Exhibit 10.1

AMENDMENT NO. 1 TO CREDIT AGREEMENT

AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of July 5, 2022 (this “Amendment No. 1”), is by and among Bank of America, N.A., a national banking association, in its capacity as Agent (in such capacity, together with its successors and assigns, “Agent”) pursuant to the Credit Agreement (as defined below), the financial institutions from time to time parties thereto (such financial institutions, together with their respective successors and assigns, each individually, a “Lender” and collectively, the “Lenders”), Herc Holdings Inc., a Delaware corporation (the “Company”), each the Subsidiaries of the Company party hereto as U.S. Subsidiary Borrowers (the “U.S. Subsidiary Borrowers” and, together with the Company, the “U.S. Borrowers”), Matthews Equipment Limited, a corporation amalgamated under the laws of the Province of Ontario (the “Canadian Borrower”), and the Subsidiaries of the Company party hereto as Guarantors (“Guarantors”).

W I T N E S S E T H :

WHEREAS, Agent, Lenders and certain other parties have entered into a senior secured revolving credit facility pursuant to which Agent and Lenders have made, and may make, loans and advances and provide other financial accommodations to Borrowers as set forth in the Credit Agreement, dated as of July 31, 2019, by and among U.S. Borrowers, Canadian Borrower and the Guarantors (as the same now exists or may hereafter be amended, amended and restated, modified, supplemented, extended, renewed, restated or replaced prior to the effectiveness of this Amendment No. 1, the “Existing Credit Agreement” and the Existing Credit Agreement as amended by this Amendment No. 1 to Credit Agreement, the “Amended Credit Agreement”), and the other Loan Documents (as defined in the Credit Agreement);

WHEREAS, the Obligors have requested, in accordance with Section 12.1 of the Existing Credit Agreement on the terms set forth herein to increase the aggregate amount of the Revolving Credit Commitments outstanding under the Existing Credit Agreement and to extend the maturity date of the Existing Credit Agreement and make certain other changes as set forth herein;

WHEREAS, in connection with the foregoing, Agent, the Company, the other Obligors, and each of the financial institutions party hereto as “Lenders” (which includes Lenders under the Existing Credit Agreement) are willing to agree to such amendments subject to the terms and conditions set forth herein; and

WHEREAS, by this Amendment No. 1, Agent, the Lenders party hereto, and the Obligors intend to evidence such amendments;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Interpretation. For purposes of this Amendment No. 1, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Amended Credit Agreement.

2. Amendments to Existing Credit Agreement.

2.1. Amended Credit Agreement. As of the Amendment No. 1 Effective Date, the Existing Credit Agreement (excluding the schedules and exhibits thereto, which shall remain in full force and effect, except as specifically amended and restated pursuant to Section 2.2 and 2.3 of this Amendment No. 1) is hereby amended as set forth in Exhibit A hereto to delete the bold, stricken text (indicated textually in the same manner as the following example: stricken text ) and adding the bold, double-underlined text (indicated textually in the same manner as the following example: double-underlined text). as set forth in the Credit Agreement as attached as Exhibit A hereto.

2.2. Amendments to Schedules to Existing Credit Agreement.

(a) Each of the following Schedules to the Existing Credit Agreement is hereby deleted in its entirety and replaced with the corresponding Schedule set forth in Exhibit B to this Amendment No. 1:

(i) Schedule 1.1—Commitments

(ii) Schedule 1.2—U.S. Subsidiary Borrowers,

(iii) Schedule 1.2A—Guarantors,

(iv) Schedule 1.3—Immaterial Subsidiaries,

(v) Schedule 1.4—Unrestricted Subsidiaries,

(vi) Schedule 6.4—Subsidiaries,

(vii) Schedule 6.6—Capitalization, and

(viii) Schedule 6.24(b)—Credit Card Arrangements.

(b) All references to each of the Schedules to the Credit Agreement listed above in the Credit Agreement or any other Loan Document are hereby amended to refer to the corresponding Schedule included as part of Exhibit B hereto.

2.3. Amendments to Exhibits to Existing Credit Agreement.

(a) Each of the following Exhibits to the Existing Credit Agreement is hereby deleted in its entirety and replaced with the corresponding Exhibit set forth in Exhibit C to this Amendment No. 1:

(i) Exhibit A—Form of Borrowing Base Certificate,

(ii) Exhibit B—Form of Notice of Borrowing

(iii) Exhibit C—Form of Notice of Continuation/Conversion

(b) All references to each of the Exhibits to the Credit Agreement listed above in the Credit Agreement or any other Loan Document are hereby amended to refer to the corresponding Exhibit included as part of Exhibit C hereto.

 

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2.4. Amendments to Schedules to U.S. GCA.

(a) Each of the following Schedules to the U.S. GCA is hereby deleted in its entirety and replaced with the corresponding Schedule set forth in Exhibit D to this Amendment No. 1:

(i) Schedule 1--Notice Addresses of Guarantors

(ii) Schedule 2--Pledged Securities

(iii) Schedule 3--Perfection Matters

(iv) Schedule 4--Location of Jurisdiction of Organization

(v) Schedule 5--Intellectual Property

(vi) Schedule 6-- Contracts

(vii) Schedule 7--Commercial Tort Claim

(b) All references to each of the Schedules to the U.S. GCA listed above in the U.S. GCA or any other Loan Document are hereby amended to refer to the corresponding Schedule included as part of Exhibit D hereto.

3. Representations, Warranties and Covenants. Each Obligor represents and warrants with and to Secured Parties as follows, which representations and warranties shall survive the execution and delivery hereof:

3.1. As of the Amendment No. 1 Effective Date and after giving effect to this Amendment No. 1 and the Amendment No. 1 Documents (as such term is defined in Section 4.1 below) to be delivered on or before the Amendment No. 1 Effective Date, no Default or Event of Default exists or has occurred and is continuing.

3.2. Each Obligor party hereto (i) has the power and authority to execute, deliver and perform this Amendment No. 1 and the other Amendment No. 1 Documents and (ii) has taken all necessary corporate, limited liability company or partnership, as applicable, action (including obtaining approval of its stockholders if necessary) to authorize its execution, delivery and performance of this Amendment No. 1 and the other Amendment No. 1 Documents to which it is a party.

3.3. This Amendment No. 1 and each of the other Amendment No. 1 Documents have been duly authorized, executed and delivered by all necessary corporate or limited liability company action, as applicable, on the part of each Obligor and is in full force and effect as of the date hereof, as the case may be, and constitute legal, valid and binding obligations of each such Obligor, enforceable against it in accordance with their respective terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, winding up, moratorium and other similar laws relating to or affecting creditors’ rights generally and general equitable principles (whether considered in a proceeding in equity or at law).

3.4. Each Obligor’s execution, delivery, and performance of this Amendment No. 1 and each of the other Amendment No. 1 Documents to which it is a party do not and will not (a) conflict with, or constitute a violation or breach of, the terms of (i) any contract, mortgage, lease, agreement, indenture, or instrument to which such Obligor or any of its Subsidiaries is a party or which is binding upon it, (ii) any Requirement of Law applicable to such Obligor or any of its Subsidiaries, or (ii) any Charter Documents of such Obligor or any of its Subsidiaries or (b) result in the imposition of any Lien (other than the Liens created by the Loan Documents) upon the property of such Obligor or any of its Subsidiaries by reason of any of the foregoing, except in the case of clause (a)(i) or (ii) above, as would not reasonably be expected to have a Material Adverse Effect.

 

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3.5. All of the representations and warranties of each Obligor set forth herein and in each of the other Amendment No. 1 Documents are true and correct in all material respects (or, in the case of any representations and warranties qualified by materiality or Material Adverse Effect, in all respects) on and as of the Amendment No. 1 Effective Date after giving effect to the effectiveness of this Amendment No. 1 and the other Amendment No. 1 Documents and the transactions contemplated hereby with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects (or, in the case of any representations and warranties qualified by materiality or Material Adverse Effect, in all respects) as of such earlier date).

3.6. Borrowers shall deliver to the Agent on or before July 29, 2022, certificates of insurance as to property and casualty insurance naming the Agent as certificate holder and with endorsements for Agent as an additional insured under the casualty insurance and lender loss payee under the property insurance, in each case in form and substance reasonably satisfactory to the Agent.

4. Conditions Precedent. The amendments contained in this Amendment No. 1 and the other Amendment No. 1 Documents shall only be effective upon the satisfaction of each of the following conditions (the date of such effectiveness, the “Amendment No. 1 Effective Date”):

4.1. Agent shall have received executed counterparts of the following documents (collectively, together with the documents referred to below in this Section 4, the “Amendment No. 1 Documents”):

(a) the Master Assignment and Acceptance, duly executed and delivered by the Existing Lenders, the Lenders party hereto and acknowledged by the Obligors,

(b) the Collateral Allocation Mechanism Agreement, duly executed and delivered by the Existing Lenders, the Lenders party hereto and acknowledged by the Obligors;

(c) this Amendment No. 1, duly executed and delivered by the Obligors, the Agent and each of the Lenders.

4.2. The Agent and the Lenders shall have received (i) customary opinions of counsel for the Obligors (including Canadian counsel to the Canadian Obligors) reasonably satisfactory to the Agent; (ii) a copy of the certificate or articles of incorporation/amalgamation/amendment or memoranda of association (or similar Charter Documents, including all amendments thereto to the extent such amendments are in full force and effect) of each Obligor, certified as of a recent date by the Secretary of State of the state of its organization or other Governmental Authority (to the extent applicable), and a certificate as to the good standing or status, to the extent applicable, of each Obligor as of a recent date, from such Secretary of State or other Governmental Authority; (iii) a certificate of the Secretary or Assistant Secretary or other officer of each Obligor dated as of the Amendment No. 1 Effective Date and certifying (1) that attached thereto is a true and complete copy of the by-laws (or similar Charter Documents) of such Obligor as in effect on the Amendment No. 1 Effective Date and at all times since a date prior to the date of the resolutions described in clause (2) below, (2) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or the equivalent governing body) of such Obligor authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and, in the case of the Borrowers, the borrowings thereunder, and that such

 

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resolutions have not been modified, rescinded or amended and are in full force and effect, (3) that the certificate or articles of incorporation/amalgamation/amendment or memoranda of association/status (or similar Charter Documents) of such Obligor have not been amended since the date of the last amendment thereto provided to the Agent and the Lenders and (4) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Obligor; and (iv) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary or other officer executing the certificate pursuant to clause (iii) above.

4.3. The Borrowers shall have paid (i) all fees required to be paid and payable by the Obligors on the Amendment No. 1 Effective Date, (ii) all reasonable and documented, out-of-pocket expenses of the Agent and the Attorney Costs incurred in connection with any of the Amendment No. 1 Documents and the transactions contemplated thereby to the extent invoiced at least three Business Days prior to the Amendment No. 1 Effective Date and payable by the Obligors, (iii) all unpaid interest and fees accrued under the Existing Credit Agreement as of (and including) the Amendment No. 1 Effective Date pursuant to Section 1.10(d) of the Existing Credit Agreement, (iv) any amounts payable as required pursuant to Section 1.10(c) of the Existing Credit Agreement and (v) any amounts payable under Section 5.4 as required pursuant to Section 1.10(e) or (f) of the Existing Credit Agreement.

4.4. The Agent shall have received evidence of all coverage with respect to insurance required by the Credit Agreement relating to the Collateral.

4.5. The Agent and the Lenders shall have received a Borrowing Base Certificate prepared as of the last Business Day of the calendar month ended May 31, 2022.

4.6. The Agent shall have received a certificate, dated the Amendment No. 1 Effective Date and signed by a Responsible Officer of the Company, confirming compliance with the conditions precedent set forth in this Section 4.

4.7. The Agent shall have received a certificate attesting to the Solvency of the Company and its Subsidiaries, taken as a whole, after giving effect to this Amendment No. 1 and the other Amendment No. 1 Documents, from the Company’s Chief Financial Officer.

4.8. The Agent shall have received the Florida Borrower Affidavit As To Out-of-State Execution and Delivery as executed and delivered by a Responsible Officer of the Company.

4.9. The Company and the other Obligors shall have provided to such Lender the documentation and other information requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the Act, in each case at least three days prior to the Amendment No. 1 Effective Date, and at least three days prior to the Amendment No. 1 Effective Date, any Obligor that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver, to each Lender that so requests a Beneficial Ownership Certification in relation to such Obligor.

4.10. The representations and warranties contained in this Amendment No. 1 and the other Amendment No. 1 Documents shall be correct in all material respects (and any representation and warranty that is qualified as to materiality or Material Adverse Effect is correct in all respects) on and as of the Amendment No. 1 Effective Date.

4.11. No Default or Event of Default has occurred and is continuing as of the Amendment No. 1 Effective Date.

 

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Execution and delivery to the Agent by a Lender of a counterpart of this Amendment No. 1 shall be deemed confirmation by such Lender that (i) all conditions precedent in this Section 4 have been fulfilled to the satisfaction of such Lender, (ii) the decision of such Lender to execute and deliver to the Agent an executed counterpart of this Amendment No. 1 was made by such Lender independently and without reliance on the Agent or any other Lender as to the satisfaction of any condition precedent set forth in this Section 4, and (iii) all documents sent to such Lender for approval, consent, or satisfaction were acceptable to such Lender.

5. Effect of Amendment No. 1 and other Amendment No. 1 Documents; Reaffirmation.

5.1. Effect of Amendment No. 1.

(a) Except as expressly set forth in this Amendment No. 1, this Amendment No. 1 shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders, the Agent, the Borrowers or any other Obligor under the Existing Credit Agreement or any other Loan Document. In addition, except as expressly set forth in this Amendment No. 1, this Amendment No. 1 shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document, all of which are, except as expressly set forth in this Amendment No. 1, ratified and affirmed in all respects and shall continue in full force and effect. Nothing in this Amendment No. 1 shall be deemed to entitle any Borrower or other Obligor to any future consent to, or waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Amended Credit Agreement or any other Loan Document in similar or different circumstances.

(b) From and after the Amendment No. 1 Effective Date, each reference in the Amended Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference to the “Credit Agreement” in any other Loan Document shall be deemed a reference to the Existing Credit Agreement as amended hereby. Each of the financial institutions listed on the signature pages hereto as a “Lender” acknowledges and agrees that, effective as of the Amendment No. 1 Effective Date, it shall become a “Lender” for all purposes in connection with this Amendment, the Amended Credit Agreement and the other Loan Documents. Upon the Amendment No. 1 Effective Date, any reference to the Credit Agreement shall mean the Amended Credit Agreement. Upon the Amendment No. 1 Effective Date, this Amendment No. 1 shall constitute a “Loan Document”.

5.2. Acknowledgement of Obligations and Security Interests.

(a) Each Obligor, in their respective capacities as Borrowers or Guarantors, absolutely and unconditionally acknowledges and reaffirms its obligations under the Loan Document to which it is a party and reaffirms that such obligations are and shall continue to be secured by the security interests, pledges, assignments and liens granted by such Obligor and all of the terms, conditions provisions, agreements, obligations, duties, covenants and representations of such Obligor under such documents and agreements are hereby ratified and affirmed in all respects by such Obligor, and agrees that its obligations thereunder are and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects. Although each Obligor has been informed of the matters set forth herein and has acknowledged and agreed to the same, it understands that Agent and Lenders have no obligation to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments, supplements or waivers, and nothing contained herein shall create such duty. This reaffirmation shall be binding upon each Obligor and its successors and assigns and inure to the benefit of Agent and the Lenders and their respective successors and assigns. The failure of any one Obligor to execute and deliver this Amendment No. 1 or any other Amendment No. 1 Documents shall not affect the agreement of any other Obligor that has executed and delivered the Amendment No. 1 and the other Amendment No. 1 Documents.

 

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(b) Without limiting the foregoing, to the extent such Obligor granted liens on or security interests in any of its property pursuant to any such Loan Document as security for the Obligations under or with respect to the Loan Documents, such Obligor ratifies and reaffirms as of the date hereof such grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby and hereby re-grants a security interest and liens in all of its right, title and interest in the Collateral, as defined in, and on the terms set forth in, the applicable Security Documents, to secure all of the Obligations as amended hereby and, further, ratifies and reaffirms as of the date hereof that the security constituted by the Security Documents continue to secure the payment of liabilities and obligations of the Obligors under the Loan Documents.

5.3. No Novation. The parties hereto expressly acknowledge that it is not their intention that this Amendment No. 1 or any of the other Loan Documents executed or delivered pursuant hereto constitute a novation of any of the obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document, but rather constitute a modification thereof or supplement thereto pursuant to the terms contained herein. The Existing Credit Agreement and the Loan Documents, in each case as amended, modified, restated and/or supplemented hereby, shall be deemed to be continuing agreements among the parties thereto, and all documents, instruments, and agreements delivered, as well as all Liens created, pursuant to or in connection with the Existing Credit Agreement and the other Loan Documents shall remain in full force and effect, each in accordance with its terms (as amended, modified, restated and/or supplemented by this Amendment No. 1 or otherwise).

6. Governing Law. The validity, interpretation and enforcement of this Amendment No. 1 and any dispute arising out of the relationship between the parties hereto whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

7. Jury Trial Waiver. OBLIGORS, AGENT AND LENDERS PARTY HERETO EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT NO. 1 OR ANY OF THE OTHER LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AMENDMENT NO. 1 OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. OBLIGORS, AGENT AND LENDERS PARTY HERETO EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT OBLIGORS, AGENT, OR ANY LENDER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 1 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

8. Binding Effect. This Amendment No. 1 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

9. Waiver, Modification, Etc. No provision or term of this Amendment No. 1 may be modified, altered, waived, discharged or terminated orally or by course of conduct, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought to be enforced.

 

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10. Further Assurances. Loan Parties shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes of this Amendment No. 1.

11. Entire Agreement. This Amendment No. 1 and the Amended Credit Agreement represent the entire agreement and understanding concerning the subject matter hereof among the parties hereto, and supersede all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written.

12. Headings. The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 1.

13. Counterparts. This Amendment No. 1 and any notices or other documents delivered under this Amendment No. 1 may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery by facsimile or other electronic means of an executed counterpart of a signature page to this Amendment No. 1 and any notices or other documents as set forth herein shall be effective as delivery of an original executed counterpart of this Amendment No. 1 or such notice or other document. This Amendment No. 1 and any notices or other documents delivered under this Amendment No. 1, may be executed by means of (a) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, or any other relevant and applicable electronic signatures law; (b) an original manual signature; or (c) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. The Agent reserves the right, in its sole discretion, to accept, deny, or condition acceptance of any electronic signature on this Amendment No. 1 or on any notice or other document delivered to the Agent under this Amendment No. 1.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered by their authorized officers as of the day and year first above written.

 

[Signature Page to Amendment No. 1 to Credit Agreement]

[Signature Page to Amendment No. 1 to Credit Agreement]

[Signature Page to Amendment No. 1 to Credit Agreement]

[Signature Page to Amendment No. 1 to Credit Agreement]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

 

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

[Signature Page to Amendment No. 1 to Credit Agreement (Herc)]

Exhibit A to Amendment No. 1 to Credit Agreement

Amended Credit Agreement

[See attached]

EXHIBIT A TO AMENDMENT NO. 1 TO CREDIT AGREEMENT

CREDIT AGREEMENT

Dated as of July 31, 2019

among

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as the Lenders

and

BANK OF AMERICA, N.A.,

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

Issuer

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

as Multicurrency Canadian Swingline Lender

and

HERC HOLDINGS INC.,

as the Company and a U.S. Borrower

CERTAIN SUBSIDIARIES OF HERC HOLDINGS INC.,

as the Guarantors

MATTHEWS EQUIPMENT LIMITED,

as the Initial Canadian Borrower

and

THE OTHER BORROWERS PARTY HERETO

and

BANK OF AMERICA, N.A.,

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK

MUFG UNION BANK, N.A.

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Joint Lead Arrangers, Joint Book Runners and Co-Syndication Agents

and

BANK OF MONTREAL

CAPITAL ONE, NATIONAL ASSOCIATION

JPMORGAN CHASE BANK, N.A.

ING CAPITAL LLC

TD BANK, N.A.

NYCB SPECIALITY FINANCE COMPANY, LLC

PNC BANK, NATIONAL ASSOCIATION

SUMITOMO MITSUI BANKING CORPORATION,

as Joint Book Runners and Co-Documentation Agents

TABLE OF CONTENTS

 

					Page
ARTICLE I
DEFINITIONS
1.1.		Defined Terms			2
1.2.		Accounting Terms			82
1.3.		Interpretive Provisions			83
1.4.		Classification of Loans and Borrowings			85
1.5.		Effectuation of Transactions			85
1.6.		Currency			85
1.7.		Additional Alternative Currencies			86
1.8.		Pro Forma Calculations			87
1.9.		Additional Borrowers			89
1.10.		No Novation; Acknowledgement and Adjustment of Loans, Payment of Accrued Interest and Fees.			91
1.11.		Canadian Guarantors, Excess Availability and Related Matters			92
1.12.		LLC Divisions			93
ARTICLE II
LOANS AND LETTERS OF CREDIT
2.1.		Revolving Loans			93
2.2.		Revolving Loan Administration			94
2.3.		Swingline Loans			97
2.4.		Letters of Credit			98
2.5.		Incremental Facility			104
2.6.		Extension Amendments			107
2.7.		Refinancing Amendments			111
2.8.		[Intentionally Omitted]			116
2.9.		Reserves			116
2.10.		Sustainability Adjustments			116
ARTICLE III
INTEREST AND FEES
3.1.		Interest			117
3.2.		Continuation and Conversion Elections			119
3.3.		Maximum Interest Rate			121
3.4.		Closing Fees			121
3.5.		Unused Line Fee			121
3.6.		Letter of Credit Fees			122

 

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ARTICLE IV
PAYMENTS AND PREPAYMENTS
4.1.		Payments and Prepayments			122
4.2.		Out-of-Formula Condition			123
4.3.		Termination or Reductions of Facilities			123
4.4.		Term SOFR Loan and BA Equivalent Loans Prepayments			125
4.5.		Payments by the Borrowers			125
4.6.		Apportionment, Application and Reversal of Payments			125
4.7.		Indemnity for Returned Payments			127
4.8.		[Intentionally Omitted]			127
4.9.		Agent’s and Lenders’ Books and Records; Monthly Statements			128
4.10.		Borrowers’ Agent			128
4.11.		[Intentionally Omitted]			128
4.12.		Excess Resulting from Exchange Rate Change			128
4.13.		[Intentionally omitted.]			129
4.14.		Joint and Several Liability			129
ARTICLE V
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1.		Taxes			130
5.2.		Illegality			134
5.3.		Increased Costs and Reduction of Return			134
5.4.		Funding Losses			136
5.5.		Inability to Determine Applicable Interest Rate			136
5.6.		Certificates of Agent			137
5.7.		Successor Rate			138
5.8.		Successor BA Rate			139
5.9.		Survival			140
5.10.		Assignment of Commitments Under Certain Circumstances			140
ARTICLE VI
GENERAL WARRANTIES AND REPRESENTATIONS
6.1.		Authorization, Validity, and Enforceability of this Agreement and the Loan Documents			141
6.2.		Validity and Priority of Security Interest			141
6.3.		Organization and Qualification			142
6.4.		Subsidiaries			142
6.5.		Financial Statements and Borrowing Base Certificate			142
6.6.		Capitalization			142
6.7.		Solvency			143
6.8.		Intellectual Property			143
6.9.		Litigation			143

 

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6.10.		Labor Disputes			143
6.11.		Environmental Laws			143
6.12.		No Violation of Law			144
6.13.		No Default			144
6.14.		ERISA Compliance			144
6.15.		Taxes			145
6.16.		Regulated Entities			145
6.17.		Use of Proceeds; Margin Regulations			145
6.18.		No Material Adverse Effect			146
6.19.		No Material Misstatements			146
6.20.		Government Authorization			146
6.21.		Sanctions			146
6.22.		EU Bail-In			147
6.23.		Beneficial Ownership Certification			147
6.24.		Deposit Accounts; Credit Card Arrangements			147
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1.		Books and Records			147
7.2.		Financial Information			147
7.3.		Certificates; Other Information			149
7.4.		Collateral Reporting			149
7.5.		Filing of Tax Returns; Payment of Taxes			150
7.6.		Legal Existence and Good Standing			150
7.7.		Compliance with Law; Maintenance of License			151
7.8.		Maintenance of Property			151
7.9.		Inspection; Field Examinations; Appraisals			151
7.10.		Insurance			152
7.11.		Insurance and Condemnation Proceeds			153
7.12.		Use of Proceeds			153
7.13.		Environmental Laws			153
7.14.		Compliance with ERISA			154
7.15.		Further Assurances			154
7.16.		Additional Obligors			154
7.17.		Bank and Securities Accounts; Cash Dominion			158
7.18.		Sanctions			160
7.19.		Anti-Money Laundering Laws			160
7.20.		Securitization Transactions			160

 

iii

ARTICLE VIII
NEGATIVE COVENANTS
8.1.		Indebtedness			161
8.2.		Liens			166
8.3.		[Intentionally omitted]			170
8.4.		Distributions; Restricted Investments			171
8.5.		Mergers, Consolidations or Sales			171
8.6.		Prepayments of Indebtedness			172
8.7.		Transactions with Affiliates			173
8.8.		Restrictive Agreements			175
8.9.		Fixed Charge Coverage Ratio			177
ARTICLE IX
CONDITIONS OF LENDING
9.1.		Conditions Precedent to Effectiveness of Agreement and Making of Loans on the Closing Date			178
9.2.		Conditions Precedent to Each Loan			180
ARTICLE X
DEFAULT; REMEDIES
10.1.		Events of Default			181
10.2.		Remedies			184
ARTICLE XI
TERM AND TERMINATION
11.1.		Term and Termination			185
ARTICLE XII
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
12.1.		Amendments and Waivers			185
12.2.		Assignments; Participations			188
ARTICLE XIII
THE AGENT
13.1.		Appointment and Authorization			191
13.2.		Delegation of Duties			191
13.3.		Liability of Agent			192
13.4.		Reliance by Agent			192
13.5.		Notice of Default			192
13.6.		Credit Decision			192
13.7.		Indemnification			193
13.8.		Agent in Individual Capacity			193

 

iv

13.9.		Successor Agent			194
13.10.		Withholding Tax			194
13.11.		Collateral Matters			195
13.12.		Restrictions on Actions by Lenders; Sharing of Payments			196
13.13.		Agency for Perfection			197
13.14.		Payments by Agent to Lenders			197
13.15.		Settlement; Defaulting Lenders			198
13.16.		Letters of Credit; Intra-Lender Issues			203
13.17.		Concerning the Collateral and the Related Loan Documents			205
13.18.		Field Audit and Examination Reports; Disclaimer by Lenders			206
13.19.		Relation Among Lenders			207
13.20.		Arrangers; Agent			207
13.21.		The Register			207
13.22.		Québec Collateral			208
13.23.		Certain ERISA Matters			209
13.24.		Recovery of Erroneous Payments			210
ARTICLE XIV
MISCELLANEOUS
14.1.		No Waivers; Cumulative Remedies			211
14.2.		Severability			211
14.3.		Governing Law; Choice of Forum; Service of Process			211
14.4.		WAIVER OF JURY TRIAL			212
14.5.		Survival of Representations and Warranties			212
14.6.		Other Security and Guarantees			212
14.7.		Fees and Expenses			213
14.8.		Notices			213
14.9.		Binding Effect			214
14.10.		Indemnity of the Agent and the Lenders			215
14.11.		Limitation of Liability			215
14.12.		Final Agreement			216
14.13.		Counterparts; Facsimile Signatures; Electronic Execution			216
14.14.		Captions			216
14.15.		Right of Setoff			217
14.16.		Confidentiality			217
14.17.		Conflicts with Other Loan Documents			218
14.18.		Collateral Matters			218
14.19.		No Fiduciary Relationship			218
14.20.		Judgment Currency			219
14.21.		Incremental Indebtedness; Extended Commitments; Extended Loans; Refinancing Commitments and Refinancing Loans; Additional First Lien Debt			219
14.22.		Lenders			220
14.23.		USA PATRIOT Act			220
14.24.		[Reserved]			220
14.25.		Waiver of Notices			220
14.26.		Acknowledgement and Consent to Bail-In of EEA Financial Institutions			220
14.27.		Canadian Anti-Money Laundering Legislation			221
14.28.		Acknowledgement Regarding Any Supported QFCs			221

 

v

EXHIBITS AND SCHEDULES
EXHIBIT A		FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B		FORM OF NOTICE OF BORROWING
EXHIBIT C		FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT D		FORM OF COMPLIANCE CERTIFICATE
EXHIBIT E		FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT F		[INTENTIONALLY OMITTED]
EXHIBIT G		FORM OF SOLVENCY CERTIFICATE
EXHIBIT H		[INTENTIONALLY OMITTED]
EXHIBIT I		FORM OF LENDER JOINDER AGREEMENT
EXHIBIT J		FORMS OF U.S. TAX COMPLIANCE CERTIFICATES
EXHIBIT K		FORM OF JUNIOR LIEN INTERCREDITOR AGREEMENT
EXHIBIT L		[INTENTIONALLY OMITTED]
SCHEDULE 1.1		LENDERS’ COMMITMENTS
SCHEDULE 1.2		U.S. SUBSIDIARY BORROWERS
SCHEDULE 1.2A		GUARANTORS
SCHEDULE 1.3		IMMATERIAL SUBSIDIARIES
SCHEDULE 1.4		UNRESTRICTED SUBSIDIARIES
SCHEDULE 6.4		SUBSIDIARIES
SCHEDULE 6.6		CAPITALIZATION
SCHEDULE 6.9		LITIGATION
SCHEDULE 6.11		ENVIRONMENTAL LAW
SCHEDULE 6.14		ERISA AND PENSION PLAN COMPLIANCE
SCHEDULE 6.15		TAXES
SCHEDULE 6.24(a)		DEPOSIT ACCOUNTS
SCHEDULE 6.24(b)		CREDIT CARD ARRANGEMENTS
SCHEDULE 8.1		DEBT
SCHEDULE 8.2		LIENS
SCHEDULE 8.4		INVESTMENTS

 

vi

CREDIT AGREEMENT

This Credit Agreement, dated as of July 31, 2019, 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 One Bryant Park, New York, New York 10036, 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 181 Bay Street, Toronto Ontario, M5J2V8, as Multicurrency Canadian Swingline Lender, Bank of America, N.A., JPMorgan Chase Bank, N.A., Capital One, National Association, Wells Fargo Bank, National Association, Bank of Montreal, Credit Agricole Corporate and Investment Bank, Goldman Sachs Bank USA, ING Capital LLC, MUFG Union Bank, N.A., and TD Bank, N.A., as co-syndication agents (each, in its capacity as a co-syndication agent, a “Co-Syndication Agent”), Herc Holdings Inc., a Delaware corporation, with offices at 27500 Riverview Center Blvd., Bonita Springs, FL 34134 (the “Company”), each Subsidiary that is listed on Schedule 1.2 (the “U.S. Subsidiary Borrowers” and, together with the Company and each Additional Borrower organized under the Laws of the United States, any state thereof or the District of Columbia made a party hereto from time to time in accordance with Section 1.9(a), the “U.S. Borrowers”), Matthews Equipment Limited, a corporation amalgamated under the laws of the Province of Ontario (the “Initial Canadian Borrower” and the Initial Canadian Borrower, together with each Additional Borrower organized under the Laws of Canada or any territory or province thereof made a party hereto from time to time in accordance with Section 1.9(a), the “Canadian Borrowers”), the Guarantors (as defined below) party hereto, and Bank of America, N.A., Credit Agricole Corporate and Investment Bank, MUFG Union Bank, N.A., Wells Fargo Bank, National Association, as Joint Lead Arrangers and Joint Book Runners (each, in its capacity as a joint lead arranger, a “Joint Lead Arranger”), Bank of Montreal, Capital One, National Association, JPMorgan Chase Bank, N.A. ING Capital LLC, TD Bank, N.A., NYCB Specialty Finance Company, LLC, PNC Bank, National Association, Sumitomo Mitsui Banking Corporation, as Joint Book Runners (each, in its capacity as a joint book runner, a “Joint Book Runner”).

W I T N E S E T H:

WHEREAS, the Borrowers have requested that the Lenders make available a revolving credit facility, portions of which may be used from time to time by the U.S. Borrowers, and portions of 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 to this Agreement shall be secured by, among other things, the Security Documents and the other Loan Documents, in each case as and to the extent set forth herein and therein;

WHEREAS, each of the U.S. Guarantors and the Canadian Guarantors has agreed to guarantee the Obligations of each of the Borrowers, on the terms and conditions specified in the U.S. GCA and the Canadian GCA (each as defined herein); and

WHEREAS, on the Agreement Date, the proceeds of the Loans will be used by the Borrowers to refinance all outstanding obligations under that certain Credit Agreement, dated as of June 30, 2016 among certain of the U.S. Borrowers, the Initial Canadian Borrower, certain of the Guarantors, Citibank, N.A., certain of the Lenders party hereto and certain other parties thereto (as amended, restated or otherwise modified prior to the date hereof, the “Existing Citibank Loan Agreement”), to pay fees and expenses related to the Transactions, to finance ongoing working capital needs and for general corporate purposes;

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:

“Acceleration” has the meaning specified in Section 10.1(d).

“Acceptable Intercreditor Agreement” means any intercreditor agreement containing customary terms and conditions for comparable transactions that is in form and substance reasonably acceptable to the Agent; provided that (i) any intercreditor agreement between the Agent and one or more representatives of Persons (other than the Company or any of its Subsidiaries) benefitting from a Lien on any Collateral of a U.S. Obligor or a Canadian Obligor that is intended to be junior to the Agent’s Lien thereon having terms that are substantially consistent with, or not materially less favorable, taken as a whole, to the Secured Parties than, the terms of the Junior Lien Intercreditor Agreement, shall be deemed to be reasonably acceptable to the Agent and (ii) any Pari Passu Intercreditor Agreement.

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

“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, and all rentals, lease payments and other monies due and to become due under any Lease.

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

“Act” has the meaning specified in Section 14.23.

“Additional Borrower” has the meaning specified in Section 1.9(a).

“Additional Lender” means any Person that has agreed to provide Incremental Facilities pursuant to Section 2.5 or Refinancing Commitments pursuant to Section 2.7, whether or not such Person was a Lender hereunder immediately prior to such time; provided that such Person qualifies an Eligible Assignee.

 

2

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“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, 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, the term “Affiliate” shall include any “authorized foreign bank” for purposes of the Income Tax Act (Canada) of such Person.

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

“Agent Advance Period” has the meaning specified in Section 2.2(b).

“Agent Advances” has the meaning specified in Section 2.2(b).

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

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

“Aggregate Multicurrency Revolver Outstandings” means, at any date of determination and without duplication, the Equivalent Amount in Dollars of the sum of (a) the aggregate unpaid principal balance of Multicurrency Revolving Loans, (b) 100% of the aggregate maximum amount available to be drawn under all outstanding Multicurrency Letters of Credit, and (c) the aggregate amount of any unpaid reimbursement obligations in respect of Multicurrency Letters of Credit.

“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 Multicurrency 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 aggregate unpaid principal balance of U.S. Revolving Loans, (b) 100% of the aggregate maximum amount available to be drawn under all outstanding U.S. Facility Letters of Credit, and (c) the aggregate amount of any unpaid reimbursement obligations in respect of U.S. Facility Letters of Credit.

“Agreement” means this Credit Agreement.

 

3

“Agreement Date” means the date of this Agreement.

“Alternative Currency” means any currency (other than Dollars or Canadian Dollars) that is approved in accordance with Section 1.7.

“Amendment No. 1” means Amendment No. 1 to Credit Agreement, dated on or about the Amendment No. 1 Effective Date, by and among Agent, Lenders and Obligors.

“Amendment No. 1 Date” means the date of Amendment No. 1.

“Amendment No. 1 Effective Date” means the later of the Amendment No. 1 Date and the first date on which all of the applicable conditions set forth in Section 4 of Amendment No. 1 have been fulfilled (or waived in writing by the Agent).

“AML Legislation” has the meaning specified in Section 14.27.

“Anti-Corruption Laws” means any Laws concerning or relating to bribery or corruption, including the United States Foreign Corrupt Practices Act of 1977, as amended, the Corruption of Foreign Public Officials Act (Canada), the UK Bribery Act 2010, and any other similar anti- money laundering or anti-corruption law or regulations administered or enforced in any jurisdiction in which any Obligor or any of its Subsidiaries is organized or conducts business.

“Applicable Entities” has the meaning specified in Section 14.19.

“Applicable Margin” means, for each Type of Loan, the interest margin applicable thereto based on the Quarterly Average Excess Availability for the previous calendar quarter (or portion thereof), as set forth below:

 

Level		Quarterly Average Excess Availability		Applicable Margin for U.S. Revolving Loans denominated in Dollars and Canadian Revolving Loans denominated in Dollars, in each case that are Base Rate Loans		Applicable Margin for U.S. Revolving Loans and Canadian Revolving Loans that are Term SOFR Loans or Daily One Month SOFR Loans		Loans Applicable Margin for Canadian Revolving Loans that are Canadian Prime Rate Loans		Applicable Margin for Canadian Revolving Loans that are BA Equivalent Loans
I		Equal to or greater than 50% of the Maximum Revolver Amount		0.25%		1.25%		0.25%		1.25%
II		Less than 50% of the Maximum Revolver Amount		0.50%		1.50%		0.50%		1.50%

 

4

Notwithstanding the Applicable Margins set forth above, at any time and for so long as the Company has received a corporate or family credit rating from both Moody’s and Standard & Poor’s of Ba2 and BB, respectively, or higher, the Level II pricing for each Type of Loan shall be reduced by 12.5 basis points and at any time thereafter, in the event that the Company has received a corporate or family credit rating from both Moody’s and Standard & Poor’s lower than Ba2 and BB, respectively, the Level II pricing for each Type of Loan shall be increased by 12.5 basis points.

Each change in the Applicable Margin resulting from a change in the Quarterly Average Excess Availability for the most recent calendar quarter ended immediately preceding the first day of a calendar quarter shall be effective with respect to all Loans and Letters of Credit outstanding on and after such first day of such calendar quarter. Notwithstanding anything to the contrary contained above in this definition, Level II pricing shall apply for all Loans at all times once the Commitments have terminated or the Termination Date has occurred.

Notwithstanding the foregoing, in the event that any Borrowing Base Certificate delivered pursuant to Section 7.4(a) is shown to be inaccurate and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) the Company shall promptly deliver to the Agent a corrected Borrowing Base Certificate for such Applicable Period, (ii) the Applicable Margin for such Applicable Period shall be determined as if the Quarterly Average Excess Availability in the corrected Borrowing Base Certificate were applicable for such Applicable Period, and (iii) promptly following the delivery of such corrected Borrowing Base Certificate, the applicable Borrowers shall pay to the Agent an amount equal to the excess of the amount of interest that should have been paid for such Applicable Period over the amount of interest actually paid for such Applicable Period, which payment shall be promptly applied by the Agent in accordance with Section 13.14. Nothing in this paragraph shall limit the rights of the Agent and Lenders with respect to Sections 3.1 and 10.2 nor any of their other rights under this Agreement or any other Loan Document.

References to “U.S. Revolving Loans” in the grid above are to both U.S. Revolving Loans and Multicurrency U.S. Revolving Loans and references to “Canadian Revolving Loans” in the grid above are to Multicurrency Canadian Revolving Loans.

“Appraisal” means an appraisal, prepared on a basis reasonably satisfactory to the Agent, setting forth the Net Orderly Liquidation Value of all Rental Equipment and all Service Vehicles of the applicable Secured Obligors, which appraisal shall be prepared in accordance with Section 7.9(b).

 

5

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

“Arrangers” means Bank of America, N.A., Credit Agricole Corporate and Investment Bank, MUFG Union Bank, N.A., and Wells Fargo Bank, National Association.

“Asset Disposition” means any sale, issuance, conveyance, transfer, lease or other disposition (including a disposition to a Divided LLC pursuant to an LLC Division) by an Obligor or any Restricted Subsidiary to any Person other than an Obligor or a Restricted Subsidiary of:

(a) any Capital Stock of any Restricted Subsidiary (other than directors qualifying shares or to the extent required by applicable law);

(b) all or substantially all of the assets of any division or line of business of an Obligor or any Restricted Subsidiary; or

(c) any other assets of an Obligor or any Restricted Subsidiary;

other than, in the case of clause (a), (b) or (c) above:

(i) sales, conveyances, transfers, leases or other dispositions of assets, including sales of equipment to equipment manufacturers and similar transactions, in each case in the ordinary course of business;

(ii) sales, conveyances, transfers, leases 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;

(iii) sales, conveyances, transfers, leases or other dispositions of assets in one or a series of related transactions for aggregate consideration of less than the greater of (A) $75,000,000 and (B) 2.0% of Consolidated Tangible Assets;

(iv) the lease, license, sublicense or sublease of any real or personal property in the ordinary course of business;

(v) (x) a disposition that constitutes a Permitted Distribution or a Permitted Investment, (y) a disposition governed by Section 8.5 (other than the clauses thereof specifically referring to Asset Dispositions) and (z) any sale, issuance, conveyance, transfer, lease or other disposition of properties or assets in connection with a Securitization Transaction; provided that (A) the aggregate amount of the book value (or in the case of Rental Equipment, Service Vehicles or Spare Parts and Merchandise, Net Book Value) of all such properties or assets of any

 

6

Obligor sold, issued, conveyed, transferred, leased or otherwise disposed of in connection with all Equipment Securitization Transactions, whether permitted under this clause (v)(z) or any other provision of this Agreement, shall not exceed $510,000,000 in the aggregate during the term of this Agreement, (B) the properties or assets of any Obligor sold, issued, conveyed, transferred, leased or otherwise disposed of in connection with all Equipment Securitization Transactions, transferred in connection with an Equipment Securitization Transaction consist of the types described in the definition of the term Equipment Securitization Transaction and (C) the Obligors shall not select properties or assets for disposition in connection with a Securitization Transaction in a manner so as to intentionally adversely affect the Agent’s or Lenders’ interests hereunder;

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

(vii) any disposition arising from foreclosure, condemnation or similar action with respect to any property or other assets, or exercise of termination rights under any lease, license, concession or agreement, or necessary or advisable (as determined by the Company in good faith) in order to consummate any acquisition of any Person, business or assets, or pursuant to buy/sell arrangements under any joint venture or similar agreement or arrangement;

(viii) dispositions of cash and Cash Equivalents, Investment Grade Securities or Temporary Cash Investments pursuant to any transaction permitted under the Loan Documents;

(ix) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;

(x) the unwinding of any Hedge Agreement;

(xi) the sale or discount (with or without recourse, and on customary or commercially reasonable terms) of Accounts arising in the ordinary course of business, or the conversion or exchange of accounts receivable for notes receivable;

(xii) a disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a person (other than an Obligor or a Restricted Subsidiary) from which such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquires its business and assets (having been newly formed in connection with such acquisition), entered into in connection with such acquisition;

(xiii) the lapse, abandonment (including failure to maintain) or other disposition of Intellectual Property (other than a non-exclusive license, sublicense, cross-license or other grant of rights to Intellectual Property) that is, in the good faith determination of the Company, no longer material or no longer commercially desirable to maintain or used or useful in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole;

(xiv) non-exclusive licenses, sublicenses, cross-licenses or other grants of rights to Intellectual Property not materially interfering with the conduct of the business of the Borrowers and the Restricted Subsidiaries taken as a whole or the Agent’s rights with respect to the Collateral; and

 

7

(xv) any disposition for Fair Market Value, to any Franchisee or any Franchise Special Purpose Entity; provided that (A) the aggregate Fair Market Value of all such properties or assets of any Obligor, together (but in each case without duplication) with (1) the aggregate Fair Market Value of any properties or assets transferred as permitted under any other provision hereof in connection with the disposition of properties or assets to any Franchisee or any Franchise Special Purpose Entity, (2) the amount of Investments under clause (x) of the definition of the term “Permitted Investments”, and (3) the amounts paid as consideration for all acquisitions in reliance on clause (d)(iii) of the definition of the term “Permitted Acquisition”, shall not exceed $120,000,000 in the aggregate during the term of this Agreement and (B) the properties or assets transferred to any Franchisee or any Franchise Special Purpose Entity shall consist of the types described in the definition of the term Equipment Securitization Transaction.

“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 (limited to one primary counsel and not more than one local counsel for each relevant jurisdiction (including relevant foreign jurisdictions)).

“Availability Reserves” means, without duplication of any other reserves or items that are otherwise addressed or excluded through eligibility criteria, subject to Section 2.9, Dilution Reserve and such other reserves as the Agent, in its Reasonable Credit Judgment, determines as being appropriate to reflect any impediments to the realization upon any Collateral consisting of Eligible Accounts, Eligible Unbilled Accounts, Eligible Rental Equipment, Eligible Spare Parts and Merchandise or Eligible Service Vehicles included in the U.S. Borrowing Base or Canadian Borrowing Base (including any claims that the Agent determines may need to be satisfied in connection with the realization upon such Collateral).

“Available Incremental Amount” means, on any date, without duplication, an amount equal to the difference between (a) the greater of (i) $1,000,000,000 and (ii) an amount equal to Suppressed Availability and (b) the sum of the aggregate principal amount of all Incremental ABL Term Loans made, plus all Incremental Revolving Commitments established, in each case, prior to such date pursuant to Section 2.5 and that shall be outstanding as of such date (it being understood that any Incremental ABL Term Loans that shall be repaid, and any Incremental Revolving Commitment that shall be terminated, in connection with any proposed Incremental ABL Term Loans or Incremental Revolving Commitments shall not be deemed outstanding for purposes of this definition).

“BA Equivalent Interest Payment Date” means, with respect to a BA Equivalent Loan, (a) the last day of each BA Equivalent Interest Period applicable to such BA Equivalent Loan and (b) the Termination Date.

 

8

“BA Equivalent Interest Period” means, with respect to each BA Equivalent 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 BA Equivalent Loan, and ending on (a) the date one or three months thereafter, or (b) any other date agreed to by all the Lenders making or holding such Loan, in each case, as selected by the applicable Canadian Borrower in its Notice of Borrowing or Notice of Continuation/Conversion; provided that:

(a) the initial BA Equivalent Interest Period for any Borrowing of a BA Equivalent Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of Canadian Prime Rate Loans, as applicable) and each BA Equivalent Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding BA Equivalent Interest Period expires;

(b) if any BA Equivalent Interest Period of one month or longer relating to a Borrowing of a BA Equivalent Loan begins on the last Business Day of a calendar month or begins on a day for which there is no numerically corresponding day in the calendar month at the end of such BA Equivalent Interest Period, such BA Equivalent Interest Period shall end on the last Business Day of the calendar month at the end of such BA Equivalent Interest Period;

(c) if any BA Equivalent Interest Period would otherwise expire on a day that is not a Business Day, such BA Equivalent Interest Period shall expire on the next succeeding Business Day; provided that if any BA Equivalent Interest Period of one month or longer in respect of a BA Equivalent Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such BA Equivalent Interest Period shall expire on the next preceding Business Day; and

(d) none of the Canadian Borrowers nor the Borrowers’ Agent shall be entitled to elect any BA Equivalent Interest Period in respect of any BA Equivalent Loan if such BA Equivalent Interest Period would extend beyond the Maturity Date.

“BA Equivalent Loan” means a Multicurrency 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 a per annum rate of interest equal to the Canadian Dollar bankers’ acceptance rate having such specified term (or a term as closely as possible comparable to such specified term), or comparable or successor rate approved by the Agent, determined by it, acting reasonably and in consultation with the Borrowers’ Agent, at or about 10:00 a.m. (Toronto time) on the applicable day (or the preceding Business Day, if the applicable day is not a Business Day), as published on the CDOR or other applicable Reuters screen page (or other commercially available source designated by the Agent, acting reasonably, from time to time); provided that in no event shall the BA Rate be less than zero.

“BA Successor Rate” has the meaning specified in Section 5.8.

 

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“BA Successor Rate Conforming Changes” means, with respect to any proposed BA Successor Rate, any conforming changes to the definitions of Canadian Prime Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Agent, to reflect the adoption of such BA Successor Rate and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such BA Successor Rate exists, in such other manner of administration as the Agent determines in consultation with the Borrowers’ Agent).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Bank” means, as the context requires, (a) the U.S. Bank, or (b) the Canadian Bank. Any general reference to the “Bank” refers to the U.S. Bank with respect to the U.S. Credit Facilities and/or the U.S. Bank with respect to U.S. Swingline Loan and/or Loans to U.S. Borrowers under the Multicurrency Credit Facilities and/or the Canadian Bank with respect to Multicurrency Canadian Swingline Loans, and/or Loans to Canadian Borrowers under the Multicurrency Credit Facilities.

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

“Bank Product Reserves” means (a) all reserves which the Agent from time to time establishes in its Reasonable Credit Judgment for the Designated Bank Products Obligations then outstanding and (b) without duplication of clause (a), all Waterfall Priority Hedge Agreement Reserves.

“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, other similar banking products or services (other than Loans and Letters of Credit) as, in the case of each of clauses (a), (b) and (c), may be requested by any Borrower (on behalf of itself or any other Restricted Subsidiary) and extended to any Borrower or any Restricted Subsidiary by a Lender Counterparty.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (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” and (c) Term SOFR for a 30-day interest period as determined on such day, plus 1%; provided that in no event shall the Base Rate be less than zero. The “prime rate” is a rate set by Bank of America based upon

 

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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. If the Base Rate is being used as an alternate rate of interest pursuant to Section 5.5 or 5.7 hereof, then the Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.

“Base Rate Loan” means (a) any U.S. Revolving Loan denominated in Dollars, in each case during any period for which it bears interest based on the Base Rate, (b) any Multicurrency Canadian Revolving Loan denominated in Dollars during any period for which it bears interest based on the Canadian Base Rate, (c) all Agent Advances made to a U.S. Borrower and (d) all U.S. Swingline Loans and Multicurrency U.S. Swingline Loans.

“Basel III” means:

(a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010;

(b) the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement — Rules text” published by the Basel Committee on Banking Supervision in November 2011; and

(c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation, which certification shall be substantially similar in form and substance to the form of “Certification Regarding Beneficial Owners of Legal Entity Customers” published jointly, in May 2018, by the Loan Syndications and Trading Association and Securities Industry and Financial Markets Association (or any successor or replacement form).

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

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

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

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

 

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“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 Multicurrency U.S. Swingline Loans or by the Agent in the case of a Borrowing consisting of an Agent Advance made to a U.S. Borrower, or (b) by the Canadian Bank in the case of a Borrowing funded by Multicurrency Canadian Swingline Loans or by the Agent in the case of a Borrowing consisting of an Agent Advance made to a Canadian Borrower).

“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 2.9 and the definitions of Pari Passu Debt Reserves and Waterfall Priority Hedge Agreement Reserves. All calculations of the U.S. Borrowing Base and the Canadian Borrowing Base in connection with the preparation of any Borrowing Base Certificate shall be made by the Borrowers’ Agent 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 (or, with respect to Pari Passu Debt Reserves and Waterfall Priority Hedge Agreement Reserves, as otherwise set forth in the definitions thereof) and in consultation with the Company, any such calculation to the extent that such calculation is not in accordance with this Agreement; provided that the Agent shall provide the Borrowers’ Agent prior written notice of any such adjustment.

“Borrowing Minimum” means (a) with respect to Base Rate Loans or Canadian Prime Rate Loans, (i) in the case of a Borrowing denominated in Dollars, $1,000,000, and (ii) in the case of a Borrowing denominated in Canadian Dollars, Cdn $1,000,000 (or, in each case, if the applicable Commitment then available is less than the applicable amount specified in the foregoing, such lesser amount), (b) with respect to Daily One Month SOFR Loans, $1,000,000, and (c) with respect to Term SOFR Loans or BA Equivalent Loans, (i) in the case of a Borrowing denominated in Dollars, $5,000,000, (ii) in the case of a Borrowing denominated in Canadian Dollars, Cdn $5,000,000, and (iii) in the case of a Borrowing denominated in any other Alternative Currency, such amount as may be agreed by the Agent and the Borrowers’ Agent.

“Borrowing Multiple” means (a) in the case of a Borrowing denominated in Dollars, $1,000,000, (b) in the case of a Borrowing denominated in Canadian Dollars, Cdn $1,000,000, and (c) in the case of a Borrowing denominated in any other Alternative Currency, such amount as may be agreed by the Agent and the Borrowers’ Agent.

“Business Day” means 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; provided that when used in connection with a Multicurrency Canadian Revolving 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.

 

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

“Canadian Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the per annum rate of interest designated by the Canadian Bank from time to time as its base rate for commercial loans made by it in Dollars, which rate is based on various factors, including its 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 rate, (b) the Federal Funds Rate plus 1/2 of 1% and (c) Term SOFR for a 30-day interest period as determined on such day, plus 1%; provided that in no event shall the Canadian Base Rate be less than zero. Any change in such rate shall take effect at the opening of business on the applicable Business Day. If the Canadian Base Rate is being used as an alternate rate of interest pursuant to Section 5.5 or 5.7 hereof, then the Canadian Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.

“Canadian Base Rate Loan” means any Multicurrency Canadian Revolving Loan during any period for which it bears interest by reference to the Canadian Base Rate.

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

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

(a) the sum of

(i) 90% of the amount of Eligible Canadian Accounts owing from Account Debtors which have an Investment Grade Rating; plus

(ii) 85% of the amount of Eligible Canadian Accounts owing from Account Debtors which do not have an Investment Grade Rating; plus

(iii) 75% of the amount of Eligible Unbilled Canadian Accounts (not to exceed 50% of the aggregate amount calculated under clauses (i) and (ii) above); plus

(iv) the lesser of: (A) 100% multiplied by the then Net Book Value of Eligible Canadian Rental Equipment and Eligible Canadian Service Vehicles, and (B) 85% multiplied by the then extant Net Orderly Liquidation Value Percentage of Eligible Canadian Rental Equipment and Eligible Canadian Service Vehicles multiplied by the Net Book Value thereof; plus

(v) 55% multiplied by the then Net Book Value of Eligible Canadian Spare Parts and Merchandise; minus

(b) the sum of (i) the amount of Pari Passu Debt Reserves with respect to Indebtedness of the Canadian Obligors; plus (ii) the amount of all other Reserves related to the Canadian Obligors from time to time established by the Agent in accordance with Section 2.9 or in accordance with the definition of “Waterfall Priority Hedge Agreement Reserve”.

 

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“Canadian Collateral” means all of the Canadian Obligors’ personal property from time to time subject to the Agent’s Liens securing payment or performance of any Obligations pursuant to the Canadian Security Documents, other than Excluded Assets (as defined in the Canadian GCA); provided that the term “Canadian Collateral” shall not include U.S. Collateral.

“Canadian DB Pension Plan” means any Canadian Pension Plan that contains a “defined benefit provision” as defined in the Income Tax Act (Canada).

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

“Canadian GCA” means the Canadian Guarantee and Collateral Agreement dated as of the Agreement Date from the Canadian Obligors in favor of the Agent for the benefit of the Secured Parties.

“Canadian Guarantors” means (a) any Subsidiary of the Company that is organized under the Laws of Canada or any province or territory thereof, whether now existing or hereafter created or acquired, and (b) each other Person (other than a U.S. Guarantor), who guarantees payment or performance in whole or in part of the Obligations; provided that “Canadian Guarantors” shall not include any Subsidiary that is an Excluded Subsidiary. The Canadian Guarantors as of the Agreement Date are set forth on Schedule 1.2A under the heading “Canadian Guarantors”.

“Canadian Obligations” means, with respect to the Indebtedness of the Canadian Obligors under the Loan Documents, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to any Canadian Obligor whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any Canadian Obligor of any nature and all other amounts payable by any Canadian Obligor under the Loan Documents or in respect thereof, excluding in each case Excluded Swap Obligations; provided that “Canadian Obligations” shall in any event include Designated Bank Products Obligations of any Canadian Obligor and all U.S. Obligations guaranteed by the Canadian Obligors (in each case, to the extent such Obligations are not Excluded Swap Obligations).

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

“Canadian Pension Plan” means any Pension Plan applicable solely to employees or former employees of any of the Canadian Obligors but shall not include any Pension Plan maintained by the Government of Canada, the government of the Province of Québec or the government of the Province of Ontario.

“Canadian Prime Rate” means, on any day, the greater of (a) the rate of interest publicly announced from time to time by the Canadian Bank as its reference rate of interest for loans made in Canadian Dollars and designated as its “prime” rate being a rate set by the Canadian Bank based upon various factors, including the Canadian Bank’s costs and desired return, general economic conditions and other factors and is used as a reference point for pricing some loans, and (b) the BA Rate for a one month BA Equivalent Interest Period as determined on such day, plus 1%; provided that in no event shall the Canadian Prime Rate be less than zero. Any

 

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change in the prime rate for loans made in Canadian Dollars announced by the Canadian Bank shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based on such prime rate hereunder shall be adjusted simultaneously with any change in such prime rate.

“Canadian Prime Rate Loan” means any Multicurrency Canadian Revolving Loan during any period for which it bears interest by reference to the Canadian Prime Rate and all Multicurrency Canadian Swingline Loans and Agent Advances made to a Canadian Borrower.

“Canadian Security Documents” means, collectively, (a) the Canadian GCA, (b) any security agreement and/or deed of hypothec executed and delivered after the Agreement Date by a Person that is or becomes a Canadian Obligor hereunder in accordance with Section 7.16, and (c) any Control Agreement or other agreements, instruments and documents heretofore, now or hereafter securing any of the Canadian Obligations.

“Canadian Subsidiary” means any Subsidiary of the Company that is organized under the Laws of Canada or any province or territory thereof.

“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 or liquidity requirements 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 as “capital expenditures” (exclusive of expenditures for Investments not prohibited hereby, including Permitted Acquisitions) 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)(i) proceeds received by the Company or its Subsidiaries from dispositions of property, plant and equipment or similar items reflected in the statement of cash flows of such Person and its consolidated Subsidiaries during such period, (ii) expenditures that are paid for by a third party (excluding the Company and any of its consolidated Subsidiaries) and for which neither the Company nor any of its consolidated Subsidiaries has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such third party or any other Person or (iii) expenditures made with the proceeds of any equity securities issued or capital contributions received, or Indebtedness incurred, by the Company or any of its consolidated Subsidiaries which, in accordance with GAAP, are included in “capital expenditures,” including any such expenditures made for purchases of Rental Equipment.

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person’s capital stock or equity participations, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible into such capital stock and, including, with respect to partnerships, limited liability companies or business trusts, ownership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnerships, limited liability companies or business trusts.

 

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“Cash Dominion Period” means (a) any period (i) commencing on the date on which Specified Availability shall have been less than the greater of (A) 10% of the Loan Cap and (B) $225,000,000 for five consecutive Business Days, and the Agent has notified the Borrowers’ Agent that a Cash Dominion Period is in effect, and (ii) ending on the earliest of (A) the date on which Specified Availability shall have been at least equal to the greater of (1) 10% of the Loan Cap and (2) $225,000,000 for 20 consecutive calendar days or (B) Specified Availability shall have been at least 15% of the Loan Cap for five consecutive calendar days or (b) any period during which a Specified Default shall have occurred and be continuing.

“Cash Equivalents” 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) (i) certificates of deposit, guaranteed investment certificates 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 (x) any Lender or an Affiliate thereof or (y) any other bank or trust company organized under the laws of the United States of America or any state thereof or Canada or any province or territory thereof, in each such case, having, at the time of acquisition thereof, capital and surplus aggregating at least $500,000,000 (or the Equivalent Amount in Canadian Dollars, as applicable) and the commercial paper of the holding company of which is rated at least “A2” by S&P or “P2” by Moody’s, and (ii) repurchase obligations for underlying securities of the types described in clause (i) above entered into with any financial institution meeting the qualifications specified in clause (i) above;

(c) commercial paper maturing not more than one year from the date of creation thereof or corporate demand notes, in each case given a rating of “A2” or better by S&P or “P2” or better by Moody’s;

(d) (i) marketable direct obligations issued by any state of the United States of America or the District of Columbia 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 “A1” from S&P or at least “P1” from Moody’s, (ii) Temporary Cash Investments or (iii) investments in short-term asset management accounts that are primarily invested in investments of the type specified in any of clauses (i) or (ii) above; and

(e) any investment in (i) funds investing primarily in investments of the types specified in clauses (a) through (d) above or (ii) money market funds complying with the risk limiting conditions of Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of 1940;

 

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provided that in the case of any Investment by any Foreign Subsidiary, “Cash Equivalents” shall also include: (A) direct obligations of the sovereign nation (or any agency thereof) in which such Foreign Subsidiary is organized and is conducting business or in obligations fully and unconditionally guaranteed by such sovereign nation (or any agency thereof) (or, in the case of a Foreign Subsidiary organized under the Laws of a member state of the European Union, any other sovereign nation (or agency thereof) in the European Union), in each case maturing within a year after such date and having, at the time of the acquisition thereof, a rating equivalent to at least “A2” from S&P and at least “P2” from Moody’s, (B) investments of the type and maturity described in clauses (a) through (e) above of non-U.S. obligors, which investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable non-U.S. rating agencies and (C) shares of money market mutual or similar funds substantially all of the assets of which are invested in assets otherwise satisfying the requirements of this definition (including this paragraph).

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

“Cash Management Obligation” means any obligation of an Obligor or Restricted Subsidiary in connection with, or in respect of, cash management services (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 Agreement Date 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.

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

“CDOR Screen Rate” means the CDOR on other applicable Reuters screen page the Agent (in its reasonable discretion) designates to determine CDOR (or such other commercially available source providing such quotations as may be designated by the Agent from time to time in its reasonable discretion).

“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), other than one or more Permitted Holders, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total Voting Stock of the Company on a fully diluted basis, (b) the Company shall cease to own, directly or indirectly 100% of the Capital Stock of Herc Rentals, (c) the occurrence of a “Change of Control” as defined in (i) the Senior Note Indenture or (ii) any other indenture, loan agreement or similar instrument in each case evidencing or governing Indebtedness in an outstanding principal amount in excess of $250,000,000 entered into or assumed by the Company after the Agreement Date.

“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.

 

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“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).

“CME” means CME Group Benchmark Administration Limited.

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

“Code” means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder.

“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, Service Vehicles or Spare Parts and Merchandise is stored or located, in each case in a form reasonably satisfactory to the Agent.

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

“Commitment” means a Revolving Credit Commitment (and including any Incremental Revolving Commitment and Extended Commitment to make Revolving Loans), a U.S. Swingline Commitment, a Multicurrency Facility Swingline Commitment, or any Refinancing Revolving Commitment under this Agreement as the context requires.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.) and any successor statute.

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

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

“Conforming Changes” with respect to use, administration of or conventions associated with SOFR, Term SOFR, Daily One Month SOFR or any proposed Successor Rate, as applicable, any conforming changes to the definitions of Base Rate, Canadian Base Rate, SOFR, Term SOFR, Daily One Month SOFR, BA Rate, Canadian Prime Rate, BA Equivalent Interest Period and Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definitions of Business Day and U.S. Government Securities Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of lookback periods) as may be appropriate, in the Agent’s discretion, to reflect the adoption and

 

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implementation of such applicable rate(s) and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as Agent determines is reasonably necessary in connection with the administration of any Loan Document).

“Consolidated EBITDA” means, for any period:

(a) the sum of, without duplication, the amounts for such period, taken as a single accounting period, of:

(i) Consolidated Net Income;

(ii) Consolidated Non-cash Charges;

(iii) Consolidated Interest Expense, all items excluded from the definition of Consolidated Interest Expense pursuant to clause (b) thereof, and to the extent not reflected in Consolidated Interest Expense, costs of surety bonds in connection with financing activities;

(iv) Consolidated Income Tax Expense;

(v) any fees, expenses or charges related to the Transactions, any issuance of Capital Stock, Investment, merger, acquisition, disposition, consolidation, recapitalization or the incurrence or repayment of Indebtedness permitted by this Agreement (including any refinancing or amendment of any of the foregoing) (whether or not consummated or incurred);

(vi) the amount of any restructuring charges or reserves (which shall include retention, severance, systems establishment cost, excess pension charges, contract termination costs, including future lease commitments, costs related to start up, closure, relocation or consolidation of facilities, costs to relocate employees, consulting fees, one time information technology costs, one time branding costs and losses on the sale of excess fleet from closures); provided that the aggregate amount of such charges or reserves added to Consolidated EBITDA for any period pursuant to this clause (vi) (when taken together with any amounts added pursuant to clause (vii) below) shall not exceed 20% of Consolidated EBITDA for such period;

(vii) the amount of net cost savings and synergies projected by the Company in good faith to be realized (which shall be calculated on a pro forma basis as though such cost savings or synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such cost savings or synergies are reasonably identifiable and supportable, (B) such actions have been taken or are to be taken within 18 months after the date of determination to take such action and (C) the aggregate amount of any cost savings and synergies added pursuant to this clause (vii) (when taken together with any amounts added pursuant to clause (vi) above) shall not exceed 20% of Consolidated EBITDA for such period;

(viii) the amount of any loss attributable to non-controlling interests;

 

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(ix) the amount of any loss on any Franchise Financing Disposition;

(x) any costs or expenses pursuant to any management or employee stock option or other equity-related plan, program or arrangement, or other benefit plan, program or arrangement, or any equity subscription or equityholder agreement, to the extent funded with cash proceeds contributed to the capital of the Company by a Person other than the Company or a Subsidiary of the Company or an issuance of Capital Stock of the Company (other than Disqualified Stock);

(xi) all deferred financing costs written off and premiums paid in connection with any early extinguishment of any obligations under Hedge Agreements or other derivative instruments; and

(xii) realized foreign exchange losses resulting from the impact of foreign currency changes on the valuation of assets or liabilities on the balance sheet of the Company and its Restricted Subsidiaries; less

(b) the sum of:

(i) non-cash items increasing Consolidated Net Income; and

(ii) all cash payments during such period relating to non-cash charges that were added back in determining Consolidated EBITDA for the most recent period of four consecutive Fiscal Quarters.

“Consolidated Income Tax Expense” means, for any period, the provision for federal, state, local and foreign taxes (whether or not paid, estimated or accrued) based on income, profits or capitalization (including penalties and interest, if any) of the Consolidated Parties for such period as determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, for any period, without duplication, the sum of:

(a) the interest expense to the extent deducted in calculating Consolidated Net Income, net of any interest income, of the Consolidated Parties for such period as determined on a consolidated basis in accordance with GAAP, including:

(i) any amortization of debt discount;

(ii) the net payments made or received under interest rate Hedge Agreements (including any amortization of discounts);

(iii) the interest portion of any deferred payment obligation;

(iv) all commissions, discounts and other fees and charges owed with respect to letters of credit, bankers’ acceptance financing or similar facilities;

(v) all accrued interest;

 

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(vi) interest in respect of Indebtedness of any other Person that has been guaranteed by any Consolidated Party, but only to the extent that such interest is actually paid by any such Consolidated Party;

(vii) non-cash interest expense; and

(viii) the interest expense attributable to Finance Lease Obligations, minus

(b) to the extent otherwise included in such interest expense referred to in clause (a) above, (u) amortization or write-off of financing costs, (v) accretion or accrual of discounted liabilities not constituting Indebtedness, (w) any expense resulting from discounting of Indebtedness in conjunction with recapitalization or purchase accounting, (x) any “additional interest” in respect of registration rights arrangements for any securities and (y) any expensing of bridge, commitment and other financing fees, in each case under clauses (a) and (b), as determined on a consolidated basis in accordance with GAAP; provided that gross interest expense shall be determined after giving effect to any net payments made or received by the Consolidated Parties with respect to interest rate Hedge Agreements.

“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) any net income (loss) of any Person if such Person is not a Consolidated Party, except that (A) any Consolidated Party’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount actually dividended or distributed or that (as determined by the Company in good faith, which determination shall be conclusive) could have been dividended or distributed by such Person during such period to a Consolidated Party as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (b) below), to the extent not already included therein, and (B) any Consolidated Party’s equity in the net loss of such Person shall be included to the extent of the aggregate Investment of any such Consolidated Party in such Person;

(b) any extraordinary, unusual or non-recurring gain, loss, expense or charge (including fees, expenses and charges associated with the Transactions or any merger, acquisition, disposition or consolidation after the Agreement Date or any accounting change);

(c) (i) the portion of net income of the Consolidated Parties allocable to minority interests in unconsolidated Persons or to Investments in Unrestricted Subsidiaries to the extent that cash dividends or distributions have not actually been received by the Consolidated Parties and (ii) the portion of net loss of the Consolidated Parties allocable to minority interests in unconsolidated Persons or to Investments in Unrestricted Subsidiaries shall be included to the extent of the aggregate investment of the Consolidated Parties in such Person;

(d) any gain or loss realized upon the sale, abandonment or other disposition of any asset of the Consolidated Parties (including pursuant to any sale/leaseback transaction) that is not sold, abandoned or otherwise disposed of in the ordinary course of business (as determined in good faith by the Company, which determination shall be conclusive) and (y) any gain or loss realized upon the disposal, abandonment or discontinuation of operations of the Consolidated Parties;

 

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(e) the net income of any Consolidated Party to the extent that the declaration of dividends or similar distributions by that Consolidated Party of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulations applicable to that Consolidated Party or its stockholders (other than (i) restrictions that have been waived or otherwise released, (ii) restrictions pursuant to this Agreement and (iii) restrictions in effect on the Agreement Date with respect to a Consolidated Party and other restrictions with respect to such Consolidated Party that taken as a whole are not materially less favorable to the Lenders than such restrictions in effect on the Agreement Date);

(f) any gain or loss realized as a result of the cumulative effect of a change in accounting principles;

(g) the write-off of any deferred financing costs and premiums costs incurred by the Company in connection with the refinancing or repayment of any Indebtedness;

(h) any net after-tax gain (or loss) attributable to the early repurchase, extinguishment or conversion of Indebtedness, obligations under Hedge Agreements or other derivative instruments (including any premiums paid);

(i) any non-cash income (or loss) related to the recording of the fair market value of any obligations under Hedge Agreements or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of any obligations under Hedge Agreements;

(j) (i) any unrealized gains or losses in respect of any foreign exchange contract, currency swap agreement or other similar agreement with respect to currency values, and (ii) any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case of this clause (ii), in respect of any obligations under Hedge Agreements;

(k) any non-cash compensation deduction as a result of any grant of stock or stock related instruments to employees, officers, directors or members of management;

(l) any income (or loss) from discontinued operations;

(m) any unrealized foreign currency translation or transaction gains or losses in respect of Indebtedness or other obligations of any Person denominated in a currency other than the functional currency of such Person;

 

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(n) to the extent covered by insurance and actually reimbursed, or, so long as the Company has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption; provided that, to the extent included in Consolidated Net Income in a future period, reimbursements with respect to expenses excluded from the calculation of Consolidated Net Income pursuant to this clause (n) shall be excluded from Consolidated Net Income in such period up to the amount of such excluded expenses;

(o) any non-cash charge, expense or other impact attributable to application of the purchase or recapitalization method of accounting (including the total amount of depreciation and amortization, cost of sales or other non-cash expense resulting from the write-up of assets to the extent resulting from such purchase or recapitalization accounting adjustments) noncash charges for deferred tax valuation allowances and noncash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under GAAP;

(p) any goodwill or other intangible asset impairment charge;

(q) effects of fair value adjustments in the merchandise inventory, property and equipment, goodwill, intangible assets, deferred revenue, deferred rent and debt line items in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of acquisition accounting in relation to the Transactions or any consummated acquisition and the amortization or write-off or removal of revenue otherwise recognizable of any amounts thereof, net of taxes, shall be excluded or added back in the case of lost revenue;

(r) the amount of loss on sale of assets to a Subsidiary in connection with a Securitization Transaction;

(s) the amount of any restructuring charge or reserve, integration cost or other business optimization expense or cost (including charges related to the implementation of strategic or cost-savings initiatives), including any severance, retention, signing bonuses, relocation, recruiting and other employee-related costs, future lease commitments, and costs related to the opening and closure and/or consolidation of facilities and to existing lines of business; and

(t) accruals and reserves established within 12 months after the closing of any acquisition or investment required to be established as a result of such acquisition or investment in accordance with GAAP, or changes as a result of adoption or modification of accounting policies.

“Consolidated Non-cash Charges” means, for any period, the aggregate depreciation, amortization (including amortization of goodwill and other intangibles) and other non-cash expenses of the Consolidated Parties reducing Consolidated Net Income for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss).

 

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

“Consolidated Tangible Assets” means, as of any date of determination, the total assets less the sum of goodwill, net, and other intangible assets, net, in each case as reflected on the consolidated balance sheet of the Company and its Restricted Subsidiaries as at the end of the most recently completed fiscal quarter of the Company for which such a balance sheet is available, determined on a consolidated basis in accordance with GAAP (and, in the case of any determination relating to any incurrence of Indebtedness or Liens or any Investment, on a pro forma basis including any property or assets being acquired in connection therewith).

“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, 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 Term SOFR Loan or BA Equivalent Loan, as applicable, or is converted into a Daily One Month SOFR Loan.

“Control Agreement” has the meaning specified in Section 7.17(b).

“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) in or relating to copyrights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith.

“Covenant Trigger” has the meaning specified in Section 8.9.

“Covenant Trigger Date” has the meaning specified in Section 8.9.

“Covenant Trigger Period” has the meaning specified in Section 8.9.

“Credit Card Notification” has the meaning specified in Section 7.17.

“CRA” means the Canada Revenue Agency.

“Credit Facilities” means revolving credit, swingline and letter of credit facilities provided for by this Agreement (which are the Multicurrency Credit Facilities and the U.S. Credit Facilities).

“Daily One Month SOFR” means for any day a fluctuating rate per annum equal to the Term SOFR Screen Rate for a 30-day interest period determined as of two (2) U.S. Government Securities Business Days prior to such day (or if such rate is not published prior to 11:00 a.m. on the determination date, the applicable Term SOFR Screen Rate on the U.S. Government Securities Business Day immediately preceding such date), plus the SOFR Adjustment; provided, that in no event shall Daily One Month SOFR be less than zero.

 

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“Daily One Month SOFR Loan” means any U.S. Revolving Loan during any period for which it bears interest by reference to Daily One Month SOFR.

“Daily Simple SOFR” means, with respect to any applicable determination date, the secured overnight financing rate published on the FRBNY website (or any successor source satisfactory to Agent).

“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 Notice” has the meaning specified in Section 10.1(d).

“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) 2% per annum. Each Default Rate shall be adjusted simultaneously with any change in the applicable Interest Rate.

“Defaulting Lender” means any Lender that (a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or its participations in respect of Letters of Credit or Swingline Loans, within one Business Day of the date required to be funded by it hereunder, unless, with respect to the funding of any Loan, such Lender notifies the Agent and the Borrowers’ Agent in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding of such Loan has not been satisfied (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing), (b) has notified any Borrower or the Agent in writing that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after written request by the Agent or the Borrowers’ Agent, to confirm in a manner satisfactory to the Agent or the Borrowers’ Agent, as the case may be, that it will comply with its funding obligations (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such confirmation in writing by the Agent and the Borrowers’ Agent), or (d) has, or has a direct or indirect parent company that (i) has become the subject of a proceeding under any of the federal Bankruptcy Code, the BIA, the CCAA, the Winding-up and Restructuring Act (Canada), the Canada Deposit Insurance Corporation Act (Canada) or under any other state, provincial, territorial, federal or other applicable jurisdictional bankruptcy or insolvency act or law, now or hereafter existing, (ii) has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, (iii) has taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment, (iv) is being subject to a forced liquidation or any Person that directly or indirectly controls such Lender is being subject to a forced liquidation, (v) is making a general assignment for the benefit of creditors or otherwise being adjudicated as, or determined by any Governmental Authority having regulatory authority over such Lender or its assets to be, insolvent or bankrupt or subject to a resolution regime or (vi) has become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender (a) solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so

 

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long as such equity interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender, or (b) solely by virtue of a so-called undisclosed administration (being the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulatory under or based on the law in the country where such Lender or any person that directly or indirectly controls such Lender is subject to home jurisdiction supervision if applicable Law requires that such appointment is not to be publicly disclosed).

“Designated Bank Products Obligations” means all obligations and liabilities of any Borrower or any other Restricted Subsidiary in respect of Bank Products, except for any Bank Product for which the applicable Lender Counterparty and the applicable Borrower or other Restricted Subsidiary have agreed in a writing delivered to the Agent that the obligations and liabilities of the applicable Borrower or other Restricted Subsidiary under such Bank Product shall not be deemed “Designated Bank Products Obligations” for purposes of this Agreement.

“Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition as determined in good faith by the Company.

“Designation Date” has the meaning specified in Section 2.6(f).

“Dilution” means, as of any date of determination, a percentage concerning dilution of Accounts of the Secured Obligors as set forth in the most recent field examination with respect to Eligible Accounts included in the U.S. Borrowing Base or the Canadian Borrowing Base, in each case without duplication of any exclusion from the definition of “Eligible Accounts,” during the 12 month period covered by such report.

“Dilution Reserve” means, as of any date of determination, an amount equal to (a) if Dilution is less than or equal to five percent (5%), $0, and (b) if Dilution is greater than five percent (5%), an amount sufficient to reduce the advance rate against Eligible Accounts set forth in the definition of U.S. Borrowing Base or Canadian Borrowing Base, as applicable, by one percentage point (1.00%) for each percentage point by which Dilution is in excess of five percent (5%).

“Disqualified Lender” means (a) any competitor of the Company or any of its Subsidiaries, identified in writing by the Borrowers’ Agent to the Agent from time to time, (b) such other Persons identified in writing by the Borrowers’ Agent to the Agent on or prior to the Agreement Date and (c) in the case of any Person under clauses (a) and (b), any of its Affiliates (other than any bona fide debt funds) that are either (i) readily identifiable solely on the basis of name or (ii) identified in writing to the Agent by the Borrowers’ Agent from time to time. The Agent shall provide a current list of Disqualified Lenders under clauses (a) and (b) and, to the extent identified in writing to the Agent by the Borrowers’ Agent, clause (c) to any Lender (other than a Disqualified Lender) upon written request for such list from such Lender.

 

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“Disqualified Stock” means that portion of any Capital Stock (other than Management 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 or as a result of a sale of assets), 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 or as a result of a sale of assets) on or prior to the six-month anniversary of the latest maturity date with respect to any of the Obligations then applicable hereunder at the date of issuance of such Disqualified Stock.

“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 any such dividend or other distribution 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 direct or indirect redemption or other acquisition by any 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, other than any such redemption or other acquisition 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.

“Divided LLC” means any limited liability company which was formed upon, or is a party to and continues in existence after giving effect to, the consummation of an LLC Division.

“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 respective Subsidiaries.

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

“Domestic Subsidiary” means any Subsidiary of the Company other than a Foreign Subsidiary.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

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“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“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, that extends credit or buys commercial loans in the ordinary course of business; (b) any Lender listed on the signature page of this Agreement; (c) any Affiliate or branch 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, (ii) with respect to any Commitments or Loans, the Company or any Borrower or any Affiliate thereof, (iii) any Disqualified Lender (other than any Disqualified Lender otherwise agreed to by the Borrowers’ Agent in a writing delivered to the Agent), or (iv) any Defaulting Lender.

“Eligible Accounts” means Accounts that comply in all material respects with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. In determining the amount to be included, Eligible Accounts shall be calculated net of related customer deposits (or any other customer deposit that such customer may set-off or apply against such Account) and related unapplied cash. Eligible Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 120 days of original invoice date; provided that notwithstanding the foregoing, up to $25,000,000 of Accounts on extended terms shall not be deemed ineligible under this clause so long as the Account Debtor has not failed to pay within 150 days of the original invoice date;

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of the total amount of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above;

(c) Accounts with respect to which the Account Debtor is (i) an Affiliate of any Obligor or (ii) an employee or agent of any Obligor or any Affiliate of such Obligor;

(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional (other than, for the avoidance of doubt, a rental or lease basis);

(e) Accounts that are not payable in Dollars; provided that Eligible Canadian Accounts may be payable in Canadian Dollars;

(f) Accounts with respect to which the Account Debtor is a Person other than a Governmental Authority unless: (i) the Account Debtor (A) is a natural person with a billing address in the United States or Canada, (B) maintains its Chief Executive Office in the United States or Canada, or (C) is organized under the laws of the United States, Canada or any state, territory, province or subdivision thereof; or (ii) (A) the Account is supported by an irrevocable letter of credit satisfactory to the Agent, in its Reasonable Credit Judgment (as to form, substance, and issuer or domestic confirming bank), that has been delivered to the Agent and is directly drawable by the Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Agent, in its Reasonable Credit Judgment;

 

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(g) Accounts with respect to which to the knowledge of the Company the Account Debtor is the government of any country or sovereign state (other than the United States and Canada), or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (i) the Account is supported by an irrevocable letter of credit satisfactory to the Agent in its Reasonable Credit Judgment (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Agent and is directly drawable by the Agent, or (ii) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to the Agent in its Reasonable Credit Judgment;

(h) Accounts with respect to which to the knowledge of the Company the Account Debtor is (i) the federal government of Canada or any department, agency or instrumentality of Canada or (ii) the federal government of the United States or any department, agency or instrumentality of the United States (exclusive, however, of Accounts with respect to which the applicable Obligor has complied, to the reasonable satisfaction of the Agent, in the case of clause (i) with the Financial Administration Act (Canada), and, in the case of clause (ii), the Assignment of Claims Act of 1940 (31 USC Section 3727));

(i) (i) Accounts with respect to which the Account Debtor is a creditor of any Obligor or any Subsidiary of an Obligor, has or has asserted a right of setoff with respect to, or has disputed its obligation to, pay all or any portion of such Accounts, to the extent of such claim, right of setoff, or dispute and (ii) Accounts which are subject to a rebate that has been earned but not taken or a chargeback, to the extent of such rebate or chargeback;

(j) Accounts with respect to an Account Debtor whose total obligations owing to Borrowers exceed 15% of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage; provided that in each case, the amount of Eligible Accounts that are excluded because they exceed the foregoing percentage shall be determined by the Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limit;

(k) Accounts with respect to which the Account Debtor is not Solvent, is subject to a proceeding related thereto, has gone out of business, or as to which an Obligor has received notice of an imminent proceeding related to such Account Debtor being or alleged to not be Solvent or which proceeding is reasonably likely to result in a material impairment of the financial condition of such Account Debtor unless (x) such Account is supported by an irrevocable letter of credit satisfactory to the Agent in its Reasonable Credit Judgment (as to form, substance, and issuer or domestic confirming bank) that has been delivered to the Agent and is directly drawable by the Agent or (y) such Account Debtor has received debtor-in-possession financing sufficient as determined by the Agent in its Reasonable Credit Judgment to finance its ongoing business activities and, solely with respect to Accounts that constitute prepetition claims, the Company or other Obligor is designated as a “critical vendor” of the Account Debtor;

 

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(l) Accounts with respect to which the Account Debtor is located in a state, province or jurisdiction that requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless the applicable Obligor has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges). The foregoing shall not apply to the extent that the applicable Obligor may qualify subsequently as a foreign entity authorized to transact business in such state, province or jurisdiction and gain access to such courts, without incurring any cost or penalty viewed by the Agent, in its Reasonable Credit Judgment, to be material in amount, and such later qualification cures any access to such courts to enforce payment of such Account (including, for greater certainty, the requirement for a creditor to extra-provincially register in a province or territory of Canada for such purposes);

(m) Accounts, the collection of which the Agent, in its Reasonable Credit Judgment, believe to be doubtful by reason of the Account Debtor’s financial condition, upon notice thereof to the Company;

(n) Accounts that are not subject to a valid and perfected first priority Lien in favor of the Agent pursuant to a Security Document (as and to the extent provided therein) (it being agreed that in no event shall any Excluded Assets be deemed to be Eligible Accounts hereunder);

(o) Accounts that have not been billed to the Account Debtor; or

(p) Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Obligor of the subject contract for goods or services.

“Eligible Canadian Accounts” means the Eligible Accounts owned by the Canadian Obligors.

“Eligible Canadian Rental Equipment” means the Eligible Rental Equipment owned by the Canadian Obligors.

“Eligible Canadian Service Vehicles” means the Eligible Service Vehicles owned by the Canadian Obligors.

“Eligible Canadian Spare Parts and Merchandise” means the Eligible Spare Parts and Merchandise owned by the Canadian Obligors.

“Eligible Rental Equipment” means (x) Rental Equipment of the Obligors or (y) equipment of the Obligors available for sale, in each case that complies in all material respects with each of the representations and warranties respecting Eligible Rental Equipment made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. An item of Rental Equipment shall not be included in Eligible Rental Equipment if:

 

 

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(a) an Obligor does not have good and valid title thereto;

(b) it is not located in the United States or Canada;

(c) it is not subject to a valid and perfected first priority Lien in favor of the Agent pursuant to a Security Document (as and to the extent provided therein (it being agreed that in no event shall any Excluded Assets be deemed to be Eligible Rental Equipment hereunder)); provided that this clause (c) will not apply to Rental Equipment represented by a certificate of title or subject to the parenthetical at the end of clause (f) (such Rental Equipment being subject to clause (f) below);

(d) it consists of Spare Parts and Merchandise or Service Vehicles;

(e) it is reflected on the books and records of the Company and its Subsidiaries maintained in accordance with GAAP and consistently with the Company’s and its Subsidiaries’ then current practices as, or has been written off as, or is determined in the most recent appraisal to be, both (i) damaged or defective and (ii) not repairable; provided that (A) any item of Rental Equipment that is damaged or defective and repairable will not be Eligible Rental Equipment if the repair cost estimated by Company is greater than $1,000.00 (or such greater amount as determined by the Agent in its sole discretion) or the repair cost estimated by the Company is equal to or exceeds the Net Book Value thereof, (B) the amount included in the Borrowing Base for Eligible Rental Equipment that is damaged or defective and repairable shall be reduced by the aggregated estimated repair cost of all damaged or defective Eligible Rental Equipment that is included in the Borrowing Base as a result of satisfying these criteria and (C) the aggregate amount included in the Borrowing Base attributable to such damaged or defective and repairable Eligible Rental Equipment will not exceed 5% of the portion of the Borrowing Base based on Eligible Rental Equipment (calculated without including any portion of the damaged or defective and repairable Rental Equipment for this purpose); or

(f) it is U.S. Rental Equipment represented by a certificate of title unless for all periods after the 150-day period following the Closing Date (or such later date as shall be agreed to by the Agent in its sole discretion), an Obligor has caused the certificate of title for such Rental Equipment to be registered with the applicable Governmental Authority showing “Wilmington Trust, National Association, as Agent” (or a successor Agent in such capacity, or a trustee or agent reasonably acceptable to the Agent) as the lienholder thereon, such that such Rental Equipment is subject to a valid and perfected first priority Lien in favor of the Agent (or such certificate of title or the requisite application therefor has been submitted to the applicable Governmental Authority for such registration or for issuance of such certificate of title as so registered); provided for the avoidance of doubt that on or prior to the 150-day period following the Closing Date (or such later date as shall be agreed to by the Agent in its sole discretion), Rental Equipment shall be included in Eligible Rental Equipment notwithstanding this clause (f), and the eligibility criteria specified in this clause (f) shall not apply during such period.

 

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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. Notwithstanding the foregoing, the Agent may, from time to time, in the exercise of its Reasonable Credit Judgment, on not less than 10 Business Days’ prior notice to the Borrowers’ Agent, change the criteria for Eligible Rental Equipment as reflected on the Borrowing Base Certificate based on either (i) an event, condition or other circumstance arising after the Closing Date or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Rental Equipment in any material respect as determined by the Agent in the exercise of its Reasonable Credit Judgment. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Agent shall be available to discuss the proposed change, and the applicable Obligor may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Agent in the exercise of its Reasonable Credit Judgment.

“Eligible Service Vehicles” means Service Vehicles of the Obligors that comply in all material respects with each of the representations and warranties respecting Eligible Service Vehicles made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below. A Service Vehicle shall not be included in Eligible Service Vehicles if:

(a) an Obligor does not have good and valid title thereto;

(b) it is not located in the United States or Canada;

(c) it is not subject to a valid and perfected first priority Lien in favor of the Agent pursuant to a Security Document (as and to the extent provided therein); provided that this clause (c) will not apply to Service Vehicles represented by a certificate of title or subject to the parenthetical at the end of clause (f) (such Service Vehicle being subject to clause (f) below); provided, further, that with respect to Service Vehicles of any Canadian Obligor, this clause (c) will not apply if it is necessary to enhance perfection of the Agent’s Lien on such Vehicles by describing the vehicle identification number so long as there is no competing PPSA registration that does so;

(d) it is reflected on the books and records of the Company and its Subsidiaries maintained in accordance with GAAP and consistently with the Company’s and its Subsidiaries’ then current practices as, or has been written off as, or is determined in the most recent appraisal to be, both (i) damaged or defective and (ii) not repairable; provided that (A) any Service Vehicle that is damaged or defective and repairable will not be an Eligible Service Vehicle if the repair cost estimated by Company is greater than $1,000.00 (or such greater amount as determined by the Agent in its sole discretion) or the repair cost estimated by the Company is equal to or exceeds the Net Book Value thereof, (B) the amount included in the Borrowing Base for Eligible Service Vehicles that are damaged or defective and repairable shall be reduced by the aggregated estimated repair cost of all damaged or defective Eligible Service Vehicles that are included in the Borrowing Base as a result of satisfying these criteria and (C) the aggregate amount included in the Borrowing Base attributable to such damaged or defective and repairable Eligible Service Vehicles will not exceed 5% of the portion of the Borrowing Base based on Eligible Service Vehicles (calculated without including any portion of the damaged or defective and repairable Service Vehicle for this purpose);

 

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(e) it is not reflected in the records of an Obligor regularly maintained for recording the existence of Service Vehicles; or

(f) it is a Service Vehicle owned by a U.S. Obligor represented by a certificate of title unless for all periods after the 150-day period following the Closing Date (or such later date as shall be agreed to by the Agent in its sole discretion), an Obligor has caused the certificate of title for such Service Vehicle to be registered with the applicable Governmental Authority showing “Wilmington Trust, National Association, as Agent” (or a successor Agent in such capacity, or a trustee or agent reasonably acceptable to the Agent) as the lienholder thereon, such that such Service Vehicle is subject to a valid and perfected first priority Lien in favor of the Agent (or such certificate of title or the requisite application therefor has been submitted to the applicable Governmental Authority for such registration or for issuance of such certificate of title as so registered); provided, for the avoidance of doubt, that on or prior to the 150-day period following the Closing Date (or such later date as shall be agreed to by the Agent in its sole discretion), Service Vehicles shall be included in Eligible Service Vehicles notwithstanding this clause (f), and the eligibility criteria specified in this clause (f) shall not apply during such period.

If any Service Vehicle at any time ceases to be Eligible Service Vehicle, such Service Vehicle shall promptly be excluded from the calculation of Eligible Service Vehicles. Notwithstanding the foregoing, the Agent may, from time to time, in the exercise of its Reasonable Credit Judgment, on not less than 10 Business Days’ prior notice to the Borrowers’ Agent, change the criteria for Eligible Service Vehicle as reflected on the Borrowing Base Certificate based on either (i) an event, condition or other circumstance arising after the Closing Date or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Eligible Service Vehicles in any material respect as determined by the Agent in the exercise of its Reasonable Credit Judgment. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Agent shall be available to discuss the proposed change, and the applicable Obligor may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Agent in the exercise of its Reasonable Credit Judgment.

“Eligible Spare Parts and Merchandise” means Spare Parts and Merchandise of the Obligors that comply in all material respects with each of the representations and warranties respecting Eligible Spare Parts and Merchandise made in the Loan Documents and that are not excluded as ineligible by virtue of one or more of the excluding criteria below. Any piece of Spare Parts and Merchandise shall not be included in Eligible Spare Parts and Merchandise if:

 

 

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(a) an Obligor does not have good and valid title thereto;

(b) it is not located within the United States or Canada;

(c) it is reflected on the books and records of the Company and its Subsidiaries maintained in accordance with GAAP and consistently with the Company’s and its Subsidiaries’ then current practices as, or has been written off as, damaged or defective and not repairable;

(d) it is not reflected in the records of an Obligor regularly maintained for recording the existence of Spare Parts and Merchandise; or

(e) it is not subject to a valid and perfected first priority Lien in favor of the Agent, as applicable, pursuant to a Security Document (as and to the extent provided therein).

If any Spare Parts and Merchandise at any time ceases to be Eligible Spare Parts and Merchandise, such Spare Parts and Merchandise shall promptly be excluded from the calculation of Eligible Spare Parts and Merchandise. Notwithstanding the foregoing, the Agent may, from time to time, in the exercise of its Reasonable Credit Judgment, on not less than 10 Business Days’ prior notice to the Borrowers’ Agent, change the criteria for Eligible Spare Parts and Merchandise as reflected on the Borrowing Base Certificate based on either (i) an event, condition or other circumstance arising after the Closing Date or (ii) an event, condition or other circumstance existing on the Closing Date to the extent the Agent had no knowledge thereof on or prior to the Closing Date, in either case under clause (i) or (ii), which adversely affects, or would reasonably be expected to adversely affect, Spare Parts and Merchandise in any material respect as determined by the Agent in the exercise of its Reasonable Credit Judgment. Any such change in criteria shall have a reasonable relationship to the event, condition or other circumstance that is the basis for such change. Upon delivery of the notice of such change pursuant to the foregoing sentence, the Agent shall be available to discuss the proposed change, and the applicable Obligor may take such action as may be required so that the event, condition or circumstance that is the basis for such change no longer exists, in a manner and to the extent reasonably satisfactory to the Agent in the exercise of its Reasonable Credit Judgment.

“Eligible Unbilled Accounts” means Accounts (which are Eligible Accounts except for their failure to comply with clause (o) of the definition of “Eligible Accounts”) (a) which have not been billed but for which services have been rendered, (b) which have not been billed solely because either (i) the services were rendered pursuant to a customer agreement which provides for monthly billing at a date other than month-end, or (ii) the services were rendered pursuant to a customer agreement which provides for billing at the completion of the rental term, and such rental term has not yet ended, and (c) which shall be billed not more than 30 days after such Account is first included on the Borrowing Base Certificate or otherwise reported to the Agent as Collateral.

“Eligible Unbilled Canadian Accounts” means the Eligible Unbilled Accounts owned by the Canadian Obligors.

“Eligible Unbilled U.S. Accounts” means the Eligible Unbilled Accounts owned by the U.S. Obligors.

 

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“Eligible U.S. Accounts” means the Eligible Accounts owned by the U.S. Obligors.

“Eligible U.S. Rental Equipment” means the Eligible Rental Equipment owned by the U.S. Obligors.

“Eligible U.S. Service Vehicles” means the Eligible Service Vehicles owned by the U.S. Obligors.

“Eligible U.S. Spare Parts and Merchandise” means the Eligible Spare Parts and Merchandise owned by the U.S. Obligors.

“Employee Matters Agreement” means the Employee Matters Agreement, dated as of June 30, 2016, by and between Hertz Global Holdings, Inc. and the Company.

“Environmental Laws” means all applicable federal, state, provincial or local or foreign 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 (i) environmental matters (including Releases of Contaminants) or (ii) to the extent relating to exposure to Contaminants, health matters.

“Equipment” means all of each Obligor’s and each of its Subsidiary’s now owned or 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 its Subsidiary’s rights and interests with respect thereto under such leases (including 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.

“Equipment Securitization Transaction” means any sale, assignment, pledge or other transfer (a) by the Company or any Subsidiary of the Company of rental fleet equipment, (b) by any ES Special Purpose Vehicle of leases or rental agreements between the Company and/or any Subsidiary of the Company, as lessee, on the one hand, and such ES Special Purpose Vehicle, as lessor, on the other hand, relating to such rental fleet equipment and lease receivables arising under such leases and rental agreements and (c) by the Company or any Subsidiary of the Company of any interest in any of the foregoing, together in each case with (i) any and all proceeds thereof (including all collections relating thereto, all payments and other rights under insurance policies or warranties relating thereto, all disposition proceeds received upon a sale thereof, and all rights under manufacturers’ repurchase programs or guaranteed depreciation programs relating thereto), (ii) any collection or deposit account relating thereto and (iii) any collateral, guarantees, credit enhancement or other property or claims supporting or securing payment on, or otherwise relating to, any such leases, rental agreements or lease receivables; provided that notwithstanding anything to the contrary contained in this Agreement, (A) the

 

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aggregate amount of the book value (or in the case of Rental Equipment, Service Vehicles or Spare Parts and Merchandise, Net Book Value) of all such properties or assets of any Obligor sold, assigned, pledged or otherwise transferred pursuant to such arrangements shall not exceed $510,000,000 in the aggregate during the term of this Agreement and (B) the properties or assets transferred in connection with any Equipment Securitization Transaction shall consist of the types described in this definition.

“Equivalent Amount” means, on any date, the amount of Dollars into which an amount of Cdn. Dollars or any other Alternative Currency, as applicable, may be converted or the amount of Cdn. Dollars or any other Alternative Currency, as applicable, into which an amount of Dollars may be converted, in any case, (a) at the exchange rate reported by Bloomberg (or other commercially available source designated by the Agent from time to time) as of approximately 12:00 noon, New York City time, or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding business day in the Agent’s principal foreign exchange trading office for the first currency, on such date, in each case rounded to the nearest unit of the applicable currency, with 0.5 of a unit being rounded upward.

“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) 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; (c) the filing pursuant to 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; (d) 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); (e) 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; (f) a complete or partial withdrawal by any Borrower or ERISA Affiliate from a Multi-employer Plan; (g) 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; (h) 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; (i) the Borrowers or any of their Subsidiaries engaging in a non-exempt “prohibited transaction” with respect to which any Borrower or any of its Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code), or with respect to which such Borrower or any such Subsidiary could otherwise be liable; or (j) the imposition of any material 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.

 

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“ESG” has the meaning specified in Section 2.10.

“ESG Amendment” has the meaning specified in Section 2.10.

“ESG Pricing Provisions” has the meaning specified in Section 2.10.

“ES Special Purpose Vehicle” means a trust, bankruptcy remote entity or other special purpose entity which is a Subsidiary of the Company (or, if not a Subsidiary of the Company, the common equity of which is wholly owned, directly or indirectly, by the Company) and which is formed for the purpose of, and engages in no material business other than, acting as a lessor, issuer or depositor in an Equipment Securitization Transaction (and, in connection therewith, owning the rental fleet equipment, leases, rental agreements, lease receivables, rights to payment and other interests, rights and assets described in the definition of “Equipment Securitization Transaction”, and pledging or transferring any of the foregoing or interests therein).

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“EU Insolvency Regulation” means the Council of the European Union Regulation 2015/848 on insolvency proceedings.

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

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

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

“Excluded Account” means any deposit account of an Obligor that is an Excluded Asset as defined in Section 3.3 of the U.S. GCA.

“Excluded Subsidiary” means any (a) Subsidiary of a Foreign Subsidiary other than any Canadian or Domestic Subsidiary of a Canadian Subsidiary, (b) Unrestricted Subsidiary, (c) Immaterial Subsidiary, (d) Domestic Subsidiary or Canadian Subsidiary that, at the time such Subsidiary becomes a Restricted Subsidiary (and for so long as such restriction or any replacement or renewal thereof is in effect), is prohibited by any applicable contractual obligation or Requirement of Law from guaranteeing or granting Liens to secure the Obligations hereunder or if guaranteeing or granting Liens to secure the Obligations hereunder would require governmental (including regulatory) consent, approval, license or authorization unless such consent, approval, license or authorization has been received, (e) joint venture or Subsidiary that is not a Wholly Owned Subsidiary (it being agreed that it shall be a condition for any such Subsidiary that was a Wholly Owned Subsidiary to become an Excluded Subsidiary that either (i) at the time it became a non-Wholly Owned Subsidiary none of its assets comprised part of the

 

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Borrowing Base or (ii) at the time it becomes (after giving effect to it becoming) an Excluded Subsidiary no Out-of-Formula Condition would exist), (f) Subsidiary formed solely for the purpose of merging or amalgamating with another Person in connection with a Permitted Acquisition or other Permitted Investment by the Company or another Obligor, or (g) Domestic Subsidiary or Canadian Subsidiary with respect to which, in the reasonable judgment of the Agent (or, in the case of adverse tax consequences, the Borrowers’ Agent) (confirmed in writing by notice to the Borrowers’ Agent or the Agent, as applicable), the cost or other consequences (including any adverse tax consequences) of providing a Guarantee of the Obligations hereunder shall be excessive in view of the benefits to be obtained by the Lenders therefrom; provided that any Subsidiary that fails to meet the requirement in clause (c) as of the last day of the most recent four consecutive Fiscal Quarters for which consolidated financial statements of the Consolidated Parties are available shall continue to be deemed an Excluded Subsidiary hereunder until the date that is 60 days following the date on which such financial statements were required to be delivered pursuant to Section 7.2 with respect to such period; provided, further, that in no event shall the Company be an Excluded Subsidiary.

“Excluded Swap Obligation” means, with respect to any Guarantor (in its capacity as a guarantor), any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to any keepwell, support or other agreement for the benefit of such Guarantor) at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under an agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“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, such Lender’s or such recipient’s overall net income or capital 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 such 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, (c) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes that are Other Connection Taxes, (d) any U.S. federal withholding Tax that is imposed on amounts payable to or for the account of a Lender, in each case, with respect to an applicable interest in an Obligation pursuant to a law in effect on the date on which (i) such Lender becomes a party hereto (other than pursuant to any assignment request by the Borrowers under Section 5.10 or Section 12.1(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.1, amounts with respect to such Taxes were payable either to such

 

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Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office (and in each case assuming the completion of any necessary procedural formalities), (e) any withholding Tax that is attributable to a Lender’s failure to comply with Section 5.1(f), (f) any withholding Tax payable under Part XIII of the Income Tax Act (Canada) that is imposed on amounts payable to or for the account of a Lender as a consequence of the Lender (i) not dealing at arm’s length (within the meaning of the Income Tax Act (Canada)) with the payer at the time of such payment, or (ii) any withholding Tax payable under Part XIII of the Income Tax Act (Canada) that is imposed on amounts payable to or for the account of a Lender as a consequence of the Lender being, at any time, a “specified non-resident shareholder” (within the meaning of sub-section 18(5) of the Income Tax Act (Canada)) of any Canadian Borrower, or, at any time, not dealing at arm’s length (within the meaning of the Income Tax Act (Canada)) with a “specified shareholder” (within the meaning of sub-Section 18(5) of the Income Tax Act (Canada)) of any Canadian Borrower, except in the case of (i) or (ii) above, where the non-arm’s length relationship arises, or where the Lender is (or is deemed to be) a “specified shareholder”, in each case, on account of the Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or enforced this Agreement or any other Loan Document, and (g) any withholding Taxes imposed under FATCA.

“Existing Citibank Loan Agreement” has the meaning specified in the recitals to this Agreement.

“Existing Commitment” has the meaning specified in Section 2.6(a).

“Existing Credit Agreement” means this Agreement as in effect immediately prior to the effectiveness of Amendment No. 1.

“Existing Lender” has the meaning specified in Section 1.10(c).

“Existing Lender Assignment” has the meaning specified in Section 1.10(c).

“Existing Loans” has the meaning specified in Section 2.6(a).

“Existing Securitization Facility” means the receivables facility established pursuant to the Purchase and Contribution Agreement, dated as of September 17, 2018, among Herc Rentals Inc., as seller and collection agent, Cinelease, Inc., as seller, and Herc Receivables U.S. LLC, as purchaser, and the Receivables Financing Agreement, dated as of September 17, 2018, among Herc Receivables U.S. LLC, the Company, the lenders and managing agents from time to time party thereto and Credit Agricole Corporate and Investment Bank, as administrative agent, as amended, modified or supplemented from time to time.

“Existing Tranche” has the meaning specified in Section 2.6(a).

“Extended Commitments” has the meaning specified in Section 2.6(a).

“Extended Loans” has the meaning specified in Section 2.6(a).

“Extending Lender” has the meaning specified in Section 2.6(b).

 

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“Extension Amendment” has the meaning specified in Section 2.6(c).

“Extension Date” has the meaning specified in Section 2.6(d).

“Extension Election” has the meaning specified in Section 2.6(b).

“Extension Request” has the meaning specified in Section 2.6(a).

“Fair Market Value” means, with respect to any asset, the fair market value of such asset as determined by the board of directors (or the equivalent governing body) of the Company in good faith, whose determination shall be conclusive and, in the case of assets with a Fair Market Value in excess of $500,000,000, evidenced by a resolution of the board of directors of the Company.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version if substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

“FCPA” means the Foreign Corrupt Practices Act of 1977.

“Federal Funds Rate” means, for any day, the rate per annum equal to (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System on such day (or on the preceding Business Day, if such day is not a Business Day), as published by FRBNY on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded upward to the next 1/100th of 1%) 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. and/or an Arranger, the Company and/or any Borrower, with respect to the payment of certain fees in connection with this Agreement.

“Finance Lease” means, as applied to any Person, any lease of any property (whether real, personal or mixed) by such Person as lessee that, in conformity with GAAP (but subject to Section 1.2(c)), is or should be accounted for as a finance lease on the balance sheet of that Person.

“Finance Lease Obligation” means, with respect to any Finance 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 Finance Lease; provided, that the amount of obligations attributable to any Finance Lease shall exclude any capitalized operating lease liabilities resulting from the adoption of ASC 842, Leases.

 

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“Financial Statements” means, according to the context in which it is used, the financial statements referred to in Sections 6.5 and 7.2.

“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 the Company’s, each Borrower’s, each Guarantor’s and their Subsidiaries’ fiscal year for financial accounting purposes. As of the Agreement Date, the current Fiscal Year of the Company, the other Obligors and their Subsidiaries will end on December 31, 2019.

“Fixed Charge Coverage Ratio” means the ratio of:

(a) (i) Consolidated EBITDA for the most recent period of four consecutive Fiscal Quarters for which financial information in respect thereof is available minus (ii) the unfinanced portion of all Capital Expenditures (excluding any Capital Expenditure made in an amount equal to all or part of the cash proceeds, of (x) any casualty insurance, condemnation or eminent domain or (y) any sale of assets of the Company and its Restricted Subsidiaries (other than to the Company or any of its Restricted Subsidiaries) during such period); to

(b) the sum, without duplication, of (i) Consolidated Interest Expense for such period paid or payable in cash (other than (w) fees and expenses associated with entering into this Agreement and the other Transactions and any agency fees, (x) costs associated with obtaining, or breakage costs in respect of, Hedge Agreements, (y) fees and expenses associated with any Permitted Acquisitions, Permitted Investments, mergers, consolidations or amalgamations, the issuance of Capital Stock or the incurrence of Indebtedness, in each case permitted under this Agreement (in each case, whether or not the applicable Permitted Acquisition, Permitted Investment, merger, consolidation, amalgamation, issuance of Capital Stock or incurrence of Indebtedness is consummated) and (z) amortization of deferred financing costs), net of interest income, plus (ii) the aggregate amount of Federal, state, local and foreign income, capital or profits taxes, including foreign withholding taxes, expensed during such period to the extent paid in cash (net of refunds received during such period), in each case, of or by the Company and its Subsidiaries for such period including any cash Distribution made to the Company to permit the Company to pay such taxes, plus (iii) the aggregate principal amount of all regularly scheduled principal or amortization payments on Indebtedness for borrowed money of the Company and its Subsidiaries for such period paid or payable in cash (other than prepaid amounts, payments due at maturity, payment in respect of intercompany debt or any payments with respect thereto paid in cash from the proceeds of any refinancing thereof), plus (iv) the aggregate amount of scheduled mandatory payments on account of Disqualified Stock of the Company and its Restricted Subsidiaries (other than any Special Purpose Vehicle) (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made during such period, in each case determined on a consolidated basis in accordance with GAAP.

 

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“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary of the Company that is formed under the laws of a jurisdiction other than a State of the United States or the District of Columbia. For the avoidance of doubt, any Subsidiary of the Company which is organized and existing under the Laws of Puerto Rico or any other territory of the United States of America shall be a Foreign Subsidiary.

“Foreign Subsidiary Holding Company” means any Domestic Subsidiary the primary assets of which consist of Capital Stock in (a) one or more Foreign Subsidiaries or (b) one or more Foreign Subsidiary Holding Companies.

“Franchise Equipment” means (a) any Franchise Vehicles and (b) any equipment owned by or leased to any Franchisee that is revenue earning equipment, or is of a type that would be classified as “revenue earning equipment” in the consolidated financial statements of the Company, including any such equipment consisting of (i) construction, industrial, commercial and office equipment, (ii) earthmoving, material handling, compaction, aerial and electrical equipment, (iii) air compressors, pumps and small tools and (iv) other personal property.

“Franchise Equipment Indebtedness” means as of any date of determination (a) Indebtedness of any Franchise Special Purpose Entity directly or indirectly incurred to finance or refinance the acquisition of, or secured by, Franchise Equipment and/or related rights and/or assets, (b) Indebtedness of any Franchisee or any Affiliate thereof that is attributable to the financing or refinancing of Franchise Equipment and/or related rights and/or assets, as determined in good faith by the Company and (c) Indebtedness of any Franchisee.

“Franchise Financing Disposition” means any sale, transfer, conveyance or other disposition of, or creation or incurrence of any Lien on, property or assets by the Company or any Subsidiary thereof to or in favor of any Franchise Special Purpose Entity, in connection with the incurrence by a Franchise Special Purpose Entity of Indebtedness, or obligations to make payments to the obligor on Indebtedness, which may be secured by a Lien in respect of such property or assets.

“Franchise Lease Obligation” means any Finance Lease, and any other lease, of any Franchisee relating to any property used, occupied or held for use or occupation by any Franchisee in connection with any of its Franchise Equipment operations.

“Franchise Special Purpose Entity” means any Person (a) that is engaged in the business of (i) acquiring, selling, collecting, financing or refinancing accounts receivable, accounts (as defined in the UCC, PPSA, or similar law, as in effect in any jurisdiction from time to time), other accounts and/or other receivables, and/or related assets, and/or (ii) acquiring, selling, leasing, financing or refinancing Franchise Equipment, and/or related rights (including under leases, manufacturer warranties and buy-back programs, and insurance policies) and/or assets (including managing, exercising and disposing of any such rights and/or assets) and (b) is designated in writing to Agent as a “Franchise Special Purpose Entity” by the Company.

 

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“Franchise Vehicles” means vehicles owned or operated by, or leased or rented to or by, any Franchisee, including automobiles, trucks, tractors, trailers, vans, sport utility vehicles, buses, campers, motor homes, motorcycles and other motor vehicles.

“Franchisee” means any Person that is a franchisee or licensee of the Company or any of its Subsidiaries (or of any other Franchisee), or any Affiliate of such Person.

“FRBNY” means the Federal Reserve Bank of New York.

“FSRA” means the Financial Services Regulatory Authority of Ontario or any other Governmental Authority of another jurisdiction in Canada exercising similar functions in respect of any Canadian Pension Plans of a Canadian Obligor.

“Full Payment” or “Full Payment of the Obligations” means (a) the payment in full in cash or immediately available funds (except for (i) contingent indemnities and cost and reimbursement obligations, in each case, to the extent no claim has been made, (ii) Obligations under Hedge Agreements that have been novated or collateralized, to the extent required by the terms thereof or as otherwise reasonably acceptable to the applicable counterparty and the Agent and (iii) Cash Management Obligations and Designated Bank Products Obligations, to the extent such Cash Management Obligations or Designated Bank Products Obligations, as the case may be, are not then due) of all Obligations then outstanding, if any, (b) with respect to Letters of Credit outstanding, delivery of cash collateral or backstop letters of credit in respect thereof in the manner and as otherwise required under Section 2.4(g) and (c) the termination or expiration of all Commitments and any Refinancing Term Commitments.

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

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or, if applicable in the case of the Canadian Subsidiaries, such generally accepted accounting principles and practices set forth from time to time in Canada by Chartered Professional Accountants of Canada) or in such other statements by such other entity as approved by a significant segment of the accounting profession, subject to Section 1.2(b).

“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, choses in action and causes of action and all other intangible personal property of each Obligor of every kind and nature (other than Accounts), including all contract rights, payment intangibles, Intellectual Property, corporate or other business records, inventions, designs, blueprints, plans, specifications, 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

 

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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 and any governmental entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, including the European Union.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.

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

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

“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 managing any Borrower’s or any other Restricted Subsidiary’s exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations or commodity prices.

“Herc Rentals” means Herc Rentals, Inc.

“Immaterial Subsidiary” means any Subsidiary of the Company that, as of the last day of the Fiscal Quarter of the Company most recently ended for which financial information in respect thereof is available, (a) did not have assets with a value in excess of 2.5% of the total assets of the Company and its Restricted Subsidiaries as at such date and (b) did not have total revenues in excess of 2.5% of the total revenues of the Company and its Restricted Subsidiaries for the four consecutive Fiscal Quarter period then ended; provided that at the time of such designation (x) the aggregate total consolidated revenues of all Immaterial Subsidiaries shall not exceed 10.0% of the total consolidated revenue of the Company and its Restricted Subsidiaries during the most recent four consecutive Fiscal Quarter period then ended and (y) the aggregate total consolidated assets of all Immaterial Subsidiaries shall not exceed 10.0% of the total

 

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consolidated assets of the Company and its Restricted Subsidiaries as of the last day of such period. Any determination of whether a Subsidiary shall cease to qualify as an Immaterial Subsidiary shall be made on the date of the delivery of the Compliance Certificate pursuant to Section 7.2(d). To the extent a Subsidiary ceases to be an Immaterial Subsidiary in connection with such determination, the Company shall have 60 days (or such longer period as shall be agreed to by the Agent in its sole discretion) from the date of delivery of such Compliance Certificate to cause such Subsidiary to comply with the requirements of Section 7.16 to the extent applicable. Each Immaterial Subsidiary as of the Closing Date is set forth in Schedule 1.3.

“Increased Amount” of any Indebtedness means any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of the Company or any other Borrower and the accretion of original issue discount or liquidation preference.

“Incremental ABL Term Loans” has the meaning specified in Section 2.5(a).

“Incremental Commitment Amendment” has the meaning specified in Section 2.5(e)(ii).

“Incremental Facility” and “Incremental Facilities” have the meanings specified in Section 2.5(a).

“Incremental Facility Increase” has the meaning specified in Section 2.5(a).

“Incremental Indebtedness” means any Indebtedness incurred by any Borrower pursuant to and in accordance with Section 2.5.

“Incremental Revolving Commitment Effective Date” has the meaning specified in Section 2.5(e)(i).

“Incremental Revolving Commitments” has the meaning specified in Section 2.5(a).

“Indebtedness” means, without duplication, (a) all 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 other 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 (the amount of such obligation being deemed to be the lesser of the value of such property (as determined in good faith by the Company) or the amount of the obligation so secured); (c) all obligations or liabilities created or arising under any Finance Lease; (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business; (e) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (f) all net obligations of such Person in respect of Hedge

 

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Agreements; and (g) all obligations and liabilities under Guarantees in respect of obligations of the type described in any of clauses (a) through (f) above.

“Indemnified Liabilities” has the meaning specified in Section 14.10.

“Indemnified Person” has the meaning specified in Section 14.10.

“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes and (b) to the extent not otherwise described in (a), Other 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” means all rights, title and interest in intellectual property and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks and IP Licenses.

“Intellectual Property Agreement” means the Intellectual Property Agreement, dated as of June 30, 2016, by and among The Hertz Corporation, Hertz Systems, Inc. and Herc Rentals.

“Intercreditor Agreement Supplement” has the meaning specified in Section 13.17(b).

“Interest Period” means, as to any Term SOFR 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 Term SOFR Loan, and ending on (i) the date one, three or six months thereafter, or (ii) any other date agreed to by all the Lenders making or holding such Loan, in each case, 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, in the case of any Interest Period of one month or longer, 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 of one month or longer pertaining to a Term SOFR 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 Maturity Date.

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

 

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“Inventory” means all of each Obligor’s and each of its Subsidiaries’ now owned or hereafter acquired Rental Equipment, Spare Parts and Merchandise 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 any of 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.

“Investment” means, with respect to any Person, (a) any loan or other extension of credit (including a guarantee) or capital contribution to any other Person (by means of any transfer of cash or other property or any payment for property or services for consideration of Indebtedness or Capital Stock of any other Person), other than in connection with leases of Equipment or leases or sales of Inventory on credit in the ordinary course of business or (b) any purchase or acquisition by such Person of Capital Stock, bonds, notes, debentures or other securities or evidences of indebtedness issued by any other Person, excluding the acquisition of inventory, supplies, equipment and other assets used or consumed in the ordinary course of business of such Person and Capital Expenditures. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced (at the Company’s option) by any dividend, distribution, interest payment, return of capital, repayment or other amount or value received in respect of such Investment.

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or, in the case of short-term obligations, P-3) (or the equivalent) by Moody’s and BBB- (or, in the case of short-term obligations, A-3) (or the equivalent) by S&P, or any equivalent rating by any other rating agency recognized internationally or in the United States of America.

“Investment Grade Securities” means (i) securities issued or directly and fully guaranteed or insured by the United States of America government or any agency or instrumentality thereof (other than Cash Equivalents); (ii) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among the Company and its Subsidiaries; (iii) investments in any fund that invests exclusively in investments of the type described in clauses (i) and (ii) above, which fund may also hold immaterial amounts of cash pending investment or distribution; and (iv) corresponding instruments in countries other than the United States of America customarily utilized for high quality investments.

“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.

“IP Ancillary Rights” means, with respect to any Intellectual Property, as applicable, all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties and proceeds at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right.

 

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“IP License” means all written contracts, agreements, licenses, sublicenses or other legally binding agreement (and related IP Ancillary Rights), granting any right, title or interest in or relating to any Intellectual Property.

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

“Joint Book Runner” has the meaning specified in the preamble to this Agreement.

“Joint Lead Arranger” has the meaning specified in the preamble to this Agreement.

“Junior Lien Intercreditor Agreement” means an intercreditor agreement substantially in the form of Exhibit K or otherwise in form and substance reasonably satisfactory to the Borrowers’ Agent and the Agent.

“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, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“LCA Election” has the meaning specified in Section 1.3(m)(ii).

“LCA Test Date” has the meaning specified in Section 1.3(m)(ii).

“Leases” means the written agreements between an Obligor and an Account Debtor entered into in the ordinary course of business of such Obligor 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 this Agreement and shall include (i) the Agent to the extent of any Agent Advance outstanding and the Banks to the extent of any Swingline Loan outstanding and (ii) any Affiliates or branches of Lenders who make Loans pursuant to Section 2.2(c); provided that for all purposes of voting or consenting with respect to (a) any amendment, supplementation or modification of any Loan Document, (b) any waiver of any of the requirements of any Loan Document or any Default or Event of Default and its consequences or (c) any other matter as to which a Lender may vote or consent pursuant to Section 12.1, the bank or financial institution making such election shall be deemed the “Lender” rather than such Affiliate, which shall not be entitled to so vote or consent.

“Lender Counterparty” means any Person that was the Agent, a Lender or an Affiliate of the Agent or a Lender at the time it entered into a Bank Product (or with respect to any Bank Product in effect as of the Closing Date), any Person that was the Agent, a Lender or an Affiliate of the Agent or a Lender as of the Closing Date, whether or not such Person subsequently ceases to be the Agent, a Lender or an Affiliate of the Agent or a Lender, in its capacity as a counterparty to such Bank Product.

 

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“Lender Joinder Agreement” has the meaning specified in Section 2.5(d)(i).

“Letter of Credit” and “Letters of Credit” have the meanings specified in Section 2.4(a)(i).

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

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

“Letter of Credit Subfacility” means $250,000,000.

“Lien” means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, or preference or priority or other encumbrance upon or with respect to any property of any kind. A Person shall be deemed to own subject to a Lien any property which such Person has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, finance lease or other title retention agreement.

“Like-Kind Exchange” means a substantially contemporaneous exchange or swap, including transactions covered by Section 1031 of the Code, of property or assets (“Relinquished Property”) for property or assets with comparable or greater Fair Market Value or usefulness to the business of the U.S. Borrowers and their Domestic Subsidiaries (“Replacement Property”); provided that (a) the disposition of the Relinquished Property is permitted under the terms of this Agreement, (b) the transaction is entered into 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 the Company and otherwise contains customary terms and (d) all net proceeds thereof are 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.

“Limited Condition Acquisition” means any acquisition of any assets, business or Person permitted by this Agreement, the consummation of which is not conditioned on the availability of, or on obtaining, third-party financing.

“LLC Division” means the statutory division of any limited liability company into two or more limited liability companies pursuant to Section 18-217 of the Delaware Limited Liability Company Act or a comparable statute under a different jurisdiction’s law.

“Loan Cap” means, on any date of determination, an amount equal to the lesser of (a) the Maximum Revolver Amount and (b) the Combined Borrowing Base.

 

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“Loan Documents” means this Agreement, the Guarantee Agreements, Supplemental Agreement referred to in any Guarantee Agreement, the Security Documents, the Fee Letters, any Acceptable Intercreditor Agreement or any other intercreditor agreement entered into by the Agent at any time in connection with this Agreement or any Security Document, any promissory note evidencing any Obligations, and any other agreements, instruments, and documents to which one or more Obligors is a party that, for any such other agreement, instrument or document entered into after the Closing Date, expressly states that it is to be treated as a “Loan Document” hereunder.

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

“Management Investors” means the collective reference to the officers, directors, employees and other members of the management of the Company or any of its Subsidiaries, or family members or relatives of any thereof or trusts for the benefit of any of the foregoing, or any of their heirs, executors, successors and legal representatives who at any particular date shall beneficially own or have the right to acquire, directly or indirectly, common stock of the Company.

“Management Stock” means Capital Stock of the Company (including any options, warrants or other rights in respect thereof) held by any of the Management Investors.

“Market Disruption Event” has the meaning specified in Section 5.5(b).

“Material Account” means any bank account, securities account or commodities account of any Obligor, including in any case any account into which proceeds from any Securitization Transaction (including, but not limited to, the Existing Securitization Facility) are deposited, but excluding (a) any “Collection Account” under and as defined in the documents evidencing the Existing Securitization Facility as in effect as of the Agreement Date and any similar account under any Securitization Transaction, (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 at the end of each Business Day does not exceed $10,000,000.

“Material Adverse Effect” means a material adverse effect on (a) the business or financial condition of the Company and its Restricted Subsidiaries, taken as a whole, (b) the ability of the Company, the Borrowers and the other Obligors (taken as a whole) to perform their payment obligations under this Agreement or any other Loan Document or (c) the rights and remedies of the Agent and the Lenders under this Agreement or any other Loan Document (taken as a whole).

“Material Intellectual Property” means any Intellectual Property that is material to the business of the Obligors.

“Maturity Date” means the date that is the fifth anniversary of the Amendment No. 1 Effective Date.

 

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“Maximum Multicurrency Revolver Amount” means, at any time, the aggregate Multicurrency Facility Commitments at such time, as the same may be increased from time to time in accordance with Section 2.5 or reduced from time to time in accordance with Section 4.3. As of the Amendment No. 1 Effective Date, the Maximum Multicurrency Revolver Amount is $350,000,000. Anything contained herein to the contrary notwithstanding, (a) upon termination of the Commitments, the Maximum Multicurrency Revolver Amount shall automatically be reduced to zero and (b) in no event shall the sum of the Maximum Multicurrency Revolver Amount and the Maximum U.S. Revolver Amount at any time be greater than the Revolving Credit Commitments at such time.

“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 2.5 or reduced from time to time in accordance with Section 4.3. As of the Amendment No. 1 Effective Date, the Maximum Revolver Amount is $3,500,000,000. Anything contained herein to the contrary notwithstanding, upon termination of the Commitments, the Maximum Revolver Amount shall automatically be reduced to zero.

“Maximum U.S. Revolver Amount” means, at any time, the aggregate U.S. Facility Commitments at such time, as the same may be increased from time to time in accordance with Section 2.5 or reduced from time to time in accordance with Section 4.3. As of the Amendment No. 1 Effective Date, the Maximum U.S. Revolver Amount is $3,150,000,000.    Anything contained herein to the contrary notwithstanding, (a) upon termination of the Commitments, the Maximum U.S. Revolver Amount shall automatically be reduced to zero and (b) in no event shall the sum of the Maximum U.S. Revolver Amount and the Maximum Multicurrency Revolver Amount at any time be greater than the Revolving Credit Commitments at such time.

“Minimum Extension Condition” has the meaning specified in Section 2.6(g).

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

“Multicurrency Canadian Revolving Loans” means the revolving loans made to the Canadian Borrowers pursuant to Section 2.1(b) under the Multicurrency Credit Facility, or any amendment to this Agreement entered into pursuant to Section 2.5, 2.6 or 2.7, each Agent Advance made to a Canadian Borrower and each Multicurrency Canadian Swingline Loan under the Multicurrency Credit Facilities.

“Multicurrency Canadian Swingline Loan” and “Multicurrency Canadian Swingline Loans” have the meanings specified in Section 2.3(c).

“Multicurrency Credit Facilities” means the revolving credit and swingline facilities provided for by this Agreement provided to the Canadian Borrowers and the U.S. Borrowers pursuant to Section 2 hereof.

“Multicurrency Excess Availability” means, at any time, (a) the lesser of (i) the Maximum Multicurrency Revolver Amount and (ii) the amount equal to (A) the Combined Borrowing Base, minus (B) the Aggregate U.S. Revolver Outstandings, minus (b) the Aggregate Multicurrency Revolver Outstandings, in each case at such time.

 

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“Multicurrency Facility Commitment” means, at any date for any Lender, the obligation of such Lender to make Multicurrency Revolving Loans and to purchase participations in Multicurrency Letters of Credit and Multicurrency Swingline 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 “Multicurrency Facility 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 “Multicurrency Facility Commitments” means the aggregate principal amount of the Multicurrency Facility Commitments of all Lenders. The initial aggregate amount of the Multicurrency Lenders’ Multicurrency Facility Commitments is $350,000,000.

“Multicurrency Facility Lender” means each Lender that has a Multicurrency Facility Commitment (or an Affiliate or branch of any such Person that is acting on behalf of such Person, in which case the term “Multicurrency Facility Lenders” shall include any such Affiliate or branch with respect to the Multicurrency Revolving Loans made by such Affiliate or branch) as having a Multicurrency Facility Commitment and any other Person that shall acquire a Multicurrency Facility Commitment, other than any such Person that ceases to be a Multicurrency Facility Lender pursuant to an Assignment and Acceptance.

“Multicurrency Facility Letter of Credit” has the meaning specified in Section 2.4(a). Multicurrency Facility Letters of Credit shall be denominated in Dollars or Canadian Dollars.

“Multicurrency Letter of Credit Subfacility” means $100,000,000.

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

“Multicurrency Swingline Commitment” means the commitment of the Canadian Bank to make loans to Canadian Borrowers and the commitment of the U.S. Bank to make loans to U.S. Borrowers pursuant to Section 2.3(c).

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

“Multicurrency Swingline Loan” and “Multicurrency Swingline Loans” have the meanings specified in Section 2.3(c).

“Multicurrency Swingline Sublimit” has the meaning specified in Section 2.3(c).

“Multicurrency Unused Letter of Credit Subfacility” means an amount equal to the Multicurrency Letter of Credit Subfacility minus the Equivalent Amount in Dollars of the sum of (a) the aggregate undrawn amount of all outstanding Multicurrency Facility Letters of Credit issued for the account of any Canadian Borrower or U.S. Borrower plus, without duplication, (b) the aggregate unpaid reimbursement obligations with respect to all Multicurrency Facility Letters of Credit issued for the account of any Canadian Borrower or U.S. Borrower.

 

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“Multicurrency U.S. Revolving Loans” means the revolving loans made to the U.S. Borrowers pursuant to Section 2.1(b) under the Multicurrency Credit Facility, or any amendment to this Agreement entered into pursuant to Section 2.5, 2.6 or 2.7, each Agent Advance made to a U.S. Borrower and each Multicurrency U.S. Swingline Loan under the Multicurrency Credit Facility.

“Multicurrency U.S. Swingline Loan” and “Multicurrency U.S. Swingline Loans” have the meanings specified in Section 2.3(c).

“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 years contributed to by any of the Borrowers or any ERISA Affiliate.

“Net Book Value” means, with respect to any Rental Equipment, Service Vehicles or Spare Parts and Merchandise, cost minus accumulated depreciation for such Rental Equipment, Service Vehicles or Spare Parts and Merchandise, as applicable, calculated in accordance with GAAP.

“Net Orderly Liquidation Value Percentage” means the orderly liquidation value (net of costs and expenses estimated to be incurred in connection with such liquidation) of an Obligor’s Rental Equipment or Service Vehicles that is estimated to be recoverable in an orderly liquidation of such Rental Equipment or Service Vehicles expressed as a percentage of the Net Book Value thereof, such percentage to be as determined from time to time by reference to the most recent Appraisal of Rental Equipment or Service Vehicles received by the Agent in accordance with Section 7.9(b).

“Non-Consenting Lender” has the meaning specified in Section 12.1(b).

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

“Non-Extended Commitments” has the meaning specified in Section 2.6(a).

“Non-Extended Loans” has the meaning specified in Section 2.6(a).

“Non-Extending Lender” has the meaning specified in Section 2.6(e).

“Non-Extension Notice Date” has the meaning specified in Section 2.4(b).

“Non-Recourse Indebtedness” means Indebtedness of a Person (a) as to which no Obligor provides any Guarantee 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, in each case other than Standard Securitization Undertakings.

“North American Borrowing Base” means the sum of (a) 85.0% of the book value of Inventory (excluding Equipment) of the Company and its Restricted Subsidiaries, (b) 85.0% of the book value of Accounts of the Company and its Restricted Subsidiaries, (c) 95.0% of the book value of Equipment of the Company and its Restricted Subsidiaries (or in the case of Rental

 

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Equipment, Service Vehicles or Spare Parts and Merchandise, Net Book Value thereof) and (d) cash, Cash Equivalents, Investment Grade Securities and Temporary Cash Investments of the Company and its Restricted Subsidiaries (in each case, determined as of the end of the most recently ended fiscal month of the Company for which internal consolidated financial statements of the Company are available, and, in the case of any determination relating to any incurrence of Indebtedness, on a pro forma basis including (x) any property or assets of a type described above acquired since the end of such fiscal month and (y) any property or assets of a type described above being acquired in connection therewith).

“Notice of Borrowing” has the meaning specified in Section 2.2(a).

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

“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 on any collateral as security for any of the Obligations.

“Original Currency” has the meaning specified in Section 14.20.

“Originating Lender” has the meaning specified in Section 12.2(e).

“Other Connection Taxes” means, with respect to any Agent, Lender or other such recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means any present or future stamp , court or documentary, intangible, recording, filing or similar Taxes or any other excise or property Taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Documents, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than Other Connection Taxes imposed on an assignor as a result of any assignment request by the Borrowers under Sections 5.10 or 12.1(b)).

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

“Pari Passu Debt Reserves” means all reserves with respect to (a) any outstanding Indebtedness (other than the Obligations), (b) any Incremental Indebtedness (other than increases to the Revolving Credit Commitments) or (c) any Refinancing Term Loans or Refinancing Revolving Loans, in each case in respect of Indebtedness described in clauses (a), (b), or (c), that is secured by Liens on Collateral on a basis pari passu in priority with the Agent’s Liens thereon, which reserve for any such outstanding Indebtedness shall be imposed automatically without any

 

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further action or notice by the Agent upon the incurrence of such Indebtedness (or the maximum amount that may be borrowed under commitments in respect of any such Indebtedness) and shall be in an amount equal to the unpaid principal amount of such Indebtedness (or the maximum amount that may be borrowed under commitments in respect of such Indebtedness) from time to time. For the avoidance of doubt, no Pari Passu Debt Reserves shall be established with respect to any Indebtedness incurred pursuant to Section 8.1 or secured pursuant to Section 8.2 or any Incremental Indebtedness or any Refinancing Term Loans or Refinancing Revolving Loans, in each case that is secured by Liens on Collateral solely in the event that all such Liens on the Collateral are junior in priority to the Agent’s Liens thereon.

“Pari Passu Intercreditor Agreement” means an intercreditor agreement between the Agent and one or more representatives of Persons (other than the Company or any of its Subsidiaries) benefitting from a Lien on any Collateral of a U.S. Obligor or Canadian Obligor that is intended to be pari passu to the Agent’s Lien having terms that are reasonably satisfactory to the Borrowers’ Agent and the Agent.

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

“Participant Register” has the meaning specified in Section 13.21(b).

“Patents” means all rights, title and interests (and all related IP Ancillary Rights) in or relating to letters patent and applications therefor, industrial designs and applications therefor, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of such, as applicable.

“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 reasonably acceptable to the Agent.

“Payment Conditions” means, at any time of determination with respect to any payment, event or transaction described herein as being specifically subject to satisfaction of the Payment Conditions, that (a) both before and immediately after such payment, event or transaction (including any Loans made in connection therewith), no Specified Default has occurred and is continuing and (b) either (i) Specified Availability shall be greater than 10% of the Loan Cap immediately prior to such payment, event or transaction and immediately after such payment, event or transaction (including the making of any Loans in connection therewith) and the Company and the other Obligors shall be in pro forma compliance with the covenant set forth in Section 8.9 (regardless of whether a Covenant Trigger is in effect or such covenant is otherwise effective, and measured as of the last day of the most recently ended Fiscal Quarter for which financial statements were required to be delivered in accordance with Section 7.2) or (ii) Specified Availability shall be greater than 15% of the Loan Cap immediately prior to such payment, event or transaction and immediately after such payment, event or transaction (including the making of any Loans in connection therewith).

 

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“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 Event” means solely with respect to Canadian Pension Plans (a) the filing of a notice of proposal to terminate in whole or in part a Canadian DB Pension Plan so as to result in a liability; or (b) 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 DB Pension Plan; or (c) 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 a trustee to administer any Canadian Pension 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 a “registered pension plan” under the Income Tax Act (Canada) or which is subject to 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 plan years.

“Permitted Acquisition” means the acquisition by an Obligor or a Restricted Subsidiary 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 “Acquired Business”) or the acquisition by an Obligor or a Restricted Subsidiary of all of the Capital Stock of the Acquired Business (other than directors’ qualifying shares or nominee or other similar shares required pursuant to applicable law) or the merger, amalgamation or consolidation of the Acquired Business with and into an Obligor or a Restricted Subsidiary (with such Obligor or Restricted Subsidiary, as the case may be, as the surviving Person) or an Obligor or a Restricted Subsidiary with and into the Acquired Business (to the extent permitted under Section 8.5), so long as:

(a) the assets acquired shall be used or useful in or otherwise relate to, the business or lines of business of the Borrowers and their Subsidiaries as of the Closing Date;

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

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

(d) (i) the Payment Conditions are satisfied at the time of such Permitted Acquisition (or, at the option of the Borrowers’ Agent if such Permitted Acquisition is a Limited Condition Acquisition, as of the date definitive agreements for such Limited Condition Acquisition are entered into), or (ii) the consideration for such transaction consists solely of any combination of (A) Capital Stock of the Company (other than Disqualified Stock), which is issued to any Person that is not an Obligor, (B) cash and property in an amount equal to the net

 

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proceeds from a substantially concurrent sale or issuance of Capital Stock of the Company (other than Disqualified Stock) to any Person that is not an Obligor, (C) additional cash and property (excluding cash and property covered in clause (B) above); provided that the aggregate amount of consideration paid for all such Permitted Acquisitions pursuant to this clause (C), together with the aggregate amount of all Investments made in reliance on clause (s) of the definition of the term “Permitted Investments”, the aggregate amount of all Distributions made in reliance on clause (f) of the definition of the term “Permitted Distributions”, and the aggregate amount of Permitted Payments made in reliance on Section 8.6(k), shall not exceed $600,000,000 in the aggregate during the term of this Agreement, and (D) Indebtedness (whether incurred or assumed) permitted hereunder, or (iii) such acquisition is an acquisition of businesses of Franchisees (1) that have discontinued operations or that have indicated, or that the Company shall have reasonably determined, that if an acquisition is not made it is reasonably likely to imminently discontinue operations or (2) otherwise for a cash purchase price; provided that the aggregate amount of such cash purchase price paid pursuant to this clause (2), together with cash consideration paid in respect of acquisitions under clause (1), the Fair Market Value of all properties or assets of any Obligor sold, assigned, pledged or otherwise transferred pursuant to Franchise Financing Dispositions and all Investments under clause (x) of the definition of the term “Permitted Investments” shall not exceed $120,000,000 in the aggregate during the term of this Agreement;

provided that to the extent any Permitted Acquisition or other Permitted Investment results in the acquisition by any Borrower of Accounts, Rental Equipment, Service Vehicles and/or Spare Parts and Merchandise constituting Collateral consisting either of (x) assets of a type substantially different from those in the Canadian Borrowing Base or the U.S. Borrowing Base at such time, or (y) assets of a type substantially similar to those in the Borrowing Base at such time, in the case of this clause (y) with an aggregate Net Book Value in excess of $350,000,000, then (1) the Company may request that Agent obtain an Appraisal and conduct a field examination with respect to such acquired assets at the expense of Borrowers and (2) until such Appraisal is delivered and field examination completed, or waived in writing by the Agent, the assets acquired pursuant to such acquisition shall not be included in the Borrowing Base Certificate, the Canadian Borrowing Base or the U.S. Borrowing Base (and any such Appraisal shall be disregarded for purposes of the limitation on the number of Appraisals that may be conducted at Borrowers’ expense as set forth in Section 7.9).

“Permitted Credit Facility” means one or more debt facilities or agreements, commercial paper facilities, securities purchase agreements, indentures or similar agreements, in each case, with banks or other institutional lenders or investors providing for, or acting as underwriters of, revolving loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables), notes, debentures, letters of credit or the issuance and sale of securities including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith and in each case, as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any agreements, indentures or other instruments (and related documents) governing any form of Indebtedness incurred to refinance or replace, in whole or in part, the borrowings and commitments at any time outstanding or permitted to be outstanding under such facility or agreement or successor facility or agreement whether by the same or any other lender or holder of Indebtedness or group of lenders or holders of Indebtedness and whether the same obligor or different obligors.

 

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“Permitted Distributions” means:

(a) Distributions by (i) any Subsidiary of an Obligor to such Obligor, (ii) any Subsidiary that is not an Obligor to any Subsidiary that is not an Obligor, (iii) any Subsidiary that is not an Obligor to a Subsidiary that is an Obligor, and (iv) any Subsidiary that is not a Wholly Owned Subsidiary to the holders of its Capital Stock on a pro rata basis;

(b) (i) Distributions by the Company to repurchase equity securities issued by the Company from employees, officers or directors of the Company or any Subsidiary, or the authorized representatives of any of the foregoing, upon the death, disability or termination of employment of any such employee, officer or director in an amount not to exceed $20,000,000 in the aggregate in any Fiscal Year and (ii) so long as no Default or Event of Default has occurred and is continuing, Distributions to purchase Capital Stock of the Company from employees, officers or directors of the Company or any Subsidiary in an amount not to exceed the sum of (x) $20,000,000 plus (y) $5,000,000 multiplied by the number of calendar years that have commenced since June 30, 2016;

(c) any purchase or redemption of any Capital Stock of the Company required pursuant to the terms thereof as a result of a Change of Control or an asset disposition, so long as at such time no Default or Event of Default shall have occurred and be continuing (or would result therefrom);

(d) cash payments in lieu of the issuance of fractional shares in connection with the exercise of any warrants, options or other securities convertible into or exchangeable for capital stock of the Company;

(e) the deemed repurchase of Capital Stock of the Company on the cashless exercise of stock options;

(f) other Distributions made with cash, Cash Equivalents, Investment Grade Securities and Temporary Cash Investments by the Company and any of its Subsidiaries; provided that (i) the aggregate amount of all such Distributions, together with the aggregate amount of all Investments made in reliance on clause (s) of the definition of the term “Permitted Investments”, the amounts consideration paid for all acquisitions in reliance on clause (d)(ii)(C) of the definition of the term “Permitted Acquisition”, and the aggregate amount of Permitted Payments made in reliance on Section 8.6(k), shall not exceed $600,000,000 in the aggregate during the term of this Agreement, and (ii) at the time of any such Distribution, no Default or Event of Default shall have occurred and be continuing (or would result therefrom);

(g) any Distributions, so long as the Payment Conditions are satisfied either at the time the Distribution is made or at the time the Distribution is declared (so long as such Distribution is made within 60 days of declaration);

 

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(h) payments in respect of any dividend or other distribution on the Capital Stock of the Company and payments to purchase Capital Stock of the Company, in each case, not to exceed 6% of the market capitalization of the Company at the time of such payment;

(i) the making of any Distribution in exchange for, or out of the net cash proceeds of, a substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of Capital Stock of the Company (other than Disqualified Stock) or from a substantially concurrent cash capital contribution to the Company (other than from an Obligor);

(j) any Distribution to a Special Purpose Vehicle in connection with a Securitization Transaction, which Distribution consists of the assets described in the definition of “Equipment Securitization Transaction” or “Receivables Securitization Transaction”; provided that the aggregate amount of all such Distributions, together with the book value (or in the case of Rental Equipment, Service Vehicles or Spare Parts and Merchandise, Net Book Value) of all such properties or assets of any Obligor sold, assigned, pledged or otherwise transferred (including Investments) pursuant to all Equipment Securitization Transactions shall not exceed $510,000,000 during the term of this Agreement;

(k) the Company and any of its Subsidiaries may pay, without duplication, the amount due or payable (A) pursuant to any Transaction Agreement and (B) in order to pay or permit the Company or any of its Subsidiaries to pay any related Taxes;

(l) the Company and any of its Subsidiaries may pay cash dividends in an amount sufficient to (x) pay all fees and expenses incurred in connection with the Transactions and the other transactions expressly contemplated by this Agreement and the other Loan Documents and (y) satisfy its obligations under the Separation Agreement and the other Transaction Agreements; and

(m) Investments constituting Distributions made as a result of the receipt of non-cash consideration from any Asset Disposition or other sale of assets or property made pursuant to and in compliance with this Agreement.

For purposes of determining compliance with this definition, in the event that any Distribution meets the criteria of more than one of the types of Permitted Distributions described in the above clauses, the Borrowers’ Agent, in its sole discretion, may from time to time classify and reclassify such Distribution and only be required to include the amount and type of such Distribution in one of such clauses.

“Permitted Holders” means (a) any of the Management Investors; and (b) any Person acting in the capacity of an underwriter in connection with a public or private offering of Capital Stock of the Company.

“Permitted Indebtedness” has the meaning specified in Section 8.1.

“Permitted Investments” means:

(a) Investments in cash, Cash Equivalents, Investment Grade Securities and Temporary Cash Investments;

 

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(b) Investments existing on the Agreement Date and identified in Schedule 8.4 to this Agreement;

(c) [reserved];

(d) Investments by any Subsidiary which is not a Secured Obligor in any other Subsidiary;

(e) Investments (i) by any Obligor in any other Obligor, (ii) by any Subsidiary which is not a Obligor in another Subsidiary which is not an Obligor, (iii) by any Subsidiary which is not an Obligor in an Obligor; provided that any such Investment in the form of a loan or other extension of credit shall be subordinated in right of payment to the Obligations pursuant to a subordination agreement in form and substance reasonably satisfactory to Agent, or (iv) by any Obligor in any Subsidiary which is not an Obligor; provided that (A) the aggregate amount of all such Investments under this clause (e)(iv) shall not exceed $120,000,000 in the aggregate during the term of this Agreement, and (B) at the time of any such Investment, no Default or Event of Default shall have occurred and be continuing (or would result therefrom);

(f) Investments by any Obligor in any Special Purpose Vehicle pursuant to a Securitization Transaction; provided that, in the case of an Investment pursuant to an Equipment Securitization Transaction, (i) the aggregate amount of all such Investments, together with the book value (or in the case of Rental Equipment, Service Vehicles or Spare Parts and Merchandise, Net Book Value) of all such properties or assets of any Obligor sold, assigned, pledged or otherwise transferred (including Distributions) pursuant to all Equipment Securitization Transactions shall not exceed $510,000,000 during the term of this Agreement, (ii) the properties or assets transferred in connection with any Equipment Securitization Transaction shall consist of the types described in the definition of the term “Equipment Securitization Transaction”, and (iii) the properties or assets transferred in connection with a Receivables Securitization Transaction shall consist of the types described in the definition of the term “Receivables Securitization Transaction”;

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

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

(i) Investments constituting Hedge Agreements;

(j) Investments in securities or other Investments received in settlement of debts created in the ordinary course of business and owing to, or of other claims asserted by, the Company or any Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments, including in connection with any bankruptcy proceeding or other reorganization of another Person;

(k) loans and advances to officers, directors or employees (i)(A) in the ordinary course of business, (B) existing on the Closing Date and described in Schedule 8.4, (C) made after the Closing Date for relocation expenses in the ordinary course of business, and (D) for any other purpose satisfactory to the Company or its Subsidiaries; provided that the aggregate

 

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outstanding principal amount of all such Investments under this clause (k)(i) shall not exceed $20,000,000 at any time; and (ii) relating to indemnification of any officers, directors or employees in respect of liabilities relating to their serving in any such capacity, and any reimbursement of any such officer, director or employee of expenses relating to the claims giving rise to such indemnification;

(l) Permitted Acquisitions;

(m) any Investment to the extent that the consideration therefor is Capital Stock (other than Disqualified Stock) of the Company, or out of the net cash proceeds of, a substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of Capital Stock of the Company (other than Disqualified Stock) or from a substantially concurrent cash capital contribution to the Company other than from an Obligor

(n) guarantees of Permitted Indebtedness (provided that no Canadian Obligor or Excluded Subsidiary may Guarantee any Indebtedness of a U.S. Obligor under this clause (n) unless such Person Guarantees the U.S. Obligations pursuant to a Guarantee agreement reasonably acceptable to the Agent);

(o) Investments acquired by an Obligor or a Restricted Subsidiary in the ordinary course of business received in settlement of claims against any other Person or a reorganization or similar arrangement of any debtor of such Obligor or Restricted Subsidiary, including upon the bankruptcy or insolvency of such debtor, or as a result of foreclosure, perfection or enforcement of any Lien;

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

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

(r) Investments acquired by the Company or any Subsidiary in connection with an Asset Disposition permitted under Section 8.5(d) to the extent such Investments are non-cash proceeds as permitted under Section 8.5(d);

(s) other Investments made with cash, Cash Equivalents, Investment Grade Securities and Temporary Cash Investments; provided that (i) the aggregate amount of all such Investments made in reliance on this clause (s), together with all Distributions made in reliance on clause (f) of the definition of the term “Permitted Distributions”, the consideration paid for all acquisitions made in reliance on clause (d)(ii)(C) of the definition of the term “Permitted Acquisition”, and the aggregate amount of Permitted Payments made in reliance on Section 8.6(k), shall not exceed $600,000,000 in the aggregate during the term of this Agreement, and (B) at the time of any such Investment, no Default or Event of Default shall have occurred and be continuing (or would result therefrom);

(t) any Investments, so long as the Payment Conditions shall have been satisfied;

 

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(u) Investments in receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business;

(v) any transaction to the extent that it constitutes an Investment that is permitted by and made in accordance with Section 8.4;

(w) Investments consisting of the licensing of Intellectual Property granted by the Company or any Restricted Subsidiary in the ordinary course of business;

(x) (i) Investments in Franchise Special Purpose Entities directly or indirectly to finance or refinance the acquisition of Franchise Equipment and/or related rights and/or assets, (ii) Investments in Franchisees attributable to the financing or refinancing of Franchise Equipment and/or related rights and/or assets, as determined in good faith by the Company, (iii) other Investments in Franchisees, (iv) Investments in Capital Stock of Franchisees and Franchise Special Purpose Entities (including pursuant to capital contributions) and (v) Investments in Franchisees arising as the result of guarantees in respect of Franchise Equipment Indebtedness or Franchise Lease Obligations; provided that the aggregate amount of all such Investments (and including for this purpose, in the case of any Rental Equipment, Service Vehicles, Spare Parts and Merchandise, the Net Book Value thereof) under this clause (x), together with cash consideration paid in respect of acquisitions under clause (d)(iii) of the definition of the term “Permitted Acquisition”, and the Fair Market Value of all properties or assets of any Obligor sold, assigned, pledged or otherwise transferred pursuant to all Franchise Financing Dispositions, shall not exceed $120,000,000 in the aggregate during the term of this Agreement;

(y) Investments in the nature of pledges or deposits with respect to (i) landlord leases, (ii) worker’s compensation, professional liability, unemployment insurance, other social security benefits and other insurance related obligations and (iii) other utility and surety liens provided to third parties in the ordinary course of business;

(z) Investments in industrial development or revenue bonds or similar obligations secured by assets leased to and operated by the Company or any of its Subsidiaries that were issued in connection with the financing or refinancing of such assets, so long as the Company or any such Subsidiary may obtain title to such assets at any time by optionally canceling such bonds or obligations, paying a nominal fee and terminating such financing transaction;

(aa) loans and advances to Management Investors in connection with the purchase by such Management Investors of Capital Stock of the Company of up to $25,000,000 outstanding at any one time;

(bb) any Investment pursuant to an agreement entered into in connection with any securities lending or other securities financing transaction to the extent such securities lending or other securities financing transaction is otherwise permitted under Sections 8.1 and 8.5; and

(cc) Investments made as part of an Islamic financing arrangement, including Sukuk, if such arrangement, if structured as Indebtedness, would be permitted under Section 8.1; provided that (i) the amount that would constitute Indebtedness if such arrangement were structured as Indebtedness, as determined in good faith by the Company, shall be treated by the

 

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Company as Indebtedness for purposes of Section 8.1 (including, to the extent applicable, with respect to the calculation of any amounts of Indebtedness outstanding thereunder) and (ii) any such Islamic financing arrangement shall not include any payment obligations of any Obligor secured by a Lien on the Collateral on a basis pari passu in priority with the Liens securing the amounts due under the Credit Facilities.

For purposes of determining compliance with this definition, in the event that any Investment meets the criteria of more than one of the types of Permitted Investments described in the above clauses, the Borrowers’ Agent, in its sole discretion, may from time to time classify and reclassify such Investment and only be required to include the amount and type of such Investment in one of such clauses.

“Permitted Liens” has the meaning specified in Section 8.2.

“Permitted Payments” has the meaning specified in Section 8.6.

“Permitted Priority Liens” means Permitted Liens described in clauses (b), (f), (g), (h), (j), (n), (o), (p) (to the extent the Liens that secured the Refinanced Indebtedness were Permitted Priority Liens), (q), (t), (u), (v), (w), (x), (y), (z), (aa), (bb), (dd), (ff), (jj) and (kk) of Section 8.2.

“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.

“Plan” means any of (a) an “employee benefit plan” (including such plans as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”; in each case 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; provided that 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 Canadian jurisdiction other than Ontario, PPSA means those personal property security laws (including the Civil Code of Québec) 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.

“Previously Absent Financial Maintenance Covenant” means, at any time, any financial maintenance covenant that is not included in the Loan Documents at such time.

“Priority Payable Reserves” means reserves established in the Reasonable Credit Judgment of the Agent for amounts secured by any Liens, choate or inchoate or any deemed trusts arising under Laws, which rank or are capable of ranking in priority to the Agent’s Liens.

 

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“Pro Rata Share” means:

(a) with respect to a U.S. Facility Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such Lender’s U.S. Facility Commitment and the denominator of which is the sum of the amounts of all of the Lenders’ U.S. Facility Commitments, or if no U.S. Facility Commitments are outstanding, a fraction (expressed as a percentage), (a) the numerator of which is the Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the U.S. Revolving Loans owed to such Lender plus such Lender’s participation in the aggregate maximum amount available to be drawn under all outstanding U.S. Facility Letters of Credit, plus such Lender’s participation in the aggregate amount of any unpaid reimbursement obligations in respect of U.S. Facility Letters of Credit and (b) the denominator of which is the Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the U.S. Revolving Loans owed to the Lenders, plus the aggregate maximum amount available to be drawn under all outstanding U.S. Facility Letters of Credit, plus the aggregate amount of any unpaid reimbursement obligations in respect of U.S. Facility Letters of Credit, in each case giving effect to a Lender’s participation in U.S. Swingline Loans and Agent Advances under the U.S. Credit Facilities.

(b) with respect to a Multicurrency Facility Lender, a fraction (expressed as a percentage), the numerator of which is the amount of such Lender’s Multicurrency Facility Commitment and the denominator of which is the sum of the amounts of all of the Lenders’ Multicurrency Facility Commitments, or if no Multicurrency Facility Commitments are outstanding, a fraction (expressed as a percentage), (a) the numerator of which is the Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the Multicurrency Revolving Loans owed to such Lender plus such Lender’s participation in the aggregate maximum amount available to be drawn under all outstanding Multicurrency Letters of Credit, plus such Lender’s participation in the aggregate amount of any unpaid reimbursement obligations in respect of Multicurrency Letters of Credit and (b) the denominator of which is the Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the Multicurrency Revolving Loans owed to the Lenders, plus the aggregate maximum amount available to be drawn under all outstanding Multicurrency Letters of Credit, plus the aggregate amount of any unpaid reimbursement obligations in respect of Multicurrency Letters of Credit, in each case giving effect to a Lender’s participation in Multicurrency Swingline Loans and Agent Advances under the Multicurrency Credit Facility.

(c) with respect to each Lender for all Credit Facilities, a fraction (expressed as a percentage), the numerator of which is the amount of such Lender’s Multicurrency Facility Commitment and such Lender’s U.S. Facility Commitment and the denominator of which is the sum of the amounts of all of the Lenders’ Commitments, or if no Commitments are outstanding, a fraction (expressed as a percentage), (a) the numerator of which is the Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the Revolving Loans owed to such Lender plus such Lender’s participation in the aggregate maximum amount available to be drawn under all outstanding Letters of Credit, plus such 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 Equivalent Amount in Dollars of the sum (without duplication) of the aggregate amount of the Revolving Loans owed to the Lenders, plus the aggregate maximum amount available to be drawn under 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 Lender’s participation in Swingline Loans and Agent Advances under the Credit Facilities.

 

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“Proposed Change” has the meaning specified in Section 12.1(b).

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Purchase Money Obligations” means any Indebtedness incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (including Capital Stock), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise; provided that such Indebtedness is incurred within 180 days after such acquisition.

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

“Quarterly Average Excess Availability” means, at any time, the daily average of the Excess Availability for the immediately preceding calendar quarter.

“Ratio Debt Test” means the ratio of (a) Consolidated EBITDA for the most recent period of four consecutive Fiscal Quarters for which financial information in respect thereof is available, to (b) the sum, without duplication, of (i) Consolidated Interest Expense for such period paid or payable in cash, plus (ii) the aggregate amount of dividends and other distributions paid in cash during such period in respect of Disqualified Stock by the Consolidated Parties on a consolidated basis.

“Real Estate” means all of each Obligor’s and each of its Subsidiaries now or hereafter owned or leased estates in real property, including all fees, leaseholds and future interests, together with all of each Obligor’s and each of its 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 reasonable (from the perspective of a secured asset-based lender) judgment, exercised in good faith in accordance with customary business practices of the Agent for comparable asset-based lending transactions, as to any reserve or eligibility criteria which the Agent, as applicable, reasonably determines as being appropriate to reflect: (a) items that could reasonably be expected to adversely affect the Agent’s ability to realize upon the Collateral, (b) costs, expenses and other amounts that the Agent reasonably determines will need to be satisfied in connection with the realization upon the Collateral or (c) criteria, events, conditions, contingencies or risks that differ materially from facts or events occurring and known to the Agent on the Agreement Date and which directly and adversely affect any component of the applicable Borrowing Base.

 

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“Receivables Entity” means a trust, bankruptcy remote entity or other special purpose entity which is a Subsidiary of the Company (or, if not a Subsidiary of the Company, the common equity of which is wholly owned, directly or indirectly, by the Company) and which is formed for the purpose of, and engages in no material business other than, acting as an issuer or a depositor in a Receivables Securitization Transaction (and, in connection therewith, owning accounts receivable, lease receivables, other rights to payment, leases and related assets and pledging or transferring any of the foregoing or interests therein).

“Receivables Securitization Transaction” means any sale, discount, assignment, conveyance, participation, contribution to capital, grant of security interest in, pledge or other transfer by the Company or any Subsidiary of the Company of accounts receivable, lease receivables or other payment obligations owing to the Company or such Subsidiary of the Company or any interest in any of the foregoing, together in each case with any collections and other proceeds thereof, any collection or deposit account related thereto, and any collateral, guarantees or other property (other than Inventory or Equipment) or claims supporting or securing payment by the obligor thereon of, or otherwise related to, or subject to leases giving rise to, any such receivables.

“Refinance” has the meaning specified in the definition of “Refinancing Indebtedness”.

“Refinanced Debt” has the meaning specified in Section 2.7(a).

“Refinancing Amendment” has the meaning specified in Section 2.7(f).

“Refinancing Closing Date” has the meaning specified in Section 2.7(d).

“Refinancing Commitments” has the meaning specified in Section 2.7(a).

“Refinancing Indebtedness” means with respect to any Indebtedness (the “Refinanced Indebtedness”), any other Indebtedness which extends, refinances, refunds, replaces or renews (collectively, “Refinance”) such Indebtedness; provided that (a) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Indebtedness except by an amount equal to unpaid accrued interest and premium (including applicable prepayment or redemption penalties) thereof plus fees and expenses incurred in connection therewith plus an amount equal to any existing commitment unutilized and letters of credit undrawn thereunder, (b) any Liens securing such Refinancing Indebtedness do not (i) attach to any property of any Obligor that did not secure the Refinanced Indebtedness and (ii) have the same (or junior) priority relative to the Agent’s Liens as the Liens securing the Refinanced Indebtedness, (c) such Refinancing Indebtedness shall not have a shorter maturity than the earlier of (i) the maturity of the Refinanced Indebtedness or (ii) the Maturity Date, and (d) if the Refinanced Indebtedness is Subordinated Indebtedness, then the terms and conditions of the Refinancing Indebtedness shall include subordination terms and conditions that are no less favorable to the Lenders in all material respects as those that were applicable to the Refinanced Indebtedness.

“Refinancing Lenders” has the meaning specified in Section 2.7(c).

“Refinancing Loan” has the meaning specified in Section 2.7(b).

“Refinancing Loan Request” has the meaning specified in Section 2.7(a).

 

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“Refinancing Revolving Commitments” has the meaning specified in Section 2.7(a).

“Refinancing Revolving Lender” has the meaning specified in Section 2.7(c).

“Refinancing Revolving Loan” has the meaning specified in Section 2.7(b).

“Refinancing Term Commitments” has the meaning specified in Section 2.7(a).

“Refinancing Term Lender” has the meaning specified in Section 2.7(c).

“Refinancing Term Loan” has the meaning specified in Section 2.7(b).

“Register” has the meaning specified in Section 13.21.

“Related Parties” means with respect to any Person, such Person’s Affiliates and the partners, officers, directors, trustees, employees, shareholders, members, attorneys and other advisors, agents and controlling persons of such Person and of such Person’s Affiliates and “Related Party” shall mean any of them (other than, in each case, the Company and its Subsidiaries and any of its controlling shareholders).

“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.

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

“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 the Company, including Inventory that the Company currently describes as “rental equipment” in such consolidated accounts, but excluding any Spare Parts and Merchandise.

“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 Secured Obligors where Eligible Rental Equipment, Eligible Service Vehicles or Eligible Spare Parts and Merchandise 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 (i) for any location shall not exceed two months’ rent at such location and (ii) will not be established during a period of 90 days following the Closing Date (or such later date as shall be agreed to by the Agent in its sole discretion).

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

 

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“Report” and “Reports” each has the meaning specified in Section 13.18(a).

“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.

“Required Lenders” means, at any time, Lenders having Revolving Credit Commitments representing at least 50.1% of the aggregate Revolving Credit Commitments at such time (excluding the Revolving Credit Commitment of any Lender that is a Defaulting Lender); provided that if the Revolving Credit Commitments have been terminated, the term “Required Lenders” means Lenders holding Revolving Loans (including Swingline Loans) representing at least 50.1% of the aggregate principal amount of Revolving Loans (including Swingline Loans) outstanding at such time (excluding Revolving Loans of any Lender that 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.

“Rescindable Amount” has the meaning specified in Section 4.6(d).

“Reserves” means reserves that limit the availability of credit hereunder, consisting of reserves against Excess Availability, Eligible Accounts, Eligible Rental Equipment, Eligible Spare Parts and Merchandise, Eligible Service Vehicles or Eligible Unbilled Accounts, including (a) Bank Product Reserves, (b) Rent Reserves, (c) warehousemen’s and bailees’ charges, (d) Priority Payable Reserves and (e) Availability Reserves, established, in the case of reserves other than Pari Passu Debt Reserves and Waterfall Priority Hedge Agreement Reserves, by the Agent from time to time in the Agent’s Reasonable Credit Judgment in accordance with Section 2.9 and, in the case of Pari Passu Debt Reserves and Waterfall Priority Hedge Agreement Reserves, in accordance with such definitions.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“Responsible Officer” means the president, any vice president, chief executive officer, chief financial officer, secretary, assistant secretary, treasurer, assistant treasurer, legal counsel, or any other executive or financial officer of the Company 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 treasurer of the Company, or any other officer having substantially the same authority and responsibility.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

 

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“Revolving Credit Commitments” means, at any date for any Lender, the U.S. Facility Commitment of such Lender and the Multicurrency Facility Commitment of such Lender, 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 Revolving Credit Commitments of all Lenders.

“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 the Multicurrency Revolving Loans, as the context requires.

“S&P” means S&P Global Ratings, or any successor thereto.

“Sale and Leaseback Transaction” means any arrangement with any Person providing for the leasing by the Company or any of its Subsidiaries of real or personal property that has been or is to be sold or transferred by the Company or any such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Company or such Subsidiary.

“Sanctioned Country” means a country, region or territory that is, or whose government is, the subject of economic or other sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of State, other relevant sanctions authority of the United States, the Government of Canada, the United Nations Security Council, the European Union or any member state thereof in which an Obligor or any of its Subsidiaries is organized or conducts business, or Her Majesty’s Treasury of the United Kingdom under any Sanctions Law (at the time of the Amendment No. 1 Effective Date, including, but not limited to, Crimea, Cuba, Iran, North Korea, Syria and the Ukrainian territories under Russian control).

“Sanctioned Person” means (a) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) or any similar list maintained by U.S. Department of State, other relevant sanctions authority of the United States or Canada, the United Nations Security Council, the European Union or any member state thereof or Her Majesty’s Treasury of the United Kingdom, (b) Person that is specifically targeted by any other relevant sanctions authority of a jurisdiction in which an Obligor or any of its Subsidiaries is organized or conducts business, (c) a Person that is the target of any sanctions under any Sanctions Laws or (d) a Person controlled by any such Person set forth in clauses (a) through (c) above.

“Sanctions Laws” means, individually and collectively, any and all laws relating to anti-terrorism, economic, financial or other sanctions, other trade sanctions programs and embargoes, import/export licensing, and any regulation, order, or directive promulgated, issued, administered or enforced pursuant to such Laws, including any law administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), U.S. Department of State, other relevant sanctions authority of the United States or Canada, the United Nations Security Council, the European Union or any member state thereof in which an Obligor or any of its Subsidiaries is organized or conducts business or Her Majesty’s Treasury of the United Kingdom or such other relevant sanctions authority.

 

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“Scheduled Unavailability Date” has the meaning specified in Section 5.7(a)(ii).

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

“Second Currency” has the meaning specified in Section 14.20.

“Section 2.6 Additional Amendment” has the meaning specified in Section 2.6(c).

“Secured Obligors” means, collectively, the U.S. Borrowers, the Canadian Borrowers, the U.S. Guarantors and the Canadian Guarantors.

“Secured Parties” means, collectively, the Agent, each Lender, each affiliate or branch of any Lender that makes Loans pursuant to Section 2.2(c), each Bank, each Letter of Credit Issuer, the Indemnified Persons and each Lender Counterparty who is owed Designated Bank Products Obligations.

“Securitization Transaction” means any Equipment Securitization Transaction or Receivables Securitization Transaction.

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

“Senior Note Indenture” means that certain Indenture dated as of July 9, 2019 among the Company, certain of its subsidiaries named therein and Wells Fargo Bank, National Association, as Trustee, as amended, modified and supplemented from time to time prior to the date hereof.

“Senior Notes” means the Senior Notes due 2027 issued by the Company pursuant to the Senior Note Indenture.

“Senior Secured Indebtedness Leverage Ratio” means, on any date of determination, a ratio (i) the numerator of which is the aggregate principal amount (or accreted value, as the case may be) of Indebtedness that is secured by a Lien of the Company and its Restricted Subsidiaries on a consolidated basis outstanding on such date, less the amount of cash, Cash Equivalents, Investment Grade Securities and Temporary Cash Investments that would be stated on the consolidated balance sheet of the Company and held by the Company or its Restricted Subsidiaries, as determined in accordance with GAAP, as of the date of determination, and (ii) the denominator of which is the Consolidated EBITDA for the most recent period of four consecutive Fiscal Quarters for which financial information in respect thereof is available, in each case calculated on a pro forma basis.

“Separation Agreement” means the Separation and Distribution Agreement, dated as of June 30, 2016, between Hertz Global Holdings, Inc. and the Company, as amended, supplemented, waived or otherwise modified from time to time.

 

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“Service Vehicles” means all Vehicles, owned by the Company or a Subsidiary of the Company that are classified as “plant, property and equipment” in the consolidated financial statements of the Company that are not rented or offered for rental by the Company or any of its Subsidiaries, including any such Vehicles being held for sale.

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

“Significant Subsidiary” means any Restricted Subsidiary that would be a significant subsidiary of the Company as determined in accordance with the definition in Rule 1-02(w) of Article 1 of Regulation S-X promulgated by the SEC and as in effect on the Agreement Date.

“SOFR” means the secured overnight financing rate as administered by FRBNY (or a successor administrator).

“SOFR Adjustment” means (a) with respect to Daily Simple SOFR, 0.10%, (b) with respect to Daily One Month SOFR, 0.10%, and (c) with respect to Term SOFR, 0.10% for all Interest Periods.

“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);

(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;

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

(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, 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.

“Spare Parts and Merchandise” means (a) any and all spare parts, instruments, appurtenances, accessories, modules, components, apparatus and assemblies and any and all expendable or repairable parts and equipment of whatever nature that are now or hereafter maintained for installation or use or usable by or on behalf of an Obligor in connection with Equipment or other equipment or any appliance useable thereon or related thereto, and any and all substitutions for any of the foregoing and replacement thereto and (y) goods held for sale, lease or use by any Obligor (in each case including any property noted on any Obligor’s books and records as tires, small equipment, power tools, spare parts or supplies and merchandise but in each case excluding, for the avoidance of doubt, Eligible Rental Equipment and Eligible Service Vehicles).

 

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“Special Purpose Vehicle” means any ES Special Purpose Vehicle or Receivables Entity.

“Specified Availability” means, as of any date of determination and without duplication, the sum of (a) Excess Availability, (b) Suppressed Availability (if positive) and (c) Specified Unrestricted Cash; provided that for the purpose of calculating Specified Availability, not more than 50% of any threshold or test based on Specified Availability may be satisfied with Suppressed Availability. The Company shall use its commercially reasonable efforts to afford the Agent access to electronically monitor on a current basis any accounts referred to in clause (c); provided that so long as the Company uses its commercially reasonable efforts to provide such access, such access shall not be a condition to whether amounts in such accounts are considered part of Specified Availability.

“Specified Default” means any Event of Default pursuant to paragraphs (a), (e), (f), (g) or (h) of Section 10.1, any material misrepresentation of the Borrowing Base in a Borrowing Base Certificate, the failure to deliver a Borrowing Base Certificate in a timely manner in accordance with Section 7.4(a), the failure of the Company or any Restricted Subsidiary to deliver financial statements within 30 days of when required pursuant to Section 7.2 or any Event of Default arising from a material breach of Section 7.17.

“Specified Existing Commitment” has the meaning specified in Section 2.6(a).

“Specified Transaction” means any (a) Investment, (b) sale or other disposition of assets (including any disposal, abandonment or discontinuance of operations) other than in the ordinary course of business, (c) incurrence, repayment or refinancing of Indebtedness, (d) Permitted Distribution, (e) designation or redesignation of an Unrestricted Subsidiary or Restricted Subsidiary, (f) provision of Incremental Revolving Commitment increases or (g) other event or transaction, in each case that by the terms of the Loan Documents requires pro forma compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a “pro forma basis.”

“Specified Unrestricted Cash” means Unrestricted Cash of any Obligor in deposit accounts (other than an account referred to in clause (a), (b) or (c) of the definition of “Material Account”) maintained with Agent, Lender or another depository institution reasonably acceptable to Agent, in each case, subject to a first priority security interest of Agent pursuant to a control agreement in favor of Agent; provided that, without limiting any other rights of Agent to information, Agent shall receive reasonable evidence of amounts of Unrestricted Cash at such times and from time to time as it may reasonably require at any time when Excess Availability is less than 15% of the Maximum Revolver Amount or an Event of Default has occurred and is continuing.

“Standard Securitization Undertakings” means representations, warranties, covenants, indemnities, guarantees of performance and (subject to clause (y) of the proviso below) other agreements and undertakings entered into or provided by the Company or any of its Restricted Subsidiaries that the Company determines in good faith are customary or otherwise necessary or advisable in connection with any Securitization Transaction or a Franchise Financing Disposition; provided that (x) it is understood that Standard Securitization Undertakings may consist of or include (i) reimbursement and other obligations in respect of notes, letters of credit,

 

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surety bonds and similar instruments provided for credit enhancement purposes or (ii) hedging obligations, or other obligations relating to interest rate or other Hedge Agreements entered into by the Company or any Restricted Subsidiary, in respect of any Securitization Transaction or a Franchise Financing Disposition, and (y) subject to the preceding clause (x), any such other agreements and undertakings shall not include any guarantee obligations in respect of Indebtedness of a Special Purpose Vehicle by the Company or a Restricted Subsidiary that is not a Special Purpose Vehicle.

“Subordinated Indebtedness” means any Indebtedness expressly subordinated in writing to, or required under the Loan Documents to be subordinated to, any Indebtedness under the Loan Documents, except any Indebtedness that is subject to Lien subordination but not payment subordination.

“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 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 the Company.

“Successor Rate” has the meaning specified in Section 5.7.

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

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

“Suppressed Availability” means, if a positive number, (a) the amount of the Combined Borrowing Base minus (b) the Maximum Revolver Amount.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swingline Lender” means the U.S. Swingline Lender or the Multicurrency Canadian Swingline Lender, as the context requires.

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

 

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“Tax Matters Agreement” means the Tax Matters Agreement, dated as of June 30, 2016, by and among the Company, Hertz Global Holdings, Inc., Herc Rentals and The Hertz Corporation.

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

“Temporary Cash Investments” means any of the following: (a) any investment in (x) direct obligations of the United States of America, Canada, a member state of the European Union (in the case of any such member state, to the extent rated at least A-2 by S&P or at least P-2 by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization)) or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any thereof or obligations Guaranteed by the United States of America, Canada or a member state of the European Union (in the case of any such member state, to the extent rated at least A-2 by S&P or at least P-2 by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization)) or any country in whose currency funds are being held pending their application in the making of an investment or capital expenditure by the Company or a Restricted Subsidiary in that country or with such funds, or any agency or instrumentality of any of the foregoing, or obligations guaranteed by any of the foregoing or (y) direct obligations of any foreign country recognized by the United States of America rated at least “A” by S&P or “A-1” by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (b) overnight bank deposits, and investments in time deposit accounts, certificates of deposit, bankers’ acceptances and money market deposits (or, with respect to foreign banks, similar instruments) maturing not more than one year after the date of acquisition thereof issued by (x) any bank or other institutional lender under a Credit Facility or any affiliate thereof or (y) a bank or trust company that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States of America having capital and surplus aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof), (c) repurchase obligations with a term of not more than 30 days for underlying securities or instruments of the types described in clause (a) or (b) above entered into with a bank meeting the qualifications described in clause (b) above, (d) Investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a Person (other than that of the Company or any of its Subsidiaries), with a rating at the time as of which any Investment therein is made of “P-2” (or higher) according to Moody’s or “A-2” (or higher) according to S&P (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (e) Investments in securities maturing not more than one year after the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A-2” by S&P or “P-2” by Moody’s (or, in either case, the equivalent of such rating

 

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by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (f) Indebtedness or preferred stock (other than of the Company or any of its Subsidiaries) having a rating of “A” or higher by S&P or “A2” or higher by Moody’s (or, in either case, the equivalent of such rating by such organization or, if no rating of S&P or Moody’s then exists, the equivalent of such rating by any nationally recognized rating organization), (g) investment funds investing 95% of their assets in securities of the type described in clauses (a) and (e) above (which funds may also hold reasonable amounts of cash pending investment and/or distribution), (h) any money market deposit accounts issued or offered by a domestic commercial bank or a commercial bank organized and located in a country recognized by the United States of America, in each case, having capital and surplus in excess of $250,000,000 (or the foreign currency equivalent thereof), or investments in money market funds subject to the risk limiting conditions of Rule 2a-7 (or any successor rule) of the Securities and Exchange Commission under the Investment Company Act, and (i) similar investments approved by the Board of Directors in the ordinary course of business. For the avoidance of doubt, for purposes of this definition and the definitions of “Cash Equivalents” and “Investment Grade Rating,” rating identifiers, watches and outlooks will be disregarded in determining whether any obligations satisfy the rating requirement therein.

“Termination Date” means the earliest to occur of (a) the Maturity Date, (b) the date the Commitments are terminated either by the Borrowers pursuant to Section 4.3 or by the Required Lenders pursuant to Section 10.2, and (c) the date this Agreement is otherwise terminated pursuant to the terms of this Agreement.

“Term SOFR” means (a) for any Interest Period relating to a Term SOFR Loan, a per annum rate equal to the Term SOFR Screen Rate two (2) U.S. Government Securities Business Days prior to such Interest Period, with a term equivalent to such Interest Period (or if such rate is not published prior to 11:00 a.m. on the determination date, the applicable Term SOFR Screen Rate on the U.S. Government Securities Business Day immediately preceding such date), plus the SOFR Adjustment for such Interest Period; and (b) for any Interest Period relating to a Base Rate Loan on any day, a per annum rate equal to the Term SOFR Screen Rate with a term of one month commencing that day; provided, that in no event shall Term SOFR be less than zero.

“Term SOFR Interest Payment Date” means, with respect to a Term SOFR 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 three months, each three-month anniversary of the commencement of such Interest Period for such Term SOFR Loan.

“Term SOFR Loan” means a Loan that bears interest based on clause (a) of the definition of Term SOFR.

“Term SOFR Screen Rate” means the forward-looking SOFR term rate administered by CME (or any successor administrator satisfactory to Agent) and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by Agent from time to time).

 

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“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.

“Trademarks” means all rights, title and interests in (and all related IP Ancillary Rights in) or relating to trademarks, trade names, corporate names, company names, business names, trade dress, fictitious business names, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith.

“Transaction Agreements” means, collectively, the Separation Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Agreement and any other instruments, assignments, documents and agreements contemplated thereby and executed in connection therewith.

“Transactions” means, collectively, (a) the execution, delivery and performance by the Obligors of this Agreement and the other Loan Documents to which they are a party and the making of the borrowings hereunder and (b) the payment of related fees and expenses in connection with each of the foregoing.

“Transition Services Agreement” means the Transition Services Agreement, dated as of June 30, 2016, by and among the Company and Hertz Global Holdings, Inc., as amended, supplemented, waived or otherwise modified from time to time.

“Type” means any type of a Loan determined with respect to the interest option applicable thereto, which shall be a Term SOFR Loan, a Daily One Month SOFR 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.

“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unfunded Pension Liability” means (a) with respect to a Pension Plan that is not a Canadian DB Pension Plan, 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 or, (b) with respect to any Canadian DB Pension Plan, any unfunded liability or solvency deficiency as determined for the purposes of the PBA on a “wind-up basis” that is set out in the actuarial valuation report most recently filed with a Governmental Authority.

 

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“Unrestricted Cash” means cash, Cash Equivalents and Temporary Cash Investments, other than (a) as disclosed in the consolidated financial statements of the Consolidated Parties as a line item on the balance sheet as “restricted cash” and (b) cash, Cash Equivalents and Temporary Cash Investments of any Subsidiary to the extent such cash, Cash Equivalents and Temporary Cash Investments are not permitted by applicable law or regulation or any agreement binding on the Company or any other Consolidated Party to be dividended, distributed or otherwise transferred to an Obligor.

“Unrestricted Subsidiary” means (a) Herc Receivables U.S. LLC, (b) any other Special Purpose Vehicle, (c) any Subsidiary of the Company (other than a Borrower) designated by the Borrowers’ Agent as an Unrestricted Subsidiary hereunder by written notice to the Agent and (d) any Subsidiary of an Unrestricted Subsidiary; provided that the Borrowers’ Agent shall only be permitted to designate a new Unrestricted Subsidiary pursuant to clause (c) above after the Closing Date if (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) such Unrestricted Subsidiary is capitalized (to the extent capitalized by the Company or any of the Subsidiaries) through Investments as permitted by, and in compliance with, Section 8.4, and any prior or concurrent Investments in such Subsidiary by the Company or any of its Restricted Subsidiaries shall be deemed to have been made under Section 8.4, (iii) without duplication of clause (ii), any assets owned by such Unrestricted Subsidiary at the time of the initial designation thereof are treated as Investments pursuant to Section 8.4, (iv) at the time such Subsidiary is designated an Unrestricted Subsidiary, (x) the Ratio Debt Test, determined on a pro forma basis, is not less than 2.00:1.00 or (y) the Payment Conditions are satisfied, (v) after giving effect to such designation, no Out-of-Formula Condition exists, (vi) such Unrestricted Subsidiary does not at any time own any Material Intellectual Property (whether at the time of designation or at any time thereafter) and (vii) such Subsidiary is an Unrestricted Subsidiary under the Senior Note Indenture and any other indenture, loan agreement or similar instrument in each case evidencing or governing Indebtedness in an outstanding principal amount in excess of $250,000,000 entered into or assumed by the Company after the Agreement Date; provided, further, that at the time of such designation, (x) the aggregate total assets of all Unrestricted Subsidiaries shall not exceed 10% of the total assets of the Company and its Subsidiaries as at such date and (y) the aggregate total revenues of all Unrestricted Subsidiaries shall not exceed 10% of the total revenues of the Company and its Subsidiaries for the four consecutive Fiscal Quarter period most recently ended for which financial statements are available. The Borrowers’ Agent may designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes of this Agreement at any time; provided that (A) such Unrestricted Subsidiary, after giving effect to such designation, shall be a Wholly Owned Subsidiary of the Company and (B) no Default or Event of Default shall have occurred and be continuing or would result therefrom. Each Unrestricted Subsidiary as of the Closing Date shall be set forth in Schedule 1.4. The redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary will be deemed to be an incurrence at the time of such designation of Indebtedness of such Unrestricted Subsidiary and the Liens on the assets of such Unrestricted Subsidiary, in each case outstanding on the date of such redesignation.

 

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“Unused Letter of Credit Subfacility” means an amount equal to the Letter of Credit Subfacility minus the Equivalent Amount in Dollars of 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.

“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 this Agreement.

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

(a) the sum of

(i) 90% of the amount of Eligible U.S. Accounts owing from Account Debtors which have an Investment Grade Rating; plus

(ii) 85% of the amount of Eligible U.S. Accounts owing from Account Debtors which do not have an Investment Grade Rating; plus

(iii) 75% of the amount of Eligible Unbilled U.S. Accounts (not to exceed 50% of the aggregate amount calculated under clauses (i) and (ii) above); plus

(iv) the lesser of: (A) 100% multiplied by the then Net Book Value of Eligible U.S. Rental Equipment and Eligible U.S. Service Vehicles, and (B) 85% multiplied by the then extant Net Orderly Liquidation Value Percentage of Eligible U.S. Rental Equipment and Eligible U.S. Service Vehicles multiplied by the Net Book Value thereof; plus

(v) 55% multiplied by the then Net Book Value of Eligible U.S. Spare Parts and Merchandise; minus

(b) the sum of (i) the amount of Pari Passu Debt Reserves with respect to Indebtedness of the U.S. Obligors; plus (ii) the amount of all other Reserves related to U.S. Obligors from time to time established by the Agent in accordance with Section 2.9 or in accordance with the definition of “Waterfall Priority Hedge Agreement Reserve”.

“U.S. Collateral” means all of the U.S. Obligors’ personal property from time to time subject to the Agent’s Liens securing payment or performance of any Obligations pursuant to the U.S. Security Documents, other than Excluded Assets (as defined in the U.S. GCA).

“U.S. Credit Facilities” means the revolving credit, swingline facilities and letter of credit facilities provided for by this Agreement provided to the U.S. Borrowers pursuant to Section 2 hereof.

 

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“U.S. Excess Availability” means, at any time, (a) the lesser of (i) the Maximum U.S. Revolver Amount and (ii) the amount equal to (A) the Combined Borrowing Base, minus (B) the Aggregate Multicurrency Revolver Outstandings, minus (b) the Aggregate U.S. Revolver Outstandings, in each case at such time.

“U.S. Facility Commitment” means, at any date for any Lender, the obligation of such Lender to make U.S. Revolving Loans and to purchase participations in U.S. Facility Letters of Credit and U.S. Swingline 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 “U.S. Facility 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 “U.S. Facility Commitments” means the aggregate principal amount of the U.S. Facility Commitments of all Lenders. The initial aggregate amount of the U.S. Facility Lenders’ U.S. Facility Commitments is $3,150,000,000.

“U.S. Facility Lenders” means each Lender that has a U.S. Facility Commitment (or an Affiliate or branch of any such Person that is acting on behalf of such Person, in which case the term “U.S. Facility Lenders” shall include any such Affiliate or branch with respect to the U.S. Revolving Loans made by such Affiliate or branch) as having a U.S. Facility Commitment and any other Person that shall acquire a U.S. Facility Commitment, other than any such Person that ceases to be a U.S. Facility Lender pursuant to an Assignment and Acceptance.

“U.S. Facility Letter of Credit” has the meaning specified in Section 2.4(a). U.S. Facility Letters of Credit shall be denominated in Dollars.

“U.S. GCA” means the U.S. Guarantee and Collateral Agreement, dated as of the Agreement Date, from the U.S. Obligors in favor of the Agent for the benefit of the Secured Parties.

“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“U.S. Guarantors” means (a) each Domestic Subsidiary, whether now existing or hereafter created or acquired (other than any Subsidiary that is an Excluded Subsidiary or Subsidiary of a Foreign Subsidiary, unless the Company otherwise determines), and (b) each other Person who guarantees payment or performance in whole or in part of the U.S. Obligations. The U.S. Guarantors as of the Agreement Date include the Canadian Guarantors and are set forth on Schedule 1.2A under the heading “U.S. Guarantors”.

“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.

 

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

“U.S. Letter of Credit Subfacility” means the Letter of Credit Subfacility minus the Equivalent Amount in Dollars of the sum of (a) the aggregate undrawn amount of all outstanding Multicurrency Facility Letters of Credit issued for the account of any Canadian Borrower or U.S. Borrower plus, without duplication, (b) the aggregate unpaid reimbursement obligations with respect to all Multicurrency Facility Letters of Credit issued for the account of any Canadian Borrower or U.S. Borrower.

“U.S. Obligations” means, with respect to the Indebtedness of the U.S. Obligors under the Loan Documents, any principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to any U.S. Obligor whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, Guarantees of such Indebtedness (or of Obligations in respect thereof), other monetary obligations of any U.S. Obligor of any nature and all other amounts payable by any U.S. Obligor under the Loan Documents or in respect thereof, excluding in each case Excluded Swap Obligations; provided that “U.S. Obligations” shall in any event include Designated Bank Products Obligations of any U.S. Obligor guaranteed by the U.S. Obligors and any Canadian Obligations guaranteed by the U.S. Obligors (in each case, to the extent such Obligations are not Excluded Swap Obligations).

“U.S. Obligors” means the U.S. Borrowers and the U.S. Guarantors.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Rental Equipment” means the Rental Equipment owned by the U.S. Obligors.

“U.S. Revolving Loans” means the revolving loans made to the U.S. Borrowers pursuant to Section 2.1(a) under the U.S. Credit Facilities, or any amendment to this Agreement entered into pursuant to Section 2.5, 2.6 or 2.7, each Agent Advance made to a U.S. Borrower and each U.S. Swingline Loan under the U.S. Credit Facilities.

“U.S. Security Documents” means, collectively, (a) the U.S. GCA, (b) any security agreement executed and delivered after the Agreement Date by a Person that is or becomes a U.S. Obligor hereunder in accordance with Section 7.16, (c) the U.S. Intellectual Property Security Agreement, and (d) any Control Agreement or other agreements, instruments and documents heretofore, now or hereafter securing any of the U.S. Obligations.

“U.S. Swingline Commitment” means the commitment of the U.S. Bank to make loans to U.S. Borrowers pursuant to Section 2.3(c).

“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.

 

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“U.S. Swingline Loan” and “U.S. Swingline Loans” have the meanings specified in Section 2.3(a).

“U.S. Swingline Sublimit” has the meaning specified in Section 2.3(a).

“U.S. Tax Compliance Certificate” has the meaning specified in Section 5.1(f)(ii).

“U.S. Unused Letter of Credit Subfacility” means an amount equal to the U.S. Letter of Credit Subfacility minus the amount in Dollars of the sum of (a) the aggregate undrawn amount of all outstanding U.S. Facility Letters of Credit issued for the account of any U.S. Borrower plus, without duplication, (b) the aggregate unpaid reimbursement obligations with respect to all U.S. Facility Letters of Credit issued for the account of any U.S. Borrower.

“Vehicles” means vehicles owned or operated by, or leased or rented to or by, the Company or any of its Subsidiaries, including automobiles, trucks, tractors, trailers, vans, sport utility vehicles, buses, campers, motor homes, motorcycles and other motor vehicles.

“Voting Stock” means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).

“Waterfall Priority Hedge Agreement” means a Hedge Agreement constituting a Bank Product entered into with any Borrower or a Restricted Subsidiary for which the Agent has received a Waterfall Priority Hedge Agreement Reserve Notice that remains in effect; provided that such Hedge Agreement shall constitute a Waterfall Priority Hedge Agreement only to the extent of the Waterfall Priority Hedge Agreement Reserve therefor.

“Waterfall Priority Hedge Agreement Reserve” means, with respect to a Waterfall Priority Hedge Agreement, a reserve in an amount equal to the maximum Designated Bank Products Obligations in respect thereof set forth in the Waterfall Priority Hedge Agreement Reserve Notice therefor (as updated from time to time in accordance with the definition thereof) received by the Agent.

“Waterfall Priority Hedge Agreement Reserve Notice” means, with respect to a Hedge Agreement constituting a Bank Product entered into with a Borrower or any other Restricted Subsidiary, a written notice by the applicable Lender Counterparty and the Borrowers’ Agent to the Agent, in form and substance reasonably satisfactory to the Agent, delivered to the Agent within 10 Business Days (or such later date as shall be agreed to by the Agent in its sole discretion) after the later of the Closing Date and the date of creation of such Hedge Agreement that (a) describes such Hedge Agreement in reasonable detail (including the date and parties to such Hedge Agreement) and (b) sets forth the maximum Designated Bank Products Obligations in respect of such Hedge Agreement to be secured as a Waterfall Priority Hedge Agreement by the applicable Collateral, as such notice may be updated from time to time (not more often than once per calendar month except to permanently revoke such notice), pursuant to a writing, in form and substance reasonably satisfactory to the Agent, by the provider of such Hedge Agreement and the Borrowers’ Agent received by the Agent, to increase or decrease (including to zero) the maximum Designated Bank Products Obligations in respect of such Hedge Agreement to be secured by the applicable Collateral.

 

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“Wholly Owned Subsidiary” means, with respect to any Person, a Subsidiary of such Person, all of the Capital Stock of which (other than directors’ qualifying shares or nominee or other similar shares required pursuant to applicable law) are owned by such Person or another Wholly Owned Subsidiary of such Person.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

1.2. Accounting Terms.

(a) Any accounting term used in this Agreement shall have, unless otherwise specifically provided herein, the meaning customarily given in accordance with GAAP, and all financial computations in this 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.

(b) If at any time any change in GAAP or the application thereof would affect the computation or interpretation of any financial ratio, basket, requirement or other provision set forth in any Loan Document, and either the Borrowers’ Agent or the Required Lenders shall so request, the Agent and the Borrowers’ Agent shall negotiate in good faith to amend such ratio, basket, requirement or other provision to preserve the original intent thereof in light of such change in GAAP or the application thereof (and the Lenders hereby irrevocably authorize the Agent to enter into any such amendment); provided that until so amended, (i)(x) such ratio, basket, requirement or other provision shall continue to be computed or interpreted in accordance with GAAP or the application thereof prior to such change therein and (y) upon request by the Agent, the Borrowers’ Agent shall provide to the Agent and the Lenders a written reconciliation between calculations of such ratio, basket, requirement or other provision made before and after giving effect to such change in GAAP or the application thereof or (ii) the Borrowers’ Agent may elect to fix GAAP (for purposes of such ratio, basket, requirement or other provision) as of another later date notified in writing to the Agent from time to time.

(c) Notwithstanding anything to the contrary contained in paragraph (a) above or in the definition of “Finance Lease”, unless the Borrower’s Agent elects otherwise, all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016

 

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of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases (and not be treated as financing or capital lease obligations or Indebtedness) for purposes of all financial definitions, calculations and deliverables under this Agreement or any other Loan Document (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU or any other change in accounting treatment or otherwise (on a prospective or retroactive basis or otherwise) to be treated as or to be recharacterized as financing or capital lease obligations or otherwise accounted for as liabilities in 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 this Agreement as a whole and not to any particular provision of this Agreement; and Subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

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

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

(e) 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.”

(f) The word “or” is not exclusive.

(g) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual documents shall be deemed to include all subsequent amendments, supplements and other modifications thereto, but only to the extent such amendments, supplements 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.

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

(i) This 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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(j) This 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.

(k) For purposes of any Collateral located in the Province of Québec 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 Québec 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”, “mortgage” and “lien” shall be deemed to include a “hypothec,” “prior claim” and a “resolutory clause”, (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, (x) an “agent” shall be deemed to include a “mandatary”, (xi) “construction liens” shall be deemed to include “legal hypothecs”, (xii) “joint and several” shall be deemed to include “solidary”, (xiii) “gross negligence or wilful misconduct” shall be deemed to be “intentional or gross fault”, (xiv) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (xv) “easement” shall be deemed to include “servitude”, (xvi) “priority” shall be deemed to include “prior claim”, (xvii) “survey” shall be deemed to include “certificate of location and plan”, (xviii) “fee simple title” shall be deemed to include “absolute ownership”, and (xix) “foreclosure” shall be deemed to include “the exercise of a hypothecary right”.

(l) In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of determining compliance with any provision of this Agreement which requires that no Default, Event of Default or Specified Default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Borrowers’ Agent, be deemed satisfied, so long as no Default, Event of Default or Specified Default, as applicable, exists on the date the definitive agreements for such Limited Condition Acquisition are entered into. For the avoidance of doubt, if the Borrowers’ Agent has exercised its option under the first sentence of this clause (l), and any Default or Event of Default occurs following the date the definitive agreements for the applicable Limited Condition Acquisition were entered into and prior to the consummation of such Limited Condition Acquisition, any such Default or Event of Default shall be deemed to not have occurred or be continuing for purposes of determining whether any action being taken in connection with such Limited Condition Acquisition is permitted hereunder.

(m) In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of:

(i) determining compliance with any provision of this Agreement which requires the calculation of the Fixed Charge Coverage Ratio; or

 

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(ii) testing baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated Tangible Assets), in each case, at the option of the Borrowers’ Agent (the Borrowers’ Agent’s election to exercise such option in connection with any Limited Condition Acquisition, an “LCA Election”), the date of determination of whether any such action is permitted hereunder, shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”), and if, after giving pro forma effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent four consecutive fiscal quarters ending prior to the LCA Test Date for which consolidated financial statements of the Consolidated Parties are available, the Borrowers’ Agent could have taken such action on the relevant LCA Test Date in compliance with such ratio or basket, such ratio or basket shall be deemed to have been complied with. For the avoidance of doubt, if the Borrowers’ Agent has made an LCA Election and any of the ratios or baskets for which compliance was determined or tested as of the LCA Test Date are exceeded as a result of fluctuations in any such ratio or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Tangible Assets, at or prior to the consummation of the relevant transaction or action, such baskets or ratios will not be deemed to have been exceeded as a result of such fluctuations.

1.4. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by class (e.g., a “Multicurrency Revolving Loan” or “U.S. Revolving Loan”) or by Type (e.g., a “Term SOFR 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 “Multicurrency Revolving Borrowing” or “U.S. Revolving Borrowing”) or by Type (e.g., a “Term SOFR 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 the Company 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.

(a) U.S. Revolving Loans shall be made and denominated in Dollars. U.S. Revolving Loans, interest thereon, and any Obligor’s payment obligations in respect thereof shall all be payable in Dollars.

(b) Multicurrency Revolving Loans shall be made and denominated in Dollars or Cdn. Dollars, as applicable. Multicurrency Revolving Loans, interest thereon, and any Obligor’s payment obligations in respect thereof expressly payable in Dollars or Cdn. Dollars shall all be payable in Dollars or Cdn. Dollars, as applicable.

(c) [Reserved]

 

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(d) Any Obligor’s other payment obligations hereunder or under any other Loan Document expressly payable in Dollars, Cdn. Dollars, or any other Alternative Currency shall all be payable in Dollars, Cdn. Dollars, or such other Alternative Currency, as applicable. Any Obligor’s other payment obligations hereunder or under any other Loan Document not expressly payable in another currency shall all be payable in Dollars.

(e) Notwithstanding clauses (a), (b) and (d) above, 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 the amount of each Borrowing Base, the Combined Borrowing Base, the Excess Availability, the U.S. Excess Availability, the Multicurrency Excess Availability, the Aggregate U.S. Revolver Outstandings, the Aggregate Multicurrency Revolver Outstandings, the Maximum U.S. Revolver Amount, the Maximum Multicurrency Revolver Amount, and each Lender’s Commitments as of any date shall all be calculated in Dollars or the Equivalent Amount in Dollars.

(f) Where the permissibility of a transaction or a representation, warranty or covenant depends upon compliance with, or is determined by reference to, amounts stated in Dollars, any amount stated in another currency shall be translated to the Equivalent Amount in Dollars at the applicable time of determination hereunder and the permissibility of actions taken by a Borrower or any Subsidiary hereunder shall not be affected by subsequent fluctuations in exchange rates. Further, if Indebtedness is incurred to refinance Indebtedness in a transaction otherwise permitted hereunder and such Refinanced Indebtedness is denominated in a currency that is different from the currency of the Indebtedness being incurred, such refinancing shall be deemed not to have exceeded the principal amount of the Refinanced Indebtedness so long as the principal amount of such Refinancing Indebtedness incurred does not exceed (i) the outstanding committed or principal amount (whichever is higher) of such Indebtedness being refinanced determined at the Equivalent Amount in Dollars as of the applicable date of determination plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing.

1.7. Additional Alternative Currencies.

(a) The Borrowers’ Agent may, from time to time, request that a Loan to a Borrower be made and/or Letters of Credit be issued in a currency other than in Dollars; provided that such requested currency is a lawful currency that is readily available and freely transferable and convertible into Dollars. In the case of any such request (i) with respect to the making of Loans to a Borrower, such request shall be subject to the approval of the Agent and each Lender, and the approval of Agent, each Lender and Borrowers’ Agent on the alternative benchmark interest rate and related Applicable Margin to be used for such a Loan in such Alternative Currency and (ii) with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Agent and each Letter of Credit Issuer that will be required to issue Letters of Credit in such Alternative Currency.

(b) Any request with respect to an additional Alternative Currency shall be made to the Agent not later than 11:00 a.m., New York City time, 10 Business Days prior to the date of the desired Borrowing (or such other time or date as may be agreed by the Agent and, in the case of any such request with respect to Letters of Credit, each applicable Letter of Credit Issuer). The Agent shall promptly notify each Lender and each applicable Letter of Credit Issuer (in the case of any such request pertaining to Letters of Credit). Each Lender or each applicable Letter

 

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of Credit Issuer, as applicable, shall notify the Agent, not later than 11:00 a.m., New York City time, 10 Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Loans to a Borrower or the issuance of Letters of Credit, as applicable, in such requested currency.

(c) Any failure by a Lender or a Letter of Credit Issuer, as applicable, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal of such Lender or such Letter of Credit Issuer, as applicable, to permit Loans to be made to a Borrower or Letters of Credit to be issued in such requested currency. If the Agent and the Lenders or the applicable Letter of Credit Issuer, as applicable, consent to making of Loans to a Borrower or the issuance of Letters of Credit in such requested currency, the Agent shall so notify the Borrowers’ Agent and such currency shall thereupon be deemed for all purposes to be an “Alternative Currency” hereunder for purposes of any Loans made to a Borrower or any Letters of Credit, as applicable. If the Agent shall fail to obtain consent to any request for an additional currency under this Section 1.7, the Agent shall promptly so notify the Borrowers’ Agent. Additionally, if at any time, any Lender(s) and/or any Letter of Credit Issuer(s) notify the Agent that they will no longer be able to extend Loans and/or issue Letters of Credit, as applicable, in an Alternative Currency approved pursuant to this Section 1.7, the Agent shall promptly notify the Borrowers’ Agent, and such Alternative Currency shall no longer be an “Alternative Currency” hereunder effective (i) in the case of any Loan or Letter of Credit to be made or issued after receipt of such notice, immediately after receipt thereof and (ii) otherwise, five Business Days after receipt of such notice.

(d) For the avoidance of doubt, any notice requirements applicable to Loans made to Borrowers or Letters of Credit in Alternative Currencies shall be substantially similar to those set forth in Sections 2.2 and 4.1(b) and Section 2.4 (with respect to Letters of Credit) or on such other terms as are mutually agreed by the Agent (and, in the case of any Letters of Credit, each applicable Letter of Credit Issuer) and the Borrowers’ Agent.

1.8. Pro Forma Calculations.

(a) Any financial ratio or test or compliance with any covenants determined by reference to Consolidated EBITDA, Consolidated Tangible Assets or any component definition thereof shall be calculated in a manner prescribed by this Section 1.8. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to the applicable period for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended period for which the financial statements of the Consolidated Parties are available (as determined in good faith by the Company).

(b) For purposes of determining compliance with any provision of this Agreement, including the determination of any financial ratio or test, any Specified Transaction that has occurred (i) during the applicable period or (ii) subsequent to such period and prior to or simultaneously with the event for which the determination of any such ratio, test or compliance with covenants is being made shall be determined on a pro forma basis (including giving effect to those specified in accordance with the definitions of “Consolidated EBITDA” and “Consolidated Net Income” and any component definitions thereof) assuming that all such Specified Transactions (including such Specified Transaction for which such compliance is

 

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being determined) had occurred on the first day of the applicable period. If since the beginning of any applicable period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into an Obligor or any Restricted Subsidiary since the beginning of such period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.8, then for purposes of determining compliance with any provision of this Agreement, including the determination of any financial ratio or test, such Specified Transactions shall be calculated to give pro forma effect thereto in accordance with this Section 1.8.

(c) In the event that (i) any Obligor or Restricted Subsidiary incurs (including by assumption or guarantee) or repays or refinances (including by redemption, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility unless such Indebtedness has been permanently repaid and not replaced) or (ii) any Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (x) during the applicable period or (y) subsequent to the end of the applicable period and prior to or simultaneously with the event for which the calculation of any such ratio or test is made or compliance with any covenant is determined, then such financial ratio or test or determination of compliance shall be calculated giving pro forma effect to such incurrence or repayment of Indebtedness, or such issuance, refinancing or redemption of Disqualified Stock, in each case to the extent required, as if the same had occurred on the last day of the applicable period (except that, in making such computation, the amount of Indebtedness under any revolving credit facility shall be computed based upon the average daily balance of such Indebtedness during the applicable period during the period from the date of creation of such facility to the date of such calculation);

(d) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness); provided, in the case of repayment of any Indebtedness, to the extent actual interest related thereto was included during all or any portion of the applicable period, the actual interest may be used for the applicable portion of such period. Interest on a Finance Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Finance Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, Term SOFR, Daily One Month SOFR or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Company or a Restricted Subsidiary may designate.

(e) Whenever pro forma effect is to be given to any Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company.

 

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1.9. Additional Borrowers.

(a) Notwithstanding anything in Section 12.1 to the contrary, following the Closing Date, the Borrowers’ Agent may request that one or more of its Subsidiaries that is a Wholly Owned Subsidiary organized under the laws of a jurisdiction in the United States or Canada be added to this Agreement as an additional borrower (an “Additional Borrower”) by delivering to the Agent a written notice; provided that:

(i) the Agent shall have consented, which consent may not be unreasonably withheld, to the designation of such Additional Borrower;

(ii) (A) such Additional Borrower shall become a party to this Agreement as a U.S. Borrower or a Canadian Borrower, as applicable, pursuant to joinder documentation in form and substance reasonably acceptable to the Agent and the Borrowers’ Agent and (B) to the extent reasonably requested by the Agent, the Agent shall have received such opinions, certificates, Charter Documents and other similar documents with respect to the Additional Borrower as are substantially consistent (as modified for differences in jurisdiction or as otherwise modified in a manner reasonably acceptable to the Agent) with those delivered with respect to the U.S. Borrower or the Canadian Borrowers, as applicable, on the Closing Date pursuant to Section 9.1(c);

(iii) (A) the Agent shall have first received, with respect to such Additional Borrower, all documentation and other information that is required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations including the Act (as defined in Section 14.23) to the extent reasonably requested in writing by the Agent and the Lenders and (B) any Additional Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall have first delivered, to each Lender that so requested, a Beneficial Ownership Certification in relation to such Additional Borrower;

(iv) (A) in the case of an Additional Borrower that is organized under the Laws of the United States of America, any state thereof or the District of Columbia, to the extent such Additional Borrower is not already a U.S. Guarantor, such Additional Borrower shall (x) execute and deliver to the Agent a Supplemental Agreement (as defined in the U.S. GCA) and such other amendments to the U.S. Security Documents as the Agent may reasonably deem necessary or reasonably advisable to grant to the Agent, for the benefit of the Secured Parties, a perfected security interest (as and to the extent provided in the U.S. Security Documents) in the Collateral of such Additional Borrower, (y) deliver such other documentation as the Agent may reasonably request in accordance with the U.S. Security Documents (and subject to the limitations set out therein) in order to cause the Lien created by the U.S. Security Documents in such Additional Borrower’s Collateral to be duly perfected in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may reasonably be requested by the Agent, and such other documents with respect to such Additional Borrower as the Agent may reasonably request that are consistent with the documents in place or delivered to the Agent by the Obligors on the Closing Date, and (z) except as may otherwise be provided in the definition of the term “Permitted Acquisition”, prior to including such Additional Borrower’s assets in the U.S. Borrowing Base, the Agent shall conduct an Appraisal and field examination with respect to such Additional Borrower, including of (A) such Additional Borrower’s practices in the computation of its Borrowing Base and (B) the assets included in

 

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such Additional Borrower’s Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to the Agent and at the sole expense of the Obligors; or

(B) in the case of an Additional Borrower that is organized under the Laws of Canada or any territory or province thereof, to the extent such Additional Borrower is not already a Canadian Guarantor, such Additional Borrower shall (x) execute and deliver to the Agent a Supplemental Agreement (as defined in the Canadian GCA) and such other amendments to the Canadian Security Documents as the Agent may reasonably deem necessary or reasonably advisable to grant to the Agent, for the benefit of the Secured Parties, a perfected security interest (as and to the extent provided in the Canadian Security Documents) in the Collateral of such Additional Borrower and in the Capital Stock of such Additional Borrower, (y) deliver such other documentation as the Agent may reasonably request in accordance with the applicable Security Documents (and subject to the limitations set out therein) in order to cause the Lien created by the applicable Security Documents in such new Canadian Subsidiary’s Collateral and in the Capital Stock of such new Canadian Subsidiary to be duly perfected in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may reasonably be requested by the Agent, and such other documents with respect to such Additional Borrower as the Agent may reasonably request that are consistent with the documents in place or delivered to the Agent by the Obligors on the Closing Date. Any obligations in respect of borrowings by any Additional Borrower under this Agreement will constitute “Obligations” for all purposes of the Loan Documents, and (z) to the extent applicable and as may otherwise be provided in the definition of the term “Permitted Acquisition”, prior to including such Additional Borrower’s assets in the Canadian Borrowing Base, the Agent shall conduct an Appraisal and field examination with respect to such Additional Borrower, including of (A) such Additional Borrower’s practices in the computation of its Borrowing Base and (B) the assets included in such Additional Borrower’s Borrowing Base and related financial information such as, but not limited to, sales, gross margins, payables, accruals and reserves, in each case, prepared on a basis reasonably satisfactory to the Agent and at the sole expense of the Obligors.

(b) In the case of any Additional Borrower, the Agent and the Borrowers’ Agent agree to enter into any amendment required to incorporate the addition of the Additional Borrower and such other amendments as may be necessary or appropriate in the reasonable opinion of the Agent and the Borrowers’ Agent in connection therewith. The Lenders hereby irrevocably authorize the Agent to enter into such amendments.

(c) The Borrowers’ Agent may from time to time, upon not less than three Business Days’ written notice to the Agent (or such shorter period as may be agreed by the Agent in its reasonable discretion), terminate a Borrower’s (other than the Company’s) status as such, and such Person shall thereupon cease to be considered a “Borrower” (and cease to be considered a U.S. Borrower or Canadian Borrower, as applicable) for all purposes hereunder; provided that (i) there are no outstanding Loans or Agent Advances payable by such Borrower, or other amounts payable by such Borrower on account of any Loans made to it, as of the effective date of such termination, (ii) there are no amounts (including charges and fees payable to or reasonably incurred by the applicable Letter of Credit Issuer) outstanding under any Letters of Credit issued to such Borrower as of the effective date of such termination, (iii) after giving

 

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effect to the exclusion of such Borrower’s assets that were included in the applicable Borrowing Base, no Out-of-Formula Condition would be created, (iv) to the extent such Borrower is otherwise required to be a Guarantor hereunder, such Borrower shall continue to be a Guarantor for all purposes hereunder without any additional action by the Borrowers’ Agent upon such termination and (v) the Maximum Multicurrency Revolver Amount shall be deemed to be zero at all times when there is no Canadian Borrower. The Agent will promptly notify the Lenders of any such termination of a Borrower’s status.

1.10. No Novation; Acknowledgement and Adjustment of Loans, Payment of Accrued Interest and Fees.

(a) It is the intent of the parties hereto that this Agreement not constitute a novation of the rights, obligations and liabilities of the respective parties (including the Obligations) existing under the Existing Credit Agreement or evidence payment of all or any of such obligations and liabilities, and such rights, obligations and liabilities shall continue and remain outstanding under the terms and conditions of this Agreement, and that this Agreement amends and restates in its entirety the Existing Credit Agreement. Without limiting the generality of the foregoing (i) all U.S. Revolving Loans outstanding under, and as defined in, the Existing Credit Agreement shall on the Closing Date become U.S. Revolving Loans hereunder, (ii) all Canadian Revolving Loans outstanding under, and as defined in, the Existing Credit Agreement shall on the Closing Date become Multicurrency Canadian Revolving Loans hereunder, and (iii) all other Obligations outstanding under, and as defined in, the Existing Credit Agreement shall on the Closing Date be Obligations under this Agreement.

(b) The Borrowers acknowledge and agree that as of the close of business on July 1, 2022 (i) the Aggregate U.S. Revolver Outstandings under, and as defined in, the Existing Credit Agreement (excluding the aggregate amount of Letters of Credit under, and as defined in, the Existing Credit Agreement) is approximately $905,000,000, (ii) the Aggregate Canadian Revolver Outstandings under, and as defined in, the Existing Credit Agreement (excluding the aggregate undrawn amount of Canadian Letters of Credit under, and as defined in, the Existing Credit Agreement) is $143,000,000, (iii) the Letters of Credit under, and as defined in, the Existing Credit Agreement are $23,802,794, and (iv) the Canadian Letters of Credit under, and as defined in the Existing Credit Agreement, are $989,922.

(c) As of the date hereof, immediately prior to entering into Amendment No. 1 and giving effect to the amendment and restatement of the outstanding obligations under the Existing Credit Agreement by Amendment No. 1, the Lenders under, and as such term is defined in, the Existing Credit Agreement (each an “Existing Lender”) have entered into a master Assignment and Acceptance Agreement with the Bank pursuant to which each such Existing Lender assigned to the applicable Bank 100% of its applicable Commitments and Loans each under, and as each such term is defined in, the Existing Credit Agreement (the “Existing Lender Assignments”). Each party hereto hereby agrees that (i) no consents or notices otherwise required under Section 12.2(a) of the Existing Credit Agreement shall be required for the Existing Lender Assignments and (ii) all other conditions or requirements set forth in Section 12.2 of the Existing Credit Agreement for the effectiveness of the Existing Lender Assignments shall be waived. In addition, the Borrowers agree to pay to each applicable Existing Lender any amounts payable in respect of the assignment by such Existing Lender under the Existing Lender Assignments in accordance with Section 12.2 of the Existing Credit Agreement.

 

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(d) The Borrowers acknowledge and agree that any and all unpaid interest and fees accrued under the Existing Credit Agreement as of (and including) the Amendment No. 1 Effective Date shall be paid on the Amendment No. 1 Effective Date.

(e) After giving effect to the Existing Lender Assignments and entering into Amendment No. 1, on the Amendment No. 1 Effective Date, the Existing Lenders that are parties thereto shall be Lenders hereunder and have Revolving Credit Commitments in the amounts set forth on Schedule 1.1 hereto, with the Commitments and Loans assigned to the applicable Bank under the Existing Lender Assignments deemed to be assigned to the Lenders party hereto on the same terms and conditions as those to which the same were assigned to the applicable Bank, to the extent and in the amounts provided for such Lender hereunder, and the Commitments held by one or more of the Lenders that are party hereto, and as such terms are defined in, the Existing Credit Agreement shall be converted into Revolving Credit Commitments hereunder and reduced or increased, as applicable, and reallocated amongst the Lenders party hereto so that, after giving effect to the provisions of this Section 1.10(e), each Lender holds the Revolving Credit Commitment set forth on Schedule 1.1 with respect to such Lender. After giving effect to such conversion and reallocation, the outstanding Revolving Loans may not be held pro rata in accordance with the new Revolving Credit Commitments hereunder. In order to remedy the foregoing, on or about the Amendment No. 1 Effective Date, the Lenders shall, as determined by the Agent, make advances among themselves (through the Agent) so that after giving effect thereto the Revolving Loans will be held by the Lenders on a pro rata basis in accordance with each Lender’s Pro Rata Share (after giving effect to the foregoing Revolving Credit Commitment reallocation) and, in such event, the Company shall pay to the applicable Lenders any amounts payable in respect thereof in accordance with Section 5.4 (with any reduction in Revolving Loans of any Lender pursuant to this Section 1.10(e) being deemed a prepayment for purposes of Section 5.4). Each Lender agrees to wire immediately available funds to the Agent in accordance with this Agreement as may be required by the Agent in connection with the foregoing. Notwithstanding the provisions of Section 12.2, the advances so made by each Lender under this Section 1.10(e) shall be deemed to be a purchase of a corresponding amount of the Revolving Loans from the applicable Lender or Lenders which hold Revolving Loans in excess of their Pro Rata Share of the aggregate outstanding Revolving Loans and shall not be considered an assignment for purposes of Section 12.2.

1.11. Canadian Guarantors, Excess Availability and Related Matters. Notwithstanding anything to the contrary contained herein, if the IRS or any other Governmental Authority having jurisdiction over the Company or any of its Subsidiaries adopts any regulation under Section 956 of the Code or otherwise, and such regulation would reasonably be expected to cause the guarantees and collateral provided by any Canadian Guarantor as guarantees of, or security for, any U.S. Obligation, in each case, to result in material tax or other material adverse consequences to be suffered by the Company or any of its Subsidiaries (as determined by the Borrowers’ Agent in its sole discretion), then the Borrowers’ Agent will promptly so notify the Agent and the Agent, the Borrowers and the applicable Obligors may, at the election of the Borrowers’ Agent (in its sole discretion) amend this Agreement, the Canadian GCA, any other

 

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Canadian Security Document and any other Loan Document to provide that no Canadian Guarantor shall (i) guarantee any Obligation of a U.S. Obligor or (ii) otherwise constitute a U.S. Guarantor and that no Canadian Collateral shall secure any Obligation of a U.S. Obligor and, in connection therewith: (a) amend this Agreement to exclude the Canadian Borrowing Base, Eligible Accounts, Eligible Rental Equipment, Eligible Service Vehicles, and Eligible Spare Parts and Merchandise, in each case owned by the Canadian Obligors, from the determination of the “Borrowing Base” and revise the definition of “Out-of-Formula Condition” in Section 4.2 accordingly, and (b) make any other amendments, modifications or other changes to any of the Loan Documents as are reasonably necessary or advisable in connection with the foregoing in the reasonable determination of Agent (including, but not limited to, so that the amount of Loans and Letters of Credit made to or for the benefit of U.S. Borrowers shall be based exclusively on the U.S. Borrowing Base as amended pursuant to clause (a) above and will not exceed the amount of the U.S. Borrowing Base as so amended). Any such amendment, modification or other change will become effective upon execution thereof by the applicable Obligors and the Agent. The Lenders hereby irrevocably authorize the Agent to enter into any such amendment or other modification.

1.12. LLC Divisions. For all purposes under the Loan Documents, in connection with any LLC Division: (a) if any asset, right, obligation or liability of any Person becomes an asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.

ARTICLE II

LOANS AND LETTERS OF CREDIT

2.1. Revolving Loans.

(a) Subject to all of the terms and conditions of this Agreement, each U.S. Facility Lender severally, but not jointly or jointly and severally, agrees to make U.S. Revolving Loans to the U.S. Borrowers in amounts not to exceed such Lender’s Pro Rata Share of the aggregate U.S. Facility Commitments at such time; provided that no Lender shall have any obligation to make (i) a U.S. Revolving Loan if U.S. Excess Availability is less than zero or to the extent that such U.S. Revolving Loan would result in U.S. Excess Availability being less than zero, subject to the Agent’s authority, in its sole discretion, to make Agent Advances pursuant to the terms of Section 2.2(b), (ii) any U.S. Revolving Loan to the extent that such U.S. Revolving Loan would result in the Aggregate U.S. Revolver Outstandings exceeding the Maximum U.S. Revolver Amount, or (iii) any U.S. Revolving Loan to the extent that such U.S. Revolving Loan would result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount. The U.S. Facility Lenders, however, in their unanimous discretion, may elect to make U.S. Revolving Loans or issue or arrange to have issued U.S. Facility Letters of Credit in excess of the U.S. Excess Availability (but not in an amount that would result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount or in the Aggregate U.S. Revolver Outstandings exceeding the Maximum U.S. Revolver Amount), as applicable, on one or more occasions, but if they do so, neither the Agent nor the U.S. Facility Lenders shall be deemed thereby to have changed the limits of the U.S. Borrowing Base or the Canadian Borrowing Base or to be obligated to exceed such limits on any other occasion.

 

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(b) Subject to all of the terms and conditions of this Agreement, each Multicurrency Facility Lender severally, but not jointly or jointly and severally, agrees to make Multicurrency Revolving Loans to the U.S. Borrowers or Canadian Borrowers in amounts not to exceed such Lender’s Pro Rata Share of the aggregate Multicurrency Facility Commitments at such time; provided that no Lender shall have any obligation to make (i) a Multicurrency Revolving Loan if Multicurrency Excess Availability is less than zero or to the extent that such Multicurrency Revolving Loan would result in Multicurrency Excess Availability being less than zero, subject to the Agent’s authority, in its sole discretion, to make Agent Advances pursuant to the terms of Section 2.2(b), (ii) any Multicurrency Revolving Loan to the extent that such Multicurrency Revolving Loan would result in the Aggregate Multicurrency Revolver Outstandings exceeding the Maximum Multicurrency Revolver Amount, or (iii) any Multicurrency Revolving Loan to the extent that such Multicurrency Revolving Loan would result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount. The Multicurrency Facility Lenders, however, in their unanimous discretion, may elect to make Multicurrency Revolving Loans or issue or arrange to have issued Multicurrency Facility Letters of Credit in excess of the Multicurrency Excess Availability (but not in an amount that would result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount or in the Aggregate Multicurrency Revolver Outstandings exceeding the Maximum Multicurrency Revolver Amount), as applicable, on one or more occasions, but if they do so, neither the Agent nor the Multicurrency Facility Lenders shall be deemed thereby to have changed the limits of the U.S. Borrowing Base or the Canadian Borrowing Base or to be obligated to exceed such limits on any other occasion.

2.2. Revolving Loan Administration.

(a) Procedure for Borrowing.

(i) Each of the applicable Borrowers may borrow under the applicable Commitments on any Business Day during the period from the Closing Date until the Termination Date; provided that the Borrowers’ Agent shall give the Agent irrevocable (in the case of any notice except notice with respect to the initial extension of Revolving Loans hereunder) notice in substantially the form of Exhibit B or in such other form as may be agreed between the Borrowers’ Agent and the Agent (each, a “Notice of Borrowing”) (which request must be received by the Agent prior to (A) 11:00 a.m., New York City time, at least three Business Days prior to the requested Funding Date, if all or any part of the requested Revolving Loans are to be initially Term SOFR Loans denominated in Dollars made to a U.S. Borrower or Daily One Month SOFR Loans denominated in Dollars made to a U.S. Borrower, (B) 11:00 a.m., New York City time, at least three Business Days prior to the requested Funding Date, if all or any part of the requested Revolving Loans are to be initially Term SOFR Loans denominated in Dollars made to any Borrower other than a U.S. Borrower or BA Equivalent Loans, (C) 11:00 a.m., New York City time, at least three Business Days prior to the requested Funding Date, for Canadian Prime Rate Loans (or in the case of the initial Borrowing hereunder, in each case, 10:00 a.m., New York City time, one Business Day prior to the date of the initial borrowing hereunder) or (D) 12:00 noon, New York City time, on the requested Funding Date, for Base

 

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Rate Loans denominated in Dollars (or in the case of the initial Borrowing hereunder, in each case, 10:00 a.m., New York City time, one Business Day prior to the date of the initial borrowing hereunder) specifying (1) the identity of the Borrower, (2) the currency of the requested Borrowing and the amount to be borrowed, (3) the requested Funding Date, (4) whether the Borrowing is to be of Term SOFR Loans, Daily One Month SOFR Loans, BA Equivalent Loans, Base Rate Loans or Canadian Prime Rate Loans (as applicable) or a combination thereof (and if not so specified, it shall be deemed a request for Base Rate Loans (in the case of U.S. Revolving Loans or Multicurrency Revolving Loans denominated in Dollars), Term SOFR Loans with an Interest Period of one month or Canadian Prime Rate Loans (in the case of Multicurrency Canadian Revolving Loans denominated in Canadian Dollars)), (5) if the Borrowing is to be entirely or partly of Term SOFR Loans or BA Equivalent Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Periods or BA Equivalent Interest Periods therefor (and if not so specified, it shall be deemed a request for a period of one month) and (6) in the case of a U.S. Borrower, whether such Borrowing is a U.S. Revolving Loan or a Multicurrency Revolving Loan. All Borrowings by Canadian Borrowers shall be Multicurrency Revolving Loans. Daily One Month SOFR Loans shall only be made to U.S. Borrowers denominated in Dollars and shall not exceed $100,000,000 in the aggregate at any time outstanding. Base Rate Loans, including Canadian Base Rate Loans, shall be denominated in Dollars. Canadian Prime Rate Loans and BA Equivalent Loans shall be denominated in Canadian Dollars. Each Borrowing, except any Base Rate Loan or Canadian Prime Rate Loan to be used solely to pay a like amount of outstanding reimbursement obligations in respect of Letters of Credit or Swingline Loans, shall be in an amount equal to an integral multiple of the applicable Borrowing Multiple and not less than the applicable Borrowing Minimum. Upon receipt of any such notice from the Borrowers’ Agent, the Agent shall promptly notify each Revolving Credit Lender thereof. Subject to the satisfaction of the conditions precedent specified in Section 9.2, each Revolving Credit Lender will make the amount of its Pro Rata Share of each Borrowing of Revolving Loans available to the Agent for the account of the Borrower(s) identified in such notice to the account or accounts from time to time designated by the Agent prior to 3:00 p.m., New York City time (or 10:00 a.m., New York City time, in the case of the initial borrowing hereunder), or at such other time as to which the Agent shall notify the Borrowers’ Agent reasonably in advance of the Funding Date with respect thereto, on the Funding Date requested by such Borrower(s) in Dollars, Canadian Dollars or any other Alternative Currency, as applicable, and in funds immediately available to the Agent. Such Borrowing will then be made available to the relevant Borrower by the Agent, crediting the account of such Borrower designated by the Borrowers’ Agent in writing, with the aggregate of the amounts made available to the Agent by the Revolving Credit Lenders and in like funds as received by the Agent.

(ii) In lieu of delivering a Notice of Borrowing, the Borrowers’ Agent may give the Agent telephonic notice of such request for advances on or before the deadline set forth above. The Agent at all times shall be entitled to rely on such telephonic notice in making such Loans, regardless of whether any written confirmation is received.

(iii) At the election of the Agent or the Required Lenders, the Borrowers shall not be entitled to request a BA Equivalent Loan, a Daily One Month SOFR Loan or a Term SOFR Loan while a Default or Event of Default has occurred and is continuing.

 

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(b) Agent Advances. (i) In the event any U.S. Borrower or Canadian Borrower is, as applicable, unable to comply with (x) the U.S. Excess Availability or Multicurrency Excess Availability limitations set forth in Section 2.1, as applicable, or (y) the conditions precedent to the making of Loans or the issuance of Letters of Credit set forth in Article IX or (ii) during the existence of a Default or Event of Default, (x) the Lenders authorize the Agent (in the case of Multicurrency Canadian Revolving Loans, acting through its Canada branch), for the account of the Lenders, to make U.S. Revolving Loans to the U.S. Borrowers in Dollars or Multicurrency Canadian Revolving Loans to the Canadian Borrowers in Canadian Dollars, as applicable, each of which may only be made as Base Rate Loans (in the case of U.S. Revolving Loans) or Canadian Prime Rate Loans (in the case of Multicurrency Canadian Revolving Loans) (each, an “Agent Advance”) for a period commencing on the date the Agent first receives a Notice of Borrowing requesting an Agent Advance until the earliest of (A) the 30^th Business Day after such date, (B) the date the respective Borrowers or Borrower is again able to comply with the U.S. Excess Availability or Multicurrency Excess Availability limitations and the conditions precedent to the making of Loans and issuance of Letters of Credit or obtains an amendment or waiver with respect thereto, or the Default or Event of Default no longer exists, and (C) the date the Required Lenders instruct the Agent in writing to cease making Agent Advances (in each case, the “Agent Advance Period”); provided that (I) the Equivalent Amount in Dollars of the aggregate amount of Agent Advances outstanding at any time shall not exceed $200,000,000, (II) the Equivalent Amount in Dollars of the aggregate amount of Agent Advances to the Canadian Borrowers outstanding at any time shall not exceed the product of $120,000,000 multiplied by the Maximum Multicurrency Revolver Amount as a percentage of the Maximum Revolver Amount, and (III) no Agent Advance shall be made to the extent that such Agent Advance would result in (x) the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount, (y) the Aggregate Multicurrency Revolver Outstandings exceeding the Maximum Multicurrency Revolver Amount or (z) the Aggregate U.S. Revolver Outstandings exceeding the Maximum U.S. Revolver Amount. It is understood and agreed that the Borrowers shall have no right to require that any Agent Advances be made.

(c) Each Lender may make any Loan to the applicable Borrower through any branch or affiliate of such Lender that is an Eligible Assignee; provided that such Lender shall retain all rights and obligations hereunder in respect of any such Loan and such Lender’s Commitment.

(d) Changes to Maximum Multicurrency Revolver Amount.

(i) Provided no Default or Event of Default has occurred and is continuing, upon notice to the Agent, (A) the Borrowers’ Agent may request an increase to the Maximum Multicurrency Revolver Amount by an amount not to exceed $100,000,000 (up to a total of $450,000,000), which increase shall be subject to the prior written consent of the Agent (not to be unreasonably withheld) but shall not require the consent of any Lender, and (B) the Borrowers’ Agent may request an increase to the Maximum Multicurrency Revolver Amount by an amount in excess of $100,000,000, which increase shall be subject to the prior written consent of the Agent (not to be unreasonably withheld) and the Required Lenders; provided that the Maximum Multicurrency Revolver Amount may only be increased in amounts of at least $25,000,000 and in integral multiples of $5,000,000 in excess thereof.

 

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(ii) Upon notice to the Agent, the Borrowers’ Agent may request a decrease to the Maximum Multicurrency Revolver Amount in an amount equal to an integral multiple of $5,000,000.

2.3. Swingline Loans.

(a) U.S. Swingline Loans. Subject to the terms and conditions hereof, the U.S. Swingline Lender agrees to make swing line loans (individually, a “U.S. Swingline Loan” and collectively, the “U.S. Swingline Loans”) to any U.S. Borrower from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate principal amount at any one time outstanding not to exceed (i) $200,000,000 or (ii) such greater amount, not to exceed $350,000,000, as may be requested by the Borrowers’ Agent and agreed to in writing by the Agent and the U.S. Swingline Lender (the “U.S. Swingline Sublimit”); provided that the U.S. Swingline Lender shall not make any U.S. Swingline Loans if, after doing so, (A) Excess Availability would be less than zero, (B) the Aggregate Revolver Outstandings would exceed the Maximum Revolver Amount, (C) the Aggregate U.S. Revolver Outstandings would exceed the Maximum U.S. Revolver Amount or (D) U.S. Excess Availability would be less than zero. Amounts borrowed by any U.S. Borrower under this Section 2.3(a) may be repaid and, through but excluding the Termination Date, reborrowed. All U.S. Swingline Loans shall be made in Dollars as Base Rate Loans and shall not be entitled to be converted into Term SOFR Loans or Daily One Month SOFR Loans. The Borrowers’ Agent (on behalf of any U.S. Borrower) shall give the U.S. Swingline Lender irrevocable notice (which notice must be received by the U.S. Swingline Lender prior to 12:00 noon, New York City time) on the requested Funding Date specifying (1) the identity of the U.S. Borrower and (2) the amount of the requested U.S. Swingline Loan, which shall be in a minimum amount of $100,000 or whole multiples of $50,000 in excess thereof. The proceeds of the U.S. Swingline Loan will be made available by the U.S. Swingline Lender to the U.S. Borrower identified in such notice at an office of the U.S. Swingline Lender by wire transfer to the account of such U.S. Borrower specified in such notice. Each U.S. Swingline Loan shall be subject to all the terms and conditions applicable to other U.S. Revolving Loans except that all payments thereon (including interest) shall be payable to the U.S. Swingline Lender solely for its own account.

(b) [Reserved]

(c) Multicurrency Swingline Loans. Subject to the terms and conditions hereof, the Multicurrency Canadian Swingline Lender agrees to make swing line loans to any Canadian Borrower (individually, a “Multicurrency Canadian Swingline Loan”; collectively, the “Multicurrency Canadian Swingline Loans”) and the Multicurrency U.S. Swingline Lender agrees to make swing line loans to any U.S. Borrower (individually, a “Multicurrency U.S. Swingline Loan”; collectively, the “Multicurrency U.S. Swingline Loans,” and together with Multicurrency Canadian Swingline Loans, individually a “Multicurrency Swingline Loan” and collectively, “Multicurrency Swingline Loans”) from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate principal amount at any one time outstanding not to exceed (i) $100,000,000 or (ii) such greater amount, not to exceed $200,000,000, as may be requested by the Borrowers’ Agent and agreed to in writing by the Agent and the Multicurrency Swingline Lender (the “Multicurrency Swingline Sublimit”); provided that the Multicurrency Swingline Lenders shall not make any Multicurrency Swingline

 

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Loans if, after doing so, (A) Excess Availability would be less than zero, (B) the Aggregate Revolver Outstandings would exceed the Maximum Revolver Amount, (C) the Aggregate Multicurrency Revolver Outstandings would exceed the Maximum Multicurrency Revolver Amount, (D) Multicurrency Excess Availability would be less than zero, or (E) the aggregate amount of Multicurrency Canadian Swingline Loans would exceed the Dollar Equivalent of $75,000,000 or such greater amount not to exceed the Multicurrency Swingline Sublimit as then in effect, as may be requested by the Borrowers’ Agent and agreed to in writing by Agent and the Multicurrency Swingline Lender. Amounts borrowed by any Borrower under this Section 2.3(c) may be repaid and, through but excluding the Termination Date, reborrowed. All Multicurrency Canadian Swingline Loans shall be made in Canadian Dollars as Canadian Prime Rate Loans and shall not be entitled to be converted into BA Equivalent Loans. All Multicurrency U.S. Swingline Loans shall be made in U.S. Dollars as Base Rate Loans and shall not be entitled to be converted into Term SOFR Loans or Daily One Month SOFR Loans. The Borrowers’ Agent (on behalf of any Borrower) shall give the applicable Multicurrency Swingline Lender irrevocable notice (which notice must be received by such Multicurrency Swingline Lender prior to 12:00 noon, New York City time) on the requested Funding Date specifying (A) the identity of the Borrower and (B) the amount of the requested Multicurrency Swingline Loan, which shall be in a minimum amount of Cdn $100,000 or whole multiples of Cdn $50,000 in excess thereof or $100,000 or whole multiples of $50,000 in excess thereof, as applicable. The proceeds of the Multicurrency Swingline Loan will be made available by the applicable Multicurrency Swingline Lender to the Borrower identified in such notice at an office of the applicable Multicurrency Swingline Lender by wire transfer to the account of such Borrower specified in such notice. Each Multicurrency Swingline Loan shall be subject to all the terms and conditions applicable to other Multicurrency Revolving Loans except that all payments thereon (including interest) shall be payable to the applicable Multicurrency Swingline Lender solely for its own account.

2.4. Letters of Credit.

(a) Agreement to Issue or Cause to Issue. Subject to all of the terms and conditions of this Agreement, the Agent agrees to cause each Letter of Credit Issuer to issue for the account of the Company (or for the support of any other Borrower or any Subsidiary of the Company or any of their franchisees, so long as the Company and such other Borrower are co-applicants) one or more commercial/documentary and standby letters of credit (i) denominated in Dollars, Canadian Dollars or any Alternative Currency under the Multicurrency Credit Facility (each a “Multicurrency Facility Letter of Credit” and collectively the “Multicurrency Letters of Credit”), as requested by the Borrowers’ Agent or (ii) denominated in Dollars under the U.S. Credit Facilities (each, a “U.S. Facility Letter of Credit” and, collectively, the “U.S. Facility Letters of Credit,” and together with the Multicurrency Facility Letters of Credit, each a “Letter of Credit” and, collectively, the “Letters of Credit”), as requested by the Borrowers’ Agent, and to amend, renew or extend Letters of Credit previously issued by the applicable Letter of Credit Issuer (unless otherwise provided below).

(b) Amounts; Outside Expiration Date. The Agent shall not issue or cause to be issued any Letter of Credit at any time if the Equivalent Amount in Dollars of (i) the maximum aggregate amount of the requested Letter of Credit for the term of such Letter of Credit (in each case including any increases in amount referenced therein) is greater than the Unused Letter of

 

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Credit Subfacility at such time, (ii) with respect to any Letter of Credit requested for the account of any Canadian Borrower or U.S. Borrower, the maximum aggregate amount of the requested Multicurrency Letter of Credit for the term of such Multicurrency Letter of Credit (in each case including any increases in amount referenced therein) is greater than the Multicurrency Unused Letter of Credit Subfacility at such time, (iii) in the case of a Multicurrency Letter of Credit, the maximum undrawn amount of the requested Letter of Credit would result in the Multicurrency Excess Availability being less than zero, or in the case of a U.S. Facility Letter of Credit would result in the U.S. Excess Availability being less than zero, (iv) such Letter of Credit would result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount, (v) in the case of a Multicurrency Letter of Credit, such Letter of Credit would result in the Aggregate Multicurrency Revolver Outstandings exceeding the Maximum Multicurrency Revolver Amount or in the case of a U.S. Facility Letter of Credit would result in the Aggregate U.S. Revolver Outstandings exceeding the Maximum U.S. Revolver Amount or (vi) such Letter of Credit has an expiration date later than 12 months after the date of issuance, in the case of standby letters of credit (subject to customary evergreen or automatic renewal provisions reasonably acceptable to such Letter of Credit Issuer), or later than 180 days after the date of issuance, in the case of documentary letters of credit; provided that in no event shall any Letter of Credit have an expiration date later than the date that is five Business Days prior to the Termination Date (except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Letter of Credit Issuer). With respect to any Letter of Credit which contains any “evergreen” or automatic renewal or extension provision, if such Letter of Credit permits the applicable Letter of Credit Issuer to prevent any extension by giving notice to the beneficiary thereof no later than a date (the “Non-Extension Notice Date”), once any such Letter of Credit has been issued, the Lenders shall be deemed to have authorized such Letter of Credit Issuer to permit extensions of such Letter of Credit to an expiry date not later than the date that is five Business Days prior to the Termination Date, unless the Agent and the applicable Letter of Credit Issuer shall have received written notice from the Required Lenders declining to consent to any such extension at least 30 days prior to the Non-Extension Notice Date; provided that no Lender may decline to consent to any such extension if all of the requirements of this Section 2.4 are met and no Default or Event of Default has occurred and is continuing. Notwithstanding anything to the contrary contained herein, no Letter of Credit Issuer shall be required to issue any Letter of Credit if after giving effect thereto, the aggregate maximum amount of all undrawn Letters of Credit issued by such Letter of Credit Issuer would exceed the sublimit for such Letter of Credit Issuer set forth on Schedule 1.1 (unless otherwise agreed by such Letter of Credit Issuer from time to time).

(c) Other Conditions. In addition to the conditions precedent contained in Article IX, and subject to the terms and conditions contained in Section 13.15 with respect to Defaulting Lenders, the obligation of the Agent to cause to be issued, or of a Letter of Credit Issuer to issue, any applicable Letter of Credit is subject to the following conditions precedent having been satisfied in a manner reasonably acceptable to the Agent and such Letter of Credit Issuer:

(i) the Borrowers’ Agent shall have delivered to the applicable Letter of Credit Issuer and Agent, as set forth in Section 2.4(d)(i), at least three Business Days (or such shorter period as the applicable Letter of Credit Issuer may, in its reasonable discretion, agree) in advance of the proposed date of issuance of any Letter of Credit, an application in form and substance reasonably satisfactory to such Letter of Credit Issuer for the issuance of the Letter of Credit and such other documents as may be reasonably required pursuant to the terms thereof, and the form of the proposed Letter of Credit shall be reasonably satisfactory to the Agent and the applicable Letter of Credit Issuer; and

 

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(ii) as of the date of issuance, no order of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain the applicable Letter of Credit Issuer from issuing letters of credit of the type and in the amount of the proposed Letter of Credit, and no law, rule or regulation applicable to the applicable Letter of Credit Issuer and no request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Letter of Credit Issuer shall prohibit, or request that the proposed Letter of Credit Issuer refrain from, the issuance of letters of credit generally or the issuance of such Letters of Credit.

(d) Issuance of Letters of Credit.

(i) Request for Issuance. To request the issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit), the Borrowers’ Agent shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the respective Letter of Credit Issuer) to a Letter of Credit Issuer selected by it and to the Agent at least three Business Days (or such shorter period as the applicable Letter of Credit Issuer may agree) prior to the proposed issuance date, notice requesting the issuance of such Letter of Credit or identifying the Letter of Credit to be amended or extended. Such notice shall be irrevocable and must specify (A) the applicant or applicants of the Letter of Credit, (B) the original face amount (and currency) of the Letter of Credit requested, (C) the date of issuance, amendment or extension of such requested Letter of Credit (which shall be a Business Day), (D) whether such Letter of Credit may be drawn in a single or in partial draws, (E) the Business Day on which the requested Letter of Credit is to expire, (F) the purpose for which such Letter of Credit is to be issued, (G) the beneficiary of the requested Letter of Credit, and (H) in the case of a Letter of Credit for a U.S. Borrower, whether such Letter of Credit is a U.S. Facility Letter of Credit or Multicurrency Facility Letter of Credit (and if such notice does not specify, Agent shall make such determination). The Borrowers’ Agent shall attach to such notice the proposed form of the Letter of Credit. A Letter of Credit Issuer shall not be under any obligation to issue any Letter of Credit if the issuance of such Letter of Credit would violate one or more policies of such Letter of Credit Issuer applicable to letters of credit generally and disclosed to Borrowers’ Agent.

(ii) Responsibilities of the Agent; Issuance. As of the Business Day immediately preceding the requested issuance date of each Letter of Credit, the Agent shall determine the amount of the Unused Letter of Credit Subfacility, the Multicurrency Unused Letter of Credit Subfacility, the U.S. Unused Letter of Credit Subfacility, the U.S. Excess Availability and the Multicurrency Excess Availability as of such date. If the Equivalent Amount in Dollars of (A) the aggregate amount of the requested Letter of Credit for the term of such Letter of Credit (including any increases in amount referenced therein) is no greater than the Unused Letter of Credit Subfacility, (B) with respect to any Multicurrency Facility Letter of Credit requested for the account of any Canadian Borrower or U.S. Borrower, the aggregate amount of the requested Letter of Credit for the term of such Letter of Credit (including any increases in amount referenced therein) is no greater than the Multicurrency Unused Letter of

 

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Credit Subfacility and would not result in the Aggregate Multicurrency Revolver Outstandings exceeding the Maximum Multicurrency Revolver Amount, (C) with respect to any U.S. Facility Letter of Credit requested for the account of a U.S. Borrower, the aggregate amount of the requested Letter of Credit for the term of such Letter of Credit (including any increases in amount referenced therein) is no greater than the U.S. Unused Letter of Credit Subfacility and would not result in the Aggregate U.S. Revolver Outstandings exceeding the Maximum U.S. Revolver Amount, and (D) such Letter of Credit would not result in the Aggregate Revolver Outstandings exceeding the Maximum Revolver Amount, the Agent shall cause such Letter of Credit Issuer to issue the requested Letter of Credit on the requested issuance date so long as the other conditions to such issuance are met.

(iii) No Extensions or Amendment. Except in the case of Letters of Credit subject to evergreen or automatic renewal provisions, the Agent shall not be obligated to cause the applicable Letter of Credit Issuer, and the applicable Letter of Credit Issuer shall not be obligated, to extend, renew or amend any Letter of Credit issued pursuant hereto unless the requirements of this Section 2.4 are met as though a new Letter of Credit were being requested and issued.

(e) Payments Pursuant to Letters of Credit. Borrowers’ Agent (on behalf of the Borrowers) agrees to reimburse the applicable Letter of Credit Issuer for any draw under any Letter of Credit within one Business Day (or such longer period as may be agreed to by the Agent and the applicable Letter of Credit Issuer, in each case in its sole discretion) after notice of such drawing is received by such Borrowers’ Agent, together with accrued interest thereon from the date of such drawing at the Base Rate (in the case of Letters of Credit denominated in Dollars), at the Canadian Prime Rate (in the case of Letters of Credit denominated in Canadian Dollars), and to pay the applicable Letter of Credit Issuer the amount of all other charges and fees payable to or reasonably incurred by such Letter of Credit Issuer in connection with any Letter of Credit immediately when due, irrespective of any claim, setoff, defense or other right which any Borrower may have at any time against such Letter of Credit Issuer or any other Person. All payments required under this Section 2.4(e) shall be made in the currency in which the applicable Letter of Credit was issued; provided that the Borrowers’ Agent may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.2 that such payment be financed with, or, in the event not so requested on such date, each drawing under any Letter of Credit issued for the account of a Borrower shall constitute a request by such Borrower to the Agent for, a Borrowing in Dollars of a Base Rate Loan or a Borrowing in Canadian Dollars of a Canadian Prime Rate Loan, as applicable, in the amount of such drawing (or, with respect to Letters of Credit issued in any Alternative Currency, a Borrowing in Dollars of a Base Rate Loan in the Equivalent Amount in Dollars of such drawing) and, to the extent so financed, such Borrower’s obligation to make such payment will be discharged and replaced by the resulting Base Rate Loan or Canadian Prime Rate Loan, as applicable.

(f) Indemnification; Exoneration; Power of Attorney.

(i) Indemnification. In addition to amounts payable as elsewhere provided in this Section 2.4, the Borrowers agree to protect, indemnify, pay and save the applicable Revolving Credit Lenders, the applicable Letter of Credit Issuer (and its branches, Affiliates and correspondents) and the Agent, and each such Person’s Related Parties, harmless from and

 

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against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including Attorney Costs) which any Revolving Credit Lender, such Letter of Credit Issuer (and its branches, Affiliates and correspondents) or the Agent, or such Related Parties, may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, except that the foregoing indemnity shall not apply to such Revolving Credit Lender, such Letter of Credit Issuer (and its branches, Affiliates and correspondents) or the Agent, or such Related Parties, as applicable, to the extent of the gross negligence, bad faith or willful misconduct of such Person (as determined by a final non-appealable order of a court of competent jurisdiction). The Borrowers’ obligations under this Section 2.4(f)(i) shall survive payment of all other Obligations and termination of this Agreement and the Letters of Credit.

(ii) Assumption of Risk by the Borrowers and Obligations Absolute. As among the Borrowers, the applicable Revolving Credit Lenders, the applicable Letter of Credit Issuer and the Agent, the Borrowers assume all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. The Borrowers’ obligation to reimburse any payment made by a Letter of Credit Issuer pursuant to a Letter of Credit as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of: (r) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of and presentation of drafts with respect to any of the Letters of Credit, even if it should prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (s) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (t) the failure of the beneficiary of any Letter of Credit to comply duly with conditions set forth in any separate agreement with an Obligor that are required in order to draw upon such Letter of Credit; (u) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (w) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (x) the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under such Letter of Credit; (y) any consequences arising from causes beyond the control of the applicable Revolving Credit Lenders, the applicable Letter of Credit Issuer or the Agent, including any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Authority; or (z) the applicable Letter of Credit Issuer’s honor of a draw for which the draw or any certificate fails to comply in any material respect with the terms of the Letter of Credit; provided that the foregoing shall not be construed to excuse a Letter of Credit Issuer from liability to the Borrowers to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrowers to the extent permitted by applicable law) suffered by the Borrowers that are caused by such Letter of Credit Issuer’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of a Letter of Credit Issuer (as determined by a final non-appealable order of a court of competent jurisdiction), such Letter of Credit Issuer shall be deemed to have exercised care in each such determination. None of the foregoing shall affect, impair or prevent the vesting of any rights or powers of the Agent or any Revolving Credit Lender under this Section 2.4(f).

 

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(iii) Exoneration. Without limiting the foregoing, no action or omission whatsoever by the Agent, a Letter of Credit Issuer or any Revolving Credit Lender with respect to any Letter of Credit shall result in any liability of the Agent, such Letter of Credit Issuer or any Revolving Credit Lender to any Borrower (except as provided in the immediately succeeding clause (iv)), or relieve any Borrower of any of its obligations hereunder to any such Person nor shall any other circumstances whatsoever impair the obligations of Borrowers to reimburse any Letter of Credit Issuer for each drawing under any Letter of Credit issued by it.

(iv) Rights Against Letter of Credit Issuer. Nothing contained in this Agreement is intended to limit the Borrowers’ rights, if any, with respect to any Letter of Credit Issuer which arise as a result of the letter of credit application and related documents executed by and between any Borrower and such Letter of Credit Issuer or the gross negligence or willful misconduct of such Letter of Credit Issuer (as determined by a final non-appealable order of a court of competent jurisdiction).

(v) Account Party. The Borrowers hereby authorize and direct any Letter of Credit Issuer to name the applicable Borrower as the “Account Party” in the Letters of Credit and to deliver to the Agent all instruments, documents and other writings and property received by the applicable Letter of Credit Issuer pursuant to the Letters of Credit, and to accept and rely upon the Agent’s instructions and agreements with respect to all matters arising in connection with the Letters of Credit or the applications therefor. If Borrowers request any Letter of Credit Issuer to issue a Letter of Credit for the credit support of an affiliated or unaffiliated third party (including a Subsidiary or a Franchisee) (A) such third party shall have no rights against such Letter of Credit Issuer; (B) Borrowers shall be responsible for the application and obligations under this Agreement; and (C) communications (including notices) related to the respective Letter of Credit shall be among Letter of Credit Issuer and Borrowers.

(g) Supporting Letter of Credit. If, notwithstanding the provisions of Section 2.4(b) and Section 11.1, any Letter of Credit is outstanding upon the Termination Date, then upon the Termination Date each applicable Borrower shall (i) deposit with the Agent, for the ratable benefit of the Agent, the applicable Letter of Credit Issuer and the applicable Revolving Credit Lenders, with respect to each Letter of Credit then outstanding, a standby letter of credit (a “Supporting Letter of Credit”) in form and substance reasonably satisfactory to the Agent and the applicable Letter of Credit Issuer, issued by an issuer reasonably satisfactory to the Agent, in an amount equal to 102% (or such lesser amount as the Agent and such Letter of Credit Issuer shall agree, but not less than 100%) of the sum of the greatest amount for which such Letter of Credit may be drawn plus any fees and expenses then due with respect to such Letter of Credit, under which Supporting Letter of Credit the Agent is entitled to draw amounts necessary to reimburse the Agent, such Letter of Credit Issuer and the applicable Revolving Credit Lenders for payments to be made by the Agent, such Letter of Credit Issuer and such Revolving Credit Lenders under such Letter of Credit and any fees and expenses then due or to become due with such Letter of Credit, or (ii) cash collateralize each Letter of Credit then outstanding, in an amount equal to 102% (or such lesser amount as the Agent and such Letter of Credit Issuer shall agree) of the sum of the greatest amount for which such Letter of Credit may

 

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be drawn plus any fees and expenses then due with such Letter of Credit, in a manner reasonably satisfactory to the Agent. Such Supporting Letter of Credit or cash collateral shall be held by the Agent, for the ratable benefit of the Agent, the applicable Letter of Credit Issuer and the Revolving Credit Lenders, as security for, and to provide for the payment of, the aggregate undrawn amount of such Letters of Credit remaining outstanding and any such fees and expenses.

2.5. Incremental Facility.

(a) So long as no Specified Default exists or would arise therefrom, each Borrower shall have the right, at any time and from time to time after the Closing Date, to request (i) an increase of the aggregate amount of the then outstanding Revolving Credit Commitments (the “Incremental Revolving Commitments”) or (ii) one or more term loans to be obtained hereunder (the “Incremental ABL Term Loans” and together with the Incremental Revolving Commitments, collectively, the “Incremental Facilities” and each, an “Incremental Facility”). Any request under this Section 2.5 shall specify, in the case of a request for Incremental ABL Term Loans, (x) whether such loans will be made to a U.S. Borrower and/or a Canadian Borrower (including in each case any Additional Borrower) and (y) the currency in which such loans will be denominated, which shall be Dollars (to the extent made to a U.S. Borrower), or Cdn. Dollars or Dollars (to the extent made to a Canadian Borrower). Incremental ABL Term Loans will count as U.S. Revolving Loans (to the extent made to a U.S. Borrower), or Multicurrency Canadian Revolving Loans (to the extent made to a Canadian Borrower) for purposes of determining the Aggregate U.S. Revolver Outstandings and the Aggregate Multicurrency Revolver Outstandings, as applicable. Notwithstanding anything to the contrary herein, after giving effect to any new Incremental Facility, the Equivalent Amount in Dollars of the aggregate principal amount of any Incremental ABL Term Loans or Incremental Revolving Commitments shall not exceed the Available Incremental Amount at such time. The Borrowers may seek to obtain Incremental Revolving Commitments or Incremental ABL Term Loans from existing Lenders or any Person that qualifies as an Eligible Assignee, as applicable (each, an “Incremental Facility Increase”); provided that (A) no Lender shall be obligated to provide an Incremental Facility Increase as a result of any such request by any of the Borrowers, and (B) any Additional Lender which is not an existing Lender shall be subject to the approval of the Agent and the Borrowers’ Agent and, in the case of Incremental Revolving Commitments, the Swingline Lenders and the Letter of Credit Issuers (each such approval not to be unreasonably withheld).

(b) Any Incremental ABL Term Loans (i) may not be guaranteed by any Subsidiaries of the Company other than the Guarantors and shall rank pari passu or junior in right of (x) priority with respect to the Collateral and (y) payment with respect to the Obligations in respect of the Revolving Credit Commitments and any corresponding existing Incremental ABL Term Loans, (ii) shall count against the applicable Borrowing Base, (iii) shall not have a final maturity that is earlier than the Maturity Date (or, if later, the latest final maturity of any Extended Loans or any then-existing Incremental Facility), (iv) may not be secured by any Collateral or other assets of any Borrower or any Guarantor that do not also secure the Loans (other than, in the case of Incremental ABL Term Loans incurred to finance a Permitted Acquisition or other permitted Investment, proceeds of such Incremental ABL Term Loans that are subject to customary escrow or similar arrangements pending consummation of such

 

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Permitted Acquisition or other Investment), (v) may provide for commitment, arrangement, upfront or similar fees and margins and interest rates that may be agreed among the applicable Borrower and the Lenders providing such Incremental ABL Term Loans and (vi) shall otherwise be on terms as are reasonably acceptable to the Agent; provided that terms that are substantially consistent with, or not materially less favorable, taken as a whole, to the Lenders than, the terms of this Agreement shall be deemed to be reasonably acceptable to the Agent.

(c) Any Incremental Revolving Commitments (i) shall be guaranteed by the Guarantors and shall rank pari passu or junior in right of (x) priority with respect to the Collateral and (y) payment with respect to the Obligations in respect of the Revolving Credit Commitments in effect prior to the Incremental Revolving Commitment Effective Date, (ii) may not be secured by any Collateral or other assets of any Borrower or any Guarantor that do not also secure the Loans, (iii) may provide for commitment, arrangement, upfront or similar fees and margins and interest rates that may be agreed among the applicable Borrower and the Lenders providing such Incremental Revolving Commitments and (iv) shall otherwise be on terms and pursuant to the documentation applicable to the existing relevant Revolving Credit Commitments.

(d) No Incremental Facility Increase shall become effective unless and until each of the following conditions has been satisfied:

(i) The applicable Borrowers, the Agent, and any Additional Lender shall have executed and delivered a joinder to the Loan Documents (“Lender Joinder Agreement”) in substantially the form of Exhibit I;

(ii) The applicable Borrowers shall have paid such fees and other compensation to the Additional Lenders and to the Agent as the applicable Borrowers, the Agent and such Additional Lenders shall agree;

(iii) To the extent reasonably required by the Lenders providing the Incremental Facility Increase, the applicable Borrowers shall deliver to the Agent and the Lenders participating in the Incremental Facility Increase customary legal opinion(s) from counsel to the applicable Borrowers and dated such date;

(iv) The Company shall deliver on the closing date of any Incremental Facility Increase a certificate certifying that (x) (other than with respect to an Incremental Facility Increase in connection with a Permitted Acquisition permitted hereunder or any other Investment not prohibited by the terms of this Agreement, unless required by the Lenders providing such Incremental Facility Increase) the representations and warranties made by the Company, each Borrower and each Guarantor contained herein and in the other Loan Documents are true and correct in all material respects on and as of such closing date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and (y) no Specified Default has occurred and is continuing; and

 

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(v) The applicable Borrowers and Additional Lenders shall have delivered such other instruments, documents and agreements as the Agent may reasonably have requested in order to effectuate the documentation of the foregoing.

(vi) In the case of any Incremental Facility Increase constituting Incremental Revolving Commitments, the Agent shall promptly notify each Lender as to the effectiveness of such Incremental Facility Increase (with each date of such effectiveness being referred to herein as an “Incremental Revolving Commitment Effective Date”), and at such time (x) the Revolving Credit Commitments under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Revolving Commitments, (y) Schedule 1.1 shall be deemed modified, without further action, to reflect the revised Commitments of the Lenders and (z) this Agreement shall be deemed amended, without further action, to the extent necessary to reflect any such Incremental Revolving Commitments.

(vii) In the case of any Incremental Facility Increase, the Agent, the Additional Lenders and the Borrowers agree to enter into any amendment required to incorporate the addition of the Incremental Revolving Commitments and the Incremental ABL Term Loans, the pricing of the Incremental Revolving Commitments and the Incremental ABL Term Loans, the maturity date of the Incremental Revolving Commitments and the Incremental ABL Term Loans and such other amendments as may be necessary or appropriate in the reasonable opinion of the Agent and the applicable Borrowers in connection therewith, including amendments to provide for the inclusion, as appropriate, of Additional Lenders in any required vote or action of the Required Lenders or the Supermajority Lenders, amendments to permit purchases of Incremental ABL Term Loans by the Company or any of its Affiliates (which shall be cancelled upon purchase by the Company or any Subsidiary) (provided that such purchases by an Affiliate of the Company other than a Subsidiary shall be subject to customary restrictions to be agreed with the Additional Lenders providing such Incremental ABL Term Loans and the Agent), and amendments to properly reflect the pari passu or junior right of payment or priority with respect to the Collateral (each an “Incremental Commitment Amendment”). The Lenders hereby irrevocably authorize the Agent to enter into such amendments.

(e) In connection with the Incremental Facility Increases hereunder, the Lenders and the Borrowers agree that, notwithstanding anything to the contrary in this Agreement, (i) the applicable Borrowers shall, in coordination with the Agent, (x) repay applicable outstanding Revolving Loans of certain Lenders, and obtain applicable Revolving Loans from certain other Lenders (including the Additional Lenders), or (y) take such other actions as reasonably may be required by the Agent to the extent necessary so that the Lenders effectively participate in each of the outstanding Revolving Loans, as applicable, pro rata on the basis of their respective applicable Commitments (determined after giving effect to any increase in such applicable Commitments pursuant to this Section 2.5), and (ii) the applicable Borrowers shall pay to the applicable Lenders any costs of the type referred to in Section 5.4 in connection with any repayment required pursuant to the preceding clause (i). Without limiting the obligations of the Borrowers provided for in this Section 2.5, the Agent and the Lenders agree that they will use commercially reasonable efforts to attempt to minimize the costs of the type referred to in Section 5.4 that the Borrowers would otherwise incur in connection with the implementation of an increase in the applicable Commitments.

 

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2.6. Extension Amendments.

(a) The applicable Borrowers may at any time and from time to time request that all or a portion of the Revolving Credit Commitments (including any Extended Commitments), each existing at the time of such request (each, an “Existing Commitment” and any related Loans thereunder, “Existing Loans”; each Existing Commitment and related Existing Loans together being referred to as an “Existing Tranche”) be converted to extend the termination date thereof and the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of Existing Loans related to such Existing Commitments (any such Existing Commitments which have been so extended, “Extended Commitments” and any related Existing Loans, “Extended Loans”, with the commitments of the Existing Tranche not so extended and any related Loans thereunder being referred to as “Non-Extended Commitments” and “Non-Extended Loans”, respectively) and to provide for other terms consistent with this Section 2.6; provided that (i) any such request shall be made by the applicable Borrowers to all Lenders with Existing Commitments with a like maturity date on a pro rata basis, and (ii) any Minimum Extension Condition shall be satisfied unless waived by the applicable Borrowers. In order to establish any Extended Commitments, the Borrowers’ Agent shall provide a notice to the Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Tranche) (an “Extension Request”) setting forth the proposed terms of the Extended Commitments to be established, which Extension Request may be modified, revoked, or revoked and reissued by the Borrowers’ Agent at any time prior to the effectiveness of the Extension Amendment. The terms of the Extended Commitments to be established pursuant to an Extension Request shall be identical to those applicable to the Existing Commitments from which they are to be extended (the “Specified Existing Commitment”), except (x) all or any of the final maturity dates of such Extended Commitments may be delayed to later dates than the final maturity dates of the Specified Existing Commitments and (y)(A) the interest margins with respect to the Extended Commitments may be higher or lower than the interest margins for the Specified Existing Commitments and/or (B) additional fees may be payable to the Lenders providing such Extended Commitments in addition to or in lieu of any increased margins contemplated by the preceding clause (A); provided that notwithstanding anything to the contrary in this Section 2.6, (I) the borrowing and repayment (other than in connection with a permanent repayment and termination of commitments) of Loans with respect to any Extended Commitments and Non-Extended Commitments shall be made on a pro rata basis with all such other outstanding Extended Commitments and Non-Extended Commitments, (II) assignments and participations of Extended Commitments and Extended Loans shall be governed by the same assignment and participation provisions applicable to relevant Commitments and the Revolving Loans related to such Commitments set forth in Section 12.2, and (III) no termination of Extended Commitments and no repayment of Extended Loans accompanied by a corresponding permanent reduction in Extended Commitments shall be permitted unless such termination or repayment (and corresponding reduction) is accompanied by an at least pro rata termination or permanent repayment (and corresponding permanent reduction), as applicable, of all earlier maturing corresponding Non-Extended Commitments and Revolving Loans related to such earlier maturing corresponding Non-Extended Commitments (or all earlier maturing corresponding Non-Extended Commitments and Revolving Loans related to such corresponding Non-Extended Commitments shall otherwise be or have been terminated and repaid in full). No Lender shall have any obligation to agree to have any of its Existing Loans or Existing Commitments of any Existing Tranche converted into Extended Loans or Extended

 

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Commitments pursuant to any Extension Request. Any Extended Commitments shall constitute a separate class of Commitments from the Specified Existing Commitments and from any other Existing Commitments (together with any other Extended Commitments so established on such date); provided that any Extended Commitments or Extended Loans may, to the extent provided in the applicable Extension Amendment, be designated as part of any class of Revolving Credit Commitments or Revolving Loans, as applicable, established on or prior to the date of such Extension Amendment.

(b) The Borrowers’ Agent shall provide the applicable Extension Request at least 10 Business Days (or such shorter period as may be agreed to by the Agent) prior to the date on which Lenders under the applicable Existing Tranche or Existing Tranches are requested to respond. Any Lender (an “Extending Lender”) wishing to have all or a portion of its Specified Existing Commitments converted into Extended Commitments shall notify the Agent (an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Specified Existing Commitments that it has elected to convert into Extended Commitments. In the event that the aggregate amount of Specified Existing Commitments subject to Extension Elections exceeds the amount of Extended Commitments requested pursuant to the Extension Request, the Specified Existing Commitments subject to Extension Elections shall be converted to Extended Commitments on a pro rata basis based on the amount of Specified Existing Commitments included in each such Extension Election. Notwithstanding the conversion of any Existing Commitment into an Extended Commitment, such Extended Commitment shall be treated identically to all relevant Commitments for purposes of the obligations of a Lender in respect of Letters of Credit under Section 2.4 and Swingline Loans under Section 2.3, except that the applicable Extension Amendment may provide that the maturity date for Swingline Loans and/or Letters of Credit may be extended and the related obligations to make Swingline Loans and issue Letters of Credit may be continued so long as the U.S. Swingline Lender, the Multicurrency Swingline Lenders and/or the applicable Letter of Credit Issuer, as applicable, have consented to such extensions in their sole discretion (it being understood that no consent of any other Lender shall be required in connection with any such extension).

(c) Extended Commitments shall be established pursuant to an amendment (an “Extension Amendment”) to this Agreement (which may include amendments to provisions related to maturity, interest margins or fees referenced in Section 2.6(a), clauses (x) and (y), and which, except to the extent expressly contemplated by the penultimate sentence of this Section 2.6(c) and notwithstanding anything to the contrary set forth in Section 12.1, shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Commitments established thereby) executed by the Borrowers, the Guarantors, the Agent and the Extending Lenders. Notwithstanding anything to the contrary in this Agreement and without limiting the generality or applicability of Section 12.1 to any Section 2.6 Additional Amendments, any Extension Amendment may provide for additional terms and/or additional amendments other than those referred to or contemplated above (any such additional amendment, a “Section 2.6 Additional Amendment”) to this Agreement and the other Loan Documents; provided that such Section 2.6 Additional Amendments do not become effective prior to the time that such Section 2.6 Additional Amendments have been consented to (including pursuant to consents applicable to holders of any Extended Commitments provided for in any Extension Amendment) by such of the Lenders, Borrowers, Guarantors and other

 

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parties (if any) as may be required in order for such Section 2.6 Additional Amendments to become effective in accordance with Section 12.1; provided, further, that no Extension Amendment may provide for (i) any Extended Commitment or Extended Loans to be secured by any Collateral or other assets of any Borrower or Guarantor that does not also secure the Existing Tranches and (ii) so long as any Existing Tranches are outstanding, any mandatory or voluntary prepayment provisions that do not also apply to the Existing Tranches (other than Existing Tranches secured on a junior basis by the Collateral or ranking junior in right of payment, which may be subject to junior prepayment provisions) on a pro rata basis (or otherwise provide for more favorable prepayment treatment for Existing Tranches than such Extended Commitments or Extended Loans). It is understood and agreed that each Lender has consented for all purposes requiring its consent, and shall at the effective time thereof be deemed to consent to each amendment to this Agreement and the other Loan Documents authorized by this Section 2.6 and the arrangements described above in connection therewith except that the foregoing shall not constitute a consent on behalf of any Lender to the terms of any Section 2.6 Additional Amendment. In connection with any Extension Amendment, the applicable Borrowers shall deliver an opinion of counsel reasonably acceptable to the Agent as to the enforceability of such Extension Amendment, this Agreement as amended thereby, and such of the other Loan Documents (if any) as may be amended thereby.

(d) Notwithstanding anything to the contrary contained in this Agreement, (i) on any date on which any Existing Tranche is converted to extend the related scheduled maturity date(s) in accordance with Section 2.6(a) (an “Extension Date”), in the case of the Specified Existing Commitments of each Extending Lender, the aggregate principal amount of such Specified Existing Commitments shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Commitments so converted by such Lender on such date, and such Extended Commitments shall, unless otherwise provided by the Extension Amendment, be established as a separate class of Commitments from the Specified Existing Commitments and from any other Existing Commitments (together with any other Extended Commitments so established on such date) and (ii) if, on any Extension Date, any Revolving Loans of any Extending Lender are outstanding under the applicable Specified Existing Commitments, such Revolving Loans (and any related participations) shall be deemed to be allocated as Extended Loans (and related participations) and Existing Loans (and related participations) in the same proportion as such Extending Lender’s Specified Existing Commitments to Extended Commitments so converted by such Lender on such date.

(e) If, in connection with any proposed Extension Amendment, any Lender declines to consent to the extension of its applicable Commitment on the terms and by the deadline set forth in the applicable Extension Request (each such other Lender, a “Non-Extending Lender”) then the applicable Borrowers may, on notice to the Agent and the Non-Extending Lender, (i) replace such Non-Extending Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 12.2 (with the assignment fee and any other costs and expenses to be paid by the applicable Borrowers in such instance) all of its rights and obligations under this Agreement to one or more assignees; provided that neither the Agent nor any Lender shall have any obligation to the applicable Borrower to find a replacement Lender; provided, further, that the applicable assignee shall have agreed to provide an applicable Commitment on the terms set forth in such Extension Amendment; and provided, further, that all obligations of the Borrowers owing to the Non-Extending Lender relating to the Revolving

 

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Loans and participations so assigned shall be paid in full by the assignee Lender to such Non-Extending Lender concurrently with such Assignment and Acceptance or (ii) upon notice to the Agent, to prepay the Loans and, at the applicable Borrowers’ option, terminate the applicable Commitments of such Non-Extending Lender, in whole or in part, subject to Section 4.3 and Section 5.4, without premium or penalty. In connection with any such replacement under this Section 2.6, if the Non-Extending Lender does not execute and deliver to the Agent a duly completed Assignment and Acceptance and/or any other documentation necessary to reflect such replacement by the later of (x) the date on which the replacement Lender executes and delivers such Assignment and Acceptance and/or such other documentation and (y) the date as of which all obligations of the Borrowers owing to the Non-Extending Lender relating to the Loans and participations so assigned shall be paid in full by the assignee Lender to such Non-Extending Lender, then such Non-Extending Lender shall be deemed to have executed and delivered such Assignment and Acceptance and/or such other documentation as of such date and the applicable Borrowers shall be entitled (but not obligated) to execute and deliver such Assignment and Acceptance and/or such other documentation on behalf of such Non-Extending Lender.

(f) Following any Extension Date, with the written consent of the Borrowers’ Agent, any Non-Extending Lender may elect to have all or a portion of its Existing Commitment deemed to be an Extended Commitment under the applicable Extended Commitment tranche on any date (each date a “Designation Date”) prior to the maturity date of such Extended Commitments; provided that (i) such Lender shall have provided written notice to the Borrowers’ Agent and the Agent at least 10 Business Days (or such shorter period as may be agreed to by the Agent) prior to such Designation Date and (ii) no more than three Designation Dates may occur in any one-year period without the written consent of the Agent. Following a Designation Date, the Existing Commitments held by such Lender so elected to be extended will be deemed to be Extended Commitments of the applicable Extended Commitment tranche, and any Existing Commitments held by such Lender not elected to be extended, if any, shall continue to be “Existing Commitments.”

(g) With respect to all extensions consummated by the Borrowers pursuant to this Section 2.6, (i) such extensions shall not constitute payments or prepayments for purposes of Section 4.3 and (ii) no Extension Request is required to be in any minimum amount or any minimum increment; provided that the applicable Borrowers may at their election specify as a condition (a “Minimum Extension Condition”) to consummating any such extension that a minimum amount (to be determined and specified in the relevant Extension Request in the applicable Borrowers’ discretion and may be waived by the applicable Borrowers) of Existing Commitments of any or all applicable classes be extended. The Agent and the Lenders hereby consent to the transactions contemplated by this Section 2.6 (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Commitments on such terms as may be set forth in the relevant Extension Request) and hereby waive the requirements of any provision of this Agreement (including Sections 4.3, 4.7 and 13.12(b)) or any other Loan Document that may otherwise prohibit any such extension or any other transaction contemplated by this Section 2.6.

 

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2.7. Refinancing Amendments.

(a) The Borrowers’ Agent may, at any time or from time to time after the Closing Date, by notice to the Agent (a “Refinancing Loan Request”), request (i) the establishment of one or more new classes of term loans under this Agreement (any such new class, “Refinancing Term Commitments”) or (ii) the establishment of one or more new classes of revolving commitments under this Agreement (any such new class, “Refinancing Revolving Commitments” and collectively with any Refinancing Term Commitments, “Refinancing Commitments”), in each case, established in exchange for, or to replace, repurchase, retire or refinance, in whole or in part, as selected by the Borrowers’ Agent, any one or more then-existing class or classes of Loans or Commitments (with respect to a particular Refinancing Commitment or Refinancing Loan, such existing Loans or Commitments, “Refinanced Debt”), whereupon the Agent shall promptly deliver a copy of each such notice to each of the Lenders holding such proposed Refinanced Debt.

(b) Any Refinancing Term Loans made pursuant to Refinancing Term Commitments or any Refinancing Revolving Commitments made on a Refinancing Closing Date shall be designated a separate class of Refinancing Term Loans or Refinancing Revolving Commitments, as applicable, for all purposes of this Agreement. On any Refinancing Closing Date on which any Refinancing Term Commitments of any class are effected, subject to the satisfaction of the terms and conditions in this Section 2.7, (i) each Refinancing Term Lender of such class shall make a term loan, severally, but not jointly or jointly and severally with the other Refinancing Term Lenders, to the applicable Borrowers (a “Refinancing Term Loan”) in an amount equal to its Refinancing Term Commitment of such class and (ii) each Refinancing Term Lender of such class shall become a Lender hereunder with respect to the Refinancing Term Commitment of such class and the Refinancing Term Loans of such class made pursuant thereto. On any Refinancing Closing Date on which any Refinancing Revolving Commitments of any class are effected, subject to the satisfaction of the terms and conditions in this Section 2.7, (x) each Refinancing Revolving Lender of such class shall make its Refinancing Revolving Commitment available to the applicable Borrowers (when borrowed, a “Refinancing Revolving Loan” and collectively with any Refinancing Term Loan, a “Refinancing Loan”) and (y) each Refinancing Revolving Lender of such class shall become a Lender hereunder with respect to the Refinancing Revolving Commitment of such class and the Refinancing Revolving Loans of such class made pursuant thereto.

(c) Each Refinancing Loan Request from the Borrowers’ Agent pursuant to this Section 2.7 shall set forth the requested amount and proposed terms of the relevant Refinancing Term Loans or Refinancing Revolving Commitments and identify the proposed Refinanced Debt with respect thereto. Refinancing Term Loans may be made, and Refinancing Revolving Commitments may be provided by any existing Lender (but no existing Lender will have an obligation to make any Refinancing Commitment, nor will the Borrowers have any obligation to approach any existing Lender to provide any Refinancing Commitment) or by any additional Lender (each such Additional Lender providing such Refinancing Commitment or Refinancing Term Loan, a “Refinancing Revolving Lender” or “Refinancing Term Lender”, as applicable, and, collectively, “Refinancing Lenders”); provided that the Agent shall have consented (not to be unreasonably conditioned, withheld or delayed) to such Lender’s or Additional Lender’s making such Refinancing Term Loans or providing such Refinancing Revolving Commitments to the extent such consent, if any, would be required under Section 12.2 for an assignment of Loans or Revolving Credit Commitments, as applicable, to such Additional Lender.

 

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