UNITED STATES                                         SECURITIES AND EXCHANGE COMMISSION                                               Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedDecember 31, 2001           Commission File Number: 001-14145 NEFF CORP.
(Exact Name of registrant as specified in its charter)

**DELAWARE**(State or other jurisdiction of incorporation or organization)
Internal Revenue Service - Employer No. **65-0626400**
3750 N.W. 87th AVENUE, SUITE 400, MIAMI, FLORIDA 33178                                (Address of principal executive offices) (Zip Code)

Registrant's telephone number: (305) 513-3350
**Securities registered pursuant to Section 12(b) of the Act:**

**Title of each class**                      Class A Common Stock par value $.01 per share

**Name of each exchange on which registered**NONE

**Securities registered pursuant to Section 12(g) of the Act:**

**(Title of class)**
   None
Indicate by check markwhether the registrant has (1) filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90days. X Yes __ No 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements by reference in PartIII of this Form 10-K or any amendment to this Form 10-K [X]. 

As of March 1, 2002, theaggregate market value of the voting stock held by non-affiliates of theregistrant was approximately $3.7 million. As of March 1, 2002, there were16,065,350 shares of the registrant’s Class A Common Stock outstanding. 

**Documents incorporated by reference:**

Portions of theCompany’s Proxy Statement in connection with its Annual Meeting to be heldon June 7, 2002 (the “2002 Proxy Statement”). Specifically, thesections in the 2002 Proxy Statement entitled “Ownership of Shares ofCertain Beneficial Owners,” “Certain Relationships and RelatedTransactions,” “Executive and Director Compensation,” and“Compensation Committee Interlocks and Insider Participation” areincorporated by reference into Part III of this Report. 
====================================================================================================================  Part I
***Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995***

        Thematters discussed in this Annual Report may include forward-looking statementswithin the meaning of Section 27A of the Securities Act of 1933, as amended andSection 21E of the Securities Act of 1934, as amended. Statements in Item 1,Business, and Item 7, Management’s Discussion and Analysis of Operationsand Financial Condition, of this Annual Report, together with other statementsbeginning with such words as “believes”, “intends”,“plans”, “expects” and similar expressions includeforward-looking statements that are based on management’s expectationsgiven facts as currently known by management. Actual results may differmaterially from those discussed in these forward-looking statements. Factorsthat could cause our future results to differ materially from those in theforward-looking statements are described in this Annual Report under the section“Risk Factors” and include, but are not limited to our dependence onadditional capital for future growth, the high degree to which we are leveraged,the restrictions on our operations imposed by our debt instruments, competitionin our industry, and general economic conditions. 

         Anyforward-looking statements speak only as of the date on which the statement ismade and we undertake no obligation to update any forward-looking statement orstatements to reflect events or circumstances occurring after the date on whichthe statement is made. New factors that may affect our operating results emergefrom time to time, and it is not possible for management to predict thematerialization of all new factors. Further, management cannot assess the impactof each factor on our business or the extent to which any factor, orcombinations of factors, may cause our actual results to differ materially fromthose discussed in any forward-looking statements. 
  ITEM 1.          BUSINESS
**General**
        NeffCorp. (“Neff” or the “Company”) is one of the largestequipment rental companies in the United States, with 74 rental locations in 16states as of March 1, 2002. We rent a wide variety of equipment, includingbackhoes, air compressors, loaders, lifts and compaction equipment, toconstruction, governmental and industrial customers. In addition, we sell newand used equipment, spare parts and merchandise and provide ongoing repair andmaintenance services. 

        Accordingto industry sources, the equipment rental industry grew from approximately $600million in revenues in 1982 to over $25 billion in 2001. This growth has beendriven primarily by construction and industrial companies, and other equipmentusers such as governmental entities, that have increasingly outsourced equipmentneeds to reduce capital investment in non-core assets, convert costs from fixedto variable, lower storage and maintenance costs and access a broad selection ofequipment, including the latest technology. The equipment rental industry ishighly fragmented, with an estimated 18,000 equipment rental companies in theUnited States. Relative to smaller competitors, we have several advantages,including increased purchasing power, larger inventories to service largeraccounts and the ability to transfer equipment among our rental locations inresponse to changing patterns of customer demand. 

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**Competitive Strengths**
        Webelieve that we have several competitive strengths that provide us with theopportunity for increased profitability. 

        *StrongMarket Position.* Neff is one of the largest construction and industrialequipment rental companies in the United States, and is a leading competitorwith a significant presence in the Southeast and Gulf Coast regions. We operate74 rental locations in 16 states, including Florida, Georgia, South Carolina,North Carolina, Tennessee, Louisiana, Texas, Oklahoma, Arizona, Nevada, Utah,California, Oregon, Washington, Virginia and Colorado. From December 31, 1995 toDecember 31, 2001, we increased our equipment rental locations from 8 to 74 andexpanded our rental fleet from $62 million to $434 million based on originalcost. We believe our size gives us an advantage over our smaller competitors,while our geographic diversity helps insulate us from regional economicdownturns. 

        *HighQuality Rental Fleet.*We believe our rental fleet is one of the newest, mostcomprehensive and well-maintained rental fleets in the equipment rentalindustry. As of December 31, 2001, the average age of our rental fleet wasapproximately 34 months. We make ongoing capital investment in new equipment,engage in regular sales of used equipment and conduct an advanced preventativemaintenance program. We believe this maintenance program increases fleetutilization, extends the useful life of equipment and produces higher resalevalues. We expect to reduce our sales of used equipment during 2002 to reduceour capital expenditures which should result in an average rental fleetage of 39-42 months at December 31, 2002. 

        *ExcellentCustomer Service.* We differentiate ourselves from our competitors by providinghigh quality, responsive service to our customers. Service initiatives include(1) reliable on-time equipment delivery directly to our customers’ jobsites; (2) on-site repairs and maintenance of rental equipment by factorytrained mechanics, generally available 24 hours a day, seven days a week; and(3) ongoing training of an experienced sales force to consult with customersregarding their equipment needs. 

        *State-of-the-ArtManagement Information System.* We have developed a customized, state-of-the-artmanagement information system. We use this system to maximize fleet utilizationand determine the optimal fleet composition by market. The system links all ofour rental locations and allows management to track customer and salesinformation, as well as the location, rental status and maintenance history ofevery piece of equipment in the rental fleet. Rental location managers cansearch our entire rental fleet for needed equipment, quickly determine theclosest location of such equipment, and arrange for delivery to thecustomer’s work site, maximizing equipment utilization. 

        *ExperiencedManagement Team.* Since 1995, we have significantly increased the quality anddepth of our management team. Our senior management team has extensiveexperience in the equipment rental industry and our regional management has, onaverage, 23 years of experience and substantial knowledge of the local marketsserved within their regions. 

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**Business Strategy**
        Ourobjective is to increase revenues, cash flow and profitability by building andmaintaining a leading market position in the equipment rental industry. Keyelements of our business strategy include: 

        *ImproveUtilization of Fleet.* We will continue our efforts to improve the utilization ofour rental fleet by carefully managing inventory levels at all locations. Wecarefully weigh the benefits of each new investment in rental fleet against thereturns expected from that investment at our locations. In addition, we willcontinue to adjust the selection of equipment available at each location inorder to provide product lines that are tailored to most efficiently meet thedemands of our customers. 

        *ReduceOutstanding Debt.* We intend to use all available free cash flow from operationsto pay down outstanding debt on our credit facility during 2002. By reducing ouroutstanding debt, we hope to decrease leverage, reduce interest expense andincrease profitability. 

        *SelectiveOpenings of Start-up Equipment Rental Locations.* We intend to explore thepossibility of expanding our operations by opening additional start-uplocations. We have been successful in opening start-up equipment rentallocations in existing markets and new markets. Our decision to open a start-upequipment rental location is based upon a review of demographic information,business growth projections and the level of existing competition. 

**Operations**
        Ouroperations primarily consist of renting equipment, and to a lesser extent,selling used equipment and complementary parts and merchandise to a wide varietyof construction and industrial customers. In addition, to service our customerbase more fully, we also sell new equipment and provide ongoing maintenance andrepair services for the equipment we sell and rent. 

        Ourlocations are grouped together by geographic area into different regions. Aregional vice-president oversees operations within each region. 

        *EquipmentRentals.* We are one of the largest equipment rental companies in the UnitedStates, with 74 rental locations in 16 states. Our rental fleet is comprised ofa complete line of light and heavy construction and industrial equipment from awide variety of manufacturers, including John Deere, Case, Bomag, Bosch,Sullivan Industries, Ingersoll-Rand, Gradall, Lull, JLG, Bobcat, MultiQuip,Volvo and Wacker. 

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        Major categories of equipment represented the following percentages (basedon original cost) of our total rental fleet as of December 31, 2001:**Percentage of Total Rental Fleet           Major Equipment Category               (based on original cost)**           ------------------------           ---------------------------------Earthmoving...................................               42.3 %Material Handling.............................               19.4Aerial........................................               14.8Trucks........................................                9.5Compaction....................................                5.1Compressors...................................                3.8Welders.......................................                1.3Generators....................................                1.2Lighting......................................                0.8Pumps.........................................                0.8Other.........................................                1.0
        Weattempt to differentiate ourselves from our competitors by providing a broadselection of well-maintained rental equipment, and through high-quality,responsive service to our customers. As of December 31, 2001, our equipmentrental fleet had an original cost of approximately $434 million and an averageage of 34 months, which management believes compares favorably with otherleading equipment rental companies. We make ongoing capital investments in newequipment, engage in regular sales of used equipment and conduct an advancedpreventative maintenance program. This program increases fleet utilization,extends the useful life of equipment and produces higher resale values. 

        Inaddition to providing a new and reliable rental fleet, management believesproviding high quality customer service is essential to our future success. Theequipment rental business is a service industry requiring quick response timesto satisfy customers’ needs. Though some activity is arranged withlead-time, much of the rental initiation process takes place within a 48-hourperiod. Consequently, equipment availability, branch location and transportationcapabilities play a major role in earning repeat business. Rental customersprefer a quick selection process and seek efficient communication when orderingequipment. Punctuality and reliability are key components of the servicingprocess, as well as maintenance performance, timely equipment removal at the endof the rental period and simplified billing. 

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Our service initiatives include:-      reliable on-time equipment delivery directly to customers' job sites;   on-site repairs and maintenance of rental equipment by factory trainedmechanics, which are generally available 24 hours a day, seven days a week; and  ongoing training of anexperienced sales force to consult with customers regarding their equipmentneeds.
        *Newand Used Equipment Sales.* We maintain a regular program of selling usedequipment in order to adjust the size and composition of our rental fleet inresponse to changing market conditions and our business plan. Managementattempts to balance the objective of obtaining acceptable prices from equipmentsales against the revenues obtainable from future rentals of the equipment. Weare generally able to achieve favorable resale prices for our used equipment dueto our strong preventative maintenance program and our practice of selling usedequipment before it becomes obsolete or irreparable. We believe the proactivemanagement of our rental fleet allows us to adjust the rates of new equipmentpurchases and used equipment sales to maximize equipment utilization rates andrespond to changing economic conditions. Such proactive management, togetherwith our broad geographic diversity, minimizes the impact of regional economicdownturns. In order to serve our customer base more fully, we also sell newequipment to customers. 

        *Partsand Service.* We sell a full complement of parts, supplies and merchandise to ourcustomers in conjunction with our equipment rental and sales business.  Webelieve that these revenues are more stable than equipment sales revenuesbecause of the recurring nature of the parts and service business. 

**Management Information System**
        Wehave developed a state-of-the-art, customized management information systemthat is capable of monitoring our operations on a real-time basis. We currentlyemploy five management information system employees who continually update andrefine the system. This system links all of our rental locations and allowsmanagement to track customer and sales information, as well as the location,rental status and maintenance history of every piece of equipment in the rentalfleet. We use this system to maximize fleet utilization and determine theoptimal fleet composition by geographic market. 

        Usingthis system, branch managers can search our entire rental fleet for neededequipment, quickly determine the closest location of such equipment and arrangefor delivery to the customer’s work site. This practice helps diminish“lost rents,” improves utilization and makes equipment available inmarkets where it can earn increased revenues. Our communications system canhandle multiple protocols and allows the integration of systems running ondifferent platforms. 

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**Customers**
        Ourcustomers include commercial, industrial and civil construction contractors,manufacturers, public utilities, municipalities, golf courses, shipyards,commercial farmers, military bases, offshore platform operators and maintenancecontractors, refineries and petrochemical facilities and a variety of otherindustrial businesses and governmental entities. 

        During2001 we served over 27,906 customers. Our top 10 customers represented 4.1% ofour total revenues in 2001. Our rental equipment customers vary in size fromlarge Fortune 500 companies who have elected to outsource much of theirequipment needs to small construction contractors, subcontractors, and machineoperators whose equipment needs are job-based and not easily measured inadvance. Our new and used equipment sales customers are generally largeconstruction contractors who regularly purchase wholesale equipment and annuallybudget for their fleet maintenance purchases. 

        Wedo not currently provide our own purchase financing to customers. We rentequipment, sell parts, and provide repair services on account to customers whoare successfully screened through our credit application process. Customers canfinance purchases of large equipment with a variety of creditors, includingmanufacturers, banks, finance companies and other financial institutions. 

**Sales and Marketing**
        Wemaintain a strong sales and marketing orientation throughout our organization inorder to increase our customer base and better understand and serve ourcustomers. Managers at each of our branches are responsible for supervising andtraining all sales employees at that location and supervising the sales force byconducting regular sales meetings and participating in selling activities.Managers develop relationships with local customers and assist them in planningtheir equipment requirements. Managers are also responsible for managing the mixof equipment at their locations, keeping abreast of local construction activityand monitoring competitors in their respective markets. 

        Tostay informed about their local markets, salespeople track new equipment salesand construction projects in the area through Equipment Data Reports, FW DodgeReports and PEC Reports (Planning, Engineering and Construction), follow up onreferrals and visit construction sites and potential equipment users who are newto the local area. Our salespeople use targeted marketing strategies to addressthe specific needs of local customers. 

**Purchasing**
        Wepurchase equipment from vendors with reputations for product quality andreliability. Our Vice President of Asset Management and Procurement directsfleet purchasing, asset utilization and fleet maintenance for our rental fleet.We believe the quantity of equipment we purchase enables us to purchaseequipment directly from vendors at lower prices and on more favorable terms thanmany of our smaller competitors. We seek to maintain close relationships withour vendors to ensure the timely delivery of new equipment. We do not rely onany one vendor exclusively for a particular type of equipment, and we believethat we have sufficient alternative sources of supply for the equipment wepurchase, in each of our principal product categories. 

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        Thefollowing table summarizes our principal categories of equipment and specifiesour major suppliers of such equipment: 
**Product Category                                    Primary Vendors-------------------                                -----------------**Air Compressors and Equipment............. Ingersoll-Rand, Sullivan and SullairEarthmoving Equipment (such as  Backhoes, Loaders, Dozers, Excavators  and Material Handling Equipment)........ John Deere, Case, JCB, Kobelco, Volvo and BobcatCompaction Equipment, Rollers  and Recyclers   ........................ Bomag, Wacker, MultiQuip and RammaxPumps..................................... MultiQuip, Wacker and ThompsonGenerators................................ MultiQuip, Wacker and YamahaWelders................................... Miller and LincolnElectric Tools............................ Bosch, Dewalt and MilwaukeeLight Towers.............................. Specialty Lighting, Coleman and                                                 Ingersoll - RandForklifts................................. Lull, Gradall, Toyota and ClarkTrucking.................................. International, Ford and GMCAerial.................................... JLG, Genie Industries, and SnorkelConcrete.................................. Partner, Edco, Whiteman, Miller,                                                 MultiQuip, Wacker and StoneHydraulic Hammers......................... Kent, Rammer, Stanley and Tramac
**Locations**
        Our  locations  typically  include (1)  offices for sales,  administration  and  management;  (2) a customershowroom  displaying  equipment  and parts;  (3) an  equipment  service  area;  and (4) outdoor  and indoor  storagefacilities  for  equipment.  Each  location  offers a full  range of  rental  equipment,  with the mix of  equipmentavailable designed to meet the anticipated needs of the customers in each location.
         Each  location is staffed by, on average,  15  full-time  employees,  including a branch  manager,  a rentalcoordinator, a service manager, sales representatives,  an office administrator,  mechanics and drivers.  Additionalpart-time employees are also used as necessary.
**Competition**
        The equipment rental industry is highly fragmented and very  competitive.  We compete with independent thirdparties in all of the markets in which we operate.  Most of our  competitors in the rental  business tend to operatein specific,  limited  geographic  areas,  although some larger  competitors  compete on a national  basis.  We alsocompete with equipment  manufacturers  which sell and rent equipment directly to customers.  Some of our competitorshave greater  financial  resources and name recognition than we have. These larger  competitors may have the abilityto set market rates for rental equipment in certain  geographic areas in which we operate.  If competitive  pressureforces us to lower our rental  rates,  this could reduce our rental  revenues and  materially  adversely  affect ourfinancial condition or results of operations.
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**Environmental and Safety Regulation**
        Our  facilities  and  operations  are  subject to  certain  federal,  state and local  laws and  regulationsrelating to  environmental  protection and  occupational  health and safety,  including those  governing  wastewaterdischarges,  the treatment,  storage and disposal of solid and hazardous  wastes and materials,  and the remediationof  contamination  associated  with the release of hazardous  substances.  We believe that we are in compliance withsuch  requirements and do not currently  anticipate making any material capital  expenditures or incurring  materialcosts for environmental compliance or remediation for the current or succeeding fiscal years.
**Employees**
        As of March 1, 2002, we had approximately 1,004 employees.  None of our employees are represented by a unionor covered by a collective bargaining agreement. We believe our relations with our employees are good.
**RISK FACTORS**
        *These are not the only risks and  uncertainties  we face. The following  important  factors,  among others,could adversely impact our business,  operating  results,  financial  condition and cash flows.  These factors couldcause our actual results to differ  materially from those projected in any  forward-looking  statements made in thisAnnual Report on Form 10-K or presented elsewhere by management from time to time.*
**We are dependent on additional capital for future growth**
        Although we believe that we have  sufficient  funds for working  capital,  we may need to raise  additionalfunds in the  future if we need to respond to  competitive  pressures  or decide to  accelerate  our growth  rate byincreasing our rental  equipment  fleet,  opening more start-up  locations or making  additional  acquisitions.  Ourability to obtain  additional  financing will be subject to a number of factors,  including market  conditions,  ouroperating  performance  and the terms of our  existing  indebtedness.  We cannot  assure you that we will be able toraise  additional  funds on terms  acceptable  to us, or at all. If we raise  additional  funds  through the sale ofequity or  convertible  debt  securities,  your  ownership  percentage  of our  common  stock  will be  reduced.  Inaddition,  these  transactions  may dilute the value of our common stock. We may have to issue  securities that haverights,  preferences  and  privileges  senior to our common  stock.  The terms of any  additional  indebtedness  mayinclude  restrictive  financial  and  operating  covenants  that would limit our ability to compete and expand.  Ourfailure to obtain any required  future  financing on terms  acceptable to us could  materially and adversely  effectour financial condition.
**We have a substantial amount of debt**
As of February 28, 2002, we had total  indebtedness  of  approximately  $310 million.  The degree to whichNeff is leveraged could have important consequences to holders of our common stock including, but not limited to:-   our  leverage  may limit our ability to obtain  additional  financing  in the future for  working  capital,                  capital expenditures, acquisitions or general corporate or other purposes;  a substantial  portion of our cash flow from  operations  will be dedicated to the payment of the principal                  of, and interest on, our indebtedness; andour  substantial  leverage  may make us more  vulnerable  to  economic  downturns,  limit  our  ability  to                  withstand  competitive  pressures and reduce our  flexibility to respond to changing  business and                  economic conditions.
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**The terms of our current indebtedness restrict our operations**
         Our ability to finance  future  acquisitions,  start-ups  and internal  growth is limited by the  covenantscontained in our $200 million  revolving  credit  facility (the "Credit  Facility") and in the indentures  governing$200 million in subordinated  debt securities  that we issued and sold in 1998 (the  "Indentures").  These covenantsrestrict our ability, among other things to:-         dispose of assets;     engage in mergers or consolidations;      incur debt;    pay dividends;    repurchase our capital stock;     create liens on our assets;   make capital expenditures;     make investments or acquisitions; and     engage in transactions with our affiliates.
         Our Credit Facility also requires us to maintain  specified  financial ratios,  including minimum cash flowlevels and interest  coverage.  These covenants may significantly  limit our ability to respond to changing businessand economic conditions and to secure additional  financing,  and we may be prevented from engaging in transactions,including acquisitions, that might be considered important to our business strategy or otherwise beneficial to us.
         Our ability to comply with the  restrictive  covenants  in our Credit  Facility and the  Indentures  may beaffected by events  that are beyond our  control.  The breach of any of these  covenants  could  result in a defaultunder the Credit  Facility  or the  Indentures.  In the event of a default  under the Credit  Facility,  our lenderscould declare all amounts borrowed under the Credit  Facility,  together with accrued interest and other fees, to bedue and payable.  In the event of a default under the  Indentures,  the trustee under each  indenture or the holdersof our senior  subordinated  notes may declare  the  principal  of and  accrued  interest on the notes to be due andpayable. A default that is not cured or that can not be cured under our Credit Facility would constitute a default under the Indentures, and vice versa. We cannot  assure  you that we would be able to repay all  amounts  due under the Credit  Facility  or theIndentures  in the event these amounts are declared due upon a breach of the Credit  Facility or of the  Indentures.     As of  December  31,  2001,  we were in  compliance  with  all  restrictive     covenants  under the Credit Facility and the  Indentures.  However,  if the    Company's revenues for 2002 are less than expected or if the Company'sexpenses are more than expected, operating results and related cash flows will be less than planned.Such a shortfall might cause the Company to be in default of one of the financial covenants in its Credit Facilitythat depend on the Company's operating results.
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**Our  quarterly and annual  operating  results may fluctuate and the price of our common stock may change in responseto those fluctuations**
         Our  quarterly  and annual  revenues  and  operating  results  have varied in the past and may  continue tofluctuate in the future depending on factors such as:-        general economic conditions in our markets;       changes in our, and our competitors' pricing;       the timing of start-up locations and acquisitions and related costs;      the effectiveness of efforts to integrate start-up locations and acquired businesses with existing                  operations;       rental patterns of our customers; and       increased competition.
        In addition,  equipment  rental  businesses  often experience a slowdown in demand during the winter monthswhen adverse  weather  conditions  affect  construction  activity.  Due to these and other factors,  we believe thatquarter-to-quarter  comparisons of our operating  results may not be meaningful.  You should not rely on our resultsfor any one quarter as an indication of our future  performance.  In future periods,  our operating results may fallbelow the  expectations  of public market  analysts or investors.  If this occurs,  the price of our common stock islikely to decrease.
**We face intense competition.  If we are unable to compete  successfully,  we will lose market share and our businesswill suffer**
        The  equipment  rental  industry is highly  competitive.  Our  competitors  include large  national  rentalcompanies,  regional competitors that operate in one or more states,  smaller independent businesses with one or tworental  locations,  and equipment  vendors and dealers who both sell and rent  equipment to  customers.  Some of ourcompetitors have greater financial  resources,  are more geographically  diverse,  and have greater name recognitionthan we do. If existing or future  competitors  reduce prices and we must also reduce prices to remain  competitive,our operating results would be adversely  affected.  In addition,  other equipment rental companies may compete withus for acquisition  candidates or start-up  locations,  which may increase  acquisition prices and reduce the numberof suitable acquisition candidates or expansion locations.
**We depend on our senior management**
         Neff is  managed  by a small  number  of key  executive  officers.  The loss of the  services  of these keyexecutives  could have a material  adverse  effect on our  business.  We do not maintain any key man life  insurancepolicies on any of our  officers.  Our success also depends on our ability to hire and retain  qualified  managementpersonnel. We cannot assure you that we will be able to hire and retain the personnel we need.
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**Any  acquisitions  we make could  disrupt our  business,  increase our expenses and  adversely  affect our financialcondition or operations.**
         In the future,  we may make material  acquisitions  of, or large  investments  in, other  equipment  rentalbusinesses.  We cannot assure you that we would  successfully  integrate any  businesses or personnel  that we mightacquire with our existing  operations.  Any future  acquisitions  or  investments  we might make would present riskscommonly associated with these types of transactions, including:-        difficulty in combining the operations or work force of an acquired business;        potential loss of key personnel of an acquired business;      disruptions of our on-going business;     difficulty in maintaining uniform standards, controls, procedures and policies;      potential  negative  impact on results of operations  due to  amortization  of intangible                  assets acquired other than goodwill or assumption of liabilities;      risks associated with entering markets with which we have limited previous experience; and       diversion of management attention.
         We expect that future  acquisitions,  if any, could provide for consideration to be paid in cash, shares ofour common stock,  or a combination  of cash and common stock.  Additional  equity issued in connection  with futureacquisitions  could result in dilution of our  stockholders'  equity  interest.  Fluctuations in our stock price maymake  acquisitions  more  expensive  or  prevent  us from  being  able to  complete  acquisitions  on terms that areacceptable to us.
**We may incur substantial costs in order to comply with environmental and safety regulations**
        We are  subject  to  certain  federal,  state and local  laws and  regulations  relating  to  environmentalprotection and occupational health and safety, including those governing:-       wastewater discharges;      the treatment, storage and disposal of solid and hazardous wastes and materials; and     the remediation of contamination associated with the release of hazardous substances.
        These laws often  impose  liability  without  regard to whether the owner or lessee of real estate knew of,or was responsible  for, the presence of hazardous or toxic  substances.  Some of our present and former  facilitieshave used  substances  and  generated or disposed of wastes  which are or may be  considered  hazardous,  and we mayincur  liability in connection  with these  activities.  Although we  investigate  each business or property that weacquire  or  lease,  these  businesses  or  properties  may have  undiscovered  potential  liabilities  relating  tonon-compliance  with  environmental  laws and regulations that we will be required to investigate  and/or remediate.While we do not  currently  expect  to make any  material  capital  expenditures  for  environmental  compliance  orremediation in the foreseeable  future,  we cannot assure you that  environmental  and safety  requirements will notbecome more stringent or be interpreted  and applied more  stringently in the future,  which could cause us to incuradditional  environmental  compliance or remediation  costs. These compliance and remediation costs could materiallyadversely affect our financial condition or results of operations.
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**We may be liable for claims that our insurance will not cover**
         Our  business  exposes  us to  possible  claims  for  personal  injury or death  resulting  from the use ofequipment  that we rented or sold and from  injuries  caused in motor  vehicle  accidents  in which our delivery andservice  personnel are involved.  We carry  comprehensive  insurance  subject to a deductible at a level  managementbelieves is  sufficient  to cover  existing and future  claims.  We cannot assure you that existing or future claimswill not exceed the level of our  insurance or that such  insurance  will  continue to be available on  economicallyreasonable  terms,  or at all. In addition,  our insurance may not cover claims for punitive  damages or for damagesarising from intentional misconduct.
**The market price for our common stock may fluctuate widely**
        The trading  price for our common stock has been and may continue to be highly  volatile.  The market priceof our common stock could fluctuate substantially due to factors, many of which are beyond our control, such as:-     actual or anticipated variations in our quarterly results of operations;     additions or departures of key personnel;      announcements of acquisitions, new products or new services by us or         our competitors;       changes in earnings estimates or recommendations by securities analysts;     changes in business or regulatory conditions affecting us;    changes in the market valuations of other equipment rental companies;      trading of our common stock; and     general market conditions.
**Our principal stockholders have substantial control over our affairs**
         Neff is controlled by members of the Mas family. Juan Carlos Mas, our Chief Executive Officer, his brothers,  Jorge Masand  Jose Ramon Mas, who are also members of our board of  directors,and  Santos  Fund I,  L.P.  ("Santos"),  a  limited  partnership  controlled  by the  Mas  family  beneficially  ownapproximately  44.9% of our common stock. In addition,  General Electric Capital Corporation ("GE Capital") owns Class B Special common stock that represents24.1% of the  outstanding  equity  of Neff.  Neff,  GE  Capital,  Santos  and the Mas  family  have  entered  into aStockholders'  Agreement.  The agreement provides that if GE Capital transfers common stock representing 15% or moreof the equity of Neff to a third  party,  the parties to the  agreement  will cause  Neff's  Board of  Directors  toincrease by one member and will cause the nominee  designated  by the  purchaser of GE Capital's  common stock to beelected as the additional director.
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         The Mas family,  Santos and GE Capital,  or a transferee  who acquires the common stock held by GE Capital,acting  together will have the ability to exert  substantial  influence over all matters  requiring  approval by ourstockholders.  These matters include the election and removal of directors and any merger,  consolidation or sale ofall or substantially  all of our assets.  In addition,  they may dictate the management of our business and affairs.This  concentration  of ownership could have the effect of delaying,  deferring or preventing a change in control orimpeding a merger or  consolidation,  takeover  or other  business  combination  which you,  as a  stockholder,  mayotherwise view favorably.
**Future sales of our common stock may adversely affect our common stock price**
        If our  stockholders  sell a large number of shares of common stock or if we issue a large number of sharesin  connection  with  future  acquisitions  or  financings,  the market  price of our  common  stock  could  declinesignificantly.  In addition,  the  perception in the public market that our  stockholders  might sell a large numberof shares of common  stock  could  cause a decline  in the market  price of our  common  stock.  An  additional  1.9million  shares of our common  stock may be issued upon the  exercise  of vested  stock  options we have  previouslygranted,  all of which  could be sold in the public  market if issued,  subject to  compliance  with Rule 144 of theSecurities Act in the case of shares held by our affiliates.ITEM 2.         PROPERTIES
         We lease  approximately  18,000 square feet for our corporate  headquarters  in an office building in Miami,Florida.  We own the  buildings  and/or the land at 2 of our  locations.  All other sites are leased,  generally forterms of five  years  with  renewal  options.  Owned and  leased  sites  range  from  approximately  7,000 to 25,000square  feet  on  lots  ranging  up to 22  acres,  and  include  showrooms,  equipment  service  areas  and  storagefacilities.  We do not  consider  any  specific  leased  location  to be  material  to our  operations.  We  believethat  equally suitable alternative  locations are available in all areas where we currently do business.ITEM 3.         LEGAL PROCEEDINGS
         Neff, the members of our Board of Directors,  two of our principal  stockholders  and United Rentals,  Inc.("United")  were  defendants  in at least nine  lawsuits  filed in the Delaware  Court of Chancery in January  2001.All of the suits were filed  after Neff  announced  that it had  received a proposal  from  United to acquire all ofthe  outstanding  shares  of our  Class A  common  stock  held by the  public.  The  plaintiffs  in the  suits  werestockholders  of Neff who  purported to bring the suits as class  actions on behalf of all  persons,  other than thedefendants,  who  own our  Class  A  common  stock.  The  complaints  alleged,  among  other  things,  that  certainmembers of the Board of  Directors,  GE  Capital   and Santos  breached  their  fiduciary  duties to ourpublic  shareholders  and engaged in self-dealing in negotiating  the terms of the United  proposal.  The plaintiffssought,  among other  things,  injunctive  relief and  damages.  On  February  26,  2001,  Neff  announced  that theUnited proposal had expired and negotiations with United had terminated.  The lawsuits have been dismissed.
         On December  17,  1999,  we  completed  the sale of Neff  Machinery,  Inc.  ("Machinery"),  a  wholly-ownedsubsidiary  of Neff.  Neff received  $90.5  million and recorded a gain on the sale of $3.8  million.  The Machinerysale  agreement (the  "Agreement")  provides for a post-closing  purchase price  adjustment  based on the differencebetween the net worth of Machinery as of June 30, 1999 (the date of a pro forma  balance  sheet  prepared in advanceof the execution of the Agreement)  and the closing date (on the basis of a balance sheet  prepared after  closing).Neff takes the  position  that this  provision  was  designed  in general  to  provide an upward  adjustment  in thepurchase price based on any increase in Machinery's  retained  earnings  during the period from June 30, 1999 to theclosing date.
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         Following  preparation  of a  closing  date  balance  sheet,  the  purchaser  told  Neff that Neff owed thepurchasers an adjustment  payment of $20.3  million.  Neff  responded by informing the purchaser  that the purchaserowed  Neff  additional  consideration  of $8.8  million.  In its  response,  Neff  noted  that  Machinery  had  beenprofitable  during the period  between June 30, 1999 and the closing  date.  In fact, a  significant  portion of theadditional  consideration  Neff claimed it was owed is  attributable  to  Machinery's  earnings  during this period.Neff believes that the  difference  between its position and the  purchaser's  position is generally the result of adifference in contract  interpretation.  Neff's  position is that the Agreement  requires all of Machinery's  assetsand  liabilities  to be valued,  for purposes of the closing date balance  sheet,  using the same  standards used toprepare the June 30, 1999 pro forma balance sheet.  The  purchaser's  position is that the Agreement  allows many ofMachinery's  assets and  liabilities to be valued,  for purposes of the closing date balance sheet,  at the lower ofbook or market value,  irrespective  of the valuation  standards used to prepare the June 30, 1999 pro forma balancesheet.
         The largest  monetary  dispute  concerns  Machinery's  rental fleet.  The book value (cost less accumulateddepreciation)  of the rental fleet as of the closing was  approximately  $50.5 million.  The gross book value of therental fleet was approximately  $63.7 million.  Neff's position is that Machinery's  rental fleet should be measuredon the closing date balance sheet at its book value,  consistent  with Neff's  historical  financial  statements andthe June 30, 1999 pro forma balance  sheet.  The purchaser  argues that  Machinery's  rental fleet as of the closingdate  should be  measured at the lower of book or market  value,  which the  purchaser  maintains  is  approximately$14.6 million lower than Neff's  valuation of the rental fleet under  accounting  principles  generally  accepted inthe United  States of America  ("GAAP").  Neff also  disputes  the market  values  assigned by the  purchaser to therental fleet.
         The next largest  item in dispute  between Neff and the  purchaser  relates to the  treatment of floor planfinancing  programs with  equipment  manufacturers.  The purchaser  assumed  approximately  $3 million of floor planliabilities  as of the closing and included  those  liabilities  on the closing date balance  sheet  prepared by thepurchaser.  Floor plan  financing  was not  included on the June 30, 1999 pro forma  balance  sheet.  As of June 30,1999, the amount of the floor plan financing was approximately $6 million.
         Neff  maintains that this debt was  erroneously  omitted from the June 30, 1999 pro forma balance sheet andmaintains  that the June 30, 1999 pro forma balance  sheet should be corrected  accordingly.  The purchaser  opposesthis  adjustment  on the grounds that the  Agreement  does not expressly  contemplate  adjustments  to the pro formabalance sheet.  The purchaser  also maintains that floor plan financing was properly  omitted from the June 30, 1999pro forma balance sheet.
        The balance of the difference  between Neff's and the  purchaser's  claims relates to the following  items:(1) The closing  date  balance  sheet  prepared by the  purchaser  includes a reserve for bad debt as of the closingdate.  Neff maintains  that the magnitude of the  purchaser's  proposed bad debt reserve is higher than  appropriateunder GAAP.  The difference  between  Neff's  position on the issue and the  purchaser's  position is  approximately$2.4  million;  (2) The  purchaser  contends  that  Machinery's  real estate  should be valued on the  closing  datebalance  sheet at the lower of book or market  value.  Neff  maintains  that,  under GAAP,  Machinery's  real estateshould be stated at book value unless assets are  impaired,  in which case the assets should be written down to fairmarket value.  Neff further  maintains that the assets are not impaired.  The difference  between Neff's position onthis issue and the  purchaser's  position is  approximately  $2.3 million;  and (3) The purchaser has written down aportion of  Machinery's  parts  inventory for parts it claims are inactive or are obsolete.  Neff maintains that thewrite  down is  inappropriate  because  the  parts are  included  on the  "active"  parts  inventory  lists of theirrespective  manufacturers  as of  December  31,  1999,  and are  required  in many cases to be stocked  pursuant  toagreements  with those  manufacturers.  The  difference  between Neff's  position on this issue and the  purchaser'sposition is approximately $2.1 million.
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         On May 5, 2000,  Neff filed suit in Florida  state  court,  seeking,  inter alia,  a  declaration  that theAgreement as written  requires that the  inventory be valued as of the closing in accordance  with GAAP applied on abasis consistent with the Company's  historical  financial  statements and the June 30, 1999 pro forma balance sheet.In  the  alternative,  Neff  sought  to  have  the  Agreement  reformed  to so  require.  Neff  Corp.  v.  NortraxEquipment Co. - Southeast,  L.L.C.,  Case No.  00-11524 CA01 (Circuit Court of the 11th Judicial  Circuit in and forMiami-Dade  County,  Florida).  On or about May 25, 2000,  the purchaser  filed a motion to stay the  litigation andcompel arbitration.
        In August 2001,  the parties filed a stipulation  in which they agreed that all disputes  pertaining to theclosing  balance sheet and the June 30, 1999 pro forma  balance sheet will be resolved by an arbitrator  selected bythe parties (the  "Arbitrator").  The Arbitrator  will,  acting in accordance  with the Federal  Arbitration Act andthe terms of the Agreement,  determine  whether and to what extent the closing net asset value of Machinery  derivedfrom the  closing  balance  sheet  requires  adjustment  and whether the  Agreement  and the June  30,1999 pro formabalance  sheet  should  be  reformed.  Pursuant  to the  Agreement,  the  Arbitrator  shall  refer  to a  nationallyrecognized firm of personal property  appraisers  selected by the parties, or to a real estate appraiser selected bythe parties,  those items,  if any, that it determines  are to be valued at market.  The parties have each submittedopening  statements and replies thereto to the Arbitrator,  and in November and December 2001, the Arbitrator held ahearing at which each side presented testimony.  The Arbitrator has not yet rendered a decision.
        We are also a party to other pending legal  proceedings  arising in the ordinary course of business.  Whilethe results of such  proceedings  cannot be predicted with  certainty,  we do not believe any of these other mattersare material to our financial condition or results of operations.ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 During the fourth quarter of 2001, no matter was submitted to a vote of the security holders of Neff.
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PART IIITEM 5.         MARKET FOR THE  REGISTRANT'S  COMMON STOCK AND               RELATED  STOCKHOLDER MATTERS
*Price Range of Common Stock*
         On May 21, 1998,  our Class A common stock began trading on the New York Stock  Exchange  ("NYSE") under thesymbol  "NFF".  In November 2001, the NYSE  suspended  trading in our Class A common  stock and we began to tradeunder the symbol "NFFCA" on the  NASD Over-the-Counter Bulletin Board ("OTC").  The following table sets forth the high and lowclosing  sales  prices  of our Class A common  stock as  reported  on the NYSE and the OTC  market  for the  periodsindicated.Year ended December 31, 2001:                                       HIGH               LOW                                       ----               ---First Quarter   ................  $          2.66    $          0.40Second Quarter  ................  $          1.35    $          0.35Third Quarter   ................  $          1.10    $          0.55Fourth Quarter  ................  $          0.75    $          0.33Year ended December 31, 2000:                                       HIGH                LOW                                       ----                ---First Quarter   ................  $          9.38    $          5.94Second Quarter  ................  $          7.31    $          3.00Third Quarter   ................  $          5.50    $          2.94Fourth Quarter  ................  $          4.25    $          0.75
        Asof March 1, 2002, we had 89 shareholders of record. We believe the number ofbeneficial owners is substantially greater than the number of record holdersbecause a large portion of our Class A common stock is held of record in broker“street names” for the benefit of individual investors. 

*Dividend Policy*
        Wehave not paid any cash dividends on our common stock during the two-year periodended December 31, 2001. We presently intend to retain all earnings for thedevelopment of our business and do not anticipate paying any cash dividends onour common stock in the foreseeable future. In addition, our Credit Facilityprecludes us from purchasing, redeeming or retiring any of our capital stock orfrom paying dividends. The payment of dividends is also limited by provisions ofthe Indentures governing our senior subordinated notes issued in May andDecember 1998 and due in 2008. 

        Thedeclaration and payment of any future cash dividends will depend on a number offactors including future earnings, capital requirements, our financial conditionand prospects and any restrictions under credit or other agreements existingfrom time to time, as well as any other factors as our Board of Directors maydeem relevant. We cannot assure you that we will pay any dividends in thefuture. 

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ITEM 6.         SELECTED CONSOLIDATED FINANCIAL DATA
        Thedata set forth below should be read in conjunction with Item 7 -“Management’s Discussion and Analysis of Financial Condition andResults of Operations” and Neff’s Consolidated Financial Statementsand the Notes thereto included elsewhere in this Annual Report. Certain amountsin the prior years have been reclassified to conform with the current yearpresentation. 
**For the Years Ended December 31,                                       ---------------------------------------------                                        2001     2000      1999      1998     1997                                       -------  -------   -------   -------  -------                                       (Amounts in thousands, except per share data)**Revenues Rental revenue ..................   $ 183,360  $192,990  $222,862  $179,014  $69,512 Equipment sales .................      33,520    51,179   121,865   108,352   50,578 Parts and service ...............      14,122    15,923    47,284    36,724   22,132                                       -------   -------   -------   -------  -------      Total revenues .............     231,002   260,092   392,011   324,090  142,222                                       -------   -------   -------   -------  -------Cost of revenues Cost of equipment sold ..........      29,388    43,660   100,871    83,783   40,766 Depreciation of rental     equipment (1) ...............      43,479    44,724    55,159    56,336   24,231 Maintenance of rental     equipment  ..................      64,838    64,883    66,763    49,858   18,752 Cost of parts and service .......       9,569    10,495    30,166    23,690   13,741                                       -------   -------   -------   -------  -------     Total cost of revenues ......     147,274   163,762   252,959   213,667   97,490                                       -------   -------   -------   -------  -------Gross profit  ....................      83,728    96,330   139,052   110,423   44,732                                       -------   -------   -------   -------  -------Selling, general and    administrative  expenses .....      55,497    61,574    74,893    60,347   31,329Other depreciation and     amortization ................      10,121     9,884    10,731     8,833    2,806Write-down of assets held     for sale  ...................           -     4,272     1,444         -        -Cost incurred in efforts to sell   the company  ..................           -     4,282         -         -        -Officer stock option     compensation (2).............           -         -         -     3,198    4,400Branch closure and other     related costs................       5,702         -         -         -        -                                       -------   -------   -------   -------  -------Income from operations  ..........      12,408    16,318    51,984    38,045    6,197                                       -------   -------   -------   -------  -------Other expenses  ..................      32,551    34,763    41,520    35,855   14,338                                       -------   -------   -------   -------  -------Income (loss) before income taxes, minority interest and     extraordinary item ..........     (20,143)  (18,445)   10,464     2,190   (8,141)(Provision for) benefit from     income taxes  ...............           -         -    (3,877)      134    1,748                                       -------   -------   -------   -------  -------Income (loss) before minorityinterest and     extraordinary item  .........     (20,143)  (18,445)    6,587     2,324   (6,393)Minority interest  ...............           -         -    (1,733)   (1,111)       -                                       -------   -------   -------   -------  -------Income (loss) before extraordinary   item  .........................     (20,143)  (18,445)    4,854     1,213   (6,393)Extraordinary loss, net  .........      (1,449)        -         -    (2,675)    (451)                                       -------   -------   -------   -------  -------Net income (loss)  ...............   $ (21,592) $(18,445) $  4,854  $ (1,462) $(6,844)                                       =======   =======   =======   =======  =======Basic income (loss) per common share:Income (loss) before extraordinary   item  .........................   $   (0.95) $  (0.87) $   0.23  $  (0.23) $ (1.64)Extraordinary loss, net  .........       (0.07)        -         -     (0.15)   (0.05)                                       -------   -------   -------   -------  -------Net income (loss)  ...............   $   (1.02) $  (0.87) $   0.23  $  (0.38) $ (1.69)                                       =======   =======   =======   =======  =======Diluted income (loss) per common share:Income (loss) before extraordinary   item  .........................   $   (0.95) $  (0.87) $   0.22  $  (0.23) $ (1.64)Extraordinary loss, net  .........       (0.07)        -         -     (0.15)   (0.05)                                       -------   -------   -------   -------  -------Net income (loss)  ...............   $   (1.02) $  (0.87) $   0.22  $  (0.38) $ (1.69)                                       =======   =======   =======   =======  =======Weighted average common shares   outstanding:Basic  ...........................      21,165    21,165    21,165    17,213    8,465                                       =======   =======   =======   =======  =======Diluted  .........................      21,165    21,165    21,887    17,213    8,465                                       =======   =======   =======   =======  =======
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ITEM 6.         SELECTED CONSOLIDATED FINANCIAL DATA - (continued)**Year Ended December 31,                                     2001     2000    1999     1998      1997                                    ------   ------  ------   -------   ------                             (Amounts in thousands, except percent and location data)Balance Sheet Data (end of period):**Net book value of rental equipment..$258,391 $306,265 $285,863 $321,220 $179,547Total assets........................ 414,457  474,967  471,706  572,369  279,654Total debt.......................... 317,184  345,939  335,852  406,993  226,203Redeemable preferred stock..........       -        -        -        -   53,747Total stockholders' equity        (deficit)...................  64,171   85,763  104,208   99,360  (24,735)**Other Data:**EBITDA(3)...........................$ 71,710 $ 79,480 $119,318 $106,412 $ 37,634EBITDA margin(4).....................   31.0%    30.6%    30.4%    32.8%    26.5%Rental equipment purchases .........$ 27,934 $109,578 $221,671 $199,198 $143,515Number of locations (end of period)..     74       82       84       86       53---------------------
1)          Depreciation  of rental  equipment  for 1997 and 1999  reflects  Neff's  change in  depreciation  policy to     recognize extended  estimated service lives and increased  residual values of our rental equipment.  See Neff's     Consolidated Financial Statements and the Notes thereto included elsewhere in this Annual Report.
2)               Officer stock option  compensation  expense represents a non-cash charge with respect to the changes in the     difference  between the estimated market value of the shares issuable to a former  executive  officer under     an option agreement, and the exercise price for the shares.
3)               EBITDA  represents  income from  operations plus  depreciation,  amortization,  and non-cash  expenditures,     including  branch  closure and other  related  costs in 2001,  write-down  of assets in 2000 and 1999,  officer     stock  option  compensation  expense in 1998 and 1997,  and costs  incurred  in efforts to sell the  Company in     2000.  EBITDA is not  intended  to  represent  cash flow from  operations  and should not be  considered  as an     alternative to operating or net income  computed in accordance  with GAAP, as an indicator of Neff's  operating     performance,  as an  alternative to cash flows from  operating  activities  (as  determined in accordance  with     GAAP) or as a measure of  liquidity.  We believe  that  EBITDA is a fairly  standard  measure in our  industry,     commonly  reported and widely used by analysts and investors as a measure of  profitability  for companies with     significant depreciation,  amortization and non-cash expenditures.  However, not all companies calculate EBITDA     using the same  methods;  therefore,  the  EBITDA  figures  set forth  above  may not be  comparable  to EBITDA     reported by other companies.
4)        EBITDA margin represents EBITDA as a percentage of total revenues.ITEM 7.         MANAGEMENT'S DISCUSSION  AND ANALYSIS OF FINANCIAL                CONDITION AND RESULTS OF OPERATIONS
         The  following  discussion  and analysis  compares the year ended  December 31, 2001 to results for the yearended  December  31, 2000, and the year ended  December  31, 2000 to the  historical  and pro forma  results for yearended  December  31,  1999.  This  discussion  should be read in  conjunction  with  Neff's  Consolidated  FinancialStatements and the Notes thereto, appearing elsewhere in this Annual Report.
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***Overview***
         We derive  revenue from (1) the rental of  equipment;  (2) sales of new and used  equipment and (3) sales ofparts and  service.  Our  primary  source of revenue is the  rental of  equipment  to  construction  and  industrialcustomers.  Growth in rental revenue is dependent upon several factors,  including the demand for rental  equipment,the amount of equipment  available for rent,  rental rates and the general  economic  environment.  The level of our newand used  equipment  sales is  primarily a function of the supply and demand for such  equipment,  price and generaleconomic  conditions.  The age,  quality  and mix of our rental  fleet also  affect  revenues  from the sale of usedequipment. Revenues derived from the sale of parts and  service generally correlates with rental revenues.
         As part of our  strategy  to  improve  utilization  and return on fleet  investments,  we plan to reduce ourshort term  capital  expenditures  on fleet  assets  during 2002 in order to apply  operating  cash flow to pay downdebt. The reduction in capital  expenditures  could lead to a reduction in used equipment  sales as we age the fleetand seek to maximize  return on existing fleet  investments.  We will also continue to carefully  analyze the marketpotential of each branch and may  contemplate  the closing of branches that are not  generating  adequate  return oninvestment or are in a market that we do not believe has significant future potential.
        We own and lease rental equipment fleet for our operations.  As of December 31, 2001 we owned rental fleet assets with a net book valueof $258.4 million.  We also lease rental fleet under operating leases that had an original cost of $53.7 million.  OperatingLease expense related to rental fleet under operating leases was $10.1 million for 2001.
         Costs  of  revenues  include  cost  of  equipment  sold,   depreciation  and  maintenance  costs  of  rentalequipment  and cost of  parts  and  service.  Cost of  equipment  sold  consists  of the net  book  value of  rentalequipment  at the time of sale and cost  for new  equipment  sales.  Depreciation  of  rental  equipment  representsthe  depreciation  costs  attributable to rental  equipment.  Maintenance of rental  equipment  represents the costsof  servicing  and  maintaining  rental  equipment  on an  ongoing  basis and includes operating lease payments madeon leased fleet.  Cost of  parts  and  service  represents  costs  attributable   to the sale  of parts  directly tocustomers  and service  provided  for the repair of customer owned equipment.
         Depreciation of rental equipment is calculated on a straight-line  basis over the estimated  service life ofthe asset  (generally two to eight years with 10-20%  residual  values).  Since January 1, 1996, we have,  from timeto time, made certain changes to our  depreciation  assumptions to recognize  extended  estimated  service lives andincreased  residual  values  of our  rental  equipment.  We  believe  that  these  changes  in  estimates  will moreappropriately  reflect our financial  results by better allocating the cost of our rental equipment over the servicelives of these assets.  In addition,  the new lives and residual  values more closely  conform to those prevalent inour industry.
         Selling,  general and  administrative  expenses  include sales and marketing  expenses,  payroll and relatedcosts,  professional  fees,  property  and  other  taxes  and  other  administrative  overhead.  Other  depreciationand  amortization   represents  the  depreciation   associated  with  property  and  equipment  (other  than  rentalequipment) and the amortization of goodwill and intangible assets.
         On March 21, 2001,  the Company  adopted a plan to close nine of its branches.  Management  expected all ofthe nine  branches  to be closed by March 31,  2002.  During the first  quarter of 2001,  the Company  recognized  acharge of $9.1  million  associated  with these  branch  closings.  During the  fourth  quarter of 2001,  managementdecided  not to close two of the stores it had previously  decided to close and to close two other stores  instead.  The change inthe branch closure plan  resulted in a reduction of expenses associated with the branch closings of $3.4  million  which was  recorded in the fourth  quarter of 2001.  The expense reduction of $3.4million was the result of reversing $4.7 million associated with the previously  announced  closings,  of which $3.6million was goodwill,  and new charges of $1.3 million  associated with the closure of the two other branches in thefourth  quarter.  The change in the branch closure  plan  caused the Company  to recognize  a charge of $5.7 million forthe year ended  December 31, 2001 that included $1.1 million of goodwill,  $3.0 million to write-down equipment heldfor sale,  employee  termination  benefits of $0.2 million and other  related  costs of $1.4  million.  The employeetermination  benefits were paid to  approximately  33  administrative,  sales and  maintenance  employees  who wereterminated in connection with the branch closings.
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***Results of Operations***
         Management   believes  that  the   period-to-period   comparisons  of  Neff's  financial   results  may  notnecessarily be meaningful  and should not be relied upon as an indication of future  performance.  In addition,  ourresults of operations may fluctuate from  period-to-period in the future as a result of the cyclical nature of theindustry in which we operate.
        Sale of  Subsidiaries.  During the fourth quarter of 1999, we sold our equity interest in two  subsidiaries,Sullair  Argentina  Sociedad  Anonima ("S.A.  Argentina")  and Neff  Machinery,  Inc.  ("Machinery").  Our pro formaresults  for the Company for 1999,  assuming  the sales of S.A.  Argentina  and  Machinery  took place on January 1,1999, are presented below with the other years presented for comparative purposes.
         The  following  table  sets  forth,  for  the  periodsindicated,  information  derived from the  consolidated  statements of operations of Neff, and pro forma results for1999,  expressed as a percentage  of total  revenues.  We cannot  assure you that the trends in the table below willcontinue in the future.                                   NEFF CORP.                      CONSOLIDATED STATEMENTS OF OPERATIONS                       (in thousands, except percent data)**For the years ended December 31,                                        -----------------------------------                                                              Historical        Pro Forma                               2001     %      2000      %    1999      %     1999     %                             -------- -----   -------  ----  -------  -----  -------  ----**Revenues Rental revenue..............$183,360  79.4  $192,990  74.2  $222,862  56.9 $179,062  72.0 Equipment sales.............  33,520  14.5    51,179  19.7   121,865  31.1   54,234  21.8 Parts and service...........  14,122   6.1    15,923   6.1    47,284  12.0   15,257   6.2                              ------- -----   ------- -----   -------  ----  -------  ----      Total revenues......... 231,002 100.0   260,092 100.0   392,011 100.0  248,553 100.0                              ------- -----   ------- -----   ------- -----  ------- -----Cost of revenues Cost of equipment sold...... 29,388   12.7    43,660  16.8   100,871  25.7   45,086  18.1 Depreciation of        rental equipment..... 43,479   18.8    44,724  17.2    55,159  14.1   40,821  16.4 Maintenance of        rental equipment..... 64,838   28.1    64,883  25.0    66,763  17.0   56,556  22.8 Cost of parts and service...  9,569    4.2    10,495   4.0    30,166   7.7    8,745   3.5                              ------  -----   ------- -----   -------  ----  -------  ----    Total cost of revenues...147,274   63.8   163,762  63.0   252,959  64.5  151,208  60.8                              ------  -----   ------- -----   -------  ----  -------  ----Gross profit................. 83,728   36.2    96,330  37.0   139,052  35.5   97,345  39.2                              ------  -----   ------- -----   -------  ----  -------  ----Other operating expenses Selling, general and  administrative expenses.... 55,497   24.0    61,574  23.7    74,893  19.1   56,555  22.8 Other depreciation and        amortization......... 10,121    4.4     9,884   3.8    10,731   2.7    8,707   3.5 Write-down of assets held        for sale.............      -      -     4,272   1.7     1,444   0.4    1,444   0.6 Costs incurred in efforts to  sell the company...........      -      -     4,282   1.7         -     -        -     - Branch closure and other        related costs........  5,702    2.4         -     -         -     -        -     -                              ------  -----   ------- -----   -------  ----  -------  ----Income from operations.......$12,408    5.4 $  16,318   6.3  $ 51,984  13.3  $30,639  12.3                              ------  -----   ------- -----   -------  ----  -------  ----EBITDA.......................$71,710   31.0 $  79,480  30.6  $119,318  30.4  $81,611  32.8                             =======  =====   ======= =====   =======  ====  =======  ====Certain amounts for the prior periods have been reclassified to conform with the current period presentation.
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***2001 Compared to 2000 (in thousands, except percent data)***
  This section compares our operating results for 2001 with our operating results for 2000.
        *Total  Revenues.*  Total  revenues for the year ended  December  31, 2001  decreased  11.2% to $231,002  from$260,092  for the year ended December 31, 2000.  The  decrease  in total  revenues is primarily due to a decrease of$9,630 or 5.0% in rental  revenues  and a $17,659 or 34.5%  decrease  in sales of rental  equipment  during the yearended  December 31, 2001 compared with the year ended  December 31, 2000.  Total revenues at locations open for morethan one year decreased 1.0% for the year ended December 31, 2001 compared with the year ended December 31, 2000.
          *Gross  Profit.*Gross profit for the year ended December 31, 2001 decreased  13.1% to $83,728 or36.2% of total  revenues  from  $96,330 or 37.0% of total  revenues for the yearended  December  31,  2000.  The  decrease  in gross  profit is partly  due to adecrease in rental revenue profit margins  resulting from decreased  utilizationof the rental fleet in response to economic conditions and competitive pressuresduring 2001. The decrease in gross profit was also due to reduced  profits fromthe sale of used equipment due to a decrease in  sales margins as well as equipment salesvolume.
        *Selling,  General and Administrative  Expenses.*  Selling,  general and administrative  expenses for the yearended  December  31,  2001  decreased  9.9% to  $55,497 or 24.0% of total  revenues  from $61,574 or 23.7% of total revenues for the year ended December 31, 2000.The  decrease  in  selling,  general  and administrative  expenses is primarily  attributable to the closure of branches during 2001 and our continued  effort to reduce selling, general and administrative expensesin our continuing operations.
        *Depreciation of Rental  Equipment.*  Depreciation  of rental  equipment for 2001 decreased 2.8% to $43,479 or18.8% of total  revenues  from  $44,724  or 17.2% of total  revenues  in 2000.  The  decrease in the dollar amount of depreciation is due  primarily  todecreased levels of rental fleet due to branch closures.
         *Other  Depreciation  and  Amortization.*  Other  depreciation  and  amortization  expense  for the year endedDecember 31, 2001  increased  2.4% to $10,121 or 4.4% of total  revenues  from $9,884 or 3.8% of total  revenues forthe year ended December 31, 2000.  The increase is due to increased  amortization of debt issuance costs as a result of feespaid for various amendments to our former $219 million credit facility (the "Former Credit Facility").
        *Interest  Expense.*  Interest  expense for the year ended  December 31, 2001  decreased  8.2% to $30,727 from$33,456 for the year ended  December 31, 2000.  The decrease is primarily  attributable  to decreased  borrowings underNeff's  variable rate debt during 2001, as well as reductions in interest rates charged on our variable rate debt.
         *Write-Down  of Assets Held for Sale.*  There was no write-down  of assets held for sale during 2001,  except for those  write-downs  included inthe branch closure and other related costs.  Write-down  of assets held for sale  represents  a charge of $4,272 towrite-down  fleet assets  primarily  utilized by the oil industry to estimated  fair value during the second quarterof 2000.
        *Cost  Incurred  in  Efforts  to Sell the  Company.*  There were no costs incurred in efforts to sell the Company during 2001.  In 2000 we  recorded  a charge of $4,282  during  2000 to recordexpenses  related to  consulting  and legal fees  associated  with efforts to sell Neff during 1999 and 2000.
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***2000 Compared to 1999 (in thousands, except percent data)***
        This section compares 2000 operating  results with both our historical  operating  results for 1999 and withpro forma operating  results for 1999. The pro forma operating  results of 1999 exclude the operations of two of theCompany's  subsidiaries,  S.A.  Argentina and  Machinery,  which were sold in the fourth  quarter of 1999. Pro formaoperating results assume that the sales of S.A. Argentina and Machinery occurred on January 1, 1999.
         *Total  Revenues.*  Total revenues for 2000 decreased  33.7% to $260,092 from $392,011 in 1999.  This decreasein revenues is primarily attributable to the sales of S.A. Argentina and Machinery.
        *Pro Forma Total  Revenues.*  Total  revenues for the year ended  December 31, 2000 increased 4.6% to $260,092from $248,553 for the year ended  December 31, 1999.  The increase in total revenues is partly due to an increase of$13,928  or 7.8% in  rental  revenues  resulting  from the  continued  expansion  of our  rental  fleet at  existinglocations.  The increase in total  revenues was mitigated by a $3,055 or 5.6% decrease in sales of rental  equipmentduring the year ended  December  31,  2000  compared  with the year ended  December  31,  1999.  Total  revenues  atlocations  open for more than one year  increased  7.2% for the year ended  December 31, 2000 compared with the yearended December 31, 1999.
        *Gross  Profit.*  Gross profit for 2000  decreased  30.7% to $96,330 or 37.0% of total  revenues from $139,052or 35.5% of total  revenues in 1999.  This  decrease is primarily  attributable  to the sales of S.A.  Argentina andMachinery.
        *Pro Forma Gross  Profit.*  Gross  profit for the year ended  December 31, 2000  decreased  1.0% to $96,330 or37.0% of total  revenues from $97,345 or 39.2% of total  revenues for the year ended December 31, 1999. The decreasein gross profit is primarily due to a decrease in gross profit margin  resulting  from  decreases in rental rates inresponse to competitive pressures during 2000.
        *Selling,  General  and  Administrative  Expenses.*  Selling,  general  and  administrative  expenses  in 2000decreased  17.8% to  $61,574  or 23.7% of total  revenues  from  $74,893  or 19.1% of total  revenues  in 1999.  Thedecrease in selling,  general and administrative  expenses is primarily  attributable to the sales of S.A. Argentinaand Machinery.
        *Pro Forma Selling,  General and Administrative  Expenses.*  Selling,  general and administrative expenses forthe year ended  December  31, 2000  increased  8.9% to $61,574 or 23.7% of total  revenues  from $56,555 or 22.8% oftotal revenues for the year ended December 31, 1999. The increase in selling,  general and  administrative  expensesis primarily  attributable  to the  allocation  of increased  resources  to support the  continued  expansion of ourrental fleet at existing locations.
        *Depreciation of Rental  Equipment.*  Depreciation of rental  equipment for 2000 decreased 18.9% to $44,724 or17.2% of total  revenues  from $55,159 or 14.1% of total  revenues in 1999.  The decrease was  primarily  due to thesales of S.A. Argentina and Machinery.
        *Pro Forma  Depreciation of Rental  Equipment.*  Depreciation  of rental  equipment for 2000 increased 9.6% to$44,724 or 17.2% of total  revenues from $40,821 or 16.4% of total  revenues in 1999.  The increase is due primarilyto increased investments in rental fleet at existing locations.
        *Other  Depreciation  and  Amortization.*  Other  depreciation  and  amortization  expense for 2000  decreased7.9% to  $9,884  or 3.8% of total  revenues  from  $10,731  or 2.7% of total  revenues  in 1999.  This  decrease  isprimarily attributable  to  the sales of S.A. Argentina and Machinery.
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        *Pro Forma Other  Depreciation and  Amortization.*  Other  depreciation and amortization  expense for the yearended  December 31, 2000  increased  13.5% to $9,884 or 3.8% of total revenues from $8,707 or 3.5% of total revenuesfor the year ended December 31, 1999.  The increase is due to increased  investment in non-rental  equipment  duringthe year 2000.
        *Interest  Expense.*  Interest expense for 2000 decreased 16.2% to $33,456 from $39,901 in 1999. This decreaseis primarily attributable to the paydown of debt with the proceeds of the sales of S.A. Argentina and Machinery.
        *Pro Forma  Interest  Expense.* Interest  expense for the year ended  December  31, 2000  increased  17.4% to$33,456 from  $28,508 for the year ended  December 31,  1999.  The increase is primarily  attributable  to increasedborrowings  to finance the expansion of our rental fleet assets at existing  locations and rate  increases onthe Former Credit Facility.
         *Write-Down  of Assets Held for Sale.*  Write-down  of assets held for sale  represents  a charge of $4,272 towrite-down  fleet assets  primarily  utilized by the oil industry to estimated  fair value during the second quarterof 2000.  A write-down of similar assets held for sale of $1, 444 was recorded during 1999.
        *Cost  Incurred  in  Efforts  to Sell the  Company.* We  recorded  a charge of $4,282  during  2000 to recordexpenses related to consulting and legal fees associated with efforts to sell Neff during 1999 and 2000.
***Liquidity and Capital Resources***
        During 2001, our operating  activities  provided net cash flow of $30.4 million as compared to $44.0 millionfor 2000.  This decrease is primarily attributable  to increased net loss combined with changes in working capital as a result of our operations.
         Net cash  provided  by (used in)  investing  activities  was $4.8  million  for 2001 as  compared to $(53.9)million in the same period for the prior year.  The change in cash from  investing  activities  was due primarily toreduced purchases of rental equipment offset partially by reduced sales of rental equipment in 2001 compared with the prior year.
         Net cash  provided  by (used in)  financing  activities  was  $(34.1)  million  for 2001 as compared to $9.7million for 2000.  The change in cash from financing  activities is due primarily to the net repayment of outstanding  debt of$28.9 million in 2001 compared with net borrowings of $9.9 in 2000.
            During   the   fourthquarter of 2001, the Company  entered into our new $200 million Credit  Facilitywith a group of lenders led by Fleet Capital. The Company used proceeds from theCredit Facility to repay its former revolving credit facility. Proceeds from theborrowing on the Credit  Facility were used to repay the  Company’s  outstandingdebt on the Former Credit Facility.  The Company’s maximum  availability  underthe Credit Facility is based upon eligible accounts receivable, rental fleet andinventory amounts.  The interest rates on balances  outstanding under the CreditFacility  vary based upon the leverage  ratio  maintained  by the  Company.  TheCredit  Facility  expires in December  2005. The Company is charged a commitmentfee on the aggregated  daily unused balance of the Credit  Facility which variesbetween 0.50% and 0.63%.
         The  Credit  Facility  is  secured  by  substantially  all of the  Company's  assets  and  contains  certainrestrictive  covenants which, among other things,  require the Company to maintain certain financial coverage ratiosand restrict  the payment of dividends by the Company. During 2001 the Company recorded an extraordinaryloss of approximately $1.5 million, net of related income taxes, from thewrite-off of debt issue costs associated with the repayment of the Former CreditFacility. 
        Our Credit  Facility  contains  financial  covenants  requiring  us to maintain a debt to EBITDA  ratio  (4.55:1 atDecember 31, 2001),  and an EBITDA to interest  expense  ratio  (2.30:1 at December 31,  2001).  As of December 31,2001 the  Company  was in  compliance  with all of the  financial  covenants  under  the  Credit  Facility.  If theCompany’s revenues for 2002 are less than expected or if the Company’s  expenses are more than expected,  operatingresults  and  related  cash flows will be less than  planned.  Such a  shortfall  might  cause the Company to be indefault  of one of the  financial  covenants  in  its  Credit  Facility  that  depend  on the  Company’s  operatingresults.  Such  default  could  potentially  result in a demand  for  payment  on the  outstanding  balance  of theCredit  Facility.  Management is confident that,  should such a default occur,  the Company would be able to obtainamendments  to the Credit  Facility to cure the  default,  and have  adequate  capital  resources to meet its needshowever,  there can be no assurances that the Company could obtain such  amendments.  We expect our operations willcontinue to produce  free cash flow during 2002 and we intend to use all free cash flow to repay  outstanding  debton the Credit Facility during 2002.
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***Inflation and General Economic Conditions***
         Although we cannot accurately  anticipate the effect of inflation on our operations,  we do not believe thatinflation  has had, or is likely in the  foreseeable  future to have, a material  impact on our  operating  results.Neff's  operating  results may be  adversely  affected  by events or  conditions  in a  particular  region,  such asregional economic,  weather and other factors.
         In  addition,  our  operating  results may be adversely  affected by  increases  in interest  rates that maylead to a decline in economic  activity,  while  simultaneously  resulting in higher interest  payments for us underour variable rate credit facilities.
         Although  much of our business is with  customers  in  industries  that are  cyclical in nature,  managementbelieves that certain  characteristics of the equipment rental industry and our operating  strategies should help tomitigate  the effects of an economic  downturn.  These  characteristics  include  (1) the  flexibility  and low costoffered to customers by renting,  which may be a more attractive  alternative to capital purchases;  (2) our abilityto redeploy  equipment during regional  recessions;  and (3) the diversity of our industry and customer base.
***Market Risk***
         Our  financial  instruments  consist of cash,  accounts  receivable  and fixed rate debt and  variable  ratedebt.  Cash and  accounts  receivable  are short  term,  non-interest  bearing  instruments  and are not  subject tomarket risk.
         We are exposed to market  risks  related to changes in interest  rates.  Interest  rate  changes  affect thefair  market  value of fixed  rate debt  instruments  but do not  impact  earnings  or cash  flows.  Conversely,  forvariable  rate debt  instruments,  interest  rate  changes  generally  do not  affect the fair  market  value but doimpact future earnings and cash flows.
         At December 31, 2001,  we had fixed rate debt of $199.0  million and variable  rate debt of $118.2  million.Holding debt levels  constant,  a one  percentage  point  increase in interest  rates would decrease the fair marketvalue of our fixed rate debt by  approximately  $4.5 million and  increase  interest  expense for our variable  ratedebt by approximately $1.2 million.
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*New Accounting Pronouncements*
           The  Company   adoptedStatement of Financial  Accounting  Standards ("SFAS") No. 133,  "Accounting forDerivative  Instruments  and Hedging  Activities"  ("SFAS  133"),  as amended bySFAS No. 137, "Accounting for DerivativeInstruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASBStatement  No. 133" ("SFAS  137") and further  amended by SFAS No. 138, "Accounting for Certain Derivative Instruments andCertain Hedging  Activities"  ("SFAS 138"). SFAS 133, as amended by SFAS 137 andSFAS 138, was  effective for all fiscal  quarters of all fiscal years  beginningafter June 15, 2000. The Company adopted SFAS 133 on January 1, 2001. SFAS 133 establishes accounting and reporting standards forderivative  instruments  including certain  derivative  instruments  embedded inother contracts, and for hedging activities.  It requires an entity to recognizeall derivatives as either assets or liabilities in the balance sheet and measurethose  instruments at fair value. The adoption of SFAS133 as amended by SFAS 137 and SFAS 138 did not have a material impact on itsfinancial position. 
        InJuly 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141,“Business Combinations” (“SFAS 141”), and SFAS No. 142,“Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS141 requires that the purchase method of accounting be used for all businesscombinations, among other things and applies to all business combinationsinitiated after June 30, 2001 and all business combinations accounted for usingthe purchase method for which the acquisition date is July 1, 2001 or later. TheCompany has not entered into any business combinations during 2001. SFAS 142, which became effectiveJanuary 1, 2002,changes the accounting for goodwill from an amortization method to animpairment-only approach and requires the Company to complete a transitional goodwillimpairment test six months from the date of adoption.  For the year ended December 31, 2001,2000 and 1999 goodwill amortization was approximately $2.3 million, $2.3 million and $2.3 million, respectively.Based on our preliminary assessment of SFAS 142, we expect that this amortization will no longer be recordedin future periods. The Company is in the process of evaluating the effect theadoption of these standards will have on its financial position or results of operations. 

        InAugust 2001, the FASB issued SFAS No. 143, “Accounting for Asset RetirementObligations” (“SFAS 143”). SFAS 143 addresses financialaccounting and reporting for obligations associated with the retirement oftangible long-lived assets and the associated asset retirement costs. It appliesto legal obligations associated with the retirement of long-lived assets thatresult from the acquisition, construction, development, and (or) the normaloperation of a long-lived asset, except for certain obligations of lessees. Theprovisions of SFAS 143 will be effective for fiscal years beginning after June15, 2002; however early application is permitted. The Company is currentlyevaluating the implications of adoption of SFAS 143 on its financial position or results of operations. 

        InOctober 2001, the FASB issued SFAS No. 144 “Accounting for the Impairmentor Disposal of Long-Lived Assets” (“SFAS 144”). This statementaddresses financial accounting and reporting for the impairment or disposal oflong-lived assets. This statement supersedes FASB Statement No. 121,“Accounting for the Impairment of Long-Lived Assets and for Long-LivedAssets to Be Disposed Of,” and the accounting and reporting provisions ofAccounting Principles Board Opinion No. 30, “Reporting the Results ofOperations - Reporting the Effects of Disposal of a Segment of a Business, andthe Extraordinary, Unusual and Infrequently Occurring Events andTransactions”, for the disposal of a segment of a business. The provisionsof SFAS 144 will be effective for fiscal years beginning after December 15,2001. The Company is currently evaluating the implications of adoption of SFAS144 on its financial position or results of operations. 

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ITEM 8.            FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA**Index to Financial Statements and Schedules                                                                          Page                                                                         Numbers**                                                                        ---------Independent Auditors' Report  ...........................................   28Consolidated Balance Sheets as of December 31, 2001 and 2000  ...........   29Consolidated Statements of Operations for the years ended December 31, 2001, 2000 and 1999  ......................................   30Consolidated Statements of Stockholders' Equity for the years ended December 31, 2001, 2000 and 1999  ......................   31Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000 and 1999  ......................................   32Notes to Consolidated Financial Statements  .............................   33    **SCHEDULES:**Independent Auditors' Report  ...........................................   52Schedule II-Valuation and Qualifying Accounts and Reserves  .............   53All other  schedules are omitted  because they are not  applicable or therequired information is shown in the consolidated financial statements ornotes thereto.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders ofNeff Corp.
We have audited theaccompanying consolidated balance sheets of Neff Corp. and subsidiaries (the“Company”), as of December 31, 2001 and 2000, and the relatedconsolidated statements of operations, stockholders’ equity and cash flowsfor each of the three years in the period ended December 31, 2001. Thesefinancial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements basedon our audits.  

We conducted our audits inaccordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonablebasis for our opinion. 

In our opinion, such consolidated financial statements present fairly, in allmaterial respects, the financial position of Neff Corp. and subsidiaries atDecember 31, 2001 and 2000 and the results of their operations and their cashflows for each of the three years in the period ended December 31, 2001 inconformity with accounting principles generally accepted in the United States ofAmerica. 

/s/ Deloitte & Touche LLPCertified Public Accountants
Miami, FloridaMarch 29, 2002
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                                   NEFF CORP.                           CONSOLIDATED BALANCE SHEETS                      (in thousands, except per share data)**December 31,   December 31,                                                             2001           2000                                                           --------       --------    ASSETS**Cash and cash equivalents  ........................       $   4,305      $   3,102Accounts receivable, net of allowance for doubtful  accounts of $2,947 in 2001 and $3,323 in 2000  ..          31,458         42,341Inventories .......................................           2,415          2,783Rental equipment, net  ............................         258,391        306,265Property and equipment, net  ......................          21,790         26,401Goodwill, net  ....................................          82,296         85,696Prepaid expenses and other assets  ................          13,802          8,379                                                           --------       --------        Total assets  .............................       $ 414,457      $ 474,967                                                           ========       ========    **LIABILITIES AND STOCKHOLDERS' EQUITY**Liabilities   Accounts payable  ..............................       $  10,067      $  18,029   Accrued expenses  ..............................          22,997         24,780   Credit facility  ...............................         118,217        147,121   Senior subordinated notes  .....................         198,967        198,818   Capitalized lease obligations  .................              38            456                                                           --------       --------     Total liabilities  ...........................         350,286        389,204                                                           --------       --------Commitments and contingencies (note 12)Stockholders' equity  Class A Common Stock; $.01 par value; 100,000 shares    authorized; 16,065 shares issued and outstanding in    2001 and 2000  ................................             161            161  Class B Special Common Stock; $.01 par value,    liquidation preference $11.67; 20,000 shares    authorized; 5,100 shares issued and outstanding    in 2001 and 2000 ..............................              51             51  Additional paid-in capital  .....................         127,759        127,759  Accumulated deficit  ............................         (63,800)       (42,208)                                                           --------       --------     Total stockholders' equity  ..................          64,171         85,763                                                           --------       --------     Total liabilities and stockholders' equity  ..      $  414,457     $  474,967                                                           ========       ======== The accompanying notes are an integral part of these consolidated financial statements.
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                                   NEFF CORP.                      CONSOLIDATED STATEMENTS OF OPERATIONS                      (in thousands, except per share data)**For the Years Ended December 31,                                                        ----------------------------------                                                          2001         2000         1999                                                        --------     --------     --------**Revenues  Rental revenue  .................................... $ 183,360    $ 192,990    $ 222,862  Equipment sales  ...................................    33,520       51,179      121,865  Parts and service  .................................    14,122       15,923       47,284                                                        --------     --------     --------       Total revenues  ...............................   231,002      260,092      392,011                                                        --------     --------     --------Cost of revenues  Cost of equipment sold  ............................    29,388       43,660      100,871  Depreciation of rental equipment  ..................    43,479       44,724       55,159  Maintenance of rental equipment  ...................    64,838       64,883       66,763  Cost of parts and service  .........................     9,569       10,495       30,166                                                        --------     --------     --------       Total cost of revenues  .......................   147,274      163,762      252,959                                                        --------     --------     --------Gross profit  ........................................    83,728       96,330      139,052                                                        --------     --------     --------Other operating expenses  Selling, general and administrative expenses  ......    55,497       61,574       74,893  Other depreciation and amortization  ...............    10,121        9,884       10,731  Write-down of assets held for sale  ................         -        4,272        1,444  Costs incurred in efforts to sell the company ......         -        4,282            -  Branch closure and other related costs  ............     5,702            -            -                                                        --------     --------     --------       Total other operating expenses  ...............    71,320       80,012       87,068                                                        --------     --------     --------Income from operations  ..............................    12,408       16,318       51,984                                                        --------     --------     --------Other expenses  Interest expense  ..................................    30,727       33,456       39,901  Loss on sale of subsidiaries  ......................         -            -          422  Amortization of debt issue costs  ..................     1,824        1,307        1,197                                                        --------     --------     --------       Total other expenses  .........................    32,551       34,763       41,520                                                        --------     --------     --------Income (loss) before income taxes, minority interest   and extraordinary item  ...........................   (20,143)     (18,445)      10,464Provision for income taxes  ..........................         -            -       (3,877)                                                        --------     --------     --------Income (loss) before minority interest and   extraordinary item  ...............................   (20,143)     (18,445)       6,587Minority interest  ...................................         -            -       (1,733)                                                        --------     --------     --------Income (loss) before extraordinary item  .............   (20,143)     (18,445)       4,854Extraordinary loss, net of income taxes  .............    (1,449)           -            -                                                        --------     --------     --------Net income (loss)  ................................... $ (21,592)   $ (18,445)    $  4,854                                                        ========     ========     ========Basic income (loss) per common share:   Income (loss) before extraordinary item  .......... $   (0.95)   $   (0.87)    $   0.23   Extraordinary loss, net  ..........................     (0.07)           -            -                                                        --------     --------     --------   Net income (loss)  ................................ $   (1.02)   $   (0.87)    $   0.23                                                        ========     ========     ========Basic weighted average common shares outstanding  ....    21,165       21,165       21,165                                                        ========     ========     ========Diluted income (loss) per common share:   Income (loss) before extraordinary item  .......... $   (0.95)   $   (0.87)    $   0.22   Extraordinary loss, net  ..........................     (0.07)           -            -                                                        --------     --------     --------   Net income (loss)  ................................ $   (1.02)   $   (0.87)    $   0.22                                                        ========     ========     ========Diluted weighted average common shares outstanding  ..    21,165       21,165       21,887                                                        ========     ========     ========The accompanying notes are an integral part of these consolidated financial statements.
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                                   NEFF CORP.                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY              For the Years Ended December 31, 2001, 2000, and 1999                                 (in thousands)**Common Stock A  Common Stock B  Additional                              -------------- -------------   Paid-in    Accumulated                              Shares Amount  Shares Amount   Capital    Deficit     Total                              ------ ------  ------ ------   --------   --------    -------**Balance, December 31, 1998 ...16,065 $  161   5,100 $   51   $127,765   $(28,617)   $99,360Net income ...................     -      -       -      -          -      4,854      4,854Other ........................     -      -       -      -         (6)         -         (6)                              ------ ------  ------ ------   --------   --------    -------Balance, December 31, 1999 ...16,065    161   5,100     51    127,759    (23,763)   104,208Net loss  ....................     -      -       -      -          -    (18,445)   (18,445)                              ------ ------  ------ ------   --------   --------    -------Balance, December 31, 2000 ...16,065    161   5,100     51    127,759    (42,208)    85,763Net loss .....................     -      -       -      -          -    (21,592)   (21,592)                              ------ ------  ------ ------   --------   --------    -------Balance, December 31, 2001 ...16,065 $  161   5,100 $   51   $127,759   $(63,800)   $64,171                              ====== ======  ====== ======   ========    ========   =======The accompanying notes are an integral part of these consolidated financial statements.
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                                   NEFF CORP.                      CONSOLIDATED STATEMENTS OF CASH FLOWS                                 (in thousands)**For the Years Ended December 31,                                                         --------------------------------                                                           2001       2000       1999                                                         -------    --------    --------Cash Flows from Operating Activities**Net income (loss)  ...................................$ (21,592)  $ (18,445)  $   4,854Adjustments to reconcile net income (loss) to net cash  provided by operating activities net of acquisitions  Depreciation and amortization  .....................   55,424      55,915      67,087  Gain on sale of equipment  .........................   (4,132)     (7,519)    (20,994)  Minority interest  .................................        -           -       1,733  Loss on sale of subsidiaries  ......................        -           -         422  Extraordinary loss on debt extinguishment  .........    1,449           -           -  Deferred income tax provision (benefit).............        -        (643)      3,423  Write-down of assets held for sale  ................        -       4,272       1,444  Provision for bad debt  ............................    1,643       2,795       2,317  Branch closure and other related costs,   non-cash portion  .................................    4,390           -           -  Change in operating assets and liabilities   (net of acquisitions and sales)   Accounts receivable  ..............................    9,240      (3,896)    (21,056)   Other assets  .....................................   (6,398)     (1,196)     (5,288)   Accounts payable and accrued expenses  ............   (9,596)     12,696       9,513                                                       --------    --------    --------    Net cash provided by operating activities.........   30,428      43,979      43,455                                                       --------    --------    --------**Cash Flows from Investing Activities**Purchases of rental equipment  .......................  (27,934)   (109,578)   (221,671)Proceeds from sale of rental equipment  ..............   33,520      51,179     121,865Proceeds from sale of subsidiaries  ..................        -           -     120,500Purchases of property and equipment  .................     (743)     (8,005)     (2,803)S.A. Argentina earn-out payment  .....................        -           -      (5,518)Collection of receivable from sale of subsidiary  ....        -      12,500           -Cash paid for acquisitions  ..........................        -           -     (10,750)                                                       --------    --------    --------    Net cash provided by (used in) investing                activities  ..........................    4,843     (53,904)      1,623                                                       --------    --------    --------**Cash Flows from Financing Activities**Debt issue costs  ....................................  (4,746)          -        (128)Net borrowings (repayments) under credit facility  ... (28,904)      9,939     (54,007)Repayments under capitalized lease obligations  ......    (418)       (286)       (745)Net borrowings under notes payable  ..................       -           -       8,836                                                      --------    --------    --------    Net cash provided by (used in) financing                activities  .......................... (34,068)      9,653     (46,044)                                                      --------    --------    --------Net increase (decrease) in cash and cash equivalents..   1,203        (272)       (966)Cash and cash equivalents, beginning of year  ........   3,102       3,374       4,340                                                      --------    --------    --------Cash and cash equivalents, end of year  ..............$  4,305   $   3,102   $   3,374                                                      ========    ========    ========The accompanying notes are an integral part of these consolidated financial statements.
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                                                     NEFF CORP.                                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1-GENERAL
*Description of Business*
        NeffCorp. and its subsidiaries (“Neff” or the “Company”) own andoperate equipment rental locations throughout the southern and western regionsof the United States. The Company also sells used equipment, parts andmerchandise, and provides ongoing repair and maintenance services. 

*Principles of Consolidation*
        Theaccompanying consolidated financial statements include the accounts of NeffCorp. and its wholly-owned and majority-owned subsidiaries. The financialstatements of Sullair Argentina Sociedad Anonima (“S.A. Argentina”)included in the 1999 consolidated financial statements of the Company have beenadjusted to reflect accounting principles generally accepted in the UnitedStates of America (“GAAP”). Significant intercompany transactions andbalances have been eliminated in consolidation. 

*Acquisitions*
        In1999, the Company acquired the net assets of three equipment rental companiesfor an aggregate purchase price of $10.8 million. The acquisitions of thesebusinesses added 5 locations in Virginia, 2 locations in Colorado, 1 location inOregon and 1 location in Washington to the Company’s operations. Thesetransactions were accounted for under the purchase method of accounting andgoodwill of approximately $8.0 million was recorded in connection with theseacquisitions. The pro forma effects of these 1999 acquisitions on theCompany’s results of operations are not presented because they are notconsidered material. 

*Costs Incurred in Efforts to Sell the Company.*
        TheCompany expensed $4.3 million of costs during the year ended December 31, 2000related primarily to consulting and legal fees associated with the efforts tosell the Company during 1999 and 2000. 

*Sales of Subsidiaries*
        OnNovember 18, 1999, the Company completed the sale of its equity interest in S.A.Argentina. The Company received $42.5 million in consideration, of which $12.5 million was areceivable that was paid in February 2000. The Company recorded a loss on thesale of $4.2 million. 

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         S.A.  Argentina's  results  from  operations  through  November  18, 1999 are  included in the  accompanying1999 consolidated financial statements. Below is a summary of S.A. Argentina's revenues and net income (in thousands):                                          1999                                       ---------Revenues  ...........................$    47,604                                       =========Net Income  .........................$     3,218                                       =========
        OnDecember 17, 1999, the Company completed the sale of Neff Machinery, Inc.(“Machinery”), a wholly-owned subsidiary. The Company received $90.5million for the outstanding capital stock of Machinery and recorded a gain of$3.8 million on the sale. The terms of the purchase and sale agreement (the“Agreement”) provided for an adjustment to the purchase price based onthe assets and liabilities of Machinery at the date of closing. 

        TheCompany believes it is due additional consideration of $8.8 million under theterms of the Agreement. The purchaser believes it is due $20.3 million under theterms of the Agreement (see Note 12). Because of the uncertainty of the outcomeof this dispute, the Company has not recorded any additional amounts that may bereceivable or payable under the terms of the Agreement. Machinery’s resultsfrom operations through December 17, 1999 are included in the accompanying1999 consolidated financial statements. Below is a summary of Machinery’srevenues and net income (in thousands): 
                                        1999                                      --------Revenues  ...........................$  95,996                                      ========Net Income  .........................$   5,100                                      ========
*Branch Closure and Other Related Costs*
        OnMarch 21, 2001, the Company adopted a plan to close nine of its branches.Management expected all of the nine branches to be closed by March 31, 2002.During the first quarter of 2001, the Company recognized a charge of $9.1million associated with these branch closings. During the fourth quarter of2001, management decided  not to close two of the stores it had previously decided to close andto close two other stores instead. The change in the branch closure plan resulted in a reduction of expenses associated with branch closings of$3.4 million which was recorded in the fourth quarter of 2001. The expense reduction of $3.4million was the result of reversing $4.7 million associated with the previouslyannounced closings, of which $3.6 million was goodwill, and new charges of $1.3million associated with the closure of the two other branches in the fourthquarter. The change in the branch closure plan caused the Company to recognize acharge of $5.7 million for the year ended December 31, 2001 that included $1.1million of goodwill, $3.0 million to write-down equipment held for sale,employee termination benefits of $0.2 million and other related costs of $1.4million. The employee termination benefits were paid to approximately 33administrative, sales and maintenance employees who were terminated inconnection with the branch closings. 

*Liquidity*
        As disclosed in Note 5, during December of 2001 the Company  obtained a new $200 million  revolving credit facility(the “Credit  Facility”) in which proceeds were used to repay its $219.5  million  revolving  credit  facility (the“Former  Credit  Facility”).  As of  December  31, 2001 the Company  was in  compliance  with all of the  financialcovenants  under  the  Credit  Facility.  If the  Company’s  revenues  for 2002 are less  than  expected  or if theCompany’s  expenses are more than  expected,  operating  results and related cash flows will be less than  planned.Such a  shortfall  might  cause the  Company  to be in  default  of one of the  financial  covenants  in its CreditFacility that depend on the Company’s  operating  results.  Such default could  potentially  result in a demand forpayment on the outstanding  balance of the Credit  Facility.  Management is confident  that,  should such a defaultoccur,  the  Company  would be able to obtain  amendments  to the Credit  Facility  to cure the  default,  and haveadequate  capital  resources to meet its needs  however,  there can be no assurances  that the Company could obtainsuch amendments.
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NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
*Use of Estimates*
        Thepreparation of financial statements in conformity with GAAP requires managementto make estimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differfrom those estimates. 

*Recognition of Revenue*
        Rentalagreements are structured as operating leases and the related revenues arerecognized as they are earned over the rental period. Sales of equipment andparts are recognized at the time of shipment or, if the equipment is out onlease, at the time a sales contract is finalized. Equipment may be delivered tocustomers for a trial period. Revenue on such sales is recognized at the time asales contract is finalized. Service revenues are recognized at the time theservices are rendered. 

*Cash Equivalents*
        TheCompany considers all highly liquid investments purchased with an originalmaturity of three months or less to be cash equivalents. 

*Inventories*
        Inventories,which consist principally of parts and new equipment held for sale, are statedat the lower of cost or market, with cost determined on the first-in, first-outbasis for parts and specific identification basis for equipment. Substantiallyall inventory represents finished goods held for sale. 

*Rental Equipment*
        Rentalequipment is stated at original cost less accumulated depreciation. Depreciationis recorded using the straight-line method over the estimated useful life of therelated equipment (generally two to eight years with estimated 10-20% residualvalues). For certain equipment held by Machinery, depreciation was matchedagainst the related rental income earned from such equipment by computingdepreciation on individual pieces of equipment at the rate of 50% of the rentalincome earned. Machinery was sold in the fourth quarter of 1999, and thisdepreciation method was not used by the Company during 2000 or 2001. Routinerepairs and maintenance are expensed as incurred; improvements are capitalizedat cost. 

        TheCompany routinely reviews the assumptions utilized in computing rates ofdepreciation of its rental equipment. Changes to the assumptions (such as thelength of service lives and/or the amount of residual values) are made when, inthe opinion of management, such changes are necessary to more appropriately allocate asset coststo operations over the service life of the assets. Management utilizes, amongother factors, historical experience and industry comparison in determining thepropriety of any such changes. 

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        During1999, the Company made certain changes to its depreciation assumptions torecognize longer estimated service lives and increased the residual values ofits rental equipment. The Companybelieves that these changes in estimates  more appropriately reflect itsfinancial results by better allocating the cost of its rental equipment over theservice life of these assets. These changes in accounting estimates increasednet income by approximately $10.0 million, or $0.46, per diluted common sharefor the year ended December 31, 1999. 

        Accumulateddepreciation at December 31, 2001 and 2000 for the Company’s rental fleetwas approximately $118.0 million and $93.9 million, respectively. 

*Property and Equipment*
        Propertyand equipment is stated at cost less accumulated depreciation. Depreciation isrecorded using the straight-line method over the estimated useful lives of therelated assets. Significant improvements are capitalized at cost. Repairs andmaintenance are expensed as incurred. 

        Thecapitalized cost of equipment and vehicles under capital leases is amortizedover the shorter of the lease term or the asset’s estimated useful life, andis included in other depreciation and amortization expense in the consolidatedstatements of operations. 

*Goodwill*
        Goodwillfrom acquisitions made by the Company is being amortized over 40 years using thestraight-line method. Accumulated amortization at December 31, 2001 and 2000 forgoodwill was approximately $8.2 million and $6.0 million, respectively. 

*Prepaid Expenses and Other Assets*
        Prepaidexpenses and other assets primarily include debt issue costs, prepaid expensesand deposits. Debt issue costs are amortized over the term of the debt on astraight-line basis, which approximates the interest method. Accumulatedamortization at December 31, 2001 and 2000 for debt issue costs was $2.5 and$2.4 million, respectively. 

*Insurance*
        The  Company  is  insuredagainst general liability claims,  workers' compensation claims,  and group medical claims up tospecified limits per  claim and  in the aggregate    subject to various  deductibleamounts.  Insured losses  subject to this  deductible are accrued based upon theaggregate  liability for reported claims incurred and an estimated liability forclaims    incurred   but   not    reported.    These    liabilities    are   notdiscounted.
*Stock Options*
        InOctober 1995, the Financial Accounting Standards Board (“FASB”) issuedStatement of Financial Accounting Standards (“SFAS”) No. 123,“Accounting for Stock-Based Compensation” (“SFAS 123”),which requires companies to either recognize expense for stock-based awardsbased on their fair value on the date of grant or provide footnote disclosuresregarding the impact such changes. The Company adopted the disclosure provisionsof SFAS 123 on January 1, 1996, but has continued to account for options issuedto employees or directors under the Company’s stock option plans inaccordance with Accounting Principles Board (“APB”) Opinion No. 25,“Accounting for Stock Issued to Employees” (“APB 25”). 

*Impairment of Long-lived Assets and Intangibles*
        The  Company  reviews  long-lived  assets  and  intangibles  for  impairment  whenever  events or changes incircumstances indicate thatthe carrying value of an asset may not be recoverable. In accordance with SFASNo. 121, “Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to be Disposed of” (“SFAS 121”), during thesecond quarter of 2000, based upon a comprehensive review of theCompany’s long-lived assets, the Company recorded a non-cash charge of $4.3million primarily to write-down rental assets held for sale that were utilizedby the oil industry to estimated fair value. The Company recorded a non-cashcharge of $1.4 million in 1999 related to a write-down of similar assets thatwere held for sale. 

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*New Accounting Pronouncements*
        The Company adopted SFAS No. 133,"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), asamended by SFAS No. 137, "Accounting for Derivative Instrumentsand Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133" ("SFAS 137")and further amended by SFAS No. 138, "Accounting for Certain Derivative Instrumentsand Certain Hedging Activities" ("SFAS 138").  SFAS 133, as amended by SFAS 137 and SFAS 138, waseffective for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company adoptedSFAS 133 on January 1, 2001. SFAS 133establishes accounting and reporting standards for derivative instruments including certain derivative instrumentsembedded in other contracts, and for hedging activities.  It requires an entity to recognizeall derivatives as either assets or liabilities in the balance sheet and measure those instrumentsat fair value.  The adoption of SFAS 133 as amended by SFAS 137 and SFAS 138did not have a material impact on the Company's financial position or results of operations. 
        InJuly 2001, FASB issued  SFAS No. 141,“Business Combinations” (“SFAS 141”), and SFAS No. 142,“Goodwill and Other Intangible Assets” (“SFAS 142”). SFAS141 requires that the purchase method of accounting be used for all businesscombinations, among other things and applies to all business combinationsinitiated after June 30, 2001 and all business combinations accounted for usingthe purchase method for which the acquisition date is July 1, 2001 or later. TheCompany has not entered into any business combinations during 2001. SFAS 142, which became effectiveJanuary 1, 2002,changes the accounting for goodwill from an amortization method to animpairment-only approach and requires the Company to complete a transitional goodwillimpairment test six months from the date of adoption.  For the year ended December 31, 2001,2000 and 1999 goodwill amortization was approximately $2.3 million, $2.3 million and $2.3 million, respectively.Based on the Company's preliminary assessment of SFAS 142, this amortization will no longer be recordedin future periods. The Company is in the process of evaluating the effect theadoption of these standards will have on its financial position or results of operations. 

        InAugust 2001, the FASB issued SFAS No. 143, “Accounting for Asset RetirementObligations” (“SFAS 143”). SFAS 143 addresses financialaccounting and reporting for obligations associated with the retirement oftangible long-lived assets and the associated asset retirement costs. It appliesto legal obligations associated with the retirement of long-lived assets thatresult from the acquisition, construction, development, and (or) the normaloperation of a long-lived asset, except for certain obligations of lessees. Theprovisions of SFAS 143 will be effective for fiscal years beginning after June15, 2002; however early application is permitted. The Company is currentlyevaluating the implications of adoption of SFAS 143 on its financial position or results of operations. 

        InOctober 2001, the FASB issued SFAS No. 144 “Accounting for the Impairmentor Disposal of Long-Lived Assets” (“SFAS 144”). This statementaddresses financial accounting and reporting for the impairment or disposal oflong-lived assets. This statement supersedes FASB Statement No. 121,“Accounting for the Impairment of Long-Lived Assets and for Long-LivedAssets to Be Disposed Of,” and the accounting and reporting provisions ofAccounting Principles Board Opinion No. 30, “Reporting the Results ofOperations - Reporting the Effects of Disposal of a Segment of a Business, andthe Extraordinary, Unusual and Infrequently Occurring Events andTransactions”, for the disposal of a segment of a business. The provisionsof SFAS 144 will be effective for fiscal years beginning after December 15,2001. The Company is currently evaluating the implications of adoption of SFAS144 on its financial position or results of operations. 

*Reclassifications*
        Certainamounts for the prior years have been reclassified to conform with the currentyear presentation. 

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NOTE 3-ACCOUNTS RECEIVABLE
        Themajority of the Company’s customers are engaged in the construction andindustrial business throughout the southern and western regions of the UnitedStates. 

        TheCompany extends credit to its customers based upon an evaluation of thecustomers’ financial condition and credit history. For sales of certain types ofconstruction equipment, the Company’s policy is to secure its accountsreceivable by obtaining liens on the customer’s projects and issuingnotices thereof to the projects’ owners and general contractors. All otherreceivables are generally unsecured. 
NOTE 4-PROPERTY AND EQUIPMENT        Property and equipment consists of the following (dollars in thousands):**December 31,          Estimated                                    -----------------------    Useful Lives                                       2001         2000        (in Years)                                    ---------     ---------     ---------**Land  ............................  $     113     $     113          -Buildings and improvements  ......      4,976         5,194       2-30Office equipment  ................      6,039         6,018        2-7Service equipment and vehicles  ..     30,644        31,825        2-5Shop equipment  ..................      1,895         1,937          7Capitalized lease equipment  .....        898         1,650        3-5                                    ---------     ---------                                       44,565        46,737Less accumulated depreciation  ...    (22,775)      (20,336)                                    ---------     ---------                                    $  21,790     $  26,401                                    =========     =========
        Depreciation expenses for property and equipment was $7.8 million and $7.6 million for 2001 and 2000, respectively.
        TheCompany has entered into lease arrangements for certain property and equipment,which are classified as capital leases. As of December 31, 2001, future minimumlease payments under capitalized lease obligations are as follows (in thousands,except percent data): 
2002  ..................................................  $       41Thereafter  ............................................           -                                                            --------Total future minimum lease payments  ....................         41Less amounts representing interest (6.00% to 13.5%)  ....         (3)                                                            --------Present value of net future minimum lease payments  .....  $      38                                                            ========
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NOTE 5-NOTES PAYABLE AND DEBT
 Notes payable and debt consist of the following (in thousands, except percent data):**December 31,                                                                 ---------------------                                                                   2001         2000                                                                 --------     --------**$200 million Revolving Credit Facility with interestranging from the Lender's Prime Rate plus 1.75% toLIBOR plus up to 3.50%.                                         $ 118,217    $       -10.25% Senior Subordinated Notes issued May 1998,due June                                                          100,000      100,00010.25% Senior Subordinated Notes issued December 1998,dueJune 2008, with an effective interest rate of 10.5%, netof unamortized discount of $1,033 and $1,182 respectively.         98,967       98,818$219.5 million Revolving Credit Facility with interestranging from the Lender's Prime Rate plus 1.25% toLIBOR plus up to 2.25%.                                                 -      147,121                                                                 --------     --------                                                                $ 317,184    $ 345,939                                                                 ========     ========
        Duringthe fourth quarter of 2001, the Company entered into the new $200 millionCredit Facility. The Company usedproceeds from the Credit Facility to repay the Former Credit Facility. The Company’s maximumavailability under the Credit Facility is based upon eligible accountsreceivable, rental fleet and inventory amounts. The interest rates on balancesoutstanding under the Credit Facility vary based upon the leverage ratiomaintained by the Company. The Credit Facility expires in December 2005. TheCompany is charged a commitment fee on the aggregated daily unused balance ofthe Credit Facility which varies between 0.50% and 0.63%. 

        TheCredit Facility is secured by substantially all of the Company’s assets andcontains certain restrictive covenants which, among other things, require theCompany to maintain certain financial coverage ratios and restrict the paymentof dividends by the Company. During 2001 the Company recorded an extraordinaryloss of approximately $1.5 million, net of related income taxes, from thewrite-off of debt issue costs associated with the repayment of the Former CreditFacility. 

        Inconnection with the acquisition in January 1998 of substantially all of the assets of Richbourg's Sales and Rentals, Inc., the Company obtained a$100 million term loan (the “Richbourg Term Loan”). In May 1998, theCompany completed the sale of $100 million of Senior Subordinated Notes due 2008(the “May Notes”) as well as an initial public offering (see Note 6).The net proceeds of approximately $182.7 million from the sale of the May Notesand the initial public offering were used to repay the Richbourg Term Loan,redeem the Company’s Series A Cumulative Redeemable Preferred Stock, repaythe Company’s mortgage notes payable and reduce the amount outstandingunder the Former Credit Facility. 

        InDecember 1998, the Company completed the sale of $100 million SeniorSubordinated Notes due 2008 (the “December Notes”). The net proceedsof approximately $95.2 million from the December Notes were used to reduceamounts outstanding under the Former Credit Facility. The terms of the DecemberNotes are substantially the same as the May Notes. 

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        TheMay and December Notes (the "Senior Subordinated Notes") are senior unsecured obligations of the Company and areredeemable at the option of the Company, in whole or in part, on or after June1, 2003, at pre-established redemption prices together with accrued and unpaidinterest to the redemption date. The Senior Subordinated Notes contain certainrestrictive covenants, which among other things, restrict the payment ofdividends by the Company. 
NOTE 6-REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
        DuringDecember 1995, the Company issued 300,000 shares of Series A CumulativeRedeemable Preferred Stock (“Series A”), and a detachable stockpurchase warrant (the “Redeemable Warrant”) to General ElectricCapital Corporation (“GE Capital”) for a purchase price of $12.0million ($11.4 million net of certain related costs). Series A provided for thesemiannual payment of preferential dividends at an annual rate of 8% (5%beginning January 1, 1997) of the liquidation value. The dividends wereinitially payable in cash or in additional shares of Series A. 

        TheRedeemable Warrant granted the holder the right to acquire approximately 20% ofthe common stock of the Company at a purchase price of $.01 per share. 

        TheSeries A and the Redeemable Warrant were recorded at their pro rata estimatedfair value in relation to the proceeds received on the date of issuance ($8.0million for the Series A and $3.4 million for the Redeemable Warrant, net ofissue costs). Series A was accreted using the effective interest method based onits liquidation value at maturity of $12.0 million. The Redeemable Warrant wasaccreted to its fair value on a prospective basis until the mandatory redemptiondate, which was in December 2000. Through December 31, 1996, accretion to theSeries A and the Redeemable Warrant equaled approximately $0.5 million and $1.9million, respectively. 

        DuringDecember 1996, in connection with the amendment and restatement of theCompany’s Former Credit Facility, the Company and GE Capital entered into certainagreements, providing for the exercise of the Redeemable Warrant in full andsimultaneous exchange of the shares of common stock issued under the RedeemableWarrant for 800,000 shares of Series B Cumulative Convertible RedeemablePreferred Stock (“Series B”). 

        Theaccreted balance of the Redeemable Warrant on the date these agreements wereentered into was approximately $5.3 million, which represented the carryingvalue of Series B as of December 31, 1996. 

        Ina separate transaction, the Company issued 800,000 shares of Series C CumulativeConvertible Redeemable Preferred Stock (“Series C”) to GE Capital inexchange for the purchase price of $32.0 million ($31.5 million net of certainrelated costs). For the year ended December 31, 1997, accretion of Series Camounted to approximately $0.1 million. Similarly to Series A, Series B andSeries C were accreted toward their ultimate total liquidation value of $64million. 

        InMarch 1998, the holders of Series B and Series C exchanged their shares forClass B Special Common Stock, which has a liquidation preference of $11.67 pershare. 

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        InMay 1998, the Company completed an initial public offering (the“Offering”) of 6.7 million shares of Class A Common Stock at a priceof $14 per share. The Company received net proceeds of approximately $85.7million from the Offering. Also in May 1998, the Company completed the sale ofthe May Notes and received net proceeds of approximately $97 million. TheCompany redeemed all outstanding Series A with a portion of the proceeds fromthe May Notes during 1998. 
NOTE 7-STOCK OPTION PLANS
        InDecember 1995, the Company granted its Chief Executive Officer options topurchase shares of Class A Common Stock representing 3% (on a fully dilutedbasis) of the issued and outstanding common stock of the Company for anaggregate purchase price of $1.6 million. Upon completion of the Offering in1998 (see Note 6), the number of shares granted under this agreement were fixedat 657,220 shares. No further options can be granted under this agreement. TheCompany estimated compensation expense at each reporting date based upon theestimated market value of shares to be issued until the number of shares wasfixed. Compensation expense of $3.2 million and $4.4 million was recognized in 1998 and 1997, respectively. Theseoptions have been fully vested since December 1996. One-third of the optionsexpire on December 1, 2005, one-third expire on December 31, 2005 and theremaining one-third expire on December 31, 2006. 

        InMay 1996, the Company granted to another key employee an option to purchase84,650 shares of the Company’s Class A Common Stock at an exercise price ofapproximately $0.5 million, determined based upon a multiple of theCompany’s adjusted earnings. No compensation expense was recognized at thedate of grant since the exercise price of these options approximated theestimated market value of the shares to be issued at the date of grant.  These optionsexpired unexercised, after the employee left the Company. 

        In1998, the Company adopted an Incentive Stock Option plan (“1998 ISOPlan”). Under this plan, designated officers, employees, and consultants ofthe Company are eligible to receive awards in the form of options, stockappreciation rights, restricted stock grants, performance awards, and dividendequivalent rights. An aggregate of 1 million shares of Class A Common Stock arereserved for issuance under the 1998 ISO Plan. 

        In1999, the Company adopted an Incentive Stock Option plan (“1999 ISOPlan”). Under this plan, designated officers, employees, and consultants ofthe Company are eligible to receive awards in the form of options, stockappreciation rights, restricted stock grants, performance awards, and dividendequivalent rights. An aggregate of 1 million shares of Class A Common Stock arereserved for issuance under the 1999 ISO Plan. 

        Theexercise price of incentive stock options granted under the 1999 and 1998 ISOPlans may not be less than 100% of the fair market value of the Company’sClass A Common Stock on the date of grant. Generally, options vest over a periodof three years and are not exercisable beyond 10 years from date of grant. Therehave been no stock appreciation rights, restricted stock grants, performanceawards or dividend equivalent rights awarded under the 1999 and 1998 ISO Plans. 

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The following tablesummarizes stock option activity under the 1999 and 1998 ISO Plans, (in thousands, except pershare data): 
**ISO Plan Options                                                     -------------------------------                                 Shares Available  Number of     Weighted Average                                    For Options     Shares     Exercise Price/Share                                ----------------  ---------   ---------------------**Balance at December 31, 1998....              61         939    $               9.39Authorized......................           1,000           -                       -Granted.........................               -           -                       -Forfeited.......................             105        (105)                   9.49Expired.........................               -           -                       -                                ----------------   ---------   ---------------------Balance at December 31, 1999....           1,166         834                    9.38Authorized......................               -           -                       -Granted.........................               -           -                       -Forfeited.......................              76         (76)                  10.05Expired.........................               -           -                       -                                ----------------   ---------   ---------------------Balance at December 31, 2000....           1,242         758                    9.31Authorized......................               -           -                       -Granted.........................            (433)        433                    0.58Forfeited.......................               -           -                       -Expired.........................               -           -                       -                                ----------------   ---------   ---------------------Balance at December 31, 2001....             809       1,191    $               6.13                                ================   =========   =====================**Exercisable Options                                                                       ---------------------------                       Number of    Weighted Average   Weighted Average            Weighted Average                        Options    Exercise Price Per   Remaining Life   Number of  Exercise Price                       Outstanding       Share             (Years)       Options       Per Share                      ------------  ---------------    -------------   ---------  ----------------Range of Exercise Prices:**     $ 0.58 ...........       433  $         0.58                8.0           -  $              - $6.00-7.88 ...........       453            6.18                7.0         453              6.18$9.75-14.00 ...........       305           13.97                6.4         305             13.97                       ----------- ---------------     -------------    --------- ----------------                            1,191  $         6.13                7.2         758  $           9.87                       =========== ===============     =============    ========= ================
        TheCompany accounts for stock-based compensation in accordance with APB 25. UnderAPB 25, compensation expense is measured as the excess of market value of theunderlying stock on thedate of grant over the exercise price of the options on the date of grant. 

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        Thefollowing table sets forth pro forma information, for the year ended December31, 2001, assuming that stock options granted by the Company had been accountedfor under the fair value method (in thousands, except per share data): 
Pro forma net loss  ................    $ (21,841)                                        =========Pro forma loss per common share:     Basic  ........................    $   (1.03)                                        =========     Diluted  ......................    $   (1.03)                                        =========
        Theweighted average fair value of options granted during 2001 as estimated on thedate of grant using the Black-Scholes option pricing model was $0.57. 

        Thefollowing weighted average assumptions were used in applying this model for2001: a risk free rate of 2.50%; dividend yield of 0%; volatility factor of1.83; and an expected life of the options of 8 years. 

        EffectiveJanuary 1, 1997, the Company adopted a phantom stock plan (the “PhantomPlan”). The Phantom Plan is designed to reward employees for increases inthe Company’s performance. The Phantom Plan enables the Company to awardemployees individual units representing a hypothetical share of theCompany’s Class A Common Stock (the “Phantom Share”). EachPhantom Share is assigned a share value on the date granted as determined by theadministrator of the Phantom Plan. 

        Thecash award the employees’ are entitled to receive on the redemption date isthe difference between the value assigned on the date of grant and the greaterof the fair market value of the Company’s Class A Common Stock or thecalculated Phantom Plan share value. As of December 31, 2001, the Company had0.1 million Phantom Shares granted and outstanding with assigned per sharevalues ranging from of $9 to $11.25, vesting over three to five years.Approximately $0.3 million and $0.1 million of compensation expense was recorded for theyears ended December 31, 2000 and 1999, respectively. No compensation expensewas recorded for the year ended December 31, 2001. 
NOTE 8-RETIREMENT PLAN
        InFebruary 1996, the Company adopted a qualified 401(k) profit sharing plan (the“401(k) Plan”). The 401(k) Plan covers substantially all employees ofthe Company. Participating employees may contribute to the 401(k) Plan throughsalary deductions. The Company may contribute, at its discretion, matchingcontributions equal to 50% of the employee’s contribution not to exceed 3%of the employee’s annual salary. The Company contributed approximately $0.6million, $0.6 million and $0.8 million to the 401(k) Plan for the years endedDecember 31, 2001, 2000 and 1999, respectively. 

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NOTE 9-INCOME TAXES
        Thecomponents of the provision for income taxes is as follows (inthousands): 
**For the Year Ended                                           December 31,                                --------------------------------                                  2001        2000        1999                                --------    --------    --------**Current  ....................   $     -     $  (643)    $   (454)Deferred  ...................         -         643       (3,423)                                --------    --------    --------Total  ......................   $      -    $      -    $ (3,877)                                ========    ========    ========
        Thefollowing table summarizes the tax effects comprising the Company’s netdeferred tax assets and liabilities (in thousands): 
**December 31,                                                                ---------------------                                                                  2001         2000                                                                --------     --------Deferred Tax Assets**    Net operating loss carryforwards  ......................... $ 34,216    $  28,047    Alternative minimum tax credits  ..........................      874          874    Deferred stock option compensation  .......................    2,849        2,849    Intangible assets, allowance for bad debts and other  .....    1,421        1,492                                                                 --------    --------       Total deferred tax assets  .............................   39,360       33,262    Valuation allowance  ......................................  (13,163)      (6,242)**Deferred Tax Liabilities**    Depreciation  .............................................  (26,197)     (27,020)                                                                 --------     -------**Net Deferred Tax Liability**  ................................... $       -   $       -                                                                 ========    ========
        Asof December 31, 2001 and 2000, the Company had net operating loss carryforwardsfor federal and state income tax purposes of approximately $84.7 million and$70.9 million, respectively, expiring through 2021 (includes net operating losscarryforwards for federal and state income tax purposes of approximately $4.8million and $4.4 million, respectively, acquired in connection with a 1999acquisition). Such acquired net operating loss carryforwards may only beutilized by Neff Rental, Inc., one of the Company’s subsidiaries. 

        Currentaccounting standards require that deferred income taxes reflect the taxconsequences on future years of differences between the tax bases of assets andliabilities and their carrying values for financial reporting purposes. Inaddition, future tax benefits, such as net operating loss (“NOL”)carryforwards, are required to be recognized to the extent that realization ofsuch benefits is more likely than not. A valuation allowance is established forthose benefits that do not meet the more likely than not criteria. A valuationallowance has been established for the entire balance of the net deferred taxassets at December 31, 2001 and 2000 due to the uncertainty regarding the Company’sability to generate future taxable income sufficient to utilize the netoperating loss carryforwards. 

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        Thefollowing table summarizes the differences between the statutory federal incometax rate and the Company’s effective income tax rate (dollars in thousands,except percent data): 
**For the Years Ended December 31,                                      -----------------------------------------------                                          2001            2000              1999                                      --------------  -------------    --------------                                       Amt      %       Amt     %       Amt        %                                      -----   -----   ------  -----    ------    ----**(Provision) benefit at statutory  federal income tax rate  ..........$7,341    34.0  $ 6,263   34.0   $(3,558)   34.0State income tax, net of federal  income  tax benefit  ..............     -       -      471    2.6      (410)    3.9Change in valuation allowance  ......(6,921)  (32.1)  (6,242) (33.9)      900    (8.6)Non-deductible expenses  ............  (420)   (1.9)    (492)  (2.7)     (650)    6.2Foreign subsidiary  .................     -       -        -      -       888    (8.5)Other  ..............................     -       -        -      -    (1,047)   10.0                                      -----   -----   ------  -----    ------   -----Provision for income taxes  .........$    -       -   $    -      -   $(3,877)   37.0                                     ======   =====   ======  =====    ======   =====NOTE 10-EARNINGS PER SHARE
        Forthe years ended December 31, 2001, 2000 and 1999, the treasury stock method wasused to determine the dilutive effect of options and warrants on earnings pershare data. 

        Netloss and weighted average number of shares outstanding used in the computationsare summarized as follows (in thousands, except per share data): 
**For the Years Ended December 31,                                                          ---------------------------------                                                            2001         2000        1999                                                          --------     --------    --------**Net income (loss) basic and diluted  ................... $ (21,592)   $ (18,445)  $   4,854                                                          ========     ========    ========Number of common shares:    Weighted average common shares outstanding-basic  ..    21,165       21,165      21,165    Employee stock options (1)  ........................         -            -         722                                                          --------     --------    --------Weighted average common shares outstanding-diluted  ....    21,165       21,165      21,887                                                          ========     ========    ========Net income (loss) per common share-basic  .............. $   (1.02)   $   (0.87)  $    0.23                                                          ========     ========    ========Net income (loss) per common share-diluted  ............ $   (1.02)   $   (0.87)  $    0.22                                                          ========     ========    ========(1)  The  incremental  shares  resulting from the assumed  exercise of options for the years     ended 2001 and 2000 would be antidilutive and are therefore excluded from the computation     of diluted loss per share.
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NOTE 11-FAIR VALUE OF FINANCIAL INSTRUMENTS
        Thefair market value of financial instruments held by the Company at December 31,2001 and 2000 are based on a variety of factors and assumptions and may not necessarily berepresentative of the actual gains or losses that will be realized in the futureand do not include expenses that couldbe incurred in an actual sale or settlement of such financial instruments. 

        Thefair value of the Company’s Credit Facility is assumed to be equal to itscarrying value, as the interest rates approximate market rates. At December 31,2001 approximately $118.2 million  was outstandingunder the Credit Facility.  At December 31, 2000 approximately $147.1 millionwas outstanding under the Former Credit Facility. 

        Thefair value of the Company’s Senior Subordinated Notes was estimated byobtaining the quoted market price. The carrying amount of the Company’sSenior Subordinated Notes was $198.9 million and $198.8 million, at December 31,2001 and 2000, respectively. The fair value of the Company’s SeniorSubordinated Notes as of the same dates was estimated to be $118.0 million and$90.0 million at December 31, 2001 and 2000, respectively. 
NOTE 12-COMMITMENTS AND CONTINGENCIES
        Neff,the members of the Company's Board of Directors, two of the Company's principal stockholders andUnited Rentals, Inc. (“United”) were defendants in at least ninelawsuits filed in the Delaware Court of Chancery in January 2001. All of thesuits were filed after Neff announced that it had received a proposal fromUnited to acquire all of the outstanding shares of the Company's Class A common stock heldby the public. The plaintiffs in the suits were stockholders of Neff whopurported to bring the suits as class actions on behalf of all persons, otherthan the defendants, who own the Company's Class A common stock. The complaints alleged,among other things, that certain members of the Board of Directors, GE Capitaland Santos Fund I, L.P. breached their fiduciary duties to the Company's publicshareholders and engaged in self-dealing in negotiating the terms of the Unitedproposal. The plaintiffs sought, among other things, injunctive relief anddamages. On February 26, 2001, Neff announced that the United proposal hadexpired and negotiations with United had terminated. The lawsuits have beendismissed. 

        OnDecember 17, 1999, the Company completed the sale of Neff Machinery, Inc.(“Machinery”), a wholly-owned subsidiary of Neff. Neff received $90.5million and recorded a gain on the sale of $3.8 million. The Machinery saleagreement (the “Agreement”) provides for a post-closing purchase priceadjustment based on the difference between the net worth of Machinery as of June30, 1999 (the date of a pro forma balance sheet prepared in advance of theexecution of the Agreement) and the closing date (on the basis of a balancesheet prepared after closing). Neff takes the position that this provision wasdesigned in general to provide an upward adjustment in the purchase price basedon any increase in Machinery’s retained earnings during the period fromJune 30, 1999 to the closing date. 

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        Followingpreparation of a closing date balance sheet, the purchaser told Neff that Neffowed the purchasers an adjustment payment of $20.3 million. Neff responded byinforming the purchaser that the purchaser owed Neff additional consideration of$8.8 million. In its response, Neff noted that Machinery had been profitableduring the period between June 30, 1999 and the closing date. In fact, asignificant portion of the additional consideration Neff claimed it was owed isattributable to Machinery’s earnings during this period. Neff believes thatthe difference between its position and the purchaser’s position isgenerally the result of a difference in contract interpretation. Neff’sposition is that the Agreement requires all ofMachinery’s assets and liabilities to be valued, for purposes of theclosing date balance sheet, using the same standards used to prepare the June30, 1999 pro forma balance sheet. The purchaser’s position is that theAgreement allows many of Machinery’s assets and liabilities to be valued,for purposes of the closing date balance sheet, at the lower of book or marketvalue, irrespective of the valuation standards used to prepare the June 30, 1999pro forma balance sheet. 

        Thelargest monetary dispute concerns Machinery’s rental fleet. The book value(cost less accumulated depreciation) of the rental fleet as of the closing wasapproximately $50.5 million. The gross book value of the rental fleet wasapproximately $63.7 million. Neff’s position is that Machinery’srental fleet should be measured on the closing date balance sheet at its bookvalue, consistent with Neff’s historical financial statements and the June30, 1999 pro forma balance sheet. The purchaser argues that Machinery’srental fleet as of the closing date should be measured at the lower of bookvalue and market, which the purchaser maintains is approximately $14.6 millionlower than Neff’s valuation of the rental fleet under GAAP. Neff alsodisputes the market values assigned by the purchaser to the rental fleet. 

        Thenext largest item in dispute between Neff and the purchaser relates to thetreatment of floor plan financing programs with equipment manufacturers. Thepurchaser assumed approximately $3 million of floor plan liabilities as of theclosing and included those liabilities on the closing date balance sheetprepared by the purchaser. Floor plan financing was not included on the June 30,1999 pro forma balance sheet. As of June 30, 1999, the amount of the floor planfinancing was approximately $6 million. 

        Neffmaintains that this debt was erroneously omitted from the June 30, 1999 proforma balance sheet and maintains that the June 30, 1999 pro forma balance sheetshould be corrected accordingly. The purchaser opposes this adjustment on thegrounds that the Agreement does not expressly contemplate adjustments to the proforma balance sheet. The purchaser also maintains that floor plan financing wasproperly omitted from the June 30, 1999 pro forma balance sheet. 

        Thebalance of the difference between Neff’s and the purchaser’s claimsrelates to the following items: (1) The closing date balance sheet prepared bythe purchaser includes a reserve for bad debts as of the closing date. Neffmaintains that the magnitude of the purchaser’s proposed bad debt reserveis higher than appropriate under GAAP. The difference between Neff’sposition on the issue and the purchaser’s position is approximately $2.4million; (2) The purchaser contends that Machinery’s real estate should bevalued on the closing date balance sheet at the lower of book or market value.Neff maintains that, under GAAP, Machinery’s real estate should be statedat book value unless assets are impaired, in which case the assets should bewritten down to fair market value. Neff further maintains that the assets arenot impaired. The difference between Neff’s position on this issue and thepurchaser’s position is approximately $2.3 million; and (3) The purchaserhas written down a portion of Machinery’s parts inventory for parts itclaims are inactive or are obsolete. Neff maintains that the write down isinappropriate because the parts are included on the “active” partsinventory lists of their respective manufacturers as of December 31, 1999, andare required in many cases to be stocked pursuant to agreements with thosemanufacturers. The difference between Neff’s position on this issue and thepurchaser’s position is approximately $2.1 million. 

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        OnMay 5, 2000, Neff filed suit in Florida state court, seeking, inter alia, adeclaration that the Agreement as written requires that the inventory be valuedas of the closing in accordance with GAAP applied on a basis consistent with theCompany’s historical financial statements and the June 30, 1999 pro formabalance sheet. In the alternative, Neff sought  to have  the  Agreement  reformed  to so  require.  Neff  Corp.  v.  Nortrax  Equipment  Co. -  Southeast,L.L.C.,  Case  No.  00-11524  CA01  (Circuit  Court of the  11th  Judicial  Circuit  in and for  Miami-Dade  County,Florida).  On or about May 25, 2000, the purchaser filed a motion to stay the litigation and compel arbitration.
        InAugust 2001, the parties filed a stipulation in which they agreed that alldisputes pertaining to the closing balance sheet and the June 30, 1999 pro formabalance sheet will be resolved by an arbitrator selected by the parties (the“Arbitrator”). The Arbitrator will, acting in accordance with theFederal Arbitration Act and the terms of the Agreement, determine whether and towhat extent the closing net asset value of Machinery derived from the closingbalance sheet requires adjustment and whether the Agreement and the June 30, 1999pro forma balance sheet should be reformed. Pursuant to the Agreement, theArbitrator shall refer to a nationally recognized firm of personal propertyappraisers selected by the parties, or to a real estate appraiser selected bythe parties, those items, if any, that it determines are to be valued at market.The parties have each submitted opening statements and replies thereto to theArbitrator, and in November and December 2001, the Arbitrator held a hearing atwhich each side presented testimony. The Arbitrator has not yet rendered adecision. 

        The Company isare also a party to other pending legal proceedings arising in the ordinarycourse of business. While the results of such proceedings cannot be predictedwith certainty, the Company does not believe any of these other matters are material to the Company'sfinancial condition or results of operations. 
NOTE 13-RELATED PARTY TRANSACTIONS AND OTHER COMMITMENTS
        During2001, 2000, and 1999 revenues from affiliated companies amounted toapproximately $2.5 million, $2.9 million, and $4.6 million, respectively. 

*Operating Leases*
        During2001, 2000 and 1999 rental expense under operating lease arrangements amountedto approximately $15.6 million, $12.6 million, and $7.3 million, respectively. 

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        TheCompany leases real estate, rental equipment and other equipment under operatingleases. Certain real estate leases require the Company to pay maintenance,insurance, taxes and certain other expenses in addition to the stated rentalamounts. As of December 31, 2001, future minimum rental payments undernoncancellable operating lease arrangements are as follows for the years endingDecember 31 (in thousands): 
       2002  ............................ $  15,741       2003  ............................    13,199       2004  ............................     8,121       2005  ............................     4,077       2006  ............................     1,973            Thereafter  .................     4,052                                           --------                                          $  47,163                                           ========
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NOTE 14-SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION**For the Years Ended                                                               December 31,                                                     -------------------------------                                                       2001        2000       1999                                                     --------    --------   --------                                                            (in thousands)Supplemental Disclosure of Cash Flow Information**    Cash paid for interest  .......................  $ 33,260    $ 30,896   $ 41,353                                                     ========    ========   ========    Cash paid for income taxes  ...................  $      -    $     68   $  1,584                                                     ========    ========   ========    Cash paid for acquisitions (note 1):    Net assets acquired, net of cash  .............  $      -    $      -   $  2,787    Goodwill  .....................................         -           -      7,963                                                     --------    --------   --------    Cash Paid for acquisitions  ...................  $      -    $      -   $ 10,750                                                     ========    ========   ========    Branch closure and other related costs (note 1):    Total branch closure and other related costs...  $  5,702    $      -   $      -    Non-cash costs   ..............................    (4,390)          -          -                                                     --------    --------   --------    Cash paid for branch closure and other        related costs  ............................  $  1,312    $      -   $      -                                                     ========    ========   ========NOTE 15-SUMMARY OF QUARTERLY FINANCIAL INFORMATION                  (UNAUDITED)
 A summary of the  quarterly  operating  results  during  2001 and 2000 is as follows  (in  thousands  exceptper share data):**2001                                    ----------------------------------------------                                      1st          2nd          3rd         4th                                    --------     --------     --------    --------**Revenues  .........................$  59,195    $  57,662    $  56,648   $  57,497Gross Profit  .....................   20,553       22,554       22,066      18,555Net loss  .........................$ (14,737)   $  (1,793)   $  (2,421)  $  (2,641)                                    ========     ========     ========    ========Earnings per common share data -        Basic and diluted:Net loss ..........................$   (0.70)   $   (0.08)   $   (0.11)  $   (0.12)                                    ========     ========     ========    ========**2000                                   -----------------------------------------------                                     1st          2nd          3rd         4th                                   ---------     --------     --------    --------**Revenues ..........................$  59,116    $  62,145    $  72,974   $  65,857Gross Profit ......................   21,731       23,610       28,785      22,204Net income (loss) .................$  (3,767)   $  (6,919)   $   1,909   $  (9,668)                                    ========     ========     ========    ========Earnings per common share data -        Basic and diluted:Net income (loss)  ................$   (0.18)   $   (0.33)   $    0.09   $   (0.46)                                    ========     ========     ========    ========
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        Certainamounts have been reclassified for comparative purposes. During the first quarterof 2001, the Company recognized a $9.1 million charge for the branch closure and other relatedcosts associated with the closure of branches.  During the fourth quarter of 2001, a reversal of $3.4million in branch closure and other related costs was recorded to reflect a change in the Company's branch closureplan (see Note 1).  During the fourthquarter of 2000 the tax (provision) benefit previously reported on Form 10-Q forthe first, second and third quarters of 2001, was written off due to uncertaintyregarding the realization of the net tax benefit. 
NOTE 16-SEGMENT INFORMATION
        TheCompany has historically operated three segments: Neff Rental, Inc.(“Rental”), Machinery and S.A. Argentina. These segments were a resultof the historical organization of the Company and the management of itssubsidiaries. All of these segments rent and sell industrial and constructionequipment, sell parts, merchandise and provide ongoing repair and maintenanceservice and have therefore been aggregated for disclosure purposes. Rental andMachinery’s operations are conducted in the United States and S.A.Argentina’s operations are conducted in South America. Machinery and S.A.Argentina were sold during the fourth quarter of 1999 (see Note 1). 
NOTE 17-SUBSEQUENT EVENTS
        Under the terms of the Credit Facility, the Company has the ability to repurchase its Senior SubordinatedNotes subject to certain conditions.  In the first quarter of 2002, the Company repurchased Senior SubordinatedNotes with a face value of  $24.7 million, or 12.3% of the aggregate principal amount of the Senior Subordinated Notesissued by the Company.  The Company's Senior Subordinated Notes currently trade at a discount to face value, thereforethe Company will recognize a gain on retirement of debt in the first quarter of 2002.  The average discount to face value to be recorded by the Company with respect to the Senior Subordinated Notes repurchased to date will be approximately 31.4%, lesstransaction fees and expenses.
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Neff Corp.
We have audited theconsolidated financial statements of Neff Corp. and Subsidiaries (the“Company”) as of December 31, 2001 and 2000 and for each of the threeyears in the period ended December 31, 2001, and have issued our report thereondated March 29, 2002; such financial statements and report are includedelsewhere in the Company’s 2001 Annual Report to Stockholders on Form 10-K. Our auditsalso included the financial statement schedule of the Company listed in Item14(a)2. The financial statement schedule is the responsibility of theCompany’s management. Our responsibility is to express an opinion based onour audits. In our opinion, such financial statement schedule, when consideredin relation to the basic consolidated financial statements taken as a whole,presents fairly in all material respects the information set forth therein. 

/s/ DELOITTE & TOUCHE LLPCertified Public Accountants
Miami, FloridaMarch 29, 2002
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    SCHEDULE II       NEFF CORP.                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES                                 (in thousands)**Balance     Charged to                        Balance                                    at Beginning  Costs and                         at End                                     of Period    Expenses    Other   Deductions   of Period                                     --------     --------   -------   --------    --------Year ended December 31, 2001:**Allowance for doubtful accounts ....$   3,323   $   1,643  $       -  $  (2,019)  $   2,947                                     ========    ========    =======   ========    ========Deferred tax valuation allowance....$   6,242   $   6,921  $       -  $       -   $  13,163                                     ========    ========    =======   ========    ========**Year ended December 31, 2000:**Allowance for doubtful accounts ....$   2,904   $   2,795  $       -  $  (2,376)  $   3,323                                     ========    ========    =======   ========    ========Deferred tax valuation allowance ...$       -   $   6,242  $       -  $       -   $   6,242                                     ========    ========    =======   ========    ========**Year ended December 31, 1999:**Allowance for doubtful accounts ....$   3,229   $   2,317  $       -  $  (2,642)  $   2,904                                     ========    ========    =======   ========    ========Deferred tax valuation allowance ...$     900   $       -  $       -  $    (900)  $       -                                     ========    ========    =======   ========    ========
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   PART IIIITEM 9.               CHANGES IN AND DISAGREEMENTS WITH  ACCOUNTANTS                      ON ACCOUNTING AND FINANCIAL DISCLOSURE                   None.  ITEM 10.             DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
   The information required by this Item 10 will be contained in our definitive                proxy materials to be filed with the Securities and Exchange Commission and is incorporated in this                Annual Report on Form 10-K by this reference.ITEM 11.             EXECUTIVE COMPENSATION
 The information  required by this Item 11 will be contained in our definitive  proxy materials to be                filed with the Securities and Exchange  Commission and is incorporated in this Annual Report on Form                10-K by this reference.ITEM 12.             SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                     AND MANAGEMENT
  The  information  required by this Item 12 will be contained in our definitive  proxy materials to be               filed with the Securities and Exchange  Commission and is  incorporated in this Annual Report on Form               10-K by this reference.ITEM 13.            CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 The information required by this Item 13 will be contained in our definitive proxy materials to be               filed with the Securities and Exchange Commission and is incorporated in this Annual Report on Form               10-K by this reference.
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
        (a)           The following documents are filed with, and as part of, this Annual Report on Form 10-K.-   Financial Statements.       For a complete list of the  financial  statements  filed with this Annual Report on Form 10-K,  see the             Index to Financial Statements and Schedules in Item 8 on Page 27.  Financial Statements Schedules.
     The following financial statement schedules are filed with this Annual Report on Form 10-K:
      See Index to Financial Statements and Schedules in Item 8 on Page 27.Exhibits.
      Information with respect to this item is contained in Item 14(c) hereof.
          (b)           Reports on 8-K
              During the last quarter of the period covered by this Annual Report, no reports on Form 8-K were filed.
          (c)        Exhibits
         The following exhibits are filed with this Annual Report on Form 10-K         **Number**                  **Description**         10.1             Loan and Security Agreement dated as of December 19,  2001,  by and among Neff Corp.,  Neff                            Rental, Inc., Various                                                Lenders and Fleet Capital Corporation, as Agent.
            10.2               Amendedand Restated Employment Agreement dated as of December 31, 2001, by and between Neff Corp. and Peter Gladis.
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  SIGNATURES
         Pursuant  to the  requirements  of  Section  13 or  15(d)  of the  Securities  Exchange  Act  of  1934,  theRegistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NEFF CORP.
Date: March 29, 2002                                                                                                        /s/Mark H. Irion                                                                                                                                                                   ----------------------                                                                                                                                                                   MARK H.  IRION                                                                                                                                                                   Chief Financial Officer                                                                                                                                                                   On behalf of the Registrant and as                                                                                                                                                                   Principal Financial and Accounting Officer
        Pursuant to the requirements of the Securities and Exchange Act of 1934,this report has been  signed  below by the following persons on behalf of theRegistrant and in the capacities and on the dates indicated.Signature                    Title                             Date-------------------          ----------------------            ----------------/s/ Juan Carlos Mas          President,-------------------          Chief Executive Officer,Juan Carlos Mas              Director                          March  29, 2002/s/ Mark H. Irion            Chief Financial Officer           March  29, 2002-------------------Mark H. Irion/s/ Jorge Mas                Chairman of the Board             March  29, 2002-------------------Jorge Mas/s/ Arthur B. Laffer         Director                          March  29, 2002-------------------Arthur B. Laffer/s/ Steven Scheiwe           Director                          March  29, 2002------------------Steven Sheiwe/s/ Jose Ramon Mas           Director                          March  29, 2002------------------Jose Ramon Mas/s/ Michael Markbreiter      Director                          March  29, 2002-----------------------Michael Markbreiter
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LOAN ANDSECURITY AGREEMENT
     **THIS LOAN AND SECURITYAGREEMENT** is made on December 19, 2001, by and among **NEFF CORP.**(“Neff”), a Delaware corporation, and **NEFF RENTAL, INC.******(“Rental”), a Florida corporation, each with its chiefexecutive office and principal place of business at 3750 N.W. 87thAvenue, Suite 400, Miami, Florida 33178 (Neff and Rental being referred tocollectively as “Borrowers,” and individually as a“Borrower”); the various financial institutions listed on thesignature pages hereof and their respective successors and permittedassigns which become “Lenders” as provided herein;**FLEET CAPITAL CORPORATION**, a Rhode Island corporation with an officeat 300 Galleria Parkway, Suite 800, Atlanta, Georgia 30339, in its capacity ascollateral and administrative agent for the Lenders pursuant to **Section12** hereof (together with its successors in such capacity,“Agent”); **GECC CAPITAL MARKETS GROUP, INC.**, a Delawarecorporation, in its capacity as syndication agent for the Lenders (in suchcapacity, “Syndication Agent”); and **FLEET SECURITIES, INC.**, aDelaware corporation, and **GECC CAPITAL MARKETS GROUP, INC.**, a Delawarecorporation, in their joint capacities as co-lead arrangers (in such capacities,the “Co-Lead Arrangers”). Capitalized terms used in thisAgreement have the meanings assigned to them in Appendix A,General Definitions. 
Recitals:
     Each Borrower has requestedthat Lenders make available a revolving credit and letter of credit facility toBorrowers, which shall be used by Borrowers to refinance their existing seniorsecured debt, to finance repurchases of certain of their SeniorSubordinated Notes (as hereinafter defined) and to finance their mutual andcollective enterprise of owning and operating equipment rental facilities,selling equipment and equipment parts and providing equipment repair andmaintenance services. In order to utilize the financial powers of each Borrowerin the most efficient and economical manner, and in order to facilitatethe financing of each Borrower’s needs, Lenders will, at the requestof any Borrower, make loans to Borrowers under a revolving credit facility on acombined basis and in accordance with the provisions hereinafter set forth.Borrowers’ business is a mutual and collective enterprise and Borrowersbelieve that the consolidation of all revolving credit loans under thisAgreement will enhance the aggregate borrowing powers of each Borrower and easethe administration of their revolving credit loan relationship with Lenders, allto the mutual advantage of Borrowers. Lenders’ willingness to extend creditto Borrowers and to administer each Borrower’s collateral securitytherefor, on a combined basis as more fully set forth in this Agreement, isdone solely as an accommodation to Borrowers and at Borrowers’ request infurtherance of Borrowers’ mutual and collective enterprise. 

     Each Borrower has agreed toguarantee the obligations of each of the other Borrowers under this Agreementand each of the other Loan Documents. 

     NOW, THEREFORE, for TenDollars ($10.00) and other good and valuable consideration, the parties heretohereby agree as follows: 
SECTION   1.     CREDIT FACILITIES
     Subject to the terms andconditions of, and in reliance upon the representations and warranties made inthis Agreement and the other Loan Documents, Lenders severally agree to theextent and in the manner hereinafter set forth to make their respective Pro Ratashares of the Commitments available to Borrowers, in an aggregate amount upto $200,000,000, as follows: 
1.1.      RevolverCommitment.
     1.1.1.      RevolverLoans.      Each Lender agrees, severally to the extent of itsRevolver Commitment and not jointly with the other Lenders, upon the termsand subject to the conditions set forth herein, to make Revolver Loans toBorrowers on any Business Day during the period from the date hereof through theBusiness Day before the last day of the Original Term, not to exceed inaggregate principal amount outstanding at any time such Lender’s RevolverCommitment at such time, which Revolver Loans may be repaid and reborrowedin accordance with the provisions of this Agreement; provided,however, that Lenders shall have no obligation to Borrowers whatsoever tomake any Revolver Loan on or after the Commitment Termination Date or if at thetime of the proposed funding thereof the aggregate principal amount of all ofthe Revolver Loans and Pending Revolver Loans then outstanding exceeds, or wouldexceed after the funding of such Revolver Loan, the Borrowing Base.Each Borrowing of Revolver Loans shall be funded by Lenders on a Pro Ratabasis in accordance with their respective Revolver Commitments (except for Fleetwith respect to Settlement Loans). The Revolver Loans shall bear interest as setforth in **Section 2.1.** hereof. Each Revolver Loan shall, at the option ofBorrowers, be made or continued as, or converted into, part of one or moreBorrowings that, unless specifically provided herein, shall consist entirely ofBase Rate Loans or LIBOR Loans. 

     1.1.2.      Out-of-FormulaLoans.      If the unpaid balance of Revolver Loans outstanding at any timeshould exceed the Borrowing Base at such time (an “Out-of-FormulaCondition”), such Revolver Loans shall nevertheless constituteObligations that are secured by the Collateral and entitled to all of thebenefits of the Loan Documents. In the event that Lenders are willing in theirsole and absolute discretion to make Out-of-Formula Loans, such Out-of-FormulaLoans shall be payable **on demand** and shall bear interest asprovided in **Section 2.1.5** of this Agreement. 

     1.1.3.      Use ofProceeds.      The proceeds of the Revolver Loans shall be used by Borrowerssolely for one or more of the following purposes: (i) to repay all ofBorrowers’ current outstanding indebtedness under the Existing CreditAgreement; (ii) to finance one or more repurchases by Borrowers of SeniorSubordinated Notes at any time the Senior Subordinated Note RepurchaseConditions are satisfied; (iii)  to pay the fees and transaction expensesassociated with the closing of the transactions described herein; (iv) to payany of the Obligations; and (v) to make expenditures for working capital andother lawful general corporate purposes of Borrowers to the extent suchexpenditures are not prohibited by this Agreement or Applicable Law. In no eventmay any Revolver Loan proceeds be used by Borrowers to make a contribution tothe equity of any Subsidiary, to purchase or to carry, or to reduce, retireor refinance any Debt incurred to purchase or carry, any Margin Stock or for anyrelated purpose that violates the provisions of Regulations T, U or X ofthe Board of Governors. 

     1.1.4.     RevolverNotes.      Borrowers shall execute and deliver to Agent on behalf of eachLender, on the Closing Date, a Revolver Note in the form of **Exhibit A**attached hereto and made a part hereof (each such Revolver Note, together withany new notes issued pursuant to **Section 13.3.2** upon the assignment ofany portion of any Lender’s Loans, being hereinafter referred tocollectively as the “Revolver Notes” and each of such notes beinghereinafter referred to individually as a “Revolver Note”), whichshall be in the face amount of such Lender’s Revolver Commitment and whichshall evidence all Revolver Loans (other than Settlement Loans) made by suchLender to Borrowers pursuant to the Agreement. The Revolver Loans made by eachLender and interest accruing thereon shall be evidenced by the records of Agentand such Lender and by the Revolver Note payable to such Lender (or theassignee of such Lender). All outstanding principal amounts and accruedinterest under the Revolver Notes shall be due and payable as set forth in**Section 4.2**hereof. 

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     1.1.5.      VoluntaryReductions of Revolver Commitments.      Borrowers shall have the right to reducethe amount of the Revolver Commitments at any time and from time to time inamounts of not less than $5,000,000 and in integral multiples of $1,000,000 inexcess thereof, upon not less than 3 Business Days prior written notice to Agentof such reduction, which notice shall specify the effective date thereof and theamount of any such reduction. Any such notice shall be irrevocable once givenand effective only upon receipt by Agent. Agent shall promptly transmit suchnotice to each Lender. Borrowers shall pay all interest and fees then due on theamount of the Revolver Commitment reduction accrued to the date of suchreduction of the Revolver Commitments to Agent for the Pro Rata benefit of theLenders, and if the Revolver Commitments are reduced by Borrowers pursuant tothis Section during the first Loan Year for any reason other than a PermittedChange of Control, Borrowers shall pay to Agent, for the Pro Rata benefit ofLenders, as liquidated damages for the loss of the bargain and not as a penalty,an amount equal to 1.0% of the total amount of the reduction in theRevolver Commitments. If Borrowers are required to pay any outstanding LIBORLoans prior to the end of the applicable Interest Period therefore pursuant to**Section 2.1.3** by reason of a voluntary reduction of the RevolverCommitments pursuant to this Section, then Borrowers shall indemnify each Lenderagainst the losses, costs and expenses incurred by such Lender as described in**Section 2.9** hereof. 
1.2.      Reserved.1.3.      LCFacility.
     1.3.1.      Procurement ofLetters of Credit.     During the period from the date hereof to(but excluding) the 30th day prior to the last day of the Original Term,and provided no Default or Event of Default exists, Fleet agrees to establishthe LC Facility pursuant to which Fleet shall procure from Bank one or moreLetters of Credit on Borrowers’ request therefor from time to time, subjectto the following terms and conditions: 

(i)      Each Borroweracknowledges that Bank’s willingness to issue any Letter of Credit isconditioned upon Bank’s receipt of (A) the LC Support duly executed anddelivered to Bank by Fleet, (B) an LC Application with respect to the requestedLetter of Credit and (C) such other instruments and agreements as Bank maycustomarily require for the issuance of a letter of credit of equivalent typeand amount as the requested Letter of Credit. Fleet shall only have anobligation to execute any LC Support or to join with Borrowers in executingan LC Application if (x) Fleet receives an LC Request from Borrowers atleast 3 Business Days prior to the date on which Borrowers desire to submit suchLC Application to Bank and (y) each of the LC Conditions is satisfied on thedate of Fleet’s receipt of the LC Request and at the time of the requestedexecution of the LC Application. Any Letter of Credit issued on the Closing Dateshall be for an amount in Dollars that is greater than $250,000. In no eventshall Fleet or any other Lender have any liability or obligation to Borrowers orany Subsidiary for any failure or refusal by Bank to issue, for Bank’sdelay in issuing, or for any error of Bank in issuing any Letter of Credit. 

(ii)      Letters of Credit maybe requested by Borrowers only if they are to be used (a) to support obligationsof Borrowers incurred in the Ordinary Course of Business of Borrowers or (b) forsuch other purposes as Agent and Lenders may approve from time to time inwriting. 

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(iii)     Borrowers shallcomply with all of the terms and conditions imposed on Borrowers by Bank,whether such terms and conditions are contained in an LC Application orin any agreement with respect thereto, and subject to the rights ofBank, Fleet shall have the same rights and remedies that Bank has under anyagreements that Borrowers may have with Bank in addition to any rights andremedies contained in any of the Loan Documents. Borrowers agree to reimburseBank for any draw under any Letter of Credit as hereinafter provided, andto pay Bank the amount of all other liabilities and obligations payable toBank under or in connection with any Letter of Credit immediately when due,irrespective of any claim, setoff, defense or other right that Borrowers mayhave at any time against Bank or any other Person. If Fleet shall payany amount under a LC Support with respect to any Letter of Credit, thenBorrowers shall pay to Fleet, in Dollars on the first Business Day following thedate on which payment was made by Fleet under such LC Support (the“Reimbursement Date”), an amount equal to the amount paid by Lenderunder such LC Support together with interest from and afterthe Reimbursement Date until payment in full is made by Borrowers atthe Default Rate for Revolver Loans constituting Base Rate Loans.Until Fleet has received payment from Borrowers in accordance with the foregoingprovisions of this clause (iii), Fleet, in addition to all of its otherrights and remedies under this Agreement, shall be fully subrogated to (A)the rights and remedies of Bank as issuer of the Letter of Credit underany agreement with Borrowers relating to the issuance of such Letter ofCredit, and (B) the rights and remedies of each beneficiary undersuch Letter of Credit whose claims against Borrowers has been dischargedwith the proceeds of such Letter of Credit. Whether or not Borrowers submitany Notice of Borrowing to Agent, Borrowers shall be deemed to have requestedfrom Lenders a Borrowing of Base Rate Loans in an amount necessary to payto Fleet all amounts due Fleet on any Reimbursement Date and each Lenderagrees to fund its Pro Rata share of such Borrowing whether or not any Defaultor Event of Default has occurred or exists, the Commitments have beenterminated, the funding of the Borrowing deemed requested by Borrowerswould result in, or increase the amount of, any Out-of-Formula Condition, or anyof the conditions set forth in **Section 10** hereof are not satisfied. 

(iv)      Borrowers assume allrisks of the acts, omissions or misuses of any Letter of Credit by thebeneficiary thereof. The obligation of Borrowers to reimburse Fleet forany payment made by Fleet under the LC Support shall be absolute,unconditional and irrevocable and shall be paid without regard to any lack ofvalidity or enforceability of any Letter of Credit, the existence of any claim,setoff, defense or other right which Borrowers may have at any time against abeneficiary of any Letter of Credit, or improper honor by Bank of any drawrequest under a Letter of Credit. If presentation of a demand, draft,certificate or other document does not comply with the terms of a Letter ofCredit and Borrowers contends that, as a consequence of such noncompliance ithas no obligation to reimburse Bank for any payment made with respectthereto, Borrowers shall nevertheless be obligated to reimburse Fleet forany payment made under the LC Support with respect to such Letter ofCredit, but without waiving any claim Borrowers may have against Bank inconnection therewith. All disputes regarding any Letter of Credit shall beresolved by Borrowers directly with Bank. 

(v)      No Letter of Creditshall be extended or amended in any material respect, unless all of the LCConditions are met as though a new Letter of Credit were being requested andissued. 

(vi)      Borrowers herebyauthorize and direct Bank to deliver to Fleet all instruments, documentsand other writings and Property received by Bank pursuant to orin connection with any Letter of Credit and to accept and rely uponFleet’s instructions and agreements with respect to all matters arising inconnection with such Letter of Credit and the related LC Application. 

     1.3.2.        Participations.
(i)      Immediately upon theissuance by Bank of any Letter of Credit, each Lender (other than Fleet) shallbe deemed to have irrevocably and unconditionally purchased and received fromFleet, without recourse or warranty, an undivided interest and participationequal to the Pro Rata share of such Lender (a “ParticipatingLender”) in all LC Obligations arising in connection with such Letterof Credit and any security therefor or guaranty pertaining thereto, but in noevent greater than an amount which, when added to such Lender’s Pro Ratashare of all Revolver Loans and LC Obligations then outstanding,equals such Lender’s Revolver Commitment. 

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(ii)      If Fleet makes anypayment under an LC Support and Borrowers do not repay or cause to be repaid theamount of such payment on the Reimbursement Date, Fleet shall promptlynotify Agent, which shall promptly notify each Participating Lender, ofsuch payment and each Participating Lender shall promptly (and in any eventwithin 1 Business Day after its receipt of notice from Agent) andunconditionally pay to Agent, for the account of Fleet, in immediatelyavailable funds, the amount of such Participating Lender’s Pro Rata shareof such payment, and Agent shall promptly pay such amounts to Fleet. If aParticipating Lender does not make its Pro Rata share of the amount of suchpayment available to Agent on a timely basis as herein provided, suchParticipating Lender agrees to pay to Agent for the account of Fleet, forthwith**on demand**, such amount together with interest thereon at the FederalFunds Rate until paid. The failure of any Participating Lender to makeavailable to Agent for the account of Fleet such Participating Lender’s ProRata share of the LC Obligations shall not relieve any other ParticipatingLender of its obligation hereunder to make available to Agent its Pro Rata shareof the LC Obligations, but no Participating Lender shall be responsible for thefailure of any other Participating Lender to make available to Agent its ProRata share of the LC Obligations on the date such paymentis to be made. 

(iii)      Whenever Fleetreceives a payment on account of the LC Obligations, including any interestthereon, as to which Agent has previously received payments from any Lenderfor the account of Fleet, Fleet shall promptly pay to each Participating Lenderwhich has funded its participating interest therein, in immediatelyavailable funds, an amount equal to such Participating Lender’s Pro Ratashare thereof. 

(iv)      The obligation of eachParticipating Lender to make payments to Agent for the account of Fleet inconnection with Fleet’s payment under an LC Support shall be absolute,unconditional and irrevocable, not subject to any counterclaim, setoff,qualification or exception whatsoever (other than for Fleet’s grossnegligence or willful misconduct), and shall be made in accordance with theterms and conditions of this Agreement under all circumstances and irrespectiveof whether or not Borrowers may assert or have any claim for any lack ofvalidity or unenforceability of this Agreement or any of the other LoanDocuments; the existence of any Default or Event of Default; any draft,certificate or other document presented under a Letter of Credit having beendetermined to be forged, fraudulent, invalid or insufficient in any respect orany statement therein being untrue or inaccurate in any respect; the existenceof any setoff or defense any Obligor may have with respect to any of theObligations; or the termination of the Commitments. 

(v)      Neither Fleet nor anyof its officers, directors, employees or agents shall be liable to anyParticipating Lender for any action taken or omitted to be taken under orin connection with any of the LC Documents except as a result of actualgross negligence or willful misconduct on the part of Fleet. Fleet does notassume any responsibility for any failure or delay in performance or breach byBorrowers or any other Person of any of its obligations under any of the LCDocuments. Fleet does not make to Participating Lenders any express or impliedwarranty, representation or guaranty with respect to the Collateral, the LCDocuments, or any Obligor. Fleet shall not be responsible to any ParticipatingLender for any recitals, statements, information, representations or warrantiescontained in, or for the execution, validity, genuineness, effectiveness orenforceability of or any of the LC Documents; the validity, genuineness,enforceability, collectibility, value or sufficiency of any of the Collateral orthe perfection of any Lien therein; or the assets, liabilities, financialcondition, results of operations, business, creditworthiness orlegal status of Borrowers or any other Obligor or any Account Debtor.In connection with its administration of and enforcement of rights orremedies under any of the LC Documents, Fleet shall be entitledto act, and shall be fully protected in acting upon, any certification,notice or other communication in whatever form believed by Fleet, in good faith,to be genuine and correct and to have been signed, sent or made by a properPerson. Fleet may consult with and employ legal counsel, accountants and otherexperts and to advise it concerning its rights, powers and privileges under theLC Documents and shall be entitled to act upon, and shall be fully protected inany action taken in good faith reliance upon, any advice given by such experts.Fleet may employ agents and attorneys-in-fact in connection with any matterrelating to the LC Documents and shall not be liable for thenegligence, default or misconduct of any such agents or attorneys-in-factselected by Fleet with reasonable care. Fleet shall not have any liabilityto any Participating Lender by reason of Fleet’s refraining to takeany action under any of the LC Documents without having first receivedwritten instructions from the Required Lenders to take such action. 

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(vi)      Upon the request ofany Participating Lender, Fleet shall furnish to such Participating Lendercopies (to the extent then available to Fleet) of each outstanding Letter ofCredit and related LC Application and all other documentation pertaining to suchLetter of Credit as may be in the possession of Fleet and reasonablyrequested from time to time by such Participating Lender. 

     1.3.3.      Cash CollateralAccount.      If any LC Obligations, whether or not then due or payable, shallfor any reason be outstanding (i) at any time when an Event of Default hasoccurred and is continuing, (ii) on any date that Availability is less thanzero, or (iii) on or at any time after the Commitment Termination Date, thenBorrowers shall, on Fleet’s or Agent’s request, forthwith deposit withAgent, in cash, an amount equal to 105% of the aggregate amount of LCObligations. If Borrowers fail to make such deposit on the first BusinessDay following Agent’s or Fleet’s demand therefor, Lenders may(and shall upon direction of the Required Lenders) advance such amount asRevolver Loans (whether or not an Out-of-Formula Condition is created thereby).Such cash (together with any interest accrued thereon) shall be held byAgent in the Cash Collateral Account and may be invested, in Agent’sdiscretion, in Cash Equivalents. Each Borrower hereby pledges to Agent andgrants to Agent a security interest in, for the benefit of Agent insuch capacity and for the Pro Rata benefit of Lenders, all Cash Collateralheld in the Cash Collateral Account from time to time and all proceedsthereof, as security for the payment of all Obligations, whether or notthen due or payable. From time to time after cash is deposited in theCash Collateral Account, Agent may apply Cash Collateral then held in theCash Collateral Account to the payment of any amounts, in such order asAgent may elect, as shall be or shall become due and payable by Borrowers toAgent or any Lender with respect to the LC Obligations. Neither Borrowers norany other Person claiming by, through or under or on behalf of a Borrower shallhave any right to withdraw any of the Cash Collateral held in the CashCollateral Account, including any accrued interest, provided that if such CashCollateral is being held by Agent pursuant to clause (i) or (ii) above and thecondition set forth in such clause ceases to exist, or upon termination orexpiration of all Letters of Credit and the payment and satisfaction of all ofthe LC Outstandings, any Cash Collateral remaining in theCash Collateral Account shall be returned to Borrowers unless an Event ofDefault then exists (in which event Agent may apply such Cash Collateral tothe payment of any other Obligations outstanding, with any surplus to be turnedover to Borrowers). 

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     1.3.4.     Indemnifications.
(i)      In addition to anyother indemnity which Borrowers may have to Agent or any Lender under any of theother Loan Documents and without limiting such other indemnification provisions,each Borrower hereby agrees to indemnify and defend each of the AgentIndemnitees and Lender Indemnitees and to hold each of the Agent Indemnitees andLender Indemnitees harmless from and against any and all Claims which any of theAgent Indemnitees or any of the Lender Indemnitees may (other than as the resultof their own gross negligence or willful misconduct) incur or be subject to as aconsequence, directly or indirectly, of (a) the issuance of, payment or failureto pay or any performance or failure to perform under any Letter of Credit or LCSupport or (b) any suit, investigation or proceeding as to which Agent orany Lender is or may become a party to as a consequence, directly orindirectly, of the issuance of any Letter of Credit or any LC Supportor the payment or failure to pay thereunder. 

(ii)      Each ParticipatingLender agrees to indemnify and defend each of the Fleet Indemnitees(to the extent the Fleet Indemnitees are not reimbursed by Borrowers orany other Obligor, but without limiting the indemnification obligations ofBorrowers under this Agreement), on a Pro Rata basis, from and against any andall Claims which may be imposed on, incurred by or asserted against any of theFleet Indemnitees in any way related to or arising out of Fleet’sadministration or enforcement of rights or remedies under any of the LCDocuments or any of the transactions contemplated thereby (including costsand expenses which Borrowers are obligated to pay under **Section 14.2**hereof), provided that no Participating Lender shall be liable to any of theFleet Indemnitees for any of the foregoing to the extent that they result solelyfrom the willful misconduct or gross negligence of such Fleet Indemnitees. 
SECTION   2.     INTEREST,  FEES AND CHARGES2.1.      Interest.
     2.1.1.      Rates ofInterest.      Borrowers agree to pay interest in respect of all unpaid principalamounts of the Revolver Loans from the respective dates such principal amountsare advanced until paid (whether at stated maturity, on acceleration orotherwise) at a rate per annum equal to the applicable rate indicated below: 

  (i)           for Revolver  Loans made or  outstanding  as Base Rate Loans,  the Applicable  Margin plus the Base         Rate in effect from time to time; or
(ii)      for Revolver Loansmade or outstanding as LIBOR Loans, the Applicable Margin plus therelevant Adjusted LIBOR Rate for the applicable Interest Period selected byBorrowers in conformity with this Agreement. Upon determining theAdjusted LIBOR Rate for any Interest Period requested by Borrowers, Agent shallpromptly notify Borrowers thereof by telephone and, if so requested byBorrowers, confirm the same in writing. Such determination shall, absentmanifest error, be final, conclusive and binding on all parties and for allpurposes. The applicable rate of interest for all Loans (or portions thereof)bearing interest based upon the Base Rate shall be increased or decreased, asthe case may be, by an amount equal to any increase or decrease in the BaseRate, with such adjustments to be effective as of the opening of business on theday that any such change in the Base Rate becomes effective. Interest on eachLoan shall accrue from and including the date on which such Loan is made,converted to a Loan of another Type or continued as a LIBOR Loan to (butexcluding) the date of any repayment thereof; provided, however,that, if a Loan is repaid on the same day made, one day’s interest shall bepaid on such Loan. The Base Rate on the date hereof is 4.75% per annum and,therefore, the rate of interest in effect hereunder on the date hereof,expressed in simple interest terms, is 7.00% per annum with respect toany portion of the Revolver Loans bearing interest as a Base RateLoan. The Adjusted LIBOR Rate for a 30-day Interest Period on the date hereof is1.92% per annum and, therefore, the rate of interest in effecthereunder on the date hereof, expressed in simple interest terms,is 5.17% per annum with respect to any portion of the Revolver Loansbearing interest as a LIBOR Loan with a 30 day Interest Period. 

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2.1.2     Conversions and Continuations.
(i)     Borrowers may on anyBusiness Day, subject to the giving of a proper Notice ofConversion/Continuation as hereinafter described, elect (A) to continue all orany part of a LIBOR Loan by selecting a new Interest Period therefor, tocommence on the last day of the immediately preceding Interest Period, or(B) to convert all or any part of a Loan of one Type into a Loan of anotherType; provided, however, that no outstanding Loans may beconverted into or continued as LIBOR Loans when any Default or Event of Defaultexists. Any conversion of a LIBOR Loan into a Base Rate Loan shall be madeon the last day of the Interest Period for such LIBOR Loan. Any conversionor continuation made with respect to less than the entire outstandingbalance of the Revolver Loans, must be allocated among Lenders on a Pro Ratabasis, and the Interest Period for Loans converted into or continued asLIBOR Loans shall be coterminous for each Lender. 
(ii)      Whenever Borrowersdesire to convert or continue Loans under **Section 2.1.2(i)**,Borrowers shall give Agent written notice (or telephonic notice promptlyconfirmed in writing) substantially in the form of **Exhibit C**, signed byan authorized officer of Neff, at least 1 Business Day before the requestedconversion date, in the case of a conversion into Base Rate Loans, and at least3 Business Days before the requested conversion or continuation date, in thecase of a conversion into or continuation of LIBOR Loans. Promptly afterreceipt of a Notice of Conversion/Continuation, Agent shall notify each Lenderin writing of the proposed conversion or continuation. Each such Notice ofConversion/Continuation shall be irrevocable and shall specifythe aggregate principal amount of the Loans to be converted or continued,the date of such conversion or continuation (which shall be a Business Day) andwhether the Loans are being converted into or continued as LIBOR Loans (and, ifso, the duration of the Interest Period to be applicable thereto) or Base RateLoans. If, upon the expiration of any Interest Period in respect of any LIBORLoans, Borrowers shall have failed to deliver the Notice ofConversion/Continuation, Borrowers shall be deemed to have elected to convertsuch LIBOR Loans to Base Rate Loans. 

2.1.3.      InterestPeriods.      In connection with the making or continuation of, or conversioninto, each Borrowing of LIBOR Loans, Borrowers shall select an interest period(each an “Interest Period”) to be applicable to such LIBOR Loan, whichinterest period shall commence on the date such LIBOR Loan is made and shall endon a numerically corresponding day in the first, second, third or sixth monththereafter (or such other day as all Lenders agree);provided, however, that: 

(i)      the initial InterestPeriod for a LIBOR Loan shall commence on the date of such Borrowing (includingthe date of any conversion from a Loan of another Type) and each Interest Periodoccurring thereafter in respect of such Revolver Loan shall commence on the dateon which the next preceding Interest Period expires; 

(ii)      if any Interest Periodwould otherwise expire on a day that is not a Business Day, such InterestPeriod shall expire on the next succeeding Business Day, provided that, ifany Interest Period in respect of LIBOR Loans would otherwise expire on aday that is not a Business Day but is a day of the month after which nofurther Business Day occurs in such month, such Interest Period shallexpire on the next preceding Business Day; 

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(iii)      any Interest Periodthat begins on a day for which there is no numerically corresponding day in thecalendar month at the end of such Interest Period shall expire onthe last Business Day of such calendar month; 

(iv)      no Interest Periodwith respect to any portion of principal of a Loan shall extend beyond adate on which Borrowers are required to make a scheduled payment ofsuch portion of principal; and 

(v)      no Interest Period shall extend beyond the last day of the Original Term.

2.1.4.      Interest Rate NotAscertainable.      If Agent shall determine (which determination shall, absentmanifest error, be final, conclusive and binding upon all parties) that on anydate for determining the Adjusted LIBOR Rate for any Interest Period, byreason of any changes arising after the date of this Agreement affectingthe London interbank market or any Lender’s position in such market,adequate and fair means do not exist for ascertaining the applicable interestrate on the basis provided for in the definition of Adjusted LIBOR Rate,then, and in any such event, Agent shall forthwith give notice(by telephone confirmed in writing) to Borrowers of such determination.Until Agent notifies Borrowers that the circumstances giving rise to thesuspension described herein no longer exist, the obligation of Lendersto make LIBOR Loans shall be suspended, and such affected Loans thenoutstanding shall, at the end of the then applicable Interest Period or atsuch earlier time as may be required by Applicable Law, bear thesame interest as Base Rate Loans. 

2.1.5.      Default Rate ofInterest.      Borrowers shall pay interest at a rate per annum equal to theDefault Rate (i) with respect to the principal amount of any portion of theObligations (and, to the extent permitted by Applicable Law, all past dueinterest) that is not paid on the due date thereof (whether due at statedmaturity, on demand, upon acceleration or otherwise) until paid in full; (ii)with respect to the principal amount of all of the Obligations (and, to theextent permitted by Applicable Law, all past due interest) upon the earlier tooccur of (x) Borrowers’ receipt of notice from Agent of the RequiredLenders’ election to charge the Default Rate based upon the existence ofany Default or Event of Default (which notice Agent shall send only with theconsent or at the direction of the Required Lenders), whether or notacceleration or demand for payment of the Obligations has been made or (y) thecommencement by or against Borrower of an Insolvency Proceeding whether or notunder the circumstances described in clauses (i) or (ii) hereof Lender elects toaccelerate the maturity or demand payment of any of the Obligations; and(iii) with respect to the principal amount of any Out-of-Formula Loans,whether or not demand for payment thereof has been made by Agent. To the fullestextent permitted by Applicable Law, the Default Rate shall apply and accrue onany judgment entered with respect to any of the Obligations and to the unpaidprincipal amount of the Obligations during any Insolvency Proceeding of aBorrower. Borrowers acknowledge that the cost and expense to Agent and eachLender attendant upon the occurrence of an Event of Default are difficult toascertain or estimate and that the Default Rate is a fair and reasonableestimate to compensate Agent and Lender for such added cost and expense.Interest accrued at the Default Rate shall be due and payable on demand. 

**2.2.          Fees.**      In consideration of Lender's  establishment of the Commitments in favor of Borrowers,  and Agent's agreement toserve as collateral and administrative agent hereunder, Borrowers agree to pay the following fees:

            2.2.1.        Closing  Fee.       Borrowers  shall pay to Agent a closing fee in the amount set forth in the Fee Letter,  whichfee shall be paid on the Closing Date.

     2.2.2.      Unused LineFee.      Borrowers shall pay to Agent for the Pro Rata benefit of Lenders a feeequal to (i) .625% per annum multiplied by the aggregate amount of Commitmentsfor each day during which the Revolver Loan Balance is equal to or less than 50%of the aggregate Commitments and (ii) .50%per annum multiplied by theaggregate amount of Commitments for each day during which the Revolver LoanBalance is greater than 50% of the aggregate Commitments, such fee to be paid onthe first day of each Fiscal Quarter for the immediately preceding FiscalQuarter; provided, that if the Commitments are terminated on a dayother than the first day of a Fiscal Quarter, then any such fee payable for theFiscal Quarter in which termination shall occur shall be paid on the effectivedate of such termination. 

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     2.2.3.      LC FacilityFees.      Borrowers shall pay: (i) to Agent, through its Treasury andInternational Services Group, for the ratable account of each Lender for Lettersof Credit, the Applicable Margin in effect for LIBOR Loans on a per annum basis(and at any time an Event of Default exists, the Default Rate) based on the faceamount of all Letters of Credit outstanding, payable quarterly, in arrears, onthe first Business Day of the following month, (ii) to Agent, through itsTreasury and International Services Group, for its own account a standby Letterof Credit fronting fee of 0.125% based on the amount available to be drawn undereach standby Letter of Credit outstanding, payable in advance upon issuance ofeach standby Letter of Credit, upon any increase by amendment of any Letter ofCredit and upon each renewal thereof, and (iii) to Bank for its own account allnormal and customary charges associated with the issuance, amending,negotiating, processing and administration of standby and documentary Letters ofCredit. 

     2.2.4.      Audit andAppraisal Fees.      Borrowers shall reimburse Agent for all reasonable costs andexpenses incurred by Agent or its designees or agents in connection with auditsand appraisals of any Obligor’s books and records and such other matterspertaining to any Obligor or any Collateral as Agent shall deem appropriate.Borrowers shall reimburse Agent and its designees or agents for all reasonablecosts and expenses incurred by Agent in connection with appraisals of anyCollateral as Agent shall deem appropriate and shall pay to Agent theAgent’s standard per diem rate for each day that an employee or agent ofAgent shall be engaged in an examination or review of a Borrower’s booksand records. 

      2.2.5.        Agency Fee.      In consideration  of Fleet's service as Agent hereunder,  Borrowers shall pay to Agent an agencyfee in the amount and on the dates specified in the Fee Letter.

     2.2.6.      GeneralProvisions.      All fees shall be fully earned by the identified recipientthereof pursuant to the foregoing provisions of this Agreement on the due datethereof (and, in the case of Letters of Credit, upon each issuance, renewal orextension of such Letter of Credit) and, except as otherwise set forth herein orrequired by Applicable Law, shall not be subject to rebate, refund or proration.All fees provided for in **Section 2.2** are and shall be deemed to becompensation for services and are not, and shall not be deemed to be,interest or any other charge for the use, forbearance or detention of money. 

**2.3.     ****Computation of Interest and Fees.**      All fees and other chargesprovided for in this Agreement that are calculated as a per annum percentage ofany amount and all interest shall be calculated daily and shall be computedon the actual number of days elapsed over a year of 360 days. For purposes ofcomputing interest and other charges hereunder, all Payment Items and otherforms of payment received by Agent shall be deemed applied by Agent onaccount of the Obligations (subject to final payment of such items) on theBusiness Day that Agent receives such items in immediately available fundsin the Payment Account, and Agent shall be deemed to have received such PaymentItem on the date specified in **Section 4.7**hereof. 
2.4.     Reimbursement Obligations.
2.4.1.      Borrowers shallreimburse Agent and Syndication Agent and, during any period that an Event ofDefault then exists, each Lender, for all reasonable legal, accounting,appraisal and other reasonable fees and out-of-pocket expenses incurred byAgent, Syndication Agent or any Lender in connection with (i) the negotiationand preparation of any of the Loan Documents, any amendment or modificationthereto, any waiver of any Default or Event of Default thereunder, orany restructuring or forbearance with respect thereto; (ii) theadministration of the Loan Documents and the transactions contemplated thereby,to the extent that such fees and expenses are expressly provided for in thisAgreement or any of the other Loan Documents; (iii) action taken to perfect ormaintain the perfection or priority of any of Agent’s Liens with respect toany of the Collateral; (iv) any effort to verify, protect, preserve, or restoreany of the Collateral or to collect, sell, liquidate or otherwise dispose of orrealize upon any of the Collateral; (v) any litigation, contest, dispute, suit,proceeding or action (whether instituted by or against Agent, any Lender, anyObligor or any other Person) in any way arising out of or relating to any of theCollateral (or the validity, perfection or priority of any of Agent’s Liensthereon), any of the Loan Documents or the validity, allowance or amount of anyof the Obligations; (vi) the protection or enforcement or any rights orremedies of Agent or any Lender in any Insolvency Proceeding; and (vii) anyother action taken by Agent or any Lender to enforce any of the rights orremedies of Agent or such Lender against any Obligor or any Account Debtors toenforce collection of any of the Obligations or payments with respect to any ofthe Collateral. All amounts chargeable to Borrowers under this **Section2.4** shall constitute Obligations that are secured by all of the Collateraland shall be payable **on demand** to Agent. Borrowers shall also reimburseAgent for expenses incurred by Agent in its administration of any of theCollateral to the extent and in the manner provided in **Section 7** hereofor in any of the other Loan Documents. The foregoing shall be in addition to,and shall not be construed to limit, any other provision of any of the LoanDocuments regarding the reimbursement by Borrowers of costs, expenses orliabilities suffered or incurred by Agent or any Lender. 

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2.4.2.      If at any time Agentor (with the consent of Agent) any Lender shall agree to indemnify anyPerson (including Bank) against losses or damages that such Person may suffer orincur in its dealings or transactions with Borrowers, or shall guarantee anyliability or obligation of a Borrower to such Person, or otherwise shall provideassurances of a Borrower’s payment or performance under any agreementwith such Person, including indemnities, guaranties or other assurances ofpayment or performance given by Agent or any Lender with respect to CashManagement Agreements, Hedging Agreements or Letters of Credit, then theContingent Obligation of Agent or any Lender providing any such indemnity,guaranty or other assurance of payment or performance, together with any paymentmade or liability incurred by Agent or any Lender in connection therewith,shall constitute Obligations that are secured by the Collateral andBorrowers shall repay, **on demand**, any amount so paid or anyliability incurred by Agent or any Lender in connection with any such indemnity,guaranty or assurance, except that repayment with respect to any LC Supportshall be due on the Reimbursement Date as provided in **Section 1.3.1(iii)**.Nothing herein shall be construed to impose upon Agent or any Lender anyobligation to provide any such indemnity, guaranty or assurance except to theextent provided in **Section 1.3** hereof. The foregoing agreement ofBorrowers shall apply whether or not such indemnity, guaranty or assurance is inwriting or oral and regardless of a Borrower’s knowledge of the existencethereof, and shall be in addition to any of the provision of the Loan Documentsregarding reimbursement by Borrowers of costs, expenses or liabilities sufferedor incurred by Agent or any Lender. To the extent that Agent or any Lenderagrees to provide any such indemnity, guaranty or other assurance of payment orperformance for the benefit of Borrower under this **Section 2.4**(except tothe extent provided in **Section 1.3** hereof), such party agrees to usereasonable efforts to timely notify Borrowers of such agreement; provided,that the failure to so notify Borrowers shall in no manner impairBorrowers’ reimbursement obligations hereunder. 

**2.5.     ****BankCharges.**      Borrowers shall pay to Agent, **on demand**, any and allfees, costs or expenses which Agent or any Lender pays to a bank or othersimilar institution (including any fees paid by Agent or any Lender to anyParticipant) arising out of or in connection with (i) the forwarding toBorrowers or any other Person on behalf of Borrowers by Agent or any Lender ofproceeds of Loans made by Lenders to Borrowers pursuant to this Agreement and(ii) the depositing for collection by Agent or any Lender of any Payment Itemreceived or delivered to Agent or any Lender on account of the Obligations.Borrowers acknowledge and agree that Agent may charge such costs, fees andexpenses to Borrowers based upon Agent’s good faith estimate of such costs,fees and expenses as they are incurred by Agent or any Lender. 

**2.6.     ****Illegality.**      Notwithstanding anything to the contrary containedelsewhere in this Agreement, if (i) any change in any law or regulation or inthe interpretation thereof by any Governmental Authority charged with theadministration thereof shall make it unlawful for a Lender to make or maintain aLIBOR Loan or to give effect to its obligations as contemplated hereby withrespect to a LIBOR Loan or (ii) at any time such Lender determines that themaking or continuance of any LIBOR Loan has become impracticable as a result ofa contingency occurring after the date hereof which adversely affectsthe London interbank market or the position of such Lender in suchmarket, then such Lender shall give after such determination Agent and Borrowersnotice thereof and may thereafter (1) declare that LIBOR Loans will notthereafter be made by such Lender, whereupon any request by Borrowers for aLIBOR Loan shall be deemed a request for a Base Rate Loan unless suchLender’s declaration shall be subsequently withdrawn (which declarationshall be withdrawn promptly after the cessation of the circumstancesdescribed in clause (i) or (ii) above); and (2) require that alloutstanding LIBOR Loans made by such Lender be converted to Base Rate Loans,under the circumstances of clause (i) or (ii) of this **Section 2.6**insofar as such Lender determines the continuance of LIBOR Loans to beimpracticable, in which event all such LIBOR Loans shall be convertedautomatically to Base Rate Loans as of the date of Borrowers’ receipt ofthe aforesaid notice from such Lender. 

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**2.7.     ****IncreasedCosts.**      If, by reason of (a) the introduction after the date hereof of orany change (including any change by way of imposition or increase of StatutoryReserves or other reserve requirements) in or in the interpretation of any lawor regulation, or (b) the compliance with any guideline or request from anycentral bank or other Governmental Authority or quasi-Governmental Authorityexercising control over banks or financial institutions generally (whether ornot having the force of law): 

(i)      any Lender shall besubject after the date hereof to any Tax, duty or other charge with respectto any LIBOR Loan or its obligation to make LIBOR Loans, or a change shallresult in the basis of taxation of payment to any Lender of the principal of orinterest on its LIBOR Loans or its obligation to make LIBOR Loans(except for changes in the rate of Tax on the overall net income or grossreceipts of such Lender imposed by the jurisdiction in whichsuch Lender’s principal executive office is located); or 

(ii)      any reserve (includingany imposed by the Board of Governors), special deposits or similar requirementagainst assets of, deposits with or for the account of, or credit extended by,Lender shall be imposed or deemed applicable or any other condition affectingits LIBOR Loans or its obligation to make LIBOR Loans shall be imposed on suchLender or the London interbank market;and as a result thereofthere shall be any increase in the cost to such Lender of agreeing to make ormaking, funding or maintaining LIBOR Loans (except to the extent alreadyincluded in the determination of the applicable Adjusted LIBOR Rate forLIBOR Loans), or there shall be a reduction in the amount received or receivableby such Lender, then such Lender shall, promptly after determining the existenceor amount of any such increased costs for which such Lender seeks paymenthereunder, give Borrowers notice thereof (which notice shall set forth inreasonable detail the basis for the calculation of such increased cost orreduction in amount) and Borrowers shall from time to time, upon written noticefrom and demand by such Lender (with a copy of such notice and demand toAgent), pay to Agent for the account of such Lender, within 5 Business Daysafter the date specified in such notice and demand, an additional amountsufficient to indemnify such Lender against any such increased costs which wereincurred by such Lender. A certificate as to the amount of such increased cost,submitted to Borrowers by such Lender, shall be final, conclusive andbinding for all purposes, absent manifest error. 

     If any Lender shall adviseAgent at any time that, because of the circumstances described hereinabove inthis **Section 2.7** or any other circumstances arising after the date ofthis Agreement affecting such Lender or the London interbank market or suchLender’s or Bank’s position in such market, the Adjusted LIBORRate, as determined by Agent, will not adequately and fairly reflect thecost to such Lender of funding LIBOR Loans, then, and in any such event: 

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(i)      Agent shall forthwith give notice (by telephone confirmed in writing) to Borrowers and Lenders of         such event;
(ii)      Borrowers’ rightto request and such Lender’s obligation to make LIBOR Loans shall beimmediately suspended and Borrowers’ right to continue a LIBOR Loan as suchbeyond the then applicable Interest Period shall also be suspended, until eachcondition giving rise to such suspension no longer exists; and 

(iii)      such Lender shallmake a Base Rate Loan as part of the requested Borrowing of LIBOR Loans, whichBase Rate Loan shall, for all purposes, be considered part of such Borrowing. 

For purposes of this**Section 2.7**, all references to a Lender shall be deemed to include anybank holding company or bank parent of such Lender. 

**2.8.     ****CapitalAdequacy.**     If any Lender determines that after the date hereof (a) theadoption of any Applicable Law regarding capital requirements for banks or bankholding companies or the subsidiaries thereof, (b) any change in theinterpretation or administration of any such Applicable Law by any GovernmentalAuthority, central bank, or comparable agency charged with the interpretation oradministration thereof, or (c) compliance by such Lender or its holding companywith any request or directive of any such Governmental Authority, centralbank or comparable agency regarding capital adequacy (whether or not having theforce of law), has the effect of reducing the return on such Lender’scapital to a level below that which such Lender could have achieved (taking intoconsideration such Lender’s and its holding company’s policies withrespect to capital adequacy immediately before such adoption, change orcompliance and assuming that such Lender’s capital was fully utilized priorto such adoption, change or compliance) but for such adoption, change orcompliance as a consequence of such Lender’s commitment to make the Loanspursuant hereto by any amount deemed by such Lender to be material: 

(i)      Agent shall promptly,after its receipt of a certificate from such Lender setting forth suchLender’s determination of such occurrence, give notice thereof to Borrowers(and to the extent requested by Borrowers, provide Borrowers with a copy of suchcertificate) and Lenders; and 

(ii)      Borrowers shall pay toAgent, for the account of such Lender, as an additional fee from time to time,**on demand**, such amount as such Lender certifies to be the amountreasonably calculated to compensate such Lender for such reduction. 

     A certificate of suchLender claiming entitlement to compensation as set forth above will beconclusive in the absence of manifest error. Such certificate will set forth thenature of the occurrence giving rise to such compensation, the additional amountor amounts to be paid to such Lender (including the basis for such Lender’sdetermination of such amount), and the method by which such amounts weredetermined. In determining such amount, such Lender may use any reasonableaveraging and attribution method. For purposes of this **Section 2.8**all references to a Lender shall be deemed to include any bank holding companyor bank parent of such Lender. 

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**2.9.**      **FundingLosses.**      If for any reason (other than due to a default by a Lender or asa result of a Lender’s refusal to honor a LIBOR Loan request due tocircumstances described in **Section 2.6** or **2.7** hereof) a Borrowingof, or conversion to or continuation of, LIBOR Loans does not occur on the datespecified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), or if any repayment (including anyconversions pursuant to **Section 2.1.2** hereof) of any of its LIBOR Loansoccurs on a date that is not the last day of an Interest Period applicablethereto, or if for any reason Borrowers default in their obligation to repayLIBOR Loans when required by the terms of this Agreement, then Borrowersshall pay to Agent, for the ratable benefit of the affected Lenders, within10 days after Agent’s or an affected Lender’s demand therefor, anamount equal to all losses, expenses and liabilities (including any loss,expense or liability incurred by reason of the liquidation or reemployment ofdeposits or other funds required by the affected Lenders to fund its LIBORLoans, but excluding loss of anticipated profits) which the affected Lenders maysustain as a result thereof. Borrowers shall pay such amount upon presentationby Agent or the affected Lender of a statement setting forth the amount andAgent’s or the affected Lender’s calculation of the amount owing byBorrowers pursuant hereto, which statement shall be deemed true and correctabsent manifest error. For purposes of this **Section 2.9**, all referencesto a Lender shall be deemed to include any bank holding company or bankparent of such Lender. 

**2.10.**      **MaximumInterest.**      Regardless of any provision contained in any of the LoanDocuments, in no contingency or event whatsoever shall the aggregate of allamounts that are contracted for, charged or received by Agent and Lenderspursuant to the terms of this Agreement or any of the other Loan Documents andthat are deemed interest under Applicable Law exceed the highest ratepermissible under any Applicable Law. No agreements, conditions, provisions orstipulations contained in this Agreement or any of the other Loan Documents orthe exercise by Agent of the right to accelerate the payment or the maturity ofall or any portion of the Obligations, or the exercise of any option whatsoevercontained in any of the Loan Documents, or the prepayment by Borrowers of any ofthe Obligations, or the occurrence of any contingency whatsoever, shall entitleAgent or any Lender to charge or receive in any event, interest or any charges,amounts, premiums or fees deemed interest by Applicable Law (such interest,charges, amounts, premiums and fees referred to herein collectively as“Interest”) in excess of the Maximum Rate and in no event shallBorrowers be obligated to pay Interest exceeding such Maximum Rate, andall agreements, conditions or stipulations, if any, which may in anyevent or contingency whatsoever operate to bind, obligate or compel Borrowers topay Interest exceeding the Maximum Rate shall be without binding force oreffect, at law or in equity, to the extent only of the excess of Interest oversuch Maximum Rate. If any Interest is charged or received in excess ofthe Maximum Rate (“Excess”), each Borrower acknowledges andstipulates that any such charge or receipt shall be the result of anaccident and bona fide error, and such Excess, to the extent received, shall beapplied first to reduce Revolver Loans constituting Base Rate Loans, then to theother Obligations, and the balance, if any, returned to Borrowers, it being theintent of the parties hereto not to enter into a usurious or otherwise illegalrelationship. The right to accelerate the maturity of any of theObligations does not include the right to accelerate any Interest that has nototherwise accrued on the date of such acceleration, and Agent and Lenders do notintend to collect any unearned Interest in the event of any such acceleration.Borrowers recognize that, with fluctuations in the rates of interest set forthin **Section 2.1.1** of this Agreement or in any Note, and the MaximumRate, such an unintentional result could inadvertently occur. All moniespaid to Agent or any Lender hereunder or under any of the other Loan Documents,whether at maturity or by prepayment, shall be subject to any rebate of unearnedInterest as and to the extent required by Applicable Law. By the execution ofthis Agreement, each Borrower covenants that (i) the credit or return of anyExcess shall constitute the acceptance by Borrowers of such Excess, and (ii)such Borrower shall not seek or pursue any other remedy, legal orequitable, against Agent or any Lender, based in whole or in part uponcontracting for, charging or receiving any Interest in excess of the MaximumRate. For the purpose of determining whether or not any Excess has beencontracted for, charged or received by Agent or any Lender, all Interest at anytime contracted for, charged or received from Borrowers in connection with anyof the Loan Documents shall, to the extent permitted by Applicable Law, beamortized, prorated, allocated and spread in equal parts throughout the fullterm of the Obligations. Borrowers, Agent and Lenders shall, to the maximumextent permitted under Applicable Law, (i) characterize any non-principalpayment as an expense, fee or premium rather than as Interest and(ii) exclude voluntary prepayments and the effects thereof. The provisionsof this **Section 2.10** shall be deemed to be incorporated into everyLoan Document (whether or not any provision of this Section isreferred to therein). All such Loan Documents and communications relatingto any Interest owed by Borrowers and all figures set forth therein shall, forthe sole purpose of computing the extent of Obligations, be automaticallyrecomputed by Borrowers, and by any court considering the same, to give effectto the adjustments or credits required by this **Section 2.10**. 

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SECTION      3.     LOAN ADMINISTRATION
**3.1.          Manner of Borrowing and Funding  Revolver Loans.**  Borrowings  under the Commitments  established  pursuant to **Section1.1** hereof shall be made and funded as follows:
      3.1.1.      Notice of Borrowing.
(i)      Whenever a Borrowerdesires to make a Borrowing under **Section 1.1** of this Agreement(other than a Borrowing resulting from a conversion or continuation pursuant to**Section 2.1.2**), such Borrower shall give Agent prior written notice (ortelephonic notice promptly confirmed in writing) of such Borrowing request (a“Notice of Borrowing”), which shall be in the form of**Exhibit D** annexed hereto and signed by an authorized officer of suchBorrower. Such Notice of Borrowing shall be given by a Borrower nolater than 11:00 a.m. at the office of Agent designated by Agent from time totime (a) on the Business Day of the requested funding date ofsuch Borrowing, in the case of Base Rate Loans, and (b) at least 3 BusinessDays prior to the requested funding date of such Borrowing, in the case ofLIBOR Loans. Notices received after 11:00 a.m. shall be deemed received on thenext Business Day. The Revolver Loans made by each Lender on the Closing Dateshall be in excess of $250,000 and shall be made as Base Rate Loans andthereafter may be made or continued as or converted into Base Rate Loans orLIBOR Loans. Each Notice of Borrowing (or telephonic notice thereof)shall be irrevocable and shall specify (a) the principal amount of theBorrowing, (b) the date of Borrowing (which shall be a Business Day),(c) whether the Borrowing is to consist of Base Rate Loans or LIBOR Loans,(d) in the case of LIBOR Loans, the duration of the Interest Period to beapplicable thereto, and (e) the account of such Borrower to which theproceeds of such Borrowing are to be disbursed. Borrowers may not request anyLIBOR Loans if a Default or Event of Default exists. 

(ii)      The becoming due ofany amount required to be paid under this Agreement or any of the other LoanDocuments with respect to the Obligations (whether as principal, accruedinterest, fees or other charges***,***** including the repayment ofany LC Obligations) shall be deemed irrevocably to be a request (without anyrequirement for the submission of a Notice of Borrowing) for Revolver Loans onthe due date of, and in an aggregate amount required to pay, such Obligations,and the proceeds of such Revolver Loans may be disbursed by way of directpayment of the relevant Obligation and shall bear interest as Base RateLoans. Neither Agent nor any Lender shall have any obligation to Borrowers tohonor any deemed request for a Revolver Loan after the CommitmentTermination Date, when an Out-of-Formula Condition exists or would resulttherefrom, or when any condition precedent set forth in **Section 10** hereofis not satisfied, but may do so in their discretion and without regard to theexistence of, and without being deemed to have waived, any Default or Event ofDefault and regardless of whether such Revolver Loan is funded after theCommitment Termination Date. 

(iii)      If Borrowers elect toestablish a Controlled Disbursement Account with Bank or any Affiliate of Bank,then the presentation for payment by Bank of any check or other item of paymentdrawn on the Controlled Disbursement Account at a time when there areinsufficient funds in such account to cover such check shall be deemedirrevocably to be a request (without any requirement for the submission ofa Notice of Borrowing) for Revolver Loans on the date of such presentationand in any amount equal to the aggregate amount of the items presented forpayment, and the proceeds of such Revolver Loans may be disbursed to theControlled Disbursement Account and shall bear interest as Base Rate Loans.Neither Agent nor any Lender shall have any obligation to honor any deemedrequest for a Revolver Loan after the Commitment Termination Date or when anOut-of-Formula Condition exists or would result therefrom or when any conditionprecedent in **Section 10** hereof is not satisfied, but may do so in itsdiscretion and without regard to the existence of, and without being deemed tohave waived, any Default or Event of Default and regardless of whethersuch Revolver Loan is funded after the Commitment Termination Date. 

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(iv)      As an accommodation toBorrowers, Agent and Lenders may permit telephonic requests for Borrowings andelectronic transmittal of instructions, authorizations, agreements or reports toAgent by a Borrower; provided, however, that such Borrower shallconfirm each such telephonic request for a Borrowing of LIBOR Loans bydelivery of the required Notice of Borrowing to Agent by facsimiletransmission promptly, but in no event later than 5:00 p.m. on the sameday. Neither Agent nor any Lender shall have any liability to Borrowers for anyloss or damage suffered by a Borrower as a result of Agent’s or anyLender’s honoring of any requests, execution of any instructions,authorizations or agreements or reliance on any reports communicated to ittelephonically or electronically and purporting to have been sent to Agent orLenders by a Borrower and neither Agent nor any Lender shall have any duty toverify the origin of any such communication or the identity or authority of thePerson sending it. 

     3.1.2.      Fundings byLenders.      Subject to its receipt of notice from Agent of a Notice ofBorrowing as provided in **Section 3.1.1**(i) (except in the case of a deemedrequest by a Borrower for a Revolver Loan as provided in **Sections 3.1.1(ii)or (iii)**or **3.1.3(ii)** hereof, in which event no Notice of Borrowingneed be submitted), each Lender shall timely honor its Revolver Commitment byfunding its Pro Rata share of each Borrowing of Revolver Loans that isproperly requested by a Borrower and that Borrowers are entitled to receiveunder the Loan Agreement. Agent shall endeavor to notify Lenders of each Noticeof Borrowing (or deemed request for a Borrowing pursuant to **Section3.1.1(ii)****or (iii)** hereof), by 12:00 noon on the proposed fundingdate (in the case of Base Rate Loans) or by 3:00 p.m. at least 2 BusinessDays before the proposed funding date (in the case of LIBOR Loans). Each Lendershall deposit with Agent an amount equal to its Pro Rata share of the Borrowingrequested or deemed requested by Borrowers at Agent’s designated bank inimmediately available funds not later than 2:00 p.m. on the date of fundingof such Borrowing, unless Agent’s notice to Lenders is received after 12:00noon on the proposed funding date of a Base Rate Loan, in which event Lendersshall deposit with Agent their respective Pro Rata shares of the requestedBorrowing on or before 11:00 a.m. of the next Business Day. Subject to itsreceipt of such amounts from Lenders, Agent shall make the proceeds of theRevolver Loans received by it available to Borrowers by disbursing suchproceeds in accordance with Borrowers’ disbursement instructions set forthby Borrowers in the applicable Notice of Borrowing. Neither Agent nor any Lendershall have any liability on account of any delay by any bank or other depositoryinstitution in treating the proceeds of any Revolver Loan as collected funds orany delay in receipt, or any loss, of funds that constitute a Revolver Loan, thewire transfer of which was initiated by Agent in accordance withwiring instructions provided to Agent. Unless Agent shall have beennotified in writing by a Lender prior to the proposed time of fundingthat such Lender does not intend to deposit with Agent an amount equal suchLender’s Pro Rata share of the requested Borrowing (or deemed request for aBorrowing pursuant to **Section 3.1.1(ii)****or (iii)** hereof),Agent may assume that such Lender has deposited or promptly willdeposit its share with Agent and Agent may in its discretion disbursea corresponding amount to a Borrower on the applicable funding date. If aLender’s Pro Rata share of such Borrowing is not in factdeposited with Agent, then, if Agent has disbursed to a Borrower an amountcorresponding to such share, then such Lender agrees to pay, and in additionBorrowers agree to repay, to Agent forthwith on demand such correspondingamount, together with interest thereon, for each day from the date suchamount is disbursed by Agent to or for the benefit of a Borrower until the datesuch amount is paid or repaid to Agent, (a) in the case of a Borrower, at theinterest rate applicable to such Borrowing and (b) in the case ofsuch Lender, at the Federal Funds Rate. If such Lender repays to Agent suchcorresponding amount, such amount so repaid shall constitute a RevolverLoan, and if both such Lender and Borrowers shall have repaidsuch corresponding amount, Agent shall promptly return to Borrowerssuch corresponding amount in same day funds. A notice of Agent submitted toany Lender with respect to amounts owing underthis **Section 3.1.2** shall be conclusive, absent manifest error. 

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      3.1.3.        Settlement and Settlement Loans.
(i)     In order to facilitatethe administration of the Revolver Loans under this Agreement, Lendersagree (which agreement shall not be for the benefit of or enforceable byBorrowers) that settlement among them with respect to the Revolver Loans maytake place on a periodic basis on dates determined from time to time by Agent(each a “Settlement Date”), which may occur before or after theoccurrence or during the continuance of a Default or Event of Default andwhether or not all of the conditions set forth in **Section 10** of thisAgreement have been met. On each Settlement Date, payment shall be made byor to each Lender in the manner provided herein and in accordance with theSettlement Report delivered by Agent to Lenders with respect to suchSettlement Date so that, as of each Settlement Date and after giving effect tothe transaction to take place on such Settlement Date, each Lender shallhold its Pro Rata share of all Revolver Loans and participations inLC Outstandings then outstanding. Agent shall request settlement with theLenders on a basis not less frequently than once every 5 Business Days. 

(ii)      Between SettlementDates, Agent may request Fleet to advance, and Fleet may, but shall in noevent be obligated to, advance to Borrowers out of Fleet’s own fundsthe entire principal amount of any Borrowing of Revolver Loans that areBase Rate Loans requested or deemed requested pursuant to this Agreement (anysuch Revolver Loan funded exclusively by Fleet being referred to as a“Settlement Loan”). Each Settlement Loan shall constitute aRevolver Loan hereunder and shall be subject to all of the terms, conditions andsecurity applicable to other Revolver Loans, except that all paymentsthereon shall be payable to Fleet solely for its own account. The obligation ofBorrowers to repay such Settlement Loans to Fleet shall be evidenced bythe Settlement Note. Agent shall not request Fleet to make anySettlement Loan if (A) Agent shall have received written notice from a Borroweror any Lender that one or more of the applicable conditions precedent set forthin **Section 10** hereof will not be satisfied on the requested funding datefor the applicable Borrowing or (B) the requested Borrowing would exceedthe amount of Availability on the funding date or would cause the thenoutstanding principal balance of all Settlement Loans to exceed $10,000,000.Fleet shall not be required to determine whether the applicable conditionsprecedent set forth in **Section 10** hereof have been satisfied or therequested Borrowing would exceed the amount of Availability on the funding dateapplicable thereto prior to making, in its sole discretion, any Settlement Loan.On each Settlement Date, or, if earlier, upon demand by Agent for paymentthereof, the then outstanding Settlement Loans shall be immediately due andpayable. As provided in **Section 3.1.1(ii)**, Borrowers shall be deemedto have requested (without the necessity of submitting any Notice ofBorrowing) Base Rate Revolver Loans to be made on each Settlement Date inthe amount of all outstanding Settlement Loans and to have Agent cause theproceeds of such Revolver Loans to be applied to the repayment of suchSettlement Loans and interest accrued thereon. Agent shall notify the Lenders ofthe outstanding balance of Revolver Loans prior to 11:00 a.m. on eachSettlement Date and each Lender (other than Fleet) shall deposit with Agent(without setoff, counterclaim or reduction of any kind) an amount equal toits Pro Rata share of the amount of Revolver Loans deemed requested inimmediately available funds not later than 2:00 p.m. on such Settlement Date.Each Lender’s obligation to make such deposit with Agent shall be absoluteand unconditional and without regard to whether any of the conditionsprecedent set forth in **Section 10** hereof are satisfied, anyOut-of-Formula Condition exists or the Commitment Termination Date has occurred.If as the result of the commencement by or against a Borrower of any InsolvencyProceeding or otherwise any Settlement Loan may not be repaid by the funding byLenders of Revolver Loans, then each Lender (other than Fleet) shall be deemedto have purchased a participating interest in any unpaid Settlement Loan in anamount equal to such Lender’s Pro Rata share of such Settlement Loanand shall transfer to Fleet, in immediately available funds not later than the2nd Business Day after Fleet’s request therefor, the amount of suchLender’s participation. The proceeds of Settlement Loans may be used solelyfor purposes for which Revolver Loans generally may be used in accordance with**Section 1.1.3** hereof. If any amounts received by Fleet in respect of anySettlement Loans are later required to be returned or repaid by Fleet toBorrowers or any other Obligor or their respective representatives orsuccessors-in-interest, whether by court order, settlement or otherwise, theother Lenders shall, upon demand by Fleet with notice to Agent, pay to Agent forthe account of Fleet, an amount equal to each other Lender’s Pro Rata shareof all such amounts required to be returned by Fleet. 

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     3.1.4.      DisbursementAuthorization.      Each Borrower hereby irrevocably authorizes Agent to disbursethe proceeds of each Revolver Loan requested, or deemed to be requested pursuantto **Section 3.1.1** or **Section 3.1.3(ii)**, as follows: (i) theproceeds of each Revolver Loan requested under **Section 3.1.1(i)**shall be disbursed by Agent in accordance with the terms of the writtendisbursement letter from Borrowers in the case of the initial Borrowing, and, inthe case of each subsequent Borrowing, by wire transfer to such bankaccount as may be agreed upon by Borrowers and Agent from time to time orelsewhere if pursuant to a written direction from Borrowers; and (ii) theproceeds of each Revolver Loan requested under **Section 3.1.1(ii)** or**Section 3.1.3(ii)**shall be disbursed by Agent by way of direct payment ofthe relevant interest or other Obligation. 
**3.2.**     **Defaulting Lender.**      If any Lender shall, at any time, fail to makeany payment to Agent or Fleet that is required hereunder, Agent may, but shallnot be required to, retain payments that would otherwise be made to suchdefaulting Lender hereunder and apply such payments to such defaultingLender’s defaulted obligations hereunder, at such time, and in such order,as Agent may elect in its sole discretion. With respect to the payment ofany funds from Agent to a Lender or from a Lender to Agent, the party failing tomake the full payment when due pursuant to the terms hereof shall,upon demand by the other party, pay such amount together with interest onsuch amount at the Federal Funds Rate. The failure of any Lender to fundits portion of any Revolver Loan or payment in respect of an LC Obligationshall not relieve any other Lender of its obligation, if any, to fundits portion of the Revolver Loan or payment in respect of an LC Obligationon the date of Borrowing, but no Lender shall be responsible for the failure ofany other Lender to make any Revolver Loan or payment in respect of an LCObligation to be made by such Lender on the date of any Borrowing. Solely asamong the Lenders and solely for purposes of voting or consenting tomatters with respect to any of the Loan Documents, Collateral or anyObligations and determining a defaulting Lender’s Pro Rata share ofpayments and proceeds of Collateral pending such defaulting Lender’s cureof its defaults hereunder, a defaulting Lender shall not be deemed to be a“Lender” and such Lender’s Commitment shall be deemed to bezero (0). The provisions of this **Section 3.2** shall be solelyfor the benefit of Agent and Lenders and may not be enforced by Borrowers. 
3.3.      SpecialProvisions Governing LIBOR Loans.
      3.3.1.        Number of LIBOR  Loans.       In no event may the  number of LIBOR  Loans  outstanding  at any time to any Lenderexceed 6.
     3.3.2      MinimumAmounts.     Each Borrowing of LIBOR Loans pursuant to**Section 3.1.1(i)**, and each continuation of or conversion to LIBORLoans pursuant to **Section 2.1.2**hereof, shall be in a minimum amount of$1,000,000 and integral multiples of $100,000 in excess of that amount. 

     3.3.3      LIBOR LendingOffice.      Each Lender’s initial LIBOR Lending Office is set forthopposite its name on the signature pages hereof. Each Lender shall have theright at any time and from time to time to designate a different office ofitself or of any Affiliate as such Lender’s LIBOR Lending Office, and totransfer any outstanding LIBOR Loans to such LIBOR Lending Office. No suchdesignation or transfer shall result in any liability on the part of Borrowersfor increased costs or expenses resulting solely from such designation ortransfer. Increased costs for expenses resulting from a change in Applicable Lawoccurring subsequent to any such designation or transfer shall be deemednot to result solely from such designation or transfer. 

     3.3.4     Funding of LIBORLoans.      Each Lender may, if it so elects, fulfill its obligation to make,continue or convert LIBOR Loans hereunder by causing one of its foreign branchesor Affiliates (or an international banking facility created by such Lender)to make or maintain such LIBOR Loans; provided, however, thatsuch LIBOR Loans shall nonetheless be deemed to have been made and to be held bysuch Lender, and the obligation of Borrowers to repay such LIBOR Loans shallnevertheless be to such Lender for the account of such foreign branch,Affiliate or international banking facility. The calculation of all amountspayable to Lender under **Section 2.7** and **2.9** shall be made as ifeach Lender had actually funded or committed to fund its LIBOR Loan through thepurchase of an underlying deposit in an amount equal to the amount of such LIBORLoan and having a maturity comparable to the relevant Interest Period for suchLIBOR Loans; provided, however, each Lender may fund its LIBORLoans in any manner it deems fit and the foregoing presumption shall be utilizedonly for the calculation of amounts payable under **Section 2.7** and**Section 2.9**. 

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**3.4.     ****Borrowers’ Representative.**      Each Borrower hereby irrevocablyappoints Neff and Neff agrees to act under this Agreement, as the agent andrepresentative of itself and each other Borrower for all purposes under thisAgreement, including requesting Borrowings, selecting whether any Loan orportion thereof is to bear interest as a Base Rate Loan or a LIBOR Loan, andreceiving account statements and other notices and communications to Borrowers(or any of them) from Agent. Agent may rely, and shall be fully protected inrelying, on any Notice of Borrowing, Notice of Conversion/Continuation,disbursement instructions, reports, information or any other notice orcommunication made or given by Neff, whether in its own name, on behalf of anyBorrower or on behalf of “the Borrowers,” and Agent shall have noobligation to make any inquiry or request any confirmation from or on behalf ofany other Borrower as to the binding effect on such Borrower of any suchrequest, instruction, report, information, notice or communication, nor shallthe joint and several character of Borrowers’ liability for the Obligationsbe affected, provided that the provisions of this **Section 3.4** shall notbe construed so as to preclude any Borrower from directly requesting Borrowingsor taking other actions permitted to be taken by “a Borrower”hereunder. Agent may maintain a single Loan Account in the name of “NeffCorp.” hereunder, and each Borrower expressly agrees to such arrangementand confirms that such arrangement shall have no effect on the joint and severalcharacter of such Borrower’s liability for the Obligations. 

**3.5.**      **All Loansto Constitute One Obligation.**      The Loans shall constitute one generalobligation of Borrowers and (unless otherwise expressly provided in any SecurityDocument) shall be secured by Agent’s Lien upon all of the Collateral;provided, however, that Agent and each Lender shall be deemed to bea creditor of each Borrower and the holder of a separate claim against eachBorrower to the extent of any Obligations owed by a Borrower to Agent orsuch Lender. SECTION   4.     PAYMENTS
**4.1.     ****GeneralPayment Provisions.**      All payments (including all prepayments) ofprincipal of and interest on the Loans, LC Obligations****and otherObligations that are payable to Agent or any Lender shall be made toAgent in Dollars without any offset or counterclaim and free and clear of(and without deduction for) any present or future Taxes, and, with respectto payments made other than by application of balances in the Payment Account,in immediately available funds not later than 12:00 noon on the due date(and payment made after such time on the due date to be deemed to have beenmade on the next succeeding Business Day). All payments received by Agent shallbe distributed by Agent in accordance with **Section 4.6** hereof, subject tothe rights of offset that Agent may have as to amounts otherwise to be remittedto a particular Lender by reason of amounts due Agent from such Lender under anyof the Loan Documents. 

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4.2.      Repaymentof Revolver Loans.
     4.2.1.     Payment of Principal.       The outstanding  principal amounts with respect to the Revolver Loans shall be repaidas follows:
(i)      Any portion of theRevolver Loans consisting of the principal amount of Base Rate Loans shallbe paid by Borrowers to Agent, for the Pro Rata benefit of Lenders(or, in the case of Settlement Loans, for the sole benefit ofFleet) unless timely converted to a LIBOR Loan in accordance with thisAgreement, immediately upon (a) each receipt by Agent, any Lender or aBorrower of any proceeds of any of the Accounts or Inventory, to the extent ofsuch proceeds, (b) the Commitment Termination Date, and (c) in the case ofSettlement Loans, the earlier of Fleet’s demand for payment or on eachSettlement Date with respect to all Settlement Loans outstanding on such date. 

(ii)      Any portion of theRevolver Loans consisting of the principal amount of LIBOR Loans shall be paidby Borrowers to Agent, for the Pro Rata benefit of Lenders, unless converted toa Base Rate Loan or continued as a LIBOR Loan in accordance with the terms ofthis Agreement, immediately upon (a) the last day of the Interest Periodapplicable thereto and (b) the Commitment Termination Date. In no eventshall Borrowers be authorized to make a voluntary prepayment with respect to anyRevolver Loan outstanding as a LIBOR Loan prior to the last day of the InterestPeriod applicable thereto unless (x) otherwise agreed in writing by Agent, orBorrowers are otherwise expressly authorized or required by any other provisionof this Agreement to pay any LIBOR Loan outstanding on a date other than thelast day of the Interest Period applicable thereto, and (y) Borrowers pay toAgent, for the Pro Rata benefit of Lenders, concurrently with any prepayment ofa LIBOR Loan, any amount due Agent and Lenders under **Section 2.9**hereofas a consequence of such prepayment. 

(iii)      Notwithstandinganything to the contrary contained elsewhere in this Agreement, if anOut-of-Formula Condition shall exist, Borrowers shall, on Agent’s demand,repay the outstanding Revolver Loans that are Base Rate Loans in an amountsufficient to reduce the aggregate unpaid principal amount of all Revolver Loansby an amount equal to such excess; and, if such payment of Base Rate Loansis not sufficient to eliminate the Out-of-Formula Condition, then Borrowersshall immediately either (a) deposit with Agent, for the Pro Rata benefitof Lenders, for application to any outstanding Revolver Loans bearing interestas LIBOR Loans as the same become due and payable (whether at the end of theapplicable Interest Periods or on the Commitment Termination Date) cash inan amount sufficient to eliminate such Out-of-Formula Condition, to be held byAgent pending disbursement of same to Lenders, but subject toAgent’s Lien thereon and rights of offset with respect thereto, or (b) paythe Revolver Loans outstanding as LIBOR Loans to the extent necessary toeliminate such Out-of-Formula Condition and also pay to Agent for thePro Rata benefit of Lenders any and all amounts required by **Section2.9** hereof to be paid by reason of the prepayment ofany LIBOR Loan prior to the last day of the Interest Period applicablethereto. 

     4.2.2.      Payment ofInterest.      Interest accrued on the Revolver Loans shall be due and payable on(i) the first calendar day of each month (for the immediately preceding month),computed through the last calendar day of the preceding month, with respect toany Revolver Loan (whether a Base Rate Loan or LIBOR Loan) and (ii)the last day of the applicable Interest Period in the case ofa LIBOR Loan. Accrued interest shall also be paid by Borrowers onthe Commitment Termination Date. With respect to any Base Rate Loanconverted into a LIBOR Loan pursuant to**Section 2.1.2** on a day wheninterest would not otherwise have been payable with respect to such Base RateLoan, accrued interest to the date of such conversion on the amount of suchBase Rate Loan so converted shall be paid on the conversion date. 
4.3.      Reserved.
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**4.4.**      **Paymentof Other Obligations.**      The balance of the Obligations requiring thepayment of money, including the LC Obligations and Extraordinary Expensesincurred by Agent or any Lender, shall be repaid by Borrowers to Agent forallocation among Agent and Lenders as provided in the Loan Documents,or, if no date of payment is otherwise specified in the Loan Documents, **ondemand**. 

**4.5.**     **Marshaling; Payments Set Aside.**      None of Agent or any Lender shallbe under any obligation to marshal any assets in favor of a Borrower or anyother Obligor or against or in payment of any or all ofthe Obligations. To the extent that Borrowers make a payment or payments toAgent or Lenders or any of such Persons receives payment from the proceedsof any Collateral or exercises its right of setoff, and such payment orpayments or the proceeds of such enforcement or setoff or any part thereof aresubsequently invalidated, declared to be fraudulent or preferential, set asideor required to be repaid to a trustee, receiver or any other Person, then to theextent of any loss by Agent or Lenders, the Obligations or part thereoforiginally intended to be satisfied, and all Liens, rights and remediestherefor, shall be revived and continued in full force and effect as if suchpayment or proceeds had not been made or received and any such enforcement orsetoff had not occurred. The provisions of the immediately precedingsentence of this **Section 4.5** shall survive any termination of theCommitments and payment in full of the Obligations. 
4.6.          Agent's Allocation of Payments and Collections.
     4.6.1.      Allocation ofPayments.      Notwithstanding anything herein to the contrary, all monies to beapplied to the Obligations, whether such monies represent voluntary ormandatory payments or prepayments by one or more Obligor or are receivedpursuant to demand for payment or realized from any disposition of Collateral,shall be allocated among Agent and such of the Lenders as are entitledthereto (and, with respect to monies allocated to Lenders, on a Pro Ratabasis unless otherwise provided herein): (i) first, to Agent to payprincipal and accrued interest on any portion of the Revolver Loans which Agentmay have advanced on behalf of any Lender and for which Agent has notbeen reimbursed by such Lender or Borrowers; (ii) second, to Fleet to pay theprincipal and accrued interest on any portion of the Settlement Loansoutstanding, to be shared with Lenders that have acquired a participatinginterest in such Settlement Loans; (iii) third, to the extent that Fleet has notreceived from any Participating Lender a payment as required by **Section1.3.2** hereof, to Fleet to pay all amounts owing to Fleet pursuant to**Section 1.3.2(ii)** hereof; (iv) fourth, to Agent to paythe amount of Extraordinary Expenses and amounts owing to Agent pursuant to**Section 14.10** hereof that have not been reimbursed to Agent by Borrowersor Lenders, together with interest accrued thereon at the rate applicable toRevolver Loans that are Base Rate Loans; (v) fifth, to Agent to pay anyIndemnified Amount that has not been paid to Agent by Obligors or Lenders,together with interest accrued thereon at the rate applicable to Revolver Loansthat are Base Rate Loans; (vi) sixth, to Agent and Syndication Agent to pay anyfees due and payable to Agent and Syndication Agent with respect to thisAgreement or any of the other Loan Documents; (vii) seventh, to Lenders forany Indemnified Amount that they have paid to Agent and any ExtraordinaryExpenses that they have reimbursed to Agent or themselves incurred, to theextent that Lenders have not been reimbursed by Obligors therefor;(viii) eighth, to Fleet to pay principal and interest with respect toLC Obligations (or to the extent any of the LC Obligations are contingent and anEvent of Default then exists, deposited in the Cash Collateral Account toprovide security for the payment of the LC Obligations), which paymentshall be shared with the Participating Lenders in accordance with **Section1.3.2(iii)** hereof; (ix) ninth, to Agent and Lenders in payment of theunpaid principal and accrued interest in respect of the Revolver Loans andany other Obligations (other than the Obligations described in clause (x) below)then outstanding to be shared among Agent and Lenders ratably in proportion totheir respective shares of such Revolver Loans and other Obligations (other thanthe Obligations described in clause (x) below), or on such other basis as may beagreed upon in writing by Agent and Lenders (which agreement or agreements maybe entered into without notice to or the consent or approval of Borrowers); and(x) tenth, to the Secured Parties in payment of any Banking Relationship Debt,to be shared among such Secured Parties ratably. The allocations set forth inthis **Section 4.6** are solely to determine the rights and priorities ofAgent and Lenders as among themselves and may be changed by Agent and Lenderswithout notice to or the consent or approval of Borrowers or any other Person. 

     4.6.2.      ErroneousAllocation.      Agent shall not be liable for any allocation or distribution ofpayments made by it in good faith and, if any such allocation or distribution issubsequently determined to have been made in error, the sole recourse of anyLender to whom payment was due but not made shall be to recover from the otherLenders any payment in excess of the amount to which such other Lenders aredetermined to be entitled (and such other Lenders hereby agree to return to suchLender any such erroneous payments received by them). 

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**4.7.**     **Application of Payments and Collateral Proceeds.**      All Payment Itemsreceived by Agent by 12:00 noon, New York, New York time, on any Business Dayshall be deemed received on that Business Day. All Payment Items receivedby Agent after 12:00 noon, New York, New York time, on any Business Dayshall be deemed received on the following Business Day. Each Borrowerirrevocably waives the right to direct the application of any and all paymentsand Collateral proceeds at any time or times hereafter received by Agent or anyLender from or on behalf of such Borrower, and such Borrower does herebyirrevocably agree that Agent shall have the continuing exclusive right to applyand reapply any and all such payments and Collateral proceeds received at anytime or times hereafter by Agent or its agent against the Obligations, in suchmanner as Agent may deem advisable, notwithstanding any entry by Agent uponany of its books and records. If, as the result of Agent’s collectionof proceeds of Accounts and other Collateral as authorized by **Section7.2.6** a credit balance exists, such credit balance shall not accrueinterest in favor of Borrowers, but shall be available to Borrowers at any timeor times for so long as no Default or Event of Default exists. Lendersmay, at their option, offset such credit balance against any of theObligations upon and after the occurrence of an Event of Default. 
4.8.      LoanAccounts; the Register; Account Stated.
     4.8.1.      LoanAccounts.      Each Lender shall maintain in accordance with its usual andcustomary practices an account or accounts (a “Loan Account”)evidencing the Debt of Borrowers to such Lender resulting from each Loan owingto such Lender from time to time, including the amount of principal and interestpayable to such Lender from time to time hereunder and under each Note payableto such Lender. Any failure of a Lender to record in the Loan Account, or anyerror in doing so, shall not limit or otherwise affect the obligation ofBorrowers hereunder (or under any Note) to pay any amount owing hereunder tosuch Lender. 

     4.8.2.     The Register.     Agent shall maintain a register (the “Register”) which shall includea master account and a subsidiary account for each Lender and in whichaccounts (taken together) shall be recorded (i) the date and amount of eachBorrowing made hereunder, the Type of each Loan comprising such Borrowingand any Interest Period applicable thereto, (ii) the effective date and amountof each Assignment and Acceptance delivered to and accepted by it and theparties thereto, (iii) the amount of any principal or interest due andpayable or to become due and payable from Borrowers to each Lender hereunder orunder the Notes, and (iv) the amount of any sum received by Agent from Borrowersor any other Obligor and each Lender’s share thereof. The Registershall be available for inspection by Borrowers or any Lender at the officesof Agent at any reasonable time and from time to time upon reasonable priornotice. Any failure of Agent to record in the Register, or any error in doingso, shall not limit or otherwise affect the obligation of Borrowers hereunder(or under any Note) to pay any amount owing with respect to the Loans or providethe basis for any claim against Agent. 

     4.8.3.      EntriesBinding.      The entries made in the Register and each Loan Account shallconstitute rebuttably presumptive evidence of the information contained therein;provided, however, that if a copy of information contained inthe Register or any Loan Account is provided to any Person, or any Personinspects the Register or any Loan Account, at any time or from time to time,then the information contained in the Register or the Loan Account, asapplicable shall be conclusive and binding on such Person for all purposesabsent manifest error, unless such Person notifies Agent in writing within 30days after such Person’s receipt of such copy or such Person’sinspection of the Register or Loan Account of its intention to dispute theinformation contained therein. 

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**4.9.**      **Gross Upfor Taxes.**      If a Borrower shall be required by Applicable Law to withholdor deduct any Taxes from or in respect of any sum payable under this Agreementor any of the other Loan Documents, (a) Borrower shall promptly reimburseAgent or such Lender (as the case may be) in an amount equal to all requiredwithholding or deductions, so that Agent or such Lender (as the case may be)receives an amount equal to the sum it would have received had no suchwithholding or deductions been made, (b) such Borrower shall make suchwithholding or deductions, and (c) such Borrower shall pay the full amountwithheld or deducted to the relevant taxation authority or other authority inaccordance with Applicable Law. 

If any Borrower pays anyadditional amounts under this **Section 4.9** to a Lender and such Lenderdetermines in its sole discretion that it has actually received or realized inconnection therewith any refund or any reduction of, or credit against, its Taxliabilities in or with respect to the year in which the additional amount ispaid (a “Tax Benefit”), such Lender shall pay to such Borrower anamount which such Lender shall, in its sole discretion, determine is equal tothe net benefit which was obtained by such Lender in such year as a consequenceof such Tax Benefit; provided, that (i) any Lender may determine, in its solediscretion, whether to seek a Tax Benefit, (ii) any Taxes that are imposed on aLender as a result of disallowance or reduction (including through theexpiration of any tax credit carryover or carrryback of such Lender thatotherwise would not have expired) of any Tax Benefit with respect to which suchLender has made a payment to such Borrower pursuant to this **Section 4.9**shall be treated as a Tax for which such Borrower is obligated to indemnify suchLender pursuant to this **Section 4.9** without any exclusion or defenses and(iii) nothing in this **Section 4.9** shall require any Lender to discloseany confidential information to any Borrower (including, its tax returns). 

**4.10.**     **Withholding Tax Exemption.**      At least 5 Business Days prior to thefirst date on which interest or fees are payable hereunder for the account ofany Foreign Lender, such Foreign Lender agrees that it will deliver to Borrowersand Agent 2 duly completed copies of United States Internal Revenue Service FormW-8BEN or W-8ECI (or any subsequent replacement substitute or form therefor),certifying in either case that such Lender is entitled to receive paymentunder this Agreement and its Note without deduction or withholding of any UnitedStates federal income taxes. Each Foreign Lender which so delivers a FormW-8BEN or W-8ECI further undertakes to deliver to Borrowers and Agent 2additional copies of such form (or a successor form) on or before the date thatsuch form expires (currently, 3 successive calendar years for Form W-8BENand one calendar year for Form W-8ECI) or becomes obsolete or after theoccurrence of any event requiring a change in the most form so delivered by it,and such amendments thereto or extensions or renewals thereof as may bereasonably requested by Borrowers or Agent, in each case, certifying thatsuch Foreign Lender is entitled to receive payments under this Agreementand its Notes without deduction or withholding of any United States federalincome taxes, unless an event (including any change in treaty, law orregulation) has occurred prior to the date on which any such delivery wouldotherwise be required that renders all such forms inapplicable or that wouldprevent such Foreign Lender from duly completing and delivering any such formwith respect to it and such Lender advises Borrowers and Agent that it is notcapable of receiving payments without any deduction or withholding of UnitedStates federal income taxes. Notwithstanding anything to the contrary containedin **Section 4.10**, (i) each Borrower shall be entitled to, to the extent itis required to do so by law, to deduct or withhold income or similar taxesimposed by the United States (or any political subdivision or taxing authoritythereof or therein) from interest, fees or other amounts payable hereunder forthe account of any Lender which is not a United States person (as such term isdefined in Section 7701(a)(30) of the Code) for U.S. federal income tax purposesto the extent that such Lender has not provided to such Borrower U.S.Internal Revenue Service Forms or certificates that establish a completeexemption from such deduction or withholding and (ii) no Borrower shall beobligated pursuant to **Section 4.10** hereof to gross-up payments to be madeto a Lender or reimburse a Lender in respect of income or similar taxes imposedby the United States if (x) such Lender has not provided to the Borrowers theInternal Revenue Service Forms or certificates required to be provided to theBorrowers pursuant to this **Section 4.10**or (y) in the case of a payment,other than interest, to a Lender to the extent that such forms or certificatesdo not establish a complete exemption from withholding of such taxes, until suchtime as such Lender has provided the appropriate forms and certificates toBorrowers. 

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   4.11.         Nature and Extent of Each Borrower's Liability.
     4.11.1.      Joint andSeveral Liability.      Each Borrower shall be liable for, on a joint and severalbasis, and hereby guarantees the timely payment by all other Borrowers of, allof the Loans and other Obligations, regardless of which Borrower actually mayhave received the proceeds of any Loans or other extensions of credit hereunderor the amount of such Loans received or the manner in which Agent or any Lenderaccounts for such Loans or other extensions of credit on its books and records,it being acknowledged and agreed that Loans to any Borrower inure to the mutualbenefit of all Borrowers and that Agent and Lenders are relying on the joint andseveral liability of Borrowers in extending the Loans and other financialaccommodations hereunder. Each Borrower hereby unconditionally and irrevocablyagrees that upon default in the payment when due (whether at stated maturity, byacceleration or otherwise) of any principal of, or interest owed on, any of theLoans or other Obligations, such Borrower shall forthwith pay the same, withoutnotice or demand. 

     4.11.2.      UnconditionalNature of Liability.      Each Borrower’s joint and several liabilityhereunder with respect to, and guaranty of, the Loans and other Obligationsshall, to the fullest extent permitted by Applicable Law, be unconditionalirrespective of (i) the validity, enforceability, avoidance or subordination ofany of the Obligations or of any promissory note or other document evidencingall or any part of the Obligations, (ii) the absence of any attempt to collectany of the Obligations from any other Obligor or any Collateral or othersecurity therefor, or the absence of any other action to enforce the same, (iii)the waiver, consent, extension, forbearance or granting of any indulgence byAgent or any Lender with respect to any provision of any instrumentevidencing or securing the payment of any of the Obligations, or any otheragreement now or hereafter executed by any other Borrower and delivered to Agentor any Lender, (iv) the failure by Agent to take any steps to perfect ormaintain the perfected status of its security interest in or Lien upon, orto preserve its rights to, any of the Collateral or other security forthe payment or performance of any of the Obligations or Agent’srelease of any Collateral or of its Liens upon any Collateral, (v) Agent’sor Lenders’ election, in any proceeding instituted under the BankruptcyCode, for the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) anyborrowing or grant of a security interest by any other Borrower, asdebtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the releaseor compromise, in whole or in part, of the liability of any other Obligor forthe payment of any of the Obligations, (viii) any amendment or modification ofany of the Loan Documents (unless such amendment or modification specificallyamends or modifies the liability of a Borrower) or waiver of any Default orEvent of Default thereunder, (ix) any increase in the amount of the Obligationsbeyond any limits imposed herein or in the amount of any interest, fees or othercharges payable in connection therewith, or any decrease in the same, (x) thedisallowance of all or any portion of Agent’s or any Lender’s claimsfor the repayment of any of the Obligations under Section 502 of the BankruptcyCode, or (xi) any other circumstance that might constitute a legal or equitabledischarge or defense of any Borrower. After the occurrence and during thecontinuance of any Event of Default, Agent may proceed directly and at once,without notice to any Obligor, against any or all of Obligors to collect andrecover all or any part of the Obligations, without first proceeding against anyother Obligor or against any Collateral or other security for the payment orperformance of any of the Obligations, and each Borrower waives any provisionthat might otherwise require Agent under Applicable Law to pursue or exhaust itsremedies against any Collateral or Obligor before pursuing another Obligor. EachBorrower consents and agrees that Agent shall be under no obligation to marshallany assets in favor of any Obligor or against or in payment of any or all of theObligations. 

     4.11.3.      No Reduction inLiability for Obligations.      No payment or payments made by an Obligor orreceived or collected by Agent from a Borrower or any other Person by virtue ofany action or proceeding or any setoff or appropriation or application at anytime or from time to time in reduction of or in payment of the Obligations shallbe deemed to modify, reduce, release or otherwise affect the liability of anyBorrower under this Agreement, each of whom shall remain jointly and severallyliable for the payment and performance of all Loans and other Obligations untilthe Obligations are paid in full and this Agreement is terminated. 

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     4.11.4.     Contribution.      Each Borrower is unconditionally obligated to repay theObligations as a joint and several obligor under this Agreement. If, as of anydate, the aggregate amount of payments made by a Borrower on account of theObligations and proceeds of such Borrower’s Collateral that are applied tothe Obligations exceeds the aggregate amount of Loan proceeds actuallyused by such Borrower in its business (such excess amount being referred to asan “Accommodation Payment”), then each of the other Borrowers (eachsuch Borrower being referred to as a “Contributing Borrower”) shall beobligated to make contribution to such Borrower (the “PayingBorrower”) in an amount equal to (A) the product derived by multiplying thesum of each Accommodation Payment of each Borrower by the Allocable Percentageof the Borrower from whom contribution is sought less (B) the amount, ifany, of the then outstanding Accommodation Payment of such Contributing Borrower(such last mentioned amount which is to be subtracted from the aforesaid productto be increased by any amounts theretofore paid by such Contributing Borrower byway of contribution hereunder, and to be decreased by any amounts theretoforereceived by such Contributing Borrower by way of contribution hereunder);provided, however, that a Paying Borrower’s recovery of contributionhereunder from the other Borrowers shall be limited to that amount paid by thePaying Borrower in excess of its Allocable Percentage of all AccommodationPayments then outstanding of all Borrowers. As used herein, the term“Allocable Percentage” shall mean, on any date of determinationthereof, a fraction the denominator of which shall be equal to the number ofBorrowers who are parties to this Agreement on such date and the numerator ofwhich shall be 1; provided, however, that such percentages shallbe modified in the event that contribution from a Borrower is not possible byreason of insolvency, bankruptcy or otherwise by reducing such Borrower’sAllocable Percentage equitably and by adjusting the Allocable Percentage ofthe other Borrowers proportionately so that the Allocable Percentages ofall Borrowers at all times equals 100%. 

     4.11.5.     Subordination.      Each Borrower hereby subordinates any claims, includingany right of payment, subrogation, contribution and indemnity, that it may havefrom or against any other Obligor, and any successor or assign of any otherObligor, including any trustee, receiver or debtor-in-possession, howsoeverarising, due or owing or whether heretofore, now or hereafter existing, to thepayment in full of all of the Obligations. 
SECTION   5.     ORIGINAL TERM AND TERMINATION OF COMMITMENTS     
**5.1.     ****OriginalTerm of Commitments.**      Subject to each Lender’s right to cease makingLoans and other extensions of credit to Borrowers when any Default or Event ofDefault exists or upon termination of the Commitments as provided in **Section5.2** hereof, the Revolver Commitments shall be in effect for a period fromthe Closing Date to the close of business on December 18, 2005(the “Original Term”). 
5.2.     Termination.
     5.2.1.      Termination byAgent.      Agent may (and upon the direction of the Required Lenders, shall)terminate the Commitments without notice upon or after the occurrence of anEvent of Default; provided, however, that the Commitments shallautomatically terminate (i) at the end of the Original Term and (ii) as providedin **Section 11.2** hereof. 

     5.2.2.      Termination byBorrowers.      Upon at least 30 days prior written notice to Agent, Borrowersmay, at their option, terminate the Commitments; provided,however, no such termination by Borrowers shall be effective untilBorrowers have satisfied all of the Obligations. Any notice of termination givenby Borrowers shall be irrevocable unless Agent otherwise agrees in writing.Except as set forth in **Section 1.1.5**, Borrowers may electto terminate the Commitments in their entirety only. No section of thisAgreement, Type of Loan available hereunder or Commitment may be terminated byBorrowers singly. 

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     5.2.3.      TerminationCharges.     If the Commitments are terminated by Borrowers pursuant to**Section 5.2.2** during the first Loan Year for any reason other than aPermitted Change of Control, Borrowers shall pay to Agent, for the Pro Ratabenefit of Lenders (in addition to the then outstanding principal, accruedinterest, fees and other charges owing under the terms of this Agreement and anyof the other Loan Documents), as liquidated damages for the loss of the bargainand not as a penalty, an amount equal to 1.0% of the total amount of RevolverCommitments. No termination charges shall be payable by Borrowers after the lastday of the first Loan Year. 

     5.2.4.      Effect ofTermination.      On the effective date of termination of the Commitments byAgent or by Borrowers, all of the Obligations shall be immediately due andpayable and Lenders shall have no obligation to make any Loans and Fleet shallhave no obligation to procure any Letters of Credit. All undertakings,agreements, covenants, warranties and representations of Borrowers contained inthe Loan Documents shall survive any such termination and Agent shallretain its Liens in the Collateral and all of its rights and remedies underthe Loan Documents notwithstanding such termination until Borrowershave satisfied the Obligations to Agent and Lenders, in full, and Agent andLenders have received from Obligors a full release of Claims in form andsubstance reasonably satisfactory to Agent. For purposes of this Agreement,the Obligations shall not be deemed to have been satisfied until allObligations for the payment of money have been paid to Agent in same day fundsand all Obligations that are at the time in question contingent (includingall LC Outstandings that exist by virtue of an outstanding Letter ofCredit)********have been fully cash collateralized in favor and tothe satisfaction of Agent or Agent has received as beneficiary a direct payletter of credit in form and from an issuing bank reasonably acceptable to Agentand providing for direct payment to Agent of all such contingent Obligations atthe time they become fixed (including reimbursement of all sums paid byAgent under any LC Support). Notwithstanding the payment in full of theObligations, Agent shall not be required to terminate its security interests inany of the Collateral unless, with respect to any loss or damage Agentmay incur as a result of the dishonor or return of any Payment Itemsapplied to the Obligations, Agent shall have received either (i) a writtenagreement, executed by Borrowers and any Person deemed financiallyresponsible by Agent whose loans or other advances to Borrowers are used inwhole or in part to satisfy the Obligations, indemnifying Agent and Lendersfrom any such loss or damage; or (ii) such monetary reserves and Liens on theCollateral for such period of time as Agent, in its reasonable discretion, maydeem necessary to protect Agent from any such loss or damage. Theprovisions of **Sections 2.4, 2.7, 2.8, 2.9, 4.5,****4.9**and this**Section 5.2.4** and all obligations of Borrowers to indemnify Agent or anyLender pursuant to this Agreement or any of the other Loan Documents, shall inall events survive any termination of the Commitments. 
SECTION   6.     COLLATERAL
**6.1.**      **Grant ofSecurity Interest.**      To secure the prompt payment and performance of allof the Obligations, each Borrower hereby grants to Agent, for the benefitof itself as Agent and for the benefit of the Secured Parties, a continuingsecurity interest in and Lien upon all personal property of such Borrower,whether now owned or existing or hereafter created, acquired or arising andwheresoever located, including: 

(i)       all Accounts;

(ii)      all Goods, including all Inventory and Equipment;

(iii)     all Instruments;

(iv)      all Chattel Paper, including Electronic Chattel Paper and Tangible Chattel Paper;

(v)       all Documents;

(vi)      all General Intangibles, including all Payment Intangibles and all Software;

(vii)     all Deposit Accounts;

(viii)     all Investment Property (but excluding any portion thereof that constitutes Margin Stockunless otherwise expressly provided in any Security Documents); 

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(ix)     all Letter-of-Credit Rights;

(x)     all monies now or atany time or times hereafter in the possession or under the control of Agent or aLender or a bailee or Affiliate of Agent or a Lender, including any CashCollateral in the Cash Collateral Account; 

(xi)     all Supporting Obligations;

(xii)     all accessions to,substitutions for and all replacements, products and cash and non-cash proceedsof (i) through (x) above, including proceeds of and unearned premiumswith respect to insurance policies insuring any of the Collateral andclaims against any Person for loss of, damage to or destruction of any of theCollateral; and 

(xiii)     all books andrecords (including customer lists, files, correspondence, tapes, computerprograms, print-outs, and other computer materials and records) of such Borrowerpertaining to any of (i) through (xi) above. 

**6.2.**      **Lien onDeposit Accounts.**      As additional security for the payment and performanceof the Obligations, each Borrower hereby grants to Agent, for the benefitof itself as Agent and for the benefit of the Secured Parties, a continuingsecurity interest in and Lien upon, and hereby collaterally assigns to Agent,all of such Borrower’s right, title and interest in and to each DepositAccount of such Borrower and in and to any deposits or other sums at any timecredited to each such Deposit Account, including any sums in any blocked accountor any special lockbox account and in the accounts in which sums are deposited.In connection with the foregoing, each Borrower hereby authorizes anddirects each such bank or other depository to pay or deliver to Agentupon its written demand therefor made at any time and without furthernotice to such Borrower (such notice being hereby expressly waived),all balances in each Deposit Account maintained by such Borrower with suchdepository for application to the Obligations then outstanding, and therights given Agent in this Section shall be cumulative with andin addition to Agent’s other rights and remedies in regard tothe foregoing Property as proceeds of Collateral. Each Borrower herebyirrevocably appoints Agent as such Borrower’s attorney-in-fact to collectany and all such balances to the extent any such payment is not made toAgent by such bank or other depository after demand thereon is made by Agentpursuant hereto. 
6.3.      RealEstate Collateral.
     6.3.1.      Lien on RealEstate.     The due and punctual payment and performance of the Obligationsshall also be secured by the Lien created by the Mortgages in favor of Agentupon all Real Estate of each Borrower described therein. The Mortgages shall beexecuted by Borrowers in favor of Agent on or before the Closing Date and shallbe duly recorded, at Borrowers’ expense, in each office where suchrecording is required to constitute a fully perfected Lien upon the RealEstate covered thereby. Promptly after the obtaining of any interest in anyother real Property by a Borrower, such Borrower shall execute and deliver toAgent, for Agent’s benefit and the Pro Rata benefit of Lenders, a mortgage,deed to secure debt, deed of trust, assignment or other document satisfactory toAgent and sufficient to convey and perfect, upon recordation thereof in theproper real estate records, in favor of Agent a first priority Lien upon suchinterest as security for the payment or performance of the Obligations. 

     6.3.2.      CollateralAssignment of Leases.      To further secure to the prompt payment andperformance of the Obligations, each Borrower hereby grants, transfers andassigns to Agent, for the benefit of itself as Agent and for the Pro Ratabenefit of the Lenders, and hereby grants to Agent, for the benefit of itself asAgent and for the Pro Rata benefit of the Lenders, a security interest in andLien upon all of such Borrower’s right, title and interest in, to andunder all now or hereafter existing leases of real Property to which suchBorrower is a party, whether as lessor or lessee, and all extensions, renewalsand modifications thereof. 

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**6.4.**      **OtherCollateral.**      In addition to the items of Property referred to in this**Section 6**, the Obligations shall also be secured by the Cash Collateralto the extent provided herein and all of the other items of Property fromtime to time described in any of the Security Documents as security for any ofthe Obligations. 

**6.5.     **No Assumption of Liability.**       The security  interest  granted  pursuant to this  Agreement is granted as security onlyand shall not subject  Agent or any Lender to, or in any way alter or modify,  any obligation  or liability of a Borrower  with respectto or arising out of the Collateral.
**6.6.**      **LienPerfection; Further Assurances.** Promptly after Agent’s requesttherefor, Borrowers shall execute or cause to be executed and deliver to Agentsuch instruments, assignments, title certificates or other documents as arenecessary under the UCC or other Applicable Law (including any motor vehiclecertificates of title act) to perfect (or continue the perfection of)Agent’s Lien upon the Collateral, and shall take such other action as maybe requested by Agent to give effect to or carry out the intent and purposes ofthis Agreement. Borrower shall give Agent prompt written notice at any timeit commences a material Commercial Tort Claim against any Person and shallexecute such documents as are necessary under the UCC to grant to Agent andperfect Agent’s Lien in such Commercial Tort Claim. Unless prohibited byApplicable Law, each Borrower hereby irrevocably authorizes Agent to execute andfile in any jurisdiction any financing statement or amendment thereto on suchBorrower’s behalf, including financing statements that indicate theCollateral (i) as all assets or all personal property of Borrower or words tosimilar effect or (ii) as being of an equal or lesser scope, or withgreater or lesser detail, than as set forth in this **Section 6**. EachBorrower also hereby ratifies its authorization for Agent to have filed in anyjurisdiction any like financing statements or amendments thereto if filed priorto the date hereof. The parties agree that a carbon, photographic orother reproduction of this Agreement shall be sufficient as a financingstatement and may be filed in any appropriate office in lieu thereof. 

**6.7.     **Foreign  Subsidiary  Stock.**  Notwithstanding  anything to the contrary set forth in Section 6.1  above,  the types oritems of Collateral described in such Section shall include only sixty-five percent (65%) of the voting stock of any ForeignSubsidiary.SECTION   7.     COLLATERAL ADMINISTRATION7.1.     GeneralProvisions.
     7.1.1.      Location ofCollateral.      All tangible items of Collateral, other than Inventoryin transit and motor vehicles being used in the Ordinary Course ofBusiness, shall at all times be kept by a Borrower at one or more of thebusiness locations of such Borrower set forth in **Schedule 7.1.1**hereto and shall not be moved therefrom, without the prior written approval ofAgent, except that in the absence of an Event of Default and accelerationof the maturity of the Obligations in consequence thereof, a Borrower may(i) rent or lease Rental Inventory to Borrower’s customers in the OrdinaryCourse of Business, (ii) make sales or other dispositions of any Collateral tothe extent authorized by **Section 9.2.10** hereof, (iii) temporarilymove Inventory or Equipment in connection with the provision of services forBorrowers’ customers in the Ordinary Course of Business, and (iv) moveInventory and Equipment or any record relating to any Collateral to a locationin the United States other than those shown on **Schedule 7.1.1** heretoso long as such Borrower has given Agent at least 10 Business Days priorwritten notice of such new location and prior to moving any Inventory orEquipment to such location such Borrower has executed and delivered to AgentUCC-1 financing statements and any other appropriate documentation toperfect or continue the perfection of Agent’s Liens with respect to suchInventory or Equipment. Notwithstanding anything to the contrary contained inthis Agreement, a Borrower shall not be permitted to keep, store or otherwisemaintain any Collateral at any location (including any location describedin **Section 7.1.1**), unless (i) such Borrower is the owner ofsuch location, (ii) such Borrower leases such location and the landlord hasexecuted in favor of Agent a Landlord Agreement, or (iii) if the Collateralconsists of Inventory placed with a warehouseman, bailee or processor,Agent has received from such warehouseman, bailee or processor a Lien waiveragreement, in form and substance satisfactory to Agent, in its sole discretion,and appropriate UCC-1 financing statements have been filed with the appropriateGovernmental Authority in the jurisdiction where such warehouseman, baileeor processor is located in order to perfect, or to maintain the uninterruptedperfection of, Agent’s security interest in such Inventory. 

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     7.1.2.        Insurance of Collateral; Condemnation Proceeds.
(i)     Each Borrower shallmaintain and pay for insurance upon all Collateral, wherever located, covering(i) casualty and hazard risks with respect to its Inventory and Equipment insuch amounts and with such insurance companies as are reasonably satisfactory toAgent, and (ii) casualty and hazard insurance with respect to all of itsProperties other than the Inventory and Equipment and public liability, theft,malicious mischief, and such other risks in such amounts and withsuch insurance companies as are consistent and in accordance with industrypractice for companies in the equipment rental industry of the size and owningProperties comparable to Borrowers, provided, that notwithstanding any industrystandard, any amount of self-insurance must be reasonably satisfactory toAgent. **Schedule 7.1.2** describes all insurance of such Borrower in effecton the date hereof. All proceeds payable under each such policy shall bepayable to Agent for application to the Obligations. Each Borrower shalldeliver the originals or certified copies of such policies to Agent withsatisfactory lender’s loss payable endorsements reasonably satisfactory toAgent naming Agent as sole loss payee, assignee or additional insured, asappropriate. Each policy of insurance or endorsement shall contain a clauserequiring the insurer to give not less than 30 days prior written notice toAgent in the event of cancellation of the policy for any reason whatsoever and aclause specifying that the interest of Agent shall not be impaired orinvalidated by any act or neglect of a Borrower or the owner of the Property orby the occupation of the premises for purposes more hazardous than arepermitted by said policy. If a Borrower fails to provide and pay forsuch insurance, Agent may, at its option, but shall not be requiredto, procure the same and charge Borrowers therefor. Each Borrower agrees todeliver to Agent, promptly as rendered, true copies of all reports made in anyreporting forms to insurance companies. For so long as no Event of Defaultexists, each Borrower shall have the right to settle, adjust and compromise anyclaim with respect to any insurance maintained by such Borrower providedthat all proceeds thereof are applied in the manner specified in thisAgreement, and Agent agrees promptly to provide any necessary endorsement toany checks or drafts issued in payment of any such claim. At any timethat an Event of Default exists, only Agent shall be authorized to settle,adjust and compromise such claims, Agent shall have all rights and remedies withrespect to such policies of insurance as are provided for in this Agreementand the other Loan Documents. 

(ii)     Any proceeds ofinsurance referred to in this **Section 7.1.2** and any condemnationawards that are paid to Agent in connection with a condemnation of any ofthe Collateral shall be paid to Agent and applied first to the payment ofthe Revolver Loans and then to any other Obligations outstanding;providedthat, if requested by a Borrower in writing within60 days after Agent’s receipt of insurance proceeds orcondemnation awards with respect to the Real Estate and if no Default or Eventof Default exists, such Borrower may apply such proceeds to repair orreplace the damaged or destroyed Real Estate so long as(1) such repair or replacement is promptly undertaken and concluded,(2) replacements of buildings are constructed on the sites of the originalcasualties and are of comparable size, and quality and utility tothe destroyed buildings, (3) the repaired or replaced Real Estate is at alltimes free and clear of Liens other than Permitted Liens, and (4) such Borrowercomplies with such disbursement procedures for such proceeds as Agent mayreasonably impose for repair or replacement. 

7.1.3.      Protection ofCollateral.      All expenses of protecting, storing, warehousing, insuring,handling, maintaining and shipping any Collateral, all Taxes imposed under anyApplicable Law on any of the Collateral or in respect of the sale thereof,and all other payments required to be made by Agent to any Person torealize upon any Collateral shall be borne and paid by Borrowers. Agent shallnot be liable or responsible in any way for the safekeeping of any of theCollateral or for any loss or damage thereto (except for reasonable care in thecustody thereof while any Collateral is in Agent’s actual possession)or for any diminution in the value thereof, or for any act or default of anywarehouseman, carrier, forwarding agency, or other Person whomsoever, but thesame shall be at Borrowers’ sole risk. 

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7.1.4.     Defense of Titleto Collateral.      Each Borrower shall at all times defend such Borrower’stitle to the Collateral and Agent’s Liens therein against all Persons andall claims and demands whatsoever other than Permitted Liens. 
7.2.     Administration of Accounts.
     7.2.1.      Records andSchedules of Accounts. Each Borrower shall keep accurate and completerecords of its Accounts and all payments and collections thereon and shallsubmit to Agent on such periodic basis as Agent shall request a sales andcollections report for the preceding period, in form satisfactory to Agent. EachBorrower shall also provide to Agent on or before the 20th day of each month ormore frequently as Agent may request (i) a summary aged trial balance of allAccounts existing as of the last day of the preceding month, specifying thenames, face value, and age from invoice for each Account Debtor obligatedon an Account so listed (“Schedule of Accounts”); (ii) uponAgent’s request therefor, information regarding the addresses of AccountDebtors, dates of invoices and due dates for each Account Debtor obligated on anAccount and copies of proof of delivery and a copy of all documents,including repayment histories and present status reports relating to theAccounts so scheduled; (iii) the estimated aggregate amount of monthly rentalincome owing by Account Debtors to Borrowers under leases by Borrowers ofInventory that is subject to any Vendor Lease; and (iv) such other matters andinformation relating to the status of then existing Accounts as Agentshall reasonably request. In addition, if Accounts in an aggregateface amount in excess of $2,000,000 cease to be Eligible Accounts in whole or inpart, Borrowers shall notify Agent of such occurrence promptly (and inany event within 2 Business Days) after any Borrower’s having obtainedknowledge of such occurrence and the Borrowing Base shall thereupon beadjusted to reflect such occurrence. Upon Agent’s request, eachBorrower shall deliver to Agent copies of invoices or invoice registers relatedto all of its Accounts. 

     7.2.2.      Discounts,Disputes and Returns.     If a Borrower grants any discounts, allowances orcredits that are not shown on the face of the invoice for the Account involved,such Borrower shall report such discounts, allowances or credits, as thecase may be to Agent as part of the next required Schedule of Accounts. Ifany amounts due and owing in excess of $2,000,000 are in dispute between aBorrower and any Account Debtor, or if any returns are made in excess of$2,000,000 with respect to any Accounts owing from an Account Debtor, suchBorrower shall provide Agent with written notice thereof at the time ofsubmission of the next Schedule of Accounts, explaining in detail the reason forthe dispute or return, all claims related thereto and the amount in controversy.At any time an Event of Default exists, Agent shall have the right tosettle or adjust all disputes and claims directly with the Account Debtor and tocompromise the amount or extend the time for payment of any Accounts comprisinga part of the Collateral upon such terms and conditions as Agent may deemadvisable, and to charge the deficiencies, costs and expenses thereof,including attorneys’ fees, to Borrowers. 

     7.2.3.      Taxes.      If anAccount of a Borrower includes a charge for any Taxes payable toany Governmental Authority, Agent is authorized, in its sole discretion, atany time an Event of Default exists, to pay the amount thereof tothe proper taxing authority for the account of such Borrower and to chargeBorrowers therefor; provided, however, that neither Agent norLenders shall be liable for any Taxes that may be due by a Borrower. 

     7.2.4.      AccountVerification.      Whether or not a Default or an Event of Default exists,Agent shall have the right at any time, in the name of Agent, any designeeof Agent or a Borrower to verify the validity, amount or any other matterrelating to any Accounts of such Borrower by mail, telephone, telegraph orotherwise. Each Borrower shall cooperate fully with Agent in an effort tofacilitate and promptly conclude any such verification process. 

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     7.2.5.      Maintenance ofDominion Accounts.      Each Borrower shall maintain a Dominion Account with Bankpursuant to a lockbox or other arrangement acceptable to Agent. Notwithstandingthe foregoing, each Borrower may use Dominion Accounts with banks acceptable toAgent (pursuant to agreements satisfactory to Agent in all respects) for aperiod of 90 days from the Closing Date; provided, that on or before such dateeach Borrower has opened a Dominion Account with Bank and advised all of itsAccount Debtors to remit payments to such Dominion Account with Bank. EachBorrower shall issue to each such lockbox bank an irrevocable letter ofinstruction directing such bank to deposit all payments or other remittancesreceived in the lockbox to the Dominion Account. Each Borrower shall enterinto agreements, in form satisfactory to Agent, with each bank at which aDominion Account is maintained by which such bank shall immediatelytransfer to the Payment Account all monies deposited to the Dominion Account.All funds deposited in each Dominion Account shall be subject to Agent’sLien. Each Borrower shall obtain the agreement (in favor of and in form andcontent sufficient to perfect Agent’s Lien on such Deposit Account andotherwise satisfactory to Agent and Lenders) by each bank at which a DominionAccount is maintained to waive any offset rights against the funds depositedinto such Dominion Account, except offset rights in respect of charges incurredin the administration of such Dominion Account. Neither Agent nor Lendersassume any responsibility to Borrowers for such lockbox arrangements or DominionAccounts, including any claim of accord and satisfaction or release withrespect to deposits accepted by any bank thereunder. 

     7.2.6.      Collection ofAccounts and Proceeds of Collateral.      To expedite collection,each Borrower shall endeavor in the first instance to make collection ofsuch Borrower’s Accounts for Agent and Lenders. All Payment Itemsreceived by a Borrower in respect of its Accounts, together withthe proceeds of any other Collateral, shall be held by such Borrower astrustee of an express trust for Agent’s benefit and such Borrowershall immediately deposit same in kind in the Dominion Account.Agent retains the right at all times that a Default or an Eventof Default exists to notify Account Debtors of each Borrower that Accounts havebeen assigned to Agent and to collect Accounts directly in its own name and tocharge to Borrowers the collection costs and expenses incurred by Agent orLenders, including reasonable attorneys’ fees. 
7.3.     Administration of Inventory.
     7.3.1.      Records andReports of Inventory.      Each Borrower shall keep accurate and complete recordsof its Inventory and shall furnish Agent and Lenders inventory reportsrespecting such Inventory in form and detail satisfactory to Agent and Lendersat such times as Agent and Lenders may request, but so long as no Default orEvent of Default exists, no more frequently than once each month. Each Borrowershall, at its own expense, conduct a physical inventory no less frequently thanannually and shall provide to Agent and Lenders a report based on each suchphysical inventory promptly after completion thereof, together with suchsupporting information as Agent shall request. Each Borrower shall conductperiodic cycle counts of its Inventory in accordance with historical practices,and, at Agent’s request, shall provide to Agent and Lenders a reportbased on each such cycle count. Agent may participate in and observe eachphysical count of inventory, which participation shall be at Borrowers’expense at any time that an Event of Default exists. 

     7.3.2.      Returns ofInventory.      No Borrower shall return any of its Inventory to a supplier orvendor thereof, or any other Person, whether for cash, credit against futurepurchases or then existing payables, or otherwise, unless (i) such return is inthe Ordinary Course of Business of such Borrower; (ii) no Default or Event ofDefault exists or would result therefrom; (iii) the return ofsuch Inventory will not result in an Out-of-Formula Condition; (iv) suchBorrower promptly notifies Agent thereof if the aggregate Value ofall Inventory returned in any month exceeds $5,000,000; and (v) anypayments received by such Borrower in connection with any such return arepromptly turned over to Agent for application to the Obligations. 

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     7.3.3.      Dispositions ofUsed Rental Inventory.     No Borrower will sell or otherwise dispose of ortransfer any Used Rental Inventory (other than in connection with a lease ofsuch Used Rental Inventory) without the prior written consent of Agent;provided, however, that the foregoing restriction shall notapply, for so long as no Default or Event of Default exists, to sales of UsedRental Inventory in the Ordinary Course of Business which, in the aggregate forboth Borrowers during any Fiscal Year, has a fair market value or bookvalue, whichever is more, of $40,000,000 or less, in each case provided that allNet Proceeds thereof are remitted to Agent for application to the Obligations. 

     7.3.4.     Net Book Value ofRental Inventory.      At any time requested by Agent, Borrowers shall deliver toAgent a written statement of the Net Book Value of Borrowers’ RentalInventory. In addition, Borrowers promptly shall deliver to Agent a writtenstatement of the Net Book Value of Borrowers’ Rental Inventory on any datethat Borrowers sell or otherwise dispose of Used Rental Inventory (as permittedby **Section 7.3.3** above) with an aggregate Net Book Value (taken alone ortogether with any other dispositions since the last date on which such astatement has been delivered to Agent) of $15,000,000 or more andthe Borrowing Base shall thereupon be adjusted to reflectsuch occurrence. 
7.4     Administration of Equipment.
     7.4.1.      Records andSchedules of Equipment.      Each Borrower shall keep accurate records itemizingand describing the kind, type, quality, quantity and cost of its Equipment andall dispositions made in accordance with **Section 7.4.2** hereof, and shallfurnish Agent and Lenders with a current schedule containing the foregoinginformation on at least an annual basis and more often if requested by Agent.Promptly after request therefor by Agent, each Borrower shall deliver to Agentand Lenders any and all evidence of ownership, if any, of any of the Equipment. 

     7.4.2.     Dispositions ofEquipment.      No Borrower will sell, lease or otherwise dispose of or transferany of the Equipment or any part thereof without the prior written consent ofAgent; provided, however, that the foregoing restrictionshall not apply, for so long as no Default or Event of Default exists, todispositions of Equipment which, in the aggregate for all Borrowers during anyFiscal Year, has a fair market value or book value, whichever is more,of $5,000,000 or less, provided that all Net Proceeds thereof are remitted toAgent for application to the Obligations. 

     7.4.3.      Condition ofEquipment.      Each Borrower hereby represents that the Equipment is in goodoperating condition and repair, and all necessary replacements of and repairsthereto shall be made so that the value and operating efficiency of theEquipment shall be maintained and preserved, reasonable wear and tear excepted.Each Borrower shall use reasonable efforts to ensure that the Equipment shall bemechanically and structurally sound, capable of performing the functions forwhich the Equipment was originally designed. No Borrower will permit any ofits Equipment to become affixed to any real Property leased to such Borrower sothat an interest arises therein under the real estate laws of the applicablejurisdiction unless the landlord of such real Property has executed a LandlordAgreement or leasehold mortgage in favor of and in form acceptable to Agent, andno Borrower will permit any of the Equipment to become an accession to anypersonal Property that is subject to a Lien unless the Lien is a PermittedLien. 

**7.5.**      **BorrowingBase Certificates.**      On the Closing Date and on or before the fifteenthBusiness Day of each month after the Closing Date (or more frequently ifrequested by Agent), Borrowers shall deliver to Agent a Borrowing BaseCertificate prepared as of the close of business of the previous month, and atsuch other times as Agent may request. All calculations of Availability inconnection with any Borrowing Base Certificate shall originally be made byBorrowers and certified by a Senior Officer of Neff to Agent;provided that Agent shall have the right to review andadjust, in the exercise of its reasonable credit judgment, any such calculation(i) to reflect its reasonable estimate of declines in value of any of theCollateral described therein and (ii) to the extent that such calculation is notin accordance with this Agreement or does not accurately reflect the amountof the Availability Reserve. In no event shall the Borrowing Base on any date bedeemed to exceed the amount of the Borrowing Base shown on the Borrowing BaseCertificate last received by Agent prior to such date, as such BorrowingBase Certificate may be adjusted by Agent as herein authorized. 

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SECTION   8.     REPRESENTATIONS AND WARRANTIES
**8.1.          General  Representations  and  Warranties.**       To induce  Agent and  Lenders  to enter into  this Agreement  and to makeavailable the Commitments, each Borrower warrants and represents to Agent and Lenders that:
     8.1.1.     Organization andQualification.      Each Borrower and its Subsidiaries is an entity dulyorganized, validly existing and in good standing under the laws of thejurisdiction of its organization. Each Borrower and its Subsidiaries is dulyqualified and is authorized to do business and is in good standing as aforeign corporation in each state or jurisdiction listed on **Schedule8.1.1** hereto and in all other states and jurisdictions in which the failureof such Borrower or any of such Subsidiaries to be so qualified would havea Material Adverse Effect. 

     8.1.2.      Power andAuthority.      Each Borrower and its Subsidiaries is duly authorized andempowered to enter into, execute, deliver and perform this Agreement and each ofthe other Loan Documents to which it is a party. The execution, deliveryand performance of this Agreement and each of the other Loan Documents havebeen duly authorized by all necessary action and do not and will not (i) requireany consent or approval of any of the holders of the Equity Interests of suchBorrower or any Subsidiary; (ii) contravene such Borrower’s or anySubsidiary’s Organization Documents; (iii) violate, or cause such Borroweror any Subsidiary to be in default under, any provision of any Applicable Law,order, writ, judgment, injunction, decree, determination or award in effecthaving applicability to such Borrower or any Subsidiary; (iv) result in abreach of or constitute a default under any indenture or loan or creditagreement or any other agreement, lease or instrument to which such Borrower orany Subsidiary is a party or by which it or its Properties may be bound oraffected; or (v) result in, or require, the creation or imposition of any Lien(other than Permitted Liens) upon or with respect to any of the Properties nowowned or hereafter acquired by such Borrower or any Subsidiary. 

     8.1.3.      LegallyEnforceable Agreement.      This Agreement is, and each of the otherLoan Documents when delivered under this Agreement will be, a legal, validand binding obligation of each Borrower and its Subsidiaries signatoriesthereto enforceable against each of them in accordance with the respectiveterms of such Loan Documents, except as the enforceability thereof may belimited by bankruptcy, insolvency or other similar laws of general applicationaffecting the enforcement of creditors’ rights or general equitableprincipals, whether applied in law or equity. 

     8.1.4.     CapitalStructure.      As of the date hereof, **Schedule 8.1.4** hereto states (i)the correct name of each Subsidiary, its jurisdiction of incorporation and thepercentage of its Equity Interests having voting powers owned by each Person,(ii) the name of each Borrower’s corporate Affiliates and the nature of theaffiliation (except where a director of a Borrower is a director or officer ofanother Person) and (iii) the number of authorized and issued Equity Interests(and treasury shares) of such Borrower and each Subsidiary. Each Borrower hasgood title to all of the shares it purports to own of the Equity Interests ofeach of its Subsidiaries, free and clear in each case of any Lien other thanPermitted Liens. All such Equity Interests have been duly issued and arefully paid and non-assessable. No Borrower has made, or obligated itself tomake, any Distribution. Except as have been issued under the Neff Corp. 1998Incentive Stock Plan and the Neff Corp. 1999 Incentive Stock Plan, no Borrowerhas issued any options to purchase, or any rights or warrants to subscribe for,or any commitments or agreements to issue or sell, or any Equity Interests orobligations convertible into, or any powers of attorney relating to, shares ofthe capital stock of such Borrower or any of its Subsidiaries. Except as setforth on **Schedule 8.1.4** hereto, to the Borrowers’ knowledge, thereare no outstanding agreements or instruments binding upon the holders of aBorrower’s Equity Interests relating to the ownership of its EquityInterests. No Lender is an Affiliate of a Borrower. 

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     8.1.5.     CorporateNames.      During the 5-year period preceding the date of this Agreement and asof the Closing Date, no Borrower nor any Subsidiary has been known as or usedany corporate, fictitious or trade names except those listed on **Schedule8.1.5** hereto. Except as set forth on **Schedule 8.1.5**, neitherBorrowers nor any Subsidiary has been the surviving corporation of a mergeror consolidation or acquired all or substantially all of the assets of anyPerson. 

     8.1.6.      BusinessLocations; Agent for Process.      As of the date hereof, the chief executiveoffice and other places of business of each Borrower and each Subsidiary are aslisted on **Schedule 7.1.1** hereto. During the 5-year period preceding thedate of this Agreement, neither of Borrowers nor any Subsidiary has had anoffice, place of business or agent for service of process other than as listedon **Schedule 7.1.1**. Except as shown on **Schedule 7.1.1** on the datehereof, no Inventory of a Borrower or any Subsidiary is stored witha bailee, warehouseman or similar Person, nor is any Inventory consigned toany Person. 

     8.1.7.     Title toProperties; Priority of Liens.      Each Borrower and each of its Subsidiarieshas good and marketable title to and fee simple ownership of, or valid andsubsisting leasehold interests in, all of its Real Estate, and good titleto all of its personal Property, including all Property reflected in thefinancial statements referred to in **Section 8.1.9** or delivered pursuantto **Section 9.1.3**, in each case free and clear of all Liens exceptPermitted Liens. Each Borrower has paid or discharged, and has caused eachSubsidiary to pay and discharge, all lawful claims which, if unpaid, couldreasonably be expected to become a Lien against any Properties of such Borroweror such Subsidiary that is not a Permitted Lien, except to the extent suchclaim is being Properly Contested. The Liens granted to Agent pursuant tothis Agreement and the other Security Documents are first priority Liens,subject only to those Permitted Liens which are expressly permitted by theterms of this Agreement to have priority over the Liens of Agent. 

     8.1.8.      Accounts.     Agent may rely, in determining which Accounts are Eligible Accounts, on allstatements and representations made by each Borrower with respect to anyAccount. Unless otherwise indicated in writing to Agent or excluded by Borrowersin their calculation of the Borrowing Base in any Borrowing BaseCertificate, with respect to each Account, each Borrower warrants that: 

(i)     It is genuine and in all respects what it purports to be, and it is not evidenced by a judgment;
(ii)     It arises out of acompleted, *bona fide* sale or lease and delivery of goods or rendition ofservices by such Borrower in the Ordinary Course of Business and substantiallyin accordance with the terms and conditions of all purchase orders,contracts or other documents relating thereto and forming a part of the contractbetween such Borrower and the Account Debtor; 

(iii)     It is for a sumcertain maturing as stated in the duplicate invoice covering such sale, a copyof which has been furnished or is available to Agent on request; 

(iv)     Such Account, andAgent’s security interest therein, is not, and will not, as a result of anyvoluntary act or omission of any Borrower, be in the future subject to anyoffset, Lien, deduction, defense, dispute, counterclaim or any other adversecondition except for disputes resulting in returned goods where the amount incontroversy is deemed by Agent to be immaterial, and each such Account isabsolutely owing to such Borrower and is not contingent in any respect or forany reason; 

(v)     The contract underwhich such Account arose does not condition or restrict such Borrower’sright to assign to Agent the right to payment thereunder unless such Borrowerhas obtained the Account Debtor’s consent to such collateral assignment orcomplied with any conditions to such assignment (regardless of whetherunder the UCC or other Applicable Law any such restrictions are ineffective toprevent the grant of a Lien upon such Account in favor of Agent); 

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(vi)     Such Borrower has notmade any agreement with any Account Debtor thereunder for any compromise,settlement or modification of the original invoice date with respect to any suchAccount or any deduction therefrom, except (x) compromises or settlementswhich in the aggregate for any Account Debtor do not exceed $250,000 in anyFiscal Year and (y) discounts or allowances which are granted by such Borrowerin the Ordinary Course of Business for prompt payment, all of which arereflected in the calculation of the net amount of each respective invoicerelated thereto and are reflected in the Schedules of Accounts submitted toAgent pursuant to **Section 7.2.1** hereof; 

(vii)     To the best of suchBorrower’s actual knowledge, there are no facts, events or occurrenceswhich are reasonably likely to impair the validity or enforceability of suchAccount or reduce the amount payable thereunder from the face amount of theinvoice and statements delivered to Agent with respect thereto; 

(viii)     To the best of suchBorrower’s actual knowledge, the Account Debtor thereunder (1) had thecapacity to contract at the time any contract or other document giving rise tothe Account was executed and (2) is Solvent; and 

(ix)     To the best of suchBorrower’s actual knowledge, there are no proceedings or actions which arethreatened or pending against any Account Debtor thereunder and which arereasonably likely to result in any material adverse change in such AccountDebtor’s financial condition or the collectibility of such Account. 

     8.1.9.       FinancialStatements.       The Consolidated and consolidating balance sheets of Borrowersand such other Persons described therein (including the accounts of allSubsidiaries of Borrowers for the respective periods during which a Subsidiaryrelationship existed) as of December 31, 2000, and the related statements ofincome, changes in stockholder’s equity, and changes in financial positionfor the periods ended on such dates, have been prepared in accordance with GAAP,and present fairly the financial positions of Borrowers and such Persons at suchdates and the results of Borrowers’ operations for such periods.Since December 31, 2000, except as disclosed in Neff’s public SECfilings since such date, there has been no material adverse change in thecondition, financial or otherwise, of Borrower and such other Persons as shownon the Consolidated balance sheet as of such date and no material change inthe aggregate value of Equipment and real Property owned by Borrower orsuch other Persons. 

     8.1.10.       FullDisclosure.       Neither this Agreement nor any other written statement furnishedby a Borrower to the Agent or any Lender for purposes of or in connection withthis Agreement or the other Loan Documents contains or omits any material factnecessary to make the statements contained herein or therein not materiallymisleading as of the date as of which such information is dated in light of thecircumstances under which such information was provided. There is no fact orcircumstance in existence on the date hereof which Borrowers have failed todisclose to Agent in writing that could reasonably be expected to have aMaterial Adverse Effect. 

     8.1.11.      SolventFinancial Condition.       Each Borrower and each of its Subsidiaries is nowSolvent and, after giving effect to the Loans to be made hereunder***,*****the Letters of Credit to be issued in connection herewith and theconsummation of the other transactions described in the Loan Documents, eachBorrower and each of its Subsidiaries will be Solvent. 

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     8.1.12.       SuretyObligations.       Except as set forth on **Schedule 8.1.12** hereto on thedate hereof, neither Borrower nor any of its Subsidiaries is obligated as suretyor indemnitor under any surety or similar bond or other contract issued orentered into any agreement to assure payment, performance or completion ofperformance of any undertaking or obligation of any Person. 

     8.1.13.       Taxes       TheFEIN of each Borrower and each of its Subsidiaries is as shown on **Schedule8.1.13** hereto. Each Borrower and each of its Subsidiaries has filed allfederal, state and other material tax returns and other reports it is requiredby law to file and has paid, or made provision for the payment of, all Taxesupon it, its income and Properties as and when such Taxes are due and payable,except to the extent being Properly Contested. The provision for Taxes on thebooks of each Borrower and each of its Subsidiaries are adequate for all yearsnot closed by applicable statutes, and for its current Fiscal Year. 

      8.1.14.       Brokers.       There are no claims  against a Borrower or amounts owing or to be owed by a Borrower for brokeragecommissions,  finder's fees or investment  banking fees in connection  with  the transactions  contemplated by this Agreement or any ofthe other Loan Documents.
     8.1.15.      IntellectualProperty.      Each Borrower and each of its Subsidiaries each owns or hasthe lawful right to use all Intellectual Property necessary for thepresent and planned future conduct of its business without, to itsknowledge, any conflict with the rights of others; there is no objectionto, or pending (or, to a Borrower’s knowledge, threatened)Intellectual Property Claim with respect to, such Borrower’s or any of itsSubsidiary’s right to use any such Intellectual Property and such Borroweris not aware of any grounds for challenge or objection thereto; and, except asmay be disclosed on **Schedule 8.1.15**, neither Borrower nor any of itsSubsidiaries pays any royalty or other compensation to any Person for the rightto use any Intellectual Property (other than with respect to off-the-shelf orprepackaged software). All such patents, trademarks, service marks, tradenames,copyrights, licenses and other similar rights are listed on**Schedule 8.1.15** hereto, to the extent they are registered under anyApplicable Law or are otherwise material to a Borrower’s or any of itsSubsidiaries’ business. 

     8.1.16.      GovernmentalApprovals.      Each Borrower and each of its Subsidiaries has, and is in goodstanding with respect to, all Governmental Approvals necessary to continue toconduct its business as heretofore or proposed to be conducted by it and to ownor lease and operate its Properties as now owned or leased by it, except wherethe failure to have such Governmental Approval could not reasonably be expectedto have a Material Adverse Effect. 

     8.1.17.      Compliance withLaws.      Each Borrower and each of its Subsidiaries is and its Properties,business operations and leaseholds are in compliance in all material respectswith, the provisions of all Applicable Laws (except to the extent that any suchnoncompliance with Applicable Law could not reasonably be expected to havea Material Adverse Effect) and there have been no citations, notices or ordersof noncompliance issued to such Borrower or any of the Subsidiaries underany such law, rule or regulation. Each Borrower is in material compliancewith all Environmental Laws applicable to it and Properties owned by it. 

     8.1.18.      BurdensomeContracts.      Neither Borrower nor any of its Subsidiaries is a party orsubject to any contract, agreement, or charter or other corporate restriction,which has or could be reasonably expected to have a Material AdverseEffect. Neither Borrower nor any of its Subsidiaries is a party orsubject to any Restrictive Agreements, except as set forth on **Schedule8.1.18** hereto, none of which prohibit the execution or delivery of any ofthe Loan Documents by any Obligor or the performance by any Obligor ofits obligations under any of the Loan Documents to which it is aparty, in accordance with the terms of such Loan Documents. 

     8.1.19.      Litigation.     Except as set forth on **Schedule 8.1.19** hereto, there are no actions,suits, proceedings or investigations pending or, to the knowledge of a Borrower,threatened on the date hereof against or affecting such Borrower or any of theSubsidiaries, or the business, operations, Properties, prospects, profits orcondition of such Borrower or any of the Subsidiaries, (i) which relate to anyof the Loan Documents or any of the transactions contemplated thereby or (ii)which could reasonably be expected to have a Material Adverse Effect. To theextent that all issues to be determined by the Nortrax Arbitration are decidedagainst the interests of Borrowers, such decision and the results thereof couldnot reasonably be expected to have a Material Adverse Effect. To the knowledgeof each Borrower, neither such Borrower nor any of its Subsidiaries is indefault on the date hereof with respect to any order, writ, injunction,judgment, decree or rule of any court, Governmental Authority or arbitrationboard or tribunal. 

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     8.1.20.      No Defaults.     No event has occurred and no condition exists which would, upon or after theexecution and delivery of this Agreement or such Borrower’s performancehereunder, constitute a Default or an Event of Default. Neither Borrower nor anyof its Subsidiaries is in default, and no event has occurred and no conditionexists which constitutes or which with the passage of time or the giving ofnotice or both would constitute a default, under any Material Contract or in thepayment of any Debt of such Borrower or a Subsidiary to any Person for MoneyBorrowed. 

     8.1.21.      Leases.     **Schedule 8.1.21** hereto is a complete listing of each capitalized andoperating lease of each Borrower and its Subsidiaries on the date hereof thatconstitutes a Material Contract, other than Vendor Leases that may constituteoperating leases. Each Borrower and each of its Subsidiaries is in substantialcompliance with all of the terms of each of its respective capitalized andoperating leases and there is no basis upon which the lessors under any suchleases could terminate same prior to the scheduled maturity or statedtermination date thereof or declare such Borrower or any of its Subsidiaries indefault thereunder. 

     8.1.22.      PensionPlans.      Except as disclosed on **Schedule 8.1.22** hereto, neitherBorrower nor any of its Subsidiaries has any Plan on the date hereof. EachBorrower and each of its Subsidiaries is in compliance with the requirements ofERISA and the regulations promulgated thereunder with respect to each Plan inall material respects. No fact or situation that is reasonably likely to resultin a material adverse change in the financial condition of a Borrower or any ofthe Subsidiaries exists in connection with any Plan. Neither Borrower nor any ofits Subsidiaries has any withdrawal liability in connection with aMulti-employer Plan. 

     8.1.23.      TradeRelations.      There exists no actual or, to either Borrower’s knowledge,threatened termination, cancellation or material limitation of, or anymaterially adverse modification or change in, the business relationship betweena Borrower and any customer or any group of customers whose purchasesindividually or in the aggregate are material to the business of such Borrower,or with any material supplier or group of suppliers, and there exists nocondition or state of facts or circumstances which is reasonably likely to havea Material Adverse Effect or prevent such Borrower from conducting such businessafter the consummation of the transactions contemplated by this Agreement insubstantially the same manner as it has heretofore been conducted. 

     8.1.24.      LaborRelations.      Except as described on **Schedule 8.1.24** hereto, neitherBorrower nor any of its Subsidiaries is a party to any collective bargainingagreement on the date hereof. On the date hereof, there are no materialgrievances, disputes or controversies with any union or any other organizationof such Borrower’s or any of its Subsidiary’s employees, or, to suchBorrower’s knowledge, any threats of strikes, work stoppages or anyasserted pending demands for collective bargaining by any union or organization. 

     8.1.25.      Not a RegulatedEntity.      No Obligor is (i) an “investment company” or a“person directly or indirectly controlled by or acting on behalf of aninvestment company” within the meaning of the Investment Company Act of1940; (ii) a “holding company,” or a “subsidiary company” ofa “holding company,” or an “affiliate” of a “holdingcompany” or of a “subsidiary company” of a “holdingcompany,” within the meaning of the Public Utility Holding Company Act of1935; or (iii) subject to regulation under the Federal Power Act, the InterstateCommerce Act, any public utilities code or any other Applicable Law regardingits authority to incur Debt. 

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     8.1.26.       Margin  Stock.       Neither  Borrower  nor any of its  Subsidiaries  is  engaged,  principally  or as one of itsimportant activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.
     8.1.27.       Real Estate.       The Real Estate constitutes all real Property owned by Borrowers on the Closing Date.
     8.1.28.       Projections.       All financial and business projections  heretofore delivered to Agent and Lenders by Borrowershave been prepared by Borrowers in good faith and are based on reasonable assumptions.
**8.2.**     **Reaffirmation of Representations and Warranties.**      Eachrepresentation and warranty contained in this Agreement and the other LoanDocuments shall be deemed to be reaffirmed by each Borrower on each daythat a Borrower requests or is deemed to have requested an extension of credithereunder, except for changes in the nature of a Borrower’s or, ifapplicable, any of its Subsidiaries’ business or operations that mayoccur after the date hereof in the Ordinary Course of Business so long asAgent has consented to such changes or such changes are not violative of anyprovision of this Agreement. Notwithstanding the foregoing, representations andwarranties which by their terms are applicable only to a specific date shall bedeemed made only at and as of such date. 

**8.3.**     **Survivalof Representations and Warranties.**      All representations and warranties ofeach Borrower contained in this Agreement or any of the other Loan Documentsshall survive the execution, delivery and acceptance thereof by Agent, Lendersand the parties thereto and the closing of the transactions described therein orrelated thereto. 
SECTION   9.     COVENANTS AND CONTINUING AGREEMENTS
**9.1.          Affirmative Covenants**.       For so long as there are any Commitments  outstanding and thereafter until payment in full ofthe Obligations,  each Borrower  covenants that,  unless the Required Lenders have otherwise  consented in writing,  it shall and shallcause each Subsidiary to:
     9.1.1.      Visits andInspections.      Permit representatives of Agent, from time to time, as often asmay be reasonably requested, but only during normal business hours and (exceptwhen a Default or Event of Default exists) upon reasonable prior notice tosuch Borrower, to visit and inspect the Properties of such Borrower and eachSubsidiary, conduct appraisals of a Borrower’s Properties, inspect, auditand make extracts from each Borrower’s and each of its respectiveSubsidiary’s books and records, and discuss with its officers, itsemployees and its independent accountants, Borrower’s and eachSubsidiary’s business, financial condition, business prospects and resultsof operations. Representatives of Borrowers (including Borrowers’accountants) shall be authorized to accompany Agent on any such visit orinspection, but such authorization shall in no manner be deemed to be arequirement or condition of Agent’s visits or inspections, and to theextent any of Borrowers’ representatives accompany Agent on any visit oraudit, such Persons shall in no manner hinder or delay the audits orinspections of Agent. Representatives of each Lender shall be authorized toaccompany Agent on each such visit and inspection and to participate with Agenttherein, but at their own expense, unless a Default or Event of Default exists.Neither Agent nor any Lender shall have any duty to makeany such inspection and shall not incur any liability by reasonof its failure to conduct or delay in conducting any such inspection. 

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     9.1.2.      Notices.     Notify Agent and Lenders in writing, promptly after Borrower’s obtainingknowledge thereof, (i) of the commencement of any litigation or IntellectualProperty Claim affecting any Obligor or any of its Properties, whether or notthe claims asserted in such litigation or Intellectual Property Claim areconsidered by such Borrower to be covered by insurance, and of the institutionof any administrative proceeding, to the extent that such litigation, claim orproceeding could reasonably be expected to have a Material Adverse Effect;(ii) of any material labor dispute to which any Obligor may become aparty, any strikes or walkouts relating to any of its plants or otherfacilities, and the expiration of any labor contract to which it is a party orby which it is bound; (iii) of any material default by any Obligor under, ortermination of, any Material Contract or any note, indenture, loan agreement,mortgage, lease, deed, guaranty or other similar agreement relating to anyDebt of such Obligor exceeding $2,500,000 and of any termination ofa Vendor Lease as a result of a Borrower’s default thereunder, unlessBorrowers promptly pay all Vendor Lease Debt owing under such Vendor LeaseDebt or the asserted default and termination by the Vendor Lessor isProperty Contested; (iv) of the existence of any Default or Event ofDefault; (v) of any judgment against any Obligor in an amount exceeding$2,500,000; (vi) of any violation or asserted violation by such Borrower ofany Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws),the adverse resolution of which could reasonably be expected to have aMaterial Adverse Effect or result in liability of such Borrower in an amount inexcess of $5,000,000; (vii) of any Environmental Release by an Obligoror on any Property owned or occupied by an Obligor if such Environmental Releasecould reasonably be expected to have a Material Adverse Effect; and (viii) ofthe discharge of Borrower’s independent accountants orany withdrawal of resignation by such independent accountants from theiracting in such capacity. In addition, each Borrower shall give Agent atleast 10 Business Days’ prior written notice of anyObligor’s opening of any new office or place of business. 

     9.1.3.      Financial andOther Information.      Keep adequate records and books of account with respectto its business activities in which proper entries are made in accordance withGAAP reflecting all its financial transactions; and cause to be prepared and tobe furnished to Agent and Lenders the following (all to be prepared inaccordance with GAAP applied on a consistent basis, unless Borrower’scertified public accountants concur in any change therein, such change isdisclosed to Agent and is consistent with GAAP and, if required by the RequiredLenders, the financial covenants set forth in **Section 9.3** areamended in a manner requested by the Required Lenders to take into account theeffects of such change): 

(i)      as soon as available,and in any event within 90 days after the close of each Fiscal Yearunqualified audited balance sheets of Borrowers and their Subsidiaries as of theend of such Fiscal Year (unless such audited balance sheets are qualifiedas to Borrowers’ going concern based solely on net losses or write-offs ofintangibles) and the related statements of income, shareholders’ equity andcash flow, on a Consolidated (and certified without material qualification) andconsolidating basis, by a firm of independent certified public accountants ofrecognized national standing selected by Borrowers but reasonably acceptable toAgent (except for a qualification for a change in accounting principles withwhich the accountant concurs), and setting forth in each case in comparativeform the corresponding Consolidated and consolidating figures for the precedingFiscal Year; 

(ii)      as soon as available,and in any event within 45 days after the close ofeach Fiscal Quarter, including the last Fiscal Quarter ofBorrower’s Fiscal Year, unaudited balance sheets of Borrowers andtheir Subsidiaries as of the end of such month and the related unauditedConsolidated statements of income and cash flow for such month and forthe portion of Borrowers’ Fiscal Year then elapsed, on a Consolidatedand consolidating basis, setting forth in each case in comparative form thecorresponding figures for the preceding Fiscal Year and certified by theprincipal financial officer of Borrowers as prepared in accordance with GAAP andfairly presenting the Consolidated financial position and results ofoperations of Borrowers and their Subsidiaries for such Fiscal Quarter subjectonly to changes from audit and year-end adjustments; 

(iii)      as soon as available,and in any event within 30 days after the end of each month hereafter (butwithin 45 days after the last month in a Fiscal Quarter), unaudited balancesheets of Borrowers and their Subsidiaries as of the end of such month and therelated unaudited Consolidated statements of income and cash flow for such monthand for the portion of Borrowers’ Fiscal Year then elapsed, on aConsolidated and consolidating basis, setting forth in each case incomparative form the corresponding figures for the preceding Fiscal Year andcertified by the principal financial officer of Borrowers as prepared inaccordance with GAAP and fairly presenting the Consolidated financialposition and results of operations of Borrowers and their Subsidiaries forsuch month and period subject only to changes from audit and year-endadjustments and except that such statements need not contain notes; 

(iv)      not later than 20 daysafter each month, a listing of all of Borrowers’ trade payables as of thelast Business Day of such month, specifying the name of and balance due eachtrade creditor, together with a list of all trade creditors to whom eitherBorrower owes any Purchase Money Debt or Vendor Lease Debt with respect to anyof the Inventory (provided that nothing herein shall be deemed to permit anysuch Debt or any associated Liens except as specifically provided for in thisAgreement), and, at Agent’s request, monthly detailed trade payable agingsin form acceptable to Agent; and 

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(v)      promptly after thesending or filing thereof, as the case may be, copies of any proxystatements, financial statements or reports which a Borrower has made generallyavailable to its shareholders and copies of any regular, periodic and specialreports or registration statements which such Borrower files with the SEC or anyGovernmental Authority which may be substituted therefor, or any nationalsecurities exchange. 

     To the extent that any ofthe financial statements or reports set forth in clause (v) have been properlyfiled with the SEC and are generally available on the EDGAR internet database,Borrowers written notification (which for purposes hereof only includesconfirmed electronic transmission) of such filing and availability (including aninternet protocol link to the internet page containing such financial statementsor reports) shall satisfy the requirements of delivery of such items to Agentand Lenders under this **Section 9.1.3**. Concurrently with the delivery ofthe financial statements described in clause (i) ofthis **Section 9.1.3**, Borrowers shall deliver to Agent andLenders a copy of the accountants’ letter to Borrower’s managementthat is prepared in connection with such financial statements and also shallcause to be prepared and shall deliver to Agent and Lenders a certificate of theaforesaid certified public accountants stating to Agent and Lenders that, basedupon such accountants’ audit of the Consolidated financial statements ofBorrowers and their Subsidiaries performed in connection with theirexamination of said financial statements, nothing came to their attention thatcaused them to believe that Borrowers were not in compliance with**Sections 9.2.2, 9.2.3, 9.2.4, 9.2.8, 9.2.9, 9.2.15, 9.2.16 or 9.3** hereof,or, if they are aware of such noncompliance, specifying the nature thereof, andacknowledging, in a manner satisfactory to Agent, that they are aware that Agentand Lenders are relying on such financial statements in making their decisionswith respect to the Loans. Concurrently with the delivery of the financialstatements described in clauses (i), (ii) and (iii) of this**Section 9.1.3**, or more frequently if requested by Agent or anyLender during any period that a Default or Event of Default exists, eachBorrower shall cause to be prepared and furnished to Agent and Lenders aCompliance Certificate executed by the chief financial officer of such Borrower. 

     Promptly after the sendingor filing thereof, each Borrower shall also provide to Agent copies ofany annual report to be filed in accordance with ERISA in connection witheach Plan and such other data and information (financial and otherwise) asAgent, from time to time, may reasonably request, bearing upon or related to theCollateral or such Borrower’s and each of its Subsidiaries’ financialcondition or results of operations. 

     9.1.4.      Landlord andStorage Agreements.      Provide Agent with copies of all existing agreements,and promptly after execution thereof provide Agent with copies of all agreementsentered into after the Closing Date, between such Borrower and any landlord,warehouseman or bailee which owns any premises at which any Collateral may, fromtime to time, be kept. 

     9.1.5.        Projections.      No later than 10 days after the last day of each  Fiscal Year of  Borrowers,  deliver to Agentand Lenders the Projections of Borrowers for the forthcoming Fiscal Year, on a quarter by quarter basis.
     9.1.6.        Taxes.        Pay and  discharge  all Taxes prior to the date on which such Taxes become  delinquent or penaltiesattach thereto, except and to the extent only that such Taxes are being Properly Contested.
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     9.1.7.     Compliance withLaws.      Comply with all Applicable Law, including ERISA,all Environmental Laws, FLSA, OSHA, and all laws, statutes, regulations andordinances regarding the collection, payment and deposit of Taxes, and obtainand keep in force any and all Governmental Approvals necessary tothe ownership of its Properties or to the conduct of its business, to theextent that any such failure to comply, obtain or keep in force could bereasonably expected to have a Material Adverse Effect. Without limiting thegenerality of the foregoing, Borrowers and their Subsidiaries shall comply inall material respects with all Environmental Laws applicable to the ownership,lease or use of its Property now or hereafter owned, leased or operated by aBorrower or any of its Subsidiaries, will promptly pay or cause to be paid allcosts and expenses incurred in connection with such compliance, and will keep orcause to be kept all such Property free and clear of any Liens imposed pursuantto such Environmental Laws. Neither Borrower nor any of its Subsidiaries willgenerate, use, treat, store, release or dispose of, or permit the generation,use, treatment, storage, release or disposal of Hazardous Materials on any Realproperty now or hereafter owned, leased or operated by such Borrower or any ofits Subsidiaries, or transport or permit the transportation of HazardousMaterials to or from any such Real property, except in each case for HazardousMaterials generated, used, treated, stored, released or disposed of at any suchReal property in compliance with all applicable Environmental Laws andreasonably required in connection with the operation, use and maintenance ofthe business or operations of such Borrower or its Subsidiaries. 

     9.1.8.      Insurance.      Inaddition to the insurance required herein with respect to the Collateral,maintain with financially sound and reputable insurers, insurance with respectto its Properties and business against such casualties and contingencies of suchtype (including product liability, workers’ compensation, larceny,embezzlement, or other criminal misappropriation insurance) and insuch amounts as is customary in the business of such Borrower or suchSubsidiary*.*

     9.1.9.        **Reserved.**
     9.1.10.      IntellectualProperty.      Promptly after applying for or otherwise acquiring anyIntellectual Property (other than off-the-shelf or prepackaged software),deliver to Lender, in form and substance acceptable to Lender and in recordableform, all documents necessary for Lender to perfect its Lien on suchIntellectual Property. 

     9.1.11.     PledgedShares.      On or before the Closing Date and at all times thereafter, eachBorrower shall pledge to Agent, for the benefit of itself and Lenders, all ofthe Equity Interests of each of their respective Domestic Subsidiaries, 65% ofthe voting Equity Interests of the Foreign Subsidiaries and 100% of thenon-voting Equity Interests of the Foreign Subsidiaries. 

     9.1.12.       Guarantor Financial  Statements.       Deliver or cause to be delivered to Agent and Lenders financial statementsfor each  Guarantor in form and  substance  satisfactory  to Agent and at such  intervals and covering such time periods as Agent shallreasonably request.
     9.1.13.      Neff AssetManagement.      If Neff Asset Management is not dissolved on or before 5Business Days after the Closing Date as permitted by **Section 9.2.1**hereof, deliver or cause to be delivered to Agent the following documents, allto be in form and substance satisfactory to Agent, in its sole discretion: (i) aguaranty agreement from Neff Asset Management pursuant to which Neff AssetManagement shall unconditionally guaranty payment of all of the Obligations,(ii) a security agreement from Neff Asset Management, in form and substance toAgent, in its sole discretion, pursuant to which Neff Asset Management shallgrant to Agent a Lien and security interest in all of Neff AssetManagement’s Properties as security for its obligations under the guarantyagreement set forth in clause (i) above and for the Obligations, (iii) suchinstruments, assignments, title certificates or other documents as are necessaryunder the UCC or other Applicable Law (including any motor vehicle certificateof title act) to perfect Agent’s Lien upon the Properties of Neff AssetManagement and (iv) such other documents or agreements as Agent may request,including agreements regarding the due formation of Neff Asset Management andits authorization to enter into such agreements. 

     9.1.14.      ExistingPurchase Money Transactions.      On or before March 31, 2002, with respect toeach Existing Purchase Money Vendor, either (i) deliver to Agent a duly executedVendor Intercreditor Agreement from each Existing Purchase Money Vendor, or (ii)repay in full all Debt outstanding and owing to such Existing Purchase MoneyVendor on the date thereof and terminate any and all Liens related to suchPurchase Money Debt in favor of such Person. 

     9.1.15.      UCC Files.     Endeavor in good faith on or before 60 days from the date hereof, to(i) terminate all existing UCC filings with respect to Borrowers or theirProperties in all jurisdictions to the extent Borrowers have repaid in fullall Debt owing to the secured party or lessor of record or the transactionwith respect to which such UCC filing was filed has terminated and (ii)cause to be amended all existing UCC filings that purport to coverProperties of any Borrower for which such Borrower did not grantan underlying security interest to the secured party of record to limitsuch UCC filings to the Properties of such Borrower for which such Borrower infact granted a security interest. 

**9.2.     Negative  Covenants.**       For so long as there are any Commitments  outstanding  and thereafter  until payment in full ofthe  Obligations,  each Borrower  covenants that,  unless the Required  Lenders have otherwise  consented in writing,  it shall not andshall not permit any Subsidiary to:
     9.2.1.      FundamentalChanges.      Merge, reorganize, consolidate or amalgamate with any Person,or liquidate, wind up its affairs or dissolve itself, except for mergers orconsolidations of any Subsidiary with another Subsidiary or with aBorrower; change any Borrower’s name or conduct business under anynew fictitious name; or change any Borrower’s state of incorporationor formation or FEIN. Notwithstanding the foregoing, Borrowers may dissolve NeffAsset Management so long as such dissolution is effectuated and written evidenceof such dissolution is provided to Agent from the applicable GovernmentalAuthority not more than 5 Business Days after the Closing Date. 

     9.2.2.      Loans.      Makeany loans or other advances of money to any Person other than to an officer oremployee of such Borrower or a Subsidiary (except Neff Asset Management) forsalary, travel advances, advances against commissions and other similaradvances in the Ordinary Course of Business provided, that for so long asno Default or Event of Default exists, a Borrower may (i) make loans toanother Borrower and (ii) make loans to a Domestic Subsidiary that is aSubsidiary Guarantor hereunder. 

     9.2.3.        Permitted Debt.     Create, incur, assume, guarantee or suffer to exist any Debt, except:
(i)      the Obligations;

(ii)     Debt evidenced by the Senior  Subordinated  Debt Documents in an amount not to exceed  $200,000,000         in the aggregate;

(iii)      accounts payable bysuch Borrower or a Subsidiary to trade creditors incurred in the OrdinaryCourse of Business and paid when due, unless the same are being ProperlyContested; 

(iv)      obligations to pay Rentals permitted by Section 9.2.14;

(v)     Purchase Money Debtowing by a Borrower to a Vendor from whom Agent has received a duly executedVendor Intercreditor Agreement, provided that the aggregate amount of all suchPurchase Money Debt owing by both Borrowers on any date does not exceed$20,000,000; 

(vi)     Debt for accruedpayroll, Taxes and other operating expenses (other than for Money Borrowed)incurred in the Ordinary Course of Business of such Borrower or such Subsidiary,including Cash Management Obligations, in each case so long as payment thereofis not past due and payable unless such Debt (other than Debt for accruedpayroll) is being Properly Contested; 

(vii)     Debt for MoneyBorrowed by such Borrower (other than the Obligations), but only to the extentthat such Debt is outstanding on the date of this Agreement and is not to besatisfied on the Closing Date from the proceeds of the initial Loans; 

(viii)     Permitted Contingent Obligations;

(ix)     Debt owing by such Borrower to the other Borrower;

(x)     Prior to March 31,2002, Debt owing by either or both Borrowers to the Existing Purchase MoneyVendors, provided that the aggregate amount owing to the Existing Purchase MoneyVendors by either or both Borrowers on any date does not exceed $2,000,000; 

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(xi)     Debt that is notincluded in any of the preceding paragraphs of this **Section 9.2.3,**is not secured by a Lien (unless such Lien is a Permitted Lien) and does notexceed at any time, in the aggregate, the sum of $2,000,000 as to suchBorrower and all of its Subsidiaries; and 

(xii)     Refinancing Debt so long as each of the Refinancing Conditions is met.

     9.2.4.      AffiliateTransactions.      Enter into, or be a party to any transaction with anyAffiliate, except: (i) the transactions contemplated by the Loan Documents; (ii)payment of reasonable compensation to officers and employees for servicesactually rendered to such Borrower or its Subsidiaries; (iii) payment ofcustomary directors’ fees and indemnities; and (iv) transactions withAffiliates in the Ordinary Course of Business and pursuant to the reasonablerequirements of a Borrower’s or its Subsidiary’s business and uponfair and reasonable terms and are no less favorable to such Borrower or suchSubsidiary than such Borrower or such Subsidiary would obtain in acomparable arm’s length transaction with a Person not an Affiliate orstockholder of such Borrower or such Subsidiary. 

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     9.2.5.         Limitation  on Liens.        Create or suffer  to exist  any Lien  upon any of its  Property,  income or  profits,whether now owned or hereafter acquired, except the following (collectively, "Permitted Liens"):

(i)     Liens at any time granted in favor of Agent; 

(ii)     Liens for Taxes  (excluding any Lien imposed  pursuant to any of  the provisions  of ERISA) not yet         due or being Properly Contested; 

(iii)     statutory Liens(excluding any Lien imposed pursuant to any of the provisions of ERISA) arisingin the Ordinary Course of Business of such Borrower or a Subsidiary, but only ifand for so long as (x) payment in respect of any such Lien is not at the timerequired or the Debt secured by any such Liens is being Properly Contestedand (y) such Liens do not materially detract from the value of the Property ofsuch Borrower or such Subsidiary and do not materially impair the use thereof inthe operation of Borrower’s or such Subsidiary’s business; 

(iv)     Liens in favor of aVendor to secure any Purchase Money Debt to the extent such Vendor has deliveredto Agent a duly executed Vendor Intercreditor Agreement and to the extent thePurchase Money Debt secured by such Liens is permitted pursuant to **Section9.2.3(v)** hereof; 

(v)     Liens in favor ofExisting Purchase Money Vendors to secure any Purchase Money Debt to theextent the Debt secured by such Liens is permitted pursuant to**Section 9.2.3(xii)** hereof; 

(vi)     Liens in favor of Vendor Lessors to secure Vendor Lease Debt that is permitted  pursuant to Section         9.2.14 hereof;
(vii)     Liens  securing  Debt of a  Subsidiary  of  such  Borrower  to such  Borrower  or to  another  such         Subsidiary;
(viii)     Liens arising byvirtue of the rendition, entry or issuance against such Borrower or anySubsidiary, or any Property of such Borrower or any Subsidiary, ofany judgment, writ, order, or decree so long as each such Lien (a) is inexistence for less than 20 consecutive days after it first arises or isbeing Properly Contested and (b) is at all times junior in priority to anyLiens in favor of Agent; 

(ix)     Liens incurred ordeposits made in the Ordinary Course of Business to secure the performance oftenders, bids, leases, contracts (other than for the repayment of MoneyBorrowed), statutory obligations and other similar obligations or arising as aresult of progress payments under government contracts; provided that, tothe extent any such Liens attach to any of the Collateral, such Liens areat all times subordinate and junior to the Liens upon the Collateral in favor ofAgent on terms acceptable to Agent in its sole discretion; 

(x)     easements,rights-of-way, restrictions, covenants or other agreements of record and othersimilar charges or encumbrances on real Property of such Borrower or aSubsidiary that do not secure any monetary obligation and do not interfere inany material respect with the ordinary conduct of the business of suchBorrower or such Subsidiary; 

(xi)     normal and customaryrights of setoff upon deposits of cash in favor of banks and other depositoryinstitutions and Liens of a collection bank arising under the UCC onPayment Items in the course of collection; 

(xii)     Liens in existenceimmediately prior to the Closing Date that are satisfied in full and released onthe Closing Date as a result of the application of Borrower’s cash on handat the Closing Date or the proceeds of Loans to be made on the Closing Date; 

(xiii)     such other Liens as appear on **Schedule 9.2.5** hereto, to the extent provided therein;
(xiv)     such other Liens as Agent and the Required  Lenders in their sole discretion may hereafter  approve         in writing;
(xv)     Leases and subleasesgranted by a Borrower to other Persons not materially interfering with theconduct of such Borrower’s business or affecting adversely any Liensgranted to Agent; and 

(xvi)     statutory and commonlaw landlords’ liens under leases to which such Borrower or any of itsSubsidiaries is a party and for which Agent has received aLandlord Agreement; 

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The foregoing negativepledge shall not apply to any Margin Stock to the extent that the application ofsuch negative pledge to such Margin Stock would require filings or otheractions by Agent or any Lender under such regulations or otherwise result in aviolation of such regulations. 

     9.2.6.      SeniorSubordinated Debt.      Make any payment of all or any part of the SeniorSubordinated Debt (except as permitted by **Section 1.1.3(ii)** hereof)or take any other action or omit to take any other action in respect of anySenior Subordinated Debt, except in accordance with the Senior SubordinatedIndenture; or amend or modify the terms of the Senior Subordinated DebtDocuments, other than to extend the time of payment thereof or to reduce therate of interest payable in connection therewith. To the extent that anypayment other than regular installments of interest and regular payments oftrustee’s fees is permitted to be made with respect to the SeniorSubordinated Debt pursuant to the provisions of Senior SubordinatedIndenture, Neff shall provide to Agent, not less than 5 Business Days prior tothe scheduled payment, a certificate from a Senior Officer of Neff statingthat no Default or Event of Default is in existence as of the date of thecertificate or will be in existence as of the date of such payment (bothwith and without giving effect to the making of such payment), andspecifying the amount of principal and interest to be paid. 

     9.2.7.     Distributions.       Declare or make any Distributions, except for Upstream Payments.
     9.2.8.      UpstreamPayments.      Create or suffer to exist any encumbrance or restriction on theability of a Subsidiary to make any Upstream Payment, except for encumbrances orrestrictions (i) pursuant to the Loan Documents, (ii) existing underApplicable Law and (iii) identified and fully disclosed in**Schedule 9.2.8**. 

     9.2.9.      Net CapitalExpenditures.     Make Net Capital Expenditures which in the aggregate, as toBorrowers and their Subsidiaries, exceed (i) $1.00 during Borrowers’ FiscalQuarter ending December 31, 2001, (ii) $10,000,000 during Borrowers’Fiscal Year ending December 31, 2002, (iii) $58,000,000 duringBorrowers’ Fiscal Year ending December 31, 2003,(iv) $54,000,000 duringBorrowers’ Fiscal Year ending December 31, 2004, and (v) $70,000,000 duringBorrowers’ Fiscal Year ending December 31, 2005. To the extentBorrowers’ Net Capital Expenditures in any Fiscal Year are less than theamount permitted above for such Fiscal Year (such amount being a “NetCapital Expenditure Carryover”), Borrowers may make additional Net CapitalExpenditures in the following Fiscal Year only in the amount of the aggregateNet Capital Expenditure Carryover for the immediately preceding Fiscal Year. 

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     9.2.10.      Disposition ofAssets. Sell, assign, lease, consign or otherwise dispose of any of itsProperties or any interest therein, including any disposition of its Propertiesas part of a sale and leaseback transaction, to or in favor of any Person,except (i) sales or leases of Parts Inventory and New Rental Inventory in theOrdinary Course of Business, (ii) dispositions of Used Rental Inventory to theextent authorized by **Section 7.3.3** hereof, (iii) dispositions ofEquipment to the extent authorized by **Section 7.4.2** hereof, (iv) atransfer of Property to a Borrower by a Subsidiary, (v) non-exclusivelicenses of technology and other Intellectual Property by and among a Borrowerand any of its Subsidiaries, (vi) sales or dispositions of the Real Estateand subleases of any of Borrowers’ leased real Property, provided thatpayments received by Borrowers in connection with any such sales,dispositions or leases are promptly turned over to Agent for application to theObligations, (vi) other dispositions expressly authorized by other provisions ofthe Loan Documents, and (vii) dispositions of General Intangibles(other than Intellectual Property) in connection with the closing of anybranch or store location of Borrowers. Notwithstanding the foregoing, in noevent shall a Borrower sell any Inventory held by it under a Vendor Leaseunless, prior to or concurrently with such sale, such Borrower satisfies in fullall Debt owed under such Vendor Lease (provided that a Borrower’sinadvertent breach of the foregoing shall not be an Event of Default aslong as the Value of the Inventory sold in any Fiscal Year in violation hereofdoes not exceed in aggregate $500,000). 

     9.2.11.     Subsidiaries.      Form or acquire any Subsidiary after the Closing Date orpermit any existing Subsidiary to issue any additional Equity Interests exceptshares to its directors qualifying for distribution of such shares pursuant tosuch director’s agreement to serve as a director. 

     9.2.12.      Bill-and-HoldSales and Consignments.      Make a sale to any customer on a bill-and-hold,guaranteed sale, sale and return, sale on approval or consignment basis, or anysale on a repurchase or return basis. 

     9.2.13.       Restricted Investments.       Make or maintain any Restricted Investment.
     9.2.14.      Leases.     Become a lessee under (i) any operating lease (other than an operating leaseunder which a Borrower or any of the Subsidiaries is lessor) of Property if, asto Borrowers and all of their Subsidiaries, the aggregate Rentals payable duringany current or future period of 12 consecutive months under the operating leasein question and all other operating leases under which Borrowers or any of theirSubsidiaries are then a lessee would exceed $20,000,000 or (ii) any capitalizedlease (other than a capitalized lease under which a Borrower or any of theSubsidiaries is lessor) of Property if, as to Borrowers and all of theirSubsidiaries, the aggregate value of capitalized leases (as stated on theConsolidated balance sheet of Borrowers) under which Borrowers or any of theirSubsidiaries are then a lessee would exceed $2,000,000. 

      9.2.15.       Tax  Consolidation.       File or  consent to the filing of any  consolidated  income tax return  with any Personother than another Borrower or a Subsidiary.
       9.2.16.        Accounting Changes.        Make any significant change in accounting treatment or reporting  practices,  except asmay be required by GAAP, or establish a fiscal year different from the Fiscal Year.
      9.2.17.      OrganizationDocuments.       Amend, modify or otherwise change any of the terms or provisionsin any of its Organization Documents as in effect on the date hereof, except forchanges that do not affect in any way Borrower’s or such Subsidiary’srights and obligations to enter into and perform the Loan Documents towhich it is a party and to pay all of the Obligations and that do not otherwisehave a Material Adverse Effect. 

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     9.2.18.       RestrictiveAgreements.       Enter into or become a party to any Restrictive Agreement;provided that (i) the foregoing shall not apply to Restrictive Agreementsexisting on the date hereof and identified on **Schedule 8.1.18** (but shallapply to any amendment or modification expanding the scope of any restriction orcondition contained in any such Restrictive Agreement), (ii) the foregoingshall not apply to liens, restrictions or conditions imposed by anyRestrictive Agreement relating to secured Debt permitted by this Agreement ifsuch liens, restrictions or conditions apply only to the Properties securingsuch Debt and (iii) the foregoing shall not apply to customary provisionsin leases and other contracts restricting the assignment thereof. 

     9.2.19.       Hedging  Agreements.        Enter into any Hedging Agreement,  other than Hedging Agreements entered into to hedgeor mitigate  risks to which such  Borrower or any of its  Subsidiaries  is exposed in the conduct of its business or the  management ofits liabilities and not for any speculative purpose.

     9.2.20.       Conduct of  Business.       Engage in any business  other than the business  engaged in by it on the Closing Dateand any business or activities which are substantially similar, related or incidental thereto.

**9.3.         Financial  Covenants**.        For so long as there are any Commitments  outstanding and thereafter  until payment in full ofthe Obligations, each Borrower covenants that, unless otherwise consented to by the Required Lenders in writing, Borrowers shall:

     9.3.1.      LeverageRatio.      Maintain a Consolidated Leverage Ratio as of the end of eachFiscal Quarter of not greater than the ratio set forth below for FiscalQuarter corresponding thereto, calculated at the end of each such Fiscal Quarterfor the immediately preceding 4 Fiscal Quarters, commencing with the FiscalQuarter ending December 31, 2001: 

          Period                                                                                           Ratio          Each Fiscal Quarter ending December 31, 2001,                    4.55 to 1.0          March 31, 2002, and June 30, 2002          Fiscal Quarter ending September 30, 2002                               4.50 to 1.0          Each Fiscal Quarter ending December 31, 2002,                     4.25 to 1.0          March 31, 2003, June 30, 2003, and September          30, 2003          Each Fiscal Quarter ending December 31, 2003,                      4.00 to 1.0          March 31, 2004, June 30, 2004, and September          30, 2004          Fiscal Quarter ending December 31, 2004 and                        3.80 to 1.0          each Fiscal Quarter thereafter
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     9.3.2.      Interest CoverageRatio.      Maintain a Consolidated Interest Coverage Ratio as of the end of eachFiscal Quarter of not less than the ratio set forth below for Fiscal Quartercorresponding thereto, calculated at the end of each such Fiscal Quarter for theimmediately preceding 4 Fiscal Quarters, commencing with the Fiscal Quarterending December 31, 2001: 

           Period                                                                                            Ratio          Each Fiscal Quarter ending December 31, 2001,                    2.30 to 1.0          March 31, 2002, and June 30, 2002          Fiscal Quarter ending September 30, 2002                               2.35 to 1.0          Each Fiscal Quarter ending December 31, 2002,                     2.45 to 1.0          March 31, 2003, June 30, 2003, and September          30, 2003          Fiscal Quarter ending December 31, 2003 and                        2.75 to 1.0          each Fiscal Quarter thereafter
     9.3.3.       Net Worth.       Maintain  a  Consolidated  Net Worth of not less than the  amount  set forth  below at all timesduring the period corresponding thereto:
           Period                                                                                           Amount          Fiscal Quarter ending December 31, 2001,                                 $60,000,000          Each Fiscal Quarter ending March 31, 2002                              $55,000,000          June 30, 2002, September 30, 2002 and                              December 31, 2002                    Each Fiscal Quarter ending March 31, 2003,                             $54,000,000          June 30, 2003, September 30, 2003, and          December 31, 2003          All times thereafter                                                                        $55,000,000
     9.3.4.      Fixed ChargeCoverage Ratio.      Maintain a Consolidated Fixed Charge Coverage Ratio of notless than 1.10 to 1.0 as of the end of each Fiscal Quarter, calculated at theend of each Fiscal Quarter for the immediately preceding 4 Fiscal Quarters,commencing with the Fiscal Quarter ending March 31, 2003. 
SECTION   10.     CONDITIONS PRECEDENT
**10.1.****     Conditions Precedent to Initial Credit Extensions. Lenders shallnot be required to fund any Loan requested by a Borrower, procure any Letter ofCredit, or otherwise extend credit to Borrowers, unless, on or before December21, 2001, each of the following conditions has been satisfied: 
     10.1.1.      LoanDocuments.      Each of the Loan Documents shall have been duly executed anddelivered to Agent by each of the signatories thereto (and, with the exceptionof the Notes, in sufficient counterparts for each Lender) and accepted by Agentand Lenders and each Obligor shall be in compliance with all of the termsthereof (including all representations and warranties). 

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     10.1.2.     Availability.      Agent shall have determined, and Lenders shall be satisfiedthat, immediately after Lenders have made the initial Revolver Loans to be madeon the Closing Date, Bank has issued the Letters of Credit to be issued onthe Closing Date and Borrowers have paid (or made provision for payment of) allclosing costs incurred in connection with the Commitments, Availability is notless than $40,000,000. 

     10.1.3.      Evidence ofPerfection and Priority of Liens.      Agent shall have received copies of allfiling receipts or acknowledgments issued by any Governmental Authority toevidence any filing or recordation necessary to perfect the Liens of Agentin the Collateral and evidence in form satisfactory to Agent and Lenders thatsuch Liens constitute valid and perfected security interests and Liens, and thatthere are no other Liens upon any Collateral except for Permitted Liens. 

     10.1.4.      OrganizationDocuments.      Agent shall have received copies of the Organization Documents ofeach Obligor, and all amendments thereto, certified by the Secretary of State orother appropriate officials of the jurisdiction of Borrower’s and eachObligor’s states of organization; provided, that to the extent governmentalcertification is not available for any such Organization Document, suchOrganization Document shall be certified as true, completed and correct by aSenior Officer. 

     10.1.5.      Good StandingCertificates.      Agent shall have received good standing certificates for eachObligor, issued by the Secretary of State or other appropriate official of suchObligor’s jurisdiction of organization and each jurisdiction where theconduct of such Obligor’s business activities or ownership of its Propertynecessitates qualification. 

     10.1.6.      OpinionLetters.      Agent shall have received a favorable, written opinion of Gibson,Dunn & Crutcher LLP and the respective local counsel to Borrowers and Agent,covering, to Agent’s satisfaction, the matters set forth on **ExhibitF** attached hereto. 

     10.1.7.      Insurance.     Agent shall have received certified copies of the property and casualtyinsurance policies of Borrowers with respect to the Collateral, or certificatesof insurance with respect to such policies in form acceptable to Agent, and losspayable endorsements, in form reasonably satisfactory to Agent, naming Agent asloss payee with respect to each such policy and certified copies ofBorrower’s liability insurance policies, including product liabilitypolicies, together with endorsements naming Agent as an additional insured, allas required by the Loan Documents. 

     10.1.8.      Lockbox;Dominion and Concentration Accounts.      Agent shall have received the dulyexecuted agreements with respect to the Lockbox and each Dominion Account, withBorrower’s existing financial institutions for the collection or servicingof the Accounts. 

                       10.1.9.       Landlord  Agreements.       Agent shall have received Landlord  Agreements with respect to all leased premises atwhich any Collateral may be located.

                      10.1.10.      Equipment/Rental  Inventory Leases.       Agent shall have received copies of each Borrower's leases with respectto any of Equipment and Rental Inventory that is leased by such Borrower.

     10.1.11.        Solvency.     Agent and Lenders shall have received evidence satisfactory to them from one ormore knowledgeable Senior Officers of each Borrower that, after giving effect tothe financing under this Agreement and the issuance of the Letters of Credit,each Borrower is Solvent. 

     10.1.12.        Compliance withLaws and Other Agreements.        Agent shall have determined or receivedassurances satisfactory to it that none of the Loan Documents or any of thetransactions contemplated thereby violate any Applicable Law, court order oragreement binding upon any Obligor. 

     10.1.13.        No MaterialAdverse Change.        Other than as disclosed in Neff’s public filings withthe SEC for the period from December 31, 2000, through September 30, 2001, nomaterial adverse change in the financial or business condition of any Borroweror any other Obligor or in the quality, quantity or value of any Collateralshall have occurred since December 31, 2000. 

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     10.1.14.        SyndicationMarket.        Since October 1, 2001, there shall not have occurred any disruptionor change that is materially adverse in the market for syndicated bank creditfacilities, or a material disruption of or material adverse change in financial,banking or capital market conditions, in each case as determined by Agent andSyndication Agent, in their sole discretion. 

     10.1.15.      Accounts  Payable.       Agent shall have reviewed and found  acceptable  Borrower's  accounts payable and vendorarrangements.

     10.1.16.      Payment of Fees.        Borrowers  shall have paid, or made provision for  the payment on the Closing Date of, allfees and expenses to be paid hereunder to Agent and Lenders on the Closing Date.

     10.1.17.      Title  Reports.        Agent shall have  received,  had at least 5 days to review and found  acceptable  mortgageetitle reports with respect to the Real Estate, issued by a title insurance company satisfactory to Agent.

      10.1.18.               LC Conditions.        With respect to the  procurement of any Letter of Credit on the Closing  Date, eachof the LC Conditions is satisfied.

     10.1.19.       CollateralExamination; Appraisals.       Agent and Syndication Agent shall have received andfound acceptable, in their sole discretion, the results of (i) the collateralexamination conducted by Arthur Andersen LLP and (ii) the appraisal of theRental Inventory conducted by Max Rouse & Sons, Inc. 

      10.1.20.       ObligationsConstitute Senior Debt.       Agent********shall have received true,correct and complete copies of the Senior Subordinated Indenture and alldocuments related thereto, shall have determined, in its sole discretion, thatall of the Obligations constitute “Senior Debt,” “DesignatedSenior Debt” and “Permitted Indebtedness” under (and as definedin) the Senior Subordinated Indenture, and that as a result thereof all Debtowing by Borrowers to the Senior Subordinated Noteholders is subordinate to allof the Obligations on terms satisfactory to Agent and Lenders, in their solediscretion. 

      10.1.21.       NortraxArbitration.       Agent and Lenders shall have completed their due diligence inconnection with all matters pertaining to the Nortrax Arbitration, and Agent andLenders shall be satisfied with the results thereof (including the status of theNortrax Arbitration immediately prior to the Closing Date and the potentialliability of Borrowers that could result therefrom). 

**10.2.**     **Conditions Precedent to All Credit Extensions.**       Lenders shall notbe required to fund any Loans, procure any Letters of Credit, or otherwiseextend any credit to or for the benefit of Borrowers, unless and until each ofthe following conditions has been and continues to be satisfied: 

       10.2.1.        No Defaults.        No Default or Event of Default  exists at the time,  or would result from the funding,  of anyLoan or other extension of credit.
      10.2.2.        Satisfaction  of  Conditions  in Other Loan  Documents.        Each of the  conditions  precedent set forth in anyother Loan Document shall have been and shall remain satisfied.
     10.2.3.      NoLitigation.      No action, proceeding, investigation, regulation or legislationshall have been instituted, threatened or proposed before any court,governmental agency or legislative body to enjoin, restrain or prohibit, or toobtain damages in respect of, or which is related to or arises out of, thisAgreement or any of the other Loan Documents or the consummation ofthe transactions contemplated hereby or thereby. 

      10.2.4.       No Material  Adverse Effect.       No event shall have occurred and  no condition  shall exist which has or couldbe reasonably expected to have a Material Adverse Effect.
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      10.2.5.       Borrowing  Base  Certificate.       Agent shall have received each  Borrowing  Base  Certificate  required by theterms of this Agreement or otherwise requested by Agent.
     10.2.6.       LC Conditions.       With respect to the procurement of any Letter of Credit after  the Closing Date, each of theLC Conditions is satisfied.
**10.3.**     **Inapplicability of Conditions.**      None of the conditions precedentset forth in **Sections 10.1** or **10.2** shall be conditions to theobligation of (i) each Participating Lender to make payments to Fleet pursuantto **Section 1.3.2**, (ii) each Lender to deposit with Agent suchLender’s Pro Rata share of a Borrowing in accordance with **Section3.1.2**, (iii) each Lender to fund its Pro Rata share of a Revolver Loan torepay outstanding Settlement Loans to Fleet as provided in **Section3.1.3(ii)**, (iv) each Lender to pay any amount payable to Agent or anyother Lender pursuant to this Agreement or (v) Agent to pay any amount payableto any Lender pursuant to this Agreement. 

**10.4.**      **LimitedWaiver of Conditions Precedent.**      If Lenders shall make any Loan, procureany Letter of Credit, or otherwise extend any credit to Borrowers under thisAgreement at a time when any of the foregoing conditions precedent are notsatisfied (regardless of whether the failure of satisfaction of any suchconditions precedent was known or unknown to Agent or Lenders), the funding ofsuch Loan shall not operate as a waiver of the right of Agent and Lenders toinsist upon the satisfaction of all conditions precedent with respect toeach subsequent Borrowing requested by a Borrower or a waiver of any Default orEvent of Default as a consequence of the failure of any such conditions to besatisfied, unless Agent, with the prior written consent of the Required Lenders,in writing waives the satisfaction of any condition precedent, in which eventsuch waiver shall only be applicable for the specific instance given and only tothe extent and for the period of time expressly stated in such written waiver. 
SECTION   11.     EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
**11.1.**      **Eventsof Default.**      The occurrence or existence of any one or more of thefollowing events or conditions shall constitute an “Event of Default”(each of which Events of Default shall be deemed to exist unless and untilwaived by Agent and Lenders in accordance with the provisions of**Section 12.9** hereof): 

 11.1.1.       Payment  of  Obligations.       Borrowers  shall  fail to pay any of the  Obligations  on the  due  date  thereof(whether due at stated maturity, on demand, upon acceleration or otherwise).
     11.1.2.     Misrepresentations.      Any representation, warranty or other writtenstatement to Agent or any Lender by or on behalf of any Obligor, whether made inor furnished in compliance with or in reference to any of the Loan Documents,proves to have been false or misleading in any material respect when made orfurnished or when reaffirmed pursuant to **Section 8.2** hereof. 

     11.1.3.      Breach ofSpecific Covenants.     Borrowers shall fail or neglect to perform, keep orobserve (i) any covenant contained in **Sections 6.6, 7.2.5, 7.2.6, 9.1.1,9.1.3(i), 9.1.6, 9.2 or 9.3** hereof on the date that Borrowers are requiredto perform, keep or observe such covenant, (ii) any covenant contained in**Section 7.5** hereof within 3 Business Days after the date on whichBorrowers were required to perform, keep or observe such covenant (provided,that Borrowers may not avail itself of such 3-Business Day cure period more than3 times during any Fiscal Year), (iii) any covenant contained in **Section9.1.3(ii)** within 5 Business Days after the date on which Borrowers wererequired to perform, keep or observe such covenant (provided, that Borrowers maynot avail itself of such 5-Business Day cure period more than 1 time during anyFiscal Year), (iv) any covenant contained in **Section 9.1.3(iii)** within 3Business Days after the date on which Borrowers were required to perform, keepor observe such covenant (provided, that Borrowers may not avail itself of such3-Business Day cure period more than 3 times during any Fiscal Year), or (iv)any covenant contained in **Section 9.1.3(iv)** within 7 Business Days afterthe date on which Borrowers were required to perform, keep or observe suchcovenant. 

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     11.1.4.      Breach of OtherCovenants.     A Borrower shall fail or neglect to perform, keep or observe anycovenant contained in this Agreement (other than a covenant which is dealt withspecifically elsewhere in **Section 11.1** hereof) and the breach of suchother covenant is not cured to Agent’s and the Required Lender’ssatisfaction within 30 days after the sooner to occur of any SeniorOfficer’s receipt of notice of such breach from Agent or the date on whichsuch failure or neglect first becomes actually known to any Senior Officer;provided, however, that such notice and opportunity to cure shallnot apply in the case of any failure to perform, keep or observe any covenantwhich is not capable of being cured at all or within such 30-day period or whichis a willful and knowing breach by such Borrower. 

     11.1.5.      Default UnderSecurity Documents/Other Agreements.      A Borrower or any other Obligor shalldefault in the due and punctual observance or performance (taking into accountany applicable grace periods) of any liability or obligation to be observed orperformed by it under any of the Other Agreements or Security Documents. 

     11.1.6.      OtherDefaults.      There shall occur any default or event of default on the part of aBorrower or any Subsidiary beyond any applicable cure or grace period under anyagreement, document or instrument to which a Borrower or any Subsidiary is aparty or by which a Borrower or any Subsidiary or any of their respectiveProperties is bound, creating or relating to any Debt (other than theObligations) in excess of $2,000,000 if the payment or maturity of suchDebt may be accelerated in consequence of such event of default or demand forpayment of such Debt may be made. 

     11.1.7.     UninsuredLosses. Any loss (other than a loss relating to an Account), theft, damageor destruction of any of the Collateral not fully covered (subject to suchdeductibles as Agent shall have permitted) by insurance if the aggregate amountnot covered by insurance exceeds $2,000,000 in any Fiscal Year. 

      11.1.8.       Material Adverse Effect.       There shall occur any event or condition that has a Material Adverse Effect.
      11.1.9.      Solvency.       Any Obligor shall cease to be Solvent.
     11.1.10.      InsolvencyProceedings.      Any Insolvency Proceeding shall be commenced by any Obligor; anInsolvency Proceeding is commenced against any Obligor and any of the followingevents occur: such Obligor consents to the institution of the InsolvencyProceeding against it, the petition commencing the Insolvency Proceeding is nottimely controverted by such Obligor, the petition commencing the InsolvencyProceeding is not dismissed within 60 days after the date of the filing thereof(provided that, in any event, during the pendency of any such period, Lendersshall be relieved from their obligation to make Loans or otherwise extendcredit to or for the benefit of Borrowers hereunder), an interim trustee isappointed to take possession all or a substantial portion of the Properties ofsuch Obligor or to operate all or any substantial portion of the business ofsuch Obligor or an order for relief shall have been issued or entered inconnection with such Insolvency Proceeding; or any Obligor shall make an offerof settlement extension or composition to its unsecured creditors generally. 

     11.1.11.      BusinessDisruption; Condemnation.     There shall occur a cessation of a substantialpart of the business of any Obligor for a period which may be reasonablyexpected to have a Material Adverse Effect; or any Obligor shall suffer the lossor revocation of any license or permit now held or hereafter acquired by suchObligor which is material to the operations of such Borrower or necessary to thecontinued or lawful operation of its business; or any Obligorshall be enjoined, restrained or in any way prevented by court,governmental or administrative order from conducting all or any material part ofits business affairs; or any material lease or agreement pursuant to which anyObligor leases or occupies any premises on which any Collateral is located shallbe canceled or terminated prior to the expiration of its stated term and suchcancellation or termination has a Material Adverse Effect or results in anOut-of-Formula Condition; or any material part of the Collateral shall be takenthrough condemnation or the value of such Property shall be materially impairedthrough condemnation. 

      11.1.12.       Change of Control.       There shall occur any Change of Control.
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     11.1.13.      ERISA.      AReportable Event shall occur which Agent, in its reasonable discretion, shalldetermine constitutes grounds for the termination by the Pension BenefitGuaranty Corporation of any Plan or for the appointment by the appropriateUnited States district court of a trustee for any Plan, or if any Plan shall beterminated or any such trustee shall be requested or appointed, or if aBorrower, any Subsidiary or any Obligor is in “default” (as defined inSection 4219(c)(5) of ERISA) with respect to payments to a MultiemployerPlan resulting from a Borrower’s, such Subsidiary’s orsuch Obligor’s complete or partial withdrawal from such Plan. 

     11.1.14.      Challenge toLoan Documents.      Any Obligor or any of its Affiliates shall challenge orcontest in any action, suit or proceeding the validity or enforceability of anyof the Loan Documents, the legality or enforceability of any of theObligations or the perfection or priority of any Lien granted to Agent, or anyof the Loan Documents ceases to be in full force or effect for any reason otherthan a full or partial waiver or release by Agent and Lenders in accordance withthe terms thereof. 

     11.1.15.     Judgment.     One or more judgments or orders for the payment of money in an amount thatexceeds, individually or in the aggregate, $500,000 shall be entered against aBorrower or any other Obligor and either (i) enforcement proceedings shall havebeen commenced by any creditor upon such judgment or order or (ii) thereshall be any period of 30 consecutive days during which a stay ofenforcement of such judgment or order, by reason of a pending appeal orotherwise, shall not be in effect. 

     11.1.16.      Repudiation ofor Default Under Guaranty.      Any Guarantor shall revoke or attempt to revokethe Guaranty signed by such Guarantor, shall repudiate such Guarantor’sliability thereunder, or shall be in default under the terms thereof, or shallfail to confirm in writing, promptly after receipt of Agent’s writtenrequest therefor, such Guarantor’s ongoing liability under the Guaranty inaccordance with the terms thereof. 

      11.1.17.      Criminal  Forfeiture.      Any  Obligor  shall  be  convicted  under  any  criminal  law that  could  lead to aforfeiture of any Property of such Obligor.
     11.1.18.      Default UnderSenior Subordinated Debt Documents.      There shall occur any default or eventof default under (and as defined in) the Senior Subordinated Debt Documents andsuch default or event of default shall continue beyond any applicable grace orcure period. 

11.2.       **Acceleration  of Obligations;  Termination of  Commitments.**      Without in any way limiting the right of Agent to demandpayment of any portion of the Obligations payable on demand in accordance with this Agreement:
     11.2.1.     Upon or at any timeafter the occurrence of an Event of Default (other than pursuant to **Section11.1.10**hereof) and for so long as such Event of Default shall exist, Agentmay in its discretion (and, upon receipt of written instructions to doso from the Required Lenders, shall) (a) declare the principal of and anyaccrued interest on the Loans and all other Obligations owing under any of theLoan Documents to be, whereupon the same shall become without further notice ordemand (all of which notice and demand Borrowers expressly waives),forthwith due and payable and Borrowers shall forthwith pay to Agent the entireprincipal of and accrued and unpaid interest on the Loans andother Obligations plus reasonable attorneys’ fees and expenses if suchprincipal and interest are collected by or through an attorney-at-law and (b)terminate the Commitments. 

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     11.2.2.      Upon the occurrenceof an Event of Default specified in **Section 11.1.10** hereof, all ofthe Obligations shall become automatically due and payable without declaration,notice or demand by Agent to or upon Borrowers and the Commitments shallautomatically terminate as if terminated by Agent pursuant to **Section5.2.1** hereof and with the effects specified in **Section 5.2.4** hereof;provided, however, that, if Agent or Lenders shallcontinue to make Loans or otherwise extend credit to Borrowers pursuant tothis Agreement after an automatic termination of the Commitments by reasonof the commencement of an Insolvency Proceeding by or against aBorrower, such Loans and other credit shall nevertheless begoverned by this Agreement and enforceable against and recoverable fromeach Obligor as if such Insolvency Proceeding had never beeninstituted. 

**11.3.**      **OtherRemedies.**      Upon and after the occurrence of an Event of Default and forso long as such Event of Default shall exist, Agent may in its discretion(and, upon receipt of written direction of the Required Lenders, shall)exercise from time to time the following rights and remedies (without prejudiceto the rights of Agent or any Lender to enforce its claim against any or allObligors): 

     11.3.1.     All of the rightsand remedies of a secured party under the UCC or under other Applicable Law, andall other legal and equitable rights to which Agent may be entitled underany of the Loan Documents, all of which rights and remedies shall becumulative and shall be in addition to any other rights or remedies contained inthis Agreement or any of the other Loan Documents, and none of whichshall be exclusive. 

     11.3.2.      The right tocollect all amounts at any time payable to a Borrower from any AccountDebtor or other Person at any time indebted to a Borrower. 

     11.3.3.      The right to takeimmediate possession of any of the Collateral, and to (i) requireBorrowers to assemble the Collateral, at Borrower’s expense, and make itavailable to Agent at a place designated by Agent which is reasonably convenientto both parties, and (ii) enter any premises where any of the Collateral shallbe located and to keep and store the Collateral on said premises until sold (andif said premises be the Property of a Borrower, then such Borrower agrees not tocharge Agent for storage thereof). 

     11.3.4.     The right to sellor otherwise dispose of all or any Collateral in its then condition, or afterany further manufacturing or processing thereof, at public or private sale orsales, with such notice as may be required by Applicable Law, in lots or inbulk, for cash or on credit, all as Agent, in its sole discretion, may deemadvisable. Each Borrower agrees that any requirement of notice to such Borroweror any other Obligor of any proposed public or private sale or other dispositionof Collateral by Agent shall be deemed reasonable notice thereof if given atleast 10 days prior thereto, and such sale may be at such locations asAgent may designate in said notice. Agent shall have the right to conductsuch sales on Borrower’s or any other Obligor’s premises, withoutcharge therefor, and such sales may be adjourned from time to time in accordancewith Applicable Law. Agent shall have the right to sell, lease or otherwisedispose of the Collateral, or any part thereof, for cash, credit or anycombination thereof, and Agent may purchase all or any part of the Collateral atpublic or, if permitted by law, private sale and, in lieu of actual paymentof such purchase price, may set off the amount of such price againstthe Obligations. The proceeds realized from the sale or otherdisposition of any Collateral may be applied, after allowing 2 Business Days forcollection, first to any Extraordinary Expenses incurred by Agent, second tointerest accrued with respect to any of the Obligations; and third, to theprincipal balance of the Obligations. If any deficiency shall arise,Obligors shall remain jointly and severally liable to Agent and Lenderstherefor. 

     11.3.5.     The right to theappointment of a receiver, without notice of any kind whatsoever, to takepossession of all or any portion of the Collateral and to exercise such rightsand powers as the court appointing such receiver shall confer upon suchreceiver. 

       11.3.6.       The right to exercise all of Agent's rights and remedies under the Mortgage with respect to any Real Estate.
     11.3.7.      The right torequire Borrowers to deposit with Agent funds equal tothe LC Outstandings and, if Borrowers fail promptly to make suchdeposit, Lenders may (and shall upon the direction of the Required Lenders)advance such amount as a Revolver Loan (whether or not an Out-of-FormulaCondition exists or is created thereby). Any such deposit or advance shall beheld by Agent as a reserve to fund future payments on any LC Support. At suchtime as the LC Support has been paid or terminated andall Letters of Credit have been drawn upon or expired, any amountsremaining in such reserve shall be applied against any outstanding Obligations,or, if all Obligations have been indefeasibly paid in full, returned toBorrowers. 

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To the fullest extentassignable by Borrowers, Agent is hereby granted an irrevocable, non-exclusivelicense or other right to use, license or sub-license (exercisable withoutpayment of royalty or other compensation to any Obligor or any other Person)any or all of Borrower’s Intellectual Property and all ofBorrower’s computer hardware and software trade secrets, brochures,customer lists, promotional and advertising materials, labels, and packagingmaterials, and any Property of a similar nature, in advertising for sale,marketing, selling and collecting and in completing the manufacturing of anyCollateral, and Borrower’s rights under all licenses and all franchiseagreements shall inure to Agent’s benefit. 

**11.4.     ****Setoff.**      In addition to any Liens granted under any of the LoanDocuments and any rights now or hereafter available under Applicable Law, Agentand each Lender (and each of their respective Affiliates) is hereby authorizedby each Borrower at any time that an Event of Default exists, without notice toBorrowers or any other Person (any such notice being hereby expressly waived) toset off and to appropriate and to apply any and all deposits, general or special(including Debt evidenced by certificates of deposit whether matured orunmatured (but not including trust accounts)) and any other Debt at any timeheld or owing by Agent, such Lender or any of their Affiliates to or for thecredit or the account of Borrowers against and on account of the Obligations ofBorrowers arising under the Loan Documents to Agent, such Lender or any of theirAffiliates, including all Loans and LC Obligations and all claims of any natureor description arising out of or in connection with this Agreement, irrespectiveof whether or not (i) Agent or such Lender shall have made any demand hereunder,(ii) Agent, at the request or with the consent of the Required Lenders, shallhave declared the principal of and interest on the Loans and other amounts duehereunder to be due and payable as permitted by this Agreement and even thoughsuch Obligations may be contingent or unmatured or (iii) the Collateral for theObligations is adequate. Notwithstanding the foregoing, each of Agent andLenders agree with each other that it shall not, without the express consent ofthe Required Lenders, and that it shall (to the extent that (x) it is lawfullyentitled to do so and (y) the accounts are not subject to Permitted Liensin favor of Agent or such Lender as set forth in **Section 9.2.5(ix)**) uponthe request of the Required Lenders, exercise its setoff rights hereunderagainst any accounts of Borrowers now or hereafter maintained with Agent, suchLender or any Affiliate of any of them, but Borrowers shall have no claim orcause of action against Agent or any Lender for any setoff made without theconsent of the Required Lenders and the validity of any such setoff shall not beimpaired by the absence of such consent. If any party (or its Affiliate)exercises the right of setoff provided for hereunder, such party shall beobligated to share any such setoff in the manner and to the extent required by**Section 12.5**. 
11.5.      RemediesCumulative; No Waiver.
     11.5.1.      All covenants,conditions, provisions, warranties, guaranties, indemnities, and otherundertakings of Borrowers contained in this Agreement and the other LoanDocuments, or in any document referred to herein or contained in any agreementsupplementary hereto or in any schedule or in any Guaranty given to Agent or anyLender or contained in any other agreement between Agent or any Lender andBorrowers, heretofore, concurrently, or hereafter entered into, shall be deemedcumulative to and not in derogation or substitution of any of the terms,covenants, conditions, or agreements of Borrowers herein contained. The rightsand remedies of Agent and Lenders under this Agreement and the otherLoan Documents shall be cumulative and not exclusive of any rights orremedies that Agent or any Lender would otherwise have. 

     11.5.2.      The failure ordelay of Agent or any Lender to require strict performance by a Borrower of anyprovision of any of the Loan Documents or to exercise or enforce any rights,Liens, powers or remedies under any of the Loan Documents or with respect to anyCollateral shall not operate as a waiver of such performance, Liens, rights,powers and remedies, but all such requirements, Liens, rights, powers, andremedies shall continue in full force and effect until all Loans and all otherObligations owing or to become owing from Borrowers to Agent and Lenders shallhave been fully satisfied. None of the undertakings, agreements, warranties,covenants and representations of each Borrower contained in this Agreementor any of the other Loan Documents and no Event of Default by Borrowersunder this Agreement or any other Loan Documents shall be deemed tohave been suspended or waived by Agent or any Lender, unless such suspension orwaiver is by an instrument in writing specifying such suspension or waiver andis signed by a duly authorized representative of Agent or such Lender anddirected to Borrowers. 

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     11.5.3.      If Agent or anyLender shall accept performance by Borrowers, in whole or in part, of anyobligation that Borrowers are required by any of the Loan Documents to performonly when a Default or Event of Default exists, or if Agent or any Lender shallexercise any right or remedy under any of the Loan Documents that maynot be exercised other than when a Default or Event of Default exists,Agent’s or Lender’s acceptance of such performance by Borrowersor Agent’s or Lender’s exercise of any such right or remedy shallnot operate to waive any such Event of Default or to preclude the exercise byAgent or any Lender of any other right or remedy, unless otherwise expresslyagreed in writing by Agent or such Lender, as the case may be. 
SECTION   12.     AGENT12.1.     Appointment, Authority and Duties of Agent.
     12.1.1.      Each Lender herebyirrevocably appoints and designates Fleet as Agent to act as herein specified.Agent may, and each Lender by its acceptance of a Note shall be deemedirrevocably to have authorized Agent to, enter into all Loan Documents to whichAgent is or is intended to be a party and all amendments hereto and all SecurityDocuments at any time executed by Borrowers, for its benefit and thePro Rata benefit of Lenders and, except as otherwise provided in this**Section 12**, to exercise such rights and powers under this Agreement andthe other Loan Documents as are specifically delegated to Agent by the termshereof and thereof, together with such other rights and powers as are reasonablyincidental thereto. Each Lender agrees that any action taken by Agent orthe Required Lenders in accordance with the provisions of this Agreement orthe other Loan Documents, and the exercise by Agent or the Required Lenders ofany of the powers set forth herein or therein, together with such other powersas are reasonably incidental thereto, shall be authorized and binding uponall Lenders. Without limiting the generality of the foregoing, Agent shallhave the sole and exclusive right and authority to (a) act as thedisbursing and collecting agent for Lenders with respect to all payments andcollections arising in connection with this Agreement and the other LoanDocuments; (b) execute and deliver as Agent each Loan Document and acceptdelivery of each such agreement delivered by Borrowers or any other Obligor; (c)act as collateral agent for Lenders for purposes of the perfection of allsecurity interests and Liens created by this Agreement or the Security Documentswith respect to all material items of the Collateral and, subject to thedirection of the Required Lenders, for all other purposes stated therein,provided that Agent hereby appoints, authorizes and directs each Lender to actas a collateral sub-agent for Agent and the other Lenders for purposes ofthe perfection of all security interests and Liens with respect toBorrower’s Deposit Accounts maintained with, and all cash and CashEquivalents held by, such Lender; (d) subject to the direction of the RequiredLenders, manage, supervise or otherwise deal with the Collateral; and (e) exceptas may be otherwise specifically restricted by the terms of this Agreement andsubject to the direction of the Required Lenders, exercise all remedies given toAgent with respect to any of the Collateral under the Loan Documentsrelating thereto, Applicable Law or otherwise. The duties of Agent shall beministerial and administrative in nature, and Agent shall not have by reason ofthis Agreement or any other Loan Document a fiduciary relationship with anyLender (or any Lender’s participants). Unless and until its authority to doso is revoked in writing by Required Lenders, Agent alone shall beauthorized to determine whether any Accounts or Inventory constituteEligible Accounts, Eligible Parts Inventory or Eligible Rental Inventory(basing such determination in each case upon the meanings given to such terms inAppendix A), or whether to impose or release (except as set forth in **Section12.9.1**) any reserve, and to exercise its own credit judgmentin connection therewith, which determinations and judgments, if exercisedin good faith, shall exonerate Agent from any liability to Lenders or any otherPerson for any errors in judgment. 

     12.1.2.      Agent (which term,as used in this sentence, shall include reference to Agent’s officers,directors, employees, attorneys, agents and Affiliates and to the officers,directors, employees, attorneys and agents of Agent’s Affiliates) shallnot: (a) have any duties or responsibilities except those expressly set forth inthis Agreement and the other Loan Documents or (b) be required to take, initiateor conduct any litigation, foreclosure or collection proceedings hereunder orunder any of the other Loan Documents except to the extent directed to doso by the Required Lenders during the continuance of any Event of Default. Theconferral upon Agent of any right hereunder shall not imply a duty onAgent’s part to exercise any such right unless instructed to do so bythe Required Lenders in accordance with this Agreement. 

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     12.1.3.      Agent may performany of its duties by or through its agents and employees and may employ one ormore Agent Professionals and shall not be responsible for the negligence ormisconduct of any such Agent Professionals selected by it with reasonable care.Borrowers shall promptly (and in any event, **on demand**)reimburse Agent for all reasonable expenses (including all ExtraordinaryExpenses) incurred by Agent pursuant to any of the provisions hereof or of anyof the other Loan Documents or in the execution of any of Agent’sduties hereby or thereby created or in the exercise of any right or power hereinor therein imposed or conferred upon it or Lenders (excluding, however, generaloverhead expenses), and each Lender agrees promptly to pay to Agent, **ondemand**, such Lender’s Pro Rata share ofany such reimbursement for expenses (including Extraordinary Expenses)that is not timely made by Borrowers to Agent. 

     12.1.4.      The rights,remedies, powers and privileges conferred upon Agent hereunder and under theother Loan Documents may be exercised by Agent without the necessity of thejoinder of any other parties unless otherwise required by Applicable Law.If Agent shall request instructions from the Required Lenders with respect toany act or action (including the failure to act) in connection withthis Agreement or any of the other Loan Documents, Agent shall be entitledto refrain from such act or taking such action unless and until Agent shall havereceived instructions from the Required Lenders; and Agent shall not incurliability to any Person by reason of so refraining. Without limiting theforegoing, no Lender shall have any right of action whatsoever against Agent asa result of Agent acting or refraining from acting hereunder or under any of theLoan Documents pursuant to or in accordance with the instructions of theRequired Lenders except for Agent’s own gross negligence or willfulmisconduct in connection with any action taken by it. Notwithstandinganything to the contrary contained in this Agreement, Agent shall not berequired to take any action that is in its opinion contrary toApplicable Law or the terms of any of the Loan Documents or that would inits reasonable opinion subject it or any of its officers, employees ordirectors to personal liability; provided, however, that ifAgent shall fail or refuse to take action that is not contrary to Applicable Lawor to any of the terms of any of the Loan Documents even if suchaction in Agent’s opinion would subject it to potential liability,the Required Lenders may remove Agent and appoint a successorAgent in the same manner and with the same effects as is provided in thisAgreement with respect to Agent’s resignation. 

     12.1.5.     Agent shallpromptly, upon receipt thereof, forward to each Lender (i) copies of anysignificant written notices, reports, certificates and other informationreceived by Agent from any Obligor (but only if and to the extent suchObligor is not required by the terms of the Loan Documents to supplysuch information directly to Lenders) and (ii) copies of the results of anyfield audits by Agent with respect to Borrowers. Agent shall (i) conductnot less than 2 field audits of Borrowers per calendar year (provided that suchnumber may be reduced upon the approval of the Required Lenders) and (ii)conduct not less than 4 Orderly Liquidation Value Appraisals per calendar year(provided that such number of Appraisals may be reduced to 3 upon the approvalof the Super Majority Lenders, and may be reduced to less than 3 upon theapproval of all Lenders).****Agent shall have no liability to any Lender forany delays in conducting or errors in or omissions from any field audit,appraisal or other examination of Borrowers or the Collateral, unless suchdelay or error or omission was the direct result of Agent’s willfulmisconduct. 

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     12.1.6.      Neither GECC, inits capacity as Syndication Agent hereunder, nor FSI or GECC , in theirrespective capacities as Co-Lead Arrangers, shall have any duties or obligationshereunder to Agent, Lenders or Borrowers. 

**12.2.**     **Agreements Regarding Collateral.**      Lenders hereby irrevocablyauthorize Agent, at its option and in its discretion, to release any Lien uponany Collateral (i) upon the termination of the Commitments and payment orsatisfaction of all of the Obligations, (ii) constituting Equipment or Inventorysold or disposed of in accordance with the terms of **Sections 7.3.3 or7.4.2** of this Agreement if a Borrower certifies to Agent that thedisposition is made in compliance with the terms **Sections 7.3.3 or7.4.2** of this Agreement (and Agent may rely conclusively on any suchcertificate, without further inquiry), or (iii) if approved or ratified by theRequired Lenders; provided, however, that Agent (without theconsent of any Lender) shall be authorized to release any Lien upon anyCollateral having a net book value of less than $1,000,000 in the aggregateduring any 12-month period. Agent shall have no obligation whatsoever to any ofthe Lenders to assure that any of the Collateral exists or is owned by aBorrower or is cared for, protected or insured or has been encumbered, or thatAgent’s Liens have been properly or sufficiently or lawfully created,perfected, protected or enforced or entitled to any particular priority or toexercise any duty of care with respect to any of the Collateral. 

**12.3.**     **RelianceBy Agent.**      Agent shall be entitled to rely, and shall be fully protectedin so relying, upon any certification, notice or other communication (includingany thereof by telephone, telex, telegram, telecopier message or cable) believedby it to be genuine and correct and to have been signed, sent or made by or onbehalf of the proper Person or Persons, and upon advice and statements ofAgent Professionals selected by Agent. As to any matters not expresslyprovided for by this Agreement or any of the other Loan Documents, Agent shallin all cases be fully protected in acting or refraining from actinghereunder and thereunder in accordance with the instructions of theRequired Lenders, and such instructions of the Required Lenders and anyaction taken or failure to act pursuant thereto shall be binding upon Lenders. 

**12.4.**      **ActionUpon Default.**      Agent shall not be deemed to have knowledge of theoccurrence of a Default or an Event of Default unless it has receivedwritten notice from a Lender or Borrowers specifying the occurrence and natureof such Default or Event of Default. If Agent shall receivesuch a notice of a Default or an Event of Default or shall otherwiseacquire actual knowledge of any Default or Event of Default,Agent shall promptly notify Lenders in writing and Agent shall takesuch action and assert such rights under this Agreement and the other LoanDocuments, or shall refrain from taking such action and assertingsuch rights, as the Required Lenders shall direct from time to time. If anyLender shall receive a notice of a Default or an Event of Default or shallotherwise acquire actual knowledge of any Default or Event of Default, suchLender shall promptly notify Agent and the other Lenders in writing. As providedin **Section 12.3** hereof, Agent shall not be subject to any liability byreason of acting or refraining to act pursuant to any request of the RequiredLenders except for its own willful misconduct or gross negligence in connectionwith any action taken by it. Before directing Agent to take or refrain fromtaking any action or asserting any rights or remedies under this Agreement andthe other Loan Documents on account of any Event of Default, the RequiredLenders shall consult with and seek the advice of (but without having toobtain the consent of) each other Lender, and promptly after directing Agent totake or refrain from taking any such action or asserting any such rights,the Required Lenders will so advise each other Lender of the actiontaken or refrained from being taken and, upon request of any Lender,will supply information concerning actions taken or not taken. In no eventshall the Required Lenders, without the prior written consent of each Lender,direct Agent to accelerate and demand payment of the Loans held by oneLender without accelerating and demanding payment of all other Loans orto terminate the Commitments of one or more Lenders without terminating theCommitments of all Lenders. Each Lender agrees that, except as otherwiseprovided in any of the Loan Documents and without the prior written consent ofthe Required Lenders, it will not take any legal action or institute any actionor proceeding against any Obligor with respect to any of the Obligations orCollateral or accelerate or otherwise enforce its portion of theObligations. Without limiting the generality of the foregoing, none ofLenders may exercise any right that it might otherwise have underApplicable Law to credit bid at foreclosure sales, UCC sales or other similarsales or dispositions of any of the Collateral except as authorized by theRequired Lenders. Notwithstanding anything to the contrary set forth in this**Section 12.4** or elsewhere in this Agreement, each Lender shallbe authorized to take such action to preserve or enforce its rights against anyObligor where a deadline or limitation period is otherwise applicable and would,absent the taken of specified action, bar the enforcement of Obligations held bysuch Lender against such Obligor, including the filing of proofs of claim in anyInsolvency Proceeding. 

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**12.5.**      **RatableSharing.**      If any Lender shall obtain any payment or reduction (includingany amounts received as adequate protection of a bank account deposit treated ascash collateral under the Bankruptcy Code) of any Obligation of Borrowershereunder (whether voluntary, involuntary, through the exercise of any right ofset-off or otherwise) in excess of its Pro Rata share of payments or reductionson account of such Obligations obtained by all of the Lenders, such Lender shallforthwith (i) notify the other Lenders and Agent of such receipt and (ii)purchase from the other Lenders such participations in the affected Obligationsas shall be necessary to cause such purchasing Lender to share the excesspayment or reduction, net of costs incurred in connection therewith, on a ProRata basis, provided that if all or any portion of such excess payment orreduction is thereafter recovered from such purchasing Lender or additionalcosts are incurred, the purchase shall be rescinded and the purchase pricerestored to the extent of such recovery or such additional costs, but withoutinterest. Each Borrower agrees that any Lender so purchasing a participationfrom another Lender pursuant to this **Section 12.5** may, to the fullestextent permitted by Applicable Law, exercise all of its rights of payment(including the right of set-off) with respect to such participation asfully as if such Lender were the direct creditor of such Borrower in theamount of such participation. 
12.6.  Indemnification of Agent Indemnitees.
     12.6.1.     Each Lender agreesto indemnify and defend the Agent Indemnitees (to the extent not reimbursed byBorrowers under this Agreement, but without limiting the indemnificationobligation of Borrowers under this Agreement), on a Pro Rata basis, and to holdeach of the Agent Indemnitees harmless from and against, any and all Claimswhich may be imposed on, incurred by or asserted against any of the AgentIndemnitees in any way related to or arising out of this Agreement or any of theother Loan Documents or any other document contemplated by or referred toherein or therein or the transactions contemplated hereby or thereby(including the costs and expenses which Borrowers are obligated to pay under**Section 14.2** hereof or amounts Agent may be called upon to pay inconnection with any lockbox or Dominion Account arrangement contemplated herebyor under any indemnity, guaranty or other assurance of payment or performancegiven by Agent with respect to Cash Management Agreements, and Letters ofCredit) or the enforcement of any of the terms hereof or thereof or of any suchother documents, provided that no Lender shall be liable to any Agent Indemniteefor any of the foregoing to the extent that they result solely from the willfulmisconduct or gross negligence of such Agent Indemnitee. 

     12.6.2.      Without limitingthe generality of the foregoing provisions of this **Section 12.6**,if Agent should be sued by any receiver, trustee in bankruptcy,debtor-in-possession or other Person on account of any alleged preference orfraudulent transfer received or alleged to have been received from a Borrower orany other Obligor as the result of any transaction under the LoanDocuments, then in such event any monies paid by Agent in settlement orsatisfaction of such suit, together with all Extraordinary Expenses incurred byAgent in the defense of same, shall be promptly reimbursed to Agent by Lendersto the extent of each Lender’s Pro Rata share. 

     12.6.3.      Without limitingthe generality of the foregoing provisions of this **Section 12.6**, if atany time (whether prior to or after the Commitment Termination Date) any actionor proceeding shall be brought against any of the Agent Indemnitees by anObligor or by any other Person claiming by, through or under an Obligor, torecover damages for any act taken or omitted by Agent under any of the LoanDocuments or in the performance of any rights, powers or remedies of Agentagainst any Obligor, any Account Debtor, the Collateral or with respect toany Loans, or to obtain any other relief of any kind on account of anytransaction involving any Agent Indemnitees under or in relation to any of theLoan Documents, each Lender agrees to indemnify, defend and hold the AgentIndemnitees harmless with respect thereto and to pay to the Agent Indemniteessuch Lender’s Pro Rata share of such amount as any of the Agent Indemniteesshall be required to pay by reason of a judgment, decree, or other order enteredin such action or proceeding or by reason of any compromise or settlement agreedto by the Agent Indemnitees, including all interest and costs assessed againstany of the Agent Indemnitees in defending or compromising such action, togetherwith attorneys’ fees and other legal expenses paid or incurred by the AgentIndemnitees in connection therewith; provided, however, that noLender shall be liable to any Agent Indemnitee for any of the foregoing to theextent that they arise solely from the willful misconduct or gross negligence ofsuch Agent Indemnitee. In Agent’s discretion, Agent may also reserve for orsatisfy any such judgment, decree or order from proceeds of Collateral prior toany distributions therefrom to or for the account of Lenders. 

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**12.7.**     **Limitation on Responsibilities of Agent.**      Agent shall in all casesbe fully justified in failing or refusing to act hereunder unless it shall havereceived further assurances to its satisfaction from Lenders of theirindemnification obligations under **Section 12.6** hereof against any and allClaims which may be incurred by Agent by reason of taking or continuing to takeany such action. Agent shall not be liable to Lenders (or any Lender’sparticipants) for any action taken or omitted to be taken under or in connectionwith this Agreement or the other Loan Documents except as a result of actualgross negligence or willful misconduct on the part of Agent. Agent does notassume any responsibility for any failure or delay in performance or breach byany Obligor or any Lender of its obligations under this Agreement or any ofthe other Loan Documents. Agent does not make to Lenders, and no Lendermakes to Agent or the other Lenders, any express or implied warranty,representation or guarantee with respect to the Loans, the Collateral, the LoanDocuments or any Obligor. Neither Agent nor any of its officers, directors,employees, attorneys or agents shall be responsible to Lenders, and no Lendernor any of its agents, attorneys or employees shall be responsible to Agent orthe other Lenders, for: (i) any recitals, statements, information,representations or warranties contained in any of the Loan Documents or in anycertificate or other document furnished pursuant to the terms hereof; (ii) theexecution, validity, genuineness, effectiveness or enforceability of any of theLoan Documents; (iii) the validity, genuineness, enforceability, collectibility,value, sufficiency or existence of any Collateral, or the perfection or priorityof any Lien therein; or (iv) the assets, liabilities, financial condition,results of operations, business, creditworthiness or legal status of any Obligoror any Account Debtor. Neither Agent nor any of its officers, directors,employees, attorneys or agents shall have any obligation to any Lender toascertain or inquire into the existence of any Default or Event of Default,the observance or performance by any Obligor of any of the duties oragreements of such Obligor under any of the Loan Documents or thesatisfaction of any conditions precedent contained in any of the LoanDocuments. Agent may consult with and employ legal counsel, accountants andother experts and shall be entitled to act upon, and shall be fullyprotected in any action taken in good faith reliance upon, any advice given bysuch experts. 
12.8.     Successor Agent and Co-Agents.
     12.8.1.      Subject to theappointment and acceptance of a successor Agent as provided below, Fleet, (i)upon the request of Borrowers, shall resign as Agent at such time as theaggregate amount of the Commitments retained by Fleet is less than $5,000,000,(ii) upon the request of the Required Lenders, shall resign as Agent at suchtime as the aggregate amount of the Commitments retained by Fleet is less than$10,000,000, and (iii) may resign as Agent at any time by giving at least 30days written notice thereof to each Lender and Borrowers. Upon receipt of anynotice of such resignation, the Required Lenders, after prior consultation with(but without having to obtain consent of) each Lender, shall have the right toappoint a successor Agent which shall be (i) a Lender, (ii) a UnitedStates based affiliate of a Lender, or (iii) a commercial bank that is organizedunder the laws of the United States or of any State thereof and has a combinedcapital surplus of at least $100,000,000 and, provided no Default or Event ofDefault then exists, is reasonably acceptable to Borrowers (and for purposeshereof, any successor to Fleet shall be deemed acceptable to Borrowers). Uponthe acceptance by a successor Agent of an appointment to serve as an Agenthereunder, such successor Agent shall thereupon succeed to and become vestedwith all the rights, powers, privileges and duties of the retiring Agent withoutfurther act, deed or conveyance, and the retiring Agent shall be discharged fromits duties and obligations hereunder. After any retiring Agent’sresignation hereunder as Agent, the provisions of this **Section 12**(including the provisions of **Section 12.6** hereof) shall continue ineffect for its benefit in respect of any actions taken or omitted to be taken byit while it was acting as Agent. Notwithstanding anything to the contrarycontained in this Agreement, any successor by merger or acquisition of the stockor assets of Fleet shall continue to be Agent hereunder unless such successorshall resign in accordance with the provisions hereof. 

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     12.8.2.      It is the purposeof this Agreement that there shall be no violation of any Applicable Law denyingor restricting the right of financial institutions to transact business as agentor otherwise in any jurisdiction. It is recognized that, in case of litigationunder any of the Loan Documents, or in case Agent deems that by reason ofpresent or future laws of any jurisdiction Agent might be prohibited fromexercising any of the powers, rights or remedies granted to Agent or Lendershereunder or under any of the Loan Documents or from holding title to or a Lienupon any Collateral or from taking any other action which may be necessaryhereunder or under any of the Loan Documents, Agent may appoint an additionalPerson as a separate collateral agent or co-collateral agent which is not soprohibited from taking any of such actions or exercising any of such powers,rights or remedies. If Agent shall appoint an additional Person as a separatecollateral agent or co-collateral agent as provided above, each and everyremedy, power, right, claim, demand or cause of action intended by any of theLoan Documents to be exercised by or vested in or conveyed to Agent with respectthereto shall be exercisable by and vested in such separate collateral agent orco-collateral agent, but only to the extent necessary to enable such separatecollateral agent or co-collateral agent to exercise such powers, rights andremedies, and every covenant and obligation necessary to the exercise thereof bysuch separate collateral agent or co-collateral agent shall run to and beenforceable by either of them. Should any instrument from Lenders be required bythe separate collateral agent or co-collateral agent so appointed by Agent inorder more fully and certainly to vest in and confirm to him or it such rights,powers, duties and obligations, any and all of such instruments shall, onrequest, be executed, acknowledged and delivered by Lenders whether or not aDefault or Event of Default then exists. In case any separate collateral agentor co-collateral agent, or a successor to either, shall die, becomeincapable of acting, resign or be removed, all the estates, properties, rights,powers, duties and obligations of such separate collateral agent orco-collateral agent, so far as permitted by Applicable Law, shall vest in and beexercised by Agent until the appointment of a new collateral agent orsuccessor to such separate collateral agent or co-collateral agent. 
 12.9.         Consents, Amendments and Waivers; Out-of-Formula Loans.
      12.9.1.       No amendment ormodification of any provision of this Agreement shall be effective without theprior written agreement of the Required Lenders and Borrowers, and no waiver ofany Default or Event of Default shall be effective without the prior writtenconsent of the Required Lenders; provided, however, that (i)without the prior written consent of Agent, no amendment or waiver shall beeffective with respect to any provision in any of the Loan Documents (includingthis **Section 12**) to the extent such provision relates to the rights,duties or immunities of Agent; (ii) without the prior written consent ofFleet, no amendment or waiver with respect to the provisions of **Sections****1.3 or 3.1.3** shall be effective; (iii) without the priorwritten consent of all Lenders, no waiver of any Default or Event of Defaultshall be effective if the Default or Event of Default relates to Borrowers’failure to observe or perform any covenant that may not be amended without theunanimous written consent of Lenders (and, where so provided hereinafter, thewritten consent of Agent) as hereinafter set forth in this**Section12.9.1**; and (iv) written agreement of all Lenders (except a defaultingLender as provided in**Section 3.2** of this Agreement) shall berequired to effectuate any amendment, modification or waiver that would (a)alter the provisions of **Sections 2.2, 2.4, 2.6, 2.7, 2.8, 2.9, 4.5, 4.6, 4.7,4.9, 4.10, 5.1, 12, 13, 14.2, 14.3 or 14.14**, (b) amend the definitions of“Pro Rata,” “Required Lenders,” “Super MajorityLenders,” “Availability Reserve” or “Borrowing Base”(and the other defined terms used in such definitions), if the effect wouldbe to increase the amount of Availability, or any provision ofthis Agreement obligating Agent to take certain actions at the direction ofthe Required Lenders or Super Majority Lenders, or any provision of any ofthe Loan Documents regarding the Pro Rata treatment or obligations ofLenders, (c) increase or otherwise modify any of the Commitments (other than toreduce proportionately each Lender’s Commitment in connection with anyoverall reduction in the amount of the Commitments), (d) alter or amend(other than to increase) the rate of interest payable in respect of the Loans(except as may be expressly authorized by the Loan Documents or as may benecessary, in Agent’s judgement, to comply with Applicable Law), (e) waiveor agree to defer collection of any fee, termination charge or other chargeprovided for under any of the Loan Documents (except to the extent that theRequired Lenders agree after and during the continuance of any Event of Defaultto a waiver or deferral of any termination charge provided for in**Section 5.2.3**hereof), the unused line fee in **Section 2.2.2**hereof or the LC facility fees in **Section 2.2.3** hereof, (f) subordinatethe payment of any of the Obligations to any other Debt or thepriority of any Liens granted to Agent under any of the Loan Documents toLiens granted to any other Person, except as currently provided in orcontemplated by the Loan Document in connection with Borrowers’incurrence of Purchase Money Debt permitted in **Section 9.2.3**hereofpursuant to a Vendor Intercreditor Agreement executed by Agent and except forLiens granted by an Obligor to financial institutions with respect to amounts ondeposit with such financial institutions to cover returned items,processing and analysis charges and other charges in the Ordinary Course ofBusiness that relate to deposit accounts with such financial institutions,(g) alter the time or amount of repayment of any of the Loans or waiveany Event of Default resulting from nonpayment of the Loans on the due datethereof (or within any applicable period of grace), (h) forgive any of theObligations, except any portion of the Obligations held by a Lender whoconsents in writing to such forgiveness, or (i) release any Obligor fromliability for any of the Obligations. No Lender shall be authorized toamend or modify any Note held by it, unless such amendment or modification isconsented to in writing by all Lenders; provided, however, thatthe foregoing shall not be construed to prohibit Agent from releasing orreducing any reserve imposed by virtue of clause (viii) of the definition of“Availability Reserve” or amending or modifying any provision ofthis Agreement that may be effected pursuant to this **Section 12.9.1**by agreement of Borrowers and the Required Lenders even though such anamendment or modification results in an amendment or modification of the Notesby virtue of the incorporation by reference in each of the Notes ofthis Agreement. The making of any Loans hereunder by any Lender during theexistence of a Default or Event of Default shall not be deemed to constitutea waiver of such Default or Event of Default. Any waiver orconsent granted by Lenders hereunder shall be effective only if in writingand then only in the specific instance and for the specific purposefor which it was given. 

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      12.9.2.      In connection withany proposed amendment to any of the Loan Documents or waiver of any of theterms thereof or any Default or Event of Default thereunder, Borrowers shall notsolicit, request or negotiate for or with respect to any such proposed amendmentor waiver of any of the provisions of this Agreement or any of the other LoanDocuments unless each Lender shall be informed thereof by Borrowers or Agent (tothe extent known by Agent) and shall be afforded an opportunity of consideringthe same and supplied by Borrowers with sufficient information to enable it tomake an informed decision with respect thereto. Borrowers will not, directly orindirectly, pay or cause to be paid any remuneration or other thing of value,whether by way of supplemental or additional interest, fee or otherwise, to anyLender (in its capacity as a Lender hereunder) as consideration for or asan inducement to the consent to or agreement by such Lender with any waiver oramendment of any of the terms and provisions of this Agreement or any of theother Loan Documents unless such remuneration or thing of value isconcurrently paid, on the same terms, on a Pro Rata basis to all Lenders. 

      12.9.3.       Unless otherwisedirected in writing by the Required Lenders, Agent may require Lenders to honorrequests by Borrowers for Out-of-Formula Loans (in which event, andnotwithstanding anything to the contrary set forth in **Section 1.1.1** orelsewhere in this Agreement, Lenders shall continue to make Revolver Loans up totheir Pro Rata share of the Commitments) and to forbear from requiringBorrowers to cure an Out-of-Formula Condition, (1) when no Event of Defaultexists (or if an Event of Default exists, when the existence of such Event ofDefault is not known by Agent), if and for so long as (i) suchOut-of-Formula Condition does not continue for a period of more than 30consecutive days, following which no Out-of-Formula Condition exists for atleast 15 consecutive days before another Out-of-Formula Condition exists,(ii) the amount of the Revolver Loans outstanding at any time does not exceedthe aggregate of the Commitments at such time, and (iii) the Out-of-FormulaCondition is not known by Agent at the time in question to exceed $3,000,000;and (2) regardless of whether or not an Event of Default exists, if Agentdiscovers the existence of an Out-of-Formula Condition not previously knownby it to exist, but Lenders shall be obligated to continue making suchRevolver Loans as directed by Agent only (A) if the amount of the Out-of-FormulaCondition is not increased by more than $1,000,000 above the amount determinedby Agent to exist on the date of discovery thereof and (B) for a period not toexceed 5 Business Days. In no event shall Borrowers or any otherObligor be deemed to be a beneficiary of this **Section 12.9.3** orauthorized to enforce any of the provisions of this **Section 12.9.3**. 

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**12.10.**       **DueDiligence and Non-Reliance.**       Each Lender hereby acknowledges andrepresents that it has, independently and without reliance upon Agent or theother Lenders, and based upon such documents, information and analyses as it hasdeemed appropriate, made its own credit analysis of each Obligor and its owndecision to enter into this Agreement and to fund the Loans to be made by ithereunder and to purchase participations in the LC Obligations pursuant to**Section 1.3.2** hereof***,***** and each Lender has madesuch inquiries concerning the Loan Documents, the Collateral and each Obligor assuch Lender feels necessary and appropriate, and has taken such care on its ownbehalf as would have been the case had it entered into the other Loan Documentswithout the intervention or participation of the other Lenders or Agent.Each Lender hereby further acknowledges and represents that the other Lendersand Agent have not made any representations or warranties to it concerning anyObligor, any of the Collateral or the legality, validity, sufficiency orenforceability of any of the Loan Documents. Each Lender also herebyacknowledges that it will, independently and without reliance upon the otherLenders or Agent, and based upon such financial statements, documents andinformation as it deems appropriate at the time, continue to make and rely uponits own credit decisions in making Loans and in taking or refrainingto take any other action under this Agreement or any of the other LoanDocuments. Except for notices, reports and other information expressly requiredto be furnished to Lenders by Agent hereunder, Agent shall not have any duty orresponsibility to provide any Lender with any notices, reports or certificatesfurnished to Agent by any Obligor or any credit or other information concerningthe affairs, financial condition, business or Properties of any Obligor (orany of its Affiliates) which may come into possession of Agent or any ofAgent’s Affiliates. 

**12.11.****      Representations and Warranties of Lenders.**       By its execution ofthis Agreement, each Lender hereby represents and warrants to Borrowers andthe other Lenders that it has the power to enter into and perform itsobligations under this Agreement and the other Loan Documents, and that it hastaken all necessary and appropriate action to authorize its execution andperformance of this Agreement and the other Loan Documents to which it is aparty, each of which will be binding upon it and the obligations imposed upon itherein or therein will be enforceable against it in accordance with therespective terms of such documents. 

**12.12.     ****TheRequired Lenders.**       As to any provisions of this Agreement or the otherLoan Documents under which action may or is required to be taken upon directionor approval of the Required Lenders, the direction or approval of the RequiredLenders shall be binding upon each Lender to the same extent and with the sameeffect as if each Lender had joined therein. Notwithstanding anything to thecontrary contained in this Agreement, Borrowers shall not be deemed to be abeneficiary of, or be entitled to enforce, sue upon or assert as a defense toany of the Obligations, any provisions of this Agreement that requires Agent orany Lender to act, or conditions their authority to act, upon the direction orconsent of the Required Lenders; and any action taken by Agent or anyLender that requires the consent or direction of the Required Lenders as acondition to taking such action shall, insofar as Borrowers are concerned,be presumed to have been taken with the requisite consent or direction ofthe Required Lenders. 

**12.13.**       **SeveralObligations.**       The obligations and commitments of each Lender under thisAgreement and the other Loan Documents are several and neither Agent nor anyLender shall be responsible for the performance by the other Lenders of itsobligations or commitments hereunder or thereunder. Notwithstanding anyliability of Lenders stated to be joint and several to third Persons under anyof the Loan Documents, such liability shall be shared, as among Lenders, ProRata according to the respective Commitments of Lenders. 

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**12.14.**       **Agentin its Individual Capacity.**       With respect to its obligation to lend underthis Agreement, the Loans made by it and each Note issued to it, Agent shallhave the same rights and powers hereunder and under the other Loan Documents asany other Lender or holder of a Note and may exercise the same as though itwere not performing the duties specified herein; and the terms“Lenders,” “Required Lenders,” or any similar term shall,unless the context clearly otherwise indicates, include Agent in its capacity asa Lender. Agent and its Affiliates may each accept deposits from, maintaindeposits or credit balances for, invest in, lend money to, act as trustee underindentures of, serve as financial advisor to, and generally engage in any kindof business with a Borrower or any other Obligor, or any Affiliate of a Borroweror any other Obligor, as if it were any other bank and without any duty toaccount therefor (or for any fees or other consideration received in connectiontherewith) to the other Lenders. 

**12.15.**       **NoThird Party Beneficiaries.**       This **Section 12** is not intended toconfer any rights or benefits upon Borrowers or any other Person except Lendersand Agent, and no Person (including Borrowers) other than Lenders and Agentshall have any right to enforce any of the provisions of this **Section12** except as expressly provided in **Section 12.17** hereof. As betweenBorrowers and Agent, any action that Agent may take or purport to take on behalfof Lenders under any of the Loan Documents shall be conclusively presumed tohave been authorized and approved by Lenders as herein provided. 

**12.16.**       **Noticeof Transfer.**       Agent may deem and treat a Lender party to this Agreementas the owner of such Lender’s portion of the Revolver Loans for allpurposes, unless and until a written notice of the assignment or transferthereof executed by such Lender has been received by Agent. 

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**12.17.**     **Replacement of Certain Lenders.**       If a Lender (“AffectedLender”) shall have (i) failed to fund its Pro Rata share of any RevolverLoan requested (or deemed requested) by Borrowers which such Lender is obligatedto fund under the terms of this Agreement and which such failure has not beencured, (ii) requested compensation from Borrowers under **Section 2.7**to recover increased costs incurred by such Lender (or its parent orholding company) which are not being incurred generally by the other Lenders (ortheir respective parents or holding companies), or (iii) delivered a noticepursuant to **Section 2.6** hereof claiming that such Lender is unableto extend LIBOR Loans to Borrowers for reasons not generally applicable to theother Lenders, then, in any such case and in addition to any other rights andremedies that Agent, any other Lender or Borrowers may have against suchAffected Lender, Borrowers or Agent may make written demand on all such AffectedLenders (with a copy to Agent in the case of a demand by Borrowers and acopy to Borrowers in the case of a demand by Agent) for all the Affected Lendersto assign, and each Affected Lender shall assign pursuant to one or moreduly executed Assignment and Acceptances within 5 Business Days after the dateof such demand, to one or more Lenders willing to accept such assignment orassignments, or to one or more Eligible Assignees designated by Agent, all ofsuch Affected Lender’s rights and obligations under this Agreement(including its Commitments and all Loans owing to it) in accordance with**Section 13** hereof. Agent is hereby irrevocably authorized to executeone or more Assignment and Acceptances as attorney-in-fact for any AffectedLender which fails or refuses to execute and deliver the same within 5 BusinessDays after the date of such demand. The Affected Lender shall be entitled toreceive, in cash and concurrently with execution and delivery of each suchAssignment and Acceptance, all amounts owed to the Affected Lender hereunder orunder any other Loan Document, including the aggregate outstanding principalamount of the Revolver Loans owed to such Lender, together with accrued interestthereon through the date of such assignment. Upon the replacement of anyAffected Lender pursuant to this **Section 12.17**, such Affected Lendershall cease to have any participation in, entitlement to, orother right to share in the Liens of Agent in any Collateral andsuch Affected Lender shall have no further liability to Agent, any Lenderor any other Person under any of the Loan Documents (except as provided in**Section 12.6** hereof as to events or transactions which occur prior to thereplacement of such Affected Lender), including any commitment to make Loans orpurchase participations in LC Outstandings. 
12.18.     Remittance of Payments and Collections.
      12.18.1.       All payments byany Lender to Agent shall be made not later than the time set forth elsewhere inthis Agreement on the Business Day such payment is due; provided,however, that if such payment is due on demand by Agent and such demandis made on the paying Lender after 11:00 a.m. on such Business Day, thenpayment shall be made by 11:00 a.m. on the next Business Day. Payment by Agentto any Lender shall be made by wire transfer, promptly following Agent’sreceipt of funds for the account of such Lender and in the type of fundsreceived by Agent; provided, however, that if Agent receives suchfunds at or prior to 12:00 noon, Agent shall pay such funds to such Lender by2:00 p.m. on such Business Day, but if Agent receives such funds after 12:00noon, Agent shall pay such funds to such Lender by 2:00 p.m. onthe next Business Day. 

      12.18.2.       With respect tothe payment of any funds from Agent to a Lender or from a Lender to Agent, theparty failing to make full payment when due pursuant to the terms hereof shall,on demand by the other party, pay such amount together with interest thereon atthe Federal Funds Rate. In no event shall Borrowers be entitled to receiveany credit for any interest paid by Agent to any Lender, or by any Lender toAgent, at the Federal Funds Rate as provided herein. 

      12.18.3.       If Agent pays anyamount to a Lender in the belief or expectation that a related payment has beenor will be received by Agent from an Obligor and such related payment is notreceived by Agent, then Agent shall be entitled to recover such amount from eachLender that receives such amount. If Agent determines at any time that anyamount received by it under this Agreement or any of the other LoanDocuments must be returned to an Obligor or paid to any other Person pursuant toany Applicable Law, court order or otherwise, then, notwithstanding any otherterm or condition of this Agreement or any of the other LoanDocuments, Agent shall not be required to distribute such amount to any Lender. 

-65-SECTION   13.     BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
**13.1.**     **Successors and Assigns.**       This Agreement shall be binding upon andinure to the benefit of each Borrower, Agent and Lenders and their respectivesuccessors and assigns (which, in the case of Agent, shall include any successorAgent appointed pursuant to **Section 12.8** hereof), except that (i) noBorrower shall have the right to assign its rights or delegate performanceof any of its obligations under any of the Loan Documents and (ii) anyassignment by any Lender must be made in compliance with **Section 13.3**hereof. Agent may treat the payee of any Note as the owner thereof for allpurposes hereof unless and until such payee complies with**Section 13.3** inthe case of an assignment thereof or, in the case of any other transfer, awritten notice of the transfer is filed with Agent. Any assignee ortransferee of a Note agrees by acceptance thereof to be bound by all the termsand provisions of the Loan Documents. Any request, authority or consent of anyPerson, who at the time of making such request or giving such authority orconsent is the holder of a Note, shall be conclusive and binding on anysubsequent holder, transferee or assignee of such Note or of any Note or Notesissued in exchange therefor. 
13.2.     Participations.
      13.2.1.       PermittedParticipants; Effect.       Any Lender may, in the ordinary course ofits business and in accordance with Applicable Law, at any time sell to oneor more banks or other financial institutions (each a “Participant”) aparticipating interest in any of the Obligations owing to such Lender, anyCommitment of such Lender or any other interest of such Lender under any of theLoan Documents; provided, that a Lender may not sell any participatinginterest in any of the Obligations to any Person who would constitute an“Affiliate” of any Borrower under and as defined in the SeniorSubordinated Indenture. In the event of any such sale by a Lender ofparticipating interests to a Participant, such Lender’s obligationsunder the Loan Documents shall remain unchanged, such Lender shall remainsolely responsible to the other parties hereto for the performance of suchobligations, such Lender shall remain the holder of any Note for all purposesunder the Loan Documents, all amounts payable by Borrowers under this Agreementand any of the Notes shall be determined as if such Lender had not soldsuch participating interests, and Borrowers and Agent shall continueto deal solely and directly with such Lender in connection with suchLender’s rights and obligations under the Loan Documents. If a Lendersells a participation to a Person other than an Affiliate of such Lender,then such Lender shall give prompt written notice thereof to Borrowers andthe other Lenders. A Participant that would be a Foreign Lender if it were aLender shall not be entitled to the benefits of **Section 4.9** unlessBorrowers are notified of the participation sold to Participant and suchParticipant agrees, for the benefit of Borrowers, to comply with **Section4.10** as though such Participant were a Lender. 

     13.2.2.       VotingRights.       Each Lender shall retain the sole right to approve, without theconsent of any Participant, any amendment, modification or waiver of anyprovision of the Loan Documents other than an amendment, modification or waiverwith respect to any Loans or Commitment in which such Participant has aninterest which forgives principal, interest or fees or reduces the statedinterest rate or the stated rates at which fees are payable with respect to anysuch Loan or Commitment, postpones the Commitment Termination Date, or any datefixed for any regularly scheduled payment of interest or fees on such RevolverLoan or Commitment, or releases from liability a Borrower or any Guarantor orreleases any substantial portion of any of the Collateral. 

      13.2.3.     Benefit ofSet-Off.       Each Borrower agrees that each Participant shall be deemed to havethe right of set-off provided in **Section 11.4** hereof in respect of itsparticipating interest in amounts owing under the Loan Documents to the sameextent and subject to the same requirements under this Agreement (including**Section 12.5**) as if the amount of its participating interest were owingdirectly to it as a Lender under the Loan Documents, provided that each Lendershall retain the right of set-off provided in **Section 11.4** hereofwith respect to the amount of participating interests sold to each Participant.Lenders agree to share with each Participant, and each Participant byexercising the right of set-off provided in **Section 11.4** agrees toshare with each Lender, any amount received pursuant to the exercise of itsright of set-off, such amounts to be shared in accordance with **Section12.5** hereof as if each Participant were a Lender. 

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      13.2.4.       Notices.      Each Lender shall be solely responsible for notifying its Participants of anymatters relating to the Loan Documents to the extent that any such notice may berequired, and neither Agent nor any other Lender shall have any obligation, dutyor liability to any Participant of any other Lender. Without limiting thegenerality of the foregoing, neither Agent nor any Lender shall have anyobligation to give notices or to provide documents or information to aParticipant of another Lender. 
13.3.     Assignments.
     13.3.1.       PermittedAssignments.       Subject to its giving at least 2 Business Days notice to Agentand Borrowers, any Lender may, in accordance with Applicable Law, at any timeassign to any Eligible Assignee all or any part of its rights andobligations under the Loan Documents, so long as (i) each assignment is of aconstant, and not a varying, ratable percentage of all of the transferorLender’s rights and obligations under the Loan Documents with respectto the Loans and the LC Obligations and, in the case of apartial assignment, is in a minimum principal amount of $2,500,000 (unlessotherwise agreed by Agent in its sole discretion) and integral multiples of$500,000 in excess of that amount; (ii) except in the case of an assignment inwhole of a Lender’s rights and obligations under the Loan Documents oran assignment by one original signatory to this Agreement to another suchsignatory, immediately after giving effect to any assignment, the aggregateamount of the Commitments retained by the transferor Lender shall in noevent be less than $5,000,000 (unless otherwise agreed by Agent in its solediscretion); and (iii) the parties to each such assignment shall execute anddeliver to Agent, for its acceptance and recording, an Assignment andAcceptance. The consent of Agent shall be required prior to an assignmentbecoming effective with respect to an Eligible Assignee that is not a Lender oran Affiliate of a Lender. Nothing contained herein shall limit in any way theright of Lenders to assign (i) to any Eligible Assignee all of their rights andobligations under the Loan Documents or (ii) all or any portion of the Loansowing to it to any Federal Reserve Bank or the United States Treasury ascollateral security pursuant to Regulation A of the Board of Governors and anyOperating Circular issued by such Federal Reserve Bank, provided that in thecase of this clause (ii) any payment in respect of such assigned Loans madeby Borrowers to the assigning Lender in accordance with the terms of thisAgreement shall satisfy Borrowers’ obligations hereunder in respect of suchassigned Loans to the extent of such payment, but no such assignment shallrelease the assigning Lender from its obligations hereunder. 

      13.3.2.      Effect;Effective Date.       Upon (i) delivery to Agent of a notice of assignmentsubstantially in the form attached as **Exhibit H** hereto, together with anyconsents required by **Section 13.3.1**, and (ii) payment of a $3,500fee to Agent for processing any assignment to an Eligible Assignee that isnot an Affiliate of the transferor Lender, such assignment shall becomeeffective on the effective date specified in such notice of assignment. Onand after the effective date of such assignment, such Eligible Assignee shallfor all purposes be a Lender party to the Agreement and any otherLoan Document executed by the Lenders and shall have all the rights andobligations of the Lender under the Loan Documents to the same extent as ifit were an original party thereto, and no further consent or action byBorrowers, Lenders or Agent shall be required to release the transferor Lenderwith respect to the Commitment (or portion thereof) of such Lender andObligations assigned to such Eligible Assignee. Upon the consummation of anyassignment to an Eligible Assignee pursuant to this **Section 13.3**,the transferor Lender, Agent and Borrowers shall make appropriate arrangementsso that replacement Notes are issued to such transferor Lender and new Notes or,as appropriate, replacement Notes, are issued to such Eligible Assignee, in eachcase in principal amounts reflecting their respective Commitments, as adjustedpursuant to such assignment. If the transferor Lender shall have assignedall of its interests, rights and obligations under this Agreement pursuantto **Section 13.3.1** hereof, such transferor Lender shall no longerhave any obligation to indemnify Agent with respect to any transactions,events or occurrences that transpire after the effective date of suchassignment, and each Eligible Assignee to which such transferor shall makean assignment shall be responsible to Agent to indemnify Agent in accordancewith this Agreement with respect to transactions, events and occurrencestranspiring on and after the effective date of such assignment to it. 

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      13.3.3.       Dissemination ofInformation.       Each Borrower authorizes each Lender and Agent to disclose toany Participant, any Eligible Assignee or any other Person acquiring an interestin the Loan Documents by operation of law (each a “Transferee”), andany prospective Transferee, any and all information in Agent’s or suchLender’s possession concerning such Borrower, its Subsidiaries or theCollateral, subject to appropriate confidentiality undertakings on the part ofsuch Transferee. 

**13.4.**       **TaxTreatment.**       If any interest in any Loan Document is transferred to anyTransferee that is organized under the laws of any jurisdiction other than theUnited States or any State thereof, the transferor Lender shall cause suchTransferee, concurrently with the effectiveness of such transfer, to complywith the provisions of **Section 4.10** hereof. 
SECTION   14.     MISCELLANEOUS
**      14.1.**       **Power ofAttorney.**       Each Borrower hereby irrevocably designates, makes,constitutes and appoints Agent (and all Persons designated by Agent) as suchBorrower’s true and lawful attorney (and agent-in-fact) and Agent, orAgent’s designee, may, without notice to such Borrower and in either suchBorrower’s or Agent’s name, but at the cost and expense of Borrowers: 

     14.1.1.       At such time ortimes as Agent or said designee, in its sole discretion, may determine, endorseBorrower’s name on any Payment Item or proceeds of the Collateral whichcome into the possession of Agent or under Agent’s control. 

      14.1.2.      At any time that anEvent of Default exists: (i) demand payment of the Accounts from the AccountDebtors, enforce payment of the Accounts by legal proceedings or otherwise, andgenerally exercise all of a Borrower’s rights and remedies with respect tothe collection of the Accounts; (ii) settle, adjust, compromise, dischargeor release any of the Accounts or other Collateral or any legal proceedingsbrought to collect any of the Accounts or other Collateral; (iii) sell or assignany of the Accounts and other Collateral upon such terms, for such amountsand at such time or times as Agent deems advisable; (iv) take control, inany manner, of any item of payment or proceeds relating to any Collateral; (v)prepare, file and sign Borrower’s name to a proof of claim in bankruptcy orsimilar document against any Account Debtor or to any notice of Lien,assignment or satisfaction of Lien or similar document in connection with any ofthe Collateral; (vi) receive, open and dispose of all mail addressed to suchBorrower and to notify postal authorities to change the address for deliverythereof to such address as Agent may designate; (vii) endorse the name ofsuch Borrower upon any of the items of payment or proceeds relating toany Collateral and deposit the same to the account of Agent on account ofthe Obligations; (viii) endorse the name of such Borrower upon any chattelpaper, document, instrument, invoice, freight bill, bill of lading or similardocument or agreement relating to any Accounts or Inventory of any Obligor andany other Collateral; (ix) use such Borrower’s stationery and sign thename of such Borrower to verifications of the Accounts and notices thereofto Account Debtors; (x) use the information recorded on or contained in any dataprocessing equipment and computer hardware and software relating to theAccounts, Inventory, Equipment or any other Collateral; (xi) make and adjustclaims under policies of insurance; (xii) sign the name of such Borrower onany proof of claim in bankruptcy against Account Debtors and on notices ofLiens, claims of mechanic’s Liens or assignments or releases ofmechanic’s Liens securing any Accounts; (xiii) take all action as may benecessary to obtain the payment of any letter of credit or banker’sacceptance of which such Borrower is a beneficiary; and (xiv) do all other actsand things necessary, in Agent’s determination, to fulfill suchBorrower’s obligations under this Agreement. 

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**14.2.**       **GeneralIndemnity.**       Each Borrower hereby agrees to indemnify and defend theIndemnitees and to hold the Indemnitees harmless from and against any Claim eversuffered or incurred by any of the Indemnitees arising out of or related tothis Agreement or any of the other Loan Documents, the performance by Agentor Lenders of their duties or the exercise of any of their rights or remediesunder this Agreement or any of the other Loan Documents, or as a result of suchBorrower’s failure to observe, perform or discharge any of suchBorrower’s duties hereunder. Each Borrower shall also indemnify and defendthe Indemnitees against and save the Indemnitees harmless from all Claimsof any Person arising out of, related to, or with respect to any transactionsentered into pursuant to this Agreement or Agent’s Lien upon theCollateral. Without limiting the generality of the foregoing, this indemnityshall extend to any Claims asserted against or incurred by any of theIndemnitees by any Person under any Environmental Laws or similar laws by reasonof such Borrower’s or any other Person’s failure to comply with lawsapplicable to solid or hazardous waste materials or other toxic substances.Additionally, if any Taxes (excluding Taxes imposed upon or measured solely bythe net income of Agent and Lenders, but including any intangibles tax, stamptax, recording tax or franchise tax) shall be payable by Agent or any Obligor onaccount of the execution or delivery of this Agreement, or the execution,delivery, issuance or recording of any of the other Loan Documents, or thecreation or repayment of any of the Obligations hereunder, by reason ofany Applicable Law now or hereafter in effect, Borrowers will pay(or will promptly reimburse Agent and Lenders for the payment of) all suchTaxes, including any interest and penalties thereon, and will indemnify and holdIndemnitees harmless from and against all liability in connection therewith.The foregoing indemnities shall not apply to Claims incurred by any of theIndemnitees to the extent incurred as a direct result of their own grossnegligence or willful misconduct or that arise out of any disputes arisingsolely out of the relationship between Agent and any Lender. 

Each Indemnitee willpromptly notify the Borrowers of any investigation, litigation or proceedingasserted or threatened in writing or instituted against it that may give rise toa claim under **Section 14.2**; provided that the failure to so notifythe Borrowers shall in no way impair the Borrowers’ obligations under this**Section 14.2**. Borrowers, at the request of any Indemnitee, shallhave the obligation to defend such Indemnitee against any such investigation,litigation or proceeding and shall promptly do so with representation by legalcounsel reasonably satisfactory to such Indemnitee, and the Indemnitee shall useits reasonable efforts to cooperate in such defense. In all events, suchIndemnitee shall have the right to have legal counsel of its choice participatein such defense (provided, that if Borrowers are defending such Indemnitee atsuch Indemnitee’s request, the legal fees associated with Indemnitee’scounsel participating in such defense, if any, shall be paid by suchIndemnitee). If such obligation to defend is not requested by an Indemnitee,Borrowers’ may participate in the defense thereof and any settlementnegotiations, at Borrowers’ expense, with legal counsel of Borrowers’choice (which counsel shall be reasonably satisfactory to such Indemnitee). Noaction taken by legal counsel chosen by such Indemnitee in defending against anysuch investigation, litigation or proceeding, shall vitiate or in any way impairthe Borrowers’ obligation and duty hereunder to indemnify and hold harmlesssuch Indemnitee. 

**14.3.**       **Survivalof All Indemnities.**       Notwithstanding anything to the contrary in thisAgreement or any of the other Loan Documents, the obligation of each Borrowerand each Lender with respect to each indemnity given by it in this Agreement,whether given by a Borrower to Agent Indemnitees, Lender Indemnitees or FleetIndemnitees or by any Lender to any Agent Indemnitees or Fleet Indemnitees,shall survive the payment in full of the Obligations and the termination of anyof the Commitments. 

**14.4.**      **Modification of Agreement.**       This Agreement may not be modified,altered or amended, except by an agreement in writing signed by Borrowers andAgent and Lenders (or, where otherwise expressly allowed by **Section 12**hereof, the Required Lenders in lieu of Agent and Lenders); provided,however, that no consent, written or otherwise, of Borrowers shall benecessary or required in connection with any amendment of any of the provisionsof **Sections 1.3.2, 3.1.3, 4.5,** or **12**(other than**Section 12.17**) so long as such amendment imposes no additionalobligations on Borrowers, or any other provision of this Agreement that affectsonly the rights, duties and responsibilities of Lenders and Agent as amongthemselves so long as no such amendment imposes any additional obligationson Borrowers. 

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**14.5.**     **Severability.**       Wherever possible, each provision of this Agreementshall be interpreted in such manner as to be effective and valid underApplicable Law, but if any provision of this Agreement shall be prohibited by orinvalid under Applicable Law, such provision shall be ineffective only to theextent of such prohibition or invalidity, without invalidating the remainder ofsuch provision or the remaining provisions of this Agreement. 

**14.6.**      **Cumulative Effect; Conflict of Terms.**      The provisions of the OtherAgreements and the Security Documents are hereby made cumulative with theprovisions of this Agreement. Without limiting the generality of the foregoing,the parties acknowledge that this Agreement and the other Loan Documents may useseveral different limitations, tests or measurements to regulate the same orsimilar matters and that such limitations, tests and measures arecumulative and each must be performed, except as may be expressly stated to thecontrary in this Agreement. Except as otherwise provided in any of the otherLoan Documents by specific reference to the applicable provision of thisAgreement, if any provision contained in this Agreement is in directconflict with, or inconsistent with, any provision in any of the other LoanDocuments, the provision contained in this Agreement shall govern and control. 

**14.7.**      **Execution in Counterparts.**       This Agreement and any amendmentshereto may be executed in any number of counterparts and by different partieshereto in separate counterparts, each of which when so executed and deliveredshall be deemed to be an original and all of which counterparts taken togethershall constitute but one and the same instrument. 

**14.8.**      **Consent.**       Whenever Agent’s, Lenders’ or RequiredLenders’ consent is required to be obtained under this Agreement or any ofthe other Loan Documents as a condition to any action, inaction, condition orevent, Agent and each Lender shall be authorized to give or withhold its consentin its sole and absolute discretion and to condition its consent upon thegiving of additional collateral security for the Obligations, the paymentof money or any other matter. 

**14.9.**     **Notices.**      All notices, requests and demands to or upon a partyhereto shall be in writing and shall be sent by certified or registered mail,return receipt requested, personal delivery against receipt or by telecopier orother facsimile transmission and shall be deemed to have been validly served,given or delivered when delivered against receipt or, in the case of facsimiletransmission, when received (if on a Business Day and, if not received on aBusiness Day, then on the next Business Day after receipt) at the office wherethe noticed party’s telecopier is located, in each case addressed to thenoticed party at the address shown for such party on the signature pagehereof or, in the case of a Person who becomes a Lender after the date hereof,at the address shown on the Assignment and Acceptance by which such Personbecame a Lender. Notwithstanding the foregoing, (i) no notice to or upon Agentpursuant to **Sections 1.3, 2.1.2, 3.1 or 5.2.2** shall be effectiveuntil such notice is actually received by the individual to whose attentionat Agent such notice is required to be sent and (ii) no notice to or upon anyBorrower pursuant to **Sections 5.2.1 or 11.1.4** shall be effectiveuntil such notice is actually delivered to such Borrower at its address fornotices or to its telecopier number set forth herein. Any written notice,request or demand that is not sent in conformity with the provisions hereofshall nevertheless be effective on the date that such notice, request ordemand is actually received by the individual to whose attention atthe noticed party such notice, request or demand is required to be sent. 

**14.10.**      **Performance of Borrowers’ Obligations.**       If a Borrower shallfail to discharge any covenant, duty or obligation hereunder or under any of theother Loan Documents, Agent may, in its sole discretion at any time or fromtime to time, for such Borrower’s account and at Borrowers’ expense,pay any amount or do any act required of a Borrower hereunder or under anyof the Loan Documents or otherwise lawfully requested by Agent to enforce any ofthe Loan Documents or Obligations, preserve, protect, insure or maintain any ofthe Collateral, or preserve, defend, protect or maintain the validity orpriority of Agent’s Liens in any of the Collateral, including the paymentof any judgment against a Borrower, any insurance premium, any warehouse charge,any finishing or processing charge, any landlord claim, any other Lien upon orwith respect to any of the Collateral. All payments that Agent may make underthis Section and all out-of-pocket costs and expenses (including ExtraordinaryExpenses) that Agent pays or incurs in connection with any action taken by ithereunder shall be reimbursed to Agent by Borrowers on demand with interest fromthe date such payment is made or such costs or expenses are incurred to the dateof payment thereof at the Default Rate applicable for Revolver Loans that areBase Rate Loans. Any payment made or other action taken by Agent under thisSection shall be without prejudice to any right to assert, and withoutwaiver of, an Event of Default hereunder and to proceed thereafter as providedherein or in any of the other Loan Documents. 

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**14.11.**      **CreditInquiries.**       Each Borrower hereby authorizes and permits Agent and Lenders(but Agent and Lenders shall have no obligation) to respond to usual andcustomary credit inquiries from third parties concerning such Borrower or any ofits Subsidiaries. 

**14.12.     Time of Essence.       Time is of the essence of this Agreement, the Other Agreements and the Security Documents.
**14.13.**     **Indulgences Not Waivers.**      Agent’s or any Lender’s failureat any time or times hereafter, to require strict performance by each Borrowerof any provision of this Agreement shall not waive, affect or diminish any rightof Agent or any Lender thereafter to demand strict compliance and performancetherewith. 

**14.14.**      **EntireAgreement; Appendix A, Exhibits and Schedules.**      This Agreement and theother Loan Documents, together with all other instruments, agreements andcertificates executed by the parties in connection therewith or withreference thereto, embody the entire understanding and agreement between theparties hereto and thereto with respect to the subject matter hereof and thereofand supersede all prior agreements, understandings and inducements, whetherexpress or implied, oral or written. Appendix A, each of the Exhibits andeach of the Schedules attached hereto are incorporated into this Agreement andby this reference made a part hereof. 

**14.15.**     **Interpretation.**      No provision of this Agreement or any of the otherLoan Documents shall be construed against or interpreted to the disadvantage ofany party hereto by any court or other governmental or judicial authority byreason of such party having, or being deemed to have, structured, drafted ordictated such provision. 

**14.16.      ObligationsLenders Several.**      The obligations of each Lender hereunder are several,and no Lender shall be responsible for the obligations or Commitment of anyother Lender. Nothing contained in this Agreement and no action taken by Lenderspursuant hereto shall be deemed to constitute the Lenders to be a partnership,association, joint venture or any other kind of entity. The amounts payable atany time hereunder to each Lender shall be a separate and independent debt, andeach Lender shall be entitled, to the extent not otherwise restricted hereunder,to protect and enforce its rights arising out of this Agreement and any of theother Loan Documents and it shall not be necessary for Agent or any other Lenderto be joined as an additional party in any proceeding for such purpose. 

**14.17.      Advertisingand Publicity.**     With the prior consent of Borrowers (which shall not beunreasonably withheld or delayed), Agent, on behalf of Lenders, may issue anddisseminate to the public (by advertisement or otherwise) information describingthe credit accommodations made available by Lenders pursuant to this Agreement,including the name and address of Borrowers, the amount and security for thecredit accommodations and the general nature of Borrowers’ business,provided that detail regarding terms (such as interest rate) may be providedonly to industry publications, such as the “LPC Gold Sheets.” 

**14.18.     Confidentiality.**     Agent and Lenders each agrees to exercise reasonableefforts (and, in any event, with at least the same degree of care as itordinarily exercises with respect to confidential information of its othercustomers) to keep any confidential information that is delivered or madeavailable by Borrowers to it and that is marked confidential, includinginformation made available to Agent or any Lender in connection with a visit orinvestigation by any Person contemplated in **Section 9.1.1** hereof,confidential from any Person other than their respective Affiliates andindividuals employed or retained by Agent or such Lender who are or are expectedto become engaged in evaluating, approving, structuring, administering orotherwise giving professional advice with respect to any of the Loans orCollateral, including any of their respective legal counsel, auditors or otherprofessional advisors provided, however, that nothing herein shallprevent Agent or any Lender from disclosing such confidential information(i) to any party to this Agreement from time to time or any Participant,(ii) pursuant the order of any court or administrative agency, (iii) uponthe request or demand of any regulatory agency or authority havingjurisdiction over Agent or such Lender, (iv) which has been publicly disclosedother than by an act or omission of Agent or any Lender except as permittedherein or which becomes available to Agent or any Lender on a non-confidentialbasis from a source other than Obligors, (v) to the extent reasonably requiredin connection with any litigation (with respect to any of theLoan Documents or any of the transactions contemplated thereby) towhich Agent, any Lender or their respective Affiliates may be a party (and,to the extent reasonably practicable, prior notice of such required disclosureshall be provided to Borrowers), (vi) to the extent reasonably required inconnection with the exercise of any remedies hereunder, (vii) to any actualor proposed Participant, Assignee, counterparty or advisors to any swap orderivative transactions relating to Obligors and the Obligations or otherTransferee of all or part of a Lender’s rights hereunder so long as suchTransferee has agreed in writing to be bound by the provisions of this Section,(viii) to the National Association of Insurance Commissioners or any similarorganization or to any nationally recognized rating agency that requires accessto information about a Lender’s portfolio in connection with ratings issuedwith respect to such Lender, (ix) to the extent reasonably required byApplicable Law or (x) with the consent of Borrowers. 

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**14.19.**     **Obligations Constitute Senior Debt.**      Borrowers represent andwarrant to Agent and Lenders that all of the Obligations constitute “SeniorDebt,” “Designated Senior Debt” and “PermittedIndebtedness” under (and as defined in) the Senior Subordinated Indenture.In addition, Borrowers acknowledge and agree that it is the intent of theparties hereto that the Obligations constitute “Senior Debt,”“Designated Senior Debt” and “Permitted Indebtedness” under(and as defined in) the Senior Subordinated Indenture. 

**14.20.**     **Governing Law; Consent to Forum.      This Agreement shall be governedby and construed in accordance with the laws of the State of New York;provided, however, that if any of the Collateral shall belocated in any jurisdiction other than New York, the laws of such jurisdictionshall govern the method, manner and procedure for foreclosure of Agent’sLien upon such Collateral and the enforcement of Agent’s other remedies inrespect of such Collateral to the extent that the laws of such jurisdiction aredifferent from or inconsistent with the laws of the State of New York. As partof the consideration for new value received, and regardless of any present orfuture domicile or principal place of business of Borrowers, any Lender orAgent, each Borrower hereby consents and agrees that the state courts for theState of New York, or, at Agent’s option, the United States District Courtfor the Southern District of New York, shall have jurisdiction to hear anddetermine any claims or disputes among Borrowers, Agent and Lenders pertainingto this Agreement or to any matter arising out of or related to this Agreement.Each Borrower expressly submits and consents in advance to such jurisdiction inany action or suit commenced in any such Court, and each Borrower herebywaives any objection that such Borrower may have based upon lack of personaljurisdiction, improper venue or forumnonconveniens andhereby consents to the granting of such legal or equitable relief as is deemedappropriate by such Court. Each Borrower hereby waives personal service of thesummons, complaint and other process issued in any such action or suit andagrees that service of such summons, complaint and other process may be made bycertified mail addressed to such Borrower at the address set forth in thisAgreement and that service so made shall be deemed completed upon the earlier ofsuch Borrower’s actual receipt thereof or 3 days after deposit in the U.S.mails, proper postage prepaid. Nothing in this Agreement shall be deemed oroperate to affect the right of Agent to serve legal process in any othermanner permitted by law, or to preclude the enforcement by Agent of any judgmentor order obtained in such forum or the taking of any action under this Agreementto enforce same in any other appropriate forum or jurisdiction.**

**14.21.**      **Waivers by Borrowers.      To the fullest extent permitted by Applicable Law,each Borrower waives (i) the right to trial by jury (which Agent and eachLender hereby also waives) in any action, suit, proceeding or counterclaimof any kind arising out of or related to any of the Loan Documents,the Obligations or the Collateral; (ii) presentment, demand and protest andnotice of presentment, protest, default, non payment, maturity, release,compromise, settlement, extension or renewal of any or all commercial paper,accounts, contract rights, documents, instruments, chattel paper and guarantiesat any time held by Agent on which such Borrower may in any way be liableand hereby ratifies and confirms whatever Agent may do in this regard;(iii) notice prior to taking possession or control of the Collateralor any bond or security which might be required by any court prior toallowing Agent to exercise any of Agent’s remedies;(iv) the benefit of all valuation, appraisement and exemption laws;(v) any claim against Agent or any Lender, on any theory of liability, forspecial, indirect, consequential, or punitive damages (as opposed to director actual damages) arising out of, in connection with, or as a result of, any ofthe Loan Documents, any transaction thereunder or the use of the proceeds of anyLoans; and (vi) notice of acceptance hereof. Each Borrower acknowledgesthat the foregoing waivers are a material inducement to Agent’s andLender’s entering into this Agreement and that Agent and Lenders arerelying upon the foregoing waivers in its future dealings withBorrowers. Each Borrower warrants and represents that it has reviewed theforegoing waivers with its legal counsel and has knowingly and voluntarilywaived its jury trial rights following consultation with legal counsel. Inthe event of litigation, this Agreement may be filed as a written consentto a trial by the Court.**

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**IN WITNESS WHEREOF,**this Agreement has been duly executed on the day and year specified at thebeginning of this Agreement. 

**BORROWERS:
ATTEST:                                                      **NEFF CORP.**_________________________                    By:______________________________**Mark H. Irion, Secretary**                                **Peter Gladis, President**[CORPORATE SEAL]Address:3750 N.W. 87th AvenueSuite 400Miami, Florida  33178Attention:  PresidentTelecopier No.:  (305) 513-4156
ATTEST:                                                      **NEFF RENTAL, INC.**_________________________                     By:______________________________**Mark H. Irion, Secretary**                               **Peter Gladis, President**[CORPORATE SEAL]Address:3750 N.W. 87th AvenueSuite 400Miami, Florida  33178Attention:  PresidentTelecopier No.:  (305) 513-4156
**LENDERS:FLEET CAPITALCORPORATIONRevolver Commitment: $35,000,000By:____________________________Title:________________________LIBOR Lending Office:Suite 800, 300 Galleria Parkway, N.W.Atlanta, Georgia  30339Attention:  Office HeadTelecopier No.:  (770) 859-2483
        [Signatures continued on the following page]
-73-GE CAPITALFUNDING, INC.Revolver Commitment: $35,000,000By:____________________________Title:________________________LIBOR Lending Office:401 Merritt Seven, 2nd FloorNorwalk, Connecticut  06856Attention:  Sandra DeRaffeleFIRST UNIONNATIONAL BANKRevolver Commitment: $25,000,000By:____________________________Title:________________________LIBOR Lending Office:201 S. College Street17th FloorCharlotte, North Carolina  28288-0820Attention:  Cheryl JohnsonTHE CITGROUP/BUSINESS CREDIT, INC.Revolver Commitment: $25,000,000 By:____________________________Title:________________________LIBOR Lending Office:1211 Avenue of the AmericasNew York, New York  10036Attention:  Marvin Daniels
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-74-BANK OF AMERICA,N.A.Revolver Commitment: $25,000,000By:____________________________Title:________________________LIBOR Lending Office:600 Peachtree Street5th FloorAtlanta, Georgia  30308Attention:  Carrie KellogTRANSAMERICABUSINESS CAPITAL CORPORATIONRevolver Commitment: $15,000,000By:____________________________Title:________________________LIBOR Lending Office:555 Theodore Fremd AvenueSuite C-301Rye, New York  10580Attention:  Venereen LeeUNION BANK OFCALIFORNIA, N.A.Revolver Commitment: $15,000,000 By:____________________________Title:________________________LIBOR Lending Office:455 S. Figueroa Street15th FloorLos Angeles, California  90071Attention:  Karen Hicks
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-75-NATIONAL BANK OFCANADARevolver Commitment: $12,500,000By:____________________________Title:________________________LIBOR Lending Office:5200 Town Center CircleSuite 302Boca Raton, Florida  33486Attention: Kathy MyersPNC BANK,NATIONAL ASSOCIATIONRevolver Commitment: $12,500,000By:____________________________Title:________________________LIBOR Lending Office:Two Tower CenterEighth FloorEast Brunswick, New Jersey  08816Attention: Aurea OcampoAGENT:FLEET CAPITAL CORPORATION,                                                              as AgentBy:_________________________________Title:____________________________Address:Suite 800, 300 Galleria Parkway, N.W.Atlanta, Georgia  30339Attention:  Office HeadTelecopier No.:  (770) 859-2483
[Signatures continued on the following page]

-76-SYNDICATION AGENT:                                                              GECC CAPITAL MARKETS GROUP, INC.,                                                              as Syndication AgentBy:_________________________________ Title:____________________________CO-LEAD ARRANGERS:                                                              GECC CAPITAL MARKETS GROUP, INC.,                                                              as a Co-Lead Arranger By:_________________________________Title:____________________________FLEET SECURITIES, INC.,                                                              as a Co-Lead ArrangerBy:_________________________________Title:____________________________
-77-APPENDIX AGENERALDEFINITIONS
     When used in the Loan andSecurity Agreement dated December 19, 2001 (as at any time amended, the“Agreement”), by and among **NEFF CORP.** (“Neff”), aDelaware corporation, and **NEFF RENTAL, INC.**, a Florida corporation********(“Rental”) (Neff and Rental being referred tocollectively as “Borrowers,” and individually as a“Borrower”), each financial institution listed on the signaturepages attached thereto and its successors and assigns, which become“Lenders” as provided therein (each such financial institution and itssuccessors and assigns referred to collectively herein as “Lenders”and individually as “Lender”), **FLEET CAPITAL CORPORATION**(“Agent”), in its capacity as collateral and administrative agentfor itself and the Lenders, **GECC CAPITAL MARKETS GROUP, INC.**, a Delawarecorporation, in its capacity as syndication agent, and **FLEET SECURITIES,INC.**, a Delaware corporation, and **GECC CAPITAL MARKETS GROUP, INC.**, aDelaware corporation, in their joint capacities as co-lead arrangers (in suchcapacities, the “Co-Lead Arrangers”), the following terms shall havethe following meanings (terms defined in the singular to have the same meaningwhen used in the plural and vice versa): 

Account - shall havethe meaning ascribed to “account” in the UCC and shall include any andall rights of a Borrower to payment for goods sold or leased or for servicesrendered that are not evidenced by an Instrument or Chattel Paper, whetheror not they have been earned by performance. 

Account Debtor - anyPerson who is or may become obligated under or on account of an Account. 

Accounts FormulaAmount - on any date of determination thereof, an amount equal to the lesserof (i) the Revolver Commitments on such date or (ii) 85% (or such lesserpercentage as Agent may in its reasonable discretion determine from time totime) of the net amount of Eligible Accounts on such date; provided, thatif the Dilution Percentage exceeds 5%, such advance rate percentage will bereduced by the number of full or partial percentage points of such excess. Asused herein, (i) “Dilution Percentage” shall mean the gross amount ofall returns, allowances, discounts, credits, write-offs and similar itemsrelating to Borrowers’ Accounts computed as a percentage of Borrowers’gross sales over a 12 month period, as determined by Agent in its reasonablediscretion, and (ii) the phrase “net amount of Eligible Accounts”shall mean the face amount of such Accounts on any date less any and allreturns, rebates, discounts (which may, at Lender’s option, be calculatedon shortest terms), credits, allowances or Taxes (including sales, excise orother taxes) at any time issued, owing, claimed by Account Debtors, granted,outstanding or payable in connection with, or any interest accrued on the amountof, such Accounts at such date. 

Adjusted LIBOR Rate- with respect to each Interest Period for a LIBOR Loan, an interest rate perannum (rounded upwards, to the next 1/16th of 1%) equal to the quotient of (a)the LIBOR Rate in effect for such Interest Period divided by (b) a percentage(expressed as a decimal) equal to 100% minus Statutory Reserves. 

Adjusted NetEarnings - with respect to any period, means the net earnings (or loss) forsuch period of Borrowers, all as reflected on the financial statement ofBorrowers supplied to Lender pursuant to **Section 9.1.3** hereof, butexcluding: (i) any gain arising from any write-up of assets during such period;(ii) earnings of any Subsidiary accrued prior to the date it became aSubsidiary; (iii) earnings of any Person, substantially all the assets ofwhich have been acquired in any manner by a Borrower, realized by suchPerson prior to the date of such acquisition; (iv) net earnings of anyentity (other than a Subsidiary of a Borrower) in which a Borrower has anownership interest unless such net earnings have actually been received by aBorrower in the form of cash Distributions; (v) any portion of the netearnings of any Subsidiary which for any reason is unavailable for payment ofDistributions to a Borrower; (vi) the earnings of any Person to which any assetsof Borrower shall have been sold, transferred or disposed of, or into which aBorrower shall have merged, or been a party to any consolidation or other formof reorganization, prior to the date of such transaction; (vii) any gainarising from the acquisition of any Securities of a Borrower; (viii) any gainarising from the repurchase of any of the Senior Subordinated Notes at adiscount; and (ix) any gain arising from extraordinary or non-recurring items,all as determined in accordance with GAAP. 

Affiliate - a Person(other than a Subsidiary): (i) which directly or indirectly through one or moreintermediaries controls, or is controlled by, or is under common control with,another Person; (ii) which beneficially owns or holds 10% or more of any classof the Equity Interests of a Person; or (iii) 10% or more of the EquityInterests with power to vote of which is beneficially owned or held by anotherPerson or a Subsidiary of another Person. For purposes hereof,“control” means the possession, directly or indirectly, of the powerto direct or cause the direction of the management and policies of a Person,whether through the ownership of any Equity Interest, by contract or otherwise. 

Agent Indemnitees -Agent in its capacity as collateral and administrative agent forthe Lenders under the Loan Documents and all of Agent’s presentand future officers, directors, agents and attorneys. 

Agent Professionals- attorneys, accountants, appraisers, consultants, business valuation experts,environmental engineers or consultants, turnaround specialists and otherprofessionals or experts retained by Agent. 

Agreement - the Loanand Security Agreement referred to in the first sentence ofthis Appendix A, all Exhibits and Schedules thereto and thisAppendix A. 

Applicable Law - alllaws, rules and regulations applicable to the Person, conduct, transaction,covenant, Loan Document or Material Contract in question, including allapplicable common law and equitable principles; all provisions of all applicablestate, federal and foreign constitutions, statutes, rules, regulations andorders of governmental bodies; and all orders, judgments and decrees ofall courts and arbitrators. 

Applicable Margin -a percentage equal to 2.25% percent with respect to Revolver Loans that are BaseRate Loans and 3.25% with respect to Revolver Loans that are LIBOR Loans;provided that, commencing with Borrowers’ Fiscal Quarter ending June30, 2002, the Applicable Margin shall be increased or (if no Default or Event ofDefault exists) decreased, based upon the Leverage Ratio, as follows: 

-2-                                                                              Applicable Margin for Revolver LoansLeverage Ratio                                                                         Outstanding as                                                               Base Rate Loan                                             LIBOR LoanGreater than 4.50 to 1                             2.50%                                                           3.50% If equal to or less than 4.50 to 1,            2.25%                                                            3.25% but greater than 4.00 to 1 If equal to or less than 4.00 to 1,           2.00%                                                             3.00% but greater than 3.50 to 1Equal to or less than 3.50 to 1               1.75%                                                             2.75%
The Applicable Margin shallbe subject to reduction or increase, as applicable and as set forth in the tableabove, on a quarterly basis according to the performance of Borrowers asmeasured by the Leverage Ratio for the immediately preceding 4 Fiscal Quartersof Borrowers. Except as set forth in the last sentence hereof, any suchincrease or reduction in the Applicable Margin provided for herein shall beeffective 3 Business Days after receipt by Agent of the applicable financialstatements and corresponding Compliance Certificate; provided,however, that any reduction in the Applicable Margin shall not applyto any LIBOR Loans outstanding on the effective date of such reduction thathave an Interest Period commencing prior to the effective date of suchreduction. If the financial statements and the Compliance Certificate ofBorrowers setting forth the Leverage Ratio are not received by Agent by the daterequired pursuant to**Section 9.1.3** of the Agreement, theApplicable Margin shall be determined as if the Leverage Ratio exceeds 4.50to 1 until such time as such financial statements and Compliance Certificate arereceived and any Event of Default resulting from a failure to deliversuch financial statements on a timely basis or Compliance Certificateis waived in writing by Agent and Lenders; provided, however, thatAgent and Lenders shall be entitled to accrue and receive interest atthe Default Rate to the extent authorized by **Section 2.1.5** of theAgreement and, on each date that the Default Rate accrues on any Loan, theApplicable Margin on such date for such Loan shall be the Applicable Margin thatwould apply if the Leverage Ratio exceeded 4.50 to 1 (without regard to theactual Leverage Ratio). For the final Fiscal Quarter of any Fiscal Year ofBorrowers, Borrowers may provide the unaudited financial statements ofBorrowers, subject only to year-end adjustments, for the purpose of determiningthe Applicable Margin; provided, however, that if, upondelivery of the annual audited financial statements required to be submitted byBorrowers to Agent pursuant to **Section 9.1.3(i)**of the Agreement,Borrowers have not met the criteria for reduction of the Applicable Marginpursuant to the terms hereinabove for the final Fiscal Quarter of the FiscalYear of Borrowers then ended, then (a) such Applicable Margin reductionshall be terminated and, effective on the first day of the month followingreceipt by Agent of such audited financial statements, the Applicable Marginshall be the Applicable Margin that would have been in effect if such reductionhad not been implemented based upon the unaudited financial statements ofBorrowers for the final Fiscal Quarter of the Fiscal Year of Borrowers thenended, and (b) Borrowers shall pay to Agent, for the Pro Rata benefit ofthe Lenders, on the first day of the month following receipt by Agent ofsuch audited financial statements, an amount equal to the differencebetween the amount of interest and fees that would have been paid usingthe Applicable Margin determined based upon such audited financialstatements and the amount of interest actually paid during the period in whichthe reduction of the Applicable Margin was in effect based upon theunaudited financial statements for the final Fiscal Quarter of theFiscal Year of Borrowers then ended. 

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Assignment andAcceptance - an assignment and acceptance entered into by a Lender and anEligible Assignee and accepted by Agent, in the form of **Exhibit G**. 

Availability -on any date, the amount that Borrowers are entitled to borrow as Revolver Loanson such date, such amount being the difference derived when the sum of theprincipal amount of Revolver Loans then outstanding (including any amounts thatAgent or Lenders may have paid for the account of Borrowers pursuant to any ofthe Loan Documents and that have not been reimbursed by Borrowers and anyoutstanding Settlement Loans) is subtracted from the Borrowing Base onsuch date. If the amount outstanding on such date is equal to or greaterthan the Borrowing Base, Availability is zero. 

Availability Reserve- on any date of determination thereof, an amount equal to the sum ofthe following (without duplication): (i) the Parts Inventory Reserve;(ii) all amounts of past due rent, fees or other charges owing at such timeby any Obligor to any landlord of any premises where any of the Collateralis located or to any processor, repairman, mechanic or other Person who is inpossession of any Collateral or has asserted any Lien or claim thereto;(iii) any amounts which any Obligor is obligated to pay pursuant to theprovisions of any of the Loan Documents that Agent or any Lender elects topay for the account of such Obligor in accordance with authority containedin any of the Loan Documents; (iv) the aggregate amount of reserves establishedby Agent in its reasonable discretion in respect of ACH (automatedclearinghouse) transfers; (v) the LC Reserve;********(vi) theUnpaid Vendor Reserve; (vii) the Vendor Lease Reserve; (viii) the MinimumAvailability Reserve; and (ix) such additional reserves, in such amounts andwith respect to such matters, as Agent in its reasonable credit judgment mayelect to impose from time to time. 

Bank - Fleet National Bank.
Banking RelationshipDebt - Debt or other obligations of a Borrower relating to or arising out of(i) checking and operating account relationships between such Borrower and anyLender (or any Affiliate of a Lender), including any obligations under CashManagement Agreements, and (ii) Hedging Agreements with any Lender (or anyAffiliate of a Lender). 

 Bankruptcy Code - title 11 of the United States Code.
Base Rate - on anydate, the greater of (i) the Prime Rate on such date or (ii) the Federal FundsRate on such date plus .50%. 

Base Rate Loan - aLoan, or portion thereof, during any period in which it bears interest at a ratebased upon the Base Rate. 

Board of Governors - the Board of Governors of the Federal Reserve System.
Borrowing - aborrowing consisting of Loans of one Type made on the same day by Lenders (or byFleet in the case of a Borrowing funded by Settlement Loans) or a conversion ofa Loan or Loans of one Type from Lenders on the same day. 

Borrowing Base - onany date of determination thereof, an amount equal to the lesser of: (a) theaggregate amount of the Revolver Commitments on such date minus the LCReserve and Minimum Availability Reserve on such date, or (b) an amountequal to (i) the sum of the Accounts Formula Amount plus the PartsInventory Formula Amount plus the Rental Inventory Formula Amount on suchdate minus (ii) the Availability Reserve on such date. 

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Borrowing BaseCertificate - a certificate, in the form requested by Agent, by whichBorrowers shall certify to Agent and Lenders, with such frequency as Agent mayrequest, the amount of the Borrowing Base as of the date of the certificate(which date shall be not more than one Business Days earlier than the date ofsubmission of such certificate to Agent) and the calculation ofsuch amount. 

Business Day - anyday excluding Saturday, Sunday and any other day that is a legal holiday underthe laws of the State of New York or is a day on which banking institutionslocated in such state are closed; provided, however, that whenused with reference to a LIBOR Loan (including the making, continuing, prepayingor repaying of any LIBOR Loan), the term “Business Day” shallalso exclude any day on which banks are not open for dealings inDollar deposits on the London interbank market. 

Business InterruptionInsurance Assignment - the Collateral Assignment of Business InterruptionInsurance to be executed by Borrowers on or after the Closing Date in favor ofAgent, in form and substance satisfactory to Lender, as security for the paymentof the Obligations. 

Capital Expenditures- expenditures made or liabilities incurred for the acquisition ofany Rental Inventory, fixed assets or improvements, replacements,substitutions or additions thereto which have a useful life of more than oneyear. 

Capitalized LeaseObligation - any Debt represented by obligations under a lease that isrequired to be capitalized for financial reporting purposes in accordance withGAAP. 

Cash Collateral -cash or Cash Equivalents, and any interest earned thereon, that is depositedwith Agent in accordance with the Agreement for the Pro Rata benefit of Lendersas security for the Obligations. 

Cash CollateralAccount - a demand deposit, money market or other account established byAgent at such financial institution as Agent may select in its discretion, whichaccount shall be in Agent’s name and subject to Agent’s Liens for thePro Rata benefit of Lenders. 

Cash Equivalents -(i) marketable direct obligations issued or unconditionally guaranteed by theUnited States government and backed by the full faith and credit of the UnitedStates government having maturities of not more than 12 months from the date ofacquisition; (ii) domestic certificates of deposit and time deposits havingmaturities of not more than 12 months from the date of acquisition,bankers’ acceptances having maturities of not more than 12 months from thedate of acquisition and overnight bank deposits, in each case issued by anycommercial bank organized under the laws of the United States, any state thereofor the District of Columbia, which at the time of acquisition are rated A-1 (orbetter) by S&P or P-1 (or better) by Moody’s, and (unless issued by aLender) not subject to offset rights in favor of such bank arising fromany banking relationship with such bank; (iii) repurchase obligationswith a term of not more than 30 days for underlying securities of the typesdescribed in clauses (i) and (ii) entered into with any financialinstitution meeting the qualifications specified in clause (ii) above; and(iv) commercial paper having at the time of investment therein or acontractual commitment to invest therein a rating of A-1 (or better) byS&P or P-1 (or better) by Moody’s, and having a maturitywithin 9 months after the date of acquisition thereof. 

Cash ManagementAgreements - any agreement entered into from time to time between a Borroweror any of its Subsidiaries, on the one hand, and Bank or any of its Affiliatesor any other banking or financial institution, on the other, in connectionwith cash management services for operating, collections, payroll and trustaccounts of a Borrower or its Subsidiaries provided by such banking orfinancial institution, including automatic clearinghouse services, controlleddisbursement services, electronic funds transfer services, information reportingservices, lockbox services, stop payment services and wire transfer services. 

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Cash ManagementObligations - any and all obligations of Borrowers or any of theirSubsidiaries under any of the Cash Management Agreements or otherwise relatingto any cash management services. 

 CERCLA - the Comprehensive  Environmental  Response  Compensation and Liability Act, 42 U.S.C. ' 9601 et seq. and its         implementing regulations.
Change of Control -the occurrence of any of the following events after the Closing Date: (a) SantosFund I, LLP, Jorge Mas, Jose Ramon Mas or Juan Carlos Mas (the“Holders”), any Person under the Control of a Holder, any trustestablished by or for the benefit of a Holder) or any of his lineal descendantsor any family member of a Holder shall (i) cease to own directly or indirectlymore than 25% of the aggregate Voting Power of Neff or (ii) cease to occupy atleast 2 positions on the Board of Directors of Neff or (b) any Person or groupof Persons shall beneficially (as defined in Rule 13d-3 of the Securities andExchange Commission under the Exchange Act or any successor provision thereto)own more than 33% of the aggregate Voting Power of a Borrower (other than anownership by any Person or group of Persons who beneficially owns in excess of5% of the aggregate Voting Power of such Borrower on the date hereof). 

Chattel Paper - shall have the meaning given to "chattel paper" in the UCC.
Claims - any and allclaims, demands, liabilities, obligations, losses, damages, penalties, actions,judgments, suits, awards, remedial response costs, expenses or disbursements ofany kind or nature whatsoever (including reasonable attorneys’,accountants’, consultants’ or paralegals’ fees and expenses),whether arising under or in connection with the Loan Documents,any Applicable Law (including any Environmental Laws) or otherwise, thatmay now or hereafter be suffered or incurred by a Person and whether suffered orincurred in or as a result of any investigation, litigation, arbitration orother judicial or non-judicial proceeding or any appeals related thereto. 

Closing Date - thedate on which all of the conditions precedent in **Section 10** of theAgreement are satisfied and the initial Loans are made under the Agreement. 

Collateral - all ofthe Property and interests in Property described in **Section 6** ofthe Agreement; all Property described in any of the Security Documents assecurity for the payment or performance of any of the Obligations; and all otherProperty and interests in Property that now or hereafter secure (or are intendedto secure) the payment and performance of any of the Obligations. 

Commercial TortClaim - shall have the meaning ascribed to “commercial tort claim”in the UCC. 

Commitment - at anydate for any Lender, the aggregate amount of such Lender’sRevolver Commitment on such date, and “Commitments” meansthe aggregate amount of all Revolver Commitments on any date. 

Commitment TerminationDate - the date that is the soonest to occur of (i) the last day ofthe Original Term; (ii) the date on which either Borrowers or Agentterminates the Commitments pursuant to **Section 5.2** of the Agreement; or(iii) the date on which the Commitments are automatically terminatedpursuant to **Section 11.2** of the Agreement. 

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ComplianceCertificate - a Compliance Certificate to be provided by Borrowers to Agentin accordance with, and in the form annexed as **Exhibit E** to, theAgreement, and the supporting schedules to be annexed thereto. 

Consolidated - theconsolidation in accordance with GAAP of the accounts or other items as to whichsuch term applies. 

ContingentObligation - with respect to any Person, any obligation of such Personarising from any guaranty, indemnity or other assurance of payment orperformance of any Debt, lease, dividend or other obligation(“primary obligations”) of any other Person (the “primaryobligor”) in any manner, whether directly or indirectly, including (i) thedirect or indirect guaranty, endorsement (other than for collectionor deposit in the Ordinary Course of Business), co-making, discounting withrecourse or sale with recourse by such Person of the obligation of a primaryobligor, (ii) the obligation to make take-or-pay or similar payments, ifrequired, regardless of nonperformance by any other party or parties to anagreement, (iii) any obligation of such Person, whether or not contingent, (A)to purchase any such primary obligation or any Property constituting direct orindirect security therefor, (B) to advance or supply funds (1) for the purchaseor payment of any such primary obligations or (2) to maintain working capital orequity capital of the primary obligor or otherwise to maintain the net worth orsolvency of the primary obligor, (C) to purchase Property, Securities orservices primarily for the purpose of assuring the owner of any such primaryobligation of the ability of the primary obligor to make payment ofsuch primary obligation or (D) otherwise to assure or hold harmless theholder of such primary obligation against loss in respect thereof;provided, however, that the term “ContingentObligation” shall not include any product warranties extended in theOrdinary Course of Business. The amount of any Contingent Obligation shall bedeemed to be an amount equal to the stated or determinable amount of the primaryobligation with respect to which such Contingent Obligation is made (or, ifless, the maximum amount of such primary obligation for whichsuch Person may be liable pursuant to the terms of the instrumentevidencing such Contingent Obligation) or, if not stated or determinable,the maximum reasonably anticipated liability with respect thereto (assumingsuch Person is required to perform thereunder), as determined by such Person ingood faith. 

Control orcontrolled by or under common control - possession, directly orindirectly, of the power to direct or cause the direction of management orpolicies (whether through ownership of voting securities, by contract orotherwise, but not solely by being an officer or director of that Person);provided, however, that in the event any Person which beneficiallyowns, directly or indirectly, 30% or more (in number of votes) of the EquityInterest having ordinary Voting Power with respect to a corporation shall beconclusively presumed to control such corporation. 

Controlled DisbursementAccount - a demand deposit account maintained by Borrowers at Bank and towhich proceeds of Loans will be wired from time to time. 

Cost - in respect ofthe cost of acquisition by a Borrower of any Rental Inventory, the net cost ofsuch Rental Inventory to such Borrower after all cash and other discounts,premiums, rebates, advertising and other allowances and all other discounts orother allowances which may be allowed or taken by such Borrower against thepurchase price for such Rental Inventory. 

Current Maturities ofFunded Debt - all principal payments in respect of Funded Debt that arerequired to be made within one year from the date of determination. 

Debt - as applied toa Person means, without duplication: (i) all items which in accordance with GAAPwould be included in determining total liabilities as shown on the liabilityside of a balance sheet of such Person as of the date as of which Debt is to bedetermined, including Capitalized Lease Obligations; (ii) all ContingentObligations of such Person; (iii) all reimbursement obligations in connectionwith letters of credit or letter of credit guaranties issued for the account ofsuch Person; and (iv) in the case of Borrowers (without duplication), theObligations. The Debt of a Person shall include any recourse Debt of anypartnership or joint venture in which such Person is a general partner or jointventurer. 

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Default - an eventor condition the occurrence of which would, with the lapse of time or the givingof notice, or both, become an Event of Default. 

Default Rate - onany date, a rate per annum that is equal to (i) in the case of each Loanoutstanding on such date, 2% in excess of the rate otherwise applicable to suchLoan on such date, (ii) in the case of LC Obligations, 2% in excess of the rateotherwise applicable to Letters of Credit on such date, and (iii) in the case ofany of the other Obligations outstanding on such date, 2% plus thehighest Applicable Margin for Base Rate Loans plus the Prime Rate ineffect on such date. 

Deposit Accounts -all of a Person’s demand, time, savings, passbook, money market or otherdepository accounts, and all certificates of deposit, maintained by such Personwith any bank, savings and loan association, credit union or other depositoryinstitution. 

Deposit AccountAssignment - the Collateral Assignment of Deposit Accounts to be executed byBorrowers on or before the Closing Date in favor of Agent for itself and the ProRata benefit of Lenders as security for the Obligations. 

Distribution - inrespect of any entity, (i) any payment of any dividends or other distributionson Equity Interests of the entity (except distributions in such EquityInterests) and (ii) any purchase, redemption or other acquisition or retirementfor value of any Equity Interests of the entity or any Affiliate of the entityunless made contemporaneously from the Net Proceeds of the sale ofEquity Interests. 

Document - shall have the meaning given to "document" in the UCC.
 Dollars and the sign $ - lawful money of the United States of America.
Domestic Subsidiary- a Subsidiary of a Borrower (other than a Subsidiary that is a Borrower) thatis incorporated under the laws of a state of the United States or the Districtof Columbia. 

Dominion Account - aspecial account of Agent established by a Borrower at Bank (or such other bankapproved by Agent), and over which Agent shall have sole and exclusive accessand control for withdrawal purposes. 

EBITDA - for anyfiscal period of a Borrower, an amount equal to the sum for such fiscal periodof (i) Adjusted Net Earnings, plus (ii) provision for taxes based onincome and for state franchise taxes, to the extent deducted in the calculationof Adjusted Net Earnings, plus (iii) Interest Expense, to the extentdeducted in the calculation of Adjusted Net Earnings, plus (iv)depreciation and amortization expense, to the extent deducted in the calculationof Adjusted Net Earnings, plus (v) extraordinary or non-recurringnon-cash losses, to the extent deducted in the calculation of Adjusted NetEarnings, minus, (vi) extraordinary or non-recurring non-cash gains, tothe extent added in the calculation of Adjusted Net Earnings. 

Electronic ChattelPaper - shall have the meaning given to “electronic chattel paper”in the UCC. 

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Eligible Account -an Account which arises in the Ordinary Course of Business of a Borrower fromthe sale or lease of Goods***,*****is payable in Dollars, issubject to Agent’s duly perfected Lien, and is deemed by Agent, in itsreasonable credit judgment, to be an Eligible Account. Without limiting thegenerality of the foregoing, no Account shall be an Eligible Account if:(i) it arises out of a sale or lease made by a Borrower to a Subsidiary oran Affiliate of Borrower or to a Person controlled by an Affiliate of aBorrower; (ii) it is unpaid for more than 60 days after the original due dateshown on the invoice; (iii) it is due or unpaid more than 90 days after theoriginal invoice date; (iv) 50% or more of the Accounts from the AccountDebtor are not deemed Eligible Accounts hereunder; (v) the total unpaidAccounts of the Account Debtor exceed 20% of the aggregate amount of allEligible Accounts or exceed a credit limit established by Agent for such AccountDebtor, in each case, to the extent of such excess; (vi) any covenant,representation or warranty contained in the Agreement with respect to suchAccount has been breached; (vii) the Account Debtor is also a Borrower’screditor or supplier, or the Account Debtor has disputed liability with respectto such Account, or the Account Debtor has made any claim with respect to anyother Account due from such Account Debtor to a Borrower, or the Accountotherwise is or may become subject to any right of setoff, counterclaim, reserveor chargeback, provided that, the Accounts of such Account Debtor shall beineligible only to the extent of such offset, counterclaim, disputedamount, reserve or chargeback; (viii) an Insolvency Proceeding has beencommenced by or against the Account Debtor or the Account Debtor has failed,suspended business or ceased to be Solvent; (ix) it arises from a sale or leaseto an Account Debtor with its principal office, assets or place of businessoutside the United States, unless the sale is backed by an irrevocable letter ofcredit issued or confirmed by a bank acceptable to Agent and that is in form andsubstance acceptable to Agent and payable in the full amount of the Accountin freely convertible Dollars at a place of payment within the UnitedStates and, if requested by Agent, such letter of credit, or amounts payablethereunder, is assigned to Agent (with such assignment acknowledged by theissuing or confirming bank); (x) it arises from a sale to the AccountDebtor on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval,consignment or any other repurchase or return basis or arises as a result of anyconsideration consisting of a credit received by a Borrower in connection withany Trade-In Transaction; (xi) the Account Debtor is the United States ofAmerica or any department, agency or instrumentality thereof, unless suchBorrower is not prohibited from assigning the Account and does assign its rightto payment of such Account to Agent, in a manner satisfactory to Agent, so as tocomply with the Assignment of Claims Act of 1940 (31 U.S.C. ‘3727 and41 U.S.C. ‘15), or is a state, county or municipality, or a politicalsubdivision or agency thereof and Applicable Law disallows or restricts anassignment of Accounts on which it is the Account Debtor; (xii) the AccountDebtor is located in any state which imposes similar conditions on the right ofa creditor to collect accounts receivable unless such Borrower has eitherqualified to transact business in such state as a foreign entity or filed aNotice of Business Activities Report or other required report with theappropriate officials in those states for the then current year; (xiii) theAccount Debtor is located in a state in which a Borrower is deemed to be doingbusiness under the laws of such state and which denies creditors access to itscourts in the absence of qualification to transact business in such state or ofthe filing of any reports with such state, unless such Borrower has qualified asa foreign entity authorized to transact business in such state or has filed allrequired reports; (xiv) the Account is subject to a Lien other than a PermittedLien or arises from a sale or lease by a Borrower of Goods held by it under aVendor Lease that is in default; (xv) the Goods giving rise to such Accounthave not been delivered to and accepted by the Account Debtor or the servicesgiving rise to such Account have not been performed by a Borrower and acceptedby the Account Debtor or the Account otherwise does not represent a final sale;(xvi) the Account is evidenced by Chattel Paper or an Instrument of any kind, orhas been reduced to judgment; (xvii) the Account represents a progress billingor a retainage or for services yet to be rendered; (xviii) a Borrower hasmade any agreement with the Account Debtor for any deduction therefrom, exceptfor discounts or allowances which are made in the Ordinary Course of Businessfor prompt payment and which discounts or allowances are reflected in thecalculation of the face value of each invoice related to such Account; (xix) aBorrower has made an agreement with the Account Debtor to extend the time ofpayment thereof; or (xx) the Account represents, in whole or in part, a billingfor interest, fees or late charges, provided that such Account shall beineligible only to the extent of the amount of such billing. 

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Eligible Assignee -a Lender or a U.S. based Affiliate of a Lender; a commercial bank, commercialfinance institution or insurance company organized under the laws of the UnitedStates or any state that has total assets in excess of $2 billion and thatis acceptable to Agent and that is not an “Affiliate” of a Borrower assuch term is defined in the Senior Subordinated Indenture; and any other Personapproved by Agent and, unless a Default or an Event of Default exists,Borrowers (such approval by Borrowers, when required, not to beunreasonably withheld or delayed and to be deemed given by Borrowers if noobjection is received by the assigning Lender and Agent from Borrowers within 5Business Days after notice of such proposed assignment has been provided by theassigning Lender as set forth in **Section 13.3** of the Agreement). 

Eligible PartsInventory - Parts Inventory of a Borrower (excluding all packagingmaterials, labels, samples, bags and supplies) which Agent, in its reasonablecredit judgment, deems to be Eligible Parts Inventory. Without limiting thegenerality of the foregoing, no Parts Inventory shall be Eligible PartsInventory unless: (i) it constitutes Parts Inventory; (ii) it is owned by aBorrower, such Borrower has good, valid and marketable title thereto and itis not held by such Borrower on consignment or other sale or return terms; (iii)it is not obsolete, unmerchantable or slow moving, as determined by Agentin its reasonable credit judgment; (iv) it meets all standards imposed byany Governmental Authority; (v) it conforms in all respects to thewarranties and representations set forth in the Agreement and is fully insuredin the manner required by the Agreement; (vi) it is at all times subject toAgent’s duly perfected, first priority security interest and no otherLien except a Permitted Lien; (vii) it is in a Borrower’s possession andcontrol at a location in compliance with the Agreement, is not intransit or outside the continental United States and is not consigned toany Person; (viii) it is not the subject of a negotiable warehouse receipt orother negotiable Document; (ix) it has not been sold or leased and aBorrower has not received any deposit or down payment in respect thereof inanticipation of a sale; and (x) it is not the subject of a store closing,liquidation, going-out-of business or similar sale. In no event shall any PartsInventory held by a Borrower under a Vendor Lease constitute Eligible PartsInventory. 

Eligible RentalInventory - Rental Inventory of a Borrower which Agent, in its reasonablecredit judgment, deems to be Eligible Rental Inventory. Without limiting thegenerality of the foregoing, no Inventory shall be Eligible Rental Inventoryunless: (i) it is owned solely by such Borrower and such Borrower has good,valid and marketable title thereto; (ii) it is at all times subject toAgent’s duly perfected, first priority security interest and no otherLien except a Permitted Lien; (iii) it is in such Borrower’s control andnot located outside the continental United States; (iv) it is not obsolete,unmerchantable or slow moving, as determined by Agent in its reasonablecredit judgment; (v) it conforms in all respects to the warranties andrepresentations set forth in the Agreement and is fully insured in themanner required by the Agreement. In no event shall any Rental Inventoryheld by a Borrower under a Vendor Lease constitute Eligible Rental Inventory. 

EnvironmentalAgreement - the Agreement Regarding Environmental Matters to be executed byBorrowers in favor of Agent on or about the Closing Date and by which Borrowersshall, among other things, indemnify Agent and Lenders from Liability forBorrowers’ failure to comply with any Environmental Laws. 

Environmental Laws -all federal, state and local laws, rules, regulations, codes, ordinances,programs, permits, guidance documents promulgated by regulatory agencies, ordersand consent decrees, now or hereafter in effect and relating to human health andsafety or the protection or pollution of the environment, including CERCLA. 

EnvironmentalRelease - a release as defined in CERCLA or under any applicableEnvironmental Laws. 

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Equipment - shallhave the meaning given to “equipment” in the UCC and shall include allof a Borrower’s machinery, apparatus, equipment, fittings, furniture,fixtures, motor vehicles and other tangible personal Property (other thanInventory) of every kind and description, whether now owned or hereafteracquired by a Borrower and wherever located, and all parts, accessories andspecial tools therefor, all accessions thereto, and all substitutions andreplacements thereof. 

Equity Interest -the interest of (i) a shareholder in a corporation, (ii) a partner (whethergeneral or limited) in a partnership (whether general, limited or limitedliability), (iii) a member in a limited liability company, or (iv) any otherPerson having any other form of equity security or ownership interest. 

ERISA - the EmployeeRetirement Income Security Act of 1974 and all rules and regulations from timeto time promulgated thereunder. 

EurocurrencyLiabilities - shall have the meaning ascribed thereto in Regulation D issuedby the Board of Governors. 

Event of Default - as defined in **Section 11** of the Agreement.
Existing Purchase MoneyVendors - collectively, Ingersoll Rand Company and Omniquip Textron Inc. 

ExtraordinaryExpenses - all costs, expenses, fees (including fees incurred to AgentProfessionals) or advances that Agent or any Lender may suffer or incur,whether prior to or after the occurrence of an Event of Default, and whetherprior to, after or during the pendency of an Insolvency Proceeding of anObligor, on account of or in connection with (i) the audit, inspection,repossession, storage, repair, appraisal, insuring, completion of themanufacture of, preparing for sale, advertising for sale, selling, collecting orotherwise preserving or realizing upon any Collateral; (ii) the defense ofAgent’s Lien upon any Collateral or the priority thereof orany adverse claim with respect to the Loans, the Loan Documentsor the Collateral asserted by any Obligor, any receiver or trustee forany Obligor or any creditor or representative of creditors of any Obligor;(iii) the settlement or satisfaction of any Liens upon any Collateral(whether or not such Liens are Permitted Liens); (iv) the collection orenforcement of any of the Obligations; (v) the negotiation, documentation,and closing of any restructuring or forbearance agreement with respect tothe Loan Documents or Obligations; (vi) amounts advanced by Agentpursuant to**Section 7.1.3** of the Agreement; (vii) the enforcement of anyof the provisions of any of the Loan Documents; or (viii) any payment under aguaranty, indemnity or other payment agreement provided by Agent or (withAgent’s consent) any Lender, which is reimbursable to Agent or such Lenderby Borrowers pursuant to **Section 2.4.2** of the Agreement. Such costs,expenses and advances may include transfer fees, taxes, storage fees, insurancecosts, permit fees, utility reservation and standby fees, legal fees, appraisalfees, brokers’ fees and commissions, auctioneers’ fees andcommissions, accountants’ fees, environmental study fees, wages andsalaries paid to employees of a Borrower or independent contractors inliquidating any Collateral, travel expenses, all other fees and expensespayable or reimbursable by Borrowers or any other Obligor under any of the LoanDocuments, and all other fees and expenses associated with the enforcement ofrights or remedies under any of the Loan Documents, but excludingcompensation paid to employees (including inside legal counsel who areemployees) of Agent. 

Existing CreditAgreement - that certain Credit Agreement dated as of May 1, 1998, amongNeff, Rental and Neff Machinery, Inc., as borrowers, various financialinstitutions, as lenders and Bankers Trust Company, as Agent, as at any timeheretofore amended or modified. 

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Federal Funds Rate -for any period, a fluctuating interest rate per annum equal for each date duringsuch period to the weighted average of the rates on overnight federal fundstransactions with members of the Federal Reserve System arranged by federalfunds brokers, as published for such day (or, if such day is not a Business Day,for the next preceding Business Day) in Atlanta, Georgia by the Federal ReserveBank of Atlanta, or if such rate is not so published for any day which is aBusiness Day, the average of the quotations for such day on such transactionsreceived by Agent from 3 federal funds brokers of recognized standing selectedby Agent. 

Fee Letter - the feeletter agreement to be dated on or about the date hereof, among Agent,Syndication Agent, Fleet, GECF and Borrowers. 

FEIN - with respectto any Person, the Federal Employer Identification Number of such Person. 

Fiscal Quarter -each consecutive period of 13 weeks ending on March 31, June 30, September 30and December 31 of each calendar year. 

Fiscal Year - thefiscal year of each Borrower and its Subsidiaries for accounting andtax purposes, which shall begin on January 1 of each calendar year and endon December 31 of each calendar year, and when preceded by the designation of acalendar year (e.g., 2001 Fiscal Year) means the fiscal year of Borrower and itsSubsidiaries ended on December 31 of such designated calendar year. 

Fixed Charge CoverageRatio - with respect to any period of Borrowers, on a Consolidated basis,the ratio of Borrowers’ (a) EBITDA for such period minus cash incometaxes paid and Net Capital Expenditures for such period, to (b) Fixed Chargesfor such period. 

Fixed Charges - forany period, the sum of Borrower’s (i) Interest Expense duringsuch period, plus (ii) on the date of determination, the CurrentMaturities of Funded Debt. 

Fleet - Fleet Capital Corporation, a Rhode Island corporation.
Fleet Indemnitees -Fleet and all of its present and future officers, directors and agents. 

FLSA - the Fair Labor Standards Act of 1938.
Foreign Lender - anyLender that is organized under the laws of a jurisdiction other thanthe laws of the United States, any state thereof or the District ofColumbia. 

 Foreign Subsidiary - a Subsidiary that is not a Domestic Subsidiary.
Funded Debt -collectively, without duplication, (a) the aggregate principal amount of Debtfor Money Borrowed, including Capitalized Lease Obligations, the SeniorSubordinated Notes and all Revolver Loans and (b) all Debt outstanding under anyrevolving credit, line of credit or renewals thereof), notwithstanding that anysuch Debt is created within one year of the expiration of such agreement. 

GAAP - generallyaccepted accounting principles in the United States of America in effect fromtime to time. 

 GECC - GECC Capital Markets Group, Inc., a Delaware corporation.
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GECF - GE Capital Funding, Inc., a Delaware corporation.
General Intangibles- all general intangibles of a Borrower, whether now owned or hereafter createdor acquired by a Borrower, including all choses in action, causes of action,company or other business records, inventions, blueprints, designs, patents,patent applications, trademarks, trademark applications, trade names, tradesecrets, service marks, goodwill, brand names, copyrights, registrations,licenses, franchises, customer lists, permits, tax refund claims,computer programs, operational manuals, internet addresses and domainnames, insurance refunds and premium rebates, all claims under guaranties,security interests or other security held by or granted to a Borrower to securepayment of any of any of a Borrower’s Accounts by an Account Debtor, allrights to indemnification, and all other intangible property of a Borrower ofevery kind and nature (other than Accounts). 

Goods - shall have the meaning given to "goods" in the UCC.
GovernmentalApprovals - all authorizations, consents, approvals, licenses and exemptionsof, registrations and filings with, and reports to, all GovernmentalAuthorities. 

GovernmentalAuthority - any federal, state, municipal, national, foreign or othergovernmental department, commission, board, bureau, court, agency orinstrumentality or political subdivision thereof or any entity or officerexercising executive, legislative, judicial, regulatory or administrativefunctions of or pertaining to any government or any court, in each casewhether associated with a state of the United States, the District of Columbiaor a foreign entity or government. 

Guarantors - eachSubsidiary Guarantor and each other Person who guarantees payment or performanceof the whole or any part of the Obligations. 

Guaranty - eachguaranty agreement now or hereafter executed by a Guarantor in favor of Agentwith respect to any of the Obligations. 

Hedging Agreement -any interest rate protection agreement, foreign currency exchange agreement,commodity price protection agreement or other interest or currency exchange rateor commodity price hedging arrangement. 

Indemnified Amount -in the case of Agent Indemnitees, the amount of any loss, cost, expenses ordamages suffered or incurred by Agent Indemnitees and against which Lenders orany Obligor have agreed to indemnify Agent Indemnitees pursuant to theterms of the Agreement or any of the other Loan Documents; in the case of LenderIndemnitees, the amount of any loss, cost, expenses or damages suffered orincurred by Lender Indemnitees and against which Lender or any Obligor haveagreed to indemnify Lender Indemnitees pursuant to the terms of the Agreement orany of the other Loan Documents; and, in the case of Fleet Indemnitees, theamount of any loss, cost, expenses or damages suffered or incurred by FleetIndemnitees and against which Lenders or any Obligor have agreed toindemnify Fleet Indemnitees pursuant to the terms of the Agreement or any of theother Loan Documents. 

 Indemnitees - the Agent Indemnitees, the Lender Indemnitees and the Fleet Indemnitees.
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InsolvencyProceeding - any action, case or proceeding commenced by or against aPerson, or any agreement of such Person, for (i) the entry of an order forrelief under any chapter of the Bankruptcy Code or other insolvency, moratoriumor debt adjustment law (whether state, federal or foreign), (ii) theappointment of a receiver, trustee, liquidator or other custodian for suchPerson or any part of its Property, (iii) an assignment or trust mortgagefor the benefit of creditors of such Person, or (iv) the liquidation,dissolution or winding up of the affairs of such Person. 

 Instrument - shall have the meaning given to "instrument" in the UCC.
IntellectualProperty - all intellectual and similar Property of every kind anddescription, including inventions, designs, patents, patent applications,copyrights, trademarks, service marks, trade names, mask works, trade secrets,confidential or proprietary information, know-how, software and databases andall embodiments or fixations thereof and related documentation, registrationsand franchises, all books and records describing or used in connection with theforegoing and all licenses, or other rights to use any of the foregoing. 

Intellectual PropertyClaim - the assertion by any Person of a claim (whether asserted in writing,by action, suit or proceeding or otherwise) that a Borrower’s ownership,use, marketing, sale or distribution of any Inventory, Equipment, IntellectualProperty or other Property is violative of any ownership or right to use anyIntellectual Property of such Person. 

Interest CoverageRatio - for any period, the ratio of (i) Borrowers’ EBITDA forsuch period to (ii)  Borrowers’ Interest Expense for such period. 

Interest Expense -for any period, the total interest expense of Borrowers during such perioddetermined in accordance with GAAP. 

Interest Period -shall have the meaning ascribed to it in **Section 2.1.3** of the Agreement. 

Inventory - shall havethe meaning given to “inventory” in the UCC and shall include allParts Inventory, all Rental Inventory, and all goods intended for sale or leaseby a Borrower, to be furnished by a Borrower under contracts of service, or fordisplay or demonstration; and work in process and all raw materials and othermaterials and other materials and supplies of every nature and description usedor which might be used in connection with the manufacture, printing,packing, shipping, advertising, selling, leasing or furnishing of such goods orotherwise used or consumed in a Borrower’s business; and all Documentsevidencing and General Intangibles relating to any of the foregoing,whether now owned or hereafter acquired by a Borrower 

Investment Property- shall have the meaning given to “investment property” in the UCC andshall include all Securities (whether certificated or uncertificated), securityentitlements, securities accounts, commodity contracts and commodity accounts. 

Landlord Agreements- an agreement duly executed in favor of Agent, in form and content acceptableto Agent, by which an owner or mortgagee of premises upon which any Property ofan Obligor is located agrees to waive or subordinate any Lien it may havewith respect to such Property in favor of Agent’s Lien therein and topermit Agent to enter upon such premises and to remove such Propertyor to use such premises to store or dispose of such Property. 

LC Application - anapplication by Borrowers to Bank (on which Fleet may be a co-applicant),pursuant to a form approved by Bank, for the issuance of a Letter of Credit,that is submitted to Bank at least 3 Business Days prior to the requestedissuance of such Letter of Credit. 

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LC Conditions - thefollowing conditions, the satisfaction of each of which is required before Fleetshall be obligated to provide any LC Support to Bank for the issuance of aLetter of Credit: (i) each of the conditions set forth in**Section 10.2** of the Agreement has been and continues to besatisfied, including the absence of any Default or Event of Default; (ii) aftergiving effect to the issuance of the requested Letter of Credit and all otherunissued Letters of Credit for which an LC Application has been signed byFleet, the LC Outstandings would not exceed $20,000,000 and noOut-of-Formula Condition would exist, and, if no Revolver Loans are outstanding,the LC Outstandings do not, and would not upon the issuance of therequested Letter of Credit, exceed the Borrowing Base; (iii) the expiry date ofthe Letter of Credit does not extend beyond the earlier to occur of 365days from the date of issuance or the 10th Business Day prior to the lastBusiness Day of the Original Term; and (iv) the currency in which payment is tobe made under the Letter of Credit is Dollars. 

LC Documents - anyand all agreements, instruments and documents (other than an LC Applicationor an LC Support) required by Bank or other issuer of a Letter of Credit to beexecuted by a Borrower or any other Person and delivered to Bank or such issuerfor the issuance of a such Letter of Credit. 

LC Facility - asubfacility of the Revolver Facility established pursuant to **Section 1.3**of the Agreement. 

LC Obligations - onany date of determination thereof, an amount (in Dollars) equal to the sum of(i) all amounts then due and payable by any Obligor on such date by reason ofany payment made on or before such date by Fleet under any LC Supportplus (ii) the aggregate undrawn amount of all Letters of Credit thenoutstanding or to be issued by Bank under an LC Application theretoforesubmitted to Bank. 

LC Request - aLetter of Credit Procurement Request from a Borrower to Fleet in the form ofExhibit I annexed hereto. 

LC Reserve - at anydate, the aggregate of all LC Obligations outstanding on such date, other thanLC Obligations that are fully secured by Cash Collateral. 

LC Support - aguaranty or other support agreement from Fleet in favor of Bank pursuant towhich Fleet shall guarantee or otherwise assure the payment or performance bythe parties (other than Fleet, if a party) to an LC Application of suchparties’ obligations with respect to such Letter of Credit, including theobligation of such parties to reimburse Bank for any payment made by Bank undersuch Letter of Credit. 

Lender Indemnitee -a Lender in its capacity as a lender under the Agreement and its presentand future officers, directors, employees, agents and attorneys. 

Lenders - Fleet(whether in its capacity as a provider of Loans under **Section 1** ofthe Agreement, as the provider of Settlement Loans under **Section3.1.3** of the Agreement, or as the procurer of Letters of Credit under**Section 1.3** of the Agreement), GECF and any other Person who may fromtime to time become a “Lender” under the Agreement. 

Letter of Credit -any standby letter of credit or documentary letter of credit issued by Bank forthe account of a Borrower. 

Letter-of-CreditRight - a right of a Borrower to payment or performance under a letter ofcredit (whether the letter of credit is written or electronic), whether or not aBorrower has demanded or is at the time entitled to demand payment orperformance. 

Leverage Ratio -with respect to any period of Borrowers, on a Consolidated basis, the ratio ofBorrowers’ total Funded Debt and LC Obligations as of the last day of suchperiod to EBITDA for such period. 

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LIBOR Lending Office- with respect to a Lender, the office designated as a LIBOR Lending Office forsuch Lender on the signature page hereof (or on any Assignment and Acceptance,in the case of an assignee) and such other office of such Lender or any of itsAffiliates that is hereafter designated by written notice to Agent. 

LIBOR Loan - a Loan,or portion thereof, during any period in which it bears interest at a rate basedupon the applicable Adjusted LIBOR Rate. 

LIBOR Rate - withrespect to an Interest Period, the rate per annum reported to Agent by Bank asthe rate at which deposits of U.S. Dollars approximately equal in principalamount to or comparable to the amount of the LIBOR Loan to which such InterestPeriod relates and for a term comparable to such Interest Period are offered toBank by prime banks in the London interbank foreign currency deposits market atapproximately 11:00 a.m., London time, 2 Business Days prior tothe commencement of such Interest Period. Each determination by Agent ofany LIBOR Rate shall, in the absence of any manifest error, be conclusive. 

Lien - any interestin Property securing an obligation owed to, or a claim by, a Person other thanthe owner of the Property, whether such interest is based on common law, statuteor contract. The term “Lien” shall also include reservations,exceptions, encroachments, easements, rights-of-way, covenants, conditions,restrictions, leases and other title exceptions and encumbrances affectingReal Property. For the purpose of the Agreement, a Borrower shall be deemedto be the owner of any Property which it has acquired or holds subject to aconditional sale agreement or other arrangement pursuant to which title tothe Property has been retained by or vested in some other Person for securitypurposes. 

Loan - a RevolverLoan (and each Base Rate Loan and LIBOR Loan comprising such Loan). 

Loan Account - theloan account established by each Lender on its books pursuant to**Section 4.8**of the Agreement. 

Loan Documents - the Agreement, the Other Agreements and the Security Documents.
Loan Year - a periodcommencing each calendar year on the same month and day as the date of theAgreement and ending on the same month and day in the immediately succeedingcalendar year, with the first such period (i.e. the first Loan Year) tocommence on the date of the Agreement. 

Margin Stock - shallhave the meaning ascribed to it in Regulation U and of the Board of Governors. 

Material AdverseEffect - the effect of any event, condition, action, omission orcircumstance, which, alone or when taken together with other events, conditions,actions, omissions or circumstances occurring or existing concurrentlytherewith, (i) has a material adverse effect upon the business, operations,Properties or condition (financial or otherwise) of Neff and its Subsidiaries,taken as a whole; (ii) has or could be reasonably expected to have any materialadverse effect whatsoever upon the validity or enforceability of the Agreementor any of the other Loan Documents; (iii) has any material adverse effect uponthe value of the whole or any material part of the Collateral, the Liens ofAgent with respect to the Collateral or the priority of any such Liens; (iv)materially impairs the ability of any other Obligor to perform its obligationsunder this Agreement or any of the other Loan Documents, includingrepayment of any of the Obligations when due; or (v) materially impairs theability of Agent or any Lender to enforce or collect the Obligations orrealize upon any of the Collateral in accordance with the Loan Documentsand Applicable Law. 

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Material Contract -an agreement to which an Obligor is a party (other than the Loan Documents)if (i) such agreement is deemed to be a material contract as provided inRegulation S-K promulgated by the SEC under the Securities Act of 1933 or (ii)the breach, termination, cancellation or nonperformance of or failure to renewsuch agreement could reasonably be expected to have a Material AdverseEffect. 

Maximum Rate - themaximum non-usurious rate of interest permitted by Applicable Law that at anytime, or from time to time, may be contracted for, taken, reserved, charged orreceived on the Debt in question or, to the extent that at any time ApplicableLaw may thereafter permit a higher maximum non-usurious rate of interest, thensuch higher rate. Notwithstanding any other provision hereof, the Maximum Rateshall be calculated on a daily basis (computed on the actual number of dayselapsed over a year of 365 or 366 days, as the case may be). 

Minimum AvailabilityReserve - a reserve in the amount $28,000,000; provided that upon thesatisfaction of the Nortrax Resolution Conditions, the Minimum AvailabilityReserve shall be reduced to $20,000,000. 

Money Borrowed - asapplied to any Person, without duplication, (i) Debt for money borrowed on theConsolidated balance sheet of such Person prepared in accordance with GAAP;(ii) Debt arising from the lending of money by any other Person to suchPerson; (iii) Debt, whether or not in any such case arising from the lending ofmoney by another Person to such Person, (A) which is represented by notespayable or drafts accepted that evidence extensions of credit, (B) whichconstitutes obligations evidenced by bonds, debentures, notes or similarinstruments, or (C) upon which interest charges are customarily paid (other thanaccounts payable) or that was issued or assumed as full or partial payment forProperty; (iv) Debt that constitutes a Capitalized Lease Obligation; (v)reimbursement obligations with respect to letters of credit or guaranties ofletters of credit and (vi) Debt of such Person under any guaranty of obligationsthat would constitute Debt for Money Borrowed under clauses (ii) through (iv)hereof, if owed directly by such Person. 

 Moody's - Moody's Investors Services, Inc.
Mortgages - themortgages, deeds of trust or deeds to secure debt to be executed by Neff on orbefore the Closing Date in favor of Agent and by which Borrowers shall grant andconvey to Agent, for its benefit as Agent and for the Pro Rata benefit ofLenders, Liens upon the Real Estate, as security for the payment of theObligations. 

Multiemployer Plan -has the meaning set forth in Section 4001(a)(3) of ERISA. 

  Neff Asset Management - Neff Asset Management, Inc., a Delaware corporation.
Net Book Value -Cost minus accumulated depreciation that is calculated (i) in accordance withGAAP and (ii) consistently with Borrowers’ accounting practices in place onthe Closing Date. 

Net Capital ExpenditureCarryover - shall have the meaning ascribed to it in **Section 9.2.9** ofthe Agreement. 

Net CapitalExpenditures - for any period, the aggregate Capital Expenditures incurredfor the acquisition of any Inventory (other than Parts Inventory) and Equipmentduring such period, less (i) the aggregate Net Proceeds from sales of anyInventory (other than Parts Inventory) and Equipment during such period and (ii)net proceeds from insurance claims with respect to such Inventory (otherthan Parts Inventory) and Equipment. 

Net Proceeds - withrespect to a disposition of any Collateral, proceeds (includingcash receivable (when received) by way of deferred payment) received by aBorrower from the sale, lease, transfer or other disposition of anyProperty, including insurance proceeds and awards of compensation received withrespect to the destruction or condemnation of all or part of such Property, netof: (i) the reasonable and customary costs of such sale, lease, transfer orother disposition (including legal fees and sales commissions); and (ii)amounts applied to repayment of Debt (other than the Obligations) secured by aPermitted Lien on the Collateral disposed of that is senior to Agent’sLiens with respect to such Collateral. 

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Net Worth - on anydate of determination, Borrowers’ total shareholder’s equity(including capital stock, additional paid-in capital and retained earnings,after deducting treasury stock) which would appear as such on a balance sheet ofBorrowers on a Consolidated basis and prepared in accordance with GAAP and whichshall be adjusted after the Closing Date, in a manner satisfactory to Agent, toaccount for any reduction in Borrowers’ total shareholder’s equityresulting from the write-down or write-off of goodwill on the Consolidatedbalance sheet of Borrowers as a result of changes in GAAP. 

New - when used withreference to any item of Rental Inventory, Rental Inventory which has not beensold, leased or otherwise disposed of since its original shipment to therespective Borrower and, upon its original shipment to such Borrower, such itemshad not been used for demonstration or rental in excess of an aggregate of 200hours; provided, that once any item of Rental Inventory has been designated asNew, such item of Rental Inventory shall remain designated New for the purposeof calculating the Borrowing Base. 

Nortrax - Nortrax Equipment Co. - Southeast L.L.C.
Nortrax Arbitration- the arbitration proceedings between Neff and Nortrax regarding disputesarising from the sale of Neff Machinery, Inc. by Neff to Nortrax. 

Nortrax ResolutionConditions - the following conditions, each of which must be satisfiedbefore the Minimum Availability Reserve may be reduced from $28,000,000 to$20,000,000: (i) no Default or Event of Default shall exist, (ii) Neff andNortrax shall have finally resolved all issues with respect to the NortraxArbitration on terms and conditions satisfactory to Agent in its solediscretion, (iii) any required payment from Neff to Nortrax, if any, withrespect to such arbitration proceedings shall not exceed $8,000,000, and (iv)Borrowers shall have provided to Agent written evidence of such resolution inform and content reasonably satisfactory to Agent. 

Nortrax Reserve ReleaseAmount - for any period, an amount equal to the amount by which (i)$8,000,000 (the reduction in the Minimum Availability Reserve based on theresolution of the Nortrax Arbitration on terms satisfactory to Agent andSyndication Agent) exceeds (ii) the amount, if any, that Borrowers owe toNortrax based on the final resolution of the Nortrax Arbitration. 

Notes - eachRevolver Note, the Settlement Note and any other promissory note executed byBorrowers at Agent’s request to evidence any of the Obligations. 

Notice of Borrowing - as defined in Section 3.1.1(i) of the Agreement.
Notice ofConversion/Continuation - as defined in **Section 2.1.2(ii)**of theAgreement. 

Obligations - ineach case, whether now in existence or hereafter arising, (i) the principal of,and interest and premium, if any, on, the Loans; (ii) all LC Obligations and allother obligations of any Obligor to Agent, Fleet or an Affiliate of Fleetarising in connection with the issuance of any Letter of Credit; and(iii) all other Debts, covenants, duties and obligations (including ContingentObligations) now or at any time or times hereafter owing by any Obligor to Agentor any Lender under or pursuant to the Agreement, any of the other LoanDocuments or owing by any Obligor to Agent or any Lender (or any Affiliate of aLender) with respect to the Banking Relationship Debt, whether evidenced by anynote or other writing, whether arising from any extension of credit,opening of a letter of credit, acceptance, loan, guaranty, indemnification orotherwise and whether direct or indirect, absolute or contingent, due or tobecome due, primary or secondary, or joint or several, including all interest,charges, expenses, fees or other sums (including Extraordinary Expenses)chargeable to any or all Obligors hereunder or under any of the LoanDocuments. 

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Obligor - EachBorrower and each Guarantor, and any other Person that is at any time liable forthe payment of the whole or any part of the Obligations or that has grantedin favor of Agent a Lien upon any of such Person’s assets to securepayment of any of the Obligations. 

OLV AppraisalPresentment Date - the date on which an Orderly Liquidation Value Appraisalis conducted or performed. 

Orderly LiquidationValue - with respect to any Rental Inventory means, as determined by anappraisal conducted by Max Rouse & Sons, Inc. or such other appraisalcompany of similar qualifications and standing acceptable to Agent, an expecteddollar amount to be realized at an orderly negotiated sale of such RentalInventory held within a reasonable period of time as of the date of suchopinion. 

Orderly LiquidationValue Appraisal - an appraisal, in form and substance satisfactory to Agent,conducted by Max Rouse & Sons, Inc. or such other appraisal company ofsimilar qualifications and standing acceptable to Agent pursuant to which suchappraisal company determines the expected dollar amount to be realized at anorderly negotiated sale of the Rental Inventory held within a reasonable periodof time. 

Ordinary Course ofBusiness - with respect to any transaction involving any Person,the ordinary course of such Person’s business, as conducted by suchPerson in accordance with past practices and undertaken by such Person ingood faith and not for the purpose of evading any covenant or restrictionin any Loan Document. 

OrganizationDocuments - with respect to any Person, its charter, certificate or articlesof incorporation, bylaws, articles of organization, operating agreement, membersagreement, partnership agreement, voting trust, or similar agreement orinstrument governing the formation or operation of such Person. 

Original Term - as defined in **Section 5.1** of the Agreement.
OSHA - the Occupational Safety and Hazard Act of 1970.
Other Agreements -the Notes, each LC Support, the Environmental Agreement,the Fee Letter, and any and all agreements, instruments and documents(other than the Agreement and the Security Documents),heretofore, now or hereafter executed by a Borrower or Borrowers, any Obligor orany other Person and delivered to Agent or any Lender in respect ofthe transactions contemplated by the Agreement. 

Out-of-Formula Condition - as defined in **Section 1.1.2** of the Agreement.
Out-of-Formula Loan- a Revolver Loan made or existing when an Out-of-Formula Condition exists orthe amount of any Revolver Loan which, when funded, results in an Out-of-FormulaCondition. 

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Participant - as defined in **Section 13.2.1.**
 Participating Lender - as defined in **Section 1.3.2(i)**.
Parts Inventory -Inventory owned by a Borrower which consists of parts for Rental Inventory andparts to be sold or leased by such Borrower in the Ordinary Course of Businessof such Borrower, which parts are not incorporated or installed in or on, oraffixed or appurtenant to, any such Inventory or to any other property and whichparts are new, unused, in good condition and are resalable as new productswithout repackaging or reconditioning, including Inventory a Borrower currentlydescribes as “inventory (including whole goods),” but excluding anyRental Inventory. 

Parts Inventory FormulaAmount - on any date of determination thereof, an amount equal to the lesserof (i) $5,000,000 or (ii) 60% (or such lesser percentage as Agent may in itsreasonable discretion determine from time to time) of the Value of EligibleParts Inventory on such date. 

Parts InventoryReserve - such reserves as may be established from time to time by Agent inits reasonable credit judgment to reflect changes in the saleability of anyEligible Parts Inventory in the Ordinary Course of Business or such otherfactors as may negatively impact the Value of any Eligible Parts Inventory.Without limiting the generality of the foregoing, such reserves may includereserves based on obsolescence, seasonality, theft or other shrinkage,imbalance, change in composition or mix, or markdowns. 

Payment Account - anaccount maintained by Agent to which all monies from time to time deposited to aDominion Account shall be transferred and all other payments shall be sent inimmediately available federal funds. 

Payment Intangibles- shall have the meaning given to “payment intangible” in the UCC. 

Payment Items - all checks,drafts, or other items of payment payable to a Borrower, including proceeds ofany of the Collateral, including all monies received in the Payment Account. 

Pending RevolverLoans - at any date, the aggregate principal amount of all Revolver Loanswhich have been requested in any Notice of Borrowing received by Agent but whichhave not theretofore been advanced by Agent or Lenders. 

Permitted Change ofControl - a sale by the Holders (as defined in the definition of Change ofControl) of all of their Equity Interests in Borrowers made simultaneously withthe repayment if full of all of the Obligations and termination of theCommitments. 

Permitted ContingentObligations - Contingent Obligations arising from endorsements of PaymentItems for collection or deposit in the Ordinary Course of Business; ContingentObligations arising from guaranties of the Debt (to the extent permitted under**Section 9.2.3**) of one Borrower for the benefit of its Subsidiaries oranother Borrower; Contingent Obligations of a Borrower and its Subsidiariesexisting as of the Closing Date, including extensions and renewals thereof thatdo not increase the amount of such Contingent Obligations as of the date ofsuch extension or renewal; Contingent Obligations incurred in the OrdinaryCourse of Business with respect to surety bonds, appeal bonds, performance bondsand other similar obligations;********Contingent Obligationsarising under indemnity agreements to title insurers to cause such titleinsurers to issue to Agent title insurance policies; Contingent Obligationswith respect to customary indemnification obligations in favor of purchasersin connection with dispositions of Equipment permitted under **Section****7.4.2**of the Agreement; Contingent Obligations consisting ofreimbursement obligations from time to time owing by a Borrower to Bank withrespect to Letters of Credit (but in no event to include reimbursementobligations at any time owing by a Borrower to any other Person that may issueletters of credit for the account of a Borrower); and other ContingentObligations not to exceed $3,000,000 in the aggregate at any time. 

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Permitted Lien - aLien of a kind specified in **Section 9.2.5** of the Agreement. 

Person - anindividual, partnership, corporation, limited liability company, limitedliability partnership, joint stock company, land trust, business trust, orunincorporated organization, or a Governmental Authority. 

Plan - an employeebenefit plan now or hereafter maintained for employees of a Borrower that iscovered by Title IV of ERISA. 

Prime Rate - therate of interest announced or quoted by Bank from time to time as its primerate. The prime rate announced by Bank is a reference rate and does notnecessarily represent the lowest or best rate charged by Bank. Bank may makeloans or other extensions of credit at, above or below its announced prime rate.If the prime rate is discontinued by Bank as a standard, a comparablereference rate designated by Bank as a substitute therefor shall be the PrimeRate. 

Pro Rata - a shareof or in all Loans, participations in LC Obligations, liabilities, payments,proceeds, collections, Collateral and Extraordinary Expenses, which share forany Lender on any date shall be a percentage (expressed as a decimal, rounded tothe ninth decimal place) arrived at by dividing the amount of the Commitment ofsuch Lender on such date by the aggregate amount of the Commitments of allLenders on such date. 

Projections -Borrowers’ forecasted (a) Consolidated and consolidating balance sheets,profit and loss statements, cash flow statements, and capitalization statements,all prepared on a consistent basis with Borrowers’ historicalfinancial statements, together with (b) appropriate supporting details and astatement of underlying assumptions, and a projection of the Borrowing Base andAvailability. 

Properly Contested -in the case of any Debt of an Obligor (including any Taxes) that is not paid asand when due or payable by reason of such Obligor’s bona fide disputeconcerning its liability to pay same or concerning the amount thereof, (i) suchDebt is being properly contested in good faith by appropriate proceedingspromptly instituted and diligently conducted; (ii) such Obligor has establishedappropriate reserves as shall be required in conformity with GAAP;(iii) the non-payment of such Debt will not have a Material Adverse Effect;(iv) no Lien is imposed upon any of such Obligor’s assets with respect tosuch Debt unless such Lien is at all times junior and subordinate in priority tothe Liens in favor of Agent (except only with respect to property taxes thathave priority as a matter of applicable state law) and enforcement of suchLien is stayed during the period prior to the final resolution or disposition ofsuch dispute; (v) if the Debt results from, or is determined by the entry,rendition or issuance against an Obligor or any of its assets of a judgment,writ, order or decree, enforcement of such judgment, writ, order or decree isstayed pending a timely appeal or other judicial review; and (vi) if suchcontest is abandoned, settled or determined adversely (in whole or in part)to such Obligor, such Obligor forthwith pays such Debt and all penalties,interest and other amounts due in connection therewith. 

Property - anyinterest in any kind of property or asset, whether real, personal or mixed andwhether tangible or intangible. 

Purchase Money Debt- means Debt (other than the Obligations) that is incurred by a Borrower to aVendor for the payment of all or any part of the purchase price of any Inventoryand that is secured by a Lien upon the Inventory so purchased. 

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Real Estate - allright, title and interest of Neff (whether as owner, lessor or lessee) at anytime or times held by Borrower in the real Property and any buildings,structures, parking areas or other improvements thereon, located in (i) NuecesCounty, Texas and (ii) Galveston County, Texas. 

RefinancingConditions - the following conditions, each of which must be satisfiedbefore Refinancing Debt shall be permitted under **Section 9.2.3** of theAgreement: (i) the Refinancing Debt is in an aggregate principal amount thatdoes not exceed the aggregate principal amount of the Debt being extended,renewed or refinanced, (ii) the Refinancing Debt has a later or equalfinal maturity and a longer or equal weighted average life than the Debtbeing extended, renewed or refinanced, (iii) the Refinancing Debt doesnot bear a rate of interest that exceeds a market rate (as determinedin good faith by a Senior Officer) as of the date of such extension, renewal orrefinancing, (iv) if the Debt being extended, renewed or refinanced issubordinate to the Obligations, the Refinancing Debt is subordinated to the sameextent, (v) the covenants contained in any instrument or agreement relating tothe Refinancing Debt are no less favorable to Borrowers than those relating tothe Debt being extended, renewed or refinanced, and (vi) at the time of andafter giving effect to such extension, renewal or refinancing, no Default orEvent of Default shall exist. 

Refinancing Debt -Debt for Money Borrowed (excluding any Purchase Money Debt) that is permitted by**Section 9.2.3** and that is the subject or the result of anextension, renewal or refinancing. 

Regulation D - Regulation D of the Board of Governors.
Register - theregister maintained by Agent in accordance with **Section 4.8.2** ofthe Agreement. 

Reimbursement Date - as defined in **Section 1.3.1(iii)** of the Agreement.
Rental Inventory -Inventory which is of a type offered for sale or lease by a Borrower in theOrdinary Course of Business as conducted by such Borrower on the Closing Date,including Inventory Borrowers’ currently describe as “rentalequipment, net”, but excluding any Parts Inventory. 

Rental Inventory FormulaAmount - on any date of determination thereof, an amount equal to thelesser of (i) 100% (or such lesser percentage as Agent may in its reasonablediscretion determine from time to time) of the Net Book Value of Eligible RentalInventory or (ii) the Rental Inventory OLV Amount. 

Rental Inventory OLVAdjusted Amount - on any date of determination, (i) the Net Book Value ofBorrowers’ Eligible Rental Inventory, multiplied by (ii) the RentalInventory OLV Adjustment Percentage. 

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Rental Inventory OLVAdjustment Percentage - on any date of determination, a percentage equal to(i) the Orderly Liquidation Value of Rental Inventory as of the most recent OLVAppraisal Presentment Date, divided by (ii) the Net Book Value of RentalInventory as of the most recent OLV Appraisal Presentment Date. 

Rental Inventory OLVAmount - an amount equal to (i) on any OLV Appraisal Presentment Date, 80%(or such lesser percentage as Agent may in its reasonable discretion determinefrom time to time) of the Orderly Liquidation Value of Eligible Rental Inventoryor (ii) on any date following the most recent OLV Appraisal Presentment Date,the lesser of (A)80% of the Orderly Liquidation Value of Eligible RentalInventory as of the most recent OLV Appraisal Presentment Date or (B) 80% (orsuch lesser percentage as Agent may in its reasonable discretion determine fromtime to time) of the Rental Inventory OLV Adjusted Amount. 

Rentals - as of thedate of determination, all payments which the lessee is required to make bythe terms of any lease. 

Reportable Event - any of the events set forth in Section 4043(b) of ERISA.
Required Lenders -at any date of determination thereof, Lenders having Commitments representingmore than 50% of the aggregate Commitments at such time; provided,however, that if any Lender shall be in breach of any of its obligationshereunder to Borrowers or Agent, including any breach resulting from its failureto honor its Commitment in accordance with the terms ofthis Agreement, then, for so long as such breach continues, the term“Required Lenders” shall mean Lenders (excluding each Lender thatis in breach of its obligations under the Agreement) having Commitmentsrepresenting more than 50% of the aggregate Commitments at such time held bynon-breaching Lenders; providedfurther, however, that ifthe Commitments have been terminated, the term “Required Lenders”shall mean Lenders (excluding each Lender that is in breach ofits obligations hereunder) holding Loans (including Settlement Loans)representing more than 50% of the aggregate principal amount of Loans (includingSettlement Loans) outstanding at such time. 

RestrictedInvestment - any acquisition of Property by a Borrower or any of itsSubsidiaries in exchange for cash or other Property, whether in the form of anacquisition of Equity Interests or Debt, or the purchase or acquisition by aBorrower or any Subsidiary of any other Property, or a loan, advance, capitalcontribution or subscription, except acquisitions of the following: (i) fixedassets to be used in the Ordinary Course of Business of a Borrower or anySubsidiary so long as the acquisition costs thereof constitute CapitalExpenditures permitted hereunder; (ii) goods held for sale or lease or to beused in the manufacture of goods or the provision of services by a Borrower orany Subsidiary in the Ordinary Course of Business; (iii) Current Assets arisingfrom the sale or lease of goods or the rendition of services in the OrdinaryCourse of Business of a Borrower or any Subsidiary; (iv) investments inSubsidiaries to the extent existing on the Closing Date; and (v) CashEquivalents to the extent they are not subject to rights of offset in favorof any Person other than Agent or a Lender; and (vi) loans and other advances ofmoney to the extent not prohibited by **Section 9.2.2**. 

RestrictiveAgreement - an agreement (other than any of the Loan Documents) that, if andfor so long as an Obligor or any Subsidiary of such Obligor is a party thereto,would prohibit, condition or restrict such Obligor’s or Subsidiary’sright to incur or repay Debt for Money Borrowed (including any of theObligations); grant Liens upon any of such Obligor’s or Subsidiary’sassets (except in connection with the acquisition of such asset and includingLiens granted in favor of Agent pursuant to the Loan Documents); declare or makeDistributions; amend, modify, extend or renew any agreement evidencing Debt forMoney Borrowed (including any of the Loan Documents); or repay any Debt owed toanother Obligor. 

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Revolver Commitment- at any date for any Lender, the obligation of such Lender to make RevolverLoans and to purchase participations in LC Obligations pursuant to the terms andconditions of the Agreement, which shall not exceed the principal amount setforth opposite such Lender’s name under the heading “RevolverCommitment” on the signature pages of the Agreement or the signature pageof the Assignment and Acceptance by which it became a Lender, as modified fromtime to time pursuant to the terms of the Agreement or to give effect to anyapplicable Assignment and Acceptance; and “Revolver Commitments” means the aggregate principal amount of the RevolverCommitments of all Lenders, the maximum amount of which shall be $200,000,000. 

Revolver Loan - aloan made by Lenders as provided in **Section 1.1** of the Agreement(including any Out-of-Formula Loan) or a Settlement Loan funded solely by Fleet. 

Revolver LoanBalance - on any day, the amount of the unpaid balance of Revolver Loans andLC Obligations at the end of each day. 

 Revolver Note - shall have the meaning ascribed to it in **Section 1.1.4**.
S&P - Standard  & Poor's Ratings Group, a division of McGraw-Hill, Inc.
Schedule of Accounts - as defined in **Section 7.2.1** of the Agreement.
SEC - Securities and Exchange Commission.
 Secured Parties - Agent, each Lender and each Affiliate of a Lender.
Security - shallhave the same meaning as in Section 2(1) of the Securities Act of 1933. 

Security Documents -each Guaranty, the Trademark Security Agreement, the Deposit Account Assignment,the Business Interruption Insurance Assignment and all other instruments andagreements now or at any time hereafter securing the whole or any part of theObligations. 

Senior Officer - thechairman of the board of directors, the president or the chief financial officerof, or in-house legal counsel to, a Borrower. 

Senior SubordinatedDebt - all indebtedness owing by Neff under the Senior Subordinated DebtDocuments. 

Senior Subordinated DebtDocuments - the Senior Subordinated Indenture, the Senior Subordinated Notesand any and all agreements, instruments and documents, heretofore, now orhereafter executed by a Borrower or Borrowers or any other Obligor in respect ofor relating to the transactions contemplated by the Senior SubordinatedIndenture and Senior Subordinated Notes. 

Senior SubordinatedIndenture - that certain Indenture dated as of May 28, 1998, by and among,Neff, as issuer, the guarantors noted therein and State Street Bank and Trust,as Trustee, and that certain Indenture dated as of December 9, 1998, by andamong, Neff, as issuer, the guarantors noted therein and State Street Bank andTrust, as Trustee. 

Senior SubordinatedNoteholders - collectively, at any time, the “Holders” or“Noteholders” as defined in the Senior Subordinated Indenture and anyother holders of the Senior Subordinated Notes. 

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Senior Subordinated NoteRepurchase Conditions - each of the following conditions, the satisfactionof each of which is a condition to any repurchase of any of the SeniorSubordinated Notes by Borrowers: (i) Borrowers shall have provided Agent withnot less than 2 Business Day’s prior written notice of its intent to placean order to repurchase any of the Senior Subordinated Notes, which notice shallprovide the aggregate amount of such order and the purchase price limit(expressed as a percentage of the face value of such notes) for such order; (ii)no Default or Event of Default shall exist at the time of or after giving effectto any such order; (iii) the purchase price limit is acceptable to Agent andSyndication Agent and the repurchase is conducted pursuant to an open markettransaction; (iv) upon consummation of the repurchase the Senior SubordinatedNotes repurchased are cancelled by Borrowers and no longer constituteoutstanding Debt of Borrowers under the Senior Subordinated Indenture orotherwise; (v) after giving effect to such repurchase, Availability shall not beless than $15,000,000; (vi) the amount of Borrowings under the Agreement toconsummate such repurchase, together with the amount of Borrowings under theAgreement to consummate any previous repurchases by Borrowers since the ClosingDate does not exceed (A) an amount equal to $25,000,000 in the initial twelvemonth period following the Closing Date, provided that such amount shallbe increased by (x) an incremental $5,000,000 to an aggregate total of$30,000,000 plus (y) any Nortrax Reserve Release Amount (collectively, the“Additional Repurchase Amount”) in the initial twelve-month periodfollowing the Closing Date, if after giving effect to the repurchase of suchAdditional Repurchase Amount or any part thereof, Availability is not less than$20,000,000, (B) an amount equal to $25,000,000 at any time after the initialtwelve-month period following the Closing Date, and (C) $50,000,000 in theaggregate at any time; and (vii) on or prior to the date of any settlement ofany repurchase order (or any portion thereof), but prior to the settlementthereof, Borrowers shall provide Agent with written confirmation of the purchaseprice, the proposed settlement date, Availability after giving effect to suchsettlement and the total balance of repurchases permitted under clause (vi)above after giving effect to such settlement. 

Senior SubordinatedNotes - collectively, the following notes issued pursuant to the SeniorSubordinated Indenture: (i) the 10 1/4% Senior Subordinated Notes due 2008issued by Neff on May 28, 1998, and (ii) any other series of 10 1/4% SeniorSubordinated Notes due 2008 issued by Neff under the Senior SubordinatedIndenture after May 28, 1998. 

Settlement Date - as defined in **Section 3.1.3(i)** of the Agreement.
Settlement Loan - as defined in **Section 3.1.3(ii)** of the Agreement.
Settlement Note -the Settlement Note to be executed by Borrowers to the order of Fleet on orbefore the Closing Date in the form of **Exhibit B-1**, to evidence theoutstanding Settlement Loans owing to Fleet from time to time pursuant to**Section 3.1.3** of the Agreement. 

Settlement Report -a report delivered by Agent to Lenders summarizing the amount ofthe outstanding Revolver Loans as of the Settlement Date and thecalculation of the Borrowing Base as of such Settlement Date. 

Software - shall have the meaning given to "software" in the UCC.
Solvent - as to anyPerson, such Person (i) owns Property whose fair saleable value is greater thanthe amount required to pay all of such Person’s Debts (including contingentDebts), (ii) is able to pay all of its Debts as such Debts mature, (iii) hascapital sufficient to carry on its business and transactions and allbusiness and transactions in which it is about to engage, and (iv) is not“insolvent” within the meaning of Section 101(32) of the BankruptcyCode. 

Statutory Reserves -on any date, the percentage (expressed as a decimal) established by the Board ofGovernors which is the then stated maximum rate for all reserves(including any emergency, supplemental or other marginal reserverequirements) applicable to any member bank of the Federal ReserveSystem in respect to Eurocurrency Liabilities (or any successorcategory of liabilities under Regulation D). Such reserve percentage shallinclude those imposed pursuant to said Regulation D. The Statutory Reserve shallbe adjusted automatically on and as of the effective date of any change in suchpercentage. 

Subordinated Debt -Debt of a Borrower that is fully and absolutely subordinated in right of paymentto the Obligations in a manner satisfactory to Agent. 

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Subsidiary - anyPerson in which more than 25% of its outstanding Voting Securities or more than25% of all Equity Interests is owned directly or indirectly by a Borrower, byone or more other Subsidiaries of a Borrower or by a Borrower and one or moreother Subsidiaries. 

Subsidiary Guarantor- each Subsidiary of Borrower that now or hereafter becomes a Guarantor. 

Super MajorityLenders - at any date of determination thereof, Lenders having Commitmentsrepresenting more than 66 2/3% of the aggregate Commitments at such time;provided, however, that if any Lender shall be in breach of any ofits obligations hereunder to Borrowers or Agent, including any breach resultingfrom its failure to honor its Commitment in accordance with the terms ofthis Agreement, then, for so long as such breach continues, the term “SuperMajority Lenders” shall mean Lenders (excluding each Lender that is inbreach of its obligations under the Agreement) having Commitments representingmore than 66 2/3% of the aggregate Commitments at such time held bynon-breaching Lenders; providedfurther, however, that ifthe Commitments have been terminated, the term “Super MajorityLenders” shall mean Lenders (excluding each Lender that is in breach of itsobligations hereunder) holding Loans (including Settlement Loans) representingmore than 66-2/3% of the aggregate principal amount of Loans (includingSettlement Loans) outstanding at such time. 

SupportingObligations - shall have the meaning given to “supportingobligations” in the UCC. 

Tangible ChattelPaper - shall have the meaning given to “tangible chattel paper”in the UCC. 

Taxes - any presentor future taxes, levies, imposts, duties, fees, assessments, deductions,withholdings or other charges of whatever nature, including income, receipts,excise, property, sales, use, transfer, license, payroll, withholding, socialsecurity and franchise taxes now or hereafter imposed or levied by the UnitedStates or any other Governmental Authority and all interest, penalties,additions to tax and similar liabilities with respect thereto, but excluding,in the case of each Lender, taxes imposed on or measured by the net incomeor overall gross receipts of such Lender. 

Trade-In Transaction- a transaction in which a Borrower trades in Inventory or Equipment to a dealeror an original equipment manufacturer in consideration for cash, credit orsimilar Inventory or Equipment or a combination thereof. 

Trademark SecurityAgreement - the Trademark Security Agreement to be executed by a Borrower infavor of Agent on or before the Closing Date and by which a Borrower shallassign to Agent, for its benefit as Agent and for the Pro Rata benefit ofLenders, as security for the Obligations, all of such Borrower’sright, title and interest in and to all of its trademarks. 

Transferee - as defined in **Section 13.3.3** of the Agreement.
Type - any type of aLoan determined with respect to the interest option applicable thereto, whichshall be either a LIBOR Loan or a Base Rate Loan. 

UCC - the UniformCommercial Code (or any successor statute) as adopted and in force in the Stateof New York or, when the laws of any other state govern the method or manner ofthe perfection or enforcement of any security interest in any of theCollateral, the Uniform Commercial Code (or any successor statute) of suchstate. 

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Unpaid Vendor Goods- any Goods purchased by a Borrower from a Vendor for which such Borrower hasnot paid in full the purchase price (including any fees, taxes, costs orexpenses related thereto). For purposes hereof, to the extent a Borrowerpurchases more than one item of Goods in any single purchase transaction, the“purchase price” for each item of Goods shall not be deemed to havebeen paid until the aggregate purchase price (including any fees, taxes, costsor expenses related thereto) for all Goods purchased in such transaction hasbeen paid. 

Unpaid VendorReserve - on any date of determination, a reserve in an amount equal to theaggregate original purchase price for all Unpaid Vendor Goods purchased fromeach Vendor to whom any Borrower owes Purchase Money Debt on such date, whetheror not any portion of such purchase price has been paid. 

Upstream Payment - apayment or distribution of cash or other Property by a Subsidiary to a Borrower,whether in repayment of Debt owed by such Subsidiary to Borrower, to paydividends on account of a Borrower’s ownership of Equity Interests orotherwise. 

Used - when usedwith reference to any item of Rental Inventory, any Rental Inventory that doesnot constitute New Rental Inventory and any Rental Inventory which has beentaken in trade by any Borrower for any New Rental Inventory sold by suchBorrower and which prior to such trade-in, has been sold, leased or otherwisedisposed of since its original shipment from the manufacturer to either Borroweror any other Person; provided, that once any item of Rental Inventory hasbeen designated as Used, such item of Rental Inventory shall remain designatedas Used for the purpose of calculating the Borrowing Base. 

Value - withreference to the value of Inventory or Equipment, value determined on the basisof the lower of cost or market of such Inventory or Equipment in accordancewith GAAP, with the cost thereof calculated on a first-in, first-out basisdetermined in accordance with GAAP. 

Vendor - any Person(other than a Vendor Lessor) who sells to a Borrower Goods to a Borrower thatconstitute Inventory while owned by such Borrower. 

Vendor IntercreditorAgreement - an intercreditor agreement in the form of **ExhibitJ** attached hereto (with such modifications as Agent may approvein its reasonable discretion). 

Vendor Lease - alease pursuant to which a Borrower leases Goods from a Vendor Lessor, whether ornot such lease constitutes an operating or a capital lease under GAAP andwhether or not such lease constitutes a true lease or a secured transactionunder the UCC or other Applicable Law. 

Vendor Lease Debt - a Debt owed by a Borrower to a Vendor Lessor.
Vendor Lease Reserve- on any date of determination, a reserve equal to the amount last reported byBorrowers pursuant to the Agreement as the estimated aggregate amount of onemonth’s rental income owing by Account Debtors to Borrowers under leases byBorrowers of Inventory which is subject to any Vendor Lease and for which (i) aVendor has filed a UCC financing statement with respect to such Vendor Lease orthe Inventory subject to such Vendor Lease or (ii) Agent has received writtennotice of a Vendor’s claim or interest in the Inventory subject to suchVendor Lease. 

Vendor Lessor - aPerson who leases Goods to a Borrower pursuant to a Vendor Lease. 

Voting Power - withrespect to any Person, the power ordinarily (without the occurrence of acontingency) to elect the members of the Board of Directors (or personsperforming similar functions) of such Person. 

Voting Securities -Equity Interests of any class or classes of a corporation or other entitythe holders of which are ordinarily, in the absence of contingencies,entitled to elect a majority of the corporate directors or Personsperforming similar functions. 

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**AccountingTerms**. Unless otherwise specified herein, all terms of anaccounting character used in the Agreement shall be interpreted, all accountingdeterminations under the Agreement shall be made, and all financial statementsrequired to be delivered under the Agreement shall be prepared in accordancewith GAAP, applied on a basis consistent with the most recent auditedConsolidated financial statements of Borrowers and their Subsidiaries heretoforedelivered to Agent and Lenders and using the same method for inventoryvaluation as used in such audited financial statements, except for any changerequired by GAAP. 

**OtherTerms**. All other terms contained in the Agreement shall have,when the context so indicates, the meanings provided for by the UCC to theextent the same are used or defined therein. 

**Certain Matters ofConstruction**. The terms “herein,” “hereof”and “hereunder” and other words of similar import refer to theAgreement as a whole and not to any particular section, paragraph orsubdivision. Any pronoun used shall be deemed to cover all genders. In thecomputation of periods of time from a specified date to a later specified date,the word “from” means “from and including” and the words“to” and “until” each means “to but excluding.”The section titles, table of contents and list of exhibits appear as a matter ofconvenience only and shall not affect the interpretation of the Agreement. Allreferences to statutes and related regulations shall include any amendments ofsame and any successor statutes and regulations; to any of the Loan Documentsshall include any and all modifications thereto and any and all restatements,extensions or renewals thereof; to any Person shall mean and include thesuccessors and permitted assigns of such Person; to “including” and“include” shall be understood to mean “including, withoutlimitation” (and, for purposes of the Agreement and each other LoanDocument, the parties agree that the rule of *ejusdem generis* shall not beapplicable to limit a general statement, which is followed by or referable to anenumeration of specific matters to matters similar to the matters specificallymentioned); or to the time of day shall mean the time of day on the dayin question in New York, New York, unless otherwise expressly provided inthe Agreement. A Default or an Event of Default shall be deemed toexist at all times during the period commencing on the date that such Default orEvent of Default occurs to the date on which such Default or Event of Default iswaived in writing by Agent pursuant to the Agreement or, in the case of aDefault, is cured within any period of cure expressly provided in thisAgreement; and an Event of Default shall “continue” or be“continuing” until such Event of Default has been waived inwriting by Agent. All calculations of Value shall be in Dollars, all Loans shallbe funded in Dollars and all Obligations shall be repaid in Dollars. Wheneverthe phrase “to the best of Borrower’s knowledge” or words ofsimilar import relating to the knowledge or the awareness of a Borrower are usedin the Agreement or other Loan Documents, such phrase shall mean and refer to(i) the actual knowledge of a Senior Officer of such Borrower or (ii) theknowledge that a Senior Officer would have obtained if they had engaged in goodfaith and diligent performance of his duties. Whenever in the Agreement and theother Loan Documents reference is made to attorneys’ fees and expenses thatare incurred by Agent or a Lender and that are to be reimbursed to Agent or aLender by Borrowers, such reference shall be understood to mean the reasonableattorneys’ fees and expenses which are incurred by Agent or such Lender forservices actually rendered by attorneys selected by Agent or such Lender onAgent’s or such Lender’s behalf. 

   [Remainder of the page intentionally left blank;        signatures commence on the following page]

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IN WITNESS WHEREOF, this Appendix has been duly executed on December 19, 2001.BORROWERS:
ATTEST:                                                      **NEFF CORP.**_________________________                    By:______________________________**Mark H. Irion, Secretary**                                **Peter Gladis, President**[CORPORATE SEAL]
ATTEST:                                                       **NEFF RENTAL, INC.**_________________________                     By:______________________________**Mark H. Irion, Secretary**                               **Peter Gladis, President**[CORPORATE SEAL]LENDERS:FLEET CAPITALCORPORATION By:______________________________Title:________________________GE CAPITALFUNDING, INC.By:_______________________________Title:_______________________FIRST UNIONNATIONAL BANK By:_______________________________Title:_______________________
 [Signatures continued on the following page]

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THE CITGROUP/BUSINESS CREDIT, INC.By:_______________________________ Title:_______________________BANK OF AMERICA,N.A.By:_______________________________Title:_______________________TRANSAMERICABUSINESS CAPITAL CORPORATION By:_______________________________Title:_______________________UNION BANK OFCALIFORNIA, N.A.By:_______________________________Title:_______________________NATIONAL BANK OFCANADABy:_______________________________Title:_______________________PNC BANK,NATIONAL ASSOCIATIONBy:_______________________________Title:_______________________
  [Signatures continued on the following page]

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AGENT:FLEET CAPITAL CORPORATION,                                                              as AgentBy:_________________________________Title:_____________________________SYNDICATIONAGENT  GECC CAPITAL MARKETS GROUP, INC.,                                                              as Syndication AgentBy:_________________________________Title:_____________________________CO-LEADARRANGERS GECC CAPITAL MARKETS GROUP, INC.,                                                              as a Co-Lead Arranger By:_________________________________Title:____________________________ FLEET SECURITIES, INC.,                                                              as a Co-Lead ArrangerBy:_________________________________Title:____________________________
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EXHIBIT AFORM OF REVOLVERNOTEU.S. $__________.__                                                                                                                             December ___, 2001
     FOR VALUE RECEIVED, each ofthe undersigned, **NEFF CORP.**, a Delaware corporation, **NEFF RENTAL,INC.**, a Florida corporation (hereinafter referred to collectively as“Borrowers,” and individually as a “Borrower”), herebyjointly and severally unconditionally promises to pay to the order of _________________(herein,together with any subsequent holder hereof, called the “Holder”) theprincipal sum of $_______________ or such lesser sum as may constituteHolder’s Pro Rata share of the outstanding principal amount of all RevolverLoans pursuant to the terms of the Loan Agreement (as defined below) on the dateon which such outstanding principal amounts become due and payable pursuant to**Section 4.2** of the Loan Agreement, in strict accordance with the termsthereof. Each Borrower likewise jointly and severally unconditionally promisesto pay to Holder interest from and after the date hereof on Holder’s ProRata share of the outstanding principal amount of Revolver Loans at suchinterest rates, payable at such times, and computed in such manner as arespecified in **Section 2.1** of the Loan Agreement, in strict accordance withthe terms thereof. 

     This Revolver Note(“Note”) is issued pursuant to, and is one of the “RevolverNotes” referred to in, the Loan and Security Agreement dated of even dateherewith (as the same may be amended from time to time, the “LoanAgreement”), between Borrowers, Fleet Capital Corporation, as collateraland administrative agent (in such capacity, the “Agent”) for itselfand the financial institutions from time to time parties thereto as lenders(“Lenders”), such Lenders and the other parties named therein, andHolder is and shall be entitled to all benefits thereof and of all LoanDocuments executed and delivered in connection therewith. All capitalized termsused herein, unless otherwise defined herein, shall have the meanings ascribedto such terms in the Loan Agreement. 

     The repayment of theprincipal balance of this Note is subject to the provisions of **Section4.2** of the Loan Agreement. The entire unpaid principal balance and allaccrued interest on this Note shall be due and payable immediately upon thetermination of the Commitments as set forth in **Section 5.2** ofthe Loan Agreement. 

     All payments of principaland interest shall be made in Dollars in immediately available funds asspecified in the Loan Agreement. 

     Upon or after theoccurrence of an Event of Default and for so long as such Event of Defaultexists, the principal balance and all accrued interest of this Note may bedeclared due and payable in the manner and with the effect provided in the LoanAgreement, and the unpaid principal balance hereof shall bear interest at theDefault Rate as and when provided in **Section 2.1.5** of the Loan Agreement.Each Borrower agrees to pay, and save Holder harmless against any liability forthe payment of, all costs and expenses, including, but not limited to,reasonable attorneys’ fees, if this Note is collected by or through anattorney-at-law. 

     All principal amounts ofRevolver Loans made by Holder to Borrowers pursuant to the Loan Agreement, andall accrued and unpaid interest thereon, shall be deemed outstanding under thisNote and shall continue to be owing by Borrowers until paid in accordance withthe terms of this Note and the Loan Agreement. 

     In no contingency or eventwhatsoever, whether by reason of advancement of the proceeds hereof orotherwise, shall the amount paid or agreed to be paid to Holder for the use,forbearance or detention of money advanced hereunder exceed the highest lawfulrate permissible under any law which a court of competent jurisdiction may deemapplicable hereto; and, in the event of any such payment inadvertently paid byBorrowers or inadvertently received by Holder, such excess sum shall be, atBorrowers’ option, returned to Borrowers forthwith or credited as a paymentof principal, but shall not be applied to the payment of interest. It isthe intent hereof that Borrowers not pay or contract to pay, and thatHolder not receive or contract to receive, directly or indirectly in any mannerwhatsoever, interest in excess of that which may be paid by Borrowers underApplicable Law. 

     Time is of the essence ofthis Note. To the fullest extent permitted by Applicable Law, each Borrower, foritself and its legal representatives, successors and assigns, expressly waivespresentment, demand, protest, notice of dishonor, notice of non-payment, noticeof maturity, notice of protest, presentment for the purpose of acceleratingmaturity, diligence in collection, and the benefit of any exemption orinsolvency laws. 

     Wherever possible eachprovision of this Note shall be interpreted in such a manner as to be effectiveand valid under Applicable Law, but if any provision of this Note shall beprohibited or invalid under Applicable Law, such provision shall be ineffectiveto the extent of such prohibition or invalidity without invalidating theremainder of such provision or remaining provisions of this Note. No delay orfailure on the part of Holder in the exercise of any right or remedy hereundershall operate as a waiver thereof, nor as an acquiescence in any default, norshall any single or partial exercise by Holder of any right or remedy precludeany other right or remedy. Agent, at its option, may enforce its rights againstany Collateral securing this Note without Agent or Holder enforcing its rightsagainst either Borrower, any Guarantor of the indebtedness evidenced hereby orany other property or indebtedness due or to become due to a Borrower. EachBorrower agrees that, without releasing or impairing such Borrower’sliability hereunder, Holder or Agent may at any time release, surrender,substitute or exchange any Collateral securing this Note and may at any timerelease any party primarily or secondarily liable for the indebtedness evidencedby this Note. 

     The rights of Holder andobligations of Borrowers hereunder shall be construed in accordance with andgoverned by the laws (without giving effect to the conflict of law principlesthereof) of the State of New York. This Note is intended to take effect as aninstrument under seal under New York law. 

     IN WITNESS WHEREOF, eachBorrower has caused this Note to be executed under seal and delivered by itsduly authorized officers on the date first above written. 
BORROWERS:
ATTEST:                                                       **NEFF CORP.**_________________________                    By:______________________________**Secretary**                                                           **Title:________________________**[CORPORATE SEAL]
ATTEST:                                                      **NEFF RENTAL, INC.**_________________________                    By:______________________________**Secretary**                                                            **Title:__________________________**[CORPORATE SEAL]
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EXHIBIT BFORM OFSETTLEMENT NOTEU.S. $10,000,000                                                                                                                                December ___, 2001
     FOR VALUE RECEIVED, each ofthe undersigned, **NEFF CORP.**, a Delaware corporation, **NEFF RENTAL,INC.**, a Florida corporation (hereinafter referred to collectively as“Borrowers,” and individually as a “Borrower”), herebyjointly and severally promises to pay to the order of**FLEET CAPITALCORPORATION**(herein, together with any subsequent holder hereof, called“Fleet”) the principal sum of $10,000,000 or such lesser sum as mayconstitute the outstanding principal amount of all Settlement Loans pursuant tothe terms of the Loan Agreement (as defined below) on the date on which suchoutstanding principal amounts become due and payable pursuant to the LoanAgreement, in strict accordance with the terms thereof. Each Borrower likewiseunconditionally promises to pay to Fleet interest from and after the date hereofon the outstanding principal amount of Settlement Loans at such interest rates,payable at such times, and computed in such manner as are specified in**Section 2.1** of the Loan Agreement, in strict accordance with theterms thereof. 

     This Settlement Note(“Note”) is issued pursuant to, and is the “Settlement Note”referred to in, the Loan and Security Agreement dated of even date herewith (asthe same may be amended from time to time, the “Loan Agreement”),among Borrowers, Fleet Capital Corporation, as collateral and administrativeagent (in such capacity, the “Agent”) for itself and the financialinstitutions from time to time parties thereto as Lenders (the“Lenders”), such Lenders and the other parties named therein, andFleet is and shall be entitled to all benefits thereof and of all Loan Documentsexecuted and delivered in connection therewith. All capitalized terms usedherein, unless otherwise defined herein, shall have the meanings ascribed tosuch terms in the Loan Agreement. 

     The repayment of theprincipal balance of this Note shall be made in the manner and to the extentstated in **Section 4.2** of the Loan Agreement. The entire unpaid principalbalance and all accrued interest on this Note shall be due and payableimmediately upon the Commitment Termination Date. 

     All payments of principaland interest shall be made in Dollars in immediately available funds asspecified in the Loan Agreement. 

     Upon or after theoccurrence of an Event of Default and for so long as such Event of Defaultexists, the principal balance and all accrued interest of this Note may bedeclared due and payable in the manner and with the effect provided in the LoanAgreement, and the unpaid principal balance hereof shall bear interest at theDefault Rate as and when provided in **Section 2.1.5** of the Loan Agreement.Each Borrower agrees to pay, and save Fleet harmless against any liability forthe payment of, all costs and expenses, including, but not limited to,reasonable attorneys’ fees, if this Note is collected by or through anattorney-at-law. 

     All principal amounts ofSettlement Loans made by Fleet to Borrowers pursuant to the Loan Agreement, andall accrued and unpaid interest thereon, shall be deemed outstanding under thisNote and shall continue to be owing by Borrowers until paid in accordance withthe terms of this Note and the Loan Agreement. 

     In no contingency or eventwhatsoever, whether by reason of advancement of the proceeds hereof orotherwise, shall the amount paid or agreed to be paid to Fleet for the use,forbearance or detention of money advanced hereunder exceed the highest lawfulrate permissible under any law which a court of competent jurisdiction may deemapplicable hereto; and, in the event of any such payment inadvertently paid byBorrowers or inadvertently received by Fleet, such excess sum shall be, atBorrowers’ option, returned to Borrowers forthwith or credited as a paymentof principal, but shall not be applied to the payment of interest. It is theintent hereof that Borrowers not pay or contract to pay, and that Fleet notreceive or contract to receive, directly or indirectly in any manner whatsoever,interest in excess of that which may be paid by Borrowers under Applicable Law. 

     Time is of the essence ofthis Note. To the fullest extent permitted by Applicable Law, each Borrower, foritself and its legal representatives, successors and assigns, expressly waivespresentment, demand, protest, notice of dishonor, notice of non-payment, noticeof maturity, notice of protest, presentment for the purpose of acceleratingmaturity, diligence in collection, and the benefit of any exemption orinsolvency laws. 

     Wherever possible eachprovision of this Note shall be interpreted in such a manner as to be effectiveand valid under Applicable Law, but if any provision of this Note shall beprohibited or invalid under Applicable Law, such provision shall be ineffectiveto the extent of such prohibition or invalidity without invalidating theremainder of such provision or remaining provisions of this Note. No delay orfailure on the part of Fleet in the exercise of any right or remedy hereundershall operate as a waiver thereof, nor as an acquiescence in any default, norshall any single or partial exercise by Fleet of any right or remedy precludeany other right or remedy. Agent may, at its option, enforce its rights againstany Collateral securing this Note without enforcing its rights against aBorrower, any Guarantor of the indebtedness evidenced hereby or any otherproperty or indebtedness due or to become due to a Borrower. Each Borroweragrees that, without releasing or impairing such Borrower’s liabilityhereunder, Agent or Fleet may at any time release, surrender, substitute orexchange any Collateral securing this Note and may at any time release any partyprimarily or secondarily liable for the indebtedness evidenced by this Note. 

     The rights of Fleet andobligations of Borrowers hereunder shall be construed in accordance with andgoverned by the laws (without giving effect to the conflict of law principlesthereof) of the State of New York. This Note is intended to take effect as aninstrument under seal under New York law. 

IN WITNESS WHEREOF, eachBorrower has caused this Note to be executed under seal and delivered by itsduly authorized officers on the date first above written. 
BORROWERS:
ATTEST:                                                       **NEFF CORP.**_________________________                    By:______________________________**Secretary**                                                          **Title:________________________**[CORPORATE SEAL]
ATTEST:                                                       **NEFF RENTAL, INC.**_________________________                     By:______________________________**Secretary**                                                         **Title:__________________________**[CORPORATE SEAL]
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EXHIBIT CForm of Noticeof Conversion/ContinuationDate ______________, 20__Fleet Capital Corporation, as Agent300 Galleria Parkway, N.W.Suite 800Atlanta, Georgia  30339Attention: Loan Administration Officer
Re:          Loan and Security  Agreement  dated  December __, 2001,  by and among Neff Corp.,  Neff Rental,  Inc.,  Fleet Capital                  Corporation,  as collateral and  administrative  agent for certain  Lenders from time to time parties  thereto,  such                  Lenders and the other parties named therein (as at any time amended, the "Loan Agreement")Gentlemen:
     This Notice ofConversion/Continuation is delivered to you pursuant to **Section*[2.1.2]***** of the Loan Agreement. Unless otherwise definedherein, capitalized terms used herein shall have the meanings attributablethereto in the Loan Agreement. Borrowers hereby gives notice of its request asfollows: 
Check as applicable:
 9 A conversion of Loans from one Type to another, as follows:
                (i)     The requested date of the proposed conversion is ______________, 20__ (the "Conversion Date");
              (ii)      The Type of Loans tobe converted pursuant hereto are presently _________***[****select either**LIBOR Loans or Base Rate                           Loans**]*** in the principal amount of $_____________ outstanding as ofthe Conversion Date; 

               (iii)     The portion of the aforesaid  Loans to be converted on the Conversion Date is  $_____________  (the                                    "Conversion Amount");
              (iv)     The Conversion Amountis to be converted into a ____________ ***[****select either a LIBORLoan or a Base**Rate Loan**]*** (the                           “Converted Loan”) onthe Conversion Date. 

               (v)      ***[****Inthe event Borrowers select a LIBOR Loan:**]*** Borrowers hereby requeststhat the Interest Period for such Converted Loan be                           for a duration of _____***[****insert length of Interest Period**]***. 

9 A continuation of LIBOR Loans for new Interest Period, as follows:
               (i)     The requested date of the proposed continuation is _______________, 20__ (the "Continuation Date");
              (ii)     The aggregate amount of the LIBOR Loans subject to such continuation is $__________________;
               (iii)     The  duration  of the  selected  Interest  Period for the LIBOR Loans which are the subject of such                                    continuation is: _____________                           [select duration of applicable Interest Period];
Each Borrower herebyratifies and reaffirms all of its liabilities and obligations under the LoanDocuments and certifies that no Default or Event of Default exists on the datehereof. 

Each Borrower has causedthis Notice of Conversion/Continuation to be executed and delivered by its dulyauthorized officer, this _______ day of ______________, 20__. 
NEFF CORP.By:______________________________Title:____________________________NEFF RENTAL,INC.By:______________________________Title:____________________________EXHIBIT DForm of Noticeof Borrowing  Date ______________, ______Fleet Capital Corporation, as Agent300 Galleria Parkway, N.W.Suite 800Atlanta, Georgia  30339Attention: Loan Administration Officer
 Re:            Loan and Security  Agreement  dated December ___,  2001, by and among Neff Corp.,  Neff Rental,  Inc.,  Fleet Capital                  Corporation,  as collateral and  administrative  agent for certain  Lenders from time to time parties  thereto,  such                  Lenders, the other parties named therein and the undersigned Borrower (as at any time amended, the "Loan Agreement")
     This Notice of Borrowing isdelivered to you pursuant to **Section *[3.1.1]*** of the Loan Agreement. Unlessotherwise defined herein, capitalized terms used herein shall have the meaningsattributable thereto in the Loan Agreement. Borrower hereby requests a RevolverLoan in the aggregate principal amount of $______________ to be made on_____________, _____, and to consist of: 

      Check as applicable:     9 Base Rate Loans in the aggregate principal amount of $_____________
                                               9 LIBOR Loans in theaggregate principal amount of $___________, with Interest Periods as follows: 

                                               (i)     As to $_____________, an Interest Period of ______ ____________;
                                               (ii)    As to $_____________, an Interest Period of ______ months;
                                               (iii)   As to $_____________, an Interest Period of ______ months.
     Borrower hereby ratifiesand reaffirms all of its liabilities and obligations under the Loan Documentsand Borrower hereby certifies that no Default or Event of Default exists on thedate hereof. 

     Borrower has caused thisNotice of Borrowing to be executed and delivered by its duly authorized officer,this ______ day of _____________, 20__. 
NEFF CORP.(“Borrower”) By:__________________________________ Title:________________________________EXHIBIT ECOMPLIANCECERTIFICATE
*[Form to be issued on a Quarterly Basis]*

[Letterhead of Borrowers]

    __________________, 20__
Fleet Capital Corporation, as Agent300 Galleria Parkway, N.W.Suite 800Atlanta, Georgia  30339
     The undersigned, the chieffinancial officer of **Neff Corp.** and **Neff Rental, Inc.**(collectively, “Borrowers”), gives this certificate to **FleetCapital Corporation** (“Agent”) in accordance with the requirementsof **Section 9.1.3**of that certain Loan and Security Agreement datedDecember _ __, 2001, among Borrowers, Agent, the Lenders parties thereto and theother parties named therein (“Loan Agreement”). Capitalized terms usedin this Certificate, unless otherwise defined herein, shall have the meaningsascribed to them in the Loan Agreement. 

 1.       Based  upon my  review  of the  balance  sheets  and  statements  of  income  of  Borrower  and itsSubsidiaries for the FiscalQuarter ending __________________, 20__, copies of which are attached hereto, Ihereby certify that: 

 (a)     Consolidated Net Worth is $____________;
     (i)      Consolidated Net Worth required by **Section 9.3.3** is $____________     (ii)     Satisfied ____  Not Satisfied ____ (check one)
(b)     Consolidated Interest Coverage Ratio is ____ to 1;
     (i)     Consolidated Interest Coverage Ratio required by **Section 9.3.2** is _____ to 1     (ii)    Satisfied ____  Not Satisfied ____ (check one)
(c)     Consolidated Leverage Ratio is ___ to 1.0
     (i)      Consolidated LeverageRatio required by **Section 9.3.1** is _____ to 1.0     (ii)     Satisfied ____ NotSatisfied ____ (check one)     (iii)    The Applicable Margin for Libor Loans is_______% and for Base Rate Loans is   ________%
(d)     Availability is $____________;
(e)     Net Capital  Expenditures  during the period and for the Fiscal Year to date total  $_________  for                                    Borrowers;
     (i)     Net Capital Expenditures required by **Section 9.2.9** is $____________     (ii)    Satisfied ____  Not Satisfied ____ (check one)
 2.      No    Default     exists    on    the    date     hereof,     other    than:     __________________________________________________________________ [if none, so state]; and
3.      No    Event   of    Default    exists    on   the    date    hereof,    other    than    ______________________________________________________________ [if none, so state].
4.     As of the date  hereof,  each  Borrower  is current in its  payment of all  accrued  rent and othercharges to Persons who ownor lease any premises where any of the Collateral is located, and there are nopending disputes or claims regarding such Borrower’s failure to pay ordelay in payment of any such rent or other charges. 

5.      Attached  hereto  is a  schedule  showing  the  calculations  that  support  Borrowers'  compliance***[non-compliance]*** with the financial covenants, as shown above.Very truly yours,_______________________ Chief Financial OfficerCOMPLIANCECERTIFICATE
*[Form to be issued on a Monthly Basis]*

[Letterhead of Borrowers]

__________________, 20__

Fleet Capital Corporation, as Agent300 Galleria Parkway, N.W.Suite 800Atlanta, Georgia  30339
     The undersigned, the chieffinancial officer of **Neff Corp.** and **Neff Rental, Inc.**(collectively, “Borrowers”), gives this certificate to **FleetCapital Corporation** (“Agent”) in accordance with the requirementsof **Section 9.1.3**of that certain Loan and Security Agreement dated_____________ __, 2001, among Borrowers, Agent, the Lenders parties thereto andthe other parties named therein (“Loan Agreement”). Capitalized termsused in this Certificate, unless otherwise defined herein, shall have themeanings ascribed to them in the Loan Agreement. 

1.               Based  upon my  review  of the  balance  sheets  and  statements  of  income  of  Borrower  and itsSubsidiaries for the FiscalQuarter ending __________________, 20__, copies of which are attached hereto, Ihereby certify that Consolidated Net Worth is $____________; that (i)Consolidated Net Worth required by **Section 9.3.3** is $____________and (ii)that the financial covenant required by **Section 9.3.3** is Satisfied ____Not Satisfied ____ (check one) 

(a)     Consolidated Net Worth is $____________;
     (i)       ConsolidatedNet Worth required by **Section 9.3.3** is $____________      (ii)      Satisfied ____  Not Satisfied ____ (check one)
(b)     Availability is $____________;
(c)     Net Capital  Expenditures  during the period and for the Fiscal Year to date total  $_________                                         for Borrowers;
     (i)        Net Capital Expenditures required by **Section 9.2.9** is $____________     (ii)      Satisfied ____  Not Satisfied ____ (check one)
2.     No  Default  exists  on the date  hereof,other  than:   _____________________________________________ [if  none,  sostate]; and
3.       No Event of Default exists on the date hereof,other than __________________________________________________ [ifnone, so state].
4.      As of the date  hereof,  each  Borrower  is current in its  payment of all  accrued  rent and othercharges to Persons who ownor lease any premises where any of the Collateral is located, and there are nopending disputes or claims regarding such Borrower’s failure to pay ordelay in payment of any such rent or other charges. 

5.      Attached  hereto  is a  schedule  showing  the  calculations  that  support  Borrowers'  compliance***[non-compliance]*** with the financial covenants, as shown above.Very truly yours,_____________________________ Chief Financial Officer
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EXHIBIT F OPINION LETTER REQUIREMENTS
     With respect to eachBorrower and each Guarantor, each Borrower’s and such Guarantor’scounsel’s opinion letter should address the following in a mannersatisfactory to Agent: 

1.     Each  Borrower's  and  Guarantor's  due  incorporation,  valid  existence,  good  standing  and  qualification  as  a  foreigncorporation.
2.     Corporate name of each Borrower and Guarantor.
3.     Each  Borrower's  and  Guarantor's  corporate  power to  execute,  deliver and  perform  the  Loan Documents  to which it is asignatory, and its due execution and delivery thereof.
4.     Each  Borrower's  and  Guarantor's  due  authorization  to execute,  deliver and perform the  Loan Documents  to which it is asignatory, and its due execution and delivery thereof.
5.     Each Borrower’s andGuarantor’s execution, delivery and performance of the Loan Documentsdo not (a) violate the articles or bylaws, (b) cause a breach or default bysuch Borrower or such Guarantor under any agreement, (c) violate any law,regulation, judgment or order, or (d) result in or require a Lien or otherencumbrance other than in favor of Agent. 

6.     The Loan Documents aslegal, valid and binding obligations, enforceable against all Obligors inaccordance with their respective terms, subject to standard bankruptcy and othercreditor’s rights and equity exceptions. 

7.     Absence of any  registration,  filing,  consent or approval  requirement  of a Governmental  Authority in connection  with theexecution, delivery and performance of the Loan Documents.
8.      Non-violation by the Loan Documents of any Applicable Law relating to interest or usury.
9.     Due payment of allapplicable taxes and fees required to be paid in connection with the Loans, theLoan Documents, UCC-1 financing statements and other Security Documents. 

10.     Creation in favor of Agent of a duly perfected  security  interest in the Collateral  described in the Loan  Agreement and theSecurity Documents.
11.     Absence of violation ofSection 7 of the Securities Exchange Act of 1934, as amended, any regulationsissued pursuant thereto, or Regulations T, U and X of the Board of Governors ofthe Federal Reserve System, by the transactions contemplated by the LoanDocuments. 

12.     Neither any Borrower  nor any  Guarantor is an  "investment  company" or a company  "controlled"  by an  "investment  company"within the meaning of the Investment Company Act of 1940.
13.     The enforceability of the parties choice of New York law as the governing law.
14.     The non-affiliate status of GECF and Syndication Agent with Borrowers.
15.     The Obligations  constitute "Senior Debt," "Designated Senior Debt" and "Permitted  Indebtedness"  under and as defined in the         Senior Subordinated Indentures.EXHIBIT GFORM OFASSIGNMENT AND ACCEPTANCE
Dated as of ______, 2001

     Reference is made to theLoan and Security Agreement dated December ___, 2001 (at any time amended, the“Loan Agreement”), among **NEFF CORP.**, a Delaware corporation,and **NEFF RENTAL, INC.** (collectively, the “Borrowers”), **FLEETCAPITAL CORPORATION**, in its capacity as agent (“Agent”) for thefinancial institutions from time to time party to the Loan Agreement(“Lenders”), Lenders and the other parties named therein. Capitalizedterms used herein and not otherwise defined shall have the meanings assigned tosuch terms in the Loan Agreement. 
       ______________________________________  (the "Assignor") and ______________________________________  (the "Assignee") agree asfollows:
1.      (A) Assignor herebyassigns to Assignee and Assignee hereby purchases and assumes from Assignor (i)a principal amount of $________ of the outstanding Revolver Loans held byAssignor ***[****and $___________ of participations of Assignor in LCObligations**]*** (which amounts, according to the records of Agent,represent _______% of the total principal amount of outstanding Revolver Loans***[****and LC Obligations**]***) and (ii) a principal amount of$__________ of Assignor’s Revolver Commitment (which amount includesAssignor’s outstanding Revolver Loans being assigned to Assignee pursuantto clause (i) above and which, according to the records of Agent, represents(____%) of the total Revolver Commitments of Lenders under the Loan Agreement(collectively referred to as the “Assigned Interest”), together withan interest in the Loan Documents corresponding to the Assigned Interest. ThisAgreement shall be effective from the date (the “Assignment EffectiveDate”) on which Assignor receives both (x) the principal amount of theAssigned Interest in the Loans on the Assignment Effective Date, if any, and (y)a copy of this Agreement duly executed by Assignee. From and after theAssignment Effective Date, Assignee hereby expressly assumes, and undertakes toperform, all of Assignor’s obligations in respect of Assignor’sCommitments to the extent, and only to the extent, of Assignee’s AssignedInterest, and all principal, interest, fees and other amounts which wouldotherwise be payable to or for Assignor’s account in respect of theAssigned Interest shall be payable to or for Assignee’s account, to theextent such amounts have accrued subsequent to the Assignment Effective Date. 

2.      Assignor (i) representsthat as of the date hereof, the aggregate of its Commitments under the LoanAgreement (without giving effect to assignments thereof, which have not yetbecome effective) is $__________, and the outstanding balance of its Loans***[****and participations in LC Obligations**]*** (unreduced byany assignments thereof, which have not yet become effective) is $__________;(ii) makes no representation or warranty and assumes no responsibility withrespect to any statements, warranties or representations made in or inconnection with the Loan Agreement or the execution, legality, validity,enforceability, genuineness, sufficiency or value of the Loan Agreement or anyother instrument or document furnished pursuant thereto, other than thatAssignor is the legal and beneficial owner of the interest being assigned by ithereunder and that such interest is free and clear of any adverse claim; (iii)makes no representation or warranty and assumes no responsibility with respectto the financial condition of Borrowers, the performance or observance byBorrowers of any of its obligations under the Loan Agreement or any of the Loan*Documents[; and (iv) attaches the Notes held by it and requests that Agentexchange such Notes for new Notes payable to Assignee and the Assignor in theprincipal amounts set forth on **Schedule A**hereto**]***. 

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3.      Assignee (i) representsand warrants that it is legally authorized to enter into this Assignment andAcceptance; (ii) confirms that it has received a copy of the Loan Agreement,together with copies of the most recent financial statements delivered pursuantto **Section 9.1.3** thereof, and copies of such other Loan Documents andinformation as it has deemed appropriate to make its own credit analysis anddecision to enter into this Assignment and Acceptance; (iii) agrees that itshall, independently and without reliance upon the Assignor and based on suchdocuments and information as it shall deem appropriate at the time, continue tomake its own credit decisions in taking or not taking action under the LoanAgreement; (iv) confirms that it is eligible to become an Assignee; (v) appointsand authorizes Agent to take such action as agent on its behalf and to exercisesuch powers under the Loan Agreement as are delegated to Agent by the termsthereof, together with such powers as are incidental thereto; (vi) agrees thatit will strictly observe and perform all the obligations that are required to beperformed by it as a “Lender” under the terms of the Loan Agreementand the other Loan Documents; and (vii) agrees that it will keep confidentialall information with respect to Borrowers furnished to it by Borrowers or theAssignor to the extent provided in the Loan Agreement. 

4.      Assignor acknowledgesand agrees that it will not sell or otherwise dispose of the Assigned Interestor any portion thereof, or grant any participation therein, in a manner which,or take any action in connection therewith which, would violate the terms of anyof the Loan Documents. 

5.      This Agreement and allrights and obligations shall be interpreted in accordance with and governed bythe laws of the State of New York. If any provision hereof would be invalidunder Applicable Law, then such provision shall be deemed to be modified to theextent necessary to render it valid while most nearly preserving its originalintent; no provision hereof shall be affected by another provision’s beingheld invalid. 

6.      Each notice or othercommunication hereunder shall be in writing, shall be sent by messenger, bytelescope or facsimile transmission or by first-class mail, shall be deemedgiven when sent and shall be sent as follows: 

     If to Assignee, to thefollowing address (or to such other address as Assignee may designate from timeto time): 

     If to Assignor, to thefollowing address (or to such other address as Assignor may designate from timeto time): 

     Payments hereunder shall bemade by wire transfer of immediately available Dollars as follows: 

     (a)     If to Assignee, to the following account (or to such other account as Assignee may               designate  from timeto time):
__________________________ABA No._____________________________________________Account No.________________Reference:  _________________

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     (b)     If to Assignor, to the following account (or to such other account as Assignor may               designate  from timeto time):
__________________________ABA No._____________________________________________For Account of______________Reference:  _________________

     IN WITNESS WHEREOF, theparties hereto have caused this Assignment and Acceptance to be executed anddelivered by their respective duly authorized officers, as of the date firstabove written. 

 ______________________________________("Assignor")                                                          By:  ___________________________________Title:  ___________________________

 ______________________________________("Assignee")                                                          By:  ___________________________________Title:  ___________________________

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SCHEDULE A TOASSIGNMENT AND ACCEPTANCEEXHIBIT HFORM OF NOTICE
     Reference is made to (i)the Loan and Security Agreement dated December ___, 2001 (as at any timeamended, the “Loan Agreement”) among **NEFF CORP.**, a Delawarecorporation, and **NEFF RENTAL, INC.** (collectively, the“Borrowers”), **FLEET CAPITAL**CORPORATION in its capacity ascollateral and administrative agent (“Agent”) for the financialinstitutions from time to time party to the Loan Agreement(“Lenders”), such Lenders and the other parties named therein, and(ii) the Assignment and Acceptance dated as of ____________, 20__ (the“Assignment Agreement”) between __________________ (the“Assignor”) and ____________________ (the “Assignee”).Except as otherwise defined herein, capitalized terms used herein which aredefined in the Loan Agreement are used herein with the respective meaningsspecified therein. 

     The Assignor herebynotifies Borrowers and Agent of Assignor’s intent to assign to Assigneepursuant to the Assignment Agreement a principal amount of (i) $________ of theoutstanding Revolver Loans ***[****and participations in LCObligations**]*** held by Assignor, and (ii) $___________ ofAssignor’s Revolver Commitment (which amount includes the Assignor’soutstanding Revolver Loans being assigned to Assignee pursuant to clause (i)above), together with an interest in the Loan Documents corresponding to theinterest in the Loans and Commitments so assigned. Pursuant to the AssignmentAgreement, Assignee has expressly assumed all of Assignor’s obligationsunder the Loan Agreement to the extent of the Assigned Interest (as definedin the Assignment Agreement). 

     For purposes of the LoanAgreement, Agent shall deem Assignor’s share of the Revolver Commitment tobe reduced by $_________ and $__________, respectively, and Assignee’sshare of the Revolver Commitment to be increased by $_________ and $___________,respectively. 

     The address of the Assigneeto which notices, information and payments are to be sent under the termsof the Loan Agreement is: 

     Assignee's LIBOR Lending Office address is as follows:
     This Notice is beingdelivered to the Borrowers and Agent pursuant to **Section 13.3** of theLoan Agreement. Please acknowledge your receipt of this Notice by executingand returning to Assignee and Assignor a copy of this Notice. 

     IN WITNESS WHEREOF, theundersigned have caused the execution of this Notice, as of _________________,20__. 

 ______________________________________("Assignor")                                                          By:  ___________________________________Title:  ___________________________

 ______________________________________("Assignee")                                                          By:  ___________________________________Title:  ___________________________
ACKNOWLEDGED AND AGREED TOAS OF THE DATE SET FORTH ABOVE:NEFF CORP. (*)By:______________________________Title:__________________________NEFF RENTAL,INC. (*)By:______________________________Title:__________________________FLEET CAPITAL CORPORATION,as AgentBy:______________________________Title:__________________________*No signature required by Borrowers when an Event of Default exists.EXHIBIT ILETTER OFCREDIT PROCUREMENT REQUESTFleet Capital Corporation, as AgentSuite 800300 Galleria Parkway, N.W.Atlanta, Georgia 30339Attention: Office Head
     This Letter of Credit ProcurementRequest is delivered to you pursuant to the Loan and Security Agreement, datedDecember ___, 2001 (as at any time amended, the “Loan Agreement”),among Neff Corp., a Delaware corporation, and Neff Rental, Inc. (individually, a“Borrower” and collectively, the “Borrowers”), Fleet CapitalCorporation, as collateral and administrative agent (in such capacity, the“Agent”) for the financial institutions from time to time party to theLoan Agreement (“Lenders”), such Lenders and the other parties namedtherein. Unless otherwise defined herein, terms used herein have the meaningsassigned to them in the Loan Agreement. 

     Borrower hereby requestsFleet to provide an LC Support to induce Bank to issue a Letter of Credit, asfollows, 

     (1)           Amount of Letter of Credit:               $_____________________
     (2)           Issuance Date:                                _____________________
     (3)           Beneficiary's Name:                           _____________________
     (4)           Beneficiary's Address:                        _____________________
                                                   _____________________                                                   _____________________                                                                              _____________________
     (5)           Expiry Date:                                  _____________________
     (6)           Draw Conditions:                              _____________________                                                                                                          _____________________                                                                                                          _____________________                                                                                                          _____________________                                                                                                          _____________________                                                                                                          _____________________
     (7)           Single draw 9 or Multiple draw 9
     (8)           Purpose of Letter of Credit:                  ______________________                                                             ______________________                                                             ______________________                                                             ______________________                                                             ______________________
     Attached hereto is theBank’s form of LC Application, completed with the details of the Letter ofCredit requested herein. 

     Borrower hereby certifiesthat each of the LC Conditions is now, and will on the date of issuance of theLetter of Credit, be satisfied in all respects and that no Default or Event ofDefault exists. Borrower hereby ratifies and reaffirms all of the Loan Documentsand Obligations arising thereunder. 

     IN WITNESS WHEREOF,Borrower has caused this Letter of Credit Procurement Request to be executed anddelivered by its duly authorized officer, this ___ day of _________________,20__. 
 __________________________________ ("Borrower")By:______________________________Title:____________________________
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EXHIBIT JFORM OF VENDOR INTERCREDITOR AGREEMENTINTERCREDITORAGREEMENT
 _____________, 20__
Fleet Capital Corporation, as Agent300 Galleria ParkwaySuite 800Atlanta, Georgia  30339Attention: ____________________Re:      Neff Rental, Inc.  and Neff Corp.Gentlemen:
     The undersigned(“Vendor”) may from time to time sell various goods (“VendorGoods”) to Neff Rental, Inc. and/or Neff Corp. (individually andcollectively, “Neff”) with the purchase price for such Vendor Goods tobe secured by security interest in favor of Vendor in such Vendor Goods. Vendorunderstands that Fleet Capital Corporation (“Fleet”) and various otherfinancial institutions (the “Senior Lenders”) provide loans and otherextensions of credit to Neff secured by security interests in favor of Fleet, ascollateral agent for the Senior Lenders (in such capacity, together with itssuccessors in such capacity, the “Senior Agent”), in substantially allof the assets of Neff, including, without limitation, all of Neff’s presentand future accounts, inventory and equipment (the “Senior LenderLiens”). Vendor understands that the grant of a security interest by Neffto Vendor in any Vendor Goods would constitute a default under the financingagreements between the Senior Lenders and Neff, unless Vendor enters into thisIntercreditor Agreement. 

     To induce Senior Agent toconsent to the grant by Neff of a security interest in favor of Vendor in VendorGoods from time sold by Vendor to Neff, and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,Vendor and Senior Agent agree as follows: 

     7. Senior Agent consentsand agrees that Vendor may receive from Neff, in connection with any transactioninvolving the sale of Vendor Goods to Neff, a security interest in such VendorGoods, provided that each security interest received by Vendor from Neff withrespect to any Vendor Goods (or retained by Vendor under a title retentionagreement) shall attach only to such Vendor Goods and shall secure only theunpaid Purchase Price (as defined below) for such Vendor Goods and shall notsecure any other indebtedness or obligations now or hereafter owing by Neff toVendor, irrespective of any present or future agreement to the contrary andirrespective of any applicable law. Upon payment in full of the Purchase Pricefor any Vendor Goods, all security interests and other liens in favor of Vendorwith respect to such Vendor Goods (all such security interests and other liens,whether arising by agreement or under applicable law, being called “VendorLiens”) shall be deemed satisfied and released. For purposes hereof, the“Purchase Price” for any Vendor Goods shall be deemed to be the pricetherefor as shown on an invoice or other written document delivered by Vendor inthe ordinary course of business to Neff in connection with the sale of suchVendor Goods, but if multiple items of Vendor Goods are sold in one transactionand the Purchase Price shown on the invoice or other document evidencing thetransaction does not specify an individual purchase price for each item ofVendor Goods sold or the manner for calculating the individual purchase pricefor each item of Vendor Goods sold, then, for purposes hereof, the PurchasePrice for the Vendor Goods shall be the aggregate amount shown on the invoice orother document as the purchase price for all of the Vendor Goods sold in suchtransaction. 

     8. Notwithstanding thepriorities which would ordinarily result from the order of granting orperfection of any Vendor Liens or Senior Agent Liens, the order of filing orrecording of any financing statements, or the priorities that would otherwiseapply under applicable law, Vendor and Senior Agent agree that (i) all securityinterests in favor of Vendor with respect to any Vendor Goods to secure thePurchase Price for such Vendor Goods, to the extent such security interests areexpressly permitted by paragraph 1 above (such Vendor Liens being referred to as“Permitted Vendor Liens”), shall be superior and prior to any SeniorAgent Liens with respect to such Vendor Goods until the Purchase Price for suchVendor Goods has been paid and satisfied in full (whereupon the Senior AgentLiens with respect to such Vendor Goods shall be prior and superior to all otherVendor Liens with respect to such Vendor Goods); and (ii) the Senior Agent Liensin all of Neff’s present and future accounts and other rights to thepayment of money arising from any sale, lease or other disposition by Neff ofany Vendor Goods (whether such other rights to the payment of money constituteunder applicable law instruments, general intangibles or chattel paper) shall besuperior and prior to all Vendor Liens (whether or not constituting PermittedVendor Liens). 

     9. Except for a PermittedVendor Lien to secure the Purchase Price for Vendor Goods subject to suchPermitted Vendor Lien, Vendor shall not accept from Neff or retain any securityinterest in any of the real or personal property of Neff. If notwithstanding theforegoing provisions of this paragraph 3 Vendor shall accept or retain anysecurity interest in any property of Neff other than a Permitted Vendor Lien, orVendor shall obtain any judgment lien with respect to any assets of Neff, then,in either such event, any such Vendor Lien shall in all events be subordinateand junior to the Senior Agent Liens with respect to all such property, Vendorshall be prohibited from enforcing any such Vendor Liens until all of theindebtedness and obligations owing by Neff to Senior Lenders shall have beensatisfied in full and the Senior Agent Liens have been released, and Vendorpromptly shall release (or authorize Neff and Senior Agent to release) any suchVendor Lien if requested to do so by Senior Agent to facilitate Neff’s orSenior Agent’s sale, lease or other disposition of such property. 

     10. Promptly after SeniorAgent’s request therefor, Vendor agrees promptly (i) to confirm to SeniorAgent the amount of indebtedness at any time owing by Neff to Vendor, including,without limitation, the amount of indebtedness secured by a Vendor Lien; and(ii) to execute such releases and terminations as may be necessary orappropriate, in the reasonable judgment of Senior Agent, to evidence that Vendordoes not have or assert (or releases) a Vendor Lien upon any Vendor Goods forwhich the Purchase Price has been paid in full to Vendor. 

     11. In no event shallVendor transfer or assign any security interest or lien that it may have in anyVendor Goods at any time, unless Vendor shall have first given Senior Agent notless than 10 days prior written notice of its intention to do so and thetransferee or assignee of such security interest shall have executed suchinstruments and agreements as shall be reasonably satisfactory to Senior Agentto evidence and confirm such transferee’s or assignee’s understandingand agreement to be bound by the terms of this Intercreditor Agreement (to thesame extent as Vendor is bound hereby) as if such transferee or assignee hadbeen an original signatory hereto. 

     12. Each of Senior Agentand Vendor hereby waives any right to require the other to marshall any securityor collateral or otherwise to compel the other to seek recourse against orsatisfaction of indebtedness owed it from one source before seeking recourse orsatisfaction from another source. Nothing in this Intercreditor Agreement shallbe construed to be or operate as a subordination of any indebtedness or beconstrued to confer any additional rights upon Borrower. 

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     13. The provisions of thisIntercreditor Agreement are intended by the parties to control any conflictingprovisions in any agreements among Neff and Vendor, including any covenantsprohibiting encumbrances of the Vendor Goods or any other assets of Neff. ThisAgreement shall be binding upon and shall inure to the benefit of the partieshereto and their respective successors and assigns; may be executed in anynumber of counterparts and by different parties hereto in separate counterparts,each of which when so executed and delivered shall be deemed to be an originaland all of which counterparts taken together shall constitute but one and thesame instrument; expresses the entire understanding and agreement of the partieshereto with respect to the subject matter hereof and supersedes all priorunderstandings and agreements of the parties regarding the same subject matter;may not be amended or modified except by a writing signed by the parties hereto;and shall be interpreted, and the rights and obligations of the parties heretodetermined, in accordance with the internal laws of the State of New York. Anysignature delivered by a party by facsimile transmission shall be deemed to bean original signature. 
("Vendor") By:________________________________Title:_______________________________Agreed and accepted:**Fleet Capital Corporation**, as Agent ("Senior Agent")By:________________________________Title:_______________________________
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SCHEDULE7.1.1BUSINESS LOCATIONS
1.     Borrowers currently have the following business locations, and no others:Neff Corp.:Chief Executive Office:          3750 N.W. 87th Avenue, Suite 400, Miami, Florida  33178Other Locations:Neff Rental, Inc.:Chief Executive Office:            3750 N.W. 87th Avenue, Suite 400, Miami, Florida  33178Other Locations:
2.     Borrower maintains its books and records relating to Accounts and General Intangibles at: Neff Corp.:             3750 N.W. 87th Avenue, Suite 400, Miami, Florida  33178 Neff Rental, Inc.:           3750 N.W. 87th Avenue, Suite 400, Miami, Florida  33178
3.     Borrower  has had no office,  place of  business  or agent for process  located in any county  other than as set forth  above,         except:
4.     Each Subsidiary currently has the following business locations, and no others:Neff Corp.: _______________________Chief Executive Office:Other Locations: ________________________Chief Executive Office:Other Locations:Neff Rental, Inc.:_______________________Chief Executive Office:Other Locations: ________________________Chief Executive Office:Other Locations:
5.      Each Subsidiary maintains its books and records relating to Accounts and General Intangibles at:Neff Corp.:Neff Rental, Inc.:
6.     Each  Subsidiary  has had no office,  place of  business or agent for  process  located in any county  other than as set forth         above, except:
7.     The following bailees, warehouseman, similar parties and consignees hold inventory of Neff Corp. or one of its Subsidiaries:Name and Address of Party            Nature of Relationship          Amount of Inventory          Owner of Inventory
The  following  bailees,  warehouseman,  similar  parties and  consignees  hold  inventory of Neff Rental,  Inc. or one of its         Subsidiaries:Name and Address of Party            Nature of Relationship          Amount of Inventory          Owner of Inventory
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SCHEDULE 7.1.2INSURANCEName of Carrier                            Policy No.                        Scope of Insurance                        Amount of Insurance
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SCHEDULE 8.1.1JURISDICTIONS IN WHICH EACH BORROWER                                                        AND EACH SUBSIDIARY                                                   IS AUTHORIZED TO DO BUSINESSName of Entity                                                                 JurisdictionsNeff Corp.                                                                        Delaware                                                                                          FloridaNeff Rental, Inc.                                                                                                 FloridaSCHEDULE 8.1.4CAPITAL STRUCTURE
1.     The classes  and number of  authorized  shares of  Borrower  and each  Subsidiary  and the record  owner of such shares are as         follows:Neff Corp.:Class of Stock        No. of Shares Issued & Outstanding      Record Owners        No. of Shares Authorized but UnissuedNeff Rental, Inc.:Class of Stock        No. of Shares Issued & Outstanding      Record Owners        No. of Shares Authorized but UnissuedSubsidiaries:Class of Stock        No. of Shares Issued & Outstanding      Record Owners        No. of Shares Authorized but Unissued
2.     The number, nature and holder of all other outstanding Securities of Neff Corp. and each Subsidiary are as follows:
The number, nature and holder of all other outstanding Securities of Neff Rental, Inc. and each Subsidiary are as follows:
3.      The correct name and  jurisdiction  of  incorporation  of each  Subsidiary of Neff Corp.  and the percentage of its issued and         outstanding shares owned by Borrower are as follows: Name                                  Jurisidiction of Incorporation                               Percentage of Shares Owned By Borrower
4.     The name of each Borrower's corporate or joint venture Affiliates and the nature of the affiliation are as follows:SCHEDULE 8.1.5CORPORATE NAMES
1.      Borrowers' correct corporate names, as registered with the Secretary of State of the State of Delaware, is:Neff Corp.Neff Rental, Inc.
2.     In the conduct of its business, Borrower has used the following names: Neff Corp. Neff Rental, Inc.
3.     Each Subsidiaries' correct corporate name, as registered with the Secretary of State of the State of its incorporation, is:
4.     In the conduct of its business, each Subsidiary has used the following names:SCHEDULE 8.1.12SURETY OBLIGATIONS
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SCHEDULE 8.1.13FEIN OF BORROWER AND SUBSIDIARIESNeff Corp.'s FEIN is 65-0626400.Neff Rental, Inc.'s FEIN is ____________________.Name of Subsidiary                               FEINSCHEDULE 8.1.15PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
1.      Borrowers' and their Subsidiaries' patents:Patent                  Owner                    Status in Patent Office                    Federal Registration No.                 Registration Date
2.      Borrowers' and their Subsidiaries' trademarks:Trademark             Owner              Status in Trademark Office                Federal Registration No.                 Registration Date
3.      Borrowers' and their Subsidiaries' copyrights:Copyrights             Owner              Status in Copyright Office                Federal Registration No.                 Registration Date
4.       Borrowers' and their  Subsidiaries'  licenses (other than routine business licenses,  authorizing them to transact business in         local jurisdictions):Name of License                  Nature of License                   Licensor                     Term of LicenseSCHEDULE 8.1.18CONTRACTS RESTRICTING BORROWER'S RIGHT TO INCUR DEBTS Contracts that restrict the right of Borrowers to incur Debt:Title of Contract                  Identity of Parties                   Nature of Restriction                     Term of ContractSCHEDULE 8.1.19 LITIGATION
1.      Actions, suits, proceedings and investigations pending against Borrowers or any Subsidiary:Title of Action                  Nature of Action                Complaining Parties                   Jurisdiction of Tribunal
2.       The only  threatened  actions,  suits,  proceedings  or  investigations  of which  Borrowers or any Subsidiary is aware are as         follows:SCHEDULE 8.1.21 CAPITALIZED AND OPERATING LEASES
Borrowers and its Subsidiaries have the following capitalized leases:Lessee                                    Lessor                                  Term of Lease                                     Property Covered
Borrowers and its Subsidiaries have the following operating leases:Lessee                                    Lessor                                  Term of Lease                                     Property CoveredSCHEDULE 8.1.22   PENSION PLANS
Borrowers and its Subsidiaries have the following Plans:                                     Party                                                                          Type of PlanNeff Corp.Neff Rental, Inc.[Subsidiaries]SCHEDULE 8.1.24 COLLECTIVE BARGAINING AGREEMENTS; LABOR CONTROVERSIES
1.       Borrowers and their Subsidiaries are parties to the following collective bargaining agreements:Type of Agreement                                                    Parties                                                                Term of Agreement
2.     Material grievances, disputes of controversies with employees are as follows:                         Parties Involved                                                                          Nature of Grievance, Dispute or Controversy
3.            Threatened strikes, work stoppages and asserted pending demands for collective bargaining are as follows:                         Parties Involved                                                                          Nature of MatterSCHEDULE 9.2.5 PERMITTED LIENS                         Secured Party                                                                              Nature of LienSCHEDULE 9.2.8                                                 RESTRICTIONS ON UPSTREAM PAYMENTS _________________________________________________________________NEFF CORP.andNEFF RENTAL, INC.,as Borrowers                                 _________________________________________________________________                                 _________________________________________________________________                                 _________________________________________________________________LOAN ANDSECURITY AGREEMENT                                                     Dated:  December 19, 2001$200,000,000.00                                 _________________________________________________________________                                 _________________________________________________________________                                 _________________________________________________________________
**THEFINANCIAL INSTITUTIONS                                            PARTY HERETO FROM TIME TO TIME**, as Lenders                                                                and

**FLEETCAPITAL CORPORATION**, as Agent
                                                   and**GECC CAPITAL MARKETS GROUP, INC.**, as Syndication Agent                                                                  and

**GECC CAPITALMARKETS GROUP, INC.**, and

**FLEETSECURITIES, INC.**, as Co-Lead Arrangers                                  ______________________________________________________________TABLE OFCONTENTSSECTION 1.       CREDIT  FACILITIES...........................................- 2 -        1.1.     Revolver Commitment..........................................- 2 -        1.2.     Reserved.....................................................- 3 -        1.3.     LC Facility..................................................- 3 -SECTION 2.       INTEREST,  FEES  AND  CHARGES................................- 7 -        2.1.     Interest.....................................................- 7 -        2.2.     Fees.........................................................- 9 -        2.3.     Computation of Interest and Fees.............................- 10 -        2.4.     Reimbursement Obligations....................................- 10 -        2.5.     Bank Charges.................................................- 11 -        2.6.     Illegality...................................................- 12 -        2.7.     Increased Costs..............................................- 12 -        2.8.     Capital Adequacy.............................................- 13 -        2.9.     Funding Losses...............................................- 14 -        2.10.    Maximum Interest.............................................- 14 -SECTION 3.       LOAN ADMINISTRATION..........................................- 15 -        3.1.     Manner of Borrowing and Funding Revolver Loans...............- 15 -        3.2.     Defaulting Lender............................................- 18 -        3.3.     Special Provisions Governing LIBOR Loans.....................- 18 -        3.4.     Borrowers' Representative....................................- 19 -        3.5.     All Loans to Constitute One Obligation.......................- 19 -SECTION 4.       PAYMENTS- 19 -        4.1.     General Payment Provisions...................................- 19 -        4.2.     Repayment of Revolver Loans..................................- 20 -        4.3.     Reserved.....................................................- 21 -        4.4.     Payment of Other Obligations.................................- 21 -        4.5.     Marshaling; Payments Set Aside...............................- 21 -        4.6.     Agent's Allocation of Payments and Collections...............- 21 -        4.7.     Application of Payments and Collateral Proceeds..............- 22 -        4.8.     Loan Accounts; the Register; Account Stated..................- 22 -        4.9.     Gross Up for Taxes. .........................................- 23 -        4.10.    Withholding Tax Exemption....................................- 23 -        4.11.    Nature and Extent of Each Borrower's Liability...............- 24 -SECTION 5.       ORIGINAL TERM AND TERMINATION OF COMMITMENTS.................- 25 -        5.1.     Original Term of Commitments.................................- 25 -        5.2.     Termination..................................................- 26 -SECTION 6.       COLLATERAL...................................................- 27 -        6.1.     Grant of Security Interest...................................- 27 -        6.2.     Lien on Deposit Accounts.....................................- 27 -        6.3.     Real Estate Collateral.......................................- 28 -        6.4.     Other Collateral.............................................- 28 -        6.5.     No Assumption of Liability...................................- 28 -        6.6.     Lien Perfection; Further Assurances..........................- 28 -        6.7.     Foreign Subsidiary Stock.....................................- 29 -SECTION 7.       COLLATERAL ADMINISTRATION....................................- 29 -        7.1.     General Provisions...........................................- 29 -        7.2.     Administration of Accounts...................................- 30 -        7.3.     Administration of Inventory..................................- 32 -        7.4.     Administration of Equipment..................................- 32 -        7.5.     Borrowing Base Certificates..................................- 33 -SECTION 8.       REPRESENTATIONS AND WARRANTIES...............................- 33 -        8.1.     General Representations and Warranties.......................- 33 -        8.2.     Reaffirmation of Representations and Warranties..............- 38 -        8.3.     Survival of Representations and Warranties...................- 39 -SECTION 9.       COVENANTS AND CONTINUING AGREEMENTS..........................- 39 -        9.1.     Affirmative Covenants........................................- 39 -        9.2.     Negative Covenants...........................................- 43 -        9.3.     Financial Covenants..........................................- 47 -SECTION 10.      CONDITIONS PRECEDENT.........................................- 49 -        10.1.    Conditions Precedent to Initial Credit Extensions. ..........- 49 -        10.2.    Conditions Precedent to All Credit Extensions................- 51 -        10.3.    Inapplicability of Conditions................................- 51 -        10.4.    Limited Waiver of Conditions Precedent.......................- 51 -SECTION 11.      EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT............- 51 -        11.1.    Events of Default............................................- 52 -        11.2.    Acceleration of Obligations; Termination of Commitments. ....- 54 -        11.3.    Other Remedies...............................................- 54 -        11.4.    Setoff.......................................................- 55 -        11.5.    Remedies Cumulative; No Waiver...............................- 56 -SECTION 12.      AGENT   - 57 -        12.1.    Appointment, Authority and Duties of Agent...................- 57 -        12.2.    Agreements Regarding Collateral..............................- 58 -        12.3.    Reliance By Agent............................................- 59 -        12.4.    Action Upon Default..........................................- 59 -        12.5.    Ratable Sharing..............................................- 60 -        12.6.    Indemnification of Agent Indemnitees.........................- 60 -        12.7.    Limitation on Responsibilities of Agent......................- 61 -        12.8.    Successor Agent and Co-Agents................................- 61 -        12.9.    Consents, Amendments and Waivers; Out-of-Formula Loans.......- 62 -        12.10.   Due Diligence and Non-Reliance...............................- 64 -        12.11.   Representations and Warranties of Lenders....................- 64 -        12.12.   The Required Lenders.........................................- 64 -        12.13.   Several Obligations..........................................- 64 -        12.14.   Agent in its Individual Capacity.............................- 65 -        12.15.   No Third Party Beneficiaries.................................- 65 -        12.16.   Notice of Transfer...........................................- 65 -        12.17.   Replacement of Certain Lenders...............................- 65 -        12.18.   Remittance of Payments and Collections.......................- 66 -SECTION 13.      BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS.........- 66 -        13.1.    Successors and Assigns.......................................- 66 -        13.2.    Participations...............................................- 66 -        13.3.    Assignments..................................................- 67 -        13.4.    Tax Treatment................................................- 68 -                                     -iii-SECTION 14.      MISCELLANEOUS................................................- 68 -        14.1.    Power of Attorney............................................- 68 -        14.2.    General Indemnity............................................- 69 -        14.3.    Survival of All Indemnities. ................................- 70 -        14.4.    Modification of Agreement. ..................................- 70 -        14.5.    Severability.................................................- 70 -        14.6.    Cumulative Effect; Conflict of Terms.........................- 70 -        14.7.    Execution in Counterparts....................................- 70 -        14.8.    Consent......................................................- 71 -        14.9.    Notices......................................................- 71 -        14.10.   Performance of Borrowers' Obligations........................- 71 -        14.11.   Credit Inquiries.............................................- 71 -        14.12.   Time of Essence..............................................- 71 -        14.13.   Indulgences Not Waivers......................................- 71 -        14.14.   Entire Agreement; Appendix A, Exhibits and Schedules.........- 72 -        14.15.   Interpretation...............................................- 72 -        14.16.   Obligations Lenders Several..................................- 72 -        14.17.   Advertising and Publicity....................................- 72 -        14.18.   Confidentiality..............................................- 72 -        14.19.   Obligations Constitute Senior Debt...........................- 73 -        14.20.   Governing Law; Consent to Forum..............................- 73 -        14.21.   Waivers by Borrowers. .......................................- 73 -                         LIST OF EXHIBITS AND SCHEDULES                         ------------------------------Exhibit A         Form of Revolver NoteExhibit B         Form of Settlement NoteExhibit C         Form of Notice of Conversion/ContinuationExhibit D         Form of Notice of BorrowingExhibit E         Form of Compliance CertificateExhibit F         Form of Opinion ContentsExhibit G         Form of Assignment and AcceptanceExhibit H         Form of NoticeSchedule 7.1.1    Borrowers' Business LocationsSchedule 8.1.1    Jurisdictions in which Borrowers and each Subsidiary is Authorized to do BusinessSchedule 8.1.4    Capital Structure of BorrowersSchedule 8.1.5    Corporate NamesSchedule 8.1.12   Surety ObligationsSchedule 8.1.13   Tax Identification Numbers of Borrowers and SubsidiariesSchedule 8.1.15   Patents, Trademarks, Copyrights and LicensesSchedule 8.1.18   Contracts Restricting Borrowers' Right to Incur Debts; Surety ObligationsSchedule 8.1.19   LitigationSchedule 8.1.21   Capitalized and Operating LeasesSchedule 8.1.22   Pension PlansSchedule 8.1.24   Labor ContractsSchedule 9.2.5    Permitted LiensSchedule 9.2.8    Restrictions on Upstream Payments                                      -v-AMENDED ANDRESTATED EMPLOYMENT AGREEMENT
          THIS AMENDED AND RESTATED EMPLOYMENTAGREEMENT (“Agreement”) is made and entered into as of the 31st day ofDecember, 2001, by and between Neff Corp., a Delaware Company (the“Company”), and Peter G. Gladis, an individual (the“Executive”) (hereinafter collectively referred to as the“Parties”). 

          WHEREAS, the Partiesentered into an Employment Agreement, dated as of March 31, 1999 (the“Original Agreement”) setting forth the terms of the Executive’semployment with Neff Rental, Inc., a wholly-owned subsidiary of the Company, asthe Senior Vice President of Neff Rental, Inc.; 

          WHEREAS,  the Executive was  appointed the Chief  Executive  Officer and President of the Companyas of June, 2000;
          WHEREAS, the Executiveintends to resign as Chief Executive Officer and President of the Companyeffective as of January 2, 2002 and the Board of Directors of the Company (the“Board”) intends to appoint the Executive as Chief Operating Officerof the Company effective as of January 2, 2002; 

          WHEREAS, the Parties desireto amend and restate the Original Agreement to reflect the Executive’sappointment to the office of Chief Operating Officer of the Company, effectiveas of January 2, 2002. 

          NOW, THEREFORE, inconsideration of the foregoing, the mutual promises contained herein and othergood and valuable consideration, the receipt and sufficiency of which is herebyacknowledged, the Parties, intending to be legally bound, agree as follows: 

     1.       Term.  Subject to the  provisions  for  termination  set forth in Section 8, the initial  term ofemployment under this Agreement shall be for a period of one (1) year commencing on the date hereof.
     2. Employment. (a) TheExecutive shall be employed as Chief Operating Officer of the Company as ofJanuary 2, 2002, or in such other senior executive capacity as may be mutuallyagreed to in writing by the Parties. The Executive shall perform the duties,undertake the responsibilities and exercise the authority customarily performed,undertaken and exercised by persons situated in a similar executive capacities.The Executive shall report to the President of the Company. 

          (b)      Excluding  periods  of  vacation  and  sick  leave to which  the  Executive  isentitled, the Executiveagrees to devote reasonable attention and time during the usual business hoursto the business and affairs of the Company to the extent necessary to dischargethe responsibilities assigned to the Executive hereunder. Subject to theforegoing, the Executive may (i) serve on corporate, trade group, civic orcharitable boards or committees, (ii) manage his personal, financial and legalaffairs, (iii) deliver lectures, fulfill speaking engagements or teach ateducational institutions or programs, and (iv) subject to Section 15, investpersonally in any business in a private capacity where no actual conflict ofinterest exists between such investment and the business of the Company. 

     3. Base Salary and Bonus.Effective as of January 2, 2002, the Company agrees to pay or cause to be paidto the Executive a base salary at the rate of $240,000 per annum or such largeramount as the Board may from time to time determine (hereinafter referred to asthe “Base Salary”). Such Base Salary shall be payable in accordancewith the Company’s customary practices applicable to its senior executives.In addition to the Base Salary, Executive shall be eligible annually for theterm of his employment under this Agreement to receive a cash bonus. The targetamount of the annual cash bonus the Executive is eligible to receive shall be100% of the Executive’s Base Salary for the year for which the bonus isawarded (the “Target Amount”). Notwithstanding the foregoing sentence,the amount of any bonus the Executive receives shall be determined by the Boardin its sole discretion. 

     4. Employee Benefits. TheExecutive shall be entitled to participate in all employee benefit plans,practices and programs maintained by the Company and made available to employeesgenerally including, without limitation all pension, retirement, profit sharing,savings, medical, hospitalization, disability, dental, life or travel accidentinsurance benefit plans. The Executive’s participation in such plans,practices and programs shall be on the same basis and terms as are applicable tosenior executives of the Company generally. 

     5. Executive Benefits. TheExecutive shall be entitled to participate in all executive benefit or incentivecompensation plans now maintained or hereafter established by the Company forthe purpose of providing compensation and/or benefits to executives of theCompany including, but not limited to, the Company’s 401(k) Plan, theCompany’s Phantom Stock Plan, the Company’s 1998 Stock Incentive Plan,the Company’s 1999 Stock Incentive Plan and any supplemental retirement,salary continuation, stock option, deferred compensation, supplemental medicalor life insurance or other bonus or incentive compensation plans. Unlessotherwise provided herein, or in the terms of such executive benefit orincentive compensation plans, the Executive’s participation in such plansshall be on the same basis and terms as other similarly situated executives ofthe Company, but in no event on a basis less favorable in terms of benefitlevels or reward opportunities applicable to the Executive as in effect on thedate hereof. No additional compensation provided under any of such plans shallbe deemed to modify or otherwise affect the terms of this Agreement or any ofthe Executive’s entitlements hereunder. 

     6.       Other Benefits.
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          (a)      Fringe  Benefits and  Perquisites.  The Executive  shall be entitled to receiveall fringe benefits and perquisites generally made available by the Company to its executives.
           (b)      Expenses.  The Executive shall be entitled to receive prompt  reimbursement  ofall expenses reasonably incurred by him in connection with the performance of his duties hereunder.
          (c)      Office and Facilities.  Consistent with his senior executive status  hereunder,the Executive shall be provided with an appropriate office at the Company's executive offices.
     7. Vacation and Sick Leave.At such reasonable times as the Board shall in its discretion permit, theExecutive shall be entitled, without loss of pay, to absent himself voluntarilyfrom the performance of his employment under this Agreement, in accordance withthe following: 

           (a)The  Executive  shall be entitled to annual  vacation  in  accordance  with thepolicies as periodically established by the Board for similarly situated executivesof the Company.
          (b)In addition to the aforesaid paid  vacations,  the Executive shall be entitled,without loss of pay, toabsent himself voluntarily from the performance of his employment for suchadditional periods of time and for such valid and legitimate reasons as theBoard in its discretion may determine. Further, the Board shall be entitled togrant to the Executive a leave or leaves of absence with or without pay at suchtime or times and upon such terms and conditions as the Board in its discretionmay determine. 

           (c)The  Executive  shall  be  entitled  to  sick  leave  (without  loss of pay) inaccordance with the Company's policies as in effect from time to time.
     8.       Termination.  The  Executive's  employment  hereunder  may  be  terminated  under  the  followingcircumstances:
          (a)  Disability.  The Company may  terminate theExecutive's employment after having established the Executive’s Disability.For  purposes  of this  Agreement,  “Disability”  means a physical  ormental  infirmity  which  impairs  the   Executive’s   ability  to  performsubstantially  his or her  duties  for a  period  of one  hundred  eighty  (180)consecutive  days. A  determination  of Disability  shall be made by a physiciansatisfactory  to both the  Executive  and the  Company,  which  physician’sdetermination  as to  Disability  shall be made  within  10 days of the  requesttherefor and shall be binding on all  parties;  provided,  however,  that if theExecutive  and the Company do not agree on a physician,  the  Executive  and theCompany  shall each select a physician  and these two  together  shall  select athird  physician,  which third  physician’s  determination as to Disabilityshall  be  binding  on all  parties.  The  Executive  shall be  entitled  to thecompensation  and  benefits  provided  for under this  Agreement  for any periodduring  the  term  of this  Agreement  and  prior  to the  establishment  of theExecutive’s  Disability during which the Executive is unable to work due toa physical  or mental  infirmity.  Notwithstanding  anything  contained  in thisAgreement to the contrary,  until the Termination  Date specified in a Notice ofTermination   (as  each   term  is   hereinafter   defined)   relating   to  theExecutive’s  Disability,  the Executive  shall be entitled to return to hisposition  with the  Company  as set forth in this  Agreement  in which  event noDisability of the Executive will be deemed to have occurred. 

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          (b)      Cause.  The Company may terminate the  Executive's  employment for "Cause." TheCompany shall be deemed tohave terminated the Executive’s employment for “Cause” in theevent that the Executive’s employment is terminated for any of thefollowing reasons: (i) the commission of an act of fraud or intentionalmisrepresentation or an act of embezzlement, misappropriation or conversion ofassets or opportunities of the Company; (ii) dishonesty or willful misconduct inthe performance of duties; or (iii) willful violation of any law, rule orregulation in connection with the performance of duties (other than trafficviolations or similar offenses); provided, that no act or failure to act shallbe considered willful unless done or omitted to be done in bad faith and withoutreasonable belief that the action or omission was in the best interests of theCompany. Notwithstanding anything contained in this Agreement to the contrary,no failure to perform by the Executive after Notice of Termination is given bythe Company shall constitute Cause for purposes of this Agreement. 

          (c) (i) GoodReason. The Executive may terminate his employment for "Good  Reason.”  Forpurposes of this Agreement,  Good Reason shall mean the occurrence of any of thefollowing events or conditions during the two (2) year period following a Changein Control (as defined): 

                  (A) a change in theExecutive’s status, title, position or responsibilities (includingreporting responsibilities) which, in the Executive’s reasonable judgment,does not represent a promotion from his status, title, position orresponsibilities as in effect immediately prior thereto; the assignment to theExecutive of any duties or responsibilities which, in the Executive’sreasonable judgment, are inconsistent with such status, title, position orresponsibilities; or any removal of the Executive from or failure to reappointor reelect him to any of such positions, except in connection with thetermination of his employment for Disability, Cause, as a result of his death orby the Executive other than for Good Reason; 

                  (B) a reduction in theExecutive’s Base Salary or any failure to pay the Executive anycompensation or benefits to which he is entitled within five (5) days of thedate due; 

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                  (C) a failure by theCompany to increase the Executive’s Base Salary at least annually at apercentage of Base Salary no less than the average percentage increases grantedto the Executive during the three most recent full years ended prior to a Changein Control; 

                  (D) the failure by theCompany to (*i*) continue in effect (without reduction in benefit leveland/or reward opportunities) any material compensation or benefit plan in whichthe Executive was participating at the time of the Change in Control, including,but not limited to, the Company’s 401(k) Plan, the Company’s 1998Stock Incentive Plan, or (*ii*) provide the Executive with compensation andbenefits at least equal (in terms of benefit levels and/or reward opportunities)to those provided for under each employee benefit plan, program and practice asin effect immediately prior to the Change in Control (or as in effect followingthe Change in Control, if greater). 

                  (E) the  insolvency or the filing (by any party,including the Company) of a petition for bankruptcy,  of the Company;
                  (F) any  material  breach by the  Company of anyprovision of this Agreement;
                  (G) any  purported   termination  of  theExecutive’s  employment for Cause by the Company which does not comply withthe terms of Section 8 of this Agreement; 

                  (H) the failure of theCompany to obtain an agreement, satisfactory to the Executive, from anysuccessor or assign of the Company to assume and agree to perform thisAgreement, as contemplated in Section 13 hereof; or 

-5-

                  (I) the Company requiresthe Executive to be based at any office located more than fifty (50) miles fromthe office where the Executive is currently based without the Executive’sconsent. 

                 (ii)   The  Executive's  right  to  terminate  hisemployment pursuant to this Section 8(c) shall not be affected by his incapacitydue to physical or mental illness if such  incapacity  occurs after the event orcondition  giving rise to  Executive’s  right to terminate  his  employmentpursuant to this Section 8(c). 

          (d)      Voluntary Termination.
                 (i)     The Executive may  voluntarily  terminate his  employment  hereunder atany time.
                 (ii)    The Company may terminate the Executive's  employment  hereunder at anytime.
          (e)      For  purposes of this  Agreement,  a "Change in Control"  shall mean any of thefollowing events:
                (i)  An acquisition (other than directly from NeffCorp. (the (Company")) of any voting securities of the Company (the “VotingSecurities”)  by any  “Person”  (as the term  person  is used forpurposes of Section  13(d) or 14(d) of the  Securities  Exchange Act of 1934, asamended (the “Exchange Act”)), immediately after which such Person has“Beneficial  Ownership”  (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) of thirty percent (30%) or more of the then  outstandingShares or the  combined  voting  power of the  Company’s  then  outstandingVoting Securities;*provided, however,*that Beneficial Ownership by any ofJorge Mas, Juan Carlos Mas, Jose Ramon Mas, or aggregate Beneficial Ownership byGeneral  Electric  Capital  Corporation  and  any of  its  100%  Affiliates  (asdefined),  of thirty percent (30%) or more of the then outstanding Shares or thecombined voting power of the  Company’s  then outstanding Voting Securitiesshall not constitute a Change in Control;*provided further,  however,* indetermining  whether  a  Change  in  Control  has  occurred,  Shares  or  VotingSecurities  which are  acquired  in a  “Non-Control  Acquisition”  (ashereinafter  defined) shall not  constitute an  acquisition  which would cause aChange  in  Control.  A  “Non-Control   Acquisition”   shall  mean  anacquisition by (A) an employee  benefit plan (or a trust forming a part thereof)maintained by (1) the Company or (2) any  corporation or other Person of which amajority of its voting power or its voting equity  securities or equity interestis  owned,  directly  or  indirectly,  by the  Company  (for  purposes  of  thisdefinition, a “Subsidiary”),  (B) the Company or its Subsidiaries,  or(C) any Person in  connection  with a  “Non-Control  Transaction”  (ashereinafter defined); 

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                (ii) Theindividuals  who, as of the date of this Agreement are members of the Board (the“Incumbent  Board”),  cease  for any  reason  to  constitute  at leasttwo-thirds of the members of the Board of Directors of the Company; *provided,however*,   that  if  the  election,   or  nomination  for  election  by  theCompany’s  common stockholders,  of any new director was approved by a voteof at least  two-thirds of the Incumbent  Board,  such new director  shall,  forpurposes of this  Agreement,  be considered as a member of the Incumbent  Board;*provided  further,  however*,  that no  individual  shall be  considered amember of the Incumbent Board if such individual  initially  assumed office as aresult  of  either an actual  or  threatened  “Election  Contest”  (asdescribed in Rule 14a-11  promulgated under the Exchange Act) or other actual orthreatened solicitation of proxies or consents by or on behalf of a Person otherthan  the  Board  (a  “Proxy  Contest”)  including  by  reason  of anyagreement intended to avoid or settle any Election Contest or Proxy Contest;  or

                (iii)   The consummation of:
                  (A) A merger, consolidationor reorganization involving the Company, unless such merger, consolidation orreorganization is a “Non-Control Transaction.” A “Non-ControlTransaction” shall mean a merger, consolidation or reorganization of theCompany where: 

               (1) the stockholders of theCompany, immediately before such merger, consolidation or reorganization, owndirectly or indirectly immediately following such merger, consolidation orreorganization, at least fifty percent (50%) of the combined voting power of theoutstanding voting securities of the corporation resulting from such merger orconsolidation or reorganization (the “Surviving Corporation”) insubstantially the same proportion as their ownership of the Voting Securitiesimmediately before such merger, consolidation or reorganization, 

               (2) the individuals whowere members of the Incumbent Board immediately prior to the execution of theagreement providing for such merger, consolidation or reorganization constituteat least two-thirds of the members of the board of directors of the SurvivingCorporation, or a corporation beneficially directly or indirectly owning amajority of the Voting Securities of the Surviving Corporation, and 

-7-

               (3) no Person other than(*i*) the Company, (*ii*) any Subsidiary, *(iii*) any employeebenefit plan (or any trust forming a part thereof) that, immediately prior tosuch merger, consolidation or reorganization, was maintained by the Company, orany Subsidiary, or (*iv*) any Person who, immediately prior to such merger,consolidation or reorganization had Beneficial Ownership of fifty percent (50%)or more of the then outstanding Voting Securities or Shares, has BeneficialOwnership of fifty percent (50%) or more of the combined voting power of theSurviving Corporation’s then outstanding voting securities or its commonstock. 

                  (B) A complete liquidation or dissolution of the Company; or
                  (C) The sale or other disposition of all or substantially all of the assets of the Company to anyPerson (other than a transfer to a Subsidiary). 

     Notwithstanding theforegoing, a Change in Control shall not be deemed to occur (i) solely becauseany Person (the “Subject Person”) acquired Beneficial Ownership ofmore than the permitted amount of the then outstanding Shares or VotingSecurities as a result of the acquisition of Shares or Voting Securities by theCompany which, by reducing the number of Shares or Voting Securities thenoutstanding, increases the proportional number of shares Beneficially Owned bythe Subject Persons, provided that if a Change in Control would occur (but forthe operation of this sentence) as a result of the acquisition of Shares orVoting Securities by the Company, and after such share acquisition by theCompany, the Subject Person becomes the Beneficial Owner of any additionalShares or Voting Securities which increases the percentage of the thenoutstanding Shares or Voting Securities Beneficially Owned by the SubjectPerson, then a Change in Control shall occur or (ii) if Jorge Mas, Juan CarlosMas, Jose Ramon Mas, Santos Fund I, LP or General Electric Capital Corporationand any of its 100% Affiliates have aggregate Beneficial Ownership immediatelyfollowing the occurrence of any of the events described in clauses 8(e)(i), (ii)or (iii)(A) above of at least ten percent (10%) or more of the then outstandingShares or the combined voting power of the Company’s then outstandingVoting Securities. 

     If the Executive’semployment is terminated by the Company without Cause prior to the date of aChange in Control but the Executive reasonably demonstrates that the termination(i) was at the request of a third party who has indicated an intention or takensteps reasonably calculated to effect a change in control or (ii) otherwisearose in connection with, or in anticipation of, a Change in Control which hasbeen threatened or proposed, such termination shall be deemed to have occurredafter a Change in Control for purposes of this Plan provided a Change in Controlshall actually have occurred. 

-8-

     For the purposes of thisAgreement, “100% Affiliate” means with respect to any Person, (i) eachother Person that, directly or indirectly, owns or controls one hundred percent(100%) of the stock having ordinary voting power in the election of directors ofsuch Person, (ii) each other Person of which the stock having ordinary votingpower in the election of its directors is owned or controlled one hundredpercent (100%) by such Person, or (iii) each other Person of which the stockhaving ordinary voting power in the election of its directors is owned orcontrolled one hundred percent (100%) by any Person defined in clause (i) aboveor any of its 100% Affiliates. 

          (f) Notice of Termination.Any  purported  termination  by  the  Company  or  by  the  Executive  shall  becommunicated by written Notice of Termination to the other. For purposes of thisAgreement,  a  “Notice  of  Termination”  shall  mean a  notice  whichindicates the specific  termination  provision in this Agreement relied upon andshall set forth in  reasonable  detail  the facts and  circumstances  claimed toprovide a basis for  termination of the  Executive’s  employment  under theprovision  so  indicated.  For  purposes of this  Agreement,  no such  purportedtermination of employment shall be effective without such Notice of Termination.

           (g) Termination Date, Etc."Termination  Date" shall mean in the case of the  Executive’s  death,  hisdate of death,  or in all  other  cases,  the date  specified  in the  Notice ofTermination subject to the following: 

                (i) If the Executive'semployment is terminated  by the Company for Cause or due to  Disability,  or bythe Company or the Executive pursuant to Section 8(d), the date specified in theNotice  of  Termination  shall be at least  thirty  (30)  days from the date theNotice of Termination  is given to the  Executive,  provided that in the case ofDisability the Executive shall not have returned to the full-time performance ofhis duties during such period of at least thirty (30) days; and 

                (ii) If the Executive'semployment is terminated  for Good Reason,  the date  specified in the Notice ofTermination  shall not be more than thirty (30) days from the date the Notice ofTermination is given to the Company. 

     9.  Compensation  UponTermination.  Upon termination of the Executive's  employment during the term ofthis  Agreement  (including  any  extensions  thereof),  the Executive  shall beentitled to the following benefits:
          (a)      If the  Executive's  employment  is  terminated  by the  Company  for  Cause orDisability or by the Executive (other than for Good Reason), or by reason of theExecutive’s  death,  the Company shall pay the Executive all amounts earnedor  accrued  hereunder  through  the  Termination  Date  but not  paid as of theTermination Date,  including (i) Base Salary, (ii) reimbursement for any and allmonies  advanced or expenses  incurred in connection  with the  Executive’semployment for reasonable  and necessary  expenses  incurred by the Executive onbehalf of the  Company  for the period  ending on the  Termination  Date,  (iii)vacation  pay, (iv) any bonuses or incentive  compensation  and (v) any previouscompensation which the Executive has previously deferred (including any interestearned or credited thereon) (collectively, “Accrued Compensation”). Inaddition to the foregoing,  if the Executive’s  employment is terminated bythe Company  for  Disability  or by reason of the  Executive’s  death,  theCompany  shall pay to the Executive or his  beneficiaries  as severance pay eachmonth for the two (2) years  immediately  following the date of  termination  anamount in cash equal to the difference,  if any,  between (i) the sum of (y) theamount of payments Executive receives or will receive during that month pursuantto  the   disability   insurance   policies   maintained   by  the  Company  forExecutive’s  benefit and (z) the adjustment  described in the next sentenceand (ii)  Executive’s base monthly salary on the date of termination due toDisability.  The adjustment  referred to in clause (z) of the preceding sentenceis the amount by which any tax-exempt  payments  referred to in clause (y) wouldneed to be increased if such  payments  were subject to tax in order to make theafter-tax  proceeds  of  such  payments  equal  to the  actual  amount  of  suchtax-exempt payments. The Executive’s  entitlement to any other compensationor benefits shall be determined in accordance with the  Company’s  employeebenefit  plans and other  applicable  programs  and  practices  then in  effect.

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          (b) If the Executive'semployment  by the Company shall be terminated by the Executive for Good Reason,then the Executive shall be entitled to the benefits provided below: 

                (i) the Company shall paythe Executive all Accrued Compensation;
                (ii) the Company shall paythe  Executive  as severance  pay and in lieu of any further  salary for periodssubsequent to the Termination  Date, in a single payment an amount in cash equalto one (1) times the sum of (A) the Executive’s  Base Salary at the highestrate in effect at any time within the ninety (90) day period  ending on the datethe Notice of  Termination  is given (or if the  Executive’s  employment isterminated  after  a  Change  in  Control,  the  Executive’s   Base  Salaryimmediately prior to the Change in Control,  if greater) and (B) the “BonusAmount.”  The term “Bonus  Amount”  shall mean the greater of (x)the greatest amount of the cash awards  received by the Executive  during any ofthe three fiscal years  immediately  preceding the  Termination  Date or (y) theTarget  Amount  of the  Executive’s  cash  bonus  for the year in which theExecutive’s employment is terminated; 

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                (iii) for a period ofthirty-six (36) months following such termination, the Company shall at itsexpense continue on behalf of the Executive and his dependents and beneficiariesthe life insurance, disability, medical, dental and hospitalization benefitswhich were being provided to the Executive at the time Notice of Termination isgiven (or, if the Executive is terminated following a Change in Control, thebenefits provided to the Executive at the time of the Change in Control, ifgreater). The benefits provided in this Section 9 (b) (iii) shall be no lessfavorable to the Executive, in terms of amounts and deductibles and costs tohim, than the coverage provided the Executive under the plans providing suchbenefits at the time Notice of Termination is given (or, if the Executive isterminated following a Change in Control, at the time of the Change in Controlif more favorable to the Executive). The Company’s obligation hereunderwith respect to the foregoing benefits shall be limited to the extent that theExecutive obtains any such benefits pursuant to a subsequent employer’sbenefit plans, in which case the Company may reduce the coverage of any benefitsit is required to provide the Executive hereunder as long as the aggregatecoverage of the combined benefit plans is no less favorable to the Executive, interms of amounts and deductibles and costs to him, than the coverage required tobe provided hereunder. This Subsection (iii) shall not be interpreted so as tolimit any benefits to which the Executive or his dependents may be entitledunder any of the Company’s employee benefit plans, programs or practicesfollowing the Executive’s termination of employment, including, withoutlimitation, retiree medical and life insurance benefits; and 

                (iv) all restrictions onany outstanding award (including restricted stock and performance stock awards)granted to the Executive shall lapse and such awards shall become fully (100%)vested immediately, assuming all performance targets and goals (if applicable)had been fully met by the Company and by the Executive, as applicable, for suchyear, and all stock options and stock appreciation rights granted to theExecutive shall become fully (100%) vested and shall become immediatelyexercisable. 

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          (c) In addition to thepayment provided for in Section 9(a), if (i) the Executive’s  employment isterminated  by the  Executive  (other than for Good Reason) and (ii) the Companydoes not waive the  provisions  of Section 15 hereof,  the Company shall pay theExecutive  as  severance  pay and in  lieu of any  further  salary  for  periodssubsequent to the  Termination  Date, an amount in cash equal to one-half  (1/2)times the Executive’s Base Salary at the highest rate in effect at any timewithin the ninety (90) day period  ending on the date the Notice of  Terminationis given. 

          (d) If the Executive'semployment  by the Company  shall be  terminated  by the Company  other than forCause, death or Disability, then the Executive shall be entitled to the benefitsprovided below: 

                  (i)      the   Company    shall   pay   the   Executive   all   Accrued                           Compensation; and
                (ii) if the Company doesnot waive the provisions of Section 15 hereof, the Company shall pay theExecutive as severance pay and in lieu of any further salary for periodssubsequent to the Termination Date, an amount in cash equal to one (1) times theExecutive’s Base Salary at the highest rate in effect at any time withinthe ninety (90) day period ending on the date the Notice of Termination isgiven. 

          (e) The amounts providedfor in Sections  9(a) and  9(b)(i),  (ii) and (iv) shall be paid within ten (10)days after the  Executive’s  Termination  Date. The amounts provided for inSection 9(c) and Section 9(d) may be paid, at the Company’s  option, withinten (10) days after the Executive’s  Termination Date or in accordance withthe Company’s  customary practices  applicable to its senior executives forthe year following termination of the Executive’s employment. 

          (f) The Executive shall notbe required  to mitigate  the amount of any  payment,  benefit or other  Companyobligation  provided  for in this  Agreement  by  seeking  other  employment  orotherwise and no such  payment,  benefit or other  Company  obligation  shall beoffset or reduced by the amount of any compensation or benefits  provided to theExecutive in any subsequent employment. 

      10.      Intentionally Omitted.
     11. UnauthorizedDisclosure. The Executive shall not make any Unauthorized Disclosure. Forpurposes of this Agreement, “Unauthorized Disclosure” shall meandisclosure by the Executive without the consent of the Board to any person,other than an employee of the Company or a person to whom disclosure isreasonably necessary or appropriate in connection with the performance by theExecutive of his duties as an executive of the Company or as may be legallyrequired, of any confidential information obtained by the Executive while in theemploy of the Company (including, but not limited to, any confidentialinformation with respect to any of the Company’s customers or methods ofdistribution) the disclosure of which he knows or has reason to believe will bematerially injurious to the Company; provided, however, that such term shall notinclude the use or disclosure by the Executive, without consent, of anyinformation known generally to the public (other than as a result of disclosureby him in violation of this Section 11) or any information not otherwiseconsidered confidential by a reasonable person engaged in the same business asthat conducted by the Company. 

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      12.      Indemnification.
          (a) General.  The Companyagrees that if the Executive is made a party or threatened to be made a party toany action,  suit or proceeding,  whether  civil,  criminal,  administrative  orinvestigative  (a  “Proceeding”),  by  reason  of the  fact  that  theExecutive  is or was a  director  or officer  of the  Company or any  subsidiarythereof or is or was  serving at the  request of the  Company or any  subsidiarythereof as a director, officer, member, employee or agent of another corporationor a partnership,  joint venture, trust or other enterprise,  including, withoutlimitation,  service with respect to employee benefit plans,  whether or not thebasis  of such  Proceeding  is  alleged  action  in an  official  capacity  as adirector,  officer,  member,  employee  or agent  while  serving as a  director,officer,  member, employee or agent, the Executive shall be indemnified and heldharmless by the Company to the fullest extent  authorized by Florida law, as thesame exists or may  hereafter be amended,  against all Expenses (as  hereinafterdefined) incurred or suffered by the Executive in connection therewith, and suchindemnification  shall  continue as to the  Executive  even if the Executive hasceased to be an officer,  director,  or agent,  or is no longer  employed by theCompany  and  shall  inure  to  the   benefit  of  his  heirs,   executors   andadministrators;  provided*,*however,  that the Executive  shall not be soindemnified for any Proceeding  which shall have been adjudicated to have arisenout of or been based upon his willful misconduct, bad faith, gross negligence orreckless disregard of duty or his failure to act in good faith in the reasonablebelief that his action was in the best interests of the Company. 

          (b)  Expenses.  As used inthis Agreement, the term "Expenses" shall include, without limitation,  damages,losses, judgments, liabilities, fines, penalties, excise taxes, settlements, andcosts, attorneys’ fees, accountants’  investigations, and any expensesof establishing a right to indemnification under this Agreement. 

          (c)  Enforcement.  If aclaim or request for  indemnification  under this  Section 12 is not paid by theCompany or on its  behalf,  within  thirty  (30) days  after a written  claim orrequest  has  been  received  by the  Company,  the  Executive  may at any  timethereafter  bring suit  against the Company to recover the unpaid  amount of theclaim or request and if successful in whole or in part,  the Executive  shall beentitled to be paid also the expenses of  prosecuting  such suit,  in accordancewith Section 14 hereof. All obligations for  indemnification  hereunder shall besubject to, and paid in accordance with, applicable Florida law. 

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          (d)   PartialIndemnification.  If the  Executive  is  entitled  under any  provision  of thisAgreement  to  indemnification  by the  Company  for  some or a  portion  of anyExpenses,  but not,  however,  for the total amount  thereof,  the Company shallnevertheless  indemnify  the Executive for the portion of such Expenses to whichExecutive is entitled. 

          (e) Advances of Expenses.Expenses  incurred by the Executive in connection  with any Proceeding  shall bepaid by the Company in advance  upon request of the  Executive  that the Companypay such Expenses and upon the  Executive’s  delivery of an  undertaking toreimburse  the Company for Expenses  with respect to which the  Executive is notentitled to indemnification. 

          (f) Notice of Claim. TheExecutive  shall give to the  Company  notice of any claim made  against him forwhich  indemnification  will or could be sought  under this  Agreement,  but thefailure of the  Executive  to give such notice  shall not relieve the Company ofany liability  the Company may have to the  Executive  except to the extent thatthe Company is prejudiced  thereby.  In addition,  the Executive  shall give theCompany such  information  and  cooperation as it may reasonably  require and asshall be within  the  Executive’s  power and at such time and places as areconvenient for the Executive. 

          (g)      Defense of Claim.  With  respect to any  Proceeding  as to which the  Executivenotifies the Company of the commencement thereof;
                (i)  The  Company  will  be  entitled  to  participate  therein  at its  ownexpense; and
                (ii) Except as otherwiseprovided  below, to the extent that it may wish, the Company will be entitled toassume  the  defense  thereof,  with  counsel  reasonably  satisfactory  to  theExecutive.  The Executive also shall have the right to employ his own counsel insuch action, suit or proceeding if he reasonably concludes that failure to do sowould involve a conflict of interest between the Company and the Executive,  andunder such  circumstances  the fees and expenses of such counsel shall be at theexpense of the Company. 

                (iii) The Company shallnot be liable to indemnify  the Executive  under this  Agreement for any amountspaid in settlement of any action or claim effected  without its written consent.The Company  shall not settle any action or claim in any manner  which would notinclude  a  full  and  unconditional   release  of  the  Executive  without  theExecutive’s  prior written  consent.  Neither the Company nor the Executivewill  unreasonably  withhold or delay their consent to any proposed  settlement.

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          (h)  Non-exclusivity.  Theright to  indemnification  and the payment of Expenses  incurred in  defending aProceeding in advance of its final disposition conferred in this Agreement shallnot be  exclusive of any other right which the  Executive  may have or hereaftermay  acquire  under  any  statute,  provision  of the  declaration  of  trust orcertificate  of  incorporation  or  by-laws of the  Company  or any  subsidiary,agreement,  vote  of  shareholders  or  disinterested  directors  or  otherwise.

     13.      Successors and Assigns.
          (a)      This  Agreement  shall be binding  upon and shall  inure to the  benefit of theCompany, its successors andassigns and the Company shall require any successor or assign to expresslyassume and agree to perform this Agreement in the same manner and to the sameextent that the Company would be required to perform it if no such succession orassignment had taken place. The term “the Company” as used hereinshall include such successors and assigns. The term “successors andassigns” as used herein shall mean a corporation or other entity acquiringall or substantially all the assets and business of the Company (including thisAgreement) whether by operation of law or otherwise. 

          (b)      Neither this Agreement nor any right or interest  hereunder shall be assignableor transferable by theExecutive, his beneficiaries or legal representatives, except by will or by thelaws of descent and distribution. This Agreement shall inure to the benefit ofand be enforceable by the Executive’s legal personal representative. 

     14. Fees and Expenses. TheCompany shall pay all legal fees and related expenses (including the costs ofexperts, evidence and counsel) incurred by the Executive as they become due as aresult of (a) the Company and the Executive entering into this Agreement, (b)the Executive’s termination of employment (including all such fees andexpenses, if any, incurred in contesting or disputing any such termination ofemployment) or (c) the Executive’s seeking to obtain or enforce any rightor benefit provided by this Agreement or by any other plan or arrangementmaintained by the Company under which the Executive is or may be entitled toreceive benefits. 

     15.      Covenant Not to Compete
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                (a)      The  Executive  agrees that during the term of this  Agreement  and for one (1)year subsequent totermination of Executive’s employment with the Company for any reason (the“Non-Compete Term”) the Executive shall not: 

                (i) Either directly orindirectly, for himself or on behalf of or in conjunction with any other person,persons,  company,  firm,  partnership,  corporation,  business,  group or otherentity (each, a “Person”), engage in any business or activity, whetheras  an  employee,   consultant,   partner,  principal,  agent,   representative,stockholder or other  individual,  corporate,  or  representative  capacity,  orrender any  services  or provide  any advice or  substantial  assistance  to anybusiness,  person or entity,  if such  business,  person or entity,  directly orindirectly  will  in  any  way  compete  with  the  Company  (a  “CompetingBusiness”).  Without limiting the generality of the foregoing, for purposesof this Section 15, it is understood that Competing Businesses shall include anybusiness which rents or sells construction or industrial equipment or engages inthe sale of maintenance,  repair or operating supplies;  provided, however, thatnotwithstanding the foregoing,  the Executive may make passive investments in upto 2% of the  outstanding  publicly  traded  common  stock  of an  entity  whichoperates a Competing Business. 

                (ii) Either directly orindirectly, for himself or on behalf of or in conjunction with any other Person,solicit, hire or divert any Person who is, or who is, at the time of terminationof the Executive’s  employment,  or has been within six (6) months prior tothe time of  termination  of  Executive’s  employment,  an  employee of theCompany  or any of its  subsidiaries  for the  purpose  or with  the  intent  ofenticing  such  employee  away  from the  employ  of the  Company  or any of itssubsidiaries. 

                (iii)   Either  directly  or  indirectly,  for  himself  or on  behalf of or inconjunction with any otherPerson, solicit, hire or divert any Person who is, or who is, at the time oftermination of the Executive’s employment, or has been within six (6)months prior to the time of termination of Executive’s employment, acustomer or supplier of the Company or any of its subsidiaries for the purposeor with the intent of (A) inducing or attempting to induce such Person to ceasedoing business with the Company or (B) in any way interfering with therelationship between such Person and the Company. 

          (b)  Because  of  thedifficulty of measuring  economic  losses to the Company as a result of a breachof the foregoing covenants,  and because of the immediate and irreparable damagethat could be caused to the  Company  for which it would have no other  adequateremedy,  the Executive agrees (i) that the foregoing  covenants,  in addition toand not in limitation of any other rights,  remedies or damages available to theCompany  at law,  in equity or under  this  Agreement,  may be  enforced  by theCompany in the event of the breach or  threatened  breach by the  Executive,  byinjunctions  and/or  restraining  orders and (ii) to pay the sum of one thousanddollars ($1,000) per day for each day during which the Executive is in breach ofsuch covenants as liquidated  damages or, if greater,  the amount of damages theCompany can reasonably  demonstrate it incurred as a result of such breach.  TheCompany  and  Executive  agree  that the  dollar  amount in  clause  (ii) of thepreceding sentence represents the product of their good faith  negotiations.  Ifthe  Company is  involved  in court or other  legal  proceedings  to enforce thecovenants  contained in this Section 15, then in the event the Company  prevailsin such proceedings, the Executive shall be liable for the payment of reasonableattorneys’  fees, costs and ancillary  expenses  incurred by the Company inenforcing its rights hereunder. 

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           (c)     The  covenants  in  this  Section  15  are  severable  and  separate,   and  theunenforceability of anyspecific covenant shall not affect the provisions of any other covenant.Moreover, in the event any court of competent jurisdiction shall determine thatthe scope, time or territorial restrictions set forth herein are unreasonable,then it is the intention of the parties that such restrictions be enforced tothe fullest extent that such court deems reasonable, and the Agreement shallthereby be reformed to reflect the same. 

          (d) All of the covenantsin this Section 15 shall be construed as an agreement  independent  of any otherprovision in this  Agreement,  and the existence of any claim or cause of actionof the Executive  against the Company  whether  predicated on this  Agreement orotherwise  shall not  constitute a defense to the  enforcement by the Company ofsuch  covenants.  It is  specifically  agreed  that  the  period  following  thetermination of the Executive’s employment with the Company during which theagreements  and  covenants  of the  Executive  made in this  Section 15 shall beeffective,  shall be computed by excluding from such computation any time duringwhich the  Executive  is in  violation  of any  provision  of this  Section  15.

          (e)      Notwithstanding  any of the foregoing,  if any applicable law,  judicial rulingor order shall reduce thetime period during which the Executive shall be prohibited from engaging in anycompetitive activity described in Section 15 hereof, the period of time forwhich the Executive shall be prohibited pursuant to Section 15 hereof shall bethe maximum time permitted by law. 

     16. Notice. For thepurposes of this Agreement, notices and all other communications provided for inthe Agreement (including the Notice of Termination) shall be in writing andshall be deemed to have been duly given when personally delivered or sent bycertified mail, return receipt requested, postage prepaid, addressed to therespective addresses last given by each party to the other, provided that allnotices to the Company shall be directed to the attention of the President. Allnotices and communications shall be deemed to have been received on the date ofdelivery thereof or on the third business day after the mailing thereof, exceptthat notice of change of address shall be effective only upon receipt. 

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     17. Non-exclusivity ofRights. Nothing in this Agreement shall prevent or limit the Executive’scontinuing or future participation in any benefit, bonus, incentive or otherplan or program provided by the Company or any of its subsidiaries and for whichthe Executive may qualify, nor shall anything herein limit or reduce such rightsas the Executive may have under any other agreements with the Company or any ofits subsidiaries. Amounts which are vested benefits or which the Executive isotherwise entitled to receive under any plan or program of the Company or any ofits subsidiaries shall be payable in accordance with such plan or program,except as explicitly modified by this Agreement. 

     18. Settlement of Claims.The Company’s obligation to make the payments provided for in thisAgreement and otherwise to perform its obligations hereunder shall not beaffected by any circumstances, including, without limitation, any set-off,counterclaim, recoupment, defense or other right which the Company may haveagainst the Executive or others. 

     19.      Survival.  The  agreements  and  obligations of the Company and the Executive made in Sections 9,11, 12, 14, 15, 19, and 20 of this Agreement shall survive the expiration or termination of this Agreement.
     20.      Federal  Income Tax  Withholding.  The Company may withhold from any benefits  payable under thisAgreement  all  federal,  state,  city or other  taxes as shall be  required  pursuant  to any law or  governmentalregulation or ruling.
     21. Miscellaneous. Noprovision of this Agreement may be modified, waived or discharged unless suchwaiver, modification or discharge is agreed to in writing and signed by theExecutive and the Company. No waiver by either party hereto at any time of anybreach by the other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or at anyprior or subsequent time. No agreement or representations, oral or otherwise,express or implied, with respect to the subject matter hereof have been made byeither party which are not expressly set forth in this Agreement. 

     22.      Governing  Law.  This  Agreement  shall be governed by and  construed  and enforced in accordancewith the laws of the State of Florida, without giving effect to the conflict of law principles thereof.
     23. Jurisdiction and Venue.Each of the parties to this Agreement hereby (a) consents to personaljurisdiction in any suit, claim, action or proceeding relating to or arisingunder this Agreement which is brought in any local or federal court in the Stateof Florida, (b) consents to service of process upon such party in the manner setforth in Section 16 hereof, and (c) waives any objection such party may have tovenue in any such Florida court or to any claim that any such Florida court isan inconvenient forum. 

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     24.  Severability.  Theprovisions of this  Agreement  shall be deemed  severable and the  invalidity orunenforceability   of  any   provision   shall  not  affect  the   validity   orenforceability of the other provisions hereof.
      25.      Entire  Agreement.  This Agreement  constitutes the entire  agreement  between the parties heretoand  supersedes  all prior  agreements,  if any,  understandings  and  arrangements,  oral or written,  between theparties hereto with respect to the subject matter hereof.
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          IN WITNESS WHEREOF, theCompany has caused this Amended and Restated Employment Agreement to be executedby its duly authorized officer and the Executive has executed this Amended andRestated Employment Agreement as of the day and year first above written. 

                                                     NEFF CORP.                                                     By:___________________                                                          Name:                                                          Title:                                                     PETER G. GLADIS                                                     /s/ Peter Gladis                                                     ----------------
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