Exhibit 10.13
June 3, 2005
Neff Corp.
3750 N.W. 87th Avenue
Suite 400
Miami, Florida 33178
Attention: Mark H. Irion
Re:
Management Rights
Dear Mr. Irion:
DLJ Investment Partners II, L.P.
(the “Fund” ) (i) owns shares of Common
Stock, par value $0.01 per share, of Neff Corp., a Delaware
corporation (the “Company” ) , subject to
the terms and conditions of the Stockholders Agreement dated as of
June 3, 2005 (the “Stockholders Agreement”
) by and among the Company, the Fund, Iron Merger Partnership, New
York Life Capital Partners II, L.P., TCW/Crescent Mezzanine
Partners III, L.P. and certain affiliated investors and
(ii) is one of the holders of the 13% Senior Subordinated
Notes due June 3, 2013 (the “Notes” ) of
the Company.
In addition to the warranties and
covenants contained in the Stockholders Agreement and in the
Purchase Agreement among the Company, the guarantors named therein
and the purchasers named therein dated as of June 3, 2005 (the
“Purchase Agreement” ) , the Fund and the
Company confirm that the Fund has the following contractual
management rights with respect to the Company.
1.
The Fund has the right to appoint
one representative to attend and fully participate in each meeting
of the Board of Directors of the Company as a non-voting observer;
provided , however, that such representative may be
excluded from any meeting or portion thereof if the Company
reasonably believes, upon advice of counsel, that such exclusion is
reasonably necessary to preserve the attorney-client privilege, to
protect highly confidential proprietary information, or in the
event the Board of Directors intends to discuss or vote upon any
matter in which the Fund has a material business or financial
interest (other than by reason of interest as a holder of
securities of the Company). The Company will give the Fund written
notice of each meeting of the Board of Directors of the Company at
the same time and in the same
manner as notice is given to the
members of the Board of Directors of the Company. The Fund will be
provided with all written materials and other information
(including, without limitation, copies of minutes of meetings)
given to members of the Board of Directors of the Company in
connection with such meetings at the same time such materials and
information are given to such members of the Board of Directors. If
the Company proposes to take any action by written consent in lieu
of a meeting of the Board of Directors of the Company, the Company
will give written notice thereof to the Fund promptly following the
effective date of such consent describing in reasonable detail the
nature and substance of such action.
2.
The Fund shall have the right to
consult with and advise the senior executive management team of the
Company and its subsidiaries, upon reasonable notice at reasonable
times from time to time, on all matters relating to the operation
of the Company and the subsidiaries.
3.
Upon reasonable request by the Fund,
a representative of the Fund is entitled to inspect the books and
records of the Company and the facilities of the Company, and to
request and receive management accounts of the Company, including a
balance sheet and profit and loss account, and other reasonable
information regarding the Company’s financial condition and
operations.
4.
The Company shall furnish to the
Fund the financial information described in the last sentence and
in clause (A) of the first sentence of
Section 12(c)(i) of the Stockholders Agreement, as in
effect on the date hereof.
5.
All rights conferred on the Fund
pursuant to this letter may be transferred or assigned to any
affiliate of the Fund, provided that the Company is given written
notice at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of such
transferee or assignee and identifying the specific rights being
transferred or assigned, and, provided further, that such
transferee or assignee either (x) assumes the obligations of the
Fund under the Stockholders Agreement and agrees to be bound
thereby or (y) is a holder of the Notes.
The Fund agrees that it will hold in
confidence pursuant to the terms of Section 11 of the Purchase
Agreement any confidential information obtained by the Fund
pursuant to the rights granted under this letter and will require
that its representatives agree to do the same.
The contractual rights confirmed by
this letter will terminate and be of no further force or effect as
of the date that the Fund, together with its affiliates, ceases to
beneficially own in the aggregate at least $10.0 million of the
Notes. However, the confidentiality obligations of the Fund and its
representatives under this letter will survive for a period of
three years following the termination of the Fund’s
management rights set forth herein.
2
This letter shall be construed and
enforced in accordance with the laws of the State of
