.S. Revolving Loans that are LIBOR Loans, 2.75%, (ii) with respect to Canadian Revolving Loans that are BA Equivalent Loans, 2.75% and (iii) with respect to Specified Loans that are BA Equivalent Loans, 2.75%; provided that, from and after December 9, 2008, the Applicable Margin shall be determined from time to time on the basis of the Total Leverage Ratio, as follows:

 

On December 9, 2008, and thereafter until further adjusted as provided below, the Applicable Margin shall be determined on the basis of the Total Leverage Ratio as of the last day of the most recently ended Fiscal Quarter prior to such date. Thereafter, adjustments in the

 

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Applicable Margin shall be implemented quarterly on a prospective basis, on the fifth Business Day after the date of delivery to the Lenders of unaudited Financial Statements delivered under Section 6.2(b) with respect to any Fiscal Quarter end or annual audited Financial Statements delivered under Section 6.2(a) , as applicable, evidencing the need for an adjustment. Concurrently with the delivery of those Financial Statements, the Borrowers shall deliver to the Agent and the Lenders the certificate described in Section 6.2(c) . Failure to deliver such Financial Statements and certificate within ten (10) Business Days after the date such Financial Statements are due shall, in addition to any other remedy provided for in the Agreement, result in an increase in the Applicable Margin to the highest level set forth in the foregoing grid, until the fifth Business Day following the delivery of those Financial Statements and certificate demonstrating that such an increase is not required. If any Event of Default has occurred and is continuing at the time any reduction in the Applicable Margin is to be implemented in accordance with the foregoing, no reduction shall occur until the fifth Business Day after the date on which such Event of Default is waived or cured.

“ Applicable Period ” has the meaning specified in Section 3.1(c) .

“ Applicable Unused Line Fee Margin ” means, with respect to any period, (a) 0.375%, if the sum of the average daily outstanding principal amount of all Loans (other than Swingline Loans) plus the average daily undrawn face amount of all outstanding Letters of Credit during such period is greater than 66% of the amount of the Revolving Credit Commitments; (b) 0.50%, if the sum of the average daily outstanding principal amount of all Loans (other than Swingline Loans) plus the average daily undrawn face amount of all outstanding Letters of Credit during such period is less than or equal to 66%, and greater than 33%, of the amount of the Revolving Credit Commitments; and (c) 0.625%, if the sum of the average daily outstanding principal amount of all Loans (other than Swingline Loans) plus the average daily undrawn face amount of all outstanding Letters of Credit during such period is less than or equal to 33% of the amount of the Revolving Credit Commitments.

“ Appraisal ” means an appraisal, prepared on a basis reasonably satisfactory to the Agent, setting forth the Net Orderly Liquidation Value of all Rental Equipment, which appraisal shall be prepared in accordance with Section 8.4(c) .

“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, holding or investing in extensions of credit in its ordinary course of business and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.

“ Arrangers ” means Banc of America Securities LLC and UBS Securities LLC.

“ Asset Disposition ” means any sale, lease, assignment, transfer, or other disposition of any Collateral to any Person other than the Obligors (including any condemnation or destruction of Collateral), other than:

(a) sales, leases, assignments, transfers, rentals or other disposals of Equipment and Inventory in the ordinary course of business;

 

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(b) sales, transfers or other dispositions of obsolete, surplus or worn-out property or property that is no longer necessary in the business of the Borrowers and their Subsidiaries;

(c) Like-Kind Exchanges in the ordinary course of business;

(d) dispositions of cash and cash equivalents pursuant to any transaction permitted under the Loan Documents;

(e) sales, discounting or forgiveness of Accounts in connection with the collection or compromise thereof;

(f) sales, assignments and other transfers of Accounts and Related Assets to a Receivables Entity, so long as the requirements included in the definition of Qualified Receivables Transactions have been satisfied;

(g) licenses and sublicense of software, trademarks, patents and other intellectual property and proprietary rights which do not materially interfere with the business of the Borrower and its Subsidiaries;

(h) transfers, assignments and other dispositions constituting Permitted Distributions, Permitted Investments or Permitted Liens;

(i) any issuance of Stock by a Subsidiary of a Borrower to a Borrower or another Subsidiary of a Borrower; and

(j) sales, transfers and other dispositions of property for aggregate consideration of less than $10,000,000 with respect to any individual transaction, provided that the aggregate amount of such sales, transfers and other dispositions excluded by this clause (j) shall not exceed $20,000,000 during any Fiscal Year.

“ Assignee ” has the meaning specified in Section 12.2(a) .

“ Assignment and Acceptance ” means an assignment and acceptance agreement entered into by one or more Lenders and Eligible Assignees (with the consent of any party whose consent is required by Section 12.2(a) ), and accepted by the Agent, in substantially the form of Exhibit E or any other form approved by the Agent.

“ Attorney Costs ” means and includes all reasonable and documented fees, expenses and disbursements of any law firm or other external counsel engaged by the Agent (including one primary counsel and not more than one local counsel for each jurisdiction (including foreign jurisdictions)).

“ Authorized Foreign Bank ” has the meaning ascribed thereto by subsection 248(1) of the Income Tax Act (Canada), and, by reference therein, the meaning ascribed thereto by Section 2 of the Bank Act (Canada).

“ Availability ” means U.S. Availability or Canadian Availability, as the context requires.

 

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“ BA Equivalent Interest Payment Date ” means, with respect to a BA Equivalent Loan, (i) the last day of each BA Equivalent Interest Period applicable to such BA Equivalent Loan, (ii) if such BA Equivalent Interest Period is longer than three months, each three month anniversary of the making of such BA Equivalent Loan and (iii) the Termination Date.

“ BA Equivalent Interest Period ” means, with respect to each BA Equivalent Loan, the interest period applicable thereto, as determined pursuant to Section 2.6(b) .

“ BA Equivalent Loan ” means a Specified Loan or a Canadian Revolving Loan that bears interest based on the BA Rate.

“ BA Rate ” means, for the BA Equivalent Interest Period of each BA Equivalent Loan, the rate of interest per annum equal to the annual rates applicable to Canadian Dollar Bankers’ Acceptances having an identical or comparable term as the proposed BA Equivalent Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately 10:00 a.m. New York City time on such day (or, if such day is not a Business Day, as of 10:00 a.m. New York City time on the immediately preceding Business Day), plus five (5) basis points, provided that if such rates do not appear on the CDOR Page at such time on such date, the rate for such date will be the average of the annual discount rates (rounded upward to the nearest whole multiple of  ¹ / 100 of 1%) as of 10:00 a.m. New York City time on such day at which the Canadian chartered banks listed on Schedule 1 of the Bank Act (Canada) are then offering to purchase Canadian Dollar Bankers’ Acceptances accepted by them having such specified term (or a term as closely as possible comparable to such specified term), plus five (5) basis points.

“ Bank ” means, as the context requires, (a) the U.S. Bank or (b) the Canadian Bank. Any general reference to the “Bank” shall refer to the U.S. Bank with respect to the U.S. Credit Facilities and/or the Canadian Bank with respect to the Canadian Credit Facilities, as applicable.

“ Bank of America ” means Bank of America, N.A. and its successors.

“ Bank Products ” means (a) Hedge Agreements, (b) products and services under Cash Management Documents and (c) to the extent not otherwise included in the foregoing, any or all types of banking products, services or facilities (other than Letters of Credit), including credit card services, merchant card services and such other banking products or services as, in the case of each of clauses (a) , (b)  and (c) , may be requested by any Borrower (on behalf of itself or its Subsidiaries) and extended to any Borrower by the Agent or any Person that was a Lender or an Affiliate of the Agent or any Lender at the time it entered into the same.

“ Bank Product Reserves ” means all reserves which the Agent from time to time establishes in its Reasonable Credit Judgment for the Designated Bank Products Obligations then outstanding.

“ Bankruptcy Code ” has the meaning specified in Section 4.14 .

“ Base Rate ” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus  ¹ / 2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate

 

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set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Base Rate Loan ” means any U.S. Revolving Loan during any period for which it bears interest based on the Base Rate, and all U.S. Agent Advances and U.S. Swingline Loans.

“ BIA ” means the Bankruptcy and Insolvency Act (Canada) and the regulations promulgated thereunder.

“ Blocked Account Agreement ” has the meaning specified in Section 8.27 .

“ Blocked Person ” means (a) a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (b) a Person or entity with which any bank or other financial institution is prohibited from dealing or otherwise engaging in any transaction by any applicable Anti-Terrorism Law; and (c) a Person or entity that is named as a “specially designated national” on the most current list published by OFAC at its official website or any replacement website or other replacement official publication of such list.

“ Borrowers ” means the U.S. Borrowers, the Canadian Borrowers and the Specified Loan Borrower.

“ Borrowers’ Agent ” means the Company, in its capacity as agent for itself and the other Borrowers pursuant to Section 4.10 .

“ Borrowing ” means a borrowing hereunder consisting of Loans of one Type made on the same day by Lenders to any Borrower (or (a) by the U.S. Bank in the case of a Borrowing funded by U.S. Swingline Loans or by the Agent in the case of a Borrowing consisting of a U.S. Agent Advance, or by the U.S. Bank for the issuance of Letters of Credit hereunder or (b) by the Canadian Bank in the case of a Borrowing funded by Canadian Swingline Loans or by the Agent in the case of a Borrowing consisting of a Canadian Agent Advance.

“ Borrowing Base ” means the U.S. Borrowing Base or the Canadian Borrowing Base, as the context requires.

“ Borrowing Base Certificate ” means a certificate by a Responsible Officer of the Borrowers’ Agent, substantially in the form of Exhibit A (or another form reasonably acceptable to the Agent) setting forth the calculation of the U.S. Borrowing Base and the Canadian Borrowing Base, including a calculation of each component thereof, all in such detail as shall be reasonably satisfactory to the Agent, as adjusted pursuant to Section 2.7(a) of the Agreement. All calculations of the U.S. Borrowing Base and the Canadian Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall originally be made by the U.S. Borrowers and the Canadian Borrowers and certified to the Agent; provided , that the Agent shall have the right to review and adjust, in the exercise of its Reasonable Credit Judgment, any such calculation to the extent that such calculation is not in accordance with the Agreement, provided , further , that the Agent shall provide the applicable Borrower or Borrowers prior notice of any such adjustment.

 

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“ Business Day ” means (a) any day that is not a Saturday, Sunday, or a day on which banks in New York, New York are required or permitted to be closed, and (b) with respect to all notices, determinations, fundings and payments in connection with the LIBOR Rate or LIBOR Loans, any day that is a Business Day pursuant to clause (a)  above and that is also a day on which trading in Dollars is carried on by and between banks in the London interbank market; provided , however , when used in connection with a Canadian Revolving Loan or Specified Loan, such day shall be a day on which banks are open for business in Toronto, Canada and New York, New York but excluding Saturday, Sunday and any other day which is a legal holiday in Toronto, Canada or New York, New York.

“ Canadian Agent Advances ” has the meaning specified in Section 2.6(i)(i) .

“ Canadian Availability ” means, at any time (a) the lesser of (i) the Maximum Canadian Revolver Amount and (ii) the sum of the Canadian Borrowing Base and the U.S. Availability, minus (b) the Aggregate Canadian Revolver Outstandings.

“ Canadian Bank ” means Bank of America, N.A. (acting through its Canada branch), or any successor entity thereto.

“ Canadian Borrowers ” has the meaning specified in the introductory paragraph to the Agreement.

“ Canadian Borrowing Base ” means, at any time, an amount in Dollars equal to:

(a) the lesser of (i) 95% of the Net Book Value of Eligible Rental Equipment of the Canadian Obligors and (ii) 85% of the Net Orderly Liquidation Value of the Eligible Rental Equipment of the Canadian Obligors; minus

(b) Reserves from time to time established by the Agent in accordance with Section 2.7(a) of the Agreement.

“ Canadian Collateral ” means all the Canadian Obligors’ personal property, and all other assets of any Person, in each case from time to time subject to the Agent’s Liens securing payment or performance of any Canadian Obligations; provided that the term “Canadian Collateral” shall not include U.S. Collateral.

“ Canadian Credit Facilities ” means the revolving credit and swingline facilities provided for by this Agreement extended to the Canadian Borrowers.

“ Canadian Designated Account ” has the meaning specified in Section 2.6(c).

“ Canadian Dollars or Cdn $ or Cdn. Dollars ” means the lawful currency of Canada.

“ Canadian Funding Bank ” means any Canadian Lender in its capacity as a funding bank for and seller of Canadian Loan Participations to Participating Lenders in respect of Canadian

 

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Revolving Loans. The initial Canadian Funding Banks as of the Agreement Date are (a) the Canadian Bank, (b) unless otherwise agreed by the Canadian Bank and UBS AG Canada Branch, UBS AG Canada Branch and (c) unless otherwise agreed by the Canadian Bank and Wachovia Capital Finance Corporation (Canada), Wachovia Capital Finance Corporation (Canada).

“ Canadian Funding Percentage ” means, with respect to each Canadian Funding Bank, the percentage of Canadian Revolving Loans subject to Canadian Loan Participations that shall be made by such Canadian Funding Bank, as such percentage may be adjusted from time to time in accordance with Section 12.2 such that the aggregate Canadian Funding Percentages of all Canadian Funding Banks shall be 100% at all times. As of the Agreement Date, unless otherwise agreed among the Canadian Funding Banks, the Canadian Funding Percentage is (a) in the case of the Canadian Bank, 40%, (b) in the case of UBS AG Canada Branch, 40%, and (c) in the case of Wachovia Capital Finance Corporation (Canada), 20%.

“ Canadian Guarantee Agreements ” means the Canadian URA Guarantee Agreement, the Canadian URC Guarantee Agreement and the Canadian URFLP Guarantee Agreement.

“ Canadian Guarantors ” means (a) the Foreign Subsidiaries, whether now existing or hereafter created or acquired, and (b) each other Person (other than a U.S. Guarantor), who, in a writing accepted by the Agent, guarantees payment or performance in whole or in part of the Canadian Obligations; provided that “Canadian Guarantors” shall not include any Subsidiary that is a Receivables Entity or Immaterial Subsidiary.

“ Canadian Intellectual Property Agreement ” means the Intellectual Property Security Agreement dated as of the Agreement Date among the Canadian Obligors for the benefit of the Canadian Secured Parties.

“ Canadian Lender ” means a Lender that has a Canadian Revolving Credit Commitment. For the avoidance of doubt, unless the Agent shall otherwise approve, each Canadian Lender shall be (a) a Canadian Resident, or (b) if it is not a Canadian Resident, it is also not a foreign bank for purposes of the Bank Act (Canada).

“ Canadian Loan Participation ” has the meaning specified in Section 13.17(a) .

“ Canadian Loan Participation Fee ” has the meaning specified in Section 13.17(f) .

“ Canadian Notice of Borrowing ” has the meaning specified in Section 2.6(a) .

“ Canadian Obligations ” means all present and future loans, advances, liabilities, obligations, covenants, duties, and debts owing by the Canadian Obligors, or any of them, to the Agent, any Canadian Lender, any Canadian Secured Party and/or any Indemnified Person, arising under or pursuant to the Agreement or any of the other Loan Documents in connection with the Canadian Credit Facilities, whether or not evidenced by any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including all principal, interest, charges, expenses, fees, attorneys’ fees, Attorney Costs, filing fees and any other sums chargeable to any Canadian Borrower or any other Canadian Obligor hereunder or

 

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under any of the other Loan Documents. “Canadian Obligations” includes, without limitation, all Designated Bank Products Obligations owed by any Canadian Obligor. Anything contained herein to the contrary notwithstanding, the term Canadian Obligations shall not include any U.S. Obligations.

“ Canadian Obligors ” means the Canadian Borrowers and the Canadian Guarantors.

“ Canadian Participation Settlement ” has the meaning specified in Section 13.17(b) .

“ Canadian Participation Settlement Amount ” has the meaning specified in Section 13.17(b) .

“ Canadian Participation Settlement Date ” has the meaning specified in Section 13.17(b) .

“ Canadian Participation Settlement Period ” has the meaning specified in Section 13.17(b) .

“ Canadian Pension Plan ” means any Pension Plan applicable solely to employees or former employees of the Canadian Obligors.

“ Canadian Prime Rate ” means, on any day, the nominal annual rate of interest announced from time to time by the Agent as its reference rate of interest for loans made in Canadian Dollars to Canadian customers and designated as its “prime rate”(the “prime rate” being a rate set by the Agent based upon various factors including the Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate). Any change in the prime rate announced by the Agent shall take effect at the opening of business on the day specified in the public announcement of such change. Each Interest Rate based upon the Canadian Prime Rate shall be adjusted simultaneously with any change in the Canadian Prime Rate. In the event that the Agent (including any successor or assignor) does not at any time publicly announce a prime rate, the “Prime Rate” means the “prime rate” publicly announced by a Schedule 1 chartered bank in Canada selected by the Agent.

“ Canadian Prime Rate Loan ” means any Canadian Revolving Loan, Canadian Swingline Loan or Canadian Agent Advance, in each case, during any period for which it bears interest by reference to the Canadian Prime Rate.

“ Canadian Resident ” means, at any time, (a) a person who at that time is resident in Canada for purposes of the Income Tax Act (Canada) and is not prevented by law from making or participating in Canadian Credit Facilities under this Agreement or (b) an Authorized Foreign Bank which receives all amounts paid or credited to such bank pursuant to this Agreement or any other Loan Document in respect of its Canadian banking business (as that term is defined in subsection 248(1) of the Income Tax Act (Canada).

“ Canadian Revolver Adjustment ” has the meaning specified in Section 2.9 .

“ Canadian Revolver Adjustment Date ” has the meaning specified in Section 2.9 .

 

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“ Canadian Revolving Credit Borrowing ” means a Borrowing comprised of Canadian Revolving Loans.

“ Canadian Revolving Credit Commitment ” means, at any date for any Canadian Lender, the obligation of such Canadian Lender to make Canadian Revolving Loans pursuant to the terms and conditions of this Agreement, which shall not exceed the aggregate principal amount set forth on Schedule 1.1 under the heading “Canadian Revolving Credit Commitment” or on the signature page of the Assignment and Acceptance by which it became a Lender, as modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment and Acceptance; and “Canadian Revolving Credit Commitments” means the aggregate principal amount of the Canadian Revolving Credit Commitments of all Canadian Lenders, the maximum amount of which shall be the Maximum Canadian Revolver Amount; provided , however , that, after the termination of the Canadian Revolving Credit Commitments, the Canadian Revolving Credit Commitment of any Canadian Lender shall be deemed to be in an amount equal to the outstanding principal amount of Canadian Revolving Loans owing to such Canadian Lender.

“ Canadian Revolving Loan Commitment Fee ” has the meaning specified in Section 13.17(g) .

“ Canadian Revolving Loans ” means the revolving loans made pursuant to Section 2.2(b) , each Canadian Agent Advance and Canadian Swingline Loan.

“ Canadian Secured Parties ” means, collectively, the Agent, the Canadian Lenders (including the Canadian Funding Banks), the Canadian Bank, the Indemnified Parties and each of the Agent, any Canadian Lender or any Affiliate of the Agent or such Canadian Lender to which is owed any Designated Bank Product Obligations, in each case in its capacity as an obligee of Canadian Obligations.

“ Canadian Security Agreements ” means, collectively, (a) the general security agreements and hypothecs, dated as of the Agreement Date, from the Canadian Obligors in favor of the Agent, for the benefit of the Canadian Secured Parties, and (b) any security agreement and/or hypothec executed and delivered after the Agreement Date by a Person that becomes a Canadian Guarantor hereunder in accordance with Section 8.25(b) .

“ Canadian Security Documents ” means the Canadian Intellectual Property Agreement, the Canadian Security Agreements and any other agreements, instruments and documents heretofore, now or hereafter securing or guaranteeing any of the Canadian Obligations.

“ Canadian Swingline Commitment ” means the commitment of the Canadian Bank to make loans pursuant to Section 2.6(h) .

“ Canadian Swingline Lender ” means the Canadian Bank or any successor financial institution agreed to by the Agent, in its capacity as provider of Canadian Swingline Loans.

“ Canadian Swingline Loan ” and “ Canadian Swingline Loans ” have the meanings specified in Section 2.6(h) .

 

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“ Canadian Swingline Sublimit ” has the meaning specified in Section 2.6(h).

“ Canadian URA Guarantee Agreement ” means the Guarantee Agreement dated as of the Agreement Date from the Canadian Guarantors (other than URA) and U.S. Obligors in favor of the Agent for the benefit of the Canadian Secured Parties.

“ Canadian URC Guarantee Agreement ” means the Guarantee Agreement dated as of the Agreement Date from the Canadian Guarantors (other than URC) and U.S. Obligors in favor of the Agent for the benefit of the Canadian Secured Parties.

“ Canadian URFLP Guarantee Agreement ” means the Guarantee Agreement dated as of the Agreement Date from United Rentals of Nova Scotia (No. 1), ULC and United Rentals of Nova Scotia (No. 2), ULC in favor of the Agent for the benefit of the U.S. Secured Parties.

“ Capital Adequacy Regulation ” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any bank or of any corporation controlling a bank.

“ Capital Expenditures ” means, with respect to any Person for any period, the sum of (a) the aggregate of all expenditures incurred by such Person and its consolidated Subsidiaries during such period for purchases of property, plant and equipment (including Rental Equipment and non-Rental Equipment) or similar items which, in accordance with GAAP, are or should be included in the statement of cash flows of such Person and its consolidated Subsidiaries during such period, net of (b) proceeds received by Holdings or its Subsidiaries from dispositions of property, plant and equipment (including Rental Equipment and non-Rental Equipment) or similar items reflected in the statement of cash flows of such Person and its consolidated Subsidiaries during such period.

“ Capital Lease ” means any lease of property by an Obligor or any of its Subsidiaries which, in accordance with GAAP, should be reflected as a capital lease on the balance sheet of the Consolidated Parties.

“ Capital Lease Obligation ” means, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease.

“ Cash Dominion Period ” means (a) any period commencing on the date on which the Combined Borrowing Base Availability shall have been less than 15% of the Combined Borrowing Base and ending on the date on which the Combined Borrowing Base Availability shall have been at least 15% of the Combined Borrowing Base for 60 consecutive calendar days or (b) any period during which an Event of Default shall have occurred and be continuing.

“ Cash Management Document ” means any certificate, agreement or other document executed by any Borrower in respect of the Cash Management Obligations of any such Person.

“ Cash Management Obligation ” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person in respect of cash management services

 

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(including treasury, depository, return item, overdraft, controlled disbursement, credit, merchant store value or debit card, purchase card, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer and other cash management arrangements) provided after the date hereof (regardless of whether these or similar services were provided prior to the date hereof by the Agent, any Lender or any Affiliate of any of them) by the Agent or any Person that was a Lender or the Agent or an Affiliate of the Agent or any Lender at the time the applicable Cash Management Documents were entered into, including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith.

“ CCAA ” means the Companies’ Creditors Arrangement Act (Canada) and the regulations promulgated thereunder.

“ Change of Control ” means, at any time and for any reason whatsoever, (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the equity securities of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right), or (b) Holdings shall cease to own directly 100% on a fully diluted basis of the voting interests in the Company’s capital stock, or (c) the Continuing Directors cease to constitute a majority of the members of the Board of Directors of Holdings.

“ Charter Documents ” means, with respect to any Person, the certificate or articles of incorporation or organization, memoranda of association, by-laws or operating agreement, and other organizational or governing documents of such Person.

“ Chattel Paper ” means all of each Borrower’s, each Guarantor’s and each of their Subsidiary’s now owned or hereafter acquired chattel paper, as defined in the UCC or, with respect to any chattel paper of any Canadian Obligor, the PPSA, including electronic chattel paper.

“ Closing Date ” means the later of the Agreement Date and the first date on which all of the applicable conditions set forth in Section 9.1 have been fulfilled (or waived in writing by the Agent and the Arrangers).

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Collateral ” means the U.S. Collateral and/or the Canadian Collateral, collectively or individually, as the context requires.

“ Collateral Access Agreements ” means any landlord waiver, mortgagee waiver, bailee letter, or any similar acknowledgment or agreement of any warehouseman or processor that owns or is in possession of property where Rental Equipment or Merchandise and Consumables Inventory is stored or located, in each case in a form reasonably satisfactory to the Agent.

 

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“ Combined Availability ” means, at any time (a) the lesser of (i) the Maximum Revolver Amount or (ii) the Combined Borrowing Base, minus (b) in each case, the Aggregate Revolver Outstandings.

“ Combined Borrowing Base ” means, at any time, the sum of (a) the U.S. Borrowing Base at such time and (b) the lesser of the Canadian Borrowing Base at such time and the Maximum Canadian Revolver Amount at such time.

“ Combined Borrowing Base Availability ” means, at any date of determination, the excess of the Combined Borrowing Base over the Aggregate Revolver Outstandings on such date.

“ Commitment ” means a U.S. Revolving Credit Commitment, Canadian Revolving Credit Commitment, U.S. Swingline Commitment or Canadian Swingline Commitment.

“ Commitment Increase ” has the meaning specified in Section 2.8(a) .

“ Commitment Increase Cap ” has the meaning specified in Section 2.8(a) .

“ Commitment Increase Effective Date ” has the meaning specified in Section 2.8(a) .

“ Company ” has the meaning specified in the introductory paragraph to the Agreement.

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit D.

“ Confidential Information Memorandum ” means the Confidential Information Memorandum of the Company dated May, 2008.

“ Consolidated EBITDA ” means, for any period, an amount equal to Consolidated Net Income plus (a) the following to the extent deducted in calculating such Consolidated Net Income, but without duplication: (i) any provision for taxes based on income, gain, capital or profits, including state, franchise and similar taxes and foreign withholding taxes paid or accrued during such period (net of any credits applicable to any such taxes utilized or accrued during such period), (ii) total interest expense and, to the extent not reflected in such total interest expense, any losses on hedging obligations or other derivative transactions entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations, (iii) depreciation and amortization expense, including amortization or impairment of intangibles (including, but not limited to, goodwill), (iv) amortization or write-off of debt discount and debt issuance costs and commissions and discounts and other fees and charges associated with Debt, (v) cash expenses incurred in connection with the consummation of Permitted Acquisitions, the issuance of equity interests or the incurrence of Debt (in each case, whether or not the applicable Permitted Acquisition, issuance of equity interests or incurrence of Debt is consummated), (vi) all non-cash reserves, non-cash restructuring charges, and other non-cash charges and non-cash losses (including the amount of (x) any non-cash compensation deduction as the result of any grant of stock or stock related instruments to employees, officers, directors or members of management and (y) asset write-downs, write-offs and revaluations (other than write-downs, write-offs and revaluations with respect to Current Assets and Rental Equipment)) ( provided that if the aggregate amount otherwise covered by this clause (a)(vi) in any period of 4 consecutive Fiscal Quarters is less than $10,000,000, such amount may be

 

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disregarded for purposes of calculating Consolidated EBITDA for such period), and (vii) expenses incurred in connection with the consummation of the Transactions, minus (b) the following to the extent included in calculating such Consolidated Net Income, but without duplication: (i) net after tax income from the early extinguishment of indebtedness or hedging obligations or other derivative instruments, (ii) gains from extraordinary items (net of loss from extraordinary items), (iii) any aggregate net gain (but not any aggregate net loss) arising from the sale, exchange or other disposition of capital assets (including any fixed assets, whether tangible or intangible, all Inventory sold in conjunction with the disposition of fixed assets and all Stock and other securities) not in the ordinary course of business, but in any event excluding gains from the sale of equipment in the ordinary course of business, (iv) all non-cash items increasing Consolidated Net Income ( provided that if the aggregate amount otherwise covered by this clause (b)(iv) in any period of 4 consecutive Fiscal Quarters is less than $10,000,000, such amount may be disregarded for purposes of calculating Consolidated EBITDA for such period), and (v) all cash payments made during such period on account of reserves, restructuring charges and other non-cash charges and non-cash losses added to Consolidated Net Income pursuant to clause (a)(vi) above in a prior period (in each case of or by Holdings and its Subsidiaries for such period as determined on a consolidated basis in accordance with GAAP).

“ Consolidated Net Income ” means, for any period, the consolidated net income (or loss) of the Consolidated Parties determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:

(a) the net income (or loss) of any Person in which any Person other than Holdings or its Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually been received by Holdings or any of its wholly owned Subsidiaries during such period; and

(b) the net income of any Subsidiary of Holdings (other than the Company) during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not permitted by operation of the terms of its organizational documents or any agreement, instrument or requirement of law applicable to that Subsidiary during such period.

“ Consolidated Parties ” means Holdings and each of its Subsidiaries whose financial statements are consolidated with Holdings’s financial statements in accordance with GAAP.

“ Contaminant ” means any waste, pollutant, hazardous substance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, asbestos in any form or condition, polychlorinated biphenyls (“ PCBs ”), or any constituent of any such substance or waste, or any other substance or material regulated under Environmental Law.

“ Continuation/Conversion Date ” means the date on which a Loan is converted into or continued as a LIBOR Loan or BA Equivalent Loan, as applicable.

 

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“ Continuing Directors ” means the directors of Holdings on the Agreement Date and each other director if such director’s election or nomination for the election to the Board of Directors is recommended by a majority of the then Continuing Directors.

“ Covenant Trigger ” has the meaning specified in Section 8.22 .

“ Covenant Trigger Date ” has the meaning specified in Section 8.22 .

“ Covenant Trigger Period ” has the meaning specified in Section 8.22 .

“ CRA ” means the Canada Revenue Agency.

“ Credit Facilities ” means the revolving credit, swingline and letter of credit facilities provided for by this Agreement.

“ Current Assets ” means, at any time, the consolidated current assets (other than cash and Permitted Investments) of the Consolidated Parties.

“ Debt ” means, without duplication, all (a) indebtedness for borrowed money or the deferred purchase price of property, excluding trade payables and the endorsement of checks and other similar instruments in the ordinary course of business; (b) all obligations and liabilities of any Person secured by any Lien on an Obligor’s or any of its Subsidiaries’ property, even if such Obligor or Subsidiary shall not have assumed or become liable for the payment thereof; provided , however , that all such obligations and liabilities which are limited in recourse to such property shall be included in Debt only to the extent of the book value of such property as would be shown on a balance sheet of the Consolidated Parties prepared in accordance with GAAP or, if higher, the fair market value of such property; (c) all obligations or liabilities created or arising under any Capital Lease or conditional sale or other title retention agreement with respect to property used or acquired by a Borrower or any of its Subsidiaries, even if the rights and remedies of the lessor, seller or lender thereunder are limited to repossession of such property; provided , however, that all such obligations and liabilities which are limited in recourse to such property shall be included in Debt only to the extent of the book value of such property as would be shown on a balance sheet of the Consolidated Parties prepared in accordance with GAAP or, if higher, the fair market value of such property; (d) all obligations and liabilities under Guarantees in respect of obligations of the type described in clauses (a) , (b)  and (c)  above; (e) the present value (discounted at the Base Rate) of lease payments due under synthetic leases; (f) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; and (g) all net obligations of any Person in respect of Hedge Agreements.

“ Debt for Borrowed Money ” of any Person at any time means, on a consolidated basis, the sum of (a) all debt for borrowed money of such Person at such time, plus (b) the Capital Lease Obligations of such Person at such time, plus (c) except when used in the definition of “Fixed Charge Coverage Ratio,” all obligations of such Person at such time in respect of any Qualified Receivables Transaction that, in accordance with GAAP, would be classified as indebtedness on a consolidated balance sheet of such Person.

 

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“ Default ” means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured, waived, or otherwise remedied during such time) constitute an Event of Default.

“ Default Rate ” means a fluctuating per annum interest rate at all times equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two percent (2.00%) per annum. Each Default Rate shall be adjusted simultaneously with any change in the applicable Interest Rate.

“ Defaulting Lender ” means a Defaulting Revolving Lender or Defaulting Participating Lender.

“ Defaulting Participating Lender ” has the meaning specified in Section 13.15(c) .

“ Defaulting Revolving Lender ” has the meaning specified in Section 13.15(c) .

“ Deposit Accounts ” means all “deposit accounts” as such term is defined in the UCC and all accounts with a deposit function maintained at a financial institution, now or hereafter held in the name of any Borrower or any Guarantor.

“ Designated Account ” means a U.S. Designated Account, a Canadian Designated Account or a Specified Loan Designated Account, as the context requires.

“ Designated Bank Products Obligations ” means all obligations and liabilities of any Borrower or Subsidiary in respect of Bank Products.

“ Disqualified Stock ” means that portion of any Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event which would constitute a Change of Control), matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of a Change of Control) on or prior to the first anniversary of the Stated Termination Date.

“ Distribution ” means (a) the payment or making of any dividend or other distribution of property in respect of capital stock or other equity interests (or any options or warrants for, or other rights with respect to, such stock or other equity interests) of any Person, other than distributions in capital stock or other equity interests (or any options or warrants for such stock or other equity interests) of any class other than Disqualified Stock, or (b) the redemption or other acquisition by such Person of any capital stock or other equity interests (or any options or warrants for such stock or other equity interests) of such Person or any direct or indirect shareholder or other equity holder of such Person.

“ Co-Documentation Agent ” has the meaning specified in the preamble to the Agreement.

“ Documents ” means all “documents” as such term is defined in the UCC and, with respect to any document of a Canadian Obligor, all “documents of title” as such term is defined in the PPSA, including bills of lading, warehouse receipts or other documents of title, now owned or hereafter acquired by any Borrower, any Guarantor or any of their Subsidiaries.

 

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“ DOL ” means the United States Department of Labor or any successor department or agency.

“ Dollar ” and “ $ ” means dollars in the lawful currency of the United States. Unless otherwise specified, all payments under the Agreement shall be made in Dollars.

“ Domestic Subsidiary ” means any Subsidiary of Holdings that is organized under the laws of a State of the United States or the District of Columbia.

“ Eligible Assignee ” means (a) a commercial bank, commercial finance company or other asset based lender, having total assets in excess of $2,000,000,000; (b) any Lender listed on the signature page of the Agreement; (c) any Affiliate of any Lender; (d) any Approved Fund; and (e) any other Person reasonably acceptable to the Agent; provided , that, in any event, “Eligible Assignee” shall not include (i) any natural Person or (ii) Holdings or any Borrower or any Affiliate thereof.

“ Eligible Canadian Affiliate ” means a Person which is an Affiliate of a U.S. Lender or the Canadian branch or office of a U.S. Lender, which Affiliate, branch or office makes loans in Cdn. Dollars of the type being made hereunder in Canada and (a) is a Canadian Resident, or (b) if it is not a Canadian Resident, it is also not a foreign bank for purposes of the Bank Act (Canada).

“ Eligible Merchandise and Consumables Inventory ” means Merchandise and Consumables Inventory of the Obligors which the Agent in the exercise of its Reasonable Credit Judgment determines to be Eligible Merchandise and Consumables Inventory; provided that such Merchandise and Consumables Inventory:

(i) is owned by an Obligor which has good, valid and marketable title thereto and not held by such Obligor on consignment or other sale or return terms;

(ii) is not damaged or defective, in each case, in any material respect;

(iii) is not obsolete, unmerchantable or slow moving;

(iv) meets all material applicable standards imposed by any Governmental Authority;

(v) conforms in all material respects to the warranties and representations set forth in the Agreement and is insured in the manner required by the Agreement;

(vi) is at all times subject to the Agent’s duly perfected first priority (other than with respect to the Permitted Priority Liens) security interest and subject to no other Lien except a Permitted Lien;

(vii) is at a location owned or leased by an Obligor or at a third-party location of which the Borrower’s Agent has notified the Agent in accordance with this

 

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Agreement, is not in transit (except Merchandise and Consumables Inventory in transit from one location of an Obligor to another location of an Obligor), is not outside, with respect to the U.S. Borrowing Base only, the continental United States or, with respect to the Canadian Borrowing Base only, Canada or (if such Merchandise and Consumables Inventory is not Titled Goods) the continental United States, and is not consigned to any Person;

(viii) is not the subject of a negotiable warehouse receipt or other negotiable Document; and

(ix) has not been sold;

and provided further that “Eligible Merchandise and Consumable Inventory” shall in no event include (a) fuel or (b) extraneous and unboxed Inventory held by an Obligor.

If any Merchandise and Consumables Inventory ceases to be Eligible Merchandise and Consumables Inventory, then such Merchandise and Consumables Inventory shall promptly be excluded from the calculation of Eligible Merchandise and Consumables Inventory. If the Agent deems any Merchandise and Consumables Inventory ineligible in its Reasonable Credit Judgment (and not based upon the criteria set forth above), then the Agent shall give the Borrowers’ Agent two (2) Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required).

“ Eligible Rental Equipment ” means the Rental Equipment of the Obligors, which the Agent in the exercise of its Reasonable Credit Judgment determines to be Eligible Rental Equipment, that (i) is held for sale or rent by an Obligor in the ordinary course of its business, (ii) is being rented by an Obligor as lessor in the ordinary course of its business or (iii) is Titled Goods consisting of motor vehicles used by an Obligor in its business. If the Agent deems Rental Equipment ineligible in its Reasonable Credit Judgment (and not based upon the criteria set forth below), then the Agent shall give the Borrowers’ Agent two (2) Business Days’ prior notice thereof (unless an Event of Default exists, in which event no notice shall be required). Subject to the ability of the Agent to establish other criteria of ineligibility in its Reasonable Credit Judgment, Eligible Rental Equipment shall not include any Rental Equipment of an Obligor:

(a) that is not classified as “rental equipment” on such Obligor’s balance sheet (other than (i) new Rental Equipment held for sale that is classified as “inventory” on Holdings’s balance sheet and (ii) Titled Goods consisting of motor vehicles used by an Obligor in its business);

(b) that is not owned by such Obligor free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure performance by such Obligor with respect to that Equipment), except the Liens in favor of the Agent, on behalf of itself and the Secured Parties (and other than any bailee, warehouseman, landlord or similar non-consensual Liens having priority by operation of law to the extent the requirements for the exceptions in subclauses (ii)  or (iii)  of clause (c)  below are satisfied with respect to the relevant Rental Equipment);

 

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(c) that (i) is neither (A) located on premises owned, leased or rented by such Obligor in (1) if such Obligor is a U.S. Obligor, a state of the United States of America or the District of Columbia or (2) if such Obligor is a Canadian Obligor, a province of Canada or (in the case such Rental Equipment is not Titled Goods) a state of the United States of America or the District of Columbia nor (B) being rented by a customer of such Obligor and used by such customer at a location of such customer in (1) if such Obligor is a U.S. Obligor, a state of the United States of America or the District of Columbia or (2) if such Obligor is a Canadian Obligor, a province of Canada or (in the case such Rental Equipment is not Titled Goods) a state of the United States of America or the District of Columbia, in each case pursuant to the terms of a rental agreement entered into between such customer and such Obligor; (ii) is stored at a leased location, unless the Agent has given its prior consent thereto or unless (A) a reasonably satisfactory landlord waiver has been delivered to the Agent or (B) a Rent Reserve has been established with respect thereto; or (iii) is stored with a bailee or warehouseman or is in a processor or converter facility unless a reasonably satisfactory, acknowledged bailee letter or other agreement waiving or subordinating all Liens and claims by such Person to the Liens of the Agent has been delivered to the Agent or a Rent Reserve has been established with respect thereto;

(d) that is placed on consignment or is in transit or is being serviced, except for Rental Equipment in transit or being serviced in (i) if such Obligor is a U.S. Obligor, a state of the United States of America or the District of Columbia or (ii) if such Obligor is a Canadian Obligor, a province of Canada or (in the case such Rental Equipment is not Titled Goods) a state of the United States of America or the District of Columbia, in each case as to which Agent’s Liens in such Rental Equipment remain perfected without any further action by the Agent;

(e) that is covered by a negotiable document of title, unless such document has been delivered to the Agent with all necessary endorsements, free and clear of all Liens except those in favor of the Agent and the applicable Secured Parties (and other than any bailee, warehouseman, landlord or similar non-consensual Liens having priority by operation of law to the extent the requirements for the exceptions in subclauses (ii) or (iii) of clause (c) above are satisfied with respect to the relevant Rental Equipment);

(f) that is excess, obsolete, unsaleable, unrentable, shopworn, seconds, damaged or unfit for sale or rent;

(g) that is not held for sale, rental or use in the ordinary course of business of such Obligor;

(h) that is not subject to a first priority Lien in favor of the Agent on behalf of itself and the applicable Secured Parties, subject to no other Liens (other than any bailee, warehouseman, landlord or similar non-consensual Liens having priority by operation of law to the extent the requirements for the exceptions in subclauses (ii) or (iii) of clause (c) above are satisfied with respect to the relevant Rental Equipment);

 

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(i) as to which there are any breaches of any of the representations or warranties pertaining to Rental Equipment set forth in the Loan Documents in any material respect;

(j) that is not covered by casualty insurance (subject to customary deductibles);

(k) that is held by such Obligor under a Vendor Lease or any other lease where Holdings, an Obligor or any of their Affiliates is a lessee;

(l) that is non-serialized Rental Equipment (other than “bulk” equipment that is eligible in the Agent’s Reasonable Credit Judgment);

(m) that is not segregated or separated identifiably from goods of third parties stored on the same premises as such Rental Equipment; or

(n) that does not meet the applicable standards imposed by any Governmental Authority.

If any Rental Equipment at any time ceases to be Eligible Rental Equipment, such Rental Equipment shall promptly be excluded from the calculation of Eligible Rental Equipment.

“ Environmental Laws ” means all federal, state, provincial or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, enforceable requirements, judgments, injunctions, licenses, authorizations, consents, registrations, approvals, permits of, and agreements with, any Governmental Authority, in each case in connection with environmental and health matters, including Releases of or exposure to Contaminants.

“ Equipment ” means all of each Obligor’s and each of its Subsidiary’s now owned and hereafter acquired machinery, equipment, furniture, furnishings, fixtures, and other tangible personal property (except Inventory), including embedded software, service and delivery vehicles with respect to which a certificate of title has been issued, aircraft, dies, tools, jigs, molds and office equipment, as well as all of such types of property leased by any Obligor or any of its Subsidiaries, and all of each Obligor’s and each of their Subsidiary’s rights and interests with respect thereto under such leases (including, without limitation, options to purchase); together with all present and future additions and accessions thereto, replacements therefor, component and auxiliary parts and supplies used or to be used in connection therewith, and all substitutes for any of the foregoing, and all manuals, drawings, instructions, warranties and rights with respect thereto; wherever any of the foregoing is located.

“ Equivalent Amount ” means, on any date, the amount of Dollars into which an amount of Cdn. Dollars may be converted or the amount of Cdn. Dollars into which an amount of Dollars may be converted, in either case, at, in the case of an amount expressed in Cdn. Dollars, the Canadian Bank’s spot buying rate in Toronto, Canada as at approximately 12:00 noon (Toronto time) on such date and, in the case of an amount expressed in Dollars, the Agent’s spot buying rate in New York, New York as at approximately 12:00 noon (New York City time) on such date.

 

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“ ERISA ” means the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time and any final regulations promulgated and the rulings issued thereunder.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with any Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) prior to the effectiveness of the applicable provisions of the Pension Act, the adoption of any amendment to a Pension Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) prior to the effectiveness of the applicable provisions of the Pension Act, the existence with respect to a Pension Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) or, on and after the effectiveness of the applicable provisions of the Pension Act, any failure by a Pension Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Pension Plan, in each case whether or not waived; (d) prior to the effectiveness of the applicable provisions of the Pension Act, the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to a Pension Plan; (e) on and after the effectiveness of the applicable provisions of the Pension Act, a determination that a Pension Plan is in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code); (f) a withdrawal by any Borrower or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (g) a complete or partial withdrawal by any Borrower or ERISA Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan is in reorganization; (h) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multi-employer Plan; (i) the occurrence of an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multi-employer Plan; (j) the occurrence of a “prohibited transaction” with respect to which the Borrower or any of its Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code), or with respect to which the Borrower or any such Subsidiary could otherwise be liable; or (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower or ERISA Affiliate.

“ Event of Default ” has the meaning specified in Section 10.1 .

“ Exchange Act ” means the Securities Exchange Act of 1934, and regulations promulgated thereunder, as amended.

 

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“ Excluded Taxes ” means, in the case of each Lender and the Agent and each other recipient of any payment to be made on account of the Obligations, (a) Taxes (including income Taxes, capital or franchise Taxes or other Taxes on net income) as are imposed on or measured by the Agent’s, any Lender’s or such recipient’s overall net income in the jurisdiction (whether federal, state or local and including any political subdivision thereof) under the laws of which the Agent or such Lender or recipient, as the case may be, is organized or maintains a lending office from which the Loans are made or does business, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in respect of which the applicable recipient, as the case may be, is subject to income or franchise Taxes imposed on (or measured by) its net income and (c) any withholding Tax (including any Tax payable under Part XIII of the Income Tax Act (Canada)) that is imposed on amounts payable to a Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Section 13.10 , except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from an Obligor with respect to such withholding Tax pursuant to Section 5.1 .

“ Existing Public Debt ” means the 1  ⁷ / 8 % Convertible Senior Subordinated Notes, the 6  ¹ / 2 % QUIPS, the 6  ¹ / 2 % Senior Notes, the 7% Senior Subordinated Notes, the 7  ³ / 4 % Senior Subordinated Notes and the Holdco Notes.

“ Existing Securitization Facility ” means the receivables facility established pursuant to the Receivables Purchase Agreement dated as of May 31, 2005 among United Rentals Receivables LLC II, as seller, Holdings, as collection agent, Atlantic Asset Securitization Corp., as a purchaser, Liberty Street Funding Corp., as a purchaser, Calyon New York Branch, as a purchaser agent and The Bank of Nova Scotia, as a purchaser agent and a bank, and the other Transaction Documents under and as defined therein.

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to the U.S. Bank on such day on such transactions as determined by the Agent.

“ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System or any successor thereto.

“ Fee Letter ” means one or more fee letters among Bank of America, N.A., UBS Loan Finance LLC, and/or the Arrangers and Holdings, with respect to the payment of certain fees in connection with the Agreement.

 

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“ Financial Statements ” means, according to the context in which it is used, the financial statements referred to in Sections 6.2 and 7.6 or any other financial statements required to be given to the Lenders pursuant to the Agreement.

“ First Date ” has the meaning specified in Section 8.22(b)(ii)(A) .

“ Fiscal Quarter ” means the period commencing on January 1 in any Fiscal Year and ending on the next succeeding March 31, the period commencing on April 1 in any Fiscal Year and ending on the next succeeding June 30, the period commencing on July 1 in any Fiscal Year and ending on the next succeeding September 30, or the period commencing on October 1 in any Fiscal Year and ending on the next succeeding December 31, as the context may require.

“ Fiscal Year ” means Holdings’s, the Borrowers’, the Guarantors’ and their Subsidiaries’ fiscal year for financial accounting purposes. As of the Agreement Date, the current Fiscal Year of Holdings, the Obligors and their Subsidiaries will end on December 31, 2008.

“ Fixed Charge Coverage Ratio ” means the ratio of:

(a) (i) Consolidated EBITDA for the most recent period of four (4) consecutive Fiscal Quarters, minus (ii) without duplication, the aggregate amount of all Capital Expenditures of Holdings and its Subsidiaries for such period, minus (iii) the aggregate amount of Federal, state, local and foreign income taxes capital or profits taxes, including foreign withholding taxes, expensed during such period to the extent paid in cash, in each case, of or by Holdings and its Subsidiaries for such period; to

(b) the sum, without duplication, of (i) Interest Expense for such period, plus (ii) the aggregate principal amount of all regularly scheduled principal or amortization payments on Debt for Borrowed Money of Holdings and its Subsidiaries for such period.

For purposes of calculating the Fixed Charge Coverage Ratio, the Senior Secured Leverage Ratio and the Total Leverage Ratio:

(A) Investments, acquisitions, mergers, consolidations and dispositions that have been made by Holdings, any of its Subsidiaries, or any Person or any of its Subsidiaries acquired by, merged or consolidated with Holdings or any of its Subsidiaries during the twelve-month reference period or subsequent to such reference period and on or prior to the calculation date will be given pro forma effect, as if they had occurred on the first day of the twelve-month reference period;

(B) the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the calculation date, will be excluded;

(C) the fixed charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the calculation date, will be excluded, but only to the extent that the obligations giving rise to such fixed charges will not be obligations of Holdings or any of its Subsidiaries following the calculation date;

 

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(D) any Person that is a Subsidiary on the calculation date will be deemed to have been a Subsidiary at all times during such twelve-month period; and

(E) any Person that is not a Subsidiary on the calculation date will be deemed not to have been a Subsidiary at any time during such twelve-month period.

For purposes of this definition and the definitions of “Senior Secured Leverage Ratio” and “Total Leverage Ratio”, whenever pro forma effect is given to a transaction, the pro forma calculations shall be made in accordance with Regulation S-X of the Securities Act of 1933, as amended. Interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Chief Financial Officer of Holdings to be the rate of interest implicit in such Capital Lease Obligation in accordance with GAAP.

“ Foreign Subsidiary ” means any Subsidiary of Holdings that is formed under the laws of a jurisdiction other than a State of the United States or the District of Columbia.

“ FSCO ” means the Financial Services Commission of Ontario and any Person succeeding to the functions thereof and includes the Superintendent under such statute and any other Governmental Authority (succeeding to the functions thereof) and established or appointed by the Financial Services Commission of Ontario Act, 1997.

“ Full Payment ” or “ Full Payment of the Obligations ” means, with respect to any Obligations (other than contingent indemnification obligations for which no claim has been made or asserted), (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an insolvency proceeding (whether or not allowed in the proceeding), (b) if such Obligations arise from Letters of Credit or Designated Bank Products Obligations or if such Obligations consist of indemnification obligations for which a claim has been made or asserted, the cash collateralization thereof as provided herein or otherwise acceptable to the Agent (or delivery of a standby letter of credit acceptable to the Agent in its discretion, in the amount of required cash collateral) and (c) the termination or expiration of all Commitments.

“ Funded Canadian Loan Participation ” means, with respect to any Participating Lender in relation to Canadian Revolving Loans funded by the Canadian Funding Banks, (a) the aggregate amount paid by such Participating Lender to the Canadian Funding Banks pursuant to Section 13.17(b) in respect of such Participating Lender’s participation in the principal amount of Canadian Revolving Loans funded by the Canadian Funding Banks minus (b) the aggregate amount paid to such Participating Lender by the Canadian Funding Banks pursuant to Section 13.17(b) in respect of its participation in the principal amount of Canadian Revolving Loans funded by the Canadian Funding Banks, excluding in each case any payments made in respect of interest accrued on the Canadian Revolving Loans funded by the Canadian Funding Banks.

“ Funding Date ” means the date on which a Borrowing occurs.

“ GAAP ” means generally accepted accounting principles and practices set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature

 

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and authority within the U.S. accounting profession) (or in the case of the Canadian Obligors, such generally accepted accounting principles and practices set forth from time to time in Canada by the Canadian Institute of Chartered Accountants), which are applicable to the circumstances from time to time; provided , that, in the event there is a change in GAAP or the application thereof after the Agreement Date that affects the calculation of a financial covenant contained in Section 8.22 or Section 8.23 (or the Total Leverage Ratio for purposes of determining the Applicable Margin or the definition or calculation of any financial term), promptly following the Required Lenders’ request, the Borrowers shall provide the Agent and the Lenders a reconciliation showing the effect of such change in GAAP and if the Company or the Required Lenders shall so request, the calculation of a financial covenant contained in Section 8.22 or Section 8.23 (or the Total Leverage Ratio for purposes of determining the Applicable Margin or the definition or calculation of any financial term) shall be calculated without regard to such change in GAAP.

“ General Intangibles ” means all of each Obligor’s now owned or hereafter acquired “general intangibles” as defined in the UCC or, with respect to any General Intangible of a Canadian Obligor, an “intangible” as defined in the PPSA, chooses in action and causes of action and all other intangible personal property of each Obligor of every kind and nature (other than Accounts), including, without limitation, all contract rights, payment intangibles, Proprietary Rights, corporate or other business records, inventions, designs, blueprints, plans, specifications, patents, patent applications, trademarks, service marks, trade names, trade secrets, goodwill, copyrights, computer software, customer lists, registrations, licenses, franchises, Tax refund claims, any funds which may become due to any Obligor in connection with the termination of any Plan or other employee benefit plan or any rights thereto and any other amounts payable to any Obligor from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, property, casualty or any similar type of insurance and any proceeds thereof, proceeds of insurance covering the lives of key employees on which any Obligor is beneficiary, rights to receive dividends, distributions, cash, Instruments and other property in respect of or in exchange for pledged equity interests or Investment Property and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Obligor.

“ Goods ” means all “goods” as defined in the UCC or, with respect to any goods of a Canadian Obligor, the PPSA, now owned or hereafter acquired by any Obligor, wherever located, including embedded software to the extent included in “goods” as defined in the UCC, and manufactured homes.

“ Governmental Authority ” means any nation or government, any state, provincial, territorial or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“ Guarantee Agreements ” mean the U.S. Guarantee Agreement and the Canadian Guarantee Agreements.

 

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“ Guarantors ” means (a) the U.S. Guarantors, (b) the Canadian Guarantors, and (c) each other Person, who, in a writing accepted by the Agent, guarantees payment or performance in whole or in part of the Obligations.

“ Guaranty ” means, with respect to any Person, all obligations of such Person which in any manner directly or indirectly guarantee or assure, or in effect guarantee or assure, the payment or performance of any indebtedness, dividend or other monetary obligations of any other Person (the “guaranteed obligations”), or assure or in effect assure the holder of the guaranteed monetary obligations against loss in respect thereof, excluding the endorsement of checks and other similar instruments in the ordinary course of business, but including any such obligations incurred through an agreement, contingent or otherwise: (a) to purchase the guaranteed monetary obligations or any property constituting security therefor; (b) to advance or supply funds for the purchase or payment of the guaranteed monetary obligations or to maintain a working capital or other balance sheet condition; or (c) to lease property or to purchase any debt or equity securities or other property or services.

“ Hedge Agreement ” means any and all transactions, agreements or documents now existing or hereafter entered into, which provides for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging any Obligor’s exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices.

“ Holdco Notes ” means the 14% unsecured senior notes of Holdings due 2014 in an aggregate principal amount not to exceed $425,000,000 issued and sold pursuant to the Holdco Notes Documents.

“ Holdco Notes Documents ” means that certain Note Purchase Agreement to be dated on or about June 10, 2008 among Holdings and The Bank of New York, as trustee, the Holdco Notes and all other agreements, instruments and other documents pursuant to which the Holdco Notes have been or will be issued or otherwise setting forth the terms of the Holdco Notes.

“ Holdings ” has the meaning specified in the introductory paragraph to the Agreement.

“ Immaterial Subsidiary ” means (a) United Rentals Receivables LLC II and (b) any Subsidiary of Holdings that, as of the last day of the Fiscal Quarter of Holdings most recently ended, (i) did not have assets with a value in excess of $5,000,000 at any time and (ii) did not have revenues in excess of $10,000,000 for any four (4) consecutive Fiscal Quarters. Each Immaterial Subsidiary as of the Closing Date shall be set forth in Schedule 1.3 .

“ Incremental Assumption Agreement ” means an Incremental Revolving Credit Assumption Agreement among, and in form and substance reasonably satisfactory to, the applicable Borrower, the Agent and one or more Lenders or New Lenders, as the case may be.

“ Indemnified Liabilities ” has the meaning specified in Section 14.11(a) .

“ Indemnified Person ” has the meaning specified in Section 14.11(a) .

 

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“ Indemnified Taxes ” means all Taxes other than Excluded Taxes.

“ Instruments ” means all instruments as such term is defined in Article 9 of the UCC or as is defined in the PPSA, as applicable, now owned or hereafter acquired by any Borrower, any Guarantor or any of their Subsidiaries.

“ Intellectual Property Security Agreements ” means the U.S. Intellectual Property Security Agreement and the Canadian Intellectual Property Security Agreement.

“ Interest Expense ” means, with reference to any period, total cash interest expense (including that attributable to Capital Lease Obligations but excluding any interest expense relating to the 6  ¹ / 2 % QUIPS in an aggregate amount not to exceed $10,000,000 for any period of four (4) consecutive Fiscal Quarters) of the Consolidated Parties for such period with respect to all outstanding Debt of Holdings and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedge Agreements in respect of interest rates), calculated on a consolidated basis for the Consolidated Parties for such period in accordance with GAAP.

“ Interest Period ” means, as to any LIBOR Loan, the period commencing on the Funding Date of such Loan or on the Continuation/Conversion Date on which the Loan is converted into or continued as a LIBOR Loan, and ending on the date 14 days or one, two, three or six months thereafter or, with the consent of each applicable Lender, nine or 12 months thereafter, as selected by the applicable Borrower in its Notice of Borrowing, or Notice of Continuation/Conversion, provided that:

(a) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

(b) any Interest Period pertaining to a LIBOR Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Stated Termination Date.

“ Interest Rate ” means each or any of the interest rates, including the Default Rate, set forth in Section 3.1 .

“ Inventory ” means all of each Obligor’s and each of their Subsidiaries’ now owned and hereafter acquired Rental Equipment, Merchandise and Consumables Inventory and other inventory, goods and merchandise, wherever located, to be furnished under any contract of service or held for sale or lease, all returned goods, raw materials, work-in-process, finished goods (including embedded software), other materials and supplies of any kind, nature or description which are used or consumed in such Obligor’s or its Subsidiaries’ business or used in connection with the packing, shipping, advertising, selling or finishing of such goods, merchandise, and all documents of title or other Documents representing them.

 

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“ Investment ” in any Person means (a) the acquisition (whether for cash, property, services, assumption of Debt, securities or otherwise, but exclusive of the acquisition of inventory, supplies, equipment and other assets used or consumed in the ordinary course of business of the applicable Borrower or the applicable Subsidiary and Capital Expenditures) of assets, shares of capital stock, bonds, notes, debentures, partnerships, joint ventures or other ownership interests or other securities of such Person, (b) any advance, loan or other extension of credit (other than in connection with sales of Inventory on credit in the ordinary course of business) to such Person, or (c) any other capital contribution to or investment in such Person, including, without limitation, any obligation incurred for the benefit of such Person.

“ Investment Property ” means all of each Obligor’s now owned or hereafter acquired “investment property” as defined in the UCC or the PPSA, as applicable, and includes all right title and interest of each Obligor in and to any and all: (a) securities whether certificated or uncertificated; (b) securities entitlements; (c) securities accounts; (d) commodity contracts; or (e) commodity accounts.

“ IRS ” means the Internal Revenue Service and any Governmental Authority succeeding to any of its principal functions under the Code.

“ Latest Projections ” means (a) on the Agreement Date and thereafter until the Agent receives new projections pursuant to Section 6.2(d) , the projections of the Consolidated Parties’ financial condition, results of operations, and cash flows, and the Borrowing Base and Availability projections, for the period commencing on June 30, 2008 and ending December 31, 2008, on a quarterly basis, and from January 1, 2009 through the Stated Termination Date, on a Fiscal Year basis, and delivered to the Agent prior to the Agreement Date; and (b) thereafter, the projections most recently received by the Agent pursuant to Section 6.2(d) .

“ Laws ” means, collectively, all international, foreign, federal, state, provincial, territorial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of laws.

“ Leases ” means the written agreements between an Obligor and an Account Debtor entered into in the ordinary course of business of the Obligors for rental or lease of Rental Equipment by such Obligor to such Account Debtor, including all schedules and supplements thereto.

“ Lender ” and “ Lenders ” have the meanings specified in the introductory paragraph to the Agreement and shall include the Agent to the extent of any Agent Advance outstanding and the Banks to the extent of any Swingline Loan outstanding, but excluding in any case any Participating Lender in its capacity as such.

“ Letter of Credit ” has the meaning specified in Section 2.4(a) .

“ Letter of Credit Fee ” has the meaning specified in Section 3.6 .

 

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“ Letter of Credit Issuer ” means the U.S. Bank, any affiliate of the U.S. Bank or any other Lender or Affiliate of a Lender that issues any Letter of Credit pursuant to the Agreement and agrees to provide reporting with respect to Letters of Credit reasonably required by the Agent.

“ Letter of Credit Subfacility ” means $200,000,000.

“ Letter-of-Credit Rights ” means “letter-of-credit rights” as such term is defined in the UCC, now owned or hereafter acquired by any Borrower, including rights to payment or performance under a letter of credit, whether or not a Borrower, as beneficiary, has demanded or is entitled to demand payment or performance.

“ LIBOR Interest Payment Date ” means, with respect to a LIBOR Loan, the Termination Date and the last day of each Interest Period applicable to such Loan and, with respect to each Interest Period of more than 90 days, on the date 90 days after the commencement of the Interest Period for such LIBOR Loan.

“ LIBOR Loan ” means a Loan during any period in which it bears interest based on the LIBOR Rate.

“ LIBOR Rate ” means, for any Interest Period, with respect to LIBOR Loans, the rate of interest per annum determined pursuant to the following formula:

 

Where,

“ Offshore Base Rate ” means the rate per annum appearing on Reuters Screen LIBOR01 Page at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBOR01 Page, the applicable rate shall be the arithmetic mean of all such rates. If for any reason none of the foregoing rates is available, the Offshore Base Rate shall be, for any Interest Period, the rate per annum determined by the Agent as the rate of interest at which dollar deposits in the approximate amount of the LIBOR Loan comprising part of such Borrowing would be offered by the Bank’s London Branch to major banks in the offshore dollar market at their request at or about 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period.

“ Eurodollar Reserve Percentage ” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, rounded upward to the next  ¹ / 100 of 1%) in effect on such day applicable to member banks under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “ Eurocurrency liabilities ”). The LIBOR Rate for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

 

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“ Lien ” means: (a) any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute, or contract, and including a security interest, charge, claim, priority or lien arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation, deemed trusts, assignment, deposit arrangement, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes; (b) to the extent not included under clause (a) , any reservation, exception, encroachment, easement, servitude right-of-way, restriction, lease or other title exception or encumbrance affecting property; and (c) any contingent or other agreement to provide any of the foregoing.

“ Like-Kind Exchange ” means, if gain or loss would not be recognized under Section 1031 of the Code, any exchange of property (“ Relinquished Property ”) for like property (“ Replacement Property ”) for use in the business of the U.S. Borrowers and their Domestic Subsidiaries; provided that (a) the disposition of the Relinquished Property is permitted under the terms of this Agreement, (b) the transaction is entered into in connection with the acquisition of Rental Equipment in the normal course of business, (c) the applicable “exchange agreement” reflects arm’s-length terms with a Qualified Intermediary who is not an Affiliate of Holdings and otherwise contains customary terms consistent with past practices and (d) all Net Proceeds thereof are, before giving effect to any application under Section 4.3(b) , deposited in one or more Like-Kind Exchange Accounts.

“ Like-Kind Exchange Account ” means any account established jointly with a Qualified Intermediary pursuant to and solely for the purposes of facilitating any Like-Kind Exchange, the amounts on deposit in which shall be limited to proceeds realized from the disposition of Relinquished Property in connection with a Like-Kind Exchange.

“ Loan Documents ” means the Agreement, the Intellectual Property Security Agreements, the Guarantee Agreements, each Guaranty Supplement referred to in any Guarantee Agreement, the Security Agreements, each Security Agreement Supplement referred to in any Security Agreement, the Fee Letter, the Perfection Certificate and any other agreements, instruments, and documents heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise relating to the Obligations, the Collateral, or any other aspect of the transactions contemplated by the Agreement.

“ Loans ” means, collectively, all loans and advances provided for in Article II .

“ Margin Stock ” means “margin stock” as such term is defined in Regulation T, U or X of the Federal Reserve Board.

“ Material Account ” means any bank account or securities account of any Obligor, including in any case any account into which proceeds from the Existing Securitization Facility are deposited, but excluding (a) any “Controlled Account” under and as defined in the documents evidencing the Existing Securitization Facility as in effect as of the Agreement Date, (b) any Like-Kind Exchange Account, (c) any account which is exclusively used for disbursement purposes (including payroll accounts) and (d) other accounts to the extent the aggregate amount of funds on deposit therein does not exceed $1,250,000.

 

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“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets or financial condition of Holdings and its Subsidiaries, taken as a whole; (b) a material impairment of the ability of the Borrowers and the other Obligors (taken as a whole) to perform under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Obligor of any Loan Document to which it is a party.

“ Maximum Canadian Revolver Amount ” means, at any time, the aggregate Canadian Revolving Credit Commitments at such time, as the same may be increased or reduced from time to time in accordance with Section 2.9 or reduced from time to time in accordance with Section 4.4(b) ; provided that the Maximum Canadian Revolver Amount shall not at any time exceed $250,000,000 or such lesser amount as shall be requested by the Borrowers’ Agent pursuant to clause (E)  in the proviso to Section 12.1(a) . As of the Agreement Date, the Maximum Canadian Revolver Amount is $0. Anything contained herein to the contrary notwithstanding, upon termination of the Commitments, the Maximum Canadian Revolver Amount shall automatically be reduced to zero.

“ Maximum Rate ” has the meaning specified in Section 3.3 .

“ Maximum Revolver Amount ” means, at any time, the aggregate Revolving Credit Commitments at such time, as the same may be increased from time to time in accordance with Section 2.8 or increased or reduced from time to time in accordance with Section 2.9 or reduced from time to time in accordance with Section 4.4(b) ; provided that the Maximum Revolver Amount shall not at any time exceed $1,500,000,000. As of the Agreement Date, the Maximum Revolver Amount is $1,250,000,000. Anything contained herein to the contrary notwithstanding, upon termination of the Commitments, the Maximum Revolver Amount shall automatically be reduced to zero.

“ Maximum Specified Loan Sublimit ” means $150,000,000 (or the Equivalent Amount thereof in Canadian Dollars). Anything contained herein to the contrary notwithstanding, upon termination of the Commitments, the Maximum Specified Loan Sublimit shall automatically be reduced to zero.

“ Maximum U.S. Revolver Amount ” means, at any time, the aggregate U.S. Revolving Credit Commitments at such time, as the same may be increased or reduced from time to time in accordance with Section 2.9 , increased from time to time in accordance with Section 2.8 or reduced from time to time in accordance with Section 4.4(b) ; provided that the Maximum U.S. Revolver Amount shall not at any time exceed $1,500,000,000 minus the Maximum Canadian Revolver Amount. As of the Agreement Date, the Maximum U.S. Revolver Amount is $1,250,000,000. Anything contained herein to the contrary notwithstanding, upon termination of the Commitments, the Maximum U.S. Revolver Amount shall automatically be reduced to zero.

“ Merchandise and Consumables Inventory ” means Inventory owned by a Borrower, a Guarantor or any of their Subsidiaries, other than Rental Equipment held for sale or rental, including, without limitation, parts for Rental Equipment, parts to be sold, parts to be installed on Rental Equipment (which parts are not then incorporated or installed in or on, or affixed or appurtenant to, any such Rental Equipment), and Inventory for the contractors supply business of the Obligors.

 

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“ Merchandise and Consumables Inventory Formula Amount ” means, on any date of determination thereof, an amount equal to 55% of the Value of Eligible Merchandise and Consumables Inventory on such date.

“ Moody’s ” means Moody’s Investors Service, Inc., or any successor thereto.

“ Multi-employer Plan ” means a “multi-employer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding six (6) years contributed to by the Borrowers or any ERISA Affiliate.

“ Net Book Value ” means, with respect to any Rental Equipment, cost minus accumulated depreciation for such Rental Equipment calculated in accordance with GAAP.

“ Net Orderly Liquidation Value ” means the net orderly liquidation value of any Rental Equipment, as determined in accordance with the most recent Appraisal received by the Agent in accordance with Section 8.4(c) of the Agreement.

“ Net Proceeds ” means proceeds (including cash receivable (when received) by way of deferred payment) received in cash from the sale, transfer or other disposition of any property the disposition of which would constitute an Asset Disposition or a Like-Kind Exchange, including insurance proceeds (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings) and awards of compensation received with respect to the destruction or condemnation of all or part of such property, net of: (a) the reasonable and customary costs of such sale, lease, transfer or other disposition (including legal fees and commissions); (b) Taxes paid or a good faith estimate of the Taxes payable with respect to such proceeds (including, without duplication, withholding taxes and cash Tax payments); (c) all principal, interest and other amounts in respect of Debt (other than Debt under the Loan Documents), including, without limitation, any premium, penalty or make-whole amounts related thereto, required to be repaid as a result such sale, lease, transfer or other disposition; and (d) appropriate amounts to be provided by the recipient of such proceeds as a reserve in accordance with GAAP against any liabilities associated with the assets sold or disposed of in such sale, lease, transfer or other disposition, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligation associated with the assets sold or disposed of in such sale, lease, transfer or other disposition; provided that “Net Proceeds” shall include any reserves previously taken against any liabilities associated with any such sale, lease, transfer or other disposition immediately upon those reserves being determined to be in excess of such liabilities, but only to the extent of such excess.

“ New Lender ” has the meaning specified in Section 2.8(a) .

“ Non-Core Business ” means any business which is not an essential part of the rental business.

 

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“ Non-Recourse Debt ” means Debt of a Person (a) as to which no Obligor provides any Guaranty or credit support of any kind or is directly or indirectly liable (as a guarantor or otherwise) and (b) which does not provide any recourse against any of the assets of any Obligor. Notwithstanding the foregoing, the provision of Standard Securitization Undertakings in connection with a Qualified Receivables Transaction shall not invalidate the status of the Debt of such Receivables Entity that is otherwise classified as Non-Recourse Debt pursuant to the terms of this definition.

“ Notice of Borrowing ” means a U.S. Notice of Borrowing or a Canadian Notice of Borrowing, as the context requires.

“ Notice of Continuation/Conversion ” has the meaning specified in Section 3.2(b) .

“ Notice of Requested Commitment Increase ” has the meaning specified in Section 2.8(a) .

“ Obligations ” means the U.S. Obligations and the Canadian Obligations.

“ Obligors ” means, collectively, each Borrower, each Guarantor, and any other Person that now or hereafter is primarily or secondarily liable for any of the Obligations and/or grants the Agent a Lien in any collateral as security for any of the Obligations.

“ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; (c) with respect to any Canadian unlimited liability company, the memorandum of association or articles of incorporation; and (d) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“ Other Taxes ” means any present or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, the Agreement or any other Loan Documents.

“ Out-of-Formula Condition ” has the meaning specified in Section 4.2 .

“ Participant ” means any Person who shall have been granted the right by any Lender to participate in the financing provided by such Lender under the Agreement, and who shall have entered into a participation agreement in form and substance satisfactory to such Lender, excluding any Participating Lender in its capacity as such.

“ Participant Register ” has the meaning specified in Section 13.22(b) .

“ Participating Lender ” has the meaning specified in Section 13.17(a) .

 

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“ Payment Account ” means each bank account to which the proceeds of Collateral are deposited or credited, and which is maintained in the name of the Agent, on terms acceptable to the Agent.

“ PBA ” means the Pension Benefits Act (Ontario) or similar legislation of any other Canadian federal or provincial jurisdiction, and the regulations promulgated thereunder applicable to a Pension Plan.

“ PBGC ” means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to the functions thereof or any Governmental Authority of another jurisdiction exercising similar functions in respect of any Plans of an Obligor.

“ Pension Act ” means the Pension Protection Act of 2006, as amended from time to time.

“ Pension Event ” means solely with respect to Canadian Pension Plans (a) the whole or partial withdrawal of a Canadian Obligor or any of its Subsidiaries from a Canadian Pension Plan during a plan year; or (b) the filing of a notice of proposal to terminate in whole or in part a Canadian Pension Plan or the treatment of a Canadian Pension Plan amendment as a termination or partial termination; or (c) the issuance of a notice of proposal by any Governmental Authority to terminate in whole or in part or have an administrator or like body appointed to administer a Canadian Pension Plan; or (d) any other event or condition which might constitute grounds for the termination of, winding up or partial termination or winding up or the appointment of trustee to administer, any Plan.

“ Pension Plan ” means a pension plan or an employee benefit plan (a) (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA, other than a Multi-employer Plan, or (b) which is subject to the Income Tax Act (Canada), the PBA, or any other applicable laws, which in either case of clause (a) or (b)  an Obligor sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or has made contributions at any time during the immediately preceding five (5) plan years.

“ Perfection Certificate ” means the Perfection Certificate substantially in the form of Exhibit F.

“ Permitted Acquisition ” means the acquisition by an Obligor of all or a substantial portion of the assets or businesses of a Person or of assets constituting a business unit, line of business or division of such Person (the “ Target ”) or the acquisition by an Obligor of all of the capital stock or other equity interests of the Target or the merger of the Target with and into an Obligor (with such Obligor as the surviving Person), so long as:

(a) the board of directors (or similar governing body) of the Target to be so purchased or acquired shall not have indicated publicly its opposition to the consummation of such purchase or acquisition (which opposition has not been publicly withdrawn);

(b) the Target and all acquired assets shall be in the same business or lines of business (or lines of business reasonably related or ancillary thereto) in which the Borrowers and their Subsidiaries are engaged as of the Agreement Date;

 

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(c) all transactions in connection with such acquisition shall be consummated in all material respects, in accordance with all applicable laws, governmental authorizations;

(d) after giving effect to such acquisition and any related refinancing of Debt, none of the acquired assets are subject to any Lien other than Permitted Liens;

(e) the Specified Conditions shall have been satisfied; and

(f) a Responsible Officer shall have delivered to the Agent a certificate as to the satisfaction of each of the foregoing conditions

provided , that, unless the Agent shall otherwise consents (subject to Reserves satisfactory in its discretion), no assets acquired in any such transaction (including, without limitation, assets of the Target) may be included in the calculation of Combined Availability for purposes of clause (e), or otherwise included in the calculation of any Borrowing Base or any similar calculation hereunder, until the Agent has completed to its reasonable satisfaction such field examinations as it may deem appropriate and has received an Appraisal with respect to such assets to the extent deemed appropriate by the Agent and an updated Borrowing Base Certificate giving effect to such acquisition.

“ Permitted Debt ” has the meaning specified in Section 8.13 .

“ Permitted Distributions ” means:

(a) Distributions by any Subsidiary of an Obligor to such Obligor and any Distribution by any Subsidiary to its equity holders ratably;

(b) Distributions by Holdings to repurchase equity securities issued by Holdings from employees, officers and directors of Holdings, the Company or any Subsidiary (i) upon the death of any such employee, officer or director of Holdings, the Company or any Subsidiary, and (ii) upon the disability or termination of employment of any such employee, officer or director of Holdings, the Company or any Subsidiary in an amount not to exceed $10,000,000 in the aggregate in any Fiscal Year;

(c) the Preferred Repurchase, so long as the Specified Conditions are satisfied and the Holdco Notes shall have been issued; and

(d) other Distributions, so long as the Specified Conditions are satisfied.

“ Permitted Guarantees ” means (a) the Guarantees by the Obligors of the Obligations, (b) Guarantees by any Obligor or any of its Subsidiaries in respect of Debt otherwise permitted hereunder of any Obligor or any of its wholly owned Subsidiaries, and (c) Guarantees by any Obligor or any of its Subsidiaries of leases or other ordinary course obligations that do not constitute Debt of an Obligor or Subsidiary in the ordinary course of business.

 

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“ Permitted Investments ” means:

(a) direct obligations of the United States of America or Canada, or any agency thereof, or obligations guaranteed or insured by the United States of America or Canada, or any agency thereof, provided that such obligations mature within one year from the date of acquisition thereof;

(b) acquisitions of certificates of deposit or time deposits maturing within one year from the date of acquisition, bankers’ acceptances, Eurodollar bank deposits, or overnight bank deposits, in each case issued by, created by, or with a bank or trust company organized under the laws of the United States of America or any state thereof or Canada or any province thereof having, at the time of acquisition thereof, capital and surplus aggregating at least $1,000,000,000;

(c) acquisitions of commercial paper given a rating of “A2” or better by S&P or “P2” or better by Moody’s and maturing not more than 270 days from the date of creation thereof;

(d) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A 1 from S&P or at least P 1 from Moody’s;

(e) any money market or similar fund the assets of which are comprised exclusively of any of the items specified in clauses (a) through (d) above and as to which withdrawals are permitted at least every 90 days;

(f) Investments existing on the Agreement Date and identified in Schedule 8.11 to the Agreement;

(g) Investments by any Obligor in any other Obligor in the ordinary course of business;

(h) Investments by any Subsidiary which is not an Obligor in any other Subsidiary which is not an Obligor;

(i) Investments by any Obligor in any Subsidiary which is not an Obligor, the amount of which made during any Fiscal Year (as reduced by any return of capital in respect of any such Investment during such Fiscal Year), taken together with the amount of Debt incurred pursuant to Sections 8.13(d) and (p)(ii) during such Fiscal Year, does not exceed $10,000,000 ( provided that the unused portion of such amount for any Fiscal Year may be carried forward to successive Fiscal Years), in each case by way of contributions to capital (including by way of organizing a Subsidiary after the Agreement Date pursuant to Section 8.25 ); provided that aggregate amount of Investments made under this clause (i) , taken together with Debt incurred pursuant to Sections 8.13(d) and (p)(ii) , shall not exceed $25,000,000 outstanding at any time;

 

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(j) Investments by any Obligor in any Receivables Entity pursuant to a Qualified Receivables Transaction;

(k) Investments in the nature of pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business;

(l) deposit accounts maintained in the ordinary course of business;

(m) Investments constituting Hedge Agreements entered into in the ordinary course of business;

(n) Investments acquired by the Obligors in the ordinary course of business in respect of Accounts that have become delinquent, including securities of a delinquent Account Debtor received by any Borrower or the Guarantor in connection with a plan of reorganization of the Debt of such Account Debtor;

(o) loans and advances to employees and officers in the ordinary course of business not to exceed $10,000,000 in aggregate outstanding principal amount at any time;

(p) Permitted Acquisitions;

(q) Permitted Guarantees;

(r) Investments received in connection with the bankruptcy or reorganization of suppliers and customers or in settlement of delinquent obligations of, or other disputes with, customers and suppliers arising in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(s) Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers consistent with past practices;

(t) advances of payroll payments to employees in the ordinary course of business;

(u) so long as the requirements set forth in clauses (a) and (c)  of the definition of “Specified Conditions” are satisfied and Combined Availability is not less than 15% of the Maximum Revolver Amount before and after giving effect to such Investments, Investments not to exceed $50,000,000 in the aggregate during any Fiscal Year; and

(v) other Investments, so long as the Specified Conditions shall have been satisfied.

“ Permitted Liens ” means, with respect to the Borrowers and their Subsidiaries, the Liens listed below:

(a) Liens for Taxes not delinquent or statutory Liens for Taxes; provided that (i) such Lien is junior in priority (other than Liens securing Taxes not to exceed $5,000,000 at any time, subject in all events to the Agent’s right to impose Reserves with respect to such Taxes in accordance with Section 2.7 in its Reasonable Credit Judgment) to the Agent’s Liens or (ii) the payment of such Taxes which are due and payable is being Properly Contested;

 

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(b) the Agent’s Liens;

(c) Liens consisting of deposits or pledges of cash or cash equivalents made in the ordinary course of business in connection with, or to secure payment of, obligations under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or purchase, supply or other contracts (other than for the repayment of Debt) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of Debt) or to secure statutory obligations (other than liens arising under ERISA or the PBA or Environmental Liens) or surety or appeal bonds; provided , that the aggregate outstanding face amount of bonds that are secured by any pledge of assets shall not at any time exceed $100,000,000 at any time during the Fiscal Year of Obligors ending December 31, 2008, which amount shall be increased by $7,500,000 in each subsequent Fiscal Year thereafter;

(d) Liens securing the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like Persons, provided that if any such Lien arises from the nonpayment of such claims or demand when due, such claims or demands do not exceed $5,000,000 in the aggregate or are being Properly Contested;

(e) Liens securing Capital Leases and purchase money Debt to the extent such Capital Leases or purchase money Debt are permitted in Section 8.13(c);

(f) Liens constituting encumbrances in the nature of reservations, exceptions, encroachments, easements, zoning, rights of way, covenants running with the land, and other similar title exceptions or encumbrances affecting any Real Estate; provided that they do not in the aggregate materially detract from the value of the Real Estate or materially interfere with its use in the ordinary conduct of the Borrowers’ business;

(g) Liens arising from judgments and attachments in connection with court proceedings; provided that the attachment or enforcement of such Liens would not result in an Event of Default hereunder and the judgments or other orders secured by such Liens are being Properly Contested;

(h) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrowers and their Subsidiaries taken as a whole or the Agent’s rights with respect to the Collateral;

(i) any interest or title of a lessor, sublessor, licensee or licensor under any lease, sublease, sublicense or license agreement not prohibited by the Agreement;

 

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(j) Liens in favor of a banking institution encumbering deposits (including the right of set-off) held by such banking institution incurred in the ordinary course of business;

(k) Liens attaching solely to cash earnest money deposits in connection with any letter of intent or purchase agreement in connection with a Permitted Acquisition;

(l) Liens arising from precautionary UCC filings or PPSA filings regarding “true sale” to a Receivable Entity pursuant to a Qualified Receivables Transaction or “true” operating leases or the bailment or consignment of goods to any Obligor or any Subsidiary, to the extent such lease, bailment or consignment is not otherwise in violation of the Agreement;

(m) Liens on insurance proceeds or unearned premiums incurred in the ordinary course of business in connection with the financing of insurance premiums;

(n) Liens identified on Schedule 8.18 ;

(o) Liens securing Refinancing Debt to the extent such Liens are permitted in the definition of “Refinancing Debt”;

(p) Liens on the property of the Target in a Permitted Acquisition, so long as such Liens were in existence prior to and were not incurred in connection with or in contemplation of the Permitted Acquisition and do not extend to any assets other than those of the Target;

(q) Liens on property of a Receivables Entity imposed in connection with a Qualified Receivables Transaction;

(r) Liens securing Debt permitted under Section 8.13(r) ;

(s) Liens on any Like-Kind Exchange Account and any Replacement Property that is acquired in a Like-Kind Exchange, in each case granted pursuant to and in connection with a Like-Kind Exchange in favor of any applicable Qualified Intermediary to facilitate such Like-Kind Exchange;

(t) Liens securing Debt of any Subsidiary that is not an Obligor pursuant to Section 8.13(s) ; and

(u) other Liens so long as the aggregate outstanding principal amount of Debt at any time secured thereby does not exceed $5,000,000.

“ Permitted Priority Liens ” means Permitted Liens described in clauses (a) and (d) of the definition thereof.

“ Person ” means any individual, sole proprietorship, partnership, limited liability company, unlimited liability company, joint venture, trust, unincorporated organization, association, corporation, Governmental Authority, or any other entity.

 

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“ Plan ” means any employee benefit plan (including such plans as defined in Section 3(3) of ERISA) which an Obligor sponsors or maintains or to which an Obligor or a Subsidiary of an Obligor makes, is making, or is obligated to make contributions and includes any Pension Plan.

“ PPSA ” means the Personal Property Security Act (Ontario) and the regulations promulgated thereunder, as amended from time to time, provided , however , if validity, perfection and effect of perfection and non-perfection of the Agent’s security interest in any Collateral of any Canadian Obligor are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA means those personal property security laws (including the Civil Code of Quebec) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“ Preferred Repurchase ” means the repurchase, redemption and immediate retirement of all of the shares of Holdings’ Series C and D preferred stock pursuant to the Repurchase Agreement for an aggregate consideration of approximately $679,000,000 (and in any event not to exceed $700,000,000).

“ Priority Payable Reserves ” means reserves established in the reasonable credit judgment of the Agent for amounts secured by any Liens, choate or inchoate, which rank or are capable of ranking in priority to the Agent’s Liens, including, without limitation, in the Reasonable Credit Judgment of the Agent, any such amounts due and not paid for vacation pay, amounts due and not paid under any legislation relating to workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and remitted when due under the Income Tax Act (Canada), amounts currently or past due and not paid for realty, municipal or similar Taxes (to the extent impacting personal or moveable property) and all amounts currently or past due and not contributed, remitted or paid to any Plan or under the Canada Pension Plan, the PBA or any similar legislation.

“ Pro Rata Share ” means:

(a) with respect to a U.S. Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such U.S. Lender’s U.S. Revolving Credit Commitment and the denominator of which is the sum of the amounts of all of the U.S. Lenders’ U.S. Revolving Credit Commitments, or if no U.S. Revolving Credit Commitments are outstanding, a fraction (expressed as a percentage), (x) the numerator of which is the amount of U.S. Revolving Loans and Specified Loans owed to such U.S. Lender plus such U.S. Lender’s participation in the aggregate undrawn face amount of all outstanding Letters of Credit, plus such U.S. Lender’s participation in the aggregate amount of any unpaid reimbursement obligations in respect of Letters of Credit and (b) the denominator of which is the aggregate amount of the U.S. Revolving Loans and Specified Loans owed to the U.S. Lenders, plus the aggregate undrawn face amount of all outstanding Letters of Credit, plus the aggregate amount of any unpaid reimbursement obligations in respect of Letters of Credit, in each case giving effect to a U.S. Lender’s participation in U.S. Swingline Loans and U.S. Agent Advances;

 

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(b) with respect to a Canadian Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such Canadian Lender’s Canadian Revolving Credit Commitment and the denominator of which is the sum of the amounts of all of the Canadian Lenders’ Canadian Revolving Credit Commitments, or if no Canadian Revolving Credit Commitments are outstanding, a fraction (expressed as a percentage), (x) the numerator of which is the amount of Canadian Revolving Loans owed to such Canadian Lender and (y) the denominator of which is the aggregate amount of the Canadian Revolving Loans owed to the Canadian Lenders, in each case giving effect to a Canadian Lender’s participation in Canadian Swingline Loans and Canadian Agent Advances; and

(c) with respect to a Participating Lender, the fraction described in clause (a)  above for such Person in its capacity as a U.S. Lender.

“ Proceeds of Crime Act ” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the regulations promulgated thereunder.

“ Progress Billing ” means any invoice for goods sold or services rendered under a contract or agreement pursuant to which the Account Debtor’s obligation to pay such invoice is conditioned upon any Obligor’s or any Subsidiary of an Obligor’s completion of any further performance under the contract or agreement; provided that in no event will any invoice for rent under a Lease be considered a Progress Billing.

“ Properly Contested ” means, in the case of any Debt or other obligation of an Obligor (including any Taxes) that is not paid as and when due or payable by reason of such Obligor’s bona fide dispute concerning its liability to pay the same or concerning the amount thereof, (a) such Debt or obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (b) such Obligor has established appropriate reserves for the contested obligation in conformity with GAAP; (c) the non-payment of such Debt or obligation will not be reasonably likely to have a Material Adverse Effect and will not result in a material risk of forfeiture or sale of any material assets of such Obligor; (d) if the Debt or obligation results from, or is determined by the entry, rendition or issuance against an Obligor or any of its assets of, a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (e) if such contest (including on any appeal or judicial review) is abandoned, settled or determined adversely (in whole or in part) to such Obligor, such Obligor pays such Debt or obligation, and all penalties, interest and other amounts due in connection therewith, within 30 days following such abandonment, settlement or adverse determination.

“ Proprietary Rights ” means all of each Obligor’s and each of their Subsidiary’s now owned and hereafter arising or acquired licenses, franchises, permits, patents, patent rights, copyrights, works which are the subject matter of copyrights, trademarks, service marks, trade names, trade styles, patent, trademark and service mark applications, and all licenses and rights related to any of the foregoing, and all other rights under any of the foregoing, all extensions, renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing, and all rights to sue for past, present and future infringement of any of the foregoing.

 

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“ Qualified Intermediary ” means any Person acting in its capacity as a qualified intermediary to facilitate any Like-Kind Exchange operate and/or own a Like-Kind Exchange Account.

“ Qualified Receivables Transaction ” means any transaction or series of transactions that may be entered into by any Obligor and/or any Subsidiary of an Obligor pursuant to which such Obligor and/or Subsidiary may sell, assign, convey, participate, contribute to capital or otherwise transfer to (a) a Receivables Entity (in the case of a transfer by any Obligor or any Subsidiary of an Obligor) or (b) any other Person (in the case of a transfer by a Receivables Entity), or may grant a security interest in or pledge, any Accounts or interests therein (whether now existing or arising in the future) of any Obligor or any Subsidiary of an Obligor, and any assets (which, in the case of tangible assets, are sold giving rise to the Accounts) related thereto, including, without limitation, all collateral securing such Accounts, all contracts and contract rights, purchase orders, Leases, security interests, financing statements or other documentation in respect of such Accounts and all guarantees, indemnities, warranties or other documentation or other obligations in respect of such Account, any other assets which are customarily transferred, or in respect of which security interests are customarily granted, in connection with assets securitization transactions involving receivables similar to such Accounts and any collections or proceeds of any of the foregoing (the “ Related Assets ”). For the avoidance of doubt, the transactions contemplated by the Existing Securitization Facility as of the date hereof constitute Qualified Receivables Transactions.

“ RDPRM ” means the Registre des Droits Personnels et Réels Mobiliers.

“ Real Estate ” means all of each Obligor’s and each of their Subsidiaries now or hereafter owned or leased estates in real property, including, without limitation, all fees, leaseholds and future interests, together with all of each Obligor’s and each of their Subsidiaries now or hereafter owned or leased interests in the improvements thereon, the fixtures attached thereto and the easements appurtenant thereto.

“ Reasonable Credit Judgment ” means, as applicable, the Agent’s commercially reasonable judgment, exercised in good faith, as to any factor, event, condition or other circumstance which the Agent, as applicable, reasonably determines: (a) will or could adversely affect the quantity, quality or value of the Collateral, the enforceability or priority of the Agent’s Liens thereon or the amount which the Agent or the Lenders would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of the Collateral or (b) suggests that any collateral report or financial information delivered to the Agent by any Obligor or any Person on behalf of thereof is incomplete, inaccurate or misleading in any material respect, (c) materially increases the likelihood of any event described in Section 10.1(e), (f), (g) or (h) involving an Obligor or (d) creates an Event of Default. In exercising such judgment, the Agent may consider, without duplication, factors already included in or tested by the definition of Eligible Rental Equipment or Eligible Merchandise and Consumables Inventory, and any other criteria including: (i) changes after the Closing Date in any concentration of risk with respect to Eligible Rental Equipment or Eligible Merchandise and Consumables Inventory and (ii) any other factors arising after the Closing Date that affect or that could affect the credit risk of lending to the Borrowers on the security of the Collateral.

 

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“ Receivables Entity ” means (a) any existing Subsidiary or other Investment of the Company which is listed on Schedule 1.4 or (b) any wholly owned Subsidiary of the Company or one of its other Subsidiaries (or another Person in which the Company or one of its other Subsidiaries makes an Investment and to which the Company or one of its other Subsidiaries transfers Accounts and Related Assets) formed after the Closing Date, in each such case, which engages in no activities other than in connection with the financing of Accounts or interests therein and Related Assets and any business or activities incidental or related to such business and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity and: (i) no portion of the Debt or any other obligations (contingent or otherwise) of which: (A) is guaranteed by any Obligor (excluding guarantees of obligations (other than direct guarantees of principal of, and interest on, Debt) pursuant to Standard Securitization Undertakings); (B) is recourse to or obligates any Obligor in any way other than pursuant to Standard Securitization Undertakings; or (C) subjects any property or asset of any Obligor, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (ii) with which no Obligor has any material contract, agreement, arrangement or understanding (except in connection with a Standard Securitization Undertaking or Qualified Receivables Transaction) other than (A) on terms no less favorable to such Obligor than those that might be obtained at the time from Persons that are not Affiliates of the Company, and (B) fees payable in the ordinary course of business in connection with servicing Accounts; and (iii) to which neither the Company nor any Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors of the Company shall be evidenced to the Agent by delivering to the Agent a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and a certificate of a Responsible Officer certifying that such designation complied with the foregoing conditions.

“ Refinancing Debt ” means with respect to any Debt (the “ Refinanced Debt ”), any other Debt which extends, refinances, refunds, replaces or renews such Debt; provided that (a) the principal amount (or accreted value, if applicable) of such Refinancing Debt does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Debt except by an amount equal to unpaid accrued interest and premium (including applicable prepayment penalties) thereof plus fees and expenses reasonably incurred in connection therewith, (b) any Liens securing such Refinancing Debt do not attach to any property of any obligor that did not secure the Refinanced Debt, (c) no obligor that was not previously liable for the repayment of such Refinanced Debt is or is required to become liable for the Refinancing Debt, (d) such extension, refinancing, refunding, replacement or renewal does not result in the Refinancing Debt having a shorter weighted average life to maturity than the Refinanced Debt, and (e) if the Refinanced was subordinated in right of payment to the Obligations, then the terms and conditions of the Refinancing Debt shall include subordination terms and conditions that are at least as favorable to the Lenders as those that were applicable to the Refinanced Debt.

“ Register ” has the meaning specified in Section 13.22 .

“ Related Assets ” has the meaning specified in the definition of “Qualified Receivables Transaction.”

 

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“ Related Canadian Lender ” has the meaning specified in Section 12.2(b) .

“ Relinquished Property ” has the meaning specified in the definition of Like-Kind Exchange.

“ Release ” means a release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant into the indoor or outdoor environment or into or out of any Real Estate or other property, including the movement of Contaminants through or in the air, soil, surface water, groundwater or Real Estate or other property.

“ Rent Reserves ” means such reserves as may be established from time to time by the Agent in its Reasonable Credit Judgment with respect to leased locations or bailees of the Obligors where Eligible Rental Equipment or Eligible Merchandise and Consumables Inventory is located to the extent the Agent has not received a Collateral Access Agreement from the lessor or bailee at any such location, provided that such reserves for any location shall not exceed two (2) months’ rent at such location.

“ Rental Equipment ” means tangible personal property which is offered for sale or rent (or offered for sale as used equipment) by an Obligor in the ordinary course of its business or used in the business of the Obligors and their Subsidiaries and included in fixed assets in the consolidated accounts of Holdings, including Inventory that Holdings currently describes as “rental equipment” in such consolidated accounts, but excluding any Merchandise and Consumables Inventory.

“ Replacement Property ” has the meaning specified in the definition of Like-Kind Exchange.

“ Reportable Event ” means, any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

“ Repurchase Agreement ” means the purchase agreement to be dated on or about June 10, 2008 among Holdings, Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P. and J.P. Morgan Partners (BHCA), L.P.

“ Requested Commitment Increase ” has the meaning specified in Section 2.8(a) .

“ Required Lenders ” means, at any time, Lenders having U.S. Revolving Credit Commitments representing at least 50.1% of the aggregate U.S. Revolving Credit Commitments at such time; provided , however , that if any Lender (or any related Canadian Lender thereof) shall remain a Defaulting Lender, the term “Required Lenders” means Lenders having U.S. Revolving Credit Commitments representing at least 50.1% of the aggregate U.S. Revolving Credit Commitments at such time (excluding the U.S. Revolving Credit Commitment of any such Lender that is (or any such Lender whose related Canadian Lender is) a Defaulting Lender); provided further , however , that if the U.S. Revolving Credit Commitments have been terminated, the term “Required Lenders” means Lenders holding U.S. Revolving Loans (including U.S. Swingline Loans) representing at least 50.1% of the aggregate principal amount of U.S.

 

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Revolving Loans (including U.S. Swingline Loans) outstanding at such time (excluding U.S. Revolving Loans of any such Lender that is (or any such Lender whose related Canadian Lender is) a Defaulting Lender).

“ Requirement of Law ” means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.

“ Reserves ” means reserves that limit the availability of credit hereunder, consisting of reserves against Availability, Eligible Merchandise and Consumables Inventory and Eligible Rental Equipment, established by the Agent from time to time in the Agent’s Reasonable Credit Judgment in accordance with Section 2.7(a) of the Agreement. Without limiting the generality of the foregoing, the following reserves shall be deemed to be a reasonable exercise of the Agent’s credit judgment: (a) Bank Product Reserves, (b) Rent Reserves, (c) warehousemen’s and bailees’ charges, (d) Priority Payable Reserves and (e) Specified Reserves.

“ Responsible Officer ” means the President, any Vice President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, legal counsel, or any other executive or financial officer of Holdings or any other Obligor, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants and the preparation of the Borrowing Base Certificate, the president, chief financial officer or the treasurer of Holdings, or any other officer having substantially the same authority and responsibility.

“ Reuters Screen LIBOR01 Page ” means the display designated on page “LIBOR01” on Reuters Money 3000 Services (or such other page as may replace the LIBOR01 page on that service) or such services displaying the London interbank offered rate for deposits in Dollars as may replace Reuters Money 3000 Service.

“ Revolving Credit Borrowing ” means a Borrowing comprised of Revolving Loans.

“ Revolving Credit Commitments ” means the U.S. Revolving Credit Commitments and the Canadian Revolving Credit Commitments, as the context requires.

“ Revolving Credit Lender ” means a Lender with a Revolving Credit Commitment or an outstanding Revolving Loan.

“ Revolving Loans ” means the U.S. Revolving Loans and Canadian Revolving Loans, as the context requires.

“ S&P ” means Standard & Poor’s Ratings Group, Inc., or any successor thereto.

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

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“ Secured Parties ” means, collectively, the Agent, the Lenders, each Bank, each Letter of Credit Issuer, the Indemnified Parties and each of the Agent, any Lender or Affiliate of the Agent or such Lender to which is owed Designated Bank Products Obligations.

“ Securitization Percentage ” means, at any time, with respect to any Qualified Receivables Transaction pursuant to which any third party purchases any interest in any Accounts of Holdings or any of its Subsidiaries, the sum of reserves and discounts (including, without limitation, any yield reserve, loss reserve, collection agent fee reserve and dilution reserve) required under such Qualified Receivables Transaction to be included in the calculation of such third party’s interest in such Accounts, divided by the face amount of such Accounts, expressed as a percentage.

“ Security Agreements ” means, collectively, the U.S. Security Agreement and the Canadian Security Agreement.

“ Security Documents ” means the U.S. Security Documents and the Canadian Security Documents.

“ Senior Secured Debt ” means, at any date of determination, the secured Debt for Borrowed Money of Holdings and its Subsidiaries at such time, excluding any Debt subordinated to the Obligations on terms reasonably satisfactory to the Agent.

“ Senior Secured Leverage Ratio ” means, as of the last day of any Fiscal Quarter, the ratio of (a) Senior Secured Debt as of the last day of such Fiscal Quarter to (b) Consolidated EBITDA for the four (4) Fiscal Quarter period then ending. For purposes of Section 8.23 , the Senior Secured Leverage Ratio shall be calculated pursuant to the second and third paragraphs of the definition of “Fixed Charge Coverage Ratio”.

“ Settlement ” and “ Settlement Date ” have the meanings specified in Section 13.15(a)(ii) .

“ Software ” means all “software” as such term is defined in the UCC, now owned or hereafter acquired by any Obligor or any of their Subsidiaries, other than software embedded in any category of Goods, including all computer programs and all supporting information provided in connection with a transaction related to any program.

“ Solvent ” or “ Solvency ” means, when used with respect to any Person, that at the time of determination:

(a) the assets of such Person, at a fair valuation, are in excess of the total amount of its debts (including contingent liabilities); and

(b) the present fair saleable value of its assets is greater than its probable liability on its existing debts as such debts become absolute and matured; and

(c) it is then able and expects to be able to pay its debts (including contingent debts and other commitments) as they mature; and

 

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(d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted.

For purposes of determining whether a Person is Solvent, (i) the amount of any contingent liability shall be computed as the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability, and (ii) the provisions of Section 4.15 of the Agreement shall be taken into account.

“ Specified Borrowing ” means a Borrowing comprised of Specified Loans.

“ Specified Conditions ” means, at any time of determination with respect to any Specified Payment or other event, that both before and immediately after such Specified Payment or other event (including any Loans made in connection therewith) (a) no Default or Event of Default has occurred and is continuing, (b) Combined Availability shall not be less than 20% of the Maximum Revolver Amount, (c) Holdings and the other Obligors shall be in pro forma compliance with the covenants set forth in Sections 8.22 and 8.23 (regardless of whether a Covenant Trigger is in effect or such covenants are otherwise effective, and measured as of the last day of the most recently ended Fiscal Quarter for which financial statements were delivered in accordance with Section 6.2) and (d) such Specified Payment or other event shall be in compliance with the Requirement of Law.

“ Specified Loan Borrower ” has the meaning specified in the introductory paragraph to the Agreement.

“ Specified Loan Designated Account ” has the meaning specified in Section 2.10(b) .

“ Specified Loan Notice of Borrowing ” has the meaning specified in Section 2.10(a) .

“ Specified Loans ” means the revolving loans made by Lenders to the Specified Loan Borrower pursuant to Section 2.3 .

“ Specified Payment ” means (a) any Permitted Acquisition, (b) Distributions pursuant to clause (c) or (d)  of the definition of “Permitted Distributions” and (c) Investments pursuant to clause (v)  of the definition of “Permitted Investments”.

“ Specified Reserves ” means reserves established from time to time that represent Dollar amounts that the Agent in its reasonable credit judgment believes may be required (a) in connection with the preservation, protection, collection or realization of Collateral or (b) in connection with any obligations, agreement or undertaking of any Obligor set forth in the Agreement or any of the other Loan Documents.

“ Standard Securitization Undertakings ” means the representations, warranties, covenants, indemnities and performance guarantees of the Company or any of its Subsidiaries to a Receivables Entity or its order and servicing obligations entered into by the Company or any of its Subsidiaries (other than a Receivables Entity) and the provision of cash equivalents to pay fees and expenses reasonably related thereto or any Refinancing Debt thereof permitted pursuant to Section 8.13, in each case which are reasonably customary in securitization transactions.

 

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“ Stated Termination Date ” means June 7, 2013.

“ Stock ” means all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company, unlimited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

“ Subordinated Debt ” means the Existing Public Debt (other than the 6  ¹ / 2 % Senior Notes and the Holdco Notes) and any other Debt subordinated to, or required under the Loan Documents to be subordinated to, the Debt under the Loan Documents.

“ Subsidiary ” of a Person means any corporation, association, partnership, limited liability company, unlimited liability company, joint venture or other business entity of which more than fifty percent (50%) of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. Unless the context otherwise clearly requires, references herein to a “Subsidiary” refer to a Subsidiary of Holdings.

“ Supermajority Lenders ” means, at any time, Lenders having U.S. Revolving Credit Commitments representing at least 66% of the aggregate U.S. Revolving Credit Commitments at such time; provided , however , that if any Lender (or any related Canadian Lender thereof) shall remain a Defaulting Lender, the term “Supermajority Lenders” means Lenders having U.S. Revolving Credit Commitments representing at least 66% of the aggregate U.S. Revolving Credit Commitments at such time (excluding the U.S. Revolving Credit Commitment of any such Lender that is (or any such Lender whose related Canadian Lender is) a Defaulting Lender); provided further , however , that if the U.S. Revolving Credit Commitments have been terminated, the term “Supermajority Lenders” means Lenders holding U.S. Revolving Loans (including U.S. Swingline Loans) representing at least 66% of the aggregate principal amount of U.S. Revolving Loans (including U.S. Swingline Loans) outstanding at such time (excluding U.S. Revolving Loans of any such Lender that is (or any such Lender whose related Canadian Lender is) a Defaulting Lender).

“ Supporting Letter of Credit ” has the meaning specified in Section 2.4(g) .

“ Swingline Commitment ” means collectively, the U.S. Swingline Commitment and the Canadian Swingline Commitment.

“ Swingline Lender ” means the U.S. Swingline Lender or Canadian Swingline Lender.

“ Swingline Loan ” and “ Swingline Loans ” means the collective reference to the U.S. Swingline Loan or U.S. Swingline Loans or the Canadian Swingline Loan or the Canadian Swingline Loans, in each case as the context requires.

“ Syndication Agent ” has the meaning specified in the preamble to the Agreement.

“ Target ” has the meaning specified in the definition of “Permitted Acquisition”.

 

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“ Taxes ” means any and all present or future taxes, levies, imposts, deductions, charges or withholdings and all liabilities (including interest, penalties and additions to tax) with respect thereto imposed by any Governmental Authority.

“ Termination Date ” means the earliest to occur of (a) the Stated Termination Date, (b) the date the Commitments are terminated either by the Borrowers pursuant to Section 4.4 or by the Required Lenders pursuant to Section 10.2 , and (c) the date the Agreement is otherwise terminated for any reason whatsoever pursuant to the terms of the Agreement.

“ Titled Goods ” means vehicles and similar items that are (a) subject to certificate-of-title statutes or regulations under which a security interest in such items are perfected by an indication on the certificates of title of such items (in lieu of filing of financing statements under the UCC), (b) evidenced by certificates of ownership or other registration certificates issued or required to be issued under the laws of any jurisdiction or (c) “motor vehicles” for purposes of the PPSA.

“ Total Leverage Ratio ” means, as of the last day of any Fiscal Quarter, the ratio of (a) all Debt for Borrowed Money of the Company and its Subsidiaries as of the last day of such Fiscal Quarter to (b) Consolidated EBITDA for the four (4) Fiscal Quarter period then ending. The Total Leverage Ratio shall be calculated pursuant to the second and third paragraphs of the definition of “Fixed Charge Coverage Ratio”.

“ Transactions ” means, collectively, (a) the execution, delivery and performance by the Obligors of the Loan Documents to which they are a party and the making of the borrowings hereunder, (b) the repayment of certain Debt, (c) the Preferred Repurchase and the execution, delivery and performance by Holdings of the Repurchase Agreement, (d) the issuance and sale of the Holdco Notes and the execution, delivery and performance by Holdings of the Holdco Notes Documents and (e) the payment of related fees and expenses and, as applicable, prepayment penalties, in connection with each of the foregoing.

“ Type ” means any type of a Loan determined with respect to the interest option applicable thereto, which shall be a LIBOR Loan, a BA Equivalent Loan, a Base Rate Loan or a Canadian Prime Rate Loan.

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the issue of perfection of security interests.

“ Unfunded Canadian Loan Participation ” means, in respect of any Participating Lender’s Canadian Loan Participation in a Canadian Revolving Loan of the Canadian Funding Banks, the principal amount of such Canadian Loan Participation minus the amount of such Participating Lender’s Funded Canadian Loan Participation in such Canadian Revolving Loan.

“ Unfunded Pension Liability ” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA or other applicable law, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code or other applicable laws for the applicable plan year and includes, with respect to any Canadian Pension Plan, any unfunded liability or solvency deficiency as determined for the purposes of the PBA.

 

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“ Unused Letter of Credit Subfacility ” means an amount equal to the Letter of Credit Subfacility minus the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit plus , without duplication, (b) the aggregate unpaid reimbursement obligations with respect to all Letters of Credit.

“ Unused Line Fee ” has the meaning specified in Section 3.5 .

“ URA ” has the meaning specified in the introductory paragraph to the Agreement.

“ URC ” has the meaning specified in the introductory paragraph to the Agreement.

“ U.S. Agent Advances ” has the meaning specified in Section 2.5(h) .

“ U.S. Availability ” means, at any time (a) the lesser of (i) the Maximum U.S. Revolver Amount and (ii) the U.S. Borrowing Base, minus (b) the sum of the Aggregate U.S. Revolver Outstandings and the Aggregate Canadian Revolver Outstandings Funded On U.S. Borrowing Base.

“ U.S. Bank ” means Bank of America, N.A., a national banking association, or any successor entity thereto.

“ U.S. Borrowers ” has the meaning specified in the introductory paragraph to the Agreement.

“ U.S. Borrowing Base ” means, at any time, an amount in Dollars equal to:

(a) the sum of

(i) the lesser of (A) $100,000,000 and (B) the Merchandise and Consumables Inventory Formula Amount with respect to the U.S. Obligors; plus

(ii) the lesser of (A) 95% of the Net Book Value of Eligible Rental Equipment of the U.S. Obligors and (B) 85% of the Net Orderly Liquidation Value of the Eligible Rental Equipment of the U.S. Obligors; minus

(b) Reserves from time to time established by the Agent in accordance with Section 2.7(a) of the Agreement.

“ U.S. Collateral ” means all of the U.S. Obligors’ personal property, and all other assets of any Person, in each case from time to time subject to the Agent’s Liens securing payment or performance of any Obligations; provided , however , that at no time shall the term “U.S. Collateral” include any asset of a controlled foreign corporation as defined in Section 957 of the Code.

 

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“ U.S. Credit Facilities ” means the revolving credit, swingline and letter of credit facilities provided for by this Agreement extended to the U.S. Borrowers and the Specified Loan Borrower.

“ U.S. Designated Account ” has the meaning specified in Section 2.5(b) .

“ U.S. Guarantee Agreement ” means the Guaranty dated as of the Agreement Date, among the U.S. Guarantors for the benefit of the Secured Parties.

“ U.S. Guarantors ” means (a) Holdings, (b) each Subsidiary, whether now existing or hereafter created or acquired (other than any Subsidiary that is a Receivables Entity, Immaterial Subsidiary or Foreign Subsidiary that is a “controlled foreign corporation” under Section 957 of the Code), but including, United Rentals of Nova Scotia (No. 1), ULC and United Rentals of Nova Scotia (No. 2), ULC and (c) each other Person, who, in a writing accepted by the Agent, guarantees payment or performance in whole or in part of the Obligations.

“ U.S. Intellectual Property Security Agreement ” means the Intellectual Property Security Agreement dated as of the Agreement Date among the U.S. Obligors for the benefit of the Secured Parties.

“ U.S. Lender ” means a Lender that has a U.S. Revolving Credit Commitment.

“ U.S. Notice of Borrowing ” has the meaning specified in Section 2.5(a) .

“ U.S. Obligations ” means all present and future loans, advances, liabilities, obligations, covenants, duties, and debts owing by the U.S. Obligors, or any of them, to the Agent, the Letter of Credit Issuer, any U.S. Lender, any U.S. Secured Party and/or any Indemnified Person, arising under or pursuant to the Agreement or any of the other Loan Documents, whether or not evidenced by any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including all principal, interest, charges, expenses, fees, attorneys’ fees, Attorney Costs, filing fees and any other sums chargeable to the U.S. Borrowers or any other U.S. Obligor hereunder or under any of the other Loan Documents. “U.S. Obligations” includes, without limitation, (a) all debts, liabilities, and obligations now or hereafter arising from or in connection with the Letters of Credit and (b) all Designated Bank Products Obligations owed by any U.S. Obligor. Anything contained herein to the contrary notwithstanding, the term U.S. Obligations shall not include any Canadian Obligations.

“ U.S. Obligors ” means the U.S. Borrowers, the Specified Loan Borrower and the U.S. Guarantors.

“ U.S. Revolving Credit Borrowing ” means a Borrowing comprised of U.S. Revolving Loans.

“ U.S. Revolving Credit Commitment ” means, at any date for any U.S. Lender, the obligation of such U.S. Lender to make U.S. Revolving Loans and Specified Loans and to purchase participations in Letters of Credit pursuant to the terms and conditions of this

 

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Agreement, which shall not exceed the aggregate principal amount set forth on Schedule 1.1 under the heading “Revolving Credit Commitment” or on the signature page of the Assignment and Acceptance by which it became a Lender, as modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable Assignment and Acceptance; and “ Revolving Credit Commitments ” means the aggregate principal amount of the U.S. Revolving Credit Commitments of all U.S. Lenders, the maximum amount of which shall be the Maximum U.S. Revolver Amount; provided , however , after the termination of the U.S. Revolving Credit Commitments, the U.S. Revolving Credit Commitment of any U.S. Lender shall be deemed to be in an amount equal to the outstanding principal amount of U.S. Revolving Loans and Specified Loans owing to such U.S. Lender.

“ U.S. Revolving Loans ” means the revolving loans made pursuant to Section 2.2(a) , each U.S. Agent Advance and U.S. Swingline Loan.

“ U.S. Secured Parties ” means, collectively, the Agent, the U.S. Lenders, the U.S. Bank, the Letter of Credit Issuer, the Indemnified Parties and each of the Agent, any U.S. Lender or any Affiliate of the Agent or such U.S. Lender to which is owed any Designated Bank Product Obligations, in each case in its capacity as an obligee of U.S. Obligations.

“ U.S. Security Agreements ” means, collectively, (a) the Security Agreement, dated as of the Agreement Date, among Holdings, the U.S. Borrowers and the U.S. Guarantors, for the benefit of the Secured Parties, and (b) any security agreement executed and delivered after the Agreement Date by a Person that becomes a Borrower or a U.S. Guarantor hereunder in accordance with Section 8.25(a) .

“ U.S. Security Documents ” means the U.S. Intellectual Property Security Agreement, the U.S. Security Agreements and any other agreements, instruments, and documents heretofore, now or hereafter securing or guaranteeing any of the Obligations.

“ U.S. Subsidiary Borrowers ” has the meaning specified in the introductory paragraph to the Agreement.

“ U.S. Swingline Commitment ” means the Commitment of the U.S. Bank to make loans pursuant to Section 2.5(g).

“ U.S. Swingline Lender ” means the U.S. Bank or any successor financial institution agreed to by the Agent, in its capacity as provider of U.S. Swingline Loans.

“ U.S. Swingline Loan ” and “U.S. Swingline Loans” have the meanings specified in Section 2.5(g).

“ U.S. Swingline Sublimit ” has the meaning specified in Section 2.5(g) .

“ Value ” means, with reference to the value of Eligible Merchandise and Consumables Inventory, value determined on the basis of the lower of cost or market value of such Eligible Merchandise and Consumables Inventory, with the cost thereof calculated on a first-in, first-out basis, determined in accordance with GAAP.

 

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“ Vendor Lease ” means a lease pursuant to which any Person leases Inventory or Rental Equipment from a Vendor Lessor, whether or not such lease constitutes an operating lease or a Capital Lease under GAAP and whether or not such lease constitutes a true lease or a secured transaction under the Code or other applicable law.

“ Vendor Lessor ” means any Person who leases Inventory or Rental Equipment to Holdings a Borrower or a Guarantor pursuant to a Vendor Lease.

1.2 Accounting Terms . Any accounting term used in the Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations in the Agreement shall be computed, unless otherwise specifically provided therein, in accordance with GAAP as consistently applied and using the same method for inventory valuation as used in the preparation of the Financial Statements.

1.3 Interpretive Provisions . (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “hereof,” “herein,” “hereunder” and similar words refer to the Agreement as a whole and not to any particular provision of the Agreement; and Subsection, Section, Schedule and Exhibit references are to the Agreement unless otherwise specified.

(c) The term “documents” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

(i) The term “including” is not limiting and means “including without limitation.”

(ii) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

(iii) The word “or” is not exclusive.

(d) Unless otherwise expressly provided herein, (i) references to agreements (including the Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

(e) The captions and headings of the Agreement and other Loan Documents are for convenience of reference only and shall not affect the interpretation of the Agreement.

(f) The Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

 

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(g) The Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agent, the Borrowers, the Guarantors and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or the Agent merely because of the Agent’s or Lenders’ involvement in their preparation.

(h) For purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Québec, (i) “personal property” shall be deemed to include “movable property”, (ii) “real property” shall be deemed to include “immovable property”, (iii) “tangible property” shall be deemed to include “corporeal property”, (iv) “intangible property” shall be deemed to include “incorporeal property”, (v) “security interest” and “mortgage” shall be deemed to include a “hypothec”, (vi) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code of Québec, (vii) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to the “opposability” of such Liens to third parties, (viii) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (ix) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, and (x) an “agent” shall be deemed to include a “mandatory”.

1.4 Classification of Loans and Borrowings . For purposes of the Agreement, Loans may be classified and referred to by class ( e.g. , a “Canadian Revolving Loan”, “U.S. Revolving Loan” or “Specified Loan”) or by Type ( e.g. , a “LIBOR Loan”) or by class and Type ( e.g. , a “Canadian Revolving BA Equivalent Loan”). Borrowings also may be classified and referred to by class ( e.g. , a “Canadian Revolving Borrowing”, “U.S. Revolving Borrowing” or “Specified Borrowing”) or by Type ( e.g. , a “LIBOR Borrowing”) or by class and Type ( e.g. , a “Canadian Revolving BA Equivalent Borrowing”).

1.5 Effectuation of Transactions . Each of the representations and warranties of Holdings and the other Obligors contained in this Agreement (and all corresponding definitions) are made after giving effect to the Transactions (or such portion thereof as shall be consummated as of the date of the applicable representation or warranty), unless the context otherwise requires.

1.6 Currency . All Canadian Revolving Loans and Specified Loans shall be made and denominated in Cdn. Dollars. Canadian Revolving Loans and Specified Loans, interest thereon and the Canadian Loan Participation Fees in respect of Unfunded Canadian Loan Participations in Canadian Revolving Loans to the Canadian Borrowers and any other Obligor’s payment obligations expressly payable in Cdn. Dollars shall all be payable in Cdn. Dollars. However, for purposes of determining compliance with covenant and default limitations and other monetary thresholds, all fees and amounts payable hereunder and all calculations hereunder, including, without limitation, the amount of each Borrowing Base, the Aggregate Canadian Revolver Outstandings, the Maximum Revolver Amount, the Maximum Canadian Revolver Amount, the U.S. Availability, the Canadian Availability and each Lender’s Commitments as of any date shall all be calculated in Dollars or the Equivalent Amount in Dollars.

 

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ARTICLE II

LOANS AND LETTERS OF CREDIT