exv10w1



 








Exhibit 10.1




H&E EQUIPMENT SERVICES, INC.,

GREAT NORTHERN EQUIPMENT, INC.,

and

H&E EQUIPMENT SERVICES (CALIFORNIA), LLC

as Borrowers,




THE OTHER CREDIT PARTIES SIGNATORY HERETO,

as Credit Parties,




THE LENDERS SIGNATORY HERETO

FROM TIME TO TIME,

as Lenders




GENERAL ELECTRIC CAPITAL CORPORATION,

as Agent,




and




BANK OF AMERICA, N.A.,

as Syndication Agent and Documentation Agent




 






AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of August 4, 2006




•••




GE CAPITAL MARKETS, INC.,

as Sole Lead Arranger and Bookrunner




 






 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	1	 	AMOUNT AND TERMS OF CREDIT	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	Credit Facilities	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.2	 	Letters of Credit	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.2A	 	Swap Related Reimbursement Obligations	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.3	 	Prepayments	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.4	 	Use of Proceeds	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.5	 	Interest and Applicable Margins	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.6	 	Eligible Accounts	 	 	15	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.6A	 	Eligible Rolling Stock	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.6B	 	Eligible Rentals	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.7	 	Eligible Parts and Tools Inventory	 	 	20	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.7A	 	Eligible Equipment Inventory	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.8	 	Cash Management Systems	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.9	 	Fees	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.10	 	Receipt of Payments	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.11	 	Application and Allocation of Payments	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.12	 	Loan Account and Accounting	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.13	 	Indemnity	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.14	 	Access	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.15	 	Taxes	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.16	 	Capital Adequacy; Increased Costs; Illegality	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.17	 	Single Loan	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	2	 	CONDITIONS PRECEDENT	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Conditions to Amendment and Restatement and the Initial Loans	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.2	 	Further Conditions to Each Loan	 	 	31	 






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	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.3	 	Effect of Amendment and Restatement.	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	3	 	REPRESENTATIONS AND WARRANTIES	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Corporate or Limited Liability Company Existence; Compliance with Law	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.2	 	Executive Offices; Collateral Locations; FEIN	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.3	 	Corporate or Limited Liability Company Power, Authorization, Enforceable Obligations	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.4	 	Financial Statements and Projections	 	 	37	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.5	 	Material Adverse Effect	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.6	 	Ownership of Property; Liens	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.7	 	Labor Matters	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.8	 	Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness	 	 	39	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.9	 	Government Regulation	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.10	 	Margin Regulations	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.11	 	Taxes	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.12	 	ERISA	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.13	 	No Litigation	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.14	 	Brokers	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.15	 	Intellectual Property	 	 	42	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.16	 	Full Disclosure	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.17	 	Environmental Matters	 	 	43	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.18	 	Insurance	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.19	 	Deposit and Disbursement Accounts	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.20	 	Government Contracts	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.21	 	Customer and Trade Relations	 	 	44	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.22	 	Agreements and Other Documents	 	 	45	 






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(continued)




	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.23	 	Solvency	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.24	 	Titled Vehicles	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.25	 	Omitted.	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.26	 	Senior Unsecured Notes and Other Related Transactions Document	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	4	 	FINANCIAL STATEMENTS AND INFORMATION	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Reports and Notices	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.2	 	Communication with Accountants	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	5	 	AFFIRMATIVE COVENANTS	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	Maintenance of Existence and Conduct of Business	 	 	46	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.2	 	Payment of Charges	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.3	 	Books and Records	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.4	 	Insurance; Damage to or Destruction of Collateral	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.5	 	Compliance with Laws	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.6	 	Supplemental Disclosure	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.7	 	Intellectual Property	 	 	49	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.8	 	Environmental Matters	 	 	50	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.9	 	Landlords' Agreements, Mortgagee Agreements, Bailee Letters, Real Estate Purchases and Vendor Inter-Creditor Agreements	 	 	51	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.10	 	Government Accounts	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.11	 	Further Assurances	 	 	52	 
	 
	 	 	 	 	 	 	 	 
	6	 	NEGATIVE COVENANTS	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Acquisitions, Subsidiaries, Etc.	 	 	53	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.2	 	Investments; Loans and Advances	 	 	56	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.3	 	Indebtedness	 	 	57	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.4	 	Employee Loans and Affiliate Transactions	 	 	59	 






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(continued)




	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.5	 	Capital Structure and Business	 	 	59	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.6	 	Guaranteed Indebtedness	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.7	 	Liens	 	 	60	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.8	 	Disposition of Stock and Assets	 	 	61	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.9	 	ERISA	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.10	 	Financial Covenants	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.11	 	Hazardous Materials	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.12	 	Omitted.	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.13	 	Cancellation of Indebtedness	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.14	 	Restricted Payments	 	 	62	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.15	 	Change of Name or Location; Change of Fiscal Year	 	 	63	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.16	 	No Impairment of Intercompany Transfers	 	 	63	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.17	 	No Speculative Transactions	 	 	63	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.18	 	Changes Relating to Senior Debt; Subordinated Debt Designation of Credit Facility	 	 	64	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.19	 	Changes in Depreciation Schedules	 	 	64	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.20	 	Credit Parties Other than Borrowers	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.21	 	Lock Box Remittances; Vendor Payments	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	7	 	TERM	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	Termination	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.2	 	Survival of Obligations Upon Termination of Financing Arrangements	 	 	65	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.3	 	Default Purchase Option	 	 	66	 
	 
	 	 	 	 	 	 	 	 
	8	 	EVENTS OF DEFAULT: RIGHTS AND REMEDIES	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Events of Default	 	 	67	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.2	 	Remedies	 	 	69	 






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(continued)




	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.3	 	Waivers by Credit Parties	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	9	 	ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Assignment and Participations	 	 	70	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.2	 	Appointment of Agent	 	 	73	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.3	 	Agent's Reliance, Etc.	 	 	74	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.4	 	GE Capital and Affiliates	 	 	74	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.5	 	Lender Credit Decision	 	 	74	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.6	 	Indemnification	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.7	 	Successor Agent	 	 	75	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.8	 	Co Agents	 	 	76	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.9	 	Setoff and Sharing of Payments	 	 	76	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.10	 	Advances; Payments; Non Funding Lenders; Information; Actions in Concert	 	 	77	 
	 
	 	 	 	 	 	 	 	 
	10	 	SUCCESSORS AND ASSIGNS	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.1	 	Successors and Assigns	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	11	 	MISCELLANEOUS	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.1	 	Complete Agreement; Modification of Agreement	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.2	 	Amendments and Waivers	 	 	80	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.3	 	Fees and Expenses	 	 	82	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.4	 	No Waiver	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.5	 	Remedies	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.6	 	Severability	 	 	84	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.7	 	Conflict of Terms	 	 	85	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.8	 	Confidentiality	 	 	85	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.9	 	GOVERNING LAW	 	 	85	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.10	 	Notices	 	 	86	 






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(continued)




	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.11	 	Section Titles	 	 	87	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.12	 	Counterparts	 	 	87	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.13	 	WAIVER OF JURY TRIAL	 	 	87	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.14	 	Press Releases and Related Matters	 	 	87	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.15	 	Reinstatement	 	 	88	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.16	 	Advice of Counsel	 	 	88	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.17	 	No Strict Construction	 	 	88	 






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	INDEX OF APPENDICES
	 	 	 	 
	 
	 	 	 	 
	Exhibit 1.1(a)(i)

	 	-
	 	Form of Notice of Revolving Credit Advance
	 
	 	 	 	 
	Exhibit 1.1(a)(ii)

	 	-
	 	Form of Revolving Note
	 
	 	 	 	 
	Exhibit 1.1(b)(ii)

	 	-
	 	Form of Swing Line Note
	 
	 	 	 	 
	Exhibit 1.5(e)

	 	-
	 	Form of Notice of Conversion/Continuation
	 
	 	 	 	 
	Exhibit 1.6B(a)

	 	-
	 	Form of Lease
	 
	 	 	 	 
	Exhibit 4.1(b)

	 	-
	 	Form of Borrowing Base Certificate
	 
	 	 	 	 
	Exhibit 6.7(d)(iii)(A)

	 	-
	 	Form of Intercreditor Agreement (Floor Plan Inventory)
	 
	 	 	 	 
	Exhibit 6.7(d)(iii)(B)

	 	-
	 	Form of Intercreditor Agreement (Off Balance Sheet Inventory)
	 
	 	 	 	 
	Exhibit 9.1(a)

	 	-
	 	Form of Assignment Agreement
	 
	 	 	 	 
	Exhibit B-1(a)

	 	-
	 	Form of Notice of Issuance of Letter of Credit
	 
	 	 	 	 
	Schedule I

	 	-
	 	Original Letters of Credit
	 
	 	 	 	 
	Schedule 1.1

	 	-
	 	Responsible Individual
	 
	 	 	 	 
	Schedule 1.4

	 	-
	 	Sources and Uses; Funds Flow Memorandum
	 
	 	 	 	 
	Schedule 2.1(b)

	 	-
	 	Terminating Prior Lenders
	 
	 	 	 	 
	Schedule 3.1

	 	-
	 	Jurisdiction of Organization
	 
	 	 	 	 
	Schedule 3.2

	 	-
	 	Executive Offices; FEIN
	 
	 	 	 	 
	Schedule 3.4(A)

	 	-
	 	Financial Statements
	 
	 	 	 	 
	Schedule 3.4(B)

	 	-
	 	Pro Forma
	 
	 	 	 	 
	Schedule 3.4(C)

	 	-
	 	Projections
	 
	 	 	 	 
	Schedule 3.4(D)

	 	-
	 	Fair Salable Balance Sheet
	 
	 	 	 	 
	Schedule 3.4(E)

	 	-
	 	Financial Statements
	 
	 	 	 	 
	Schedule 3.6

	 	-
	 	Real Estate and Leases
	 
	 	 	 	 
	Schedule 3.7

	 	-
	 	Labor Matters
	 
	 	 	 	 
	Schedule 3.8

	 	-
	 	Ventures, Subsidiaries and Affiliates; Outstanding Stock






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	Schedule 3.11

	 	-
	 	Tax Matters
	 
	 	 	 	 
	Schedule 3.12

	 	-
	 	ERISA Plans
	 
	 	 	 	 
	Schedule 3.13

	 	-
	 	Litigation
	 
	 	 	 	 
	Schedule 3.15

	 	-
	 	Intellectual Property
	 
	 	 	 	 
	Schedule 3.17

	 	-
	 	Hazardous Materials
	 
	 	 	 	 
	Schedule 3.18

	 	-
	 	Insurance
	 
	 	 	 	 
	Schedule 3.19

	 	-
	 	Deposit and Disbursement Accounts
	 
	 	 	 	 
	Schedule 3.20

	 	-
	 	Government Contracts
	 
	 	 	 	 
	Schedule 3.22

	 	-
	 	Material Agreements
	 
	 	 	 	 
	Schedule 3.24

	 	-
	 	Certain Titled Vehicles
	 
	 	 	 	 
	Schedule 5.1

	 	-
	 	Trade Names
	 
	 	 	 	 
	Schedule 6.2

	 	-
	 	Investments
	 
	 	 	 	 
	Schedule 6.3

	 	-
	 	Indebtedness
	 
	 	 	 	 
	Schedule 6.4(a)

	 	-
	 	Extraordinary Transactions
	 
	 	 	 	 
	Schedule 6.4(b)

	 	-
	 	Transactions with Affiliates
	 
	 	 	 	 
	Schedule 6.6

	 	-
	 	Guaranteed Indebtedness
	 
	 	 	 	 
	Schedule 6.7

	 	-
	 	Existing Liens
	 
	 	 	 	 
	Annex A (Recitals)

	 	-
	 	Definitions
	 
	 	 	 	 
	Annex B (Section 1.2)

	 	-
	 	Letters of Credit
	 
	 	 	 	 
	Annex C (Section 1.8)

	 	-
	 	Cash Management Systems
	 
	 	 	 	 
	Annex D (Section 2.2(a))

	 	-
	 	Closing Checklist
	 
	 	 	 	 
	Annex E (Section 4.1(a))

	 	-
	 	Financial Statements and Projections — Reporting
	 
	 	 	 	 
	Annex F (Section 4.1(b))

	 	-
	 	Collateral Reports
	 
	 	 	 	 
	Annex G (Section 6.10)

	 	-
	 	Financial Covenants
	 
	 	 	 	 
	Annex H (Section 9.10(a))

	 	-
	 	Lenders’ Wire Transfer Information
	 
	 	 	 	 
	Annex I (Section 11.10)

	 	-
	 	Notice Addresses






- viii -









 




AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 4, 2006 (as amended, supplemented,
amended and restated or otherwise modified from time to time, this “Agreement”), among H&E
EQUIPMENT SERVICES, INC., a Delaware corporation (“H&E Delaware”), GREAT NORTHERN EQUIPMENT, INC.,
a Montana corporation (“Great Northern”), H&E EQUIPMENT SERVICES (CALIFORNIA), LLC, a Delaware
limited liability company (“H&E California”, and together with H&E Delaware and Great Northern,
each a “Borrower” and collectively and jointly and severally, the “Borrowers”), the other Credit
Parties signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its
individual capacity, “GE Capital”), for itself as Lender, as Agent for the Lenders and the other
Lenders signatory hereto from time to time and BANK OF AMERICA, N.A., as Syndication Agent and
Documentation Agent.




WHEREAS:




     (A) GE Capital (as successor in interest to General Electric Capital Corporation), Bank of
America, N.A., PNC Bank, National Association and LaSalle Business Credit (collectively, the
“Original Lenders”), Credit Parties and Agent are parties to a Credit Agreement, dated as of June
17, 2002 (as amended by Amendment No. 1, dated as of March 31, 2003, by Amendment No. 2, dated as
of May 14, 2003, by Amendment No. 3, dated as of February 10, 2004, by Amendment No. 4, dated as of
October 26, 2004, by Amendment No. 5, dated as of January 13, 2005, by Amendment No. 6, dated as of
March 11, 2005, by Amendment No. 7, dated as of March 31, 2005, by Amendment No. 8, dated as of
October 13, 2005, by Amendment No. 9, dated as of November 11, 2005, by Joinder Agreement, Consent
and Amendment No. 10, dated as of February 3, 2006 and by Amendment No. 11, dated as of March 20,
2006, the “Original Credit Agreement”);



     (B) Borrowers have requested that Original Lenders amend and restate the Original Credit
Agreement to increase the Revolving Loan Commitment to $250,000,000, as well as to modify the
Original Credit Agreement in certain other respects and, subject to the terms and conditions
hereof, Original Lenders and Agent are willing to do so;



     (C) Credit Parties have agreed to continue to secure all of their Obligations under the Loan
Documents with a security interest in and lien in favor of Agent, for the benefit of Agent and
Lenders, upon substantially all of their existing and after-acquired personal and real property
including a continuing Lien or mortgage on and security interest in all Collateral in which a Lien
or mortgage on or security interest was granted pursuant to the Loan Documents prior to the Closing
Date;



     (D) Credit Parties are willing to continue to guaranty all of the Obligations of Borrowers;
and



     (E) Capitalized terms used in this Agreement have the meanings ascribed to them in Annex A
and, for purposes of this Agreement and the other Loan Documents, the rules of construction set
forth in Annex A shall govern. All Annexes, Disclosures Schedules, Exhibits and other attachments
(collectively, “Appendices”) hereto, or expressly identified to this Agreement, are incorporated
herein by reference, and taken together with this Agreement, shall constitute but a single
agreement. These Recitals shall be construed as part of the Agreement.



 









 




NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS HEREINAFTER CONTAINED,
AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE PARTIES HERETO AGREE AS FOLLOWS:




1 AMOUNT AND TERMS OF CREDIT





	1.1	 	Credit Facilities






	 	(a)	 	Revolving Credit Facility






	 	(i)	 	On the Closing Date, the Original Revolving Credit Advances (if
any) shall be continued as Revolving Credit Advances hereunder.
	 
	 	(ii)	 	Subject to the terms and conditions hereof, each Revolving
Lender agrees to make available to Borrowers from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a “Revolving
Credit Advance”). The Pro Rata Share of the Revolving Loan of any Revolving
Lender shall not at any time exceed its separate Revolving Loan Commitment.
The obligations of each Revolving Lender hereunder shall be several and not
joint. Until the Commitment Termination Date, each Borrower may borrow, repay
and reborrow under this Section 1.1(a); provided, that the amount of any
Revolving Credit Advance to be made to such Borrower at any time shall not
exceed Borrowing Availability of such Borrower at such time or cause the
Borrowing Availability of all Borrowers to be exceeded. Moreover, the sum of
the Revolving Loan and Swing Line Loan outstanding to any Borrower shall not
exceed at any time that Borrower’s separate Borrowing Base. Each Revolving
Credit Advance shall be made on notice by Borrower Representative on behalf of
the applicable Borrower to the representative of Agent identified in Schedule
1.1 at the address specified therein. Any such notice must be given no later
than (1) noon (New York time) on the Business Day of the proposed Revolving
Credit Advance, in the case of an Index Rate Loan, or (2) noon (New York time)
on the date which is three (3) Business Days prior to the proposed Revolving
Credit Advance, in the case of a LIBOR Loan. Each such notice (a “Notice of
Revolving Credit Advance”) must be given in writing (by telecopy or overnight
courier) substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other administrative information
as may be reasonably required by Agent. If any Borrower desires to have the
Revolving Credit Advances bear interest by reference to a LIBOR Rate, Borrower
Representative must comply with Section 1.5(e).
	 
	 	(iii)	 	Upon the request of any Revolving Lender, each Borrower shall
execute and deliver to such Revolving Lender a note to evidence the Revolving
Loan Commitment of that Revolving Lender. Each such note shall be in the maximum
principal amount of the Revolving Loan Commitment of the applicable





2









 






	 	 	 	Revolving Lender, dated the Closing Date and substantially in the form of
Exhibit 1.1(a)(ii) (each as amended or replaced from time to time, a
“Revolving Note” and, collectively, the “Revolving Notes”). Each Revolving
Note shall represent the obligation of the applicable Borrower to pay the
amount of the applicable Revolving Lender’s Revolving Loan Commitment or, if
less, such Revolving Lender’s Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances to such Borrower together
with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the aggregate Revolving Loan and all other noncontingent
Obligations shall be immediately due and payable in full in immediately
available funds on the Commitment Termination Date. Without limitation of
the foregoing, in the event that any Original Lender holds a Revolving Note
and its Revolving Loan Commitment from and after the Closing Date exceeds
its Revolving Loan Commitment prior to the Closing Date, upon request by
such Original Lender, the applicable Borrower shall execute and deliver a
Revolving Note to evidence the increased Revolving Loan Commitment and the
Original Lender shall, upon receipt of such Revolving Note, return to such
Borrower the Revolving Note it so holds. Any Revolving Note issued (and as
such term was defined) prior to the Closing Date shall in any event
constitute a Revolving Note issued under this Agreement.






	 	(b)	 	Swing Line Facility






	 	(i)	 	On the Closing Date, all Original Swing Line Advances (if any)
shall be continued as Swing Line Advances hereunder. Agent shall notify the
Swing Line Lender upon Agent’s receipt of any Notice of Revolving Credit
Advance. Subject to the terms and conditions hereof, the Swing Line Lender
may, in its discretion, make available from time to time until the Commitment
Termination Date advances (each, a “Swing Line Advance”) in accordance with any
such notice. The provisions of this Section 1.1(b) shall not relieve Revolving
Lenders of their obligations to make Revolving Credit Advances under Section
1.1(a); provided, that if the Swing Line Lender makes a Swing Line Advance
pursuant to any such notice, such Swing Line Advance shall be in lieu of any
Revolving Credit Advance that otherwise may be made by Revolving Credit Lenders
pursuant to such notice. The aggregate amount of Swing Line Advances
outstanding shall not exceed at any time the lesser of (A) the Swing Line
Commitment and (B) the lesser of (x) the Maximum Amount and (y) the Borrowing
Base in each case, less the outstanding balance of the Revolving Loan at such
time (“Swing Line Availability”). Moreover, the Swing Line Loan outstanding to
any Borrower shall not exceed at any time such Borrower’s
separate Borrowing Base less the Revolving Loan outstanding to such
Borrower. Until the Commitment Termination Date, each Borrower may from
time to time borrow, repay and reborrow under this Section 1.1(b). Each
Swing Line Advance shall be made on the day requested pursuant to a Notice
of Revolving





3









 






	 	 	 	Credit Advance delivered to Agent by Borrower Representative on
behalf of the applicable Borrower requesting a Swing Line Advance in
accordance with Section 1.1(a). Any such notice must be given no later than
noon (New York time) on the Business Day of the proposed Swing Line Advance.
Unless the Swing Line Lender has received at least one Business Day’s prior
written notice from Requisite Lenders instructing it not to make a Swing
Line Advance, the Swing Line Lender shall, notwithstanding the failure of
any condition precedent set forth in Section 2.2, except in the case of a
Prohibited Swing Line Advance, be entitled to fund that Swing Line Advance,
and to have each Revolving Lender make Revolving Credit Advances in
accordance with Section 1.1(b)(iii) or purchase participating interests in
accordance with Section 1.1(b)(iv). Notwithstanding any other provision of
this Agreement or the other Loan Documents, the Swing Line Loan shall
constitute an Index Rate Loan. Each Borrower shall repay the aggregate
outstanding principal amount of the Swing Line Advances made to such
Borrower upon demand therefor by Agent.
	 
	 	(ii)	 	Upon the request of the Swing Line Lender, each Borrower shall
execute and deliver to the Swing Line Lender a promissory note to evidence the
Swing Line Commitment. If a promissory note is requested, each such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b)(ii) (each as amended or replaced from time to time, a “Swing Line Note”
and, collectively, the “Swing Line Notes”). Each Swing Line Note shall
represent the obligation of such Borrower to pay the amount of the Swing Line
Commitment or, if less, the aggregate unpaid principal amount of all Swing Line
Advances made to such Borrower together with interest thereon as prescribed in
Section 1.5. The entire unpaid balance of the Swing Line Loan and all other
non contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date if not sooner
paid in full. Any Swing Line Note issued (and as such term was defined) prior
to the Closing Date shall in any event constitute a Swing Line Note issued
under this Agreement.
	 
	 	(iii)	 	The Swing Line Lender shall at any time and from time to time
in its sole and absolute discretion, but not less frequently than on each
Settlement Date on behalf of any Borrower (and each Borrower hereby irrevocably
authorizes the Swing Line Lender to so act on its behalf), request each
Revolving Lender (including the Swing Line Lender) to make a Revolving Credit
Advance to such Borrower (which shall be an Index Rate Loan) in an amount equal to such
Revolving Lender’s Pro Rata Share of the principal amount of such Borrower’s
Swing Line Loan (the “Refunded Swing Line Loan”) outstanding on the date
such notice is given. Unless any of the events described in Sections 8.1(h)
or (i) has occurred (in which event the procedures of Section 1.1(b)(iv)
shall apply) and regardless of whether the conditions precedent set forth in
this Agreement to





4









 






	 	 	 	the making of a Revolving Credit Advance are then
satisfied, each Revolving Lender shall disburse directly to Agent, its Pro
Rata Share of a Revolving Credit Advance on behalf of the Swing Line Lender,
prior to 3:00 p.m. (New York time), in immediately available funds on the
Business Day next succeeding the date such notice is given. The proceeds of
such Revolving Credit Advances made to a Borrower shall be immediately paid
to the Swing Line Lender and applied to repay the Refunded Swing Line Loan
of such Borrower.
	 
	 	(iv)	 	If, prior to refunding a Swing Line Loan with a Revolving
Credit Advance pursuant to Section 1.1(b)(iii), one of the events described in
Sections 8.1(h) or (i) has occurred, then, subject to the provisions of Section
1.1(b)(v) below, each Revolving Lender shall, on the date such Revolving Credit
Advance was to have been made for the benefit of the applicable Borrower,
purchase from the Swing Line Lender an undivided participation interest in the
Swing Line Loan to such Borrower in an amount equal to its Pro Rata Share of
such Swing Line Loan. Upon request, each Revolving Lender shall promptly
transfer to the Swing Line Lender, in immediately available funds, the amount
of its participation interest.
	 
	 	(v)	 	Each Revolving Lender’s obligation to make Revolving Credit
Advances in accordance with Section 1.1(b)(iii) and to purchase participation
interests in accordance with Section 1.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, any Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Default or
Event of Default; (C) any inability of any Borrower to satisfy the conditions
precedent to borrowing set forth in this Agreement at any time; or (D) any
other circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. If any Revolving Lender does not make available to Agent
or the Swing Line Lender, as applicable, the amount required pursuant to
Section 1.1(b)(iii) or 1.1(b)(iv), as the case may be, the Swing Line Lender
shall be entitled to recover such amount on demand from such Revolving Lender,
together with interest thereon for each day from the date of non-payment until
such amount is paid in full at the Federal Funds Rate for the first two
Business Days and at the Index Rate thereafter.






	 	(c)	 	Reliance on Notices; Appointment of Borrower Representative
	 
	 	 	 	Agent shall be entitled to rely upon, and shall be fully protected in relying upon,
any Notice of Revolving Credit Advance, Notice of Conversion/Continuation or similar
notice believed by Agent to be genuine. Agent may assume that each Person executing
and delivering any such notice in accordance herewith was duly authorized, unless
the responsible individual acting thereon for Agent has actual knowledge to the
contrary. Each Borrower, and to the extent applicable, each other Credit Party,
hereby designates





5









 






	 	 	 	H&E Delaware as its representative and agent on its behalf for the
purposes of issuing Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of the
proceeds of the Loans, selecting interest rate options, requesting Letters of
Credit, giving and receiving all other notices and consents hereunder or under any
of the other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Credit Party or Credit Parties under the
Loan Documents. Borrower Representative hereby accepts such appointment. Agent and
each Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all Credit
Parties, and may give any notice or communication required or permitted to be given
to any Credit Party or Credit Parties hereunder to Borrower Representative on behalf
of such Credit Party or Credit Parties. Each Credit Party agrees that each notice,
election, representation and warranty, covenant, agreement and undertaking made on
its behalf by Borrower Representative shall be deemed for all purposes to have been
made by such Credit Party and shall be binding upon and enforceable against such
Credit Party to the same extent as if the same had been made directly by such Credit
Party.






	1.2	 	Letters of Credit
	 
	 	 	Subject to and in accordance with the terms and conditions contained herein and in Annex B,
Borrower Representative, on behalf of any Borrower, shall have the right to request, and
Revolving Lenders agree to incur, or purchase participations in, Letter of Credit
Obligations in respect of such Borrower. The parties hereto agree that all Original Letters
of Credit and Original Letter of Credit Obligations shall be deemed, respectively, Letters
of Credit and Letter of Credit Obligations issued or existing under and subject to and
governed by the terms of this Agreement.
	 
	1.2A	 	Swap Related Reimbursement Obligations






          (a) Each Borrower agrees to reimburse GE Capital in immediately available funds in the
amount of any payment made by GE Capital under a Swap Related L/C (such reimbursement
obligation, whether contingent upon payment by GE Capital under the Swap Related L/C or
otherwise, being herein called a “Swap Related Reimbursement Obligation”). No Swap
Related Reimbursement Obligation for any Swap Related L/C may exceed the amount of the payment
obligations owed by any Borrower under the interest rate protection or hedging agreement or
transaction supported by the Swap Related L/C.




          (b) A Swap Related Reimbursement Obligation shall be due and payable by any applicable
Borrower within one (1) Business Day after the date on which the related payment is made by
GE Capital under the Swap Related L/C.




          (c) Any Swap Related Reimbursement Obligation shall, during the period in which it is
unpaid, bear interest at the rate per annum equal to the LIBOR Rate plus one percent (1%),
as if the unpaid amount of the Swap Related Reimbursement Obligation were a LIBOR Loan, and not



6









 






at any otherwise applicable Default Rate. Such interest shall be payable upon demand.
The following additional provisions apply to the calculation and charging of interest on
Swap Related Reimbursement Obligations by reference to the LIBOR Rate:




          (i) The LIBOR Rate shall be determined for each successive one-month LIBOR
Period during which the Swap Related Reimbursement Obligation is unpaid,
notwithstanding the occurrence of any Event of Default and even if the LIBOR Period
were to extend beyond the Commitment Termination Date.




          (ii) If a Swap Related Reimbursement Obligation is paid during a monthly period
for which the LIBOR Rate is determined, interest shall be pro-rated and charged for
the portion of the monthly period during which the Swap Related Reimbursement
Obligation was unpaid. Section 1.13(b) shall not apply to any payment of a
Swap Related Reimbursement Obligation during the monthly period.




          (iii) Notwithstanding the last paragraph of the definition of “LIBOR Rate”, if
the LIBOR Rate is no longer available from Telerate News Service, the LIBOR Rate
with respect to Swap Related Reimbursement Obligations shall be determined by GE
Capital from such financial reporting service or other information available to GE
Capital as in GE Capital’s reasonable discretion indicates GE Capital’s cost of
funds.




          (d) Except as provided in the foregoing provisions of this Section 1.2A and in
Section 11.3 no Borrower shall be obligated to pay to GE Capital or any of its
Affiliates any Letter of Credit Fee, or any other fees, charges or expenses, in respect of a
Swap Related L/C or arranging for any interest rate protection or hedging agreement or
transaction supported by the Swap Related L/C. GE Capital and its Affiliates shall look to
the beneficiary of a Swap Related L/C for payment of any such letter of credit fees or other
fees, charges or expenses and such beneficiary may factor such fees, charges, or expenses
into the pricing of any interest rate protection or hedging arrangement or transaction
supported by the Swap Related L/C.




          (e) If any Swap Related L/C is revocable prior to its scheduled expiry date, GE Capital
agrees not to revoke the Swap Related L/C unless the Commitment Termination Date or an Event
of Default has occurred and is continuing.




          (f) GE Capital or any of its Affiliates shall be permitted to (i) provide confidential
or other information furnished to it by any of the Credit Parties (including, without
limitation, copies of any documents and information in or referred to in the Closing
Checklist, Financial Statements and Compliance Certificates) to a beneficiary or potential
beneficiary of a Swap Related L/C and (ii) receive confidential or other information from
the beneficiary or potential beneficiary relating to any agreement or transaction supported
or to be supported by the Swap Related L/C. However, no confidential information shall be
provided to any Person under this paragraph unless the Person has agreed to comply with the
covenant substantially as contained in Section 11.8 of this Agreement.



7









 






	1.3	 	Prepayments






	 	(a)	 	Voluntary Prepayments; Reductions in Revolving Loan Commitments
	 
	 	 	 	Any Borrower may at any time voluntarily prepay all or part of the Revolving Credit
Advances made to such Borrower at any time or from time to time without premium or
penalty, subject to Section 1.13(b)(i). Borrowers may at any time on at least ten
(10) days’ prior written notice by Borrower Representative to Agent permanently
reduce (but not terminate) the Revolving Loan Commitment; provided, that (A) any
such reductions shall be in a minimum amount of $5,000,000 and integral multiples of
$250,000 in excess of such amount, (B) the Revolving Loan Commitment shall not be
reduced to an amount less than the amount of the Revolving Loan plus the Swingline
Loan then outstanding, and (C) after giving effect to such reductions, Borrowers
shall comply with Section 1.3(b)(i). In addition, Borrowers may at any time on at
least 10 days’ prior written notice by Borrower Representative to Agent terminate
the Revolving Loan Commitment; provided, that upon such termination, all Loans and
other Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in accordance
with Annex B. Any such payment resulting from termination of the Revolving Loan
Commitment must be accompanied by payment of all accrued and unpaid interest on the
Loans and other Obligations and any LIBOR funding breakage costs in accordance with
Section 1.13(b). Upon any such reduction or termination of the Revolving Loan
Commitment, each Borrower’s right to request Revolving Credit Advances, or request
that Letter of Credit Obligations be incurred on its behalf, or request Swing Line
Advances, shall simultaneously be permanently reduced or terminated, as the case may
be; provided, that a permanent reduction of the Revolving Loan Commitment shall not
require a corresponding pro rata reduction in the L/C Sublimit. Each notice of
partial prepayment shall designate the Borrower whose Revolving Credit Advances are to be repaid and identify the
particular Revolving Credit Advances to be repaid.
	 
	 	(b)	 	Mandatory Prepayments






	 	(i)	 	If at any time the aggregate outstanding balances of the
Revolving Loan exceeds the lesser of (A) the Maximum Amount less the aggregate
outstanding Swing Line Loan at such time and (B) the Aggregate Borrowing Base
less the aggregate outstanding Swing Line Loan at such time, Borrowers shall
immediately repay the aggregate outstanding Revolving Credit Advances to the
extent required to eliminate such excess. If any such excess remains after
repayment in full of the aggregate outstanding Revolving Credit Advances,
Borrowers shall provide cash collateral for the Letter of Credit Obligations in
the manner set forth in Annex B to the extent required to eliminate such
excess. Furthermore, if, at any time, the outstanding balance of the Revolving
Loan to any Borrower exceeds such Borrower’s separate Borrowing Base less the
outstanding balance of the Swing Line Loan to such Borrower, the applicable
Borrower shall immediately repay its





8









 






	 	 	 	Revolving Credit Advances in the amount of such excess (and, to the extent necessary, provide cash collateral for its
Letter of Credit Obligations as described above).
	 
	 	(ii)	 	Immediately upon receipt by any Credit Party of proceeds of any
asset disposition (excluding proceeds of dispositions of Equipment Inventory
and P&E permitted by Section 6.8 having an aggregate Net Book Value in any one
Fiscal Year, not exceeding $500,000) or any sale of Stock of any Subsidiary of
such Credit Party, Borrowers shall prepay the Loans in an amount equal to all
such proceeds, net of (A) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by any Credit Party in connection therewith (in each case, paid to
non Affiliates), (B) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Encumbrances hereunder), if any, on the assets
so disposed, and (C) transfer taxes plus an appropriate reserve for income
taxes in accordance with GAAP in connection therewith (“Net Proceeds”). Any
such prepayment shall, subject to Section 1.3(b)(iv), be applied in accordance
with Section 1.3(c). Notwithstanding the foregoing and provided no Default or
Event of Default has occurred and is continuing, such prepayment shall not be
required to the extent such Credit Party reinvests the Net Proceeds of such
disposition in productive assets (other than Equipment Inventory and Parts and
Tools Inventory) of a kind then used or usable in the business of such Credit
Party, within one hundred eighty (180) days after the date of such disposition
or enters into a binding commitment thereof within said one hundred eighty
(180) day period and subsequently makes such reinvestment. Pending such
reinvestment, the Net Proceeds shall be delivered to the Agent and retained
in a cash collateral account established for that purpose and shall be
available for reinvestment so long as no Default or Event of Default is continuing.
	 
	 	(iii)	 	If any Credit Party issues Stock or any Indebtedness (other
than Indebtedness permitted by Section 6.3) in excess of $1,000,000 in the
aggregate of such Stock and such Indebtedness, no later than the Business Day
following the date of receipt of the cash proceeds thereof, the issuing Credit
Party shall prepay the Loans in an amount equal to all such proceeds, net of
underwriting discounts and commissions and other reasonable costs paid to non
Affiliates in connection therewith; provided, that no such prepayment shall be
required, so long as no Event of Default has occurred and is continuing, from
the proceeds of any issuance of Stock by a Credit Party (i) to any director,
officer or other employee of such Credit Party pursuant to the stock incentive
plan adopted by H&E Delaware prior to, and as in effect on, the Closing Date,
(ii) in connection with the Related Transactions, (iii) as consideration for
any Person (other than any Affiliate of a Credit Party) providing permitted
Indebtedness under Section 6.3, (iv) to any other Credit Party or (v) as
consideration to any Person (other than an





9









 






	 	 	 	Affiliate) selling assets in any Permitted Acquisition. Any such prepayment shall, subject to Section
1.3(b)(iv), be applied in accordance with Section 1.3(c).
	 
	 	(iv)	 	In the event that Section 1.3(b)(i), (ii) or (iii) shall
require any prepayment to be made on a day other than an Interest Payment Date,
then upon receipt of such prepayment and to the extent requested by any
Borrower, Agent shall hold such amount as cash collateral (provided that the
Borrower delivering the same shall have executed and delivered such documents
as Agent shall have requested in connection with such cash collateral) and, so
long as no Default or Event of Default shall have occurred and be continuing,
shall not apply such cash collateral to the prepayment under the applicable
paragraph of this Section 1.3 until the next succeeding Interest Payment Date.
Such cash collateral shall be invested in Cash Equivalents as directed by such
Borrower in accordance with such documents. Interest earned on such cash
collateral shall accrue for the account of the Borrower providing the same,
shall constitute additional cash collateral and (assuming no Default or Event
of Default shall be continuing) shall be, to the extent remaining, applied to
such prepayment on such next succeeding Interest Payment Date.






	 	(c)	 	Application of Certain Mandatory Prepayments
	 
	 	 	 	Any prepayments made by any Borrower or Credit Party pursuant to Section 1.3(b)(ii)
or (iii) shall be applied as follows: first, to Fees and reimbursable expenses of
Agent then due and payable pursuant to any of the Loan Documents; second, to Fees and any other
fees and reimbursable expenses of Lenders then due and payable pursuant to any of
the Loan Documents; third, to interest then due and payable on the Swing Line Loan;
fourth, to the principal balance of the Swing Line Loan until the same has been
repaid in full; fifth, to interest then due and payable on the Revolving Credit
Advances; sixth, to the outstanding principal balance of the Revolving Credit
Advances until the same has been paid in full; seventh, to any Letter of Credit
Obligations, to provide cash collateral therefor in the manner set forth in Annex B
and last to any other Obligations. So long as no Event of Default is outstanding,
the Borrowers may direct that any such prepayments be applied to Index Rate Loans to
the extent outstanding, rather than LIBOR Loans. Neither the Revolving Loan
Commitment nor the Swing Line Commitment shall be permanently reduced by the amount
of any such prepayments; provided, that any prepayment made by any Borrower pursuant
to Section 1.3(b)(iii) in connection with the issuance of Indebtedness shall also
permanently reduce the Revolving Loan Commitment by the amount of such prepayment.
	 
	 	(d)	 	Application of Prepayments from Insurance and Condemnation Proceeds
	 
	 	 	 	Prepayments from insurance or condemnation proceeds in accordance with Section 5.4
shall be applied first to the Swing Line Loans and second to the Revolving Credit
Advances of the applicable Borrower. Neither the Revolving Loan Commitment nor the





10









 






	 	 	 	Swing Line Loan Commitment shall be permanently reduced by the amount of any such
prepayments. So long as no Event of Default is outstanding, Borrower Representative
may direct that any such prepayments be applied to Index Rate Loans to the extent
outstanding, rather than LIBOR Loans. Notwithstanding the foregoing and provided no
Default or Event of Default has occurred and is continuing, such prepayment shall
not be required to the extent such Credit Party reinvests such insurance or
condemnation proceeds in productive assets (other than Equipment Inventory) of a
kind then used or usable in the business of such Credit Party, within one hundred
eighty (180) days after the date of such disposition or enters into a binding
commitment thereof within said one hundred eighty (180) day period and subsequently
makes such reinvestment. Pending such reinvestment, such proceeds shall be
delivered to the Agent and retained in a cash collateral account established for
that purpose and shall be available for reinvestment so long as no Default or Event
of Default is continuing.
	 
	 	(e)	 	No Implied Consent
	 
	 	 	 	Nothing in this Section 1.3 shall be construed to constitute Agent’s or any Lender’s
consent to any transaction referred to in Sections 1.3(b)(ii) and 1.3(b)(iii) which
is not permitted by other provisions of this Agreement or the other Loan Documents.






	1.4	 	Use of Proceeds
	 
	 	 	Borrowers shall utilize the proceeds of the Revolving Loan and the Swing Line Loan solely
for the financing of Borrowers’ ordinary working capital and general corporate needs
including, on the Closing Date, for the refinancing or repurchase of Senior Notes or Senior
Subordinated Notes and the payment of interest, fees and expenses in connection therewith.
Disclosure Schedule (1.4) contains a description of Borrowers’ sources and uses of funds as
of the Closing Date, including Revolving Credit Advances and Letter of Credit Obligations to
be made or incurred on that date, and a funds flow memorandum detailing how funds from each
source are to be transferred to particular uses.
	 
	1.5	 	Interest and Applicable Margins






	 	(a)	 	Borrowers shall pay interest to Agent, for the ratable benefit of Lenders in
accordance with the various Revolving Credit Advances and Swing Line Loans being made
by each Lender, and in respect of all unreimbursed Letters of Credit Obligations, in
arrears on each applicable Interest Payment Date, at the following rates: (i) with
respect to the Revolving Credit Advances and unreimbursed Letter of Credit Obligations
and all other Obligations (other than LIBOR Loans and Swing Line Loans), the Index
Rate plus the Applicable Revolver Index Margin per annum or, at the election of
Borrower Representative, the applicable LIBOR Rate plus the Applicable Revolver LIBOR
Margin; and (ii) with respect to the Swing Line Loan, the Index Rate plus the
Applicable Revolver Index Margin per annum.






11








 









	 	 	The Applicable Margins, on a per annum basis for the period beginning on the
Closing Date and ending on the date Financial Statements in respect of the Fiscal
Quarter ending September 30, 2006 are required to be delivered hereunder, or are
actually delivered hereunder, whichever is earlier, are as follows:





	 	 	 	 	 
	Applicable Revolver Index Margin
	 	 	0.50	%
	Applicable Revolver LIBOR Margin
	 	 	1.50	%
	Applicable L/C Margin
	 	 	1.50	%
	Applicable Unused Line Fee Margin
	 	 	0.25	%







	 	 	Thereafter, the Applicable Margins (other than the Applicable Unused Line Fee
Margin) shall be adjusted (up or down) on a quarterly basis as determined by H&E
Delaware and its Subsidiaries’ consolidated financial performance, based on the
Leverage Ratio as of the last day of the most recent Fiscal Quarter then ended.
Adjustments in Applicable Margins (other than the Applicable Unused Line Fee Margin)
will be determined by reference to the following grids:





	 	 	 	 	 
	 	 	Level of	 
	 	 	Applicable	 
	If Leverage Ratio is:	 	Margins:	 
	< 1.50 to 1.00
	 	Level I
	< 2.50 to 1.00 but > 1.50 to 1.00
	 	Level II
	< 3.50 to 1.00 but > 2.50 to 1.00
	 	Level III
	> 3.50 to 1.00
	 	Level IV






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margins	 
	 	 	Level I	 	 	Level II	 	 	Level III	 	 	Level IV	 
	Applicable Revolver Index
Margin
	 	 	0.25	%	 	 	0.50	%	 	 	0.75	%	 	 	1.00	%
	Applicable Revolver LIBOR
Margin
	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%	 	 	2.00	%






12









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margins	 
	 	 	Level I	 	 	Level II	 	 	Level III	 	 	Level IV	 
	Applicable L/C Margin
	 	 	1.25	%	 	 	1.50	%	 	 	1.75	%	 	 	2.00	%







	 	 	All adjustments in the Applicable Margins (other than the Applicable Unused Line Fee
Margin) after the date Financial Statements in respect of the Fiscal Quarter ending
September 30, 2006 are required to be delivered hereunder, or are actually delivered
hereunder, whichever is earlier, shall be implemented quarterly on a prospective
basis, for each Fiscal Quarter commencing at least one (1) day after the date of
delivery to Lenders of the quarterly unaudited Financial Statements evidencing the
need for an adjustment. Concurrently with the delivery of those Financial
Statements, Borrower Representative shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer, setting forth in reasonable
detail the basis for the continuance of, or any change in, the Applicable Margins
(other than the Applicable Unused Line Fee Margin). Failure to timely deliver such
Financial Statements shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Margins (other than the
Applicable Unused Line Fee Margin) to the highest level set forth in the foregoing
grid, until the first day of the first Fiscal Quarter following the delivery of
those Financial Statements demonstrating that such an increase is not required. If
any Default or an Event of Default has occurred and is continuing at the time any
reduction in the Applicable Margins (other than the Applicable Unused Line Fee
Margin) is to be implemented, that reduction shall be deferred until the first day
of the first Fiscal Quarter following the date on which all Defaults or Events of
Default are waived or cured.






	(b)	 	If any payment on any Loan becomes due and payable on a day other than a
Business Day, the maturity thereof will be extended to the next succeeding Business
Day (except as set forth in the definition of LIBOR Period) and, with respect to
payments of principal, interest thereon shall be payable at the then applicable rate
during such extension.
	 
	(c)	 	All computations of Fees calculated on a per annum basis and interest shall
be made by Agent on the basis of a three hundred sixty (360) day year, in each case
for the actual number of days occurring in the period for which such interest and Fees
are payable. The Index Rate is a floating rate determined for each day. Each
determination by Agent of an interest rate and Fees hereunder shall be final, binding
and conclusive on Borrowers, absent manifest error.
	 
	(d)	 	So long as an Event of Default has occurred and is continuing, and at the
election of Agent (or upon the written request of Requisite Lenders) confirmed by
written notice from Agent to Borrower Representative, the interest rates applicable to
the Loans and the Letter of Credit Fees shall be increased by two percentage points
(2%) per annum above the rates of interest or the rate of such Fees otherwise
applicable hereunder (“Default Rate”), and all outstanding Obligations shall bear
interest at the Default Rate




13









 






	 	 	applicable to such Obligations. Interest and Letter of Credit Fees at the Default
Rate shall accrue from the initial date of such Event of Default until that Event
of Default is cured or waived and shall be payable upon demand.
	 

	(e)	 	So long as no Event of Default has occurred and is continuing, Borrower
Representative shall have the option to (i) request that any Revolving Credit Advance
be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans
(other than the Swing Line Loan) from Index Rate Loans to LIBOR Loans, (iii) convert
any LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.13(b) if such conversion is made prior to the expiration of
the LIBOR Period applicable thereto, or (iv) continue all or any portion of any Loan
(other than the Swing Line Loan) as a LIBOR Loan upon the expiration of the applicable
LIBOR Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be continued. Any
Loan or group of Loans having the same proposed LIBOR Period to be made or continued
as, or converted into, a LIBOR Loan must be in a minimum amount of $1,000,000 and
integral multiples of $100,000 in excess of such amount. Any such election must be
made by noon (New York time) on the third (3rd) Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of each
LIBOR Period with respect to any LIBOR Loans to be continued as such, or (3) the date
on which the applicable Borrower wishes to convert any Index Rate Loan to a LIBOR Loan
for a LIBOR Period designated by Borrower Representative in such election. If no
election is received with respect to a LIBOR Loan by noon (New York time) on the third
(3rd) Business Day prior to the end of the LIBOR Period with respect thereto (or if an
Event of Default has occurred and is continuing), that LIBOR Loan shall be converted
to an Index Rate Loan at the end of its LIBOR Period. Borrower Representative must
make such election by notice to Agent in writing, by telecopy or overnight courier.
In the case of any conversion or continuation, such election must be made pursuant to
a written notice (a “Notice of Conversion/Continuation”) in the form of Exhibit
1.5(e).
	 
	(f)	 	Notwithstanding anything to the contrary set forth in this Section 1.5, if a
court of competent jurisdiction determines in a final order that the rate of interest
payable hereunder exceeds the highest rate of interest permissible under law (the
“Maximum Lawful Rate”), then so long as the Maximum Lawful Rate would be so exceeded,
the rate of interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, that if at any time thereafter the rate of interest payable hereunder is
less than the Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder
at the Maximum Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest that would have been received had
the interest rate payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in this Agreement.
Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the
manner provided in




14









 






	 	 	Sections 1.5(a) through (d) above, unless and until the rate of interest again
exceeds the Maximum Lawful Rate, and at that time this paragraph shall again apply.
In no event shall the total interest received by any Lender pursuant to the terms
hereof exceed the amount that such Lender could lawfully have received had the
interest due hereunder been calculated for the full term hereof at the Maximum
Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to this paragraph,
such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest hereunder
in excess of the Maximum Lawful Rate, Agent shall, to the extent permitted by
applicable law, promptly apply such excess in the order specified in Section 1.11
and thereafter shall refund any excess to Borrowers or as a court of competent
jurisdiction may otherwise order.






	1.2	 	Eligible Accounts
	 
	 	 	All of the Accounts owned by any Borrower and reflected in the most recent Borrowing Base
Certificate delivered by such Borrower to Agent shall be “Eligible Accounts” for purposes of
this Agreement, except any Account to which any of the exclusionary criteria set forth below
applies. In addition, Agent reserves the right, at any time and from time to time after the
Closing Date, to adjust any of the criteria set forth below, to establish new criteria and
to adjust advance rates with respect to Eligible Accounts, in its reasonable credit judgment
exercised in good faith; provided, that (i) any increase of any advance rate above its
Original Advance Rate is subject to the approval of all Lenders and (ii) any adjustment by
Agent to any criterion set forth below that results in such criterion being less restrictive
than as in effect on the Closing Date shall be subject to approval of Requisite Lenders.
Eligible Accounts shall not include any Account of any Borrower:






	 	(a)	 	which does not arise from the sale of goods or the performance of services by
such Borrower in the ordinary course of its business;
	 
	 	(b)	 	upon which (i) such Borrower’s right to receive payment is contingent upon
the fulfillment of any condition by such Borrower or (ii) such Borrower is not able to
bring suit or otherwise enforce its remedies against the Account Debtor through
judicial process;
	 
	 	(c)	 	to the extent that any defense, counterclaim, setoff or dispute is asserted
as to such Account;
	 
	 	(d)	 	if the Account represents a progress billing consisting of an invoice for
goods sold or used or services rendered pursuant to a contract under which the Account
Debtor’s obligation to pay that invoice is subject to such Borrower’s completion of
further performance under such contract;




15









 






	 	(e)	 	that is not a true and correct statement of bona fide indebtedness incurred
in the amount of the Account for merchandise sold to or services rendered and accepted
by the applicable Account Debtor;
	 
	 	(f)	 	with respect to which an invoice, that is not unacceptable to Agent (in its
reasonable judgment) in form and substance, has not been sent to the applicable
Account Debtor;
	 
	 	(g)	 	(i) that is not owned by such Borrower or (ii) to the extent it is subject to
any right, claim, security interest or other interest of any other Person, other than
Liens in favor of Agent, on behalf of itself and Lenders, and other than Permitted
Encumbrances;
	 
	 	(h)	 	that arises from a sale to any director, officer, other employee or Affiliate
of any Credit Party, or to any entity that has any common officer or director with any
Credit Party; provided, however, that a sale to any Person that is an Affiliate or
such an entity shall not be excluded under this paragraph (h) if such Person is an
Affiliate or such an entity solely because it is controlled by BRS or a fund managed
by BRS;
	 
	 	(i)	 	that is the obligation of an Account Debtor that is the United States or
Canadian government or a political subdivision thereof, or any state, county, province
or municipality or department, agency or instrumentality thereof unless Agent, in its
sole discretion, has agreed to the contrary in writing and such Borrower, if necessary
or desirable, has complied with the Federal Assignment of Claims Act of 1940, any
Canadian equivalent thereof, or any applicable state, county or municipal law
restricting assignment thereof, with respect to such obligation; provided, so long as
no Default or Event of Default shall have occurred and be continuing, Accounts
described in this Section 1.6(i) and identified to the Agent pursuant to Section 5.10
shall be deemed Eligible Accounts to the extent such Accounts in the aggregate
outstanding at any time do not exceed $1,500,000 and otherwise meet the eligibility
criteria set forth in this Section 1.6;
	 
	 	(j)	 	that is the obligation of an Account Debtor located in a foreign country
other than Canada (excluding the provinces of Newfoundland, the Northwest Territories
and the Territory of Nunavut), unless payment thereof is assured by a letter of credit
assigned and delivered to Agent, reasonably satisfactory to Agent as to form, amount
and issuer;
	 
	 	(k)	 	to the extent such Borrower or any Subsidiary thereof is liable for goods
sold or services rendered by the applicable Account Debtor to such Borrower or any
Subsidiary thereof but only to the extent of the potential offset;
	 
	 	(l)	 	that arises with respect to goods that are delivered on a bill-and-hold,
cash-on-delivery basis or placed on consignment, guaranteed sale or other terms by
reason of which the payment by the Account Debtor is or may be conditional;
	 
	 	(m)	 	that is in default; provided, that, without limiting the generality of the
foregoing, an Account shall be deemed in default upon the occurrence of any of the
following:




16









 












	 	(i)	 	the Account is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original invoice date;
	 
	 	(ii)	 	the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or
	 
	 	(iii)	 	a petition is filed by or against any Account Debtor obligated
upon such Account under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency relief or other law
or laws for the relief of debtors;






	 	(n)	 	that is the obligation of an Account Debtor if fifty percent (50%) or more of
the Dollar amount of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in paragraph (m) of this Section 1.6;
	 
	 	(o)	 	that is not subject to a first priority perfected Lien in favor of Agent, on
behalf of itself and Lenders;
	 
	 	(p)	 	as to which any of the representations or warranties in the Loan Documents
are untrue;
	 
	 	(q)	 	to the extent such Account is evidenced by a judgment;
	 
	 	(r)	 	to the extent such Account exceeds any credit limit established by Agent, in
its reasonable credit judgment;
	 
	 	(s)	 	that is payable in any currency other than Dollars; or
	 
	 	(t)	 	that is otherwise unacceptable to Agent in its reasonable credit judgment.






	1.6A	 	Eligible Rolling Stock
	 
	 	 	All of the P&E owned by such Borrower and reflected in the most recent Borrowing Base
Certificate delivered by such Borrower to Agent shall be “Eligible Rolling Stock” for
purposes of this Agreement, except any P&E to which any of the exclusionary criteria set
forth below applies. In addition, Agent reserves the right, at any time and from time to
time after the Closing Date, to adjust any of the criteria set forth below, to establish new
criteria and to adjust advance rates with respect to Eligible Rolling Stock in its
reasonable credit judgment; provided, that (i) any increase of any advance rate above its
Original Advance Rate is subject to the approval of all Lenders and (ii) any adjustment by
Agent to any criterion set forth below that results in such criterion being less restrictive
than as in effect on the Closing Date shall be subject to approval of Requisite Lenders.
Eligible Rolling Stock shall not include any P&E of any Borrower:






	 	(a)	 	that is not owned by such Borrower free and clear of all Liens and rights of
any other person, except the Liens in favor of Agent, on behalf of itself and Lenders,
and the




17









 






	 	 	 	rights of a lessee pursuant to any permitted lease of such P&E or Permitted
Encumbrances;
	 	(b)	 	if such P&E (i) (except to the extent in use and not then being stored) is
not stored on premises owned, leased or rented by such Borrower and set forth in
Disclosure Schedule (3.2), or (ii) is stored at a leased location in respect of which
Agent has requested a landlord waiver, unless a reasonably satisfactory landlord
waiver has been delivered to Agent, provided that Agent may, treat any such P&E at any
such location as Eligible Rolling Stock and, in lieu of imposing the exclusionary
criterion in this paragraph (b) to such P&E, impose a Reserve (without duplicating any
Reserve established for other eligible collateral at such location as a consequence of
the failure to obtain such landlord’s waiver) in an amount not less than six month’s
rent for all such P&E stored at such location in respect of which such a landlord
waiver has not been delivered, or (iii) is stored with a bailee or warehouseman unless
a reasonably satisfactory, acknowledged bailee letter has been received by Agent and
Reserves reasonably satisfactory to Agent have been established with respect thereto,
(iv) is stored at an owned location subject to a mortgage in favor of a lender other
than Agent unless a reasonably satisfactory mortgagee waiver requested by Agent has
been delivered to Agent or such P&E is stored at the Santa Fe Springs Property (as
defined in the Disclosure Schedules to the Eagle Acquisition Agreement) or (v) is
anything other than automotive equipment, a trailer, a truck, a forklift, a motor
vehicle or other rolling stock;
	 
	 	(c)	 	that is covered by a certificate of title unless the interest of Agent in the
P&E has been noted on such certificate of title in accordance with applicable law;
	 
	 	(d)	 	that is excess, obsolete or damaged;
	 
	 	(e)	 	that is held for sale or lease in the ordinary course of such Borrower’s
business;
	 
	 	(f)	 	that is not subject to a first priority perfected Lien in favor of Agent on
behalf of itself and Lenders;
	 
	 	(g)	 	as to which any of the representations or warranties pertaining to P&E set
forth in the Loan Documents are untrue;
	 
	 	(h)	 	that is not covered by casualty insurance as to which Agent is listed as loss
payee in accordance with Section 5.4(c); or
	 
	 	(i)	 	that is otherwise unacceptable to Agent in its reasonable credit judgment.






	1.6B	 	Eligible Rentals
	 
	 	 	All of the Rentals of each Borrower and reflected in the most recent Borrowing Base
Certificate delivered by such Borrower to Agent shall be “Eligible Rentals” for purposes of
this Agreement, except any Rental to which any of the exclusionary criteria set forth below
applies. In addition, Agent reserves the right, at any time and from time to time after the
Closing Date to adjust any




18









 






	 	 	such criteria and to establish new criteria with respect to Eligible Rentals in its
reasonable credit judgment, provided, that (i) any increase of any advance rate above its
Original Advance Rate is subject to the approval of all Lenders and (ii) any adjustment by
Agent of any criteria set forth below that results in such criteria being less restrictive
than as in effect on the Closing Date shall be subject to the approval of Requisite Lenders.
Eligible Rentals shall not include any Rental of any Borrower:






	 	(a)	 	that is not subject to a written lease agreement in the form attached as
Exhibit 1.6B(a) or otherwise in form and substance acceptable to Agent;
	 
	 	(b)	 	that is not subject to a first priority perfected security interest of Agent
on behalf of itself and Lenders, perfected by possession of all Chattel Paper related
to such Rental by possession or by the stamping of notice of Agent’s security interest
thereon;
	 
	 	(c)	 	that is not due within ninety (90) days of the applicable date of
determination;
	 
	 	(d)	 	upon which such Borrower is not able to bring suit or otherwise enforce its
remedies against the relevant lessee through judicial process;
	 
	 	(e)	 	(i) that is not owned by such Borrower, (ii) that is subject to any right,
claim, security interest or other interest of any other Person, other than Liens in
favor of Agent, on behalf of itself and Lenders, except Permitted Encumbrances, or
(iii) to the extent that any counterclaim, dispute, offset or defense is asserted as
to such Rental;
	 
	 	(f)	 	that is the obligation of a lessee that is the United States or Canadian
government or a political subdivision thereof, or any state, county, province or
municipality or department, agency or instrumentality thereof unless Agent, in its
sole discretion, has agreed to the contrary in writing and such Borrower, if necessary
or desirable, has complied with the Federal Assignment of Claims Act of 1940, and any
amendments thereto, its Canadian equivalent or any applicable state, county or
municipal law restricting assignment thereof, with respect to such obligation;
	 
	 	(g)	 	that is the obligation of a lessee located in a foreign country other than
Canada (excluding the province of Newfoundland, the Northwest Territories and the
Territory of Nunavut), unless payment thereof is assured by a letter of credit,
reasonably satisfactory to Agent as to form, amount and issuer;
	 
	 	(h)	 	that is in default, or is due under a lease which is in default;
	 
	 	(i)	 	if any lessee obligated upon such Rental suspends business, makes a general
assignment for the benefit of creditors or fails to pay its debts generally as they
come due;
	 
	 	(j)	 	if any petition is filed by or against any lessee obligated upon such Rental
under any bankruptcy law or any other federal, state or foreign (including any
provincial) receivership, insolvency relief or other law or laws for the relief of
debtors;




19









 






	 	(k)	 	that is the obligation of a lessee if fifty percent (50%) or more of the
Dollar amount of all Rentals owing by that lessee are ineligible under the other
criteria set forth in this Section 1.6B;
	 
	 	(l)	 	as to which any of the representations or warranties in the Loan Documents
are untrue;
	 
	 	(m)	 	to the extent such Rental exceeds any credit limit established by Agent, in
its reasonable credit judgment;
	 
	 	(n)	 	that is payable in any currency other than Dollars; or
	 
	 	(o)	 	that is otherwise unacceptable to Agent in its reasonable credit judgment.






	1.7	 	Eligible Parts and Tools Inventory
	 
	 	 	All of the Parts and Tools Inventory owned by any Borrower and reflected in the most recent
Borrowing Base Certificate delivered by such Borrower to Agent shall be “Eligible Parts and
Tools Inventory” for purposes of this Agreement, except any Parts and Tools Inventory to
which any of the exclusionary criteria set forth below applies. In addition, Agent reserves
the right, at any time and from time to time after the Closing Date, to adjust any of the
criteria set forth below, to establish new criteria and to adjust advance rates with respect
to Eligible Parts and Tools Inventory in its reasonable credit judgment; provided, that (i)
any increase of any advance rate above its Original Advance Rate is subject to the approval
of all Lenders and (ii) any adjustment by Agent to any criterion set forth below that
results in such criterion being less restrictive than as in effect on the Closing Date shall
be subject to approval of Requisite Lenders. Eligible Parts and Tools Inventory shall not
include any Parts and Tools Inventory of any Borrower:






	 	(a)	 	that (i) is not owned by such Borrower free and clear of all Liens and rights
of any other Person (including the rights of a purchaser that has made progress
payments and the rights of a surety that has issued a bond to assure such Borrower’s
performance with respect to that Parts and Tools Inventory), except the Liens in favor
of Agent, on behalf of itself and Lenders, and Permitted Encumbrances in favor of
landlords and bailees to the extent permitted in Section 5.9 hereof (subject to
Reserves established by Agent in accordance with Section 5.9 hereof);
	 
	 	(b)	 	(i) that is not located on premises owned, leased or rented by such Borrower
and set forth in Disclosure Schedule (3.2), or (ii) is stored at a leased location in
respect of which Agent has requested a landlord waiver, unless a reasonably
satisfactory landlord waiver has been delivered to Agent, provided that Agent may,
treat any such Parts and Tools Inventory at any such location as Eligible Parts and
Tools Inventory and, in lieu of imposing the exclusionary criterion in this paragraph
(b) to such Parts and Tools Inventory, impose a Reserve (without duplicating any
Reserve established for other eligible collateral at such location as a consequence of
the failure to obtain such landlord’s waiver) in an amount not less than six month’s
rent for all Parts and Tools Inventory stored at such location in respect of which
such a landlord waiver has not




20









 






	 	 	 	been delivered, or (iii) is stored with a bailee or warehouseman unless a
reasonably satisfactory, acknowledged bailee letter has been received by Agent and
Reserves reasonably satisfactory to Agent have been established with respect
thereto, or (iv) is located at an owned location subject to a mortgage in favor of
a lender other than Agent unless a reasonably satisfactory mortgagee waiver
requested by Agent has been delivered to Agent, or (v) is located at any site if
the aggregate book value of Parts and Tools Inventory at any such location is less
than $25,000;
	 
	 	(c)	 	that is placed on consignment or is in transit;
	 
	 	(d)	 	that is covered by a negotiable document of title, unless such document has
been delivered to Agent with all necessary endorsements, free and clear of all Liens
except those in favor of Agent and Lenders;
	 
	 	(e)	 	that is excess, obsolete, unsalable or damaged;
	 
	 	(f)	 	that consists of display items or packing or shipping materials,
manufacturing supplies or work-in-process Inventory;
	 
	 	(g)	 	that is not held for sale in the ordinary course of such Borrower’s business;
	 
	 	(h)	 	that is not subject to a first priority perfected Lien in favor of Agent on
behalf of itself and Lenders;
	 
	 	(i)	 	as to which any of the representations or warranties pertaining to Parts and
Tools Inventory set forth in the Loan Documents are untrue;
	 
	 	(j)	 	that consists of Hazardous Materials or goods that can be transported or sold
only with licenses that are not readily available;
	 
	 	(k)	 	that is not covered by casualty insurance as to which Agent is listed as loss
payee in accordance with Section 5.4(c); or
	 
	 	(l)	 	that is otherwise unacceptable to Agent in its reasonable credit judgment.






	1.7A	 	Eligible Equipment Inventory
	 
	 	 	All of the Equipment Inventory owned by any Borrower and reflected in the most recent
Borrowing Base Certificate delivered by such Borrower to Agent shall be “Eligible Equipment
Inventory” for purposes of this Agreement, except any Equipment Inventory to which any of
the exclusionary criteria set forth below applies. In addition, Agent reserves the right,
at any time and from time to time after the Closing Date, to adjust any of the criteria set
forth below, to establish new criteria and to adjust advance rates with respect to Eligible
Equipment Inventory in its reasonable credit judgment; provided, that (i) any increase of
any advance rate above its Original Advance Rate is subject to the approval of all Lenders
and (ii) any adjustment by Agent to any criterion set forth below that results in such
criterion being less restrictive than as in effect




21









 






	 	 	on the Closing Date shall be subject to approval of Requisite Lenders. Eligible Equipment
Inventory shall not include any Equipment Inventory of any Borrower:






	 	(a)	 	that is not owned by such Borrower free and clear of all Liens and rights of
any other person (including the rights of a purchaser that has made progress payments
and the rights of a surety that has issued a bond to assure such Borrower’s
performance with respect to that Equipment Inventory), except the Liens in favor of
Agent, on behalf of itself and Lenders, and the rights of a lessee pursuant to any
permitted lease of such Equipment Inventory or Permitted Encumbrances;
	 
	 	(b)	 	that (i) except to the extent in the possession of a lessee or being
transported to or from a lessee) is not located on premises owned, leased or rented by
such Borrower and set forth in Disclosure Schedule (3.2), or (ii) is stored at a
leased location in respect of which Agent has requested a landlord waiver, unless a
reasonably satisfactory landlord waiver has been delivered to Agent, provided that
Agent may, treat any such Equipment Inventory stored at any such location as Eligible
Equipment Inventory and, in lieu of imposing the exclusionary criterion in this
paragraph (b) to such Equipment Inventory, impose a Reserve (without duplicating any
Reserve established for other eligible collateral at such location as a consequence of
the failure to obtain such landlord’s waiver) in an amount not less than six month’s
rent for all Equipment Inventory stored at such location in respect of which such a
landlord waiver has not been delivered, or (iii) is stored with a bailee or
warehouseman unless a reasonably satisfactory, acknowledged bailee letter has been
received by Agent and Reserves reasonably satisfactory to Agent have been established
with respect thereto, or (iv) is located at an owned location (other than the Santa Fe
Springs Property (as defined in the Disclosure Schedules to the Eagle Acquisition
Agreement)) subject to a mortgage in favor of a lender other than Agent unless a
reasonably satisfactory mortgagee waiver requested by Agent has been delivered to
Agent, or (v) is leased to a lessee other than pursuant to a lease of such Equipment
Inventory entered into in the ordinary course of business or is not located in the
United States or Canada (excluding. the provinces of Newfoundland, the Northwest
Territories and the Territory of Nunavut);
	 
	 	(c)	 	that is placed on consignment;
	 
	 	(d)	 	that is covered by a negotiable document of title or a certificate of title
unless such negotiable document has been delivered to Agent with all necessary
endorsements free and clear of all Liens except those in favor of Agent and Lenders,
or where it is required to perfect the security interest of Agent in the Equipment
Inventory such certificate of title has been noted in such certificate of title in
accordance with applicable law;
	 
	 	(e)	 	that is obsolete, unsalable or damaged beyond repair;
	 
	 	(f)	 	that is not held for sale or lease in the ordinary course of such Borrower’s
business;




22









 






	 	(g)	 	that is not subject to a first priority perfected Lien in favor of Agent on
behalf of itself and Lenders;
	 
	 	(h)	 	as to which any of the representations or warranties pertaining to Equipment
Inventory set forth in the Loan Documents are untrue;
	 
	 	(i)	 	that is not covered by casualty insurance as to which Agent is listed as loss
payee in accordance with Section 5.4(c); or
	 
	 	(j)	 	that is otherwise unacceptable to Agent in its reasonable credit judgment.






	1.8	 	Cash Management Systems
	 
	 	 	On or prior to the Closing Date, Borrowers will establish and will maintain until the
Termination Date, the cash management systems described in Annex C (the “Cash Management
Systems”).
	 
	1.9	 	Fees






	 	(a)	 	Borrowers shall pay to GE Capital, individually, the Fees specified in that
certain fee letter dated June 8, 2006 between H&E Delaware and GE Capital (the “GE
Capital Fee Letter”), at the times specified for payment therein which shall include
the annual Administrative Agent’s fee, which will be due and payable on the Closing
Date and on each anniversary thereof.
	 
	 	(b)	 	As additional compensation for the Revolving Lenders, Borrowers agree to pay
to Agent, for the ratable benefit of such Lenders, in arrears, on the first Business
Day of each month prior to the Commitment Termination Date and on the Commitment
Termination Date, a Fee for Borrowers’ non use of available funds in an amount equal
to the Applicable Unused Line Fee Margin per annum (calculated on the basis of a 360
day year for actual days elapsed) multiplied by the difference between (x) the Maximum
Amount (as it may be reduced from time to time) and (y) the average for the period of
the daily closing balances of the aggregate Revolving Loan and the Swing Line Loan
outstanding during the period for which such Fee is due.
	 
	 	(c)	 	As additional compensation for the Agent, Borrowers agree to pay to the L/C
Issuer with respect to any Letter of Credit, at the time such Letter of Credit is
issued or extended, a fronting fee in an amount equal twelve and one half (12.5) basis
points of the face amount of such Letter of Credit.
	 
	 	(d)	 	Borrowers shall pay to Agent, for the ratable benefit of Revolving Lenders,
the Letter of Credit Fee as provided in Annex B.
	 
	 	(e)	 	In addition, and in addition to the costs of Equipment Inventory Appraisals,
P&E Appraisals and Inspections, Borrowers agree to pay to Agent, which are due and
payable as incurred, all out of pocket costs (including reasonable fees and expenses)
paid by Agent to third party auditors, or a fee of $800 per audit day per in-house




23









 






	 	 	 	auditor, plus out of pocket expenses; provided, that Borrowers shall not be
required to pay such costs and expenses in relation to (unless an Event of Default
or an Audit and Appraisal Liquidity Event has occurred and is continuing) more than
one (1) audit in any year (such audit to be conducted, while no Event of Default or
Audit or Appraisal Liquidity Event is continuing, during an Inspection).






	1.10	 	Receipt of Payments
	 
	 	 	Each Borrower shall make each payment under this Agreement not later than 2:00 p.m. (New
York time) on the day when due in immediately available funds in Dollars to the Collection
Account. For purposes of computing interest and Fees and determining Borrowing Availability
as of any date, all payments shall be deemed received on the Business Day on which
immediately available funds therefor are received in the Collection Account prior to 2:00
p.m. New York time. Payments received after 2:00 p.m. New York time on any Business Day or
on a day that is not a Business Day shall be deemed to have been received on the following
Business Day.
	 
	1.11	 	Application and Allocation of Payments






	 	(a)	 	So long as no Event of Default has occurred and is continuing, (i) payments
consisting of proceeds of Accounts received in the ordinary course of business shall
be applied, first, to the Swing Line Loan and, second, to the Revolving Loan; (ii)
payments matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied in accordance with
the provisions of Section 1.3(a); and (iv) mandatory prepayments shall be
applied as set forth in Sections 1.3(c) and 1.3(d). All payments and
prepayments applied to a particular Loan shall be applied ratably to the portion
thereof held by each Lender as determined by its Pro Rata Share. As to any other
payment, and as to all payments made when an Event of Default has occurred and is
continuing or following the Commitment Termination Date, each Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of such Borrower, and each Borrower hereby irrevocably
agrees that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In the
absence of a specific determination by Agent with respect thereto, payments shall be
applied to amounts then due and payable in the following order: (1) to Fees and
Agent’s expenses reimbursable hereunder; (2) to interest on the Swing Line Loan; (3)
to principal payments on the Swing Line Loan; (4) to interest on the other Loans,
unpaid Swap Related Reimbursement Obligations and unpaid swap obligations owing to
Lenders other than GE Capital, ratably in proportion to the interest accrued as to
each Loan, unpaid Swap Related Reimbursement Obligation or other unpaid swap
obligation, as applicable; (5) to principal payments on the other Loans, unpaid Swap
Related Reimbursement Obligations and unpaid swap obligations owing to Lenders other
than GE Capital and to provide cash collateral for Letter of Credit Obligations in the
manner described in Annex B, ratably to the aggregate,




24









 






	 	 	 	combined principal balance of the other Loans, unpaid Swap Related Reimbursement
Obligations, other unpaid swap obligation and outstanding Letter of Credit
Obligations; and (6) to all other Obligations including expenses of Lenders to the
extent reimbursable under Section 11.3.
	 	(b)	 	Agent is authorized to, and at its sole election may, charge to the Revolving
Loan balance on behalf of each Borrower and cause to be paid all Fees, expenses,
Charges, costs (including insurance premiums in accordance with Section 5.4(a)) and
interest and principal, other than principal of the Revolving Credit Advances, due and
owing by Borrowers under this Agreement or any of the other Loan Documents if and to
the extent Borrowers fail to pay promptly any such amounts as and when due, even if
the amount of such charges would exceed Borrowing Availability at such time or would
cause the aggregate balance of the Revolving Loan and the Swing Line Loan of any
Borrower to exceed such Borrower’s separate Borrowing Base after giving effect to such
charges or if such charges would cause the aggregate balance of the Revolving Loan and
Swing Line Loan to exceed the Aggregate Borrowing Base after giving effect to such
charges. At Agent’s option and to the extent permitted by law, any charges so made
shall constitute part of the Revolving Loan hereunder.






	1.12	 	Loan Account and Accounting
	 
	 	 	Agent, as agent of Borrowers solely for purposes of this Section 1.12, shall maintain and
update from time to time a loan account (the “Loan Account”) on its books to record: (a)
all Advances, including principal thereof and interest thereon, (b) all payments made by any
Borrower and other Credit Parties, and (c) all other debits and credits as provided in this
Agreement with respect to the Loans or any other Obligations. All entries in the Loan
Account shall be made in accordance with Agent’s customary accounting practices as in effect
from time to time. The balance in the Loan Account, as recorded on Agent’s most recent
printout or other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Agent and Lenders by each Borrower; provided, that any
failure to so record or any error in so recording shall not limit or otherwise affect any
Borrower’s duty to pay the Obligations. Agent shall render to Borrower Representative a
monthly accounting of transactions with respect to the Loans setting forth the balance of
the Loan Account (including the principal of each Advance and interest thereon) as to each
Borrower for the immediately preceding month. Unless Borrower Representative notifies
Agent in writing of any objection to any such accounting (specifically describing the basis
for such objection), within thirty (30) days after the date thereof, each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive on
Borrowers in all respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrowers.
	 
	1.13	 	Indemnity






	 	(a)	 	Each Credit Party shall jointly and severally indemnify and hold harmless
each of Agent, Arranger, Lenders and their respective Affiliates, and each such
Person’s




25









 






	 	 	 	respective officers, directors, employees, attorneys, agents and representatives
(each, an “Indemnified Person”), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
reasonable attorneys’ fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) that may be instituted or
asserted against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or incurred
in connection with disputes between or among any parties to any of the Loan
Documents (collectively, “Indemnified Liabilities”); provided, that no Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent that
any such suit, action, proceeding, claim, damage, loss, liability or expense
results solely from that Indemnified Person’s gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF
SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY,
FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS
A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN
DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.
	 

	 	(b)	 	To induce Lenders to provide the LIBOR Rate option on the terms provided
herein, if (i) any LIBOR Loans are repaid in whole or in part prior to the last day of
any applicable LIBOR Period (whether that repayment is made pursuant to any provision
of this Agreement or any other Loan Document or occurs as a the result of
acceleration, by operation of law or otherwise), subject to Section 1.3(b)(iv); (ii)
any Borrower shall default in payment when due of the principal amount of or interest
on any LIBOR Loan; (iii) any Borrower shall refuse to accept any borrowing of, or
shall request a termination of, any borrowing of, conversion into or continuation of,
LIBOR Loans after such Borrower has given notice requesting the same in accordance
herewith; or (iv) any Borrower shall fail to make any prepayment of a LIBOR Loan after
such Borrower has given a notice thereof in accordance herewith, then Borrowers shall
jointly and severally indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense arising
from the reemployment of funds obtained by it or from fees payable to terminate
deposits from which such funds were obtained. For the purpose of calculating amounts
payable to a Lender under this subsection, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit bearing
interest at the LIBOR




26









 






	 	 	 	Rate in an amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may fund each
of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this subsection. This
covenant shall survive the termination of this Agreement and the payment of the
Notes and all other amounts payable hereunder. As promptly as practicable under
the circumstances, each Lender shall provide Borrowers with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation shall
be binding on the parties hereto unless Borrower Representative shall object in
writing within 10 Business Days of receipt thereof, specifying the basis for such
objection in detail.






	1.14	 	Access
	 
	 	 	Each Credit Party shall, during normal business hours, from time to time upon reasonable
advance notice as frequently as Agent reasonably determines to be appropriate: (a) provide
Agent and any of its officers, employees and agents access to its properties, facilities,
advisors and employees (including officers) of such Credit Party and to the Collateral, (b)
permit Agent, and any of its officers, employees and agents, to inspect, audit and make
extracts from such Credit Party’s books and records, and (c) permit Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of such Credit Party (clauses (a), (b) and (c)
collectively, “Inspections”). Borrowers agree to pay to Agent, which are due and payable as
incurred, all out of pocket costs (including fees and expenses) incurred by Agent in
relation to any Inspections; provided, that Borrowers shall not be required to pay such
costs and expenses in relation to (unless an Event of Default or an Audit and Appraisal
Liquidity Event has occurred and is continuing) more than one (1) Inspection in any year.
Borrowers’ obligation to pay for Inspections is in addition to its obligation to pay for
Equipment Inventory Appraisals and P&E Appraisals. If an Event of Default has occurred and
is continuing or if action is necessary to preserve or protect the Collateral as determined
by Agent, each Credit Party shall provide such access to Agent and to each Lender at all
times and without advance notice. Furthermore, so long as any Event of Default has occurred
and is continuing, each Borrower shall provide Agent and each Lender with access to its
suppliers and customers. Each Credit Party shall make available to Agent and its counsel,
as quickly as is possible under the circumstances, originals or copies of all books and
records that Agent may reasonably request. Each Credit Party shall deliver any document or
instrument necessary for Agent, as it may from time to time reasonably request, to obtain
records from any service bureau or other Person that maintains records for such Credit
Party, and shall maintain duplicate records or supporting documentation on media consistent
with reasonable commercial standards, including computer tapes and discs owned by such
Credit Party. Agent will give Lenders at least five (5) days’ prior written notice of
regularly scheduled Inspections. Representatives of other Lenders may accompany Agent’s
representatives on regularly scheduled Inspections at no charge to any Credit Party.




27









 






	1.15	 	Taxes






	 	(a)	 	Any and all payments by each Credit Party hereunder or under the Notes shall
be made, in accordance with this Section 1.15, free and clear of and without deduction
for any and all present or future Non-Excluded Taxes, unless required by law. If any
Credit Party shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Notes, (i) in the case of Non-Excluded Taxes, the
sum payable shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable under
this Section 1.15) Agent or Lenders, as applicable, receive an amount equal to the sum
they would have received had no such deductions been made, (ii) such Credit Party
shall make such deductions, and (iii) such Credit Party shall pay the full amount
deducted to the relevant taxing or other authority in accordance with applicable law.
Within thirty (30) days after the date of any payment of Taxes, Borrower
Representative shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof. Agent and Lenders shall not be obligated to return or
refund any amounts received pursuant to this Section, except that in the event a
Lender or Agent receives a refund of, or credit with respect to any Taxes that it
determines in its reasonable discretion were paid (directly or indirectly) by a Credit
Party pursuant to Section 1.15(a) or Section 1.15(b), such Lender or Agent, as
applicable, shall pay the amount of such refund or credit to such Credit Party within
thirty (30) days of receipt of such refund or application of such credit; provided
that the calculation of such refund or credit shall be determined solely by such
Lender or Agent, as applicable. In addition, the Borrowers shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
	 
	 	(b)	 	Each Credit Party shall jointly and severally indemnify and, within ten (10)
days of demand therefor, pay Agent and each Lender for the full amount of Non-Excluded
and Other Taxes (including any Taxes imposed by any jurisdiction on amounts payable
under this Section 1.15) paid by Agent or such Lender, as appropriate, and any
liability (including penalties and interest, neither of which are the result of gross
negligence by Agent or such Lender, and reasonable expenses) arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally asserted.
	 
	 	(c)	 	Each Lender organized under the laws of a jurisdiction outside the United
States (a “Foreign Lender”) as to which payments to be made under this Agreement or
under the Notes are exempt from, or entitled to a reduction in, United States federal
withholding tax under an applicable statute or tax treaty shall provide to Borrower
Representative and Agent, at the time such Foreign Lender becomes a party to this
Agreement, a properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United States
certifying as to such Foreign Lender’s entitlement to such exemption or reduction (a
“Certificate of Exemption”). Any foreign Person that seeks to become a Lender under




28









 






	 	 	 	this Agreement shall provide a Certificate of Exemption to Borrower Representative
and Agent prior to becoming a Lender hereunder, and each Foreign Lender shall
complete all further documentation reasonably requested by Borrower Representative
or the Agent required to establish and maintain such exemption from or reduction in
United States federal withholding tax. Notwithstanding any other provision of this
Section 1.15 to the contrary, a Lender shall not be required to deliver any form
pursuant to this paragraph that such Lender is not legally able to deliver.






	1.16	 	Capital Adequacy; Increased Costs; Illegality






	 	(a)	 	If any Lender shall have determined in good faith that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order regarding
capital adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve requirements
or similar requirements (whether or not having the force of law), in each case adopted
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves or
other funds required to be maintained by such Lender and thereby reducing the rate of
return on such Lender’s capital as a consequence of its obligations hereunder, then
Borrowers shall from time to time upon written demand by such Lender (with a copy of
such demand to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof submitted by
such Lender to Borrower Representative and to Agent shall, absent manifest error, be
final, conclusive and binding for all purposes.
	 
	 	(b)	 	If, due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the compliance with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), in each case adopted after the Closing Date,
there shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Loan (excluding for purposes of this Section 1.16(b)
Non-Excluded Taxes, as to which Section 1.15 shall govern), then Borrowers shall from
time to time, upon written demand by such Lender (with a copy of such demand to
Agent), pay to Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount of
such increased cost, submitted to Borrower Representative and to Agent by such Lender,
shall be conclusive and binding on Borrowers for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost, the
affected Lender shall, to the extent not inconsistent with such Lender’s internal
policies of general application, use reasonable commercial efforts to minimize costs
and expenses incurred by it and payable to it by Borrowers pursuant to this Section
1.16(b).




29









 






	 	(c)	 	Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree to
make or to make or to continue to fund or maintain any LIBOR Loan, then, unless that
Lender is able to make or to continue to fund or to maintain such LIBOR Loan at
another branch or office of that Lender without, in that Lender’s good faith opinion,
adversely affecting it or its Loans or the income obtained therefrom, on written
notice thereof and written demand therefor by such Lender to Borrower Representative
through Agent, (i) the obligation of such Lender to agree to make or to make or to
continue to fund or maintain LIBOR Loans shall terminate and (ii) each Borrower shall
forthwith prepay in full all outstanding LIBOR Loans owing by such Borrower to such
Lender, together with interest accrued thereon, unless such Borrower, within five (5)
Business Days after the delivery of such notice and demand, converts all LIBOR Loans
into Index Rate Loans.
	 
	 	(d)	 	Within fifteen (15) days after receipt by Borrower Representative of written
notice and demand from any Lender (an “Affected Lender”) for payment of additional
amounts, increased costs or reserve costs as provided in Section 1.15(a), 1.15(b),
1.16(a), 1.16(b) or 1.16(c), Borrower Representative may, at its option, notify Agent
and such Affected Lender of its intention to replace the Affected Lender. So long as
no Default or Event of Default has occurred and is continuing, Borrower
Representative, with the consent of Agent not to be unreasonably withheld, may obtain,
at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for the Affected
Lender, which Replacement Lender must be reasonably satisfactory to Agent. If
Borrower Representative obtains a Replacement Lender within ninety (90) days following
notice of its intention to do so, the Affected Lender must sell and assign (in
accordance with the requirements for assignments in Section 9.1) its Loans and
Commitments to such Replacement Lender for an amount equal to the principal balance of
all Loans held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale and the Replacement Lender shall assume all
Commitments of the Affected Lender (and the Affected Lender shall be released from its
Commitments), provided, that Borrowers shall have reimbursed such Affected Lender for
the additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrowers shall not have the right to obtain a Replacement Lender if the
Affected Lender rescinds its demand for increased costs or additional amounts within
fifteen (15) days following its receipt of Borrower Representative’s notice of
intention to replace such Affected Lender. Furthermore, if Borrower Representative
gives a notice of intention to replace and does not so replace such Affected Lender
within ninety (90) days thereafter, Borrowers’ rights under this Section 1.16(d) shall
terminate and Borrowers shall promptly pay all increased costs or additional amounts
demanded by such Affected Lender pursuant to Sections 1.15(a), 1.15(b), 1.16(a),
1.16(b) and 1.16(c).




30









 






	 	(e)	 	Notwithstanding the provisions of Section 1.16(a) and (b), if any Lender
fails to notify Borrower Representative of any event or circumstance which will
entitle such Lender to compensation pursuant to Section 1.16(a) or (b) within 180 days
after such Lender becomes aware of such event or occurrence, then such Lender shall
not be entitled to compensation from Borrowers for any amount arising prior to the
date which is 180 days before the date of such notice to Borrower Representative.






	1.17	 	Single Loan
	 
	 	 	All Loans to each Borrower and all of the other Obligations of each Borrower arising under
this Agreement and the other Loan Documents shall constitute one general obligation of that
Borrower secured, until the Termination Date, by all of the Collateral and shall be a joint
and several obligation of such Borrower with the obligations of the other Borrowers for all
Loans and other Obligations arising under this Agreement and the Loan Documents of the other
Borrowers.





2 CONDITIONS PRECEDENT





	2.1	 	Conditions to Amendment and Restatement and the Initial Loans
	 
	 	 	The Amendment and Restatement of the Original Credit Agreement shall not be effective, and
no Lender shall be obligated to make any Loan to, or incur any Letter of Credit Obligations
on the Closing Date, or to take, fulfill or perform any other action hereunder, until the
following conditions have been satisfied or provided for in a manner satisfactory to Agent,
or waived in writing by Agent and Lenders:






	 	(a)	 	Amended and Restated Credit Agreement; Loan Documents
	 
	 	 	 	This Agreement or counterparts hereof shall have been duly executed by, and
delivered to, each Credit Party, Agent and Lenders; and Agent shall have received
such documents, instruments, agreements and legal opinions as Agent shall reasonably
request in connection with the transactions contemplated by this Agreement and the
other Loan Documents, including all those listed in the Closing Checklist attached
hereto as Annex D, each in form and substance reasonably satisfactory to Agent.
	 
	 	(b)	 	Approvals
	 
	 	 	 	Agent shall have received (i) reasonably satisfactory evidence that each Credit
Party has obtained all required consents and approvals of all Persons including all
requisite Governmental Authorities, to the execution, delivery and performance of
this Agreement and the other Loan Documents and the consummation of the Related
Transactions or (ii) a certificate of an Authorized Officer in form and substance
reasonably satisfactory to Agent affirming that no such consents or approvals are
required.
	 
	 	(c)	 	Opening Availability; Initial Revolving Credit Advance




31









 






	 	 	 	The Eligible Accounts, Eligible Rentals, Eligible Parts and Tools Inventory,
Eligible Rolling Stock and Eligible Equipment Inventory supporting the Original
Revolving Credit Advances, the Original Letter of Credit Obligations, the Original
Swing Line Advances, the Revolving Credit Advance and the Letter of Credit
Obligations incurred on the Closing Date and the amount of the Reserves to be
established or continued on the Closing Date shall be sufficient in value, as
determined by Agent, to provide Borrowers, collectively, with Borrowing
Availability, after giving effect to the Revolving Credit Advance made on the
Closing Date to each Borrower, the incurrence on the Closing Date of any Letter of
Credit Obligations and the consummation of the Related Transactions (on a pro forma
basis, with trade payables being paid currently, and expenses and liabilities being
paid in the ordinary course of business and without acceleration of sales) and the
payment of or reserve for all costs and expenses related thereto of at least
$195,000,000, and the outstanding balance of the Revolving Loan and Swing Line Loan,
together with the amount Revolving Credit Advance made on the Closing Date and
Letter of Credit Obligation incurred on the Closing Date, shall be no more than
$45,000,000.
	 

	 	(d)	 	Payment of Fees
	 
	 	 	 	Borrowers shall have paid the Fees required to be paid on the Closing Date in the
respective amounts specified in Section 1.9 (including the Fees specified in the GE
Capital Fee Letter), and shall have reimbursed Agent for all fees, costs and
expenses of closing presented as of the Closing Date in accordance with Section
11.3.
	 
	 	(e)	 	Capital Structure; Other Indebtedness
	 
	 	 	 	The organizational documents, terms of equity interests, ownership, capital,
corporate, tax and legal structure of each Credit Party and the terms and conditions
of all Indebtedness of each Credit Party shall be reasonably acceptable to Agent
with no material change from that reported in Borrowers’ June 30, 2006 Financial
Statements.
	 
	 	(f)	 	Due Diligence
	 
	 	 	 	Agent shall have completed its legal due diligence with results reasonably
satisfactory to Agent.
	 
	 	(g)	 	Senior Notes and Senior Subordinated Notes
	 
	 	 	 	Not less than $195,080,000 of Senior Notes and not less than all of the Senior
Subordinated Notes shall have been repurchased and retired pursuant to the Offer to
Purchase and Consent Solicitation, without waiver or amendment except as approved by
the Agent, the Senior Note Indenture and the Senior Subordinated Note Indenture
shall have been amended in a manner satisfactory to Agent, as contemplated by and in
accordance with the Offer to Purchase and Consent Solicitation and without waiver or
amendment except as approved by the Agent.




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	 	(h)	 	Related Transactions Documents
	 
	 	 	 	Agent shall have received fully executed copies of each of the Related Transactions
Documents, each of which shall be in form and substance reasonably satisfactory to
Agent and its counsel.
	 
	 	(i)	 	Senior Unsecured Notes
	 
	 	 	 	H&E Delaware shall have issued not more than $250,000,000 in original principal
amount of Senior Unsecured Notes and shall have received in consideration thereof
not less than $245,000,000 in cash.
	 
	 	(j)	 	Financial Conditions
	 
	 	 	 	On the Closing Date, after giving effect to the consummation of the Related
transactions,






	 	(i)	 	EBITDA of H&E Delaware for the 12 month period ending June 30,
2006 on a pro forma basis as if the Related Transactions had occurred on the
first day of such period and taking into account such adjustments to EBITDA as
may be acceptable to the Agent (“Adjusted EBITDA”) shall be no less than
$148,200,000,
	 
	 	(ii)	 	the aggregate consolidated total Indebtedness of the Borrowers
(including Letter of Credit Obligations) shall be no greater than $305,000,000
and
	 
	 	(iii)	 	the ratio of the consolidated total Indebtedness (including
Letter of Credit Obligations) of Borrowers to Adjusted EBITDA of H&E Delaware
shall be no greater than 2.10:1.00.






	 	(k)	 	Ongoing Conditions
	 
	 	 	 	The conditions set forth in Section 2.2 shall have been satisfied or waived.






	2.2	 	Further Conditions to Each Loan
	 
	 	 	Except as otherwise expressly provided herein, no Lender shall be obligated to fund any
Advance, convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation, if, as of the date thereof:






	 	(a)	 	(i) any representation or warranty by any Credit Party contained herein or in
any other Loan Document is untrue or incorrect as of such date in any material
respect, except to the extent that such representation or warranty expressly relates
to an earlier date and except for changes therein expressly permitted or expressly
contemplated by this Agreement and (ii) Agent or Requisite Lenders have determined not
to make such Advance, convert or continue any Loan as a LIBOR Loan or incur such
Letter of Credit




33









 






	 	 	 	Obligation as a result of the fact that such warranty or representation is untrue
or incorrect; or
	 
	 	(b)	 	(i) any event or circumstance having a Material Adverse Effect has occurred
since the date hereof as determined by the Requisite Lenders and (ii) Agent or
Requisite Lenders have determined not to make such Advance, convert or continue any
Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a result of the fact
that such event or circumstance has occurred; or
	 
	 	(c)	 	(i) any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Advance (or the incurrence of any Letter of Credit
Obligation), and (ii) Agent or Requisite Lenders shall have determined not to make any
Advance, convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation as a result of such Default or Event of Default; or
	 
	 	(d)	 	after giving effect to any Advance (or the incurrence of any Letter of Credit
Obligations), (i) the outstanding principal amount of the aggregate Revolving Loan
would exceed the lesser of the Aggregate Borrowing Base and the Maximum Amount, in
each case, less the aggregate outstanding Swing Line Loan at such time or (ii) the
outstanding principal amount of the Revolving Loan to the applicable Borrower would
exceed such Borrower’s separate Borrowing Base less the aggregate outstanding Swing
Line Loan at such time, to that Borrower; or
	 
	 	(e)	 	after giving effect to any Swing Line Advance, the outstanding principal
amount of the Swing Line Loan would exceed Swing Line Availability.
	 




	 	 	The request and acceptance by any Borrower of the proceeds of any Advance, the incurrence of
any Letter of Credit Obligations or the conversion or continuation of any Loan into, or as,
a LIBOR Loan, shall be deemed to constitute, as of the date thereof, (i) a representation
and warranty by such Borrower that the conditions in this Section 2.2 have been satisfied
and (ii) a reaffirmation by such Borrower of the cross-guaranty provisions set forth in
Section 12 and of the granting and continuance of Agent’s Liens, on behalf of itself and
Lenders, pursuant to the Collateral Documents.






	2.3	 	Effect of Amendment and Restatement.
	 
	 	 	Upon this Agreement becoming effective pursuant to Section 2.1, from and after the Closing
Date: (a) the Revolving Loan Commitments shall be increased in accordance with the terms
hereof; (b) all terms and conditions of the Original Credit Agreement and any other “Loan
Document” as defined therein, as amended and restated by this Agreement and the other Loan
Documents being executed and delivered on or as of the Closing Date, shall be and remain in
full force and effect, as so amended and restated, and shall constitute the legal, valid,
binding and enforceable obligations of the Credit Parties party thereto, except as
enforceability thereof may be limited by applicable bankruptcy, insolvency, moratorium and
other laws relating to the enforcement of creditors’ rights and by general principles of
equity (whether considered at law or




34









 






	 	 	in equity); (c) the terms and conditions of the Original Credit Agreement shall be amended
as set forth herein and, as so amended, shall be restated in their entirety; provided that
any rights, duties and obligations among Borrowers, Lenders and Agent accruing before the
Closing Date under the Original Credit Agreement and any other Loan Documents shall survive
in their entirety unless specifically amended hereunder; (d) this Agreement shall not in any
way release or impair the rights, duties, Obligations or Liens created pursuant to the
Original Credit Agreement or any other Loan Document or affect the relative priorities
thereof, in each case to the extent in force and effect thereunder as of the Closing Date,
except as amended hereby or by documents, instruments and agreements executed and delivered
in connection herewith, and all of such rights, duties, Obligations and Liens are assumed,
ratified and affirmed by Borrowers; (e) all indemnification obligations of the Credit
Parties under the Original Credit Agreement and any other Loan Documents shall survive the
execution and delivery of this Agreement and shall continue in full force and effect for the
benefit of Lenders, Agent, and any other Person indemnified under the Original Credit
Agreement or any other Loan Document at any time prior to the Closing Date; (f) the
Obligations incurred under the Original Credit Agreement shall, to the extent outstanding on
the Closing Date, continue outstanding under this Agreement and shall not be deemed to be
paid, released, discharged or otherwise satisfied by the execution of this Agreement, and
this Agreement shall not constitute a refinancing, substitution or novation of such
Obligations or any of the other rights, duties and obligations of the parties hereunder; (g)
the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy of Lenders or Agent under the Original Credit Agreement, nor
constitute a waiver of any covenant, agreement or obligation under the Original Credit
Agreement, except to the extent that any such covenant, agreement or obligation is no longer
set forth herein or is amended hereby; (h) any and all references in the Loan Documents to
the Original Credit Agreement shall, without further action of the parties, be deemed a
reference to the Original Credit Agreement, as amended and restated by this Agreement, and
as this Agreement shall be further amended or amended and restated from time to time
hereafter; (i) any and all references in the Loan Documents that were executed or delivered
prior to the date hereof to the “Closing Date” shall, without further action of the parties,
be deemed a reference to the Original Closing Date and (j) all security interests created
under the Original Credit Agreement and the other Loan Documents executed and delivered on
the Original Closing Date continue to be in full force and effect after giving effect to the
consummation of this Agreement.





3 REPRESENTATIONS AND WARRANTIES





	 	 	To induce Lenders to make the Loans and to incur Letter of Credit Obligations, each Credit
Party, jointly and severally, makes the following representations and warranties to Agent
and each Lender, with respect to all Credit Parties, each and all of which shall survive the
execution and delivery of this Agreement.






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	3.1	 	Corporate or Limited Liability Company Existence; Compliance with Law






Each Credit Party (a) is a limited liability company or corporation, as applicable, duly
organized, validly existing and in good standing under the laws of its respective
jurisdiction of organization or incorporation set forth in Disclosure Schedule (3.1); (b) is
duly qualified to conduct business and is in good standing in each other jurisdiction where
its ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not result in exposure to
losses, damages or liabilities in excess of $50,000; (c) has the requisite corporate or
limited liability company, as applicable, power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as is now, heretofore and is proposed to be
conducted; (d) has all material licenses, permits, consents or approvals from or by, and
has made all material filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership, operation and
conduct; (e) is in compliance with its charter and bylaws or certificate of formation and
operating agreement, as applicable; and (f) subject to specific representations set forth
herein regarding ERISA, Environmental Laws, tax and other laws, is in compliance with all
applicable provisions of law; except in the case of clauses (b), (d) and (f) of this Section
3.1, where the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.




	3.2	 	Executive Offices; Collateral Locations; FEIN






As of the Closing Date, the current location of each Credit Party’s chief executive office
and the warehouses and premises at which any Collateral is located are set forth in
Disclosure Schedule (3.2), and none of such locations has changed within the 12 months
preceding the Closing Date. In addition, Disclosure Schedule (3.2) lists the jurisdiction
of organization, organizational identification number, if any, and federal employer
identification number of each Credit Party. Each Credit Party is a “registered
organization” within the meaning of Article 9 of the Code.




	3.3	 	Corporate or Limited Liability Company Power, Authorization, Enforceable Obligations






The execution, delivery and performance by each Credit Party of the Loan Documents to which
it is a party and the creation of all Liens provided for therein: (a) are within such
Credit Party’s corporate or limited liability company, as applicable, power; (b) have been
duly authorized by all necessary corporate, limited liability company, shareholder and
member action, as applicable; (c) do not contravene any provision of such Credit Party’s
certificate of formation, operating agreement, charter or by laws, as applicable; (d) do not
violate any law or regulation, or any order or decree of any court or Governmental
Authority; (e) do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to which such
Credit Party is a party or by which such Credit Party or any of its property is bound that
alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect; (f) do not result in the creation or imposition of any Lien upon any of the



36









 







property of such Credit Party other than Permitted Encumbrances or those in favor of Agent,
on behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except those referred
to in Section 2.1(b), all of which will have been duly obtained, made or complied with prior
to the Closing Date. Each of the Loan Documents shall be duly executed and delivered by
each Credit Party that is a party thereto and each such Loan Document shall constitute a
legal, valid and binding obligation of such Credit Party enforceable against it in
accordance with its terms, subject to any applicable bankruptcy, insolvency, moratorium or
similar laws affecting creditors’ rights generally and to general principles of equity.




	3.4	 	Financial Statements and Projections






All Financial Statements concerning any Credit Party and its Subsidiaries that are referred
to below have been prepared in accordance with GAAP consistently applied throughout the
periods covered (except as disclosed therein and except, with respect to unaudited Financial
Statements, for the absence of footnotes and normal year end audit adjustments) and present
fairly in all material respects the financial position of the Persons covered thereby as at
the dates thereof and the results of their operations and cash flows for the periods then
ended.




	 	(a)	 	Financial Statements






The following Financial Statements attached hereto as Disclosure Schedule (3.4(a))
have been delivered on the date hereof:




	 	(i)	 	The audited consolidated and consolidating balance sheets at
December 31, 2005 and the related statements of income and cash flows of H&E
Delaware and its Subsidiaries for the Fiscal Year then ended certified by KPMG
LLP.
	 
	 	(ii)	 	The unaudited consolidated and consolidating balance sheets and
related statements of income and cash flows of H&E Delaware and its
Subsidiaries for each Fiscal Month from January 2006 through April 2006.






	 	(b)	 	Pro Forma






The Pro Forma delivered on or prior to and attached hereto as Disclosure Schedule
(3.4(b)) was prepared by Borrowers giving pro forma effect to the Related
Transactions, and was prepared in accordance with GAAP, with only such adjustments
thereto as would be required in accordance with GAAP.




	 	(c)	 	Projections






The Projections delivered on or prior to the Closing Date and attached hereto as
Disclosure Schedule (3.4(c)) have been prepared by Borrowers in light of the past
operations of their businesses (including the actual results of past operations
during the twelve month period prior to the Closing Date), and reflect profit and
loss projections on
a month by month basis for the Fiscal Years 2006 and 2007 and on an annual basis for



37









 







the Fiscal Years 2008 and 2009. The Projections are based upon estimates and
assumptions stated therein, all of which Borrowers believe to be reasonable and fair
in light of current conditions and current facts known to Borrowers and, as of the
Closing Date, reflect Borrowers’ good faith and reasonable estimates of the future
financial performance of Borrowers and of the other information projected therein
for the period set forth therein.




	3.5	 	Material Adverse Effect






Between December 31, 2005 and the Closing Date: (a) none of the Credit Parties has incurred
any obligations, contingent or noncontingent liabilities, liabilities for Charges, long-term
leases or unusual forward or long-term commitments that are not reflected in the Pro Forma
and that, alone or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (b) no contract, lease or other agreement or instrument has been entered into by any
Credit Party or has become binding upon any Credit Party’s assets and no law or regulation
applicable to any Credit Party has been adopted that has had or could reasonably be expected
to have a Material Adverse Effect, and (c) no Credit Party is in default and to the best of
any Credit Party’s knowledge no third party is in default under any material contract, lease
or other agreement or instrument, that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Between December 31, 2005 and the Closing Date
no event has occurred, that alone or together with other events, could reasonably be
expected to have a Material Adverse Effect. For all purposes of this Section 3.5, the
entering into of the Related Transaction Documents and the consummation of the Related
Transactions shall be deemed not to have a Material Adverse Effect.




	3.6	 	Ownership of Property; Liens






	 	(a)	 	As of the Closing Date, the real estate (together with any real property
acquired by any Borrower or Guarantor after the Closing Date, “Real Estate”)
designated as such and listed in Disclosure Schedule (3.6) constitutes all of the real
property owned, leased, subleased, or operated by any Credit Party. Except as
disclosed in Disclosure Schedule (3.6), each Credit Party owns good and marketable fee
simple title to all of its owned Real Estate, and valid and marketable leasehold
interests in all of its leased Real Estate, all as more particularly described on such
schedule, and copies of all such leases or a summary of terms thereof reasonably
satisfactory to Agent have been delivered to Agent. Disclosure Schedule (3.6) further
describes any Real Estate with respect to which any Credit Party is a lessor,
sublessor or assignor as of the Closing Date. Each Credit Party also has good and
marketable title to, or valid leasehold interests in, all of its personal properties
and assets, including, without limitation, those Titled Vehicles described in
Disclosure Schedule (3.6). As of the Closing Date, none of the properties and assets
of any Credit Party are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to any Credit Party that may
result in any Liens (including Liens arising under Environmental Laws)
other than Permitted Encumbrances. Except as described in Disclosure Schedule (3.6), 




38









 






	 	 	 	each Credit Party has received all deeds, certificates of title,
assignments, waivers, consents, nondisturbance and attornment or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and perfect
such Credit Party’s right, title and interest in and to all such Real Estate and
other properties and assets including, without limitation, the Titled Vehicles.
Disclosure Schedule (3.6) also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate. No
portion of any Credit Party’s Real Estate has suffered any material damage by fire
or other casualty loss that has not heretofore been repaired and restored in all
material respects to its original condition or otherwise remedied. All material
permits required to have been issued or appropriate to enable the Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.






	3.7	 	Labor Matters






As of the Closing Date (a) no strikes or other material labor disputes against any Credit
Party are pending or, to any Credit Party’s knowledge, threatened that could reasonably be
expected to have a Material Adverse Effect; (b) hours worked by and payment made to
employees of each Credit Party comply in all material respects with the Fair Labor Standards
Act and each other federal, state, local or foreign law applicable to such matters; (c) all
material payments due from any Credit Party for employee health and welfare insurance have
been paid or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule (3.7), no Credit Party is a party to or bound by any collective
bargaining agreement, management agreement, consulting agreement, employment agreement,
bonus, restricted stock, stock option, stock appreciation plan or agreement or any similar
plan, agreement or arrangement (and true and complete copies of any agreements described in
Disclosure Schedule (3.7) have been delivered to Agent); (e) except as set forth in
Disclosure Schedule (3.7), there is no organizing activity involving any Credit Party
pending or, to any Credit Party’s knowledge, threatened by any labor union or group of
employees; (f) except as set forth in Disclosure Schedule (3.7), there are no representation
proceedings pending or, to any Credit Party’s knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of any Credit Party has
made a pending demand for recognition; and (g) except as set forth in Disclosure Schedule
(3.7), there are no complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise relating to the
employment or termination of employment by any Credit Party of any individual that could
reasonably be expected to have a Material Adverse Effect.




	3.8	 	Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness






Except as set forth in Disclosure Schedule (3.8), as of the Closing Date, no Credit Party
has any Subsidiaries, is engaged in any joint venture or partnership with any other Person,
or is an Affiliate of any other Person. All of the issued and outstanding Stock of each Credit Party is



39









 







owned by each of the members or Stockholders, as applicable, and in the amounts set forth
in Disclosure Schedule (3.8). Except as set forth in Disclosure Schedule (3.8), there are
no outstanding rights to purchase, options, warrants or similar rights or agreements
pursuant to which any Credit Party may be required to issue, sell, repurchase or redeem any
of its Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party
as of the Closing Date is described in Section 6.3 (including Disclosure Schedule (6.3)).
None of the Credit Parties other than Borrowers has any assets (except Stock of their
Subsidiaries) or any Indebtedness or Guaranteed Indebtedness. No Credit Party has any
outstanding Indebtedness or true lease obligations secured by a Lien described in Section
6.7(c) or Section 6.7(d) except as described in Disclosure Schedule (6.3) under the heading
“Vendor Financings.”




	3.9	 	Government Regulation






No Credit Party is an “investment company” or an “affiliated person” of, or “promoter” or
“principal underwriter” for, an “investment company,” as such terms are defined in the
Investment Company Act of 1940. No Credit Party is subject to regulation under the Federal
Power Act or any other federal or state statute that restricts or limits its ability to
incur Indebtedness or to perform its obligations hereunder. The making of the Loans by
Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on behalf of
Borrowers, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange Commission.




	3.10	 	Margin Regulations






No Credit Party is engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of “purchasing” or
“carrying” any “margin stock” as such terms are defined in Regulation U of the Federal
Reserve Board as now and from time to time hereafter in effect (such securities being
referred to herein as “Margin Stock”). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Indebtedness that was originally incurred to purchase or
carry any Margin Stock or for any other purpose that might cause any of the Loans or other
extensions of credit under this Agreement to be considered a “purpose credit” within the
meaning of Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit any Subsidiary to take any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.




	3.11	 	Taxes






All tax returns, reports and statements, including information returns, required by any
Governmental Authority to be filed by any Credit Party have been filed with the appropriate
Governmental Authority and all Taxes have been paid prior to the date on which any fine,



40









 







penalty, interest or late charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid), except (a) Taxes or other
amounts being contested in accordance with Section 5.2(b) or (b) to the extent that the
failure to file or pay could not reasonably be expected to result in a Material Adverse
Effect. Proper and accurate amounts have been withheld by each Credit Party from its
respective employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Disclosure Schedule (3.11) sets forth as of the
Closing Date those taxable years for which any Credit Party’s tax returns are currently
being audited by the IRS or any other applicable Governmental Authority and any assessments
or threatened assessments in connection with such audit, or otherwise currently outstanding.
Except as described in Disclosure Schedule (3.11), no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document extending,
or having the effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties or their respective predecessors are liable for any Taxes: (a)
under any agreement (including any tax sharing agreements), (b) to any Credit Party’s
knowledge, as a transferee or (c) under Treasury Regulation Section 1.1502-6(a) or any
analogous or similar state, local or foreign law or regulation. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC Section 481(a),
by reason of a change in accounting method or otherwise, which would have a Material Adverse
Effect. As of the Closing Date, no Credit Party has participated in a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4(b).




	3.12	 	ERISA






	 	(a)	 	Disclosure Schedule (3.12) lists all material Plans and separately identifies
all Pension Plans, including Title IV Plans, Multiemployer Plans and Welfare Plans,
including all Retiree Welfare Plans. Copies of all Title IV Plans, together with a
copy of the latest IRS/DOL 5500-series form for each such Title IV Plan, have been
made available to Agent. Except as would not reasonably be expected to have a
Material Adverse Effect (i) except with respect to Multiemployer Plans, each Qualified
Plan has received a favorable determination letter from the IRS, and nothing has
occurred that would cause the loss of such Qualified Plans qualification; (ii) each
Plan is in compliance in all material respects with the applicable provisions of ERISA
and the IRC, including the timely filing of all reports required under the IRC or
ERISA; (iii) neither any Credit Party nor any ERISA Affiliate has failed to make any
contribution or pay any amount due as required by either Section 412 of the IRC or
Section 302 of ERISA or the terms of any Title IV Plan; and (iv) no Credit Party or
any ERISA Affiliate has engaged in a “prohibited transaction”, as defined in Section
406 of ERISA and Section 4975 of the IRC, that will subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or Section
4975 of the IRC.
	 
	 	(b)	 	Except as set forth in Disclosure Schedule (3.12): (i) no Title IV Plan has
any material Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) 




41









 






	 	 	 	of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur that in all cases could reasonably be expected a Material
Adverse Effect; (iii) there are no pending, or to the knowledge of any Credit Party,
threatened claims (other than claims for benefits in the normal course), sanctions,
actions or lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan that could reasonably be expected to have a Material
Adverse Effect; (iv) no Credit Party or ERISA Affiliate has incurred or reasonably
expects to incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan that could reasonably be expected to have a Material Adverse
Effect; (v) within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a “standard termination” as that term
is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party
or any ERISA Affiliate (determined at any time within the last five years) with
Unfunded Pension Liabilities been transferred outside of the “controlled group”
(within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or ERISA
Affiliate (determined at the time of any such transfer).






	3.13	 	No Litigation






No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the
knowledge of any Credit Party, threatened against any Credit Party or before any
Governmental Authority or before any arbitrator or panel of arbitrators (collectively,
“Litigation”), (a) that challenges any Credit Party’s, right or power to enter into or
perform any of its obligations under any Related Transaction Document or any Loan Document
to which it is a party, or the validity or enforceability of any Related Transaction
Document or any Loan Document or any action taken thereunder, or (b) that has a reasonable
risk of being determined adversely to any Credit Party, and which, if so determined, could
reasonably be expected to have a Material Adverse Effect. Except as set forth in Disclosure
Schedule (3.13), as of the Closing Date there is no Litigation pending or to any Credit
Party’s knowledge threatened against any Credit Party that seeks damages in excess of
$100,000 or injunctive relief against, or alleges criminal misconduct of, any Credit Party.




	3.14	 	Brokers






No broker or finder brought about the obtaining, making or closing of the Loans or the
Related Transactions, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder’s or brokerage fees in connection therewith.




	3.15	 	Intellectual Property






As of the Closing Date, each Credit Party owns or has rights to use all Intellectual
Property material to the continuance of the conduct of its business as now or heretofore
conducted by it or proposed to be conducted by it, and each Patent, each registration or
each application for
registration of each Trademark, each Copyright and each License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule (3.15). Each
Credit



42









 







Party conducts its business and affairs without material infringement of or material
interference with any Intellectual Property of any other Person. Except as set forth in
Disclosure Schedule (3.15), no Credit Party is aware of any infringement claim by any other
Person with respect to any Intellectual Property.




	3.16	 	Full Disclosure






No information contained in this Agreement, any of the other Loan Documents, any
Projections, Financial Statements or Collateral Reports or other written reports from time
to time delivered hereunder or any written statement furnished by or on behalf of any Credit
Party to Agent or any Lender pursuant to the terms of this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. The Liens granted to Agent, on behalf of
itself and Lenders, pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein, subject, as to
priority, only to Permitted Encumbrances.




	3.17	 	Environmental Matters






	 	(a)	 	Except as set forth in Disclosure Schedule (3.17), as of the Closing Date:
(i) the Real Estate is free of contamination from any Hazardous Material except for
such contamination that would not adversely impact the value or marketability of such
Real Estate and that would not result in Environmental Liabilities that could
reasonably be expected to exceed $250,000; (ii) no Credit Party has caused or suffered
to occur any Release of Hazardous Materials on, at, in, under, above, to, from or
about any of its Real Estate that would result in Environmental Liabilities that could
reasonably be expected to exceed $250,000; (iii) each Credit Party is and has been in
compliance with all Environmental Laws, except for such noncompliance that would not
result in Environmental Liabilities which could reasonably be expected to exceed
$250,000; (iv) each Credit Party has obtained, and is in compliance with, all
Environmental Permits required by Environmental Laws for the operations of its
businesses as presently conducted or as proposed to be conducted, except where the
failure to so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $250,000, and
all such Environmental Permits are valid, uncontested and in good standing; (v) no
Credit Party is involved in operations or knows of any facts, circumstances or
conditions, including any Releases of Hazardous Materials, that are likely to result
in any Environmental Liabilities of Borrowers that could reasonably be expected to
exceed $250,000, and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental Permits
or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $100,000 or injunctive
relief, or which alleges criminal misconduct by any Credit Party, (vii) no notice
has been 




43









 






	 	 	 	received by any Credit Party identifying it as a “potentially responsible
party” or requesting information under CERCLA or analogous state statutes, and to
the knowledge of any Credit Party, there are no facts, circumstances or conditions
that may result in any Credit Party being identified as a “potentially responsible
party” under CERCLA or analogous state statutes; and (viii) the Credit Parties have
provided to Agent copies of all material existing environmental reports, reviews
and audits and all material written information in their possession pertaining to
actual or potential Environmental Liabilities, in each case relating to the Credit
Parties.






	 	(b)	 	Each Credit Party hereby acknowledges and agrees that Agent (i) is not now,
and has not ever been in control of any of the Real Estate or any Credit Party’s
affairs, and (ii) does not have the capacity through the provisions of the Loan
Documents or otherwise to influence any Credit Party’s conduct with respect to the
ownership, operation or management of any of its Real Estate or compliance with
Environmental Laws or Environmental Permits.






	3.18	 	Insurance






Disclosure Schedule (3.18) lists all insurance policies of any nature maintained, as of the
Closing Date, for current occurrences by each Credit Party, as well as a summary of the
terms of each such policy.




	3.19	 	Deposit and Disbursement Accounts






Disclosure Schedule (3.19) lists all banks and other financial institutions at which each
Credit Party maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a description of
the purpose of the account, and the complete account number therefor.




	3.20	 	Government Contracts






Except as set forth in Disclosure Schedule (3.20), as of the Closing Date, no Credit Party
is a party to any contract or agreement with any Governmental Authority the value of which
exceeds $100,000 and no Credit Party’s Accounts are subject to the Federal Assignment of
Claims Act, as amended (31 U.S.C. Section 3727) or any similar foreign, state or local law.




	3.21	 	Customer and Trade Relations






As of the Closing Date, there exists no actual or, to the knowledge of any Credit Party,
threatened termination or cancellation of, or any material adverse modification or change
in: (a) the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding twelve (12) months caused it or them, as
applicable, to be ranked among the ten
largest customers of such Credit Party, considered as a whole; or (b) the business
relationship of any Credit Party with any supplier or group of suppliers whose sales during
the preceding twelve



44









 







(12) months caused it or them, as applicable, to be ranked among the
ten largest suppliers of such Credit Party.




	3.22	 	Agreements and Other Documents






As of the Closing Date, each Credit Party has provided to Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or summaries) of all of the following agreements or
documents to which it is subject and each of which is listed in Disclosure Schedule (3.22):
(a) supply agreements and purchase agreements not terminable by such Credit Party within
sixty (60) days following written notice issued by such Credit Party and involving
transactions in excess of $1,000,000 per annum; (b) leases by such Credit Party as lessee of
Equipment Inventory having a remaining term of one year or longer, the total value of leases
of Equipment Inventory as to which a Credit Party is lessee, for each lessor, the annual
payments on all such leases of Equipment Inventory and the Operating Lease Payoff Value for
each operating lease of Equipment Inventory of a Borrower or a Guarantor; (c) licenses and
permits held by such Credit Party, the absence of which could be reasonably likely to have a
Material Adverse Effect; (d) instruments and documents evidencing any Indebtedness or
Guaranteed Indebtedness of such Credit Party and any Lien (other than Permitted
Encumbrances) granted by such Credit Party with respect thereto; and (e) instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of such Credit Party. With respect to the leases referred to in
clause (b) above, other than as set forth on Disclosure Schedule (3.22), no Credit Party has
any obligation in such lease or otherwise to purchase such Equipment Inventory from the
lessor of such Equipment Inventory at any time. As of the Closing Date, each Borrower has
provided to Agent the forms of lease under which such Borrower leases Equipment Inventory to
third Persons.




	3.23	 	Solvency






Both before and after giving effect to (a) the Loans and Letter of Credit Obligations to be
made or incurred on the Closing Date or such other date as Loans and Letter of Credit
Obligations requested hereunder are made or incurred, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower Representative, (c) the consummation
of the Related Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is and will be Solvent.




	3.24	 	Titled Vehicles






Each Borrower is in the business of selling (as such phrase is used in section 9-311(d) of
the Code) all Equipment Inventory constituting Titled Vehicles now or hereafter owned by
such Borrower, other than those types of Titled Vehicles set forth on Disclosure Schedule
(3.24).



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	3.25	 	Omitted.






	3.26	 	Senior Unsecured Notes and Other Related Transactions Document






As of the Closing Date, Borrowers have delivered to Agent a complete and correct copy of
each of (i) the Senior Unsecured Note Indenture, (ii) the Offer to Purchase and Consent
Solicitation, (iii) all supplemental indentures or amendments to the Senior Note Indenture
and the Senior Subordinated Note Indenture entered into in connection with the Offer to
Purchase and Consent Solicitation and (iv) all documents, instruments and agreements
executed and delivered in connection therewith.



4     FINANCIAL STATEMENTS AND INFORMATION





	4.1	 	Reports and Notices






	 	(a)	 	Each Credit Party hereby agrees that from and after the Closing Date and
until the Termination Date, it shall deliver to Agent or to Agent and Lenders, as
required, the Financial Statements, notices, Projections and other information at the
times, to the Persons and in the manner set forth in Annex E.
	 
	 	(b)	 	Each Credit Party hereby agrees that from and after the Closing Date and
until the Termination Date, it shall deliver to Agent or to Agent and Lenders, as
required, the various Collateral Reports (including Borrowing Base Certificates in the
form of Exhibit 4.1(b)) at the times, to the Persons and in the manner set forth in
Annex F.






	4.2	 	Communication with Accountants






Each Credit Party authorizes (a) Agent and (b) so long as an Event of Default has occurred
and is continuing, each Lender, to communicate directly with its independent certified
public accountants including KPMG LLP and authorizes and, at Agent’s request, shall instruct
those accountants and advisors to disclose and make available to Agent and each Lender any
and all Financial Statements and other supporting financial documents, schedules and
information relating to any Credit Party (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of any Credit Party.



5     AFFIRMATIVE COVENANTS





Each Credit Party jointly and severally agrees as to all Credit Parties that from and after
the date hereof and until the Termination Date:




	5.1	 	Maintenance of Existence and Conduct of Business






Each Credit Party shall: (a) do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a limited liability company or a corporation,
as the case may be, and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at all times
maintain, preserve and protect all



46









 







of its assets and properties used or useful in the conduct of its business, and keep the
same in good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto consistent with
industry practices; and (d) transact business only in such limited liability company,
corporate and trade names as are set forth in Disclosure Schedule (5.1).




	5.2	 	Payment of Charges






	 	(a)	 	Subject to Section 5.2(b), each Credit Party shall pay and discharge or cause
to be paid and discharged promptly all Charges payable by it, including (i) Charges
imposed upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (ii) lawful claims for labor,
materials, supplies and services or otherwise, and (iii) all storage or rental charges
payable to warehousemen or bailees, in each case, before any thereof shall become past
due.
	 
	 	(b)	 	Each Credit Party may in good faith contest, by appropriate proceedings, the
validity or amount of any Charges, Taxes or claims described in Section 5.2(a);
provided, that (i) adequate reserves with respect to such contest are maintained on
the books of such Credit Party, in accordance with GAAP; (ii) no Lien shall be
imposed to secure payment of such Charges (other than payments to warehousemen and/or
bailees and Permitted Encumbrances) that is superior to any of the Liens securing the
Obligations and such contest is maintained and prosecuted continuously and with
diligence and operates to suspend collection or enforcement of such Charges; (iii)
none of the Collateral becomes subject to forfeiture or loss as a result of such
contest; (iv) such Credit Party shall promptly pay or discharge such contested
Charges, Taxes or claims and all additional charges, interest, penalties and expenses,
if any, and shall deliver to Agent evidence reasonably acceptable to Agent of such
compliance, payment or discharge, if such contest is terminated or discontinued
adversely to such Credit Party or the conditions set forth in this Section 5.2(b) are
no longer met, and (v) Agent has not advised such Credit Party in writing that Agent
reasonably believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.






	5.3	 	Books and Records






Each Credit Party shall keep adequate books and records with respect to its business
activities in which proper entries, reflecting all financial transactions, are made in
accordance with GAAP and on a basis consistent with the Financial Statements attached as
Disclosure Schedule (3.4(a)).




	5.4	 	Insurance; Damage to or Destruction of Collateral






	 	(a)	 	Each Credit Party shall at its sole cost and expense, maintain the policies
of insurance described in Disclosure Schedule (3.18) as in effect on the date hereof,
and each Person




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	 	 	 	succeeding to the position of such individual, or otherwise in form and amounts and
with insurers reasonably acceptable to Agent. Such policies of insurance (or the
loss payable and additional insured endorsements delivered to Agent) shall contain
provisions pursuant to which the insurer agrees to provide 30 days prior written
notice to Agent in the event of any non-renewal, cancellation or amendment of any
such insurance policy. If any Credit Party at any time or times hereafter shall
fail to obtain or maintain any of the policies of insurance required above or to
pay all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums therefor.
By doing so, Agent shall not be deemed to have waived any Default or Event of
Default arising from any Credit Party’s failure to maintain such insurance or pay
any premiums therefor. All sums so disbursed, including reasonable attorneys’
fees, court costs and other charges related thereto, shall be payable on demand by
Borrowers to Agent and shall be additional Obligations hereunder secured by the
Collateral.
	 
	 	(b)	 	Agent reserves the right at any time upon any change in any Credit Party’s
risk profile (including any change in the product mix maintained by any Credit Party
or any laws affecting the potential liability of such Credit Party) to require
additional forms and limits of insurance to, in Agent’s opinion, adequately protect
both Agent’s and Lender’s interests in all or any portion of the Collateral and to
ensure that each Credit Party is protected by insurance in amounts and with coverage
customary for its industry. If reasonably requested by Agent, each Credit Party shall
deliver to Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Agent, with respect to its insurance policies.
	 
	 	(c)	 	Each Credit Party shall deliver to Agent, in form and substance reasonably
satisfactory to Agent, endorsements to (i) all “All Risk,” keyman life insurance and
business interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (ii) all general liability and other liability policies naming Agent, on
behalf of itself and Lenders, as additional insured. Each Credit Party irrevocably
makes, constitutes and appoints Agent (and all officers, employees or agents
designated by Agent), so long as any Event of Default has occurred and is continuing
or the anticipated insurance proceeds exceed $5,000,000, as such Credit Party’s true
and lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such “All Risk” policies of insurance, endorsing the name of
such Credit Party on any check or other item of payment for the proceeds of such “All
Risk” policies of insurance and for making all determinations and decisions with
respect to such “All Risk” policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in the amount of $1,000,000 or more, whether
or not covered by insurance. After deducting from such




48









 






	 	 	 	proceeds the expenses, if any, incurred by Agent in the collection or handling
thereof, such proceeds shall be applied to the Obligations except as otherwise
provided by Section 1.3(d).






	 	(d)	 	Borrower Representative shall, immediately upon learning of the institution
of any proceeding for the condemnation or other taking of any property of any Credit
Party in excess of $1,000,000 in the aggregate for all such condemnations or takings,
notify the Agent of the pendency of such proceeding, and agree that the Agent may
participate in any such proceeding, and Borrower Representative from time to time will
deliver to the Agent all instruments reasonably requested by the Agent to permit such
participation. The Agent is authorized to collect the proceeds of any such
condemnation claim or award and such proceeds shall be applied to the Obligations,
except as otherwise provided in Section 1.3(d).






	5.5	 	Compliance with Laws






Each Credit Party shall comply with all federal, state, local and foreign laws and
regulations applicable to it, including those relating to licensing, ERISA and labor matters
and Environmental Laws and Environmental Permits, except to the extent that the failure to
comply, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.




	5.6	 	Supplemental Disclosure






From time to time as may be reasonably requested by Agent (which request will not be made
more frequently than once each year absent the occurrence and continuance of a Default or an
Event of Default), Credit Parties shall supplement each Disclosure Schedule hereto, or any
representation herein or in any other Loan Document, with respect to any matter hereafter
arising that, if existing or occurring at the date of this Agreement, would have been
required to be set forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such Disclosure Schedule
or representation which has been rendered inaccurate thereby (and, in the case of any
supplements to any Disclosure Schedule, such Disclosure Schedule shall be appropriately
marked to show the changes made therein); provided, that (a) no such supplement to any such
Disclosure Schedule or representation shall amend, supplement or otherwise modify any
Disclosure Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to by Agent and
Requisite Lenders in writing; and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.




	5.7	 	Intellectual Property






Each Credit Party will conduct its business and affairs without material infringement of or
material interference with any Intellectual Property of any other Person; provided, that to
the extent any Credit Party learns of any such material infringement or interference and
such Credit



49









 







Party promptly takes steps to eliminate such infringement or interference (by procuring a
license or otherwise) such Credit Party shall not be deemed to be in violation of this
Section 5.7 so long as such Credit Party is entitled to continue to use such Intellectual
Property.




	5.8	 	Environmental Matters






Each Credit Party shall and shall cause each Person within its reasonable control to: (a)
conduct its operations and keep and maintain its Real Estate in compliance with all
Environmental Laws and Environmental Permits other than noncompliance that could not
reasonably be expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or necessary
to maintain the value and marketability of the Real Estate or to otherwise comply with
Environmental Laws and Environmental Permits pertaining to the presence, generation,
treatment, storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent promptly
after such Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about any Real
Estate which could reasonably be expected to result in Environmental Liabilities in excess
of $250,000; and (d) promptly forward to Agent a copy of any order, notice, request for
information or any written communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to any
Environmental Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $250,000, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or threatened any
action in connection with any such violation, Release or other matter. If Agent at any time
has a reasonable basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising thereunder,
or a Release of Hazardous Materials on, at, in, under, above, to, from or about any of its
Real Estate, which, in each case, could reasonably be expected to have a Material Adverse
Effect, then Credit Parties shall, upon Agent’s written request (i) cause the performance of
an environmental audit, which may include subsurface sampling of soil and groundwater, and
preparation of an environmental report with respect to the subject matter of such breach, at
Credit Parties’ expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to Agent and
shall be in form and substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
environmental audits and testing with respect to the subject matter of such breach, as Agent
deems appropriate, including subsurface sampling of soil and groundwater, provided, that
Agent provides Borrower Representative with reasonable prior notice and conducts, or causes
its representatives to conduct, all such audits and tests in a manner reasonably directed to
minimize interference with the applicable Credit Party’s business. Borrowers shall
reimburse Agent for the reasonable costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.



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	5.9	 	Landlords’ Agreements, Mortgagee Agreements, Bailee Letters, Real Estate Purchases and Vendor
Inter-Creditor Agreements






	 	(a)	 	If requested by Agent, Credit Party shall use its commercially reasonable
best efforts to obtain a landlord’s agreement, mortgagee agreement or bailee letter,
as applicable, from the lessor of each leased property, mortgagee of owned property or
bailee with respect to any warehouse, processor or converter facility or other
location where Collateral is stored or located (other than with respect to Equipment
Inventory which is being leased by a Borrower to others in the ordinary course of such
Borrower’s business), which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may assert
against the Collateral at that location, and shall otherwise be reasonably
satisfactory in form and substance to Agent. If Agent has not received a landlord or
mortgagee agreement or bailee letter at any such location within thirty (30) days
following the first placement of Collateral at such location, the applicable
Borrower’s Eligible Parts and Tools Inventory, Eligible Rolling Stock or Eligible
Equipment Inventory at that location shall, in Agent’s discretion, be excluded from
the applicable Borrower’s Borrowing Base or be subject to such Reserves as may be
established in good faith by Agent in its reasonable credit judgment and as set forth
in Sections 1.6A, 1.7 and 1.7A. After the Closing Date, no real property or warehouse
space shall be leased by any Borrower and no Parts and Tools Inventory or Equipment
Inventory shall be shipped to a processor or converter under arrangements established
after the Closing Date without prior written notice to Agent. Each Credit Party shall
timely and fully pay and perform its obligations in all material respects under all
leases and other agreements with respect to each leased location or public warehouse
where any Collateral is or may be located. To the extent otherwise permitted
hereunder, if any Credit Party proposes to acquire a fee ownership or leasehold
interest in Real Estate after the Closing Date, it shall first provide to Agent
written notice thereof and (at the reasonable request of Agent) a mortgage or deed of
trust granting Agent a first priority Lien on such Real Estate, together with a FIRREA
compliant appraisal (if requested by Agent), environmental audits, mortgage title
insurance commitment, real property survey, local counsel opinions, and, if required
by Agent, supplemental casualty insurance and flood insurance, and such other
documents, instruments or agreements reasonably requested by Agent, in each case, in
form and substance reasonably satisfactory to Agent.
	 
	 	(b)	 	At the request of Agent, each applicable Borrower shall execute and deliver
or cause to be executed and delivered to Agent a mortgage or deed of trust granting to
Agent a first priority Lien on any Real Estate at any time owned by such Borrower (or,
if such Real Estate is subject to any prior Liens as of the Closing Date, a Lien
subject only to such prior Liens), together with a FIRREA compliant appraisal,
environmental audit, mortgage title insurance commitment, real property survey, local
counsel opinion, and if required by Agent, supplemental casualty insurance, and such
other documents,




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	 	 	 	instruments or agreements reasonably requested by Agent, in each case, in form and
substance satisfactory to Agent.
	 
	 	(c)	 	Prior to entering into any financing arrangement described in Section 6.7(c)
or Section 6.7(d), a Borrower shall notify Agent. In the event that a Borrower
obtains knowledge of the assignment by any holder of any such Lien referred to in
Section 6.7(c) or Section 6.7(d), or the owner of any equipment leased by such
Borrower has transferred or sold such Lien or Equipment to another Person, such
Borrower shall notify Agent and use reasonable efforts to cause such Person to enter
into an applicable Vendor Inter-Creditor Agreement with such Person.






	5.10	 	Government Accounts






Each Borrower shall at any time upon reasonable request by the Agent prepare and deliver to
the Agent a report setting forth all of its Accounts on which the Account Debtor is the
United States or Canadian Government or a political subdivision thereof, or any state,
province or municipality or department, agency or instrumentality thereof, which such report
shall disclose the name of the Account Debtor, the amount of such Account and any other
information the Agent shall reasonably request.




	5.11	 	Further Assurances






	 	(a)	 	Each Credit Party shall ensure that all written information, exhibits and
reports furnished to the Agent or the Lenders do not and will not contain any untrue
statement of a material fact and do not and will not omit to state any material fact
or any fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgement or recordation thereof.
	 
	 	(b)	 	Promptly upon request by the Agent, the Credit Parties shall (and, subject to
the limitations hereinafter set forth, shall cause each of their Subsidiaries to) take
such additional actions as the Agent may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other Loan
Document, (ii) to subject to the Liens created by any of the Collateral Documents any
of the properties, rights or interests covered by any of the Collateral Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and the Liens intended to be created thereby, and (iv) to better
assure, convey, grant, assign, transfer, preserve, protect and confirm to the Agent
and Lenders the rights granted or now or hereafter intended to be granted to the Agent
and the Lenders under any Loan Document or under any other document executed in
connection therewith. Without limiting the generality of the foregoing and except as
otherwise approved in writing by Requisite Lenders, the Credit Parties shall cause
each of their Domestic Subsidiaries to guaranty the Obligations and to cause each such
Subsidiary to grant to




52









 






	 	 	 	the Agent, for the benefit of the Agent and Lenders, a security interest in,
subject to the limitations hereinafter set forth, all of such Subsidiary’s property
to secure such guaranty. Furthermore and except as otherwise approved in writing
by Requisite Lenders, each Credit Party shall, and shall cause each of its Domestic
Subsidiaries to, pledge all of the Stock and Stock equivalents of each of its
Domestic Subsidiaries, in each instance, to the Agent, for the benefit of the Agent
and Lenders, to secure the Obligations. In connection with each pledge of Stock
and Stock equivalents, the Credit Parties shall deliver, or cause to be delivered,
to the Agent, irrevocable proxies and stock powers and/or assignments, as
applicable, duly executed in blank. In the event any Credit Party or any Domestic
Subsidiary of any Credit Party acquires any real property, simultaneously with such
acquisition, such Person shall execute and/or deliver, or cause to be executed
and/or delivered, to the Agent, (x) a fully executed mortgage, in form and
substance reasonably satisfactory to the Agent together with an A.L.T.A. lender’s
title insurance policy issued by a title insurer reasonably satisfactory to the
Agent, in form and substance and in an amount reasonably satisfactory to the Agent
insuring that the mortgage is a valid and enforceable first priority Lien on the
respective property, free and clear of all defects, encumbrances and Liens, (y)
then current A.L.T.A. surveys, certified to the Agent and the Lenders by a licensed
surveyor sufficient to allow the issuer of the lender’s title insurance policy to
issue such policy without a survey exception and (z) an environmental site
assessment prepared by a qualified firm reasonably acceptable to the Agent, in form
and substance satisfactory to the Agent. Within 30 days following the Closing
Date, at their own cost and expense, the Credit Parties shall cause applications to
be filed with the appropriate motor vehicle authorities to cause all certificates
of title for Titled Vehicles owned as of the Closing Date by H&E California to
indicate the name of the Agent as first lienholder.





6     NEGATIVE COVENANTS





Each Credit Party agrees jointly and severally as to all parties that from and after the
date hereof until the Termination Date:




	6.1	 	Acquisitions, Subsidiaries, Etc.






No Credit Party shall directly or indirectly, by operation of law or otherwise, (a) form or
acquire any Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any Person; provided,
that any Credit Party may merge with another Credit Party, so long as (i) Borrower
Representative shall be the survivor of any such merger to which it is a party and (ii) a
Borrower shall be the survivor of any such merger to which one or more Borrowers is a party.
Notwithstanding the foregoing, any Borrower may acquire all or any substantial portion of
the assets or all of the Stock (other than assets consisting of Stock) of any Person (the
“Target”) (a “Permitted Acquisition”) subject to the satisfaction of each of the following
conditions:



53









 






	 	(i)	 	Agent shall receive at least forty-five (45) days prior written
notice of such proposed Permitted Acquisition, which notice shall include a
detailed description of such proposed Permitted Acquisition including, without
limitation, financial statements of Target and any other due diligence items
requested by Lenders;
	 
	 	(ii)	 	such Permitted Acquisition shall only involve a Target that
upon acquisition would constitute a Domestic Subsidiary and 75% or more of
whose assets are located in the United States and comprising or conducting a
business, or those assets of a business, of the type engaged in by such
Borrower as of the Closing Date or a business reasonably related thereto or a
logical extension thereof, and which business would not subject Agent or any
Lender to regulatory or third party approvals in connection with the exercise
of its rights and remedies under this Agreement or any other Loan Documents
other than approvals applicable to the exercise of such rights and remedies
with respect to such Borrower prior to such Permitted Acquisition;
	 
	 	(iii)	 	no additional Indebtedness or Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of any Credit Party and
Target after giving effect to such Permitted Acquisition, except (A)
Indebtedness permitted under clause (v) and (B) ordinary course trade payables,
accrued expenses and unsecured Indebtedness and other liabilities and
contingent obligations of the Target to the extent no Default or Event of
Default has occurred and is continuing or would result after giving effect to
such Permitted Acquisition;
	 
	 	(iv)	 	omitted;
	 
	 	(v)	 	no Indebtedness for borrowed money to finance such acquisitions
shall be incurred, guaranteed, assumed or consolidated in connection with such
Permitted Acquisitions other than Revolving Credit Advances subject to the
terms hereof;
	 
	 	(vi)	 	the business and assets acquired in such Permitted Acquisition
shall be free and clear of all Liens (other than Permitted Encumbrances);
	 
	 	(vii)	 	at or prior to the closing of any Permitted Acquisition, (x)
to the extent such Permitted Acquisition consists of the acquisition of assets
from Target, Agent will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets acquired pursuant thereto and H&E
Delaware and its Subsidiaries shall have taken such actions and executed and
delivered such documents as Agent may have reasonably requested in connection
therewith and in addition, H&E Delaware and its Subsidiaries shall have
complied with the requirements of Section 5.9(a) in respect of any real
property acquired in such Permitted Acquisition and (y) to the extent such
Permitted Acquisition consists of the acquisition of the Stock of Target,
Target shall have become a party to this




54









 






	 	 	 	Agreement pursuant to a joinder agreement in form and substance satisfactory
to Agent, Target shall have provided a Subsidiary Guaranty as well as such
Collateral Documents as Agent shall have required in order to provide to
Agent a first priority security interest (subject to Permitted Encumbrances)
in all then owned or thereafter acquired assets of Target pursuant to a
Pledge Agreement and shall have delivered certificates evidencing such Stock
and blank undated stock powers therewith to Agent, and H&E Delaware and its
Subsidiaries shall have provided to Agent a first priority perfected
security interest in all Stock of Target, in each case, together with such
legal opinions, certificates and other documents as Agent shall have
reasonably requested, and in addition, H&E Delaware and its Subsidiaries
shall comply and cause the Target to comply with all other requirements of
Section 5.11(b) as to such Target.






	 	(viii)	 	Concurrently with delivery of the notice referred to in clause (i) above, the
Borrower Representative shall have delivered to Agent, in form and substance
satisfactory to Agent:






	 	(A)	 	(x) a pro forma consolidated and consolidating,
if applicable, balance sheet of H&E Delaware and its Subsidiaries (the
“Acquisition Pro Forma”), based on recent financial data, which shall
be complete and shall accurately and fairly represent the assets,
liabilities, financial condition and results of operations of H&E
Delaware and its Subsidiaries in accordance with GAAP consistently
applied, but taking into account such Permitted Acquisition and the
funding of all Loans in connection therewith, and such Acquisition Pro
Forma shall reflect that on a pro forma basis, no Event of Default has
occurred and is continuing or would result after giving effect to such
Permitted Acquisition and H&E Delaware and its Subsidiaries would have
been in compliance with the financial covenants set forth in Annex G
for the twelve month period reflected in the Compliance Certificate
most recently delivered to Agent pursuant to Annex E prior to the
consummation of such Permitted Acquisition (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as
if made on the first day of such period);
	 
	 	(B)	 	updated versions of the most recently delivered
operating plan in form reasonably satisfactory to the Agent taking into
account such Permitted Acquisition (the “Acquisition Projections”); and
	 
	 	(C)	 	a certificate of an Authorized Officer of the
Borrower Representative to the effect that: (w) such Borrower will be
Solvent upon the consummation of the Permitted Acquisition; (x) the
Acquisition Pro Forma fairly presents the financial condition of such
Borrower and its Subsidiaries (on a consolidated and consolidating
basis, if applicable) as




55









 






	 	 	 	of the date thereof after giving effect to the Permitted Acquisition;
(y) the Acquisition Projections are reasonable estimates of the
future financial performance of H&E Delaware and its Subsidiaries
subsequent to the date thereof based upon the historical performance
of H&E Delaware and its Subsidiaries and the Target and show that H&E
Delaware and its Subsidiaries shall continue to be in compliance with
the financial covenants set forth in Annex G for the three (3) year
period thereafter or the balance remaining of the Commitment term;
and (z) such Borrower has completed its due diligence investigation
with respect to the Target and such Permitted Acquisition, which
investigation was conducted in a manner similar to that which would
have been conducted by a prudent purchaser of a comparable business
and the results of which investigation were delivered to Agent and
Lenders;






	 	(ix)	 	on or prior to the date of such Permitted Acquisition, Agent
shall have received, in form and substance reasonably satisfactory to Agent,
copies of the acquisition agreement and related agreements and instruments, and
all opinions, certificates, lien search results and other documents reasonably
requested by Agent;
	 
	 	(x)	 	Agent and Lenders shall have received results of an appraisal
and audit of the Target, its assets, and its books and records, in form and
substance reasonably satisfactory to the Agent;
	 
	 	(xi)	 	the structure and terms of the Permitted Acquisition shall be
satisfactory to the Agent and no Credit Party shall acquire any liabilities in
such transaction other than those approved by the Agent or described in clause
(iii)(B);
	 
	 	(xii)	 	at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing; and






	 	(xiii)	 	at the time of such Permitted Acquisition and after giving effect thereto and
the making of any Loans in connection therewith, Borrowing Availability shall
exceed $25,000,000.






	6.2	 	Investments; Loans and Advances






Except as otherwise expressly permitted by this Section 6.2 and except as expressly
permitted by Section 6.3(b) and Section 6.14, no Credit Party shall make or permit to exist
any investment in, or make, accrue or permit to exist loans or advances of money to, any
Person, through the direct or indirect lending of money, holding of securities or otherwise,
except that (a) a Borrower may hold investments comprised of notes payable, or stock or
other securities issued by Account Debtors to such Borrower pursuant to a bankruptcy
proceeding of such Account Debtor or negotiated agreements with respect to settlement of
such Account Debtor’s Accounts, as applicable, in the ordinary course of business, so long
as the aggregate amount of such Accounts so settled by Borrowers does not exceed $1,000,000;
(b) a Borrower may acquire Intercompany




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	 	 	Notes permitted to be incurred under Section 6.3, (c) a Borrower may invest in P&E
Capital Expenditures, (d) a Credit Party may hold investments received pursuant to a sale of
assets permitted under Section 6.8, (e) a Credit Party may hold investments held in the
ordinary course of business in any Deposit Account subject to a Lien in favor of Agent, (f)
a Credit Party may hold investments in existence on the date hereof and summarized in
Disclosure Schedule (6.2), and (g) so long as no Default or Event of Default has occurred
and is continuing, Borrowers may make investments, subject to Control Letters or otherwise
subject to a perfected security interest in favor of Agent for the benefit of Lenders, in
(i) marketable direct obligations issued, unconditionally guaranteed or insured by the
United States of America or any agency thereof maturing within one year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one year from the date of
creation thereof and currently having the highest rating obtainable from either Standard &
Poor’s Ratings Group or Moody’s Investors Service, Inc., (iii) certificates of deposit,
maturing no more than one year from the date of creation thereof, issued by commercial banks
incorporated under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $300,000,000 and having a senior secured
rating of “A” or better by a nationally recognized rating agency (an “A Rated Bank”), (iv)
time deposits, maturing no more than 30 days from the date of creation thereof with A Rated
Banks, (v) mutual funds that invest solely in one or more of the investments described in
clauses (i) through (iv) above and (vi) other investments not exceeding $100,000 in
aggregate amount in which Agent has a perfected first priority security interest. Each
Credit Party may maintain its existing investments in its Subsidiaries as of the Closing
Date.
	 
	6.3	 	Indebtedness






	 	(a)	 	No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by purchase money
security interests, Refinancing Liens and Capital Leases permitted in clause (c) or
(d) of Section 6.7, (ii) the Loans and the other Obligations, (iii) deferred taxes, to
the extent permitted under applicable law, (iv) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law, (v) existing Indebtedness described in
Disclosure Schedule (6.3) and refinancings thereof or amendments or modifications
thereto that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable to any Credit Party than the terms
of the Indebtedness being refinanced, amended or modified, (vi) Indebtedness
specifically permitted under Section 6.1, (vii) Indebtedness of Borrowers not
exceeding (x) $4,920,000 in aggregate principal amount (less all payments of principal
and repurchases and redemptions thereof) evidenced by the Senior Notes, and (y)
$250,000,000 in aggregate principal amount evidenced by Senior Unsecured Notes (less
all payments of principal and repurchases and redemptions thereof), (viii)
Indebtedness consisting of intercompany loans and advances made by any Borrower to any
other Borrower; provided, that: (A) each Borrower shall have executed and delivered to each other Borrower, on the Closing Date, a demand note (collectively, the




57









 






	 	 	 	“Intercompany Notes”) to evidence any such intercompany Indebtedness owing at
any time by such Borrower to such other Borrowers, which Intercompany Notes shall
be in form and substance reasonably satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to the applicable Pledge Agreement or Security
Agreement as additional collateral security for the Obligations; (B) each Borrower
shall record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (C) the obligations of each Borrower under any
such Intercompany Notes shall be subordinated to the Obligations of such Borrower
hereunder in a manner reasonably satisfactory to Agent; (D) at the time any such
intercompany loan or advance is made by any Borrower to any other Borrower and
after giving effect thereto, each such Borrower shall be Solvent; (E) no Default or
Event of Default would occur and be continuing after giving effect to any such
proposed intercompany loan; and (F) in the case of any intercompany Indebtedness,
the Borrower advancing such funds shall have Borrowing Availability under its
separate Borrowing Base of not less than $1.00 after giving effect to such
intercompany loan, (ix) Indebtedness owing to Affiliates and holders of Stock of
such Credit Party that constitutes Subordinated Debt, is unsecured, interest on
which is not payable in cash until after the Termination Date and as to which no
principal is payable until after the Termination Date, (x) Indebtedness owing by
H&E California to CNL Commercial Mortgage Funding, Inc. in a principal amount not
to exceed $1,285,066 or any refinancing thereof, (xi) Indebtedness under Hedging
Agreements to the extent permitted under Section 6.17 and (xii) unsecured
Indebtedness not otherwise referred to in this Section 6.3 not exceeding $1,000,000
in aggregate principal amount outstanding at any time for all Credit Parties, and
(xiii) hedging obligations under swaps, caps and collar arrangements arranged by GE
Capital or provided by any Lender entered into for the sole purpose of hedging in
the normal course of business and consistent with industry practices.






	 	(b)	 	No Credit Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount payable
in respect of any Indebtedness, other than (i) the Obligations, (ii) Indebtedness
secured by a Permitted Encumbrance if the asset securing such Indebtedness has been
sold or otherwise disposed of in accordance with Sections 6.8(b) or (c), (iii)
Indebtedness permitted by Section 6.3(a)(v) upon any refinancing thereof in accordance
with Section 6.3(a)(v) and (iv) the repurchase of Senior Notes and Senior Subordinated
Notes in accordance with the Offer to Purchase and Consent Solicitation (so long as
such notes are thereupon retired) and, so long as no Event of Default is continuing or
would arise as a result of any such purchase or prepayment, the purchase or redemption
(at the prices determined pursuant to the Indenture) of Senior Notes outstanding after
the Closing Date in accordance with the terms of the Indenture (so long as such notes
are thereupon retired).




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	6.4	 	Employee Loans and Affiliate Transactions






	 	(a)	 	No Credit Party shall enter into or be a party to any transaction with any
Affiliate of any Credit Party (other than another Credit Party) thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit Party’s
business and upon fair and reasonable terms that are no less favorable to such Credit
Party than would be obtained in a comparable arm’s length transaction with a Person
not an Affiliate of such Credit Party; provided, that other than a transaction
described in any Related Transaction Documents or Disclosure Schedule 6.4(a), no
Credit Party shall in any event enter into any such transaction or series of related
transactions (i) involving payments in excess of $10,000 without disclosing to Agent
in advance the terms of such transactions and (ii) involving payments in excess of
$50,000 in the aggregate.
	 
	 	(b)	 	All employee loans (except loans from a Qualified Plan) and affiliate
transactions existing as of the Closing Date hereof are described in Disclosure
Schedule (6.4(b)). No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its respective
employees in the ordinary course of business consistent with past practices for travel
and entertainment expenses, relocation costs and similar purposes up to a maximum of
$100,000 to any employee and up to a maximum of $500,000 in the aggregate at any one
time outstanding. No Credit Party shall repurchase any Stock of any employee of such
Credit Party, except as permitted in the Credit Party’s equity incentive plans for
income tax withholding purposes and upon termination of such employee consistent with
past practices for such repurchase up to a maximum amount of $2,000,000 in the
aggregate for all employees of all Credit Parties in any one Fiscal Year; provided,
that at the time of any such repurchase and after giving effect thereto the aggregate
Borrowing Availability for all Borrowers is in excess of $25,000,000.






	6.5	 	Capital Structure and Business
	 
	 	 	No Credit Party shall (a) make any changes in any of its business objectives, purposes or
operations that could in any way adversely affect the repayment of the Loans or any of the
other Obligations or could reasonably be expected to have or result in a Material Adverse
Effect, (b) make any change in its capital structure as described in Disclosure Schedule
(3.8), including the issuance or sale of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock, provided, that
any Borrower may issue or sell shares of its Stock for cash so long as (i) the proceeds
thereof are applied in prepayment of the Obligations as required by Section 1.3(b)(iii), and
(ii) no Change of Control occurs after giving effect thereto, and (iii) other than with
respect to H&E Delaware, such shares are pledged to the Agent for the benefit of the Lenders
pursuant to a Pledge Agreement, or (c) amend its charter, bylaws, certificate of formation
or operating agreement, each as applicable, in a manner that would adversely affect Agent or
Lenders or Credit Party’s duty or ability to repay the Obligations. No Credit Party shall
engage in any business other than the businesses currently engaged in by it or reasonably
related thereto or a logical extension thereof.




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	6.6	 	Guaranteed Indebtedness
	 
	 	 	No Credit Party shall create, incur, assume or permit to exist any Guaranteed Indebtedness
except (a) for Guaranteed Indebtedness in existence on the date hereof described in
Disclosure Schedule (6.6), (b) for Guaranteed Indebtedness incurred for the benefit of the
purchasers of Equipment Inventory to support sales by any Borrower or any Guarantor of such
Equipment Inventory in the ordinary course of business to such purchasers, not to exceed
$2,000,000 at any one time outstanding for all Credit Parties, (c) by endorsement of
instruments or items of payment for deposit to the general account of any Credit Party, and
(d) for Guaranteed Indebtedness incurred for the benefit of any other Credit Party if the
primary obligation is expressly permitted by this Agreement other than Indebtedness, if any,
of a Target existing at the time such Target is acquired.
	 
	6.7	 	Liens
	 
	 	 	No Credit Party shall create, incur, assume or permit to exist any Lien on or with respect
to its Accounts or any of its other properties or assets (whether now owned or hereafter
acquired) except for (a) Permitted Encumbrances; (b) Liens in existence on the date hereof
and summarized in Disclosure Schedule (6.7) securing the Indebtedness described in
Disclosure Schedule (6.3) (other than under the heading “Vendor Financings” it being
understood that Liens reflected under such heading shall be permitted only if in compliance
with Section 6.7(c) or Section 6.7(d)) and permitted refinancings, extensions and renewals
thereof, including extensions or renewals of any such Liens, provided, that the principal
amount of the Indebtedness so secured is not increased and the Lien does not attach to any
other property; (c) Liens created by conditional sale or other title retention agreements
(including Capital Leases) or in connection with purchase money Indebtedness, in each case,
with respect to P&E and Fixtures acquired by a Credit Party in the ordinary course of its
business, involving the incurrence of an aggregate principal amount under this clause (c)
for all Credit Parties of not more than $25,000,000 outstanding at any one time for all such
Liens (provided, that (i) such Liens attach only to the assets subject to such purchase
money debt and proceeds thereof and, (ii) such Indebtedness is incurred within ninety (90)
days following such purchase); and (d) (x) Liens created by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase money
Indebtedness provided by the seller of such Equipment Inventory or an Affiliate of such
seller or a third party financing source not affiliated with such seller or as Refinancing
Liens, in each case, with respect to Equipment Inventory purchased by a Credit Party in the
ordinary course of its business, involving the incurrence of an aggregate principal amount
under this clause (x) for all Credit Parties of not more than $175,000,000 outstanding at
any one time for all such Liens and (y) Liens on rental proceeds of Equipment Inventory
leased by any Borrower securing true lease obligations of such Borrower of such Equipment
Inventory; provided, that in the case of (x) and (y) (i) such Liens attach only to (1) the
Equipment Inventory subject to such conditioned sale or title retention agreements
(including Capital Leases), purchased with the proceeds of such purchase money Indebtedness
or subject to the Open Account Refinancing and or (2) such rental proceeds, in each case,
except as otherwise permitted by any agreement referred to in




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	 	 	subparagraph (iii) below, (ii) such Indebtedness is incurred at the time of such purchase of
such Equipment Inventory by such Credit Party or, in the case of Open Account Refinancing,
within six (6) months following original purchase by such Credit Party on Open Account of
such Equipment Inventory, and (iii) a Vendor Inter-Creditor Agreement between the holder of
such Lien and Agent (in the form of Exhibit 6.7(d)(iii)(A) in the case of Floor Plan
Equipment Inventory, and in the form of Exhibit 6.7(d)(iii)(B) in the case of Off Balance
Sheet Equipment Inventory, in each case with such changes thereto as may be acceptable to
Agent or such other form of intercreditor agreement as Agent may approve) has been delivered
to Agent, provided, however, that notwithstanding the foregoing, the Credit Parties may have
outstanding true lease obligations secured by a Lien described in clause (y) of in this
paragraph (d) without a Vendor Inter-Creditor Agreement so long as the aggregate amount of
such true lease obligations does not exceed $4,000,000 in the aggregate for all Credit
Parties, excluding, purchase option amounts payable under any such true leases, it being
understood that the Agent may establish Reserves in respect of any such true lease
obligations for which no Vendor Inter-Creditor Agreement has been delivered. In addition,
no Credit Party shall become a party to any agreement, note, indenture or instrument, or
take any other action, that would prohibit the creation of a Lien on any of its properties
or other assets in favor of Agent, on behalf of itself and Lenders, as additional collateral
for the Obligations, except true leases, Capital Leases or Licenses which prohibit Liens
upon the assets that are subject thereto.






	6.8	 	Disposition of Stock and Assets
	 
	 	 	No Credit Party shall sell, lease, license, transfer, convey, assign or otherwise dispose of
any of its properties or other assets (other than cash), including the Stock of any of its
Subsidiaries (whether in a public or a private offering or otherwise) or any of their
Accounts, other than (a) the sale or lease by a Borrower of Equipment Inventory in the
ordinary course of its business, (b) the sale, transfer, conveyance or other disposition by
a Credit Party of P&E, Equipment Inventory, Fixtures or Real Estate that are obsolete or no
longer used or useful in such Credit Party’s business and having a Net Book Value not
exceeding $250,000 in any single transaction or $500,000 for all Credit Parties in the
aggregate in any Fiscal Year, (c) the sale, transfer, conveyance or other disposition by a
Credit Party of Equipment Inventory that is part of a discontinued line, (d) the sale,
transfer, conveyance or other disposition by a Credit Party of other P&E and Fixtures having
a value not exceeding $500,000 in any single transaction or $1,000,000 in the aggregate for
all Credit Parties in any Fiscal Year, (e) the licensing of Intellectual Property by any
Credit Party in the ordinary course of its business, (f) the sale, transfer, conveyance or
other disposition of assets from a Borrower to another Borrower, and (g) a trade-in or
trade-up of assets (pursuant to which such Credit Party acquires a substantially similar
asset to the one disposed of within forty-five (45) days following such disposition and the
value of the asset disposed of is credited against the purchase price of the asset so
acquired) by a Credit Party in the ordinary course of its business. With respect to any
disposition of assets or other properties permitted pursuant to clauses (b) and (c) above,
subject to Section 1.3(b), Agent agrees on reasonable prior written notice to release its
Lien (and the Lenders authorize Agent to do so) on such assets or other properties in order
to permit the applicable Credit Party to effect such




61









 






	 	 	disposition and shall execute and deliver to such Credit Party, at such Credit Party’s
expense, appropriate UCC 3 termination statements and other releases as reasonably requested
by such Credit Party.






	6.9	 	ERISA
	 
	 	 	No Credit Party shall, nor shall it cause or permit any ERISA Affiliate to, cause or permit
to occur an event that could result in the imposition of a Lien under Section 412(n) of the
IRC or Section 302(f) or 4068 of ERISA or cause or permit to occur an ERISA Event to the
extent such Lien or such ERISA Event could reasonably be expected to have a Material Adverse
Effect.
	 
	6.10	 	Financial Covenants
	 
	 	 	No Borrower shall breach or fail to comply with any of the Financial Covenants.
	 
	6.11	 	Hazardous Materials
	 
	 	 	No Credit Party shall cause or permit a Release of any Hazardous Material on, at, in, under,
above, to, from or about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or marketability of any
of the Real Estate or any of the Collateral, other than such violations or impacts that
could not reasonably be expected to have a Material Adverse Effect.
	 
	6.12	 	Omitted.
	 
	6.13	 	Cancellation of Indebtedness
	 
	 	 	No Credit Party shall cancel any claim or debt owing to it having a face value exceeding
$100,000 except for reasonable consideration negotiated on an arm’s-length basis and in the
ordinary course of its business consistent with past practices.
	 
	6.14	 	Restricted Payments
	 
	 	 	No Credit Party shall make any Restricted Payment, except (a) intercompany loans and
advances between Borrowers and payments of principal and interest on Intercompany Notes, in
each case to the extent permitted by Section 6.3, (b) dividends and distributions by
Subsidiaries of any Borrower paid to such Borrower, (c) employee loans permitted under
Section 6.4(b) above, (d) scheduled payments of interest as and when due and payable with
respect to the Subordinated Debt, subject to the subordination terms thereof, (e)
repurchases of Stock of any employee of such Credit Party upon termination of such employee,
subject to Section 6.4(b), (f) distributions of Stock of such Credit Party in connection
with the cashless exercise of options by the holders of options for Stock of such Credit
Party and (g) Restricted Payments permitted by Section 6.3(b)(iv); provided, that in the
case of clause (e) above no Default or Event of Default shall have




62









 






	 	 	occurred and be continuing or would result after giving effect to any Restricted Payment
pursuant to clause (e) above.






	6.15	 	Change of Name or Location; Change of Fiscal Year
	 
	 	 	No Credit Party shall (a) change its name as it appears in official filings in the state of
its incorporation or organization, or (b) change its offices or warehouses or locations at
which Collateral is held or stored, or the location of its records concerning the
Collateral, (c) change the type of entity that it is, (d) change its organization
identification number, if any, issued by its state of incorporation or organization, or (e)
change its state of incorporation or organization, in each case without at least thirty (30)
days prior written notice to Agent and after Agent’s written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any Collateral, has been
completed or taken; provided that any such new location shall be in the continental United
States. Without limiting the foregoing, no Credit Party shall change its name, identity or
limited liability company (or corporate, as the case may be) structure in any manner that
might make any financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9 506 or 9 507 of the Code or any other then
applicable provision of the Code except upon prior written notice to Agent and Lenders and
after Agent’s written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken. No Credit Party shall
change its Fiscal Year without the prior consent of Agent.
	 
	6.16	 	No Impairment of Intercompany Transfers
	 
	 	 	No Credit Party shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the consent of
any Person with respect to the payment of dividends or distributions or the making or
repayment of intercompany loans by a Subsidiary of a Borrower to such Borrower or between
Borrowers.
	 
	6.17	 	No Speculative Transactions
	 
	 	 	No Credit Party shall engage in any transaction involving commodity options, futures
contracts or similar transactions, except solely to hedge against fluctuations in the prices
of commodities owned or purchased by it and the values of foreign currencies receivable or
payable by it and interest swaps, caps or collars under a Hedging Agreement; provided that
(i) any such Hedging Agreement must have a Lender as the sole counterparty or be arranged by
GE Capital, (ii) at any time, the aggregate amount payable upon termination, liquidation or
cancellation of such Hedging Agreements for all Credit Parties, calculated in accordance
with GAAP, shall not exceed $1,000,000 and (iii) at any time, Agent may maintain Reserves in
the amount of such aggregate amount.




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	6.18	 	Changes Relating to Senior Debt; Subordinated Debt Designation of Credit Facility






	 	(a)	 	No Credit Party shall change or amend the terms of the Senior Note Indenture,
the Senior Notes, the Senior Subordinated Note Indenture or the Senior Subordinated
Notes, except pursuant to the Offer to Purchase and Consent Solicitation or the
Supplemental Indentures or in a manner approved by the Agent. No Credit Party shall
change or amend the terms of the Senior Unsecured Note Indenture or Senior Unsecured
Notes without the prior written consent of the Requisite Lenders. No Credit Party
shall change or amend the terms of any Subordinated Debt (other than the Senior
Subordinated Notes and Senior Subordinated Note Indenture) if the effect of such
amendment is to (a) increase the interest rate on such Subordinated Debt by more than
two percentage points (2%); (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c) add
any default, event of default or change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any covenant
with respect to such Subordinated Debt; (d) add any covenant or change any covenant in
a matter adverse to such Credit Party, (e) change the redemption or prepayment
provisions of such Subordinated Debt other than to extend the dates therefor or to
reduce the premiums payable in connection therewith; (f) grant any security or
collateral to secure payment of such Subordinated Debt; or (g) change or amend any
other term if such change or amendment would materially increase the obligations of
the Credit Party thereunder or confer additional material rights on the holder of such
Subordinated Debt in a manner adverse to any Credit Party, Agent or any Lender.
	 
	 	(b)	 	No Credit Party shall designate any credit agreement, credit facility,
documents, agreement or indebtedness as a “Credit Facility” under and as such term is
defined in the Senior Note Indenture, as originally in effect or as a “Credit
Facility” under and as such term is defined in the Senior Unsecured Note Indenture, as
originally in effect, other than, in each case, this Agreement, or, except for this
Agreement and the Loan Documents, otherwise grant to any Indebtedness or Liens
securing the same the rights of “Priority Lien Obligations” or “Priority Liens” as
such terms are defined in the Senior Note Indenture, as originally in effect.
Borrowers hereby designate this Agreement and the credit facilities now or hereafter
created hereunder as a “Credit Facility” under and as such term is defined in the
Senior Unsecured Note Indenture.
	 
	 	(c)	 	No Credit Party shall incur any Indebtedness pursuant to clause (1) or clause
(16) of Section 4.09(b) of the Senior Unsecured Note Indenture other than Indebtedness
incurred under this Agreement.






	6.19	 	Changes in Depreciation Schedules
	 
	 	 	No Credit Party shall change or amend the schedules or methodology used to calculate
depreciation on its assets (except as required by applicable law or by a change in GAAP).




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	6.20	 	Credit Parties Other than Borrowers
	 
	 	 	None of H&E Finance or GNE Investments shall engage in any trade or business, or own any
assets (other than Stock of its Subsidiaries) or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations); provided that (i) H&E Finance may consummate the
transactions contemplated by the Senior Note Indenture and the Senior Subordinated Note
Indenture and the Senior Unsecured Note Indenture and the Supplemental Indentures and (ii)
GNE Investments may provide the guaranty of (x) the Senior Notes as provided for in the
Senior Note Indenture (y) the Senior Subordinated Notes as provided for in the Senior
Subordinated Note Indenture and (z) the Senior Unsecured Notes as provided for in the Senior
Unsecured Note Indenture and (iv) H&E Finance and GNE Investments may consummate the
Related Transactions.
	 
	6.21	 	Lock Box Remittances; Vendor Payments
	 
	 	 	No Credit Party shall make, direct or permit any remittance to be made into any lock box
maintained for the benefit of Agent that is subject to any Lien or claim or other interest
of any Person, other than Liens in favor of Agent, on behalf of itself and Lenders, and
Liens in favor of the applicable depository bank permitted by the applicable lock box or
pledged account agreement with such depository bank; provided, that the Credit Parties shall
not be in default under this Section 6.21 if the amount on deposit in the deposit accounts
associated with all such lock boxes and subject to any Lien or claim of any Person (other
than the Agent, on behalf of itself and Lenders and the depositary bank) does not exceed
$200,000 in the aggregate at any time. No Credit Party shall send an invoice or otherwise
bill any purchaser with respect to the sale by such Credit Party of any Floor Plan Equipment
Inventory or any Off Balance Sheet Equipment Inventory (that has been purchased by a Credit
Party) prior to the payment by such Credit Party of the purchase price of such Floor Plan
Equipment Inventory or such Off Balance Sheet Equipment Inventory into such a lock box.
Each Credit Party shall comply with all requirements of each Vendor Inter-Creditor Agreement
and shall give all notices and take all other actions under each Vendor Inter-Creditor
Agreement to insure compliance with the requirements of this Section 6.21.
	 
	7	 	TERM
	 
	7.1	 	Termination
	 
	 	 	The financing arrangements contemplated hereby shall be in effect until the Commitment
Termination Date, and the Loans and all other Obligations shall be automatically due and
payable in full on such date.
	 
	7.2	 	Survival of Obligations Upon Termination of Financing Arrangements
	 
	 	 	Except as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement under this
Agreement shall in any way affect or impair the obligations, duties and liabilities of
Credit Parties or the rights of Agent and Lenders relating to any unpaid portion of the
Loans or any other




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	 	 	Obligations, due or not due, liquidated, contingent or unliquidated, or any transaction or
event occurring prior to such termination, or any transaction or event, the performance of
which is required after the Commitment Termination Date. Except as otherwise expressly
provided herein or in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon any Credit Party, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or expire, but
rather shall survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date, whereupon it shall terminate; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16, and the
indemnities contained in the Loan Documents shall survive the Termination Date and provided
further that the indemnities contained in the Loan Documents in favor of a Lender shall
survive the assignment by such Lender of the Commitments and Loans of such Lender.






	7.3	 	Default Purchase Option
	 
	 	 	Agent agrees to promptly provide notice to the trustee under the Senior Note Indenture when
there has occurred the maturity (including as a result of acceleration or the commencement
of an Event of Default under Section 8.1(h) or 8.1(i)) of the Obligations and the
termination of the Revolving Loan Commitment. Such notice (the “Default Notice”) shall
include the name and address of each Lender, and Agent agrees to notify Trustee of the name
and address of any new Lender that acquires a Loan during the period beginning on the date
of such Default Notice and ending on the earlier of the date twenty (20) Business Days
following the delivery of the Default Notice or the Authorized Representative Properly
Elects under this Section 7.3. If an Authorized Representative Properly Elects to purchase
all “Priority Lien Indebtedness” (as such term is defined in the Senior Note Indenture as
originally in effect) arising under or secured by the Loan Documents (including, without
limitation, Indebtedness arising under Hedging Agreements secured thereby), each Lender
agrees to sell all, but not less than all, of the principal of and interest on and all
prepayment or acceleration penalties and premiums in respect of the Loans outstanding at the
time of purchase and all other Obligations (except Unasserted Contingent Obligations (as
defined in the Senior Note Indenture as originally in effect)) then outstanding, together
with all rights of such Lender with respect to Liens securing such Obligations and all
Guarantees and other supporting obligations relating to such Obligations (the “Subject
Property”), to Eligible Purchasers (as such term is defined in the Senior Note Indenture as
originally in effect) identified by the Authorized Representative upon the following terms
and conditions: (a) for a purchase price equal to 100% of the principal amount and accrued
interest outstanding on the Obligations included in the Subject Property on the date of
purchase plus all other Obligations included in the Subject Property (except any prepayment
or acceleration penalty or premium (the term “prepayment penalty or acceleration premium”
being deemed not to include default interest or LIBOR Rate breakage costs)) then unpaid, (b)
with such purchase price payable in cash on the date of purchase (which date of purchase
shall occur before the latter of (i) twenty (20) Business Days following the date of receipt
by such trustee of the Default Notice and (ii) five (5) Business Days after the Authorized
Representative shall have Properly Elected to purchase under this Section 7.3), against
transfer to one or more “Eligible Purchasers” or its




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	 	 	nominee or transferee identified by the Authorized Representative (such transfer to be
without recourse and without any representation or warranty whatsoever, whether as to the
enforceability of any Obligations included in the Subject Property or the validity,
enforceability, perfection or priority or sufficiency of any Lien securing, or Guaranty or
other supporting obligation for, any Obligations included in the Subject Property or as to
any other matter whatsoever, except only the representation and warranty that the transferee
is transferring free and clear of all Liens and encumbrances (other than those that will be
satisfied and discharged concurrently with the closing of such purchase), and has good right
to convey, whatever claims and interest it may have in respect of the Subject Property
pursuant to the Loan Documents), (c) with such purchase accompanied by a deposit by the
Authorized Representative on behalf of such “Eligible Purchasers” of cash collateral under
control of the Agent (pursuant to agreements reasonably acceptable to the Agent and with a
depositary reasonably acceptable to the Agent) in an amount equal to 105% of the undrawn
amount of each Letter of Credit then outstanding, as security for the additional obligation
of the purchaser to purchase, at par plus accrued interest, the reimbursement obligation in
respect of such Letters of Credit as and when such Letters of Credit are funded and to pay
all Obligations included in the Subject Property then outstanding relating to such Letter of
Credit and (d) upon documents reasonably acceptable to Agent, such Lender and the Authorized
Representative and consistent with the foregoing clauses (a) through (c). The option to
purchase under this Section 7.3 is exercisable only once. An “Authorized Representative”
shall mean the Trustee or an Eligible Purchaser (as such term is defined in the Senior Note
Indenture as originally in effect) who the Trustee, in a writing delivered to the Agent and
each Lender, indicates is authorized to exercise rights under this Section 7.3. The term
“Properly Elects” means the delivery within twenty (20) Business Days following receipt by
the Trustee of notice of acceleration of the Obligations and termination of the Commitments
to the Agent and each Lender by an Authorized Representative of an irrevocable written
notice to purchase all “Priority Lien Indebtedness” (as such term is defined in the Senior
Note Indenture as originally in effect) arising under or secured by the Loan Documents
(including, without limitation, Indebtedness arising under Hedging Agreements) pursuant to
the terms of this Section 7.3.






	8	 	EVENTS OF DEFAULT: RIGHTS AND REMEDIES
	 
	8.1	 	Events of Default
	 
	 	 	The occurrence of any one or more of the following events (regardless of the reason
therefor) shall constitute an “Event of Default” hereunder:






	 	(a)	 	Any Borrower (i) fails to make any payment of principal of, or interest on,
or Fees owing in respect of, the Loans or any of the other Obligations when due and
payable, or fails to provide cash collateral as and when required, or (ii) fails to
pay or reimburse Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within ten (10) days following Agent’s demand for such
reimbursement or payment of expenses.




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	 	(b)	 	Any Credit Party fails or neglects to perform, keep or observe any of the
provisions of Sections 1.4, 1.8, 5.4(a) or 6 applicable to it, or any of the
provisions set forth in Annexes C, E or G, respectively applicable to it.
	 
	 	(c)	 	Any Credit Party fails or neglects to perform, keep or observe any of the
provisions of Section 4 or any provisions set forth in Annex F, applicable to it and
the same shall remain unremedied for ten (10) days or more.
	 
	 	(d)	 	Any Credit Party fails or neglects to perform, keep or observe any other
provision of this Agreement or of any of the other Loan Documents applicable to it,
(other than any provision embodied in or covered by any other clause of this Section
8.1) and the same shall remain unremedied for thirty (30) days or more.
	 
	 	(e)	 	A default or breach occurs under any other agreement, document or instrument
to which any Credit Party is a party that is not cured within any applicable grace
period therefor, and such default or breach (i) involves the failure to make any
payment when due in respect of any Indebtedness or Guaranteed Indebtedness (other than
the Obligations) of any Credit Party, including Indenture Debt, in excess of
$2,000,000 in the aggregate (including (x) undrawn committed or available amounts and
(y) amounts owing to all creditors under any combined or syndicated credit
arrangements), or in respect of any true lease under which any Credit Party is lessee
under which the aggregate cost of the leased property exceeds $2,000,000, or (ii)
causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness or a
trustee to cause, Indebtedness or Guaranteed Indebtedness or a portion thereof,
including Indenture Debt, in excess of $2,000,000 in the aggregate, or rent in excess
of $2,000,000 in the aggregate, to become due prior to its stated maturity or prior to
its regularly scheduled dates of payment, or cash collateralized in respect thereof to
be demanded, in each case, regardless of whether such right is exercised, by such
holder or trustee.
	 
	 	(f)	 	Any information contained in any Borrowing Base Certificate is untrue or
incorrect in any respect (other than inadvertent, immaterial errors not exceeding
$5,000,000 in the aggregate in any Borrowing Base Certificate), or any representation
or warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate) made or
delivered to Agent or any Lender by any Credit Party is untrue or incorrect in any
material respect as of the date when made or deemed made.
	 
	 	(g)	 	Assets with a value in excess of $1,000,000 of any Credit Party are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within the
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of any Credit Party and such condition continues for sixty (60) days or
more.
	 
	 	(h)	 	A case or proceeding is commenced against any Credit Party seeking a decree
or order in respect of such Credit Party (i) under the Bankruptcy Code, or any other
applicable




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	 	 	 	federal, state or foreign bankruptcy or other similar law, (ii) appointing a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Credit Party or for any substantial part of any such Credit
Party’s assets, or (iii) ordering the winding-up or liquidation of the affairs of
such Credit Party, and such case or proceeding shall remain undismissed or unstayed
for 60 days or more or a decree or order granting the relief sought in such case or
proceeding shall be entered by a court of competent jurisdiction.






	 	(i)	 	Any Credit Party (i) files a petition seeking relief under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other similar
law, (ii) consents to or fails to contest in a timely and appropriate manner the
institution of proceedings thereunder or the filing of any such petition or the
appointment of or taking possession by a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party’s assets, (iii) makes an assignment for the
benefit of creditors, (iv) takes any action in furtherance of any of the foregoing or
(v) admits in writing its inability to, or is generally unable to, pay its debts as
such debts become due.
	 
	 	(j)	 	A final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate at any time are outstanding against one or more of the
Credit Parties and the same are not, within 30 days after the entry thereof,
discharged or execution thereof stayed or bonded pending appeal, or such judgments are
not discharged prior to the expiration of any such stay.
	 
	 	(k)	 	Any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Credit Party shall
challenge the enforceability of any Loan Document or shall assert in writing, or
engage in any action or inaction based on any such assertion, that any provision of
any of the Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any Lien created under any Loan Document
on assets with a value in excess of $1,000,000 in the aggregate ceases to be a valid
and perfected first priority Lien (except as otherwise permitted herein or therein) in
any of the Collateral purported to be covered thereby.
	 
	 	(l)	 	Any Change of Control occurs.






	8.2	 	Remedies






	 	(a)	 	If any Default or Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice, suspend
this facility with respect to additional Advances and/or the incurrence of additional
Letter of Credit Obligations, whereupon any additional Advances and additional Letter
of Credit Obligations shall be made or incurred in Agent’s sole discretion (or in the
sole discretion of the Requisite Lenders, if such suspension occurred at their
direction) so




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	 	 	 	long as such Default or Event of Default is continuing. If any Default or Event of
Default has occurred and is continuing, Agent may (and at the written request of
Requisite Lenders shall), without notice except as otherwise expressly provided
herein, increase the rate of interest applicable to the Loans and the Letter of
Credit Fees to the Default Rate.






	 	(b)	 	If any Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Lenders shall), without notice, (i) terminate this
facility with respect to further Advances or the incurrence of further Letter of
Credit Obligations, (ii) declare all or any portion of the Obligations, including all
or any portion of any Loan to be forthwith due and payable, and require that the
Letter of Credit Obligations be cash collateralized as provided in Annex B, all
without presentment, demand, protest or further notice of any kind, all of which are
expressly waived by each Credit Party, or (iii) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or equity, including all remedies
provided under the Code; provided, that upon the occurrence of an Event of Default
specified in Section 8.1(h) or Section 8.1(i), all of the Obligations, including the
Revolving Loan, shall become immediately due and payable without declaration, notice
or demand by any Person.






	8.3	 	Waivers by Credit Parties
	 
	 	 	Except as otherwise provided for in this Agreement or by applicable law, each Credit Party
waives (including for purposes of Section 12): (a) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents, instruments,
chattel paper and guaranties at any time held by Agent on which any Credit Party may in any
way be liable, and hereby ratifies and confirms whatever Agent may do in this regard, (b)
all rights to notice and a hearing prior to Agent’s taking possession or control of, or to
Agent’s replevy, attachment or levy upon, the Collateral or any bond or security that might
be required by any court prior to allowing Agent to exercise any of its remedies, and (c)
the benefit of all valuation, appraisal, marshalling and exemption laws.
	 
	9	 	ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
	 
	9.1	 	Assignment and Participations






	 	(a)	 	Subject to the terms of this Section 9.1, any Lender may make an assignment
of, or sell participations in, at any time or times, the Loan Documents, Loans, Letter
of Credit Obligations and any Commitment or any portion thereof or interest therein,
including any Lender’s rights, title, interests, remedies, powers or duties
thereunder. Any assignment by a Lender shall (i) require the consent of Agent (which
consent shall not be unreasonably withheld or delayed with respect to a Qualified
Assignee) and, so long as no Default or Event of Default has occurred and is
continuing, Borrower




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	 	 	 	Representative (which shall not be unreasonably withheld or delayed) and the
execution of an assignment agreement (an “Assignment Agreement”) substantially in
the form attached hereto as Exhibit 9.1(a) and otherwise in form and substance
reasonably satisfactory to, and acknowledged by, Agent, provided, that neither the
Agent’s nor Borrower Representative’s consent shall be required if such assignment
is to an existing Lender, to an Affiliate of such assigning Lender or to a special
purpose entity organized to acquire commercial loans and managed by an existing
Lender or an Affiliate or an existing Lender, and, provided, further that Borrower
Representative’s consent shall not be required if such assignment is to a Qualified
Assignee; (ii) be conditioned on such assignee Lender representing to the assigning
Lender and Agent that it is purchasing the applicable Loans to be assigned to it
for its own account, for investment purposes and not with a view to the
distribution thereof; (iii) after giving effect to any such partial assignment, the
assignee Lender shall have Commitments in an amount at least equal to $5,000,000
and the assigning Lender shall have retained Commitments in an amount at least
equal to $5,000,000; (iv) include a payment to Agent by the assignor or assignee of
an assignment fee of $3,500 and (v) not be effective until such assignment is
reflected in the Loan Account. In the case of an assignment by a Lender under this
Section 9.1, the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all other Lenders hereunder. Subject to the
provisos in the last sentence of Section 7.2, the assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or assigned
portion thereof from and after the date of such assignment. Each Credit Party
hereby acknowledges and agrees that any assignment shall give rise to a direct
obligation of such Credit Party to the assignee and that the assignee shall be
considered to be a “Lender”. In all instances, each Lender’s liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender’s Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of a Note, Agent or any such
Lender shall so notify Borrowers and each Borrower shall execute new Notes in
exchange for the Notes being assigned. Notwithstanding the foregoing provisions of
this Section 9.1(a), any Lender may at any time pledge as security for obligations
of such Lender or assign all or any portion of such Lender’s rights under this
Agreement and the other Loan Documents to any Person, including to a Federal
Reserve Bank; provided, that no such pledge or assignment shall release such Lender
from such Lender’s obligations hereunder or under any other Loan Document.






	 	(b)	 	Any participation by a Lender of all or any part of its Commitments and Loans
shall be entered into with the understanding that all amounts payable by Borrowers
hereunder shall be determined as if that Lender had not sold such participation, and
that the holder of any such participation shall not be entitled to require such Lender
to take or omit to take any action hereunder except actions directly affecting (i) any
reduction in the principal amount of, or interest rate or Fees payable with respect
to, any Loan in which such holder participates, (ii) any extension of the final
maturity of the principal amount of any Loan in which such holder participates, and
(iii) any release of all or substantially




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	 	 	 	all of the Collateral (other than in accordance with the terms of this Agreement,
the Collateral Documents or the other Loan Documents). Each participation created
by any Lender shall provide that it shall be terminated by such Lender upon sale of
such Lender’s Obligations pursuant to Section 7.3 (and such Lender shall pay to the
participant all amounts required to be paid under such participation upon
termination). Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.9, each
Borrower acknowledges and agrees that a participation shall give rise to a direct
obligation of such Borrower to the participant and the participant shall be
considered to be a “Lender”; provided, that any such participant shall not be
entitled to receive any greater payment under Section 1.15 or Section 1.16 than the
Lender granting such participation would have been entitled to receive with respect
to the portion of its Commitment and Loans so participated. Except as set forth in
the preceding sentence no Borrower shall have any obligation or duty to any
participant. Neither Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.






	 	(c)	 	Except as expressly provided in this Section 9.1, no Lender shall, as between
the Credit Parties, and that Lender, or Agent and that Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment, transfer or negotiation
of, or granting of participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
	 
	 	(d)	 	Each Credit Party shall assist any Lender permitted to sell assignments or
participations under this Section 9.1 as reasonably required to enable the assigning
or selling Lender to effect any such assignment or participation, including the
execution and delivery of any and all agreements, notes and other documents and
instruments as shall be requested and, in connection with the initial syndication of
the Loans and Commitments and if otherwise requested by Agent, the preparation of
informational materials for, and the participation of management in meetings with,
potential assignees or participants. Each Credit Party shall certify the correctness,
completeness and accuracy of all descriptions of the Credit Parties and their
respective affairs contained in any selling materials provided by it and all other
information provided by it and included in such materials, except that any Projections
delivered by Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 3.4(c).
	 
	 	(e)	 	Any Lender may furnish any information concerning any Credit Party in the
possession of such Lender from time to time to assignees and participants (including
prospective assignees and participants); provided, that such Lender shall obtain from
assignees or participants confidentiality covenants substantially equivalent to those
contained in Section 11.8.
	 
	 	(f)	 	So long as no Event of Default has occurred and is continuing, no Lender
shall assign or sell participations in any portion of its Loans or Commitments to a
potential Lender or




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	 	 	 	participant, if, as of the date of the proposed assignment or sale, the assignee
Lender or participant would be subject to capital adequacy, reserve or similar
requirements under Section 1.16(a), increased costs under Section 1.16(b), an
inability to fund LIBOR Loans under Section 1.16(c), or withholding taxes in
accordance with Section 1.16(d).






	 	(g)	 	Nothing contained in this Section 9 shall require the consent of any
party for GE Capital to assign any of its rights in respect of any Swap Related
Reimbursement Obligation.






	9.2	 	Appointment of Agent
	 
	 	 	GE Capital is hereby appointed to act on behalf of all Lenders as Agent under this Agreement
and the other Loan Documents. The provisions of this Section 9.2 are solely for the benefit
of Agent and Lenders and no Credit Party nor any other Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any obligation toward
or relationship of agency or trust with or for any Credit Party or any other Person. Agent
shall have no duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of Agent shall be mechanical and
administrative in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in respect of any
Lender. Except as expressly set forth in this Agreement and the other Loan Documents, Agent
shall not have any duty to disclose, and shall not be liable for failure to disclose, any
information relating to any Credit Party or any of their respective Subsidiaries or any
Account Debtor that is communicated to or obtained by GE Capital or any of its Affiliates in
any capacity. Neither Agent nor any of its Affiliates nor any of their respective officers,
directors, employees, agents or representatives shall be liable to any Lender for any action
taken or omitted to be taken by it hereunder or under any other Loan Document, or in
connection herewith or therewith, except for damages solely caused by its or their own gross
negligence or willful misconduct as finally determined by a court of competent jurisdiction.
Each Lender which is a party to a Hedging Agreement hereby appoints GE Capital as
collateral agent under the Collateral Documents.
	 
	 	 	If Agent shall request instructions from Requisite Lenders, or all affected Lenders with
respect to any act or action (including failure to act) in connection with this Agreement or
any other Loan Document, then Agent shall be entitled to refrain from such act or taking
such action unless and until Agent shall have received instructions from Requisite Lenders
or all affected Lenders, as the case may be, and Agent shall not incur liability to any
Person by reason of so refraining. Agent shall be fully justified in failing or refusing to
take any action hereunder or under any other Loan Document (a) if such action would, in the
opinion of Agent, be contrary to law or the terms of this Agreement or any other Loan
Document, (b) if such action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its satisfaction against any
and all liability and expense which may be incurred by it by reason of taking or continuing
to take any such action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from




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	 	 	acting hereunder or under any other Loan Document in accordance with the instructions of
Requisite Lenders, or all affected Lenders, as applicable.






	9.3	 	Agent’s Reliance, Etc.
	 
	 	 	Neither Agent nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the other Loan Documents, except for
damages solely caused by its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Without limiting the generality of the
foregoing, Agent: (a) may treat the payee of any Note as the holder thereof until Agent
receives written notice of the assignment or transfer thereof signed by such payee and in
form reasonably satisfactory to Agent; (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any Lender and
shall not be responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of any Credit
Party; (e) shall not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other Loan
Documents or any other instrument or document furnished pursuant hereto or thereto; and (f)
shall incur no liability under or in respect of this Agreement or the other Loan Documents
by acting upon any notice, consent, certificate or other instrument or writing (which may be
by telecopy, telegram, cable or telex) believed by it to be genuine and signed or sent by
the proper party or parties.
	 
	9.4	 	GE Capital and Affiliates
	 
	 	 	With respect to its Commitments hereunder, GE Capital shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and may exercise the
same as though it were not Agent; and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include GE Capital in its individual capacity. GE Capital and its
Affiliates may lend money to, invest in, and generally engage in any kind of business with,
any Credit Party, any of its Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were not Agent
and without any duty to account therefor to Lenders. GE Capital and its Affiliates may
accept fees and other consideration from any Credit Party for services in connection with
this Agreement or otherwise without having to account for the same to Lenders.
	 
	9.5	 	Lender Credit Decision
	 
	 	 	Each Lender acknowledges that it has, independently and without reliance upon Agent or any
other Lender and based on the Financial Statements referred to in Section 3.4(a) and such
other




74









 






	 	 	documents and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon Agent or any
other Lender and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under this
Agreement. Each Lender acknowledges the potential conflict of interest of each other Lender
as a result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.






	9.6	 	Indemnification
	 
	 	 	Lenders agree to indemnify Agent and Arranger (to the extent not reimbursed by Credit
Parties and without limiting the obligations of Credit Parties hereunder), ratably according
to their respective Pro Rata Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted against Agent
or Arranger in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent or Arranger in connection
therewith; provided, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from Agent’s or Arranger’s gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction. Without limiting the
foregoing, each Lender agrees to reimburse Agent or Arranger promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by
Agent or Arranger in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under, this
Agreement and each other Loan Document, to the extent that Agent is not reimbursed for such
expenses by the Credit Parties.
	 
	9.7	 	Successor Agent
	 
	 	 	Agent may resign at any time by giving not less than thirty (30) days’ prior written notice
thereof to Lenders and Borrower Representative. Upon any such resignation, the Requisite
Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such appointment within
30 days after the resigning Agent’s giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender, if a Lender
is willing to accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States of America or
of any State thereof and has a combined capital and surplus of at least $300,000,000. If no
successor Agent has been appointed pursuant to the foregoing, within thirty (30) days after
the date such notice of resignation was given by the resigning Agent, such resignation shall
become effective and the Requisite Lenders




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	 	 	shall thereafter perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor Agent
appointed by Requisite Lenders hereunder shall be subject to the approval of Borrower
Representative, such approval not to be unreasonably withheld or delayed; provided, that
such approval shall not be required if a Default or an Event of Default has occurred and is
continuing. Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of the resigning
Agent’s resignation, the resigning Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents, except that any indemnity rights or other
rights in favor of such resigning Agent shall continue. After any resigning Agent’s
resignation hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under this Agreement
and the other Loan Documents. Agent may be removed at the written direction of the holders
(other than Agent) of two-thirds or more of the Commitments (excluding Agent’s Commitment);
provided, that in so doing, such Lenders shall be deemed to have waived and released any and
all claims they may have against Agent.






	9.8	 	Co Agents
	 
	 	 	None of the Lenders identified on the facing page or signature pages of this Agreement or
any related document as “documentation agent”, “syndication agent” or “arranger” shall have
any right, power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders so identified as “documentation agent”, “syndication agent” or “arranger” shall have
or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges
that it has not relied, and will not rely, on any of the Lenders so identified in deciding
to enter into this Agreement or in taking or not taking action hereunder.
	 
	9.9	 	Setoff and Sharing of Payments
	 
	 	 	In addition to any rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence and during the continuance of any Event
of Default and subject to Section 9.10(f), each Lender is hereby authorized at any time or
from time to time, without notice to any Credit Party or to any other Person, any such
notice being hereby expressly waived, to offset and to appropriate and to apply any and all
balances held by it at any of its offices for the account of any Credit Party (regardless of
whether such balances are then due to such Credit Party) and any other properties or assets
at any time held or owing by that Lender or that holder to or for the credit or for the
account of any Credit Party against and on account of any of the Obligations that are not
paid when due. Any Lender exercising a right of setoff or otherwise receiving any payment
on account of the Obligations in excess of its Pro Rata Share thereof (other than any right
of setoff exercised with respect to, or payments under, Section 1.13, 1.15 or 1.16) shall
purchase for cash (and the other Lenders or holders shall sell) such




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	 	 	participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as
would be necessary to cause such Lender to share the amount so offset or otherwise received
with each other Lender or holder in accordance with their respective Pro Rata Shares. Each
Lender’s obligation under this Section 9.9 shall be in addition to and not in limitation of
its obligations to purchase a participation in an amount equal to its Pro Rata Share of the
Swing Line Loans under Section 1.1. Each Credit Party agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell participations in
such amounts so offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of offset, bankers’ lien, counterclaim or similar rights with respect to
such participation as fully as if such Lender or holder were a direct holder of the Loans
and the other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the purchase of
participations by that Lender shall be rescinded and the purchase price restored without
interest.






	9.10	 	Advances; Payments; Non Funding Lenders; Information; Actions in Concert






	 	(a)	 	Advances; Payments






	 	(i)	 	Revolving Lenders shall refund or participate in the Swing Line
Loan in accordance with clauses (iii) and (iv) of Section 1.1(b). If the Swing
Line Lender declines to make a Swing Line Loan or if Swing Line Availability is
zero, Agent shall notify Revolving Lenders, promptly after receipt of a Notice
of Revolving Credit Advance and in any event prior to noon (New York time) on
the date such Notice of Revolving Credit Advance is received, by telecopy,
telephone or other similar form of transmission. Each Revolving Lender shall
make the amount of such Lender’s Pro Rata Share of each Revolving Credit
Advance available to Agent in same day funds by wire transfer to Agent’s
account as set forth in Annex H not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan, and not later than
3:00 p.m. (New York time) on the requested funding date in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent’s sole
discretion, before receipt of such wire transfers), subject to the terms
hereof, Agent shall make the requested Revolving Credit Advance to the Borrower
designated by Borrower Representative in the Notice of Revolving Credit
Advance. All payments by each Revolving Lender shall be made without setoff,
counterclaim or deduction of any kind.
	 
	 	(ii)	 	On the 2nd Business Day of each calendar week or more
frequently at Agent’s election (each, a “Settlement Date”), Agent shall advise
each Lender by telephone or telecopy of the amount of such Lender’s Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and purchased all participations
required to




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	 	 	 	be purchased by it under this Agreement and the other Loan Documents as of
such Settlement Date, Agent shall pay to each Lender such Lender’s Pro Rata
Share of principal, interest and Fees paid by Borrowers since the previous
Settlement Date for the benefit of such Lender on the Loans held by it. To
the extent that any Lender (a “Non-Funding Lender”) has failed to fund all
such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender’s Pro Rata Share of all payments received
from Borrowers. Such payments shall be made by wire transfer to such
Lender’s account (as specified by such Lender in Annex H or the applicable
Assignment Agreement) not later than 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.






	 	(b)	 	Availability of Lender’s Pro Rata Share
	 
	 	 	 	Agent may assume that each Revolving Lender will make its Pro Rata Share of each
Revolving Credit Advance available to Agent on each funding date. If such Pro Rata
Share is not, in fact, paid to Agent by such Revolving Lender when due, Agent will
be entitled to recover such amount on demand from such Revolving Lender without
setoff, counterclaim or deduction of any kind. If any Revolving Lender fails to pay
the amount of its Pro Rata Share forthwith upon Agent’s demand, Agent shall promptly
notify Borrower Representative and the applicable Borrower shall immediately repay
such amount to Agent. Nothing in this Section 9.10(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Agent to advance
funds on behalf of any Revolving Lender or to relieve any Revolving Lender from its
obligation to fulfill its Commitments hereunder or to prejudice any rights that any
Borrower may have against any Revolving Lender as a result of any default by such
Revolving Lender hereunder. To the extent that Agent advances funds to any Borrower
on behalf of any Revolving Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for its
account all interest accrued on such Advance until reimbursed by the applicable
Revolving Lender.
	 
	 	(c)	 	Return of Payments






	 	(i)	 	If Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Agent from Borrowers and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand
without setoff, counterclaim or deduction of any kind.
	 
	 	(ii)	 	If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to any Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not




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	 	 	 	be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that
Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to any Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.






	 	(d)	 	Non-Funding Lenders






	 	 	The failure of any Non-Funding Lender to make any Revolving Credit Advance or any payment
required by it hereunder or to purchase any participation in any Swing Line Loan to be made
or purchased by it on the date specified therefor shall not relieve any other Lender (each
such other Revolving Lender, an “Other Lender”) of its obligations to make such Advance or
purchase such participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance, purchase a
participation or make any other payment required hereunder. Notwithstanding anything set
forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent
rights under or with respect to any Loan Document or constitute a “Lender” or a “Revolving
Lender” (or be included in the calculation of “Requisite Lenders” hereunder) for any voting
or consent rights under or with respect to any Loan Document. At Borrower Representative’s
request, Agent or a Person reasonably acceptable to Agent shall have the right with Agent’s
consent and in Agent’s sole discretion (but shall have no obligation) to purchase from any
Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at Agent’s request,
sell and assign to Agent or such Person, all of the Commitments of that Non-Funding Lender
for an amount equal to the principal balance of all Loans held by such Non-Funding Lender
and all accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment Agreement and in
accordance with the recording requirements for transfers in Section 9.1.






	 	(e)	 	Dissemination of Information






	 	 	Agent shall use reasonable efforts to provide Lenders with (i) any notice of Default or
Event of Default received by Agent from, or delivered by Agent to, any Borrower, with notice
of any Event of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall not be
liable to any Lender for any failure to do so, except to the extent that such failure is
attributable solely to Agent’s gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction and (ii) any Equipment Inventory Appraisals, P&E
Appraisals and Collateral audits received by Agent. Lenders acknowledge that Borrowers are
required to provide Financial Statements and Collateral Reports to Lenders in accordance
with Annexes E and F hereto and agree that Agent shall have no duty to provide the same to
Lenders.




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	 	(f)	 	Actions in Concert






	 	 	Anything in this Agreement to the contrary notwithstanding, each Lender hereby
agrees with each other Lender that no Lender shall take any action to protect or
enforce its rights arising out of this Agreement or the Notes (including exercising
any rights of setoff) without first obtaining the prior written consent of Agent and
Requisite Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Notes shall be taken in concert and at
the direction or with the consent of Agent or Requisite Lenders.
	 
	10	 	SUCCESSORS AND ASSIGNS
	 
	10.1	 	Successors and Assigns
	 
	 	 	This Agreement and the other Loan Documents shall be binding on and shall inure to the
benefit of each Credit Party, Agent, Lenders and their respective successors and assigns
(including, in the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may assign,
transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express written consent
of Agent and Requisite Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by any Credit Party without the prior express written consent of Agent and
Requisite Lenders shall be void. The terms and provisions of this Agreement are for the
purpose of defining the relative rights and obligations of each Credit Party, Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of the other
Loan Documents.
	 
	11	 	MISCELLANEOUS
	 
	11.1	 	Complete Agreement; Modification of Agreement
	 
	 	 	The Loan Documents constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set forth in
Section 11.2. Any letter of interest, commitment letter or fee letter (other than the GE
Capital Fee Letter) or confidentiality agreement, if any, between any Credit Party and Agent
or any Lender or any of their respective Affiliates, predating this Agreement and relating
to a financing of substantially similar form, purpose or effect shall be superseded by this
Agreement.
	 
	11.2	 	Amendments and Waivers






	 	(a)	 	Except for actions expressly permitted to be taken by Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any other
Loan Document, or any consent to any departure by any Credit Party therefrom, shall in
any event be effective unless the same shall be in writing and signed by Agent and
Borrowers, and by Requisite Lenders or all affected Lenders, as applicable. Except as




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	 	 	 	set forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.






	 	(b)	 	No amendment, modification, termination or waiver of or consent with respect
to any provision of this Agreement that increases the percentage advance rates set
forth in the definitions of the Great Northern Borrowing Base, the H&E Borrowing Base
or the H&E California Borrowing Base, in each case, above the Original Advance Rates,
shall be effective unless the same shall be in writing and signed by Agent, Lenders
and Borrowers. No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the conditions
precedent set forth in Section 2.2 to the making of any Loan or the incurrence of any
Letter of Credit Obligations, shall be effective unless the same shall be in writing
and signed by Agent, Requisite Lenders and Borrowers.
	 
	 	(c)	 	No amendment, modification, termination or waiver shall, unless in writing
and signed by Agent and each Lender directly affected thereby: (i) increase the
principal amount of any Lender’s Commitment (which action shall be deemed to directly
affect all Lenders); (ii) reduce the principal of, rate of interest on or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected Lender; (iii)
extend any scheduled payment date (other than payment dates of mandatory prepayments
under Sections 1.3(b)(ii) and (iii)) or final maturity date of the principal amount of
any Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees payable to any affected Lender; (v) release any Guaranty
or, (vi) except as otherwise permitted herein or in the other Loan Documents, permit
any Credit Party to sell or otherwise dispose of any Collateral with a value exceeding
$5,000,000 in the aggregate (which action shall be deemed to directly affect all
Lenders); (vii) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of them to
take any action hereunder; (viii) amend the definition of Prohibited Swing Line
Advance; (ix) change Section 1.1(b)(i) in any manner that increases the obligations of
the Lenders with respect to any Swing Line Advance, (x) eliminate or make less
restrictive any condition to lending under Section 2.2; or (xi) amend or waive this
Section 11.2 or the definition of the term “Requisite Lenders”. Furthermore, no
amendment, modification, termination or waiver affecting the rights or duties of Agent
or L/C Issuer under this Agreement or any other Loan Document shall be effective
unless in writing and signed by Agent or L/C Issuer, as the case may be, in addition
to Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for the
specific purpose for which it was given. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer, or of GE
Capital in respect of any Swap Related Reimbursement Obligations, under this Agreement
or any other Loan Document, including any release of any Guaranty or Collateral
requiring a writing signed by all Lenders, shall be




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	 	 	 	effective unless in writing and signed by Agent or L/C Issuer or GE Capital, as the
case may be, in addition to Lenders required hereinabove to take such action. No
amendment, modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification,
termination or waiver of any provision of any Note shall be effective without the
written concurrence of the holder of that Note. No notice to or demand on any
Credit Party in any case shall entitle such Credit Party or any other Credit Party
to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance with
this Section 11.2 shall be binding upon each Lender.






	 	(d)	 	If, in connection with any proposed amendment, modification, waiver or
termination (a “Proposed Change”):






	 	(i)	 	requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) being referred to as a “Non-Consenting Lender”),






	 	 	 	then, so long as Agent is not a Non-Consenting Lender, at Borrower Representative’s
request, Agent, or a Person reasonably acceptable to Agent, shall have the right
with Agent’s consent and in Agent’s sole discretion (but shall have no obligation)
to purchase from such Non Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent’s request, sell and assign to Agent or such Person (who
shall assume such Commitments), all of the Commitments of such Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to an
executed Assignment Agreement.
	 
	 	(e)	 	Upon payment in full in cash and performance of all of the Obligations (other
than Unasserted Contingent Obligations), termination of the Commitments and all
Letters of Credit (or the cash collateralization or backing with standby letters of
credit of all Letters of Credit in accordance with Annex B) and a release of all
claims against Agent and Lenders, and so long as no suits, actions, proceedings or
claims are pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Agent shall deliver to the
Credit Parties payoff letters, termination statements, mortgage releases and other
documents necessary or appropriate to evidence the termination of the Liens securing
payment of the Obligations.






	11.3	 	Fees and Expenses
	 
	 	 	Borrowers shall reimburse (i) Agent and Arranger for all fees, costs and expenses (including
the reasonable fees and expenses of all of its counsel, advisors, consultants and auditors)
and (ii) Agent and Arranger (and, with respect to clauses (c) and (d) below, all Lenders)
for all fees, costs




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	 	 	and expenses, including the reasonable fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and appraisers), incurred in connection
with the negotiation and preparation of the Loan Documents as well as those incurred in
connection with:






	 	(a)	 	the forwarding to any Borrower or any other Person on behalf of any Borrower
by Agent of the proceeds of any Loan;
	 
	 	(b)	 	any amendment, modification or waiver of, consent with respect to, or
termination of, any of the Loan Documents, Original Related Transactions Documents or
Related Transactions Documents or in connection with the syndication and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;
	 
	 	(c)	 	any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Agent, any Lender, any Borrower or any other Person and whether as a
party, witness or otherwise) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in connection herewith or
therewith, including any litigation, contest, dispute, suit, case, proceeding or
action, and any appeal or review thereof, in connection with a case commenced by or
against any or all of the Borrowers or any other Person that may be obligated to Agent
by virtue of the Loan Documents; including any such litigation, contest, dispute,
suit, proceeding or action arising in connection with any work out or restructuring of
the Loans during the pendency of one or more Events of Default; provided, that in the
case of reimbursement of counsel for Lenders other than Agent, such reimbursement
shall be limited to one counsel for all such Lenders; provided further, that no Person
shall be entitled to reimbursement under this clause (c) in respect of any litigation,
contest, dispute, suit, proceeding or action to the extent any of the foregoing
results from such Person’s gross negligence or willful misconduct;
	 
	 	(d)	 	any attempt to enforce any remedies of Agent or any Lender against any or all
of the Credit Parties or any other Person that may be obligated to Agent or any Lender
by virtue of any of the Loan Documents, including any such attempt to enforce any such
remedies in the course of any work out or restructuring of the Loans during the
pendency of one or more Events of Default; provided, that in the case of reimbursement
of counsel for Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders;
	 
	 	(e)	 	any workout or restructuring of the Loans during the pendency of one or more
Events of Default; and
	 
	 	(f)	 	efforts to (i) monitor the Loans or any of the other Obligations, (ii)
evaluate, observe or assess any Credit Party or its affairs, and (iii) verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of
any of the Collateral in accordance with the terms of the Loan Documents;




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	 	 	 	including, as to each of clauses (a) through (f) above, all reasonable attorneys’
and other professional and service providers’ fees arising from such services and
other advice, assistance or other representation, including those in connection with
any appellate proceedings, and all expenses, costs, charges and other fees incurred
by such counsel and others in connection with or relating to any of the events or
actions described in this Section 11.3, all of which shall be payable, on demand, by
Borrowers to Agent. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management and
other consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges; secretarial
overtime charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal or other advisory services.






	11.4	 	No Waiver
	 
	 	 	Agent’s or any Lender’s failure, at any time or times, to require strict performance by any
Credit Party of any provision of this Agreement or any other Loan Document shall not waive,
affect or diminish any right of Agent or such Lender thereafter to demand strict compliance
and performance herewith or therewith. Any suspension or waiver of an Event of Default
shall not suspend, waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the provisions
of Section 11.2, none of the undertakings, agreements, warranties, covenants and
representations of any Credit Party contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by any Credit Party shall be deemed to have
been suspended or waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of Agent and the
applicable required Lenders and directed to Borrower Representative specifying such
suspension or waiver.
	 
	11.5	 	Remedies
	 
	 	 	Agent’s and Lenders’ rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Agent or any Lender may have under any
other agreement, including the other Loan Documents, by operation of law or otherwise.
Recourse to the Collateral shall not be required.
	 
	11.6	 	Severability
	 
	 	 	Wherever possible, each provision of this Agreement and the other Loan Documents shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement or any other Loan Document shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement or such other Loan Document.




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	11.7	 	Conflict of Terms
	 
	 	 	Except as otherwise provided in this Agreement or any of the other Loan Documents by
specific reference to the applicable provisions of this Agreement, if any provision
contained in this Agreement conflicts with any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
	 
	11.8	 	Confidentiality
	 
	 	 	Agent and each Lender agree to use commercially reasonable efforts (equivalent to the
efforts Agent or such Lender applies to maintain the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided to them by
any Credit Party and designated as confidential for a period of two (2) years following
receipt thereof, except that Agent and each Lender may disclose such information (a) to
Persons employed or engaged by Agent or such Lender; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with the covenant
contained in this Section 11.8 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or engaged by them
as described in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any court
decree, subpoena or legal or administrative order or process; (d) as, in the opinion of
Agent’s or such Lender’s counsel, is required by law; (e) in connection with the exercise of
any right or remedy under the Loan Documents or in connection with any Litigation to which
Agent or such Lender is a party; or (f) that ceases to be confidential through no fault of
Agent or any Lender.
	 
	11.9	 	GOVERNING LAW
	 
	 	 	EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE
OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY, AGENT AND LENDERS
HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
CREDIT PARTY, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW
YORK AND, PROVIDED, FURTHER NOTHING IN THIS AGREEMENT SHALL




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	 	 	BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT
PARTY, AGENT AND LENDERS EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY, AGENT AND LENDERS HEREBY
WAIVE ANY OBJECTION WHICH ANY CREDIT PARTY, AGENT OR ANY LENDER MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT
THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF EACH CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.






	11.10	 	Notices
	 
	 	 	Except as otherwise provided herein, whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be given to or
served upon any of the parties by any other parties, or whenever any of the parties desires
to give or serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or delivered (a)
upon actual receipt in the case of notice sent by United States Mail, registered or
certified mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission (with such
telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10), (c) one (1) Business Day
after deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand-delivered by messenger, all of which shall be addressed to the party to
be notified and sent to the address or facsimile number indicated in Annex I or to such
other address (or facsimile number) as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any Person (other
than Borrowers or Agent) designated in Annex I to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.




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	11.11	 	Section Titles
	 
	 	 	The Section titles and Table of Contents contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto.
	 
	11.12	 	Counterparts
	 
	 	 	This Agreement may be executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
	 
	11.13	 	WAIVER OF JURY TRIAL
	 
	 	 	BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY
AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH
APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
	 
	11.14	 	Press Releases and Related Matters
	 
	 	 	Each Credit Party agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure with respect to the transactions contemplated by
this Agreement using the name of GE Capital, any of the Lenders parties hereto or any of
their affiliates or referring to this Agreement, the other Loan Documents, the Original
Related Transactions Documents or the Related Transactions Documents without at least two
(2) Business Days’ prior notice to such party and without the prior written consent of such
party unless (and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult with such
party before issuing such press release or other public disclosure. Each Credit Party
consents to the publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement. Agent
reserves the right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.




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	11.15	 	Reinstatement
	 
	 	 	This Agreement shall remain in full force and effect and continue to be effective should any
petition be filed by or against any Credit Party for liquidation or reorganization, should
any Credit Party become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any significant part of
any Credit Party’s assets, and shall continue to be effective or to be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded, reduced,
restored or returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
	 
	11.16	 	Advice of Counsel
	 
	 	 	Each of the parties represents to each other party hereto that it has discussed this
Agreement and, specifically, the provisions of Sections 11.9 and 11.13, with its counsel.
	 
	11.17	 	No Strict Construction
	 
	 	 	The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
	 
	12	 	CROSS-GUARANTY
	 
	12.1	 	Cross-Guaranty
	 
	 	 	Each Borrower hereby agrees that such Borrower is jointly and severally liable for, and
hereby absolutely and unconditionally guarantees to Agent and Lenders and their respective
successors and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter owing to
Agent and Lenders by each other Borrower. Each Borrower agrees that its guaranty obligation
hereunder is a continuing guaranty of payment and performance and not of collection, that
its obligations under this Section 12 shall not be discharged until payment and performance,
in full, of the Obligations has occurred, and that its obligations under this Section 12
shall be absolute and unconditional, irrespective of, and unaffected by:






	 	(a)	 	the genuineness, validity, regularity, enforceability or any future amendment
of, or change in, this Agreement, any other Loan Document or any other agreement,
document or instrument to which any Borrower is or may become a party;




88









 






	 	(b)	 	the absence of any action to enforce this Agreement (including this Section
12) or any other Loan Document or the waiver or consent by Agent and Lenders with
respect to any of the provisions thereof;
	 
	 	(c)	 	the existence, value or condition of, or failure to perfect its Lien against,
any security for the Obligations or any action, or the absence of any action, by Agent
and Lenders in respect thereof (including the release of any such security);
	 
	 	(d)	 	the insolvency of any Credit Party; or
	 
	 	(e)	 	any other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.






	 	 	Each Borrower shall be regarded, and shall be in the same position, as principal debtor with
respect to the Obligations guaranteed hereunder.
	 
	12.2	 	Waivers by Borrowers
	 
	 	 	Each Borrower expressly waives all rights it may have now or in the future under any
statute, or at common law, or at law or in equity, or otherwise, to compel Agent or Lenders
to marshal assets or to proceed in respect of the Obligations guaranteed hereunder against
any other Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to proceeding
against, such Borrower. It is agreed among each Borrower, Agent and Lenders that the
foregoing waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan Documents and that, but for the provisions of this Section 12 and such
waivers, Agent and Lenders would decline to enter into this Agreement.
	 
	12.3	 	Benefit of Guaranty
	 
	 	 	Each Borrower agrees that the provisions of this Section 12 are for the benefit of Agent and
Lenders and their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
	 
	12.4	 	Subordination of Subrogation, Etc.
	 
	 	 	Notwithstanding anything to the contrary in this Agreement or in any other Loan Document,
and except as set forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution, indemnification or set off and any
and all defenses available to a surety, guarantor or accommodation co obligor until the
Obligations are indefeasibly paid in full in cash. Each Borrower acknowledges and agrees
that this subordination and waiver is intended to benefit Agent and Lenders and shall not
limit or otherwise affect such Borrower’s liability hereunder or the enforceability of this
Section 12, and that Agent, Lenders




89









 






	 	 	and their respective successors and assigns are intended third party beneficiaries of the
waivers and agreements set forth in this Section 12.4.






	12.5	 	Election of Remedies
	 
	 	 	If Agent or any Lender may, under applicable law, proceed to realize its benefits under any
of the Loan Documents giving Agent or such Lender a Lien upon any Collateral, whether owned
by any Borrower or by any other Person, either by judicial foreclosure or by non judicial
sale or enforcement, Agent or any Lender may, at its sole option, determine which of its
remedies or rights it may pursue without affecting any of its rights and remedies under this
Section 12. If, in the exercise of any of its rights and remedies, Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a deficiency
judgment against any Borrower or any other Person, whether because of any applicable laws
pertaining to “election of remedies” or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even if such
action by Agent or such Lender shall result in a full or partial loss of any rights of
subrogation that each Borrower might otherwise have had but for such action by Agent or such
Lender. Any election of remedies that results in the denial or impairment of the right of
Agent or any Lender to seek a deficiency judgment against any Borrower shall not impair any
other Borrower’s obligation to pay the full amount of the Obligations. In the event Agent
or any Lender shall bid at any foreclosure or trustee’s sale or at any private sale
permitted by law or the Loan Documents, Agent or such Lender may bid all or less than the
amount of the Obligations and the amount of such bid need not be paid by Agent or such
Lender but shall be credited against the Obligations. The amount of the successful bid at
any such sale, whether Agent, Lender or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the difference between
such bid amount and the remaining balance of the Obligations shall be conclusively deemed to
be the amount of the Obligations guaranteed under this Section 12, notwithstanding that any
present or future law or court decision or ruling may have the effect of reducing the amount
of any deficiency claim to which Agent or any Lender might otherwise be entitled but for
such bidding at any such sale.
	 
	12.6	 	Limitation
	 
	 	 	Notwithstanding any provision herein contained to the contrary, each Borrower’s liability
under this Section 12 (which liability is in any event in addition to amounts for which such
Borrower is primarily liable under Section 1) shall be limited to an amount not to exceed as
of any date of determination the greater of:






	 	(a)	 	the net amount of all Loans advanced to any other Borrower under this
Agreement and then re-loaned or otherwise transferred to, or for the benefit of, such
Borrower; and
	 
	 	(b)	 	the amount that could be claimed by Agent and Lenders from such Borrower
under this Section 12 without rendering such claim voidable or avoidable under Section
548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law




90









 






	 	 	 	after taking into account, among other things, such Borrower’s right of
contribution and indemnification from each other Borrower under Section 12.7.






	12.7	 	Contribution with Respect to Guaranty Obligations






	 	(a)	 	To the extent that any Borrower shall make a payment under this Section 12 of
all or any of the Obligations (other than Loans made to that Borrower for which it is
primarily liable) (a “Guarantor Payment”) that, taking into account all other
Guarantor Payments then previously or concurrently made by any other Borrower, exceeds
the amount that such Borrower would otherwise have paid if each Borrower had paid the
aggregate Obligations satisfied by such Guarantor Payment in the same proportion that
such Borrower’s “Allocable Amount” (as defined below) (as determined immediately prior
to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor Payment,
then, following indefeasible payment in full in cash of the Obligations and
termination of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.
	 
	 	(b)	 	As of any date of determination, the “Allocable Amount” of any Borrower shall
be equal to the maximum amount of the claim that could then be recovered from such
Borrower under this Section 12 without rendering such claim voidable or avoidable
under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law.
	 
	 	(c)	 	This Section 12.7 is intended only to define the relative rights of Borrowers
and nothing set forth in this Section 12.7 is intended to or shall impair the
obligations of Borrowers, jointly and severally, to pay any amounts as and when the
same shall become due and payable in accordance with the terms of this Agreement,
including Section 12.1. Nothing contained in this Section 12.7 shall limit the
liability of any Borrower to pay the Loans made directly or indirectly to that
Borrower and accrued interest, Fees and expenses with respect thereto for which such
Borrower shall be primarily liable.
	 
	 	(d)	 	The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing.
	 
	 	(e)	 	The rights of the indemnifying Borrowers against other Credit Parties under
this Section 12.7 shall be exercisable upon the full and indefeasible payment in full
in cash of the Obligations and the termination of the Commitments and Letters of
Credit (or the cash collateralization or backing with standby letters of credit of all
Letters of Credit in accordance with Annex B).




91









 












	12.8	 	Liability Cumulative
	 
	 	 	The liability of Borrowers under this Section 12 is in addition to and shall be cumulative
with all liabilities of each Borrower to Agent and Lenders under this Agreement and the
other Loan Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides to the
contrary.




92









 










IN WITNESS WHEREOF, this Credit Agreement has been duly executed as of the
date first written above.




	 	 	 	 	 
	 	 	H&E EQUIPMENT SERVICES, INC.,
as a Borrower
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	H&E EQUIPMENT SERVICES (CALIFORNIA), LLC,
as a Borrower
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	GREAT NORTHERN EQUIPMENT, INC.,
as a Borrower
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






93









 






	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and a Lender
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,
as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION,
as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	LASALLE BUSINESS CREDIT, LLC,
as a Lender
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:






94









 






     The following Persons are signatories to this Credit Agreement in their capacity as Credit
Parties and not as Borrower:



	 	 	 	 	 
	 	 	GNE INVESTMENTS, INC.,
as a Credit Party
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	H&E FINANCE CORP.,
as a Credit Party
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	H&E CALIFORNIA HOLDING, INC.,
as a Credit Party
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:







95










 









ANNEX A (Recitals)




to




CREDIT AGREEMENT




DEFINITIONS




Capitalized terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings, and all references to Sections, Exhibits,
Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or
Annexes of or to the Agreement:




“A Rated Bank” has the meaning assigned to it in Section 6.2.




“Account Debtor” means any Person who may become obligated to a Credit Party under, with
respect to, or on account of, an Account, Rentals, Chattel Paper or General Intangibles
(including a payment intangible).




“Accounts” means all “accounts,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party including (a) all accounts receivable, other receivables, book
debts and other forms of obligations (other than forms of obligations evidenced by Chattel
Paper, or Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party’s rights in, to and
under all purchase orders or receipts for goods or services, (c) all of each Credit Party’s
rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), (d) all rights to payment due to any Credit Party for property sold,
leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to
be issued, for a secondary obligation incurred or to be incurred, for energy provided or to
be provided, for the use or hire of a vessel under a charter or other contract, arising out
of the use of a credit card or charge card, or for services rendered or to be rendered by
such Credit Party or in connection with any other transaction (whether or not yet earned by
performance on the part of such Credit Party), (e) all health care insurance receivables and
(f) all collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.




“Adjusted EBITDA” has the meaning assigned to it in Section 2.1(k).




“Advance” means any Revolving Credit Advance or Swing Line Advance, as the context may
require.




“Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly,
owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, ten
percent (10%) or more of the Stock having ordinary voting power in the election of directors
of such Person, (b) each Person that controls, is controlled by or is under common control
with such Person,



A-1









 






(c) each of such Person’s officers, directors, joint venturers and partners and (d) in the case of
any Credit Party, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of such Credit Party. For the purposes of this definition,
“control” of a Person means the possession, directly or indirectly, of the power to direct
or cause the direction of its management or policies, whether through the ownership of
voting securities, by contract or otherwise; provided, that the term “Affiliate” shall
specifically include Don Wheeler and John Engquist and exclude Agent and each Lender.




“Agent” means GE Capital in its capacity as Administrative Agent for Lenders or its
successor appointed pursuant to Section 9.7.




“Aggregate Borrowing Base” means, as of any date of determination, an amount equal to the
sum of the Great Northern Borrowing Base, the H&E Borrowing Base and the H&E California
Borrowing Base.




“Agreement” has the meaning assigned to it in the recitals to the Agreement.




“Appendices” has the meaning assigned to it in the recitals to the Agreement.




“Applicable L/C Margin” means the per annum fee, from time to time in effect, payable with
respect to outstanding Letter of Credit Obligations as determined by reference to Section
1.5(a).




“Applicable Margins” means collectively the Applicable L/C Margin, the Applicable Unused
Line Fee Margin, the Applicable Revolver Index Margin and the Applicable Revolver LIBOR
Margin all as set forth in Section 1.5(a).




“Applicable Revolver Index Margin” means the per annum interest rate margin from time to
time in effect and payable in addition to the Index Rate applicable to the Revolving Credit
Advances, the Swingline Advances, unreimbursed Letter of Credit Obligations and other
Obligations (excluding LIBOR Loans) as determined by reference to Section 1.5(a).




“Applicable Revolver LIBOR Margin” means the per annum interest rate from time to time in
effect and payable in addition to the LIBOR Rate applicable to LIBOR Loans, as determined by
reference to Section 1.5(a).




“Applicable Unused Line Fee Margin” means the per annum fee, from time to time in effect,
payable in respect of Borrowers’ non-use of committed funds pursuant to Section 1.9(c),
which fee is determined by reference to Section 1.5(a).




“Arranger” means GE Capital Markets, Inc., as sole lead arranger and bookrunner.




“Assignment Agreement” has the meaning assigned to it in Section 9.1(a).




“Audit and Appraisal Liquidity Event” means the determination by the Agent that Excess
Availability on any day is less than $75,000,000. The occurrence of an Audit and Appraisal



A-2









 






Liquidity Event shall be deemed continuing notwithstanding that Excess Availability may
thereafter exceed $75,000,000 unless and until Excess Availability exceeds $75,000,000 for
sixty (60) consecutive days, in which event an Audit and Appraisal Liquidity Event shall no
longer be deemed to be continuing; provided that an Audit and Appraisal Liquidity Event may
not be cured as contemplated by this sentence more than two times in any four Fiscal Quarter
period.




“Authorized Officer” means any of the following officers of each Credit Party: the chief
executive officer, the chief operating officer, the chief financial officer, executive vice
president, the secretary and the treasurer.




“Authorized Representative” has the meaning assigned to it in Section 7.3.




“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. §§
101 et seq.




“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular
“person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will
be deemed to have beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns”
and “Beneficially Owned” have a corresponding meaning.




“Blocked Account Agreement” has the meaning assigned to it in Annex C.




“Blocked Accounts” has the meaning assigned to it in Annex C.




“Borrower” has the meaning assigned to it in the preamble to the Agreement.




“Borrower Representative” means H&E Delaware in its capacity as Borrower Representative
pursuant to the provisions of Section 1.1(c).




“Borrowing Availability” means as of any date of determination (a) as to all Borrowers, the
lesser of (i) the Maximum Amount and (ii) the Aggregate Borrowing Base, in each case,
less the sum of the aggregate Revolving Loan and Swing Line Loan then outstanding,
or (b) as to an individual Borrower, the lesser of (i) the Maximum Amount less the
sum of the Revolving Loan and Swing Line Loan outstanding to all other Borrowers and (ii)
that Borrower’s separate Borrowing Base, less the sum of the Revolving Loan and
Swing Line Loan outstanding to that Borrower.




“Borrowing Base” means, as the context may require, the H&E Borrowing Base, the H&E
California Borrowing Base, the Great Northern Borrowing Base or the Aggregate Borrowing
Base.



A-3









 






“Borrowing Base Certificate” means a certificate to be executed and delivered from time
to time by Borrower Representative on behalf of any Borrower in the form attached to the
Agreement as Exhibit 4.1(b).




“BRS” means collectively Bruckmann, Rosser, Sherrill & Co., L.P., a Delaware limited
partnership, BRS Partners, LP and BRSE LLP.




“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are
required or permitted to be closed in the State of New York and in reference to LIBOR Loans
means any such day that is also a LIBOR Business Day.




“Capital Lease” means, with respect to any Person, any lease of any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such Person.




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




“Cash Collateral Account” has the meaning assigned to it Annex B.




“Cash Equivalents” has the meaning assigned to it in Annex B.




“Cash Management Systems” has the meaning assigned to it in Section 1.8.




“Certificate of Exemption” has the meaning assigned to it in Section 1.15(c).




“Change of Control” means the occurrence of any of (a) any event, transaction or occurrence
as a result of which (i) H&E Delaware shall cease to own and control, directly or
indirectly, all of the economic and voting rights associated with ownership of at least one
hundred percent (100%) of the outstanding capital Stock of H&E Finance, GNE Investments and
H&E California Holding, each on a fully diluted basis, (ii) H&E Delaware together with H&E
California Holding shall cease to own and control, directly or indirectly, all of the
economic and voting rights associated with ownership of at least one hundred percent (100%)
of the outstanding membership interests of H&E California, (iii) GNE Investments shall cease
to own and control all of the economic and voting rights associated with ownership of at
least one hundred percent (100%) of the outstanding capital Stock of Great Northern on a
fully diluted basis, in each case except pursuant to a merger as provided in Section 6.1(b)
or (iv) a “Change of Control” as such term is or any similar defined in the Senior Unsecured
Note Indenture or any agreement governing Subordinated Debt; (b) the direct or indirect
sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of
the properties or assets of any Borrower and its Subsidiaries taken as a whole to any
“person” (as that term is used in Section 13(d) of the Exchange Act) other than a Principal



A-4









 






or a Related Party of a Principal; (c) the adoption of a plan relating to the liquidation or
dissolution of any Borrower; (d) the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which is that any “person” (as
defined above), other than the Principals and their Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the voting Stock of any Borrower,
measured by voting power rather than number of shares; or (e) the first day on which a
majority of the members of the Board of Directors of any Borrower are not Continuing
Directors. Notwithstanding the foregoing, (i) any dividend or other distribution of any
voting Stock of any Borrower by any Principal to the direct or indirect equity holders and
other investors of such Principal (or further dividend or other distribution by such equity
holders and other investors to their respective direct or indirect equity holders and other
investors), in accordance with the terms of the documents (of such Principal or such direct
or indirect equity holders and other investors of such Principal) governing such equity or
other investments or as otherwise agreed by such equity holders and other investors, will
not constitute a Change of Control, and (ii) the existence from time to time of any “group”
(as that term is used in Section 13(d) of the Exchange Act) comprised of any such equity
holders and other investors will not constitute a Change of Control.




“Charges” means all federal, state, county, city, municipal, local, foreign or other
governmental taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the Collateral,
(b) the Obligations, (c) the employees, payroll, income or gross receipts of any Credit
Party, (d) any Credit Party’s ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party’s business.




“Chattel Paper” means any “chattel paper,” as such term is defined in the Code, including
electronic chattel paper, now owned or hereafter acquired by any Credit Party.




“Closing Checklist” means the schedule, including all appendices, exhibits or schedules
thereto, listing certain documents and information to be delivered in connection with the
Agreement, the other Loan Documents and the transactions contemplated thereunder,
substantially in the form attached hereto as Annex D.




“Closing Date” means the date and time that the conditions set forth in Section 2.1 hereof
are satisfied or waived, and this Amendment and Restatement becomes effective.




“Code” means the Uniform Commercial Code as the same may, from time to time, be enacted and
in effect in the State of New York; provided, that to the extent that the Code is used to
define any term herein or in any Loan Document and such term is defined differently in
different Articles of the Code, the definition of such term contained in Article 9 of the
Code shall govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Agent’s or any Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a



A-5









 






jurisdiction other than the State of New York, the term “Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of
the provisions thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.




“Collateral” means the property covered by the Security Agreements and the other Collateral
Documents and any other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that may at any time be or become subject to a security interest or Lien
in favor of Agent, on behalf of itself and Lenders, to secure the Obligations.




“Collateral Agent” means the Trustee for the Senior Notes, in its capacity as “Collateral
Agent.”




“Collateral Documents” means the Security Agreements, the Pledge Agreements, the Guaranties,
the Blocked Account Agreements, the Control Letters, Lock Box agreements, the Patent
Security Agreements, the Trademark Security Agreements, the Copyright Security Agreements
and all similar agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.




“Collateral Reports” means the reports with respect to the Collateral referred to in Annex
F.




“Collection Account” means that certain account of Agent, account number 502-328-54 in the
name of Agent at Deutsche Bank Trust Company Americas, in New York, New York ABA No. 021 001
033, or such other account as may be specified in writing by Agent as the “Collection
Account”.




“Commitment Termination Date” means the earliest of (a) August 4, 2011, (b) the date of
termination of Lenders’ obligations to make Advances and to incur Letter of Credit
Obligations or permit existing Loans to remain outstanding pursuant to Section 8.2(b), and
(c) the date of indefeasible prepayment in full in cash by Borrowers of the Loans and the
cancellation and return (or stand-by guarantee) of all Letters of Credit or the cash
collateralization of all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0) or the termination of all Commitments (or
the cash collateralization or backing with standby letters of credit of all Letters of
Credit in accordance with Annex B), in accordance with the provisions of Section 1.3(a).




“Commitments” means (a) as to any Lender, such Lender’s Revolving Loan Commitment (including
without duplication the Swing Line Lender’s Swing Line Commitment as a subset of its
Revolving Loan Commitment) as set forth on the signature page to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders’ Revolving Loan Commitments (including without duplication the
Swing Line Lender’s Swing Line Commitment as a subset of its Revolving Loan Commitment),
which aggregate commitment shall be Two Hundred Fifty Million Dollars ($250,000,000) on the
Closing Date, as such amount may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.



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“Compliance Certificate” has the meaning assigned to it in Annex E.




“Concentration Account” has the meaning assigned to it in Annex C.




“Continuing Director” means “means, as of any date of determination, any member of the Board
of Directors of any Borrower who: (i) was a member of such Board of Directors on the date of
the indenture, or (ii) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.




“Contracts” means all contracts, undertakings, or agreements (other than rights evidenced by
Chattel Paper, Documents or Instruments) now owned or hereafter entered into or acquired by
any Credit Party in or under which any Credit Party may now or hereafter have any right,
title or interest, including any agreement relating to the terms of payment or the terms of
performance of any Account.




“Contribution Agreement and Plan of Reorganization” means the Contribution Agreement and
Plan of Reorganization, dated as of June 14, 2002, whereby all common and preferred equity
of ICM Equipment Company, L.L.C. and H&E Equipment Services L.L.C. (the predecessor by
merger to H&E Delaware) was contributed to H&E Holdings L.L.C. (the predecessor by merger to
H&E Delaware).




“Control Letter” means a letter agreement between Agent and (i) the issuer of uncertificated
securities with respect to uncertificated securities in the name of any Credit Party, (ii) a
securities intermediary with respect to securities, whether certificated or uncertificated,
securities entitlements and other financial assets held in a securities account in the name
of any Credit Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit Party,
whereby, among other things, the issuer, securities intermediary or futures commission
merchant disclaims any security interest in the applicable financial assets, acknowledges
the Lien of Agent, on behalf of itself and Lenders, on such financial assets, and agrees to
follow the instructions or entitlement orders of Agent without further consent by the
affected Credit Party.




“Copyright License” means any and all rights now owned or hereafter acquired by any Credit
Party under any written agreement granting any right to use any Copyright or Copyright
registration.




“Copyright Security Agreements” means the Copyright Security Agreements made in favor of
Agent, on behalf of itself and Lenders, by each applicable Credit Party.



“Copyrights” means all of the following now owned or hereafter acquired by any Credit Party:
(a) all copyrights and General Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the United States
Copyright Office or in any similar



A-7









 






office or agency of the United States, any state or territory thereof, or any other country
or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof.




“Covenant Liquidity Event” means the determination by the Agent that Excess Availability on
any day is less than $25,000,000. The occurrence of a Covenant Liquidity Event shall be
deemed continuing notwithstanding that Excess Availability may thereafter exceed $25,000,000
unless and until Excess Availability exceeds $25,000,000 for sixty (60) consecutive days, in
which event a Covenant Liquidity Event shall no longer be deemed to be continuing; provided
that a Covenant Liquidity Event may not be cured as contemplated by this sentence more than
two times in any four Fiscal Quarter period.




“Credit Parties” means each Borrower and each Guarantor.




“Default” means any event that, with the passage of time or notice or both, would, unless
cured or waived, become an Event of Default.




“Default Notice” has the meaning assigned to it in Section 7.3.




“Default Rate” has the meaning assigned to it in Section 1.5(d).




“Deposit Accounts” means all “deposit accounts” as such term is defined in the Code, now or
hereafter held in the name of any Credit Party.




“Disbursement Accounts” has the meaning assigned to it on Annex C.




“Disclosure Schedules” means the Schedules prepared by Borrowers and denominated as
Disclosure Schedules 1.4 through 6.7 in the Index to the Agreement.




“Documents” means all “documents,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located.




“Dollars” or “$” means lawful currency of the United States of America.




“Domestic Guarantor” means a Guarantor that is organized under the laws of a state of the
United States of America or the District of Columbia.




“Domestic Subsidiary” means, with respect to any Person, a Subsidiary of such Person that is
organized under the laws of a state of the United States of America or the District of
Columbia.




“Eagle Acquisition” means that certain merger and acquisition contemplated by the Eagle
Acquisition Agreement pursuant to which as of the Eagle Acquisition Closing Date H&E
California Holding became a wholly-owned direct subsidiary of H&E Delaware and H&E
California became a wholly-owned direct and indirect subsidiary of H&E Delaware.



A-8









 






“Eagle Acquisition Agreement” means that certain Acquisition Agreement dated as of January
4, 2006, by and among H&E Delaware (as successor by merger to H&E Equipment Services,
L.L.C.), Eagle Merger Corp., a Delaware corporation, H&E California, H&E California Holding,
SBN Eagle LLC, a Delaware limited liability company, SummitBridge National Investments LLC,
a Delaware limited liability company and the shareholders of Eagle S-Corp.




“Eagle Acquisition Closing Date” means the date on which the Eagle Acquisition was
consummated in accordance with the terms of the Eagle Acquisition Agreement and the Eagle
Acquisition Consent and Waiver.




“Eagle Acquisition Consent and Waiver” means the Consent and Waiver dated as of December 29,
2005, with respect to this Agreement and the Eagle Acquisition.




“EBITDA” means, with respect to any Person for any fiscal period, without duplication an
amount equal to (a) consolidated net income of such Person for such period determined in
accordance with GAAP, minus (b) the sum of (i) income tax credits, (ii) interest
income, (iii) gain from extraordinary items for such period, and (iv) any aggregate net gain
(but not any aggregate net loss) during such period arising from the sale, exchange or other
disposition of capital assets by such Person (including any fixed assets, whether tangible
or intangible, all inventory sold in conjunction with the disposition of fixed assets and
all securities), and (v) any other non-cash gains that have been added in determining
consolidated net income, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes, (ii) Interest
Expense, (iii) loss from extraordinary items for such period, (iv) the amount of non-cash
charges (including depreciation and amortization) for such period, (v) amortized debt
discount for such period, (vi) the amount of any deduction to consolidated net income as the
result of any grant to any members of the management of such Person of any Stock, in each
case to the extent included in the calculation of consolidated net income of such Person for
such period in accordance with GAAP, but without duplication, (vii) amounts not exceeding
$10,000,000 paid on or about the Closing Date in respect of transaction expenses relating to
the Related Transactions, (viii) amounts not exceeding $8,000,000 paid in connection with
the termination of a management services agreement and (ix) amounts not exceeding
$42,000,000 expensed in connection with the senior debt restructuring completed on August 4,
2006 and recorded as loss on early extinguishment of debt. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of a Person:
(1) the income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such Person’s
Subsidiaries; (2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such income has
actually been received by such Person in the form of cash dividends or distributions; (3)
the undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary is not at
the time permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency reserve,
except to the extent that



A-9









 






provision for such reserve was made out of income accrued during such period; (5) any
write-up of any asset; (6) any net gain from the collection of the proceeds of life
insurance policies; (7) any net gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of such Person, (8) in the case of a
successor to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of assets, and
(9) any deferred credit representing the excess of equity in any Subsidiary of such Person
at the date of acquisition of such Subsidiary over the cost to such Person of the investment
in such Subsidiary.




“Eligible Accounts” has the meaning assigned to it in Section 1.6.




“Eligible Equipment Inventory” has the meaning assigned to it in Section 1.7A and excludes
Eligible Parts and Tools Inventory and Eligible Rolling Stock.




“Eligible Parts and Tools Inventory” has the meaning assigned to it in Section 1.7 and
excludes Eligible Equipment Inventory and Eligible Rolling Stock.




“Eligible Rentals” has the meaning assigned to it in Section 1.6B.




“Eligible Rolling Stock” has the meaning assigned to it in Section 1.6A and excludes
Eligible Parts and Tools Inventory and Eligible Equipment Inventory.




“Environmental Laws” means all applicable federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now or hereafter in effect, and any
applicable judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human health or
safety, the environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation). Environmental Laws include the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the
Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101 et seq.);
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid
Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C.
§§ 2601 et seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution
Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
§§ 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any and
all regulations promulgated thereunder, and all analogous state, local and foreign
counterparts or equivalents and any transfer of ownership notification or approval statutes.




“Environmental Liabilities” means, with respect to any Person, all liabilities, obligations,
responsibilities, response, remedial and removal costs, investigation and feasibility study
costs, capital costs, operation and maintenance costs, losses, damages, punitive damages,
property damages, natural resource damages, consequential damages, treble damages, costs and
expenses



A-10









 






(including all reasonable fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of or related to
any claim, suit, action, investigation, proceeding or demand by any Person, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute or
common law, including any arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release or threatened Release or presence of a Hazardous
Material whether on, at, in, under, from or about or in the vicinity of any real or personal
property.




“Environmental Permits” means all permits, licenses, authorizations, certificates,
approvals, registrations or other written documents required by any Governmental Authority
under any Environmental Laws.




“Equipment Inventory” means Inventory of any Borrower consisting of vehicles held for sale
or lease to third parties and Inventory of any Borrower consisting of vehicles while on
lease to third parties.




“Equipment Inventory Appraisal” means each periodic appraisal of any Borrower’s Equipment
Inventory and Parts and Tools Inventory conducted at such Borrower’s cost and expense by
appraisers reasonably satisfactory to Agent and using a methodology reasonably satisfactory
to Agent, provided, that unless an Event of Default or an Audit and Appraisal Liquidity
Event is continuing, Borrowers shall be responsible for the cost and expense of not more
than two (2) such appraisals for each Borrower per year, it being agreed that so long as
such limit is in effect, each item of Equipment Inventory shall be appraised pursuant to a
visit to sites of any one or more Credit Parties on one occasion during each year and the
balance of such appraisals of such item in such year shall be done as a “desk appraisal.” An
appraisal of Equipment Inventory and of Parts and Tools Inventory shall, for the purposes of
the preceding sentence, constitute one appraisal.




“ERISA” means the Employee Retirement Income Security Act of 1974, and any regulations
promulgated thereunder.




“ERISA Affiliate” means, with respect to any Credit Party, any trade or business (whether or
not incorporated) that, together with such Credit Party, is treated as a single employer
within the meaning of Sections 414(b), (c), (m) or (o) of the IRC.




“ERISA Event” means, with respect to any Credit Party or any ERISA Affiliate, (a) any event
described in Section 4043(c) of ERISA with respect to a Title IV Plan (other than an event
with respect to which the reporting requirement has been waived); (b) the withdrawal of such
Credit Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during
a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of such Credit Party or any ERISA Affiliate
from any Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA; (e)
the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the
PBGC; (f) the failure by such Credit Party or ERISA Affiliate to make when due required
contributions to a



A-11









 






Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days; (g) any
other event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section
4069 or 4212(c) of ERISA; or (h) the termination of a Multiemployer Plan under Section 4041A
of ERISA or the reorganization or insolvency of a Multiemployer Plan under Section 4241 or
4245 of ERISA or (i) the loss of a Qualified Plan’s qualification or tax exempt status; or
(j) the termination of a Title IV Plan described in Section 4064 of ERISA.




“Event of Default” has the meaning assigned to it in Section 8.1.




“Excess Availability” means, at any time, an amount equal to the Aggregate Borrowing Base
(as reflected in the Borrowing Base Certificate delivered pursuant to Section 4.1(b) and
paragraph (a) of Annex F, at or most recently prior to such time) minus the aggregate
Revolving Loan and Swing Line Loan at such time.




“Excess Availability Percentage” means, at any time, the ratio (expressed as a percentage)
of (a) average daily Excess Availability during the most recently ended Fiscal Month to (b)
an amount equal to the Borrowing Base (as reflected in the Borrowing Base Certificate
delivered pursuant to Section 4.1(b) and paragraph (a) of Annex F, at or most recently prior
to such time); provided, that in the event that a Borrowing Base Certificate is not timely
delivered as required by Section 4.1(b) and paragraph (a) of Annex F, then until the
delivery of a Borrowing Base Certificate in a timely manner as so required, the Excess
Availability Percentage shall be deemed to be greater than 75%.




“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute or statutes thereto.




“Excluded Taxes” means (a) Taxes imposed on or measured by the net income of Agent or a
Lender by the jurisdictions under the law of which Agent and Lenders are organized or
conduct business or any political subdivision thereof and (b) in the case of a Foreign
Lender (other than an assignee pursuant to a request by Borrower Representative under
Section 1.16(d)), any withholding tax (i) that is in effect and would apply to amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement, except to the extent of any additional amounts to which such Foreign Lender’s
assignor, if any was entitled, at the time of assignment, to receive from any Borrower with
respect to any withholding tax pursuant to Section 1.15, or (ii) that would not have been
imposed but for such Foreign Lender’s failure (other than as a result of a change in law,
rule, regulation or treaty or in the administration, interpretation or application thereof
by any Governmental Authority) to comply with Section 1.15(c).




“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.




“Federal Funds Rate” means, for any day, a floating rate equal to the weighted average of
the rates on overnight Federal funds transactions among members of the Federal Reserve
System, as



A-12









 






determined by Agent in its sole discretion, which determination shall be final, binding and
conclusive (absent manifest error).




“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.




“Fees” means any and all fees payable to Agent or any Lender pursuant to the Agreement or
any of the other Loan Documents.




“Financial Covenants” means the financial covenants set forth in Annex G.




“Financial Statements” means the consolidated and consolidating income statements,
statements of cash flows and balance sheets of H&E Delaware and its Subsidiaries delivered
in accordance with Section 3.4 and Annex E.




“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.




“Fiscal Month” means any of the monthly accounting periods of H&E Delaware and its
Subsidiaries.




“Fiscal Quarter” means any of the quarterly accounting periods of H&E Delaware and its
Subsidiaries, ending on March 31, June 30, September 30, and December 31 of each year.




“Fiscal Year” means any of the annual accounting periods of H&E Delaware and its
Subsidiaries ending on December 31 of each year.




“Fixed Charges” means, for H&E Delaware and its Subsidiaries for any specified period
determined on a consolidated basis in accordance with GAAP, the sum of (a) interest expense
(whether cash or non-cash) deducted in the determination of consolidated net income for such
period, including interest expense with respect to any Funded Debt and interest expense that
has been capitalized, but excluding amortization of any original discount attributable to
any Funded Debt or warrants and interest paid in kind, in each case to the extent otherwise
included as interest expense, and (b) scheduled payments of principal made or required to be
made during such period with respect to all Indebtedness.




“Fixed Charge Coverage Ratio” means, for any specified period, the ratio of (a) EBITDA of
H&E Delaware and its Subsidiaries for such period less any provision for income
taxes (whether paid or payable in cash) and P&E Capital Expenditures (other than the portion
thereof funded by third party financing) made by H&E Delaware and its Subsidiaries during
such period, in each case determined on a consolidated basis in accordance with GAAP, to (b)
Fixed Charges.




“Fixtures” means all “fixtures” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party.




“Floor Plan Equipment Inventory” means Equipment Inventory purchased by any Credit Party for
sale or lease in the ordinary course of business and subject to a purchase money Lien in
favor



A-13









 






of the seller thereof or a third party financing source and includes Equipment Inventory
subject to an Open Account Refinancing and subject to a Refinancing Lien.




“Foreign Lender” has the meaning assigned to it in Section 1.15(c).




“Funded Debt” means, with respect to any Person, without duplication, all Indebtedness for
borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness
that by its terms matures more than one year from, or is directly or indirectly renewable or
extendible at such Person’s option under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current maturities
of long-term debt, revolving credit and short-term debt extendible beyond one year at the
option of the debtor, and including without limitation, in the case of Borrowers, the
Obligations (calculated with reference to the average outstanding balance of the Obligations
during the six month period ending immediately prior to the relevant date of determination
(or such shorter period that begins on the Original Closing Date and ends immediately prior
to such relevant date of determination)), Indenture Debt and Subordinated Debt.




“GAAP” means generally accepted accounting principles in the United States of America
consistently applied as such term is further defined in Annex G to the Agreement.




“GE Capital” means General Electric Capital Corporation, a Delaware corporation.




“GE Capital Fee Letter” has the meaning assigned to it in Section 1.9(a).




“General Intangibles” means all “general intangibles,” as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contract, all payment
intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations, licenses,
permits, copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill associated with
any Trademark or Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering personal
property, real property, tangible rights or intangible rights, all liability, life, key man
and business interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit, checking and other bank accounts, rights to receive tax refunds
and other payments, rights to receive dividends, distributions, cash, Instruments and other
property in respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices and other
papers, including without limitation all tapes, cards, computer runs and other papers and
documents in the



A-14









 






possession or under the control of such Credit Party or any computer bureau or service
company from time to time acting for such Credit Party.




“GNE Investments” means GNE Investments, Inc., a Washington corporation.




“GNE Investments Pledge Agreement” means the Pledge Agreement dated as of the Closing Date
executed by GNE Investments in favor of Agent, on behalf of itself and Lenders, pledging all
Stock of its Subsidiaries owned or held by GNE Investments.




“Goods” means all “goods” as defined in the Code, now owned or hereafter acquired by any
Credit Party, wherever located, including embedded software to the extent included in
“goods” as defined in the Code, manufactured homes, standing timber that is cut and removed
for sale and unborn young of animals.




“Governmental Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining to
government.




“Great Northern” has the meaning assigned to it in the preamble to this Agreement.




“Great Northern Borrowing Base” means, as of any date of determination by Agent, from time
to time, an amount equal to the sum at such time of:




	 	(a)	 	up to eighty-five percent (85%) of Great Northern’s Eligible Accounts plus
eighty-five percent (85%) of Great Northern’s Eligible Rentals, in each case, less any
Reserves (without duplication) established by Agent in good faith using reasonable
credit judgment as of such time, plus
	 
	 	(b)	 	up to one hundred percent (100%) of the Net Book Value of Great Northern’s
new Eligible Equipment Inventory held for sale, less any Reserves (without
duplication) established by Agent in good faith using reasonable credit judgment as of
such time; plus
	 
	 	(c)	 	up to fifty percent (50%) of the Net Book Value of Great Northern’s used
Eligible Equipment Inventory held for sale, less any Reserves (without duplication)
established by Agent in good faith using reasonable credit judgment as of such time;
plus
	 
	 	(d)	 	up to fifty percent (50%) of the Net Book Value of Great Northern’s Eligible
Parts and Tools Inventory, less any Reserves (without duplication) established by
Agent in good faith using reasonable credit judgment as of such time; plus
	 
	 	(e)	 	up to fifty percent (50%) of the Net Book Value of Great Northern’s Eligible
Rolling Stock, less any Reserves (without duplication) established by Agent in good
faith using reasonable credit judgment as of such time; plus





A-15









 






	 	(f)	 	the lesser of (i) one hundred percent (100%) of the Net Book Value of Great
Northern’s Eligible Equipment Inventory held for lease to third parties or being
leased to third parties and (ii) up to eighty-five percent (85%) of the Orderly
Liquidation Value of Great Northern’s Eligible Equipment Inventory held for lease to
third parties or being leased to third parties, in each case, less any Reserves
(without duplication) established by Agent in good faith using reasonable credit
judgment as of such time.






“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend,
or other obligation (“primary obligations”) of any other Person (the “primary obligor”) in
any manner, including any obligation or arrangement of such Person to (a) purchase or
repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any balance
sheet condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation, (d) protect the
beneficiary of such arrangement from loss (other than product warranties given in the
ordinary course of business) or (e) indemnify the owner of such primary obligation against
loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be
deemed to be an amount equal to the lesser at such time of (x) the stated or determinable
amount of the primary obligation in respect of which such Guaranteed Indebtedness is
incurred and (y) the maximum amount for which such Person may be liable pursuant to the
terms of the instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full performance) in
respect thereof.




“Guaranties” means, collectively, each Subsidiary Guaranty and any other guaranty executed
by any Guarantor in favor of Agent and Lenders in respect of the Obligations.




“Guarantors” means each Subsidiary of any Borrower and each other Person, if any, that
executes a guaranty or other similar agreement in favor of Agent, for itself and the ratable
benefit of Lenders, in connection with the transactions contemplated by the Agreement and
the other Loan Documents.




“H&E Borrowing Base” means, as of any date of determination by Agent, from time to time, an
amount equal to the sum at such time of:




	 	(a)	 	up to eighty-five percent (85%) of H&E Delaware’s Eligible Accounts
plus eighty-five percent (85%) of H&E Delaware’s Eligible Rentals, in each case,
less any Reserves (without duplication) established by Agent in good faith using
reasonable credit judgment as of such time, plus
	 
	 	(b)	 	up to one hundred percent (100%) of the Net Book Value of H&E
Delaware’s new Eligible Equipment Inventory held for sale, less any Reserves
(without





A-16









 






	 	 	 	duplication) established by Agent in good faith using reasonable credit judgment as of such
time; plus
	 
	 	(c)	 	up to fifty percent (50%) of the Net Book Value of H&E Delaware’s
used Eligible Equipment Inventory held for sale, less any Reserves (without
duplication) established by Agent in good faith using reasonable credit judgment
as of such time; plus
	 
	 	(d)	 	up to fifty percent (50%) of the Net Book Value of H&E Delaware’s
Eligible Parts and Tools Inventory, less any Reserves (without duplication)
established by Agent in good faith using reasonable credit judgment as of such
time; plus
	 
	 	(e)	 	up to fifty percent (50%) of the Net Book Value of H&E Delaware’s
Eligible Rolling Stock, less any Reserves (without duplication) established by
Agent in good faith using reasonable credit judgment as of such time; plus
	 
	 	(f)	 	the lesser of (i) one hundred percent (100%) of the Net Book Value of
H&E Delaware’s Eligible Equipment Inventory held for lease to third parties or
being leased to third parties and (ii) up to eighty-five percent (85%) of the
Orderly Liquidation Value of H&E Delaware’s Eligible Equipment Inventory held for
lease to third parties or being leased to third parties, in each case, less any
Reserves (without duplication) established by Agent in good faith using reasonable
credit judgment as of such time.






“H&E California Borrowing Base” means, as of any date of determination by Agent, from time
to time, an amount equal to the sum at such time of:




	 	(a)	 	up to eighty-five percent (85%) of H&E California’s Eligible
Accounts plus eighty-five percent (85%) of H&E California’s Eligible Rentals, in
each case, less any Reserves (without duplication) established by Agent in good
faith using reasonable credit judgment as of such time, plus
	 
	 	(b)	 	up to one hundred percent (100%) of the Net Book Value of H&E
California’s new Eligible Equipment Inventory held for sale, less any Reserves
(without duplication) established by Agent in good faith using reasonable credit
judgment as of such time; plus
	 
	 	(c)	 	up to fifty percent (50%) of the Net Book Value of H&E
California’s used Eligible Equipment Inventory held for sale, less any Reserves
(without duplication) established by Agent in good faith using reasonable credit
judgment as of such time; plus
	 
	 	(d)	 	up to fifty percent (50%) of the Net Book Value of H&E
California’s Eligible Parts and Tools Inventory, less any Reserves (without
duplication) established by Agent in good faith using reasonable credit judgment
as of such time; plus





A-17









 






	 	(e)	 	up to fifty percent (50%) of the Net Book Value of H&E
California’s Eligible Rolling Stock, less any Reserves (without duplication)
established by Agent in good faith using reasonable credit judgment as of such
time; plus
	 
	 	(f)	 	the lesser of (i) one hundred percent (100%) of the H&E
California’s Net Book Value of Eligible Equipment Inventory held for lease to
third parties or being leased to third parties and (ii) up to eighty-five
percent (85%) of the Orderly Liquidation Value of H&E California’s Eligible
Equipment Inventory held for lease to third parties or being leased to third
parties, in each case, less any Reserves (without duplication) established by
Agent in good faith using reasonable credit judgment as of such time.






“H&E California Holding” means H&E California Holding, Inc., a California corporation
(formerly known as Eagle High Reach Equipment, Inc.).




“H&E California” has the meaning assigned to it in the preamble to this Agreement.




“H&E Finance” means H&E Finance Corp., a Delaware corporation.




“H&E Mergers” means the contemporaneous mergers of H&E Equipment Services, L.L.C. and H&E
Holdings L.L.C. with and into H&E Delaware, with H&E Delaware as the surviving entity, in
accordance with the terms of the Merger Documents.




“H&E Pledge Agreement” means the Pledge Agreement dated as of February 3, 2006 executed by
H&E Delaware in favor of Agent, on behalf of itself and Lenders, pledging all Stock of its
Subsidiaries owned or held by H&E Delaware.




“Hazardous Material” means any substance, material or waste that is regulated by or forms
the basis of liability now or hereafter under, any Environmental Laws, including any
material or substance that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous
material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous
waste,” “pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic
substance” or other similar term or phrase under any Environmental Laws, (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB’s), or any
radioactive substance.




“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange
agreement, commodity price protection agreement, treasury management products or other
interest or currency exchange rate or commodity price hedging arrangement (i) arranged by GE
Capital and to which one or more Credit Parties are parties, or (ii) to which a Lender is a
party and to which one or more Credit Parties are parties.




“Indebtedness” of any Person means, without duplication, (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property (including purchases on
Open Account) payment for which is deferred six (6) months or more, but excluding
obligations to trade creditors incurred in the ordinary course of business that are
unsecured and not overdue by



A-18









 






more than six (6) months unless being contested in good faith, (b) all reimbursement and
other obligations with respect to letters of credit, bankers’ acceptances and surety bonds,
whether or not matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Capital Lease Obligations and the
present value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person under
commodity purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to alter the risks of that
Person arising from fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property or other assets (including accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, and (i) the Obligations.




“Indemnified Liabilities” has the meaning assigned to it in Section 1.13.




“Indemnified Person” has the meaning assigned to it in Section 1.13.




“Indenture Debt” means Indebtedness under the Senior Notes, Senior Note Indenture, Senior
Unsecured Notes or Senior Unsecured Note Indenture.




“Index Rate” means, for any day, a floating rate equal to the higher of (i) the rate
publicly quoted from time to time by The Wall Street Journal as the “base rate on corporate
loans posted by at least 75% of the nation’s 30 largest banks” (or, if The Wall Street
Journal ceases quoting a base rate of the type described, the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve statistical release H.15
(519) entitled “Selected Interest Rates” as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus fifty (50) basis points per annum. Each change in
any interest rate provided for in the Agreement based upon the Index Rate shall take effect
at the time of such change in the Index Rate.




“Index Rate Loan” means a Loan or portion thereof bearing interest by reference to the Index
Rate.




“Inspections” has the meaning assigned to it in Section 1.14.




“Instruments” means any “instrument,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and, in any event, including all
certificated securities, all certificates of deposit, and all promissory notes and other
evidences of



A-19









 






indebtedness, other than instruments that constitute, or are a part of a group of writings
that constitute, Chattel Paper.




“Intellectual Property” means any and all Licenses, Patents, Copyrights, Trademarks, and the
goodwill associated with such Trademarks.




“Inter-Creditor Agreement” means, the intercreditor agreement dated as of June 17, 2002
entered into by and among Bank of New York as Collateral Agent, Agent, H&E Finance and H&E
Delaware, the successor by merger to H&E Equipment Services, L.L.C.




“Interest Expense” means, with respect to any Person for any fiscal period, interest expense
paid in cash of such Person determined in accordance with GAAP for the relevant period ended
on such date, including expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet of such
Person.




“Interest Payment Date” means (a) as to any Index Rate Loan, the first Business Day of each
month to occur while such Loan is outstanding and (b) as to any LIBOR Loan, the last day of
the applicable LIBOR Period; provided, that in the case of any LIBOR Period greater than
three months in duration, interest shall be payable at three month intervals and on the last
day of such LIBOR Period; and provided, further, that, in addition to the foregoing, each of
(x) the date upon which all of the Commitments have been terminated and the Loans have been
paid in full and (y) the Commitment Termination Date shall be deemed to be an “Interest
Payment Date” with respect to any interest that has then accrued under the Agreement.




“Inventory” means all “inventory,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, and in any event including
inventory, merchandise, goods and other personal property that are held by or on behalf of
any Credit Party for sale or lease or are furnished or are to be furnished under a contract
of service, or that constitute raw materials, work in process, finished goods, returned
goods, or materials or supplies of any kind, nature or description used or consumed or to be
used or consumed in such Credit Party’s business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies and embedded
software.




“Investment Property” means all “investment property” as such term is defined in the Code
now owned or hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds, interests in
limited liability companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party, including the
rights of any Credit Party to any securities account and the financial assets held by a
securities intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii) all
securities accounts of any Credit Party; (iv) all commodity contracts of any Credit Party;
and (v) all commodity accounts of any Credit Party.




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



A-20









 






“IRS” means the Internal Revenue Service.




“L/C Issuer” means GE Capital or a Subsidiary thereof or a bank or other legally authorized
Person selected by or acceptable to Agent in its sole discretion, in such Person’s capacity
as an issuer of Letters of Credit hereunder.




“L/C Sublimit” has the meaning assigned to such term in Annex B.




“Lenders” means GE Capital, the other initial Lenders named on the signature pages of the
Agreement, and, if any such Lender shall decide to assign all or any portion of the
Obligations, such term shall include any registered assignee of such Lender.




“Letter of Credit Fee” has the meaning assigned to it in Annex B.




“Letter of Credit Obligations” means all outstanding obligations incurred by Agent and
Lenders at the request of any Borrower, whether direct or indirect, contingent or otherwise,
due or not due, in connection with the issuance of Letters of Credit by Agent or any other
L/C Issuer or the purchase of a participation as set forth in Annex B with respect to any
Letter of Credit. The amount of such Letter of Credit Obligations shall equal the maximum
amount that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.




“Letters of Credit” means documentary or standby letters of credit issued for the account of
any Borrower by any L/C Issuer, and bankers’ acceptances issued by any Borrower, for which
Agent and Lenders have incurred Letter of Credit Obligations. The term does not include a
Swap Related L/C.




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




“Leverage Ratio” means, with respect to H&E Delaware and its Subsidiaries, on a consolidated
basis, the ratio of (i) Funded Debt of H&E Delaware and its Subsidiaries as of any date of
determination, to (ii) EBITDA of H&E Delaware and its Subsidiaries for the twelve-month
period ending on that date of determination.




“LIBOR Business Day” means a Business Day on which banks in the City of London are generally
open for interbank or foreign exchange transactions.




“LIBOR Loan” means a Loan or any portion thereof bearing interest by reference to the LIBOR
Rate.




“LIBOR Period” means, with respect to any LIBOR Loan, each period commencing on a LIBOR
Business Day selected by Borrower Representative pursuant to the Agreement and ending one,
two, three or six months thereafter, as selected by Borrower Representative’s irrevocable



A-21









 






notice to Agent as set forth in Section 1.5(e); provided, that the foregoing provision
relating to LIBOR Periods is subject to the following:




	 	(a)	 	if any LIBOR Period would otherwise end on a day that is not a LIBOR
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding LIBOR Business Day;
	 
	 	(b)	 	any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end 1 LIBOR Business Days prior to such date;
	 
	 	(c)	 	any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in
the calendar month at the end of such LIBOR Period) shall end on the last LIBOR
Business Day of a calendar month;
	 
	 	(d)	 	Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
	 
	 	(e)	 	Borrower Representative shall select LIBOR Periods so that there
shall be no more than seven (7) separate LIBOR Loans in existence at any one time.






“LIBOR Rate” means for each LIBOR Period, (a) a rate of interest determined by Agent equal
to the offered rate for deposits in United States Dollars for the applicable LIBOR Period
that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the second full LIBOR
Business Day next preceding the first day of such LIBOR Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used); divided
by (b) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect on the day that is
2 LIBOR Business Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the Federal Reserve
Board or other Governmental Authority having jurisdiction with respect thereto, as now and
from time to time in effect) for Eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board) that are required
to be maintained by a member bank of the Federal Reserve System. If such interest rate
shall cease to be available from Telerate News Service, the LIBOR Rate shall be the rate of
interest determined by the Agent at which deposits in United States Dollars are offered at
11:00 a.m., London time, on the second full LIBOR Business Day next preceding the first day
of such LIBOR period by major financial institutions reasonably satisfactory to Agent in the
London interbank market for the applicable LIBOR period and an amount equal to comparable to
the principal amount of the Loans to be borrowed, converted or continued as LIBOR Loans on
the date of such determination (divided by (b) above).



A-22









 






“License” means any Copyright License, Patent License, Trademark License or other license of
rights or interests now held or hereafter acquired by any Credit Party.




“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).




“Litigation” has the meaning assigned to it in Section 3.13.




“Loan Account” has the meaning assigned to it in Section 1.12.




“Loan Documents” means the Agreement, the Notes, the GE Capital Fee Letter, the Original GE
Capital Fee Letter, the Syndication Letter and the Collateral Documents and all other
agreements, instruments, documents and certificates identified in the Closing Checklist
executed and delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all other
written matter whether heretofore, now or hereafter executed by or on behalf of any Credit
Party, and delivered to Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby. Any reference in the Agreement, any other Loan Document
or the Syndication Letter to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other modifications
thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect
at any and all times such reference becomes operative.




“Loans” means the Revolving Loan and the Swing Line Loan.




“Lock Boxes” has the meaning assigned to it in Annex C.




“Margin Stock” has the meaning assigned to in Section 3.10.




“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, prospects or financial or other condition of Credit Parties considered as a
whole, (b) any Borrower’s ability to pay any of the Loans or any of the other Obligations in
accordance with the terms of the Agreement, (c) the Collateral or Agent’s Liens, on behalf
of itself and Lenders, on the Collateral or the priority of such Liens, or (d) Agent’s or
any Lender’s rights and remedies under the Agreement and the other Loan Documents.




“Maximum Amount” means, as of any date of determination, an amount equal to the Revolving
Loan Commitment of all Lenders as of that date.



A-23









 






“Merger Agreement” means that certain Agreement and Plan of Merger dated as of February 2,
2006, by and among H&E Equipment Services, L.L.C., H&E Holdings L.L.C. and H&E Delaware, as
amended, restated, modified or supplemented in accordance with the terms hereof and thereof.




“Merger Documents” means, collectively, (i) the Merger Agreement and (ii) each other
document, agreement and instrument executed or delivered in connection with the H&E Mergers,
in each case as to clause (ii), as amended, restated, modified or supplemented in accordance
with the terms hereof and thereof.




“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA
to which any Credit Party or an ERISA Affiliate is making or is obligated to make
contributions on behalf of participants who are or were employed by any of them.




“Net Book Value” means book value as determined in accordance with GAAP, lower of cost and
market, and after taking into account depreciation and excluding all “freight-in” costs and
preparatory costs.




“Net Proceeds” has the meaning assigned to it in Section 1.3(b)(ii).




“Non-Excluded Taxes” means Taxes other than Excluded Taxes.




“Non-Funding Lender” has the meaning assigned to it in Section 9.10(a)(ii).




“Notes” means, collectively, the Revolving Notes and the Swing Line Notes.




“Notice of Conversion/Continuation” has the meaning assigned to it in Section 1.5(e).




“Notice of Revolving Credit Advance” has the meaning assigned to it in Section 1.1(a).




“Obligations” means all loans, advances, debts, liabilities and obligations, for the
performance of covenants, tasks or duties or for payment of monetary amounts (whether or not
such performance is then required or contingent, or such amounts are liquidated or
determinable) owing by any Credit Party to Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not evidenced
by any note, agreement, letter of credit agreement or other instrument, arising under the
Agreement or any of the other Loan Documents. This term includes all principal, interest
(including all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Swap Related Reimbursement Obligations, hedging obligations under swaps, caps and
collar arrangements provided by any Lender in accordance with the terms of the Agreement,
expenses, attorneys’ fees and any other sum chargeable to any Credit Party under the
Agreement or any of the other Loan Documents.



A-24









 






“Off Balance Sheet Equipment Inventory” means Equipment Inventory that has been leased by
any Credit Party as lessee under an operating lease, and held for sublease by such Credit
Party to third parties in the ordinary course of business.




“Offer to Purchase and Consent Solicitation” means the Offer to Purchase and Consent
Solicitation Statement, dated May 25, 2006, of H&E Delaware and H&E Finance with respect to
the Senior Notes and the Senior Subordinated Notes.




“Open Account” means, in connection with the terms of purchase by a Credit Party of
Equipment Inventory from a dealer, that such purchase is made on credit terms, on an
unsecured basis, with payment by such Credit Party expected to be made within six (6) months
of the date of purchase. The deferral of the purchase price of Equipment Inventory
purchased on Open Account does not constitute Indebtedness unless and until such deferral
extends six (6) months or more following the date of purchase of such Equipment Inventory.




“Open Account Refinancing” means the incurrence by a Credit Party of Indebtedness, which,
subject to Section 6.7(d), may be on a secured basis, the proceeds of which are applied to
pay in full the deferral of the purchase price and related charges of Equipment Inventory
purchased on Open Account.




“Operating Lease Payoff Value” means, with respect to any operating lease of Equipment
Inventory to which any Borrower or Guarantor is a lessee, at any time, the sum of the then
remaining lease payments under such operating lease, discounted to present value at the
notional interest rate for such operating lease.




“Orderly Liquidation Value” shall mean (i) with respect to Eligible Equipment Inventory, the
orderly liquidation value thereof as determined by the most recent Equipment Inventory
Appraisal and (ii) with respect to Eligible Rolling Stock, the orderly liquidation value
thereof as determined by the most recent P&E Appraisal.




“Original Advance Rate” means, with respect to any percentage advance rate contained in the
Great Northern Borrowing Base, the H&E Borrowing Base or the H&E California Borrowing Base,
such advance rate as in effect on the Closing Date.




“Original Closing Date” means June 17, 2002.




“Original GE Capital Fee Letter” means the fee letter, dated as of June 17, 2002, between
H&E Delaware and Agent.




“Original Lenders” has the meaning assigned to it in the recitals to this Agreement.




“Original Letters of Credit” means letters of credit issued by one or more L/C Issuers
pursuant to the Original Credit Agreement (and listed on Schedule I hereto) that remain
outstanding on the Closing Date.



A-25









 






“Original Letter of Credit Obligations” means Letter of Credit Obligations under (and as
defined in) the Original Credit Agreement that remain outstanding immediately prior to the
Closing Date.




“Original Related Transactions” means the initial borrowing under the Commitments on the
Original Closing Date, the H&E Mergers, contributions and other transactions to occur under
the Contribution Agreement and Plan of Reorganization, the Refinancing, the issuance of the
Senior Notes, the issuance of the Senior Subordinated Notes, the Eagle Acquisition and the
related preferred and common units, the payment of all fees, costs and expenses associated
with all of the foregoing and the execution and delivery of all of the Original Related
Transactions Documents.




“Original Related Transactions Documents” means the Loan Documents, the Contribution
Agreement and Plan of Reorganization, the Senior Note Indenture, the Senior Subordinated
Note Indenture and all other agreements and instruments executed and delivered in connection
with the Original Related Transactions.




“Original Revolving Credit Advances” means the aggregate principal amount of Revolving
Credit Advances under (and as defined in) the Original Credit Agreement that remain unpaid
immediately prior to the Closing Date.




“Original Swing Line Advances” means the aggregate principal balance of Swing Line Advances
under (and as defined in) the Original Credit Agreement that remain unpaid immediately prior
to the Closing Date.




“Other Taxes” means any and all present or future recording, stamp, documentary, excise,
transfer, sales, property or similar taxes, charges or levies arising from any payment made
under any Loan Document or from the execution, delivery or enforcement of, or otherwise with
respect to, any Loan Document.




“P&E” means all “equipment,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located and, in any event, including all such Credit
Party’s machinery and equipment, including processing equipment, conveyors, machine tools,
data processing and computer equipment, including embedded software and peripheral equipment
and all engineering, processing and manufacturing equipment, office machinery, furniture,
materials handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a part of real
property, together with all additions and accessions thereto, replacements therefor, all
parts therefor, all substitutes for any of the foregoing, fuel therefor, and all manuals,
drawings, instructions, warranties and rights with respect thereto and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect thereto. P&E
excludes Equipment Inventory, Parts and Tools Inventory, and Fixtures.



A-26









 






“P&E Appraisal” means each periodic appraisal of each Borrower’s P&E conducted at such
Borrower’s cost and expense by appraisers reasonably satisfactory to Agent and using a
methodology reasonably satisfactory to Agent, provided, that unless an Event of Default or
an Audit and Appraisal Liquidity Event has occurred and is continuing, Borrowers shall be
responsible for the cost and expense of not more than two (2) such appraisals for each
Borrower per year, it being agreed that so long as such limit is in effect, each item of
Equipment Inventory shall be appraised pursuant to a visit to sites of any one or more
Credit Parties on one occasion during each year and the balance of such appraisals of such
item in such year shall be done as a “desk appraisal.”




“P&E Capital Expenditures” means, with respect to any Person, all expenditures (by the
expenditure of cash or the incurrence of Indebtedness) by such Person during any measuring
period for any P&E or improvements or for replacements, substitutions or additions thereto,
that have a useful life of more than one year and that are required to be capitalized under
GAAP (excluding any such expenditures related to Permitted Acquisitions).




“Parts and Tools Inventory” means Inventory of any Borrower consisting of parts, tools and
supplies.




“Patent License” means rights under any written agreement now owned or hereafter acquired by
any Credit Party granting any right with respect to any invention on which a Patent is in
existence.




“Patent Security Agreements” means the Patent Security Agreements made in favor of Agent, on
behalf of itself and Lenders, by each applicable Credit Party.




“Patents” means all of the following in which any Credit Party now holds or hereafter
acquires any interest: (a) all letters patent of the United States or of any other country,
all registrations and recordings thereof, and all applications for letters patent of the
United States or of any other country, including registrations, recordings and applications
in the United States Patent and Trademark Office or in any similar office or agency of the
United States, any State or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.




“PBGC” means the Pension Benefit Guaranty Corporation.




“Pension Plan” means a Plan described in Section 3(2) of ERISA.




“Permitted Acquisition” has the meaning assigned to it in Section 6.1.




“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or
assessments or other governmental Charges not yet due and payable, or which are being
contested in accordance with Section 5.2(b); (b) pledges or deposits of money securing
statutory obligations under workmen’s compensation, unemployment insurance, social security
or public liability laws or similar legislation (excluding Liens under ERISA); (c) pledges
or deposits of money securing



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bids, tenders, contracts (other than contracts for the payment of money) or leases to which
any Borrower is a party as lessee made in the ordinary course of business; (d) deposits of
money securing statutory obligations of any Borrower; (e) inchoate and unperfected workers’,
mechanics’ or similar liens arising in the ordinary course of business, so long as such
Liens attach only to P&E, Fixtures and/or Real Estate; (f) carriers’, warehousemen’s,
suppliers’ or other similar possessory liens arising in the ordinary course of business and
securing liabilities, so long as such Liens attach only to Equipment Inventory; (g) deposits
securing, or in lieu of, surety, appeal or customs bonds in proceedings to which any
Borrower is a party; (h) any attachment or judgment lien not constituting an Event of
Default under Section 8.1(j); (i) zoning restrictions, easements, licenses, or other
restrictions on the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (j) the Santa Fe Springs Liens (as defined in the
Disclosure Schedules to the Eagle Acquisition Agreement), provided, that such Liens encumber
only the Santa Fe Springs Property (as defined in the Disclosure Schedules to the Eagle
Acquisition Agreement) and no other property of any Credit Party and, provided further, that
the CNL Mortgage (as defined in the Disclosure Schedules to the Eagle Acquisition Agreement)
or any refinancing thereof (which refinancing shall have an outstanding principal amount not
greater than the principal amount of the CNL Mortgage outstanding at the time of such
refinancing) secures only the Indebtedness permitted by Section 6.3(a)(ix) and the BOE Santa
Fe Lien (as defined in the Disclosure Schedules to the Eagle Acquisition Agreement) secures
only the Sales Tax Settlement (as defined in the Eagle Acquisition Agreement); (k) the
Pacific Western Deed of Trust and the BP Deed of Trust (as such terms are defined in the
Disclosure Schedules to the Eagle Acquisition Agreement), provided, that such Liens encumber
only H&E California’s leasehold interest in its lease with Tillotson Corporation with
respect to the Eagle Plaza Property (as defined in the Disclosure Schedules to the Eagle
Acquisition Agreement) and no other property of any Credit Party and, provided further, that
such Liens do not secure Indebtedness of any Credit Party; (l) Liens of landlords or
mortgages arising by operation of law or pursuant to the terms of real property leases,
provided, that the mortgage or rental payments secured thereby are not yet overdue, and the
applicable mortgage or lease is not otherwise in default in a manner which could permit the
applicable mortgagee or lessee to take enforcement action with respect to such Liens and (m)
to the extent subject to the Intercreditor Agreement, Liens securing Senior Notes in favor
of the Collateral Agent acting on behalf of the holders of Senior Notes.




“Person” means any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company,
institution, public benefit corporation, other entity or government (whether federal, state,
county, city, municipal, local, foreign, or otherwise, including any instrumentality,
division, agency, body or department thereof).




“Plan” means, at any time, an “employee benefit plan”, as defined in Section 3(3) of ERISA,
that any Credit Party maintains, contributes to or has an obligation to contribute to or has
any liability under.



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“Pledge Agreements” means the H&E Pledge Agreement, the GNE Investments Pledge Agreement and
any other pledge agreement entered into after the Closing Date in connection herewith (as
required by the Agreement or any other Loan Document).




“Predecessor” means H&E Equipment Services, L.L.C., as one of the parties to the H&E
Mergers.




“Principals” means (i) Bruckmann, Rosser, Sherrill & Co., L.P. and Bruckmann, Rosser,
Sherrill & Co. II, L.P., each a Delaware limited partnership, (ii) Bruckmann, Rosser,
Sherrill & Co., Inc., a Delaware corporation and (iii) Mr. John M. Engquist.




“Prior Lenders” means the holders of the Prior Obligations.




“Prior Obligations” means collectively, the indebtedness under or pursuant to, as
applicable, (i) the Credit Agreement dated as of February 4, 1998, as amended and restated
as of July 31, 1998, among ICM Equipment Company, L.L.C., Great Northern Equipment, Inc.,
Williams Bros. Construction, Inc., the Prior Lenders, Bankers Trust Company as Syndication
Agent and Co-Agent, GE Capital as Documentation Agent and Co-Agent and The CIT
Group/Equipment Financing, Inc. as Agent, as subsequently amended; (ii) the Loan Agreement
dated August 10, 1998 between The CIT Group/Equipment Financing, Inc. and H&E Equipment
Services, L.L.C., as subsequently amended; and (iii) the 10% Senior Subordinated Promissory
Note dated February 20, 2002 issued by ICM Equipment Company, L.L.C. to John Engquist.




“Proceeds” means “proceeds,” as such term is defined in the Code, including (a) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit Party from
time to time with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Credit Party from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting under color of governmental
authority), (c) any claim of any Credit Party against third parties (i) for past, present or
future infringement of any Patent or Patent License, or (ii) for past, present or future
infringement or dilution of any Copyright, Copyright License, Trademark or Trademark
License, or for injury to the goodwill associated with any Trademark or Trademark License,
(d) any recoveries by any Credit Party against third parties with respect to any litigation
or dispute concerning any of the Collateral, including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of rights in, or
damage to, Collateral, (e) all amounts collected on, or distributed on account of, other
Collateral, including dividends, interest, distributions and Instruments with respect to
Investment Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.




“Pro Forma” means the unaudited consolidated balance sheet of H&E Delaware and its
Subsidiaries as of March 31, 2006 included in the offering circular dated July 28, 2006 with
respect to the Senior Unsecured Notes.



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“Prohibited Swing Line Advance” means a Swing Line Advance (i) that was made without
satisfaction of the condition contained in Section 2.2(e) by virtue of such Swing Line
Advance exceeding Swing Line Availability due to the limitation imposed by Section
1.1(b)(i)(A) or 1.1(b)(i)(B)(x) (but not 1.1(b)(i)(B)(y)), or (ii) (x) that was made without
satisfaction of the condition contained in Section 2.2(e) by virtue of such Swing Line
Advance exceeding Swing Line Availability due to the limitation imposed by Section
1.1(b)(i)(B)(y) based on the Borrowing Base as reflected in the most recent Borrowing Base
Certificate delivered to the Agent prior to the making of such Swing Line Advance and (y)
that (A) exceeds $4,000,000, or (B) when added to any Swing Line Advances (described in
clause (ii)(x) of this definition) made (1) during the period of 10 Business Days ending on
(and including) the date of making of such Swing Line Advance, exceeds $4,000,000 or (2)
during the period from and after the Closing Date, exceeds $15,000,000.




“Projections” means H&E Delaware and its Subsidiaries’ forecasted consolidated and
consolidating (a) balance sheets; (b) profit and loss statements; (c) cash flow statements;
and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the historical
Financial Statements of H&E and its Subsidiaries, together with appropriate supporting
details and a statement of underlying assumptions.




“Properly Elects” has the meaning assigned to it in Section 7.3.




“Pro Rata Share” means with respect to all matters relating to any Lender and with respect
to the Revolving Loan, the percentage obtained by dividing (i) the Revolving Loan Commitment
of that Lender by (ii) the aggregate Revolving Loan Commitments of all Lenders.




“Qualified Assignee” means (a) any Lender, any Affiliate of any Lender and, with respect to
any Lender that is an investment fund that invests in commercial loans, any other investment
fund that invests in commercial loans and that is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such investment advisor, and (b) any commercial
bank, savings and loan association or savings bank or any other entity which is an
“accredited investor” (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance companies, mutual
funds, lease financing companies and commercial finance companies, in each case, which has a
rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the date
that it becomes a Lender and which, through its applicable lending office, is capable of
lending to Borrowers without the imposition of any withholding or similar taxes; provided,
that no Person determined by Agent to be acting in the capacity of a vulture fund or
distressed debt purchaser shall be a Qualified Assignee, and no Person or Affiliate of such
Person (other than a Person that is already a Lender) holding Subordinated Debt or Stock
issued by any Credit Party shall be a Qualified Assignee.




“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under Section
401(a) of the IRC.



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“Real Estate” has the meaning assigned to it in Section 3.6.




“Refinancing” means the repayment in full by Borrowers of the Prior Obligations on the
Original Closing Date.




“Refinancing Lien” means a Lien granted by a Credit Party on an item of Equipment Inventory
to secure Indebtedness incurred in connection with an Open Account Refinancing of the
deferred purchase price of such item of Equipment Inventory so long as such Lien attaches
only to such item of Equipment Inventory and such Lien attaches within six (6) months
following the date of purchase by such Credit Party of such item of Equipment Inventory.




“Refunded Swing Line Loan” has the meaning assigned to it in Section 1.1(b)(iii).




“Related Party” means: (i) any controlling stockholder, partner or member; any stockholder,
partner or member of any Principal identified in clauses (i) or (ii) of the definition of
“Principals”; a majority owned Subsidiary, or immediate family member (in the case of an
individual) of any Principal or any Related Party; or (ii) any trust, corporation,
partnership, limited liability company or other entity, the beneficiaries, stockholders,
partners, members, owners or Persons beneficially holding a majority interest of which
consist of any one or more Principals and/or such other Persons referred to in the
immediately preceding clause (i).




“Related Transactions” means the tender for and repurchase of Senior Notes and Senior
Subordinated Notes pursuant to the Offer to Purchase and Consent Solicitation, the amendment
of the Senior Note Indenture and the Senior Subordinated Note Indenture pursuant to the
Offer to Purchase and Consent Solicitation, the issuance of Senior Unsecured Notes pursuant
to the Senior Unsecured Notes Indenture, the amendment and restatement of the Original
Credit Agreement, the payment of (or reserve for) all fees, costs and expenses in connection
with the foregoing and the execution and delivery of all Related Transactions Documents
increase in the Revolving Loan Commitment on the Closing Date, and the payment of all fees,
costs.




“Related Transactions Documents” means the Loan Documents, the Offer to Purchase and Consent
Solicitation, the supplemental indentures implementing amendments to the Senior Note
Indenture and Senior Subordinated Note Indenture pursuant to the Offer to Purchase and
Consent Solicitation, the offering memorandum for the Senior Unsecured Notes, the Senior
Unsecured Notes and the Senior Unsecured Notes Indenture and all documents, instruments and
agreements executed and delivered in connection therewith.




“Release” means any release, threatened release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Material in the indoor or outdoor environment, including
the movement of Hazardous Material through or in the air, soil, surface water, ground water
or property.



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“Rentals” means rental payments due to any Borrower from the rental of (i) Equipment
Inventory owned by such Borrower or (ii) inventory leased by such Borrower.




“Requisite Lenders” means (a) Lenders having more than 50% of the Commitments of all
Lenders, or (b) if the Commitments have been terminated, more than 50% of the aggregate
outstanding amount of the Loans (without giving effect to the Swing Line Loan) and Letter of
Credit Obligations.




“Reserves” means, with respect to the Borrowing Base of any Borrower (a) reserves
established by Agent from time to time against Eligible Parts and Tools Inventory or
Eligible Equipment Inventory pursuant to Section 5.9, and (b) such other reserves against
Eligible Accounts, Eligible Rentals, Eligible Parts and Tools Inventory, Eligible Rolling
Stock, Eligible Equipment Inventory or Borrowing Availability of such Borrower that Agent
may, in good faith and in its reasonable credit judgment, establish from time to time.
Without limiting the generality of the foregoing, Reserves established to ensure the payment
of accrued Interest Expenses shall be deemed to be a reasonable exercise of Agent’s credit
judgment.




“Restricted Payment” means, with respect to any Credit Party, (a) the declaration or payment
of any dividend or the incurrence of any liability to make any other payment or distribution
of cash or other property or assets in respect of such Credit Party’s Stock; (b) any payment
on account of the purchase, redemption, defeasance, sinking fund or other retirement of such
Credit Party’s Stock or any other payment or distribution made in respect thereof, either
directly or indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or other rights to
acquire Stock of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party’s Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any such claim
for damages or rescission; (f) any payment, loan, contribution, or other transfer of funds
or other property to any Stockholder of such Credit Party other than payment of compensation
and directors’ fees in the ordinary course of business to Stockholders who are employees of
such Person; (g) any payment of management fees (or other fees of a similar nature) by such
Credit Party to any Stockholder of such Credit Party or its Affiliates and (h) any optional
payment or prepayment of principal of the Senior Unsecured Notes, the Senior Notes or the
Senior Subordinated Notes, any prepayment of premium, if any, or interest, fees, or other
charges on or with respect to the Senior Unsecured Notes, Senior Notes or the Senior
Subordinated Notes, and any redemption, purchase, retirement, defeasance, subleasing fund or
similar optional payment with respect to the Senior Unsecured Notes, Senior Notes or the
Senior Subordinated Notes.



A-32









 






“Retiree Welfare Plan” means, at any time, a Welfare Plan that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant after such
participant’s termination of employment, other than continuation coverage provided pursuant
to Section 4980B of the IRC and at the sole expense of the participant or the beneficiary of
the participant.




“Revolving Credit Advance” has the meaning assigned to it in Section 1.1(a)(i).




“Revolving Lenders” means, as of any date of determination, Lenders having a Revolving Loan
Commitment.




“Revolving Loan” means, at any time, the sum of (i) the aggregate amount of Revolving Credit
Advances outstanding, as the context may require, to any Borrower or to all Borrowers
plus (ii) the aggregate Letter of Credit Obligations incurred on behalf of any
Borrower or all Borrowers. Unless the context otherwise requires, references to the
outstanding principal balance of the Revolving Loan shall include the outstanding balance of
Letter of Credit Obligations. A Letter of Credit issued for the account of a Borrower shall
be included in calculating the Letter of Credit Obligations of, and consequently the
outstanding principal balance of the Revolving Loan made to, such Borrower.




“Revolving Loan Commitment” means (a) as to any Revolving Lender, the aggregate commitment
of such Revolving Lender to make Revolving Credit Advances or incur Letter of Credit
Obligations as set forth on Annex J or in the most recent Assignment Agreement executed by
such Revolving Lender and (b) as to all Revolving Lenders, the aggregate commitment of all
Revolving Lenders to make Revolving Credit Advances or incur Letter of Credit Obligations,
which aggregate commitment shall be Two Hundred Fifty Million Dollars ($250,000,000), as
such amount may be adjusted, if at all, from time to time in accordance with the Agreement.




“Revolving Note” has the meaning assigned to it in Section 1.1(a)(ii).




“Security Agreements” means, collectively, each security agreement entered into on or after
the Original Closing Date in connection herewith (as required by the Agreement or any other
Loan Document) by and among Agent, on behalf of itself and Lenders, and each Credit Party
that is a signatory thereto.




“Senior Debt” of any Person, means all Indebtedness and Capital Lease Obligations of such
Person, other than Subordinated Debt of such Person.




“Senior Note Indenture” means the Indenture, dated as of June 17, 2002, among the
Predecessor of H&E Delaware, H&E Finance and The Bank of New York, as trustee as such
Indenture may be amended, modified or supplemented from time to time in accordance with its
terms and the terms hereof.




“Senior Notes” means the $200,000,000 11 1/8% senior secured notes due 2012 issued by the
Predecessor of H&E Delaware and H&E Finance pursuant to the Senior Note Indenture together



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with any amendments, modifications, supplements, replacements or substitutions thereof made
or issued in accordance with the terms of the Senior Note Indenture and this Agreement.




“Senior Subordinated Note Indenture” means the Indenture, dated as of June 17, 2002, among
the Predecessor of H&E Delaware, H&E Finance and The Bank of New York, as trustee as such
Indenture may be amended, modified or supplemented from time to time in accordance with its
terms and the terms hereof.




“Senior Subordinated Notes” means the $50,000,000 12 1/2% senior subordinated notes due 2013
issued by the Predecessor of H&E Delaware and H&E Finance pursuant to the Senior
Subordinated Note Indenture.




“Senior Unsecured Note Indenture” means the Indenture, dated August 4, 2006, between the H&E
Delaware and The Bank of New York as trustee, as such Indenture may be amended, modified or
supplemented from time to time in accordance with its terms and the terms hereof.




“Senior Unsecured Notes” means up to $250,000,000 8 3/8% senior notes due 2016 issued by H&E
Delaware pursuant to the Senior Unsecured Note Indenture, together with any amendments,
modifications, supplements, replacements or substitutions thereof made or issued in
accordance with the terms of the Senior Unsecured Note Indenture and this Agreement.




“Settlement Date” has the meaning assigned to it in Section 9.10(a)(ii).




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




“Solvent” means, with respect to any Person on a particular date, that on such date (a) the
fair value of the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person; (b) the present fair salable value of the
assets of such Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur debts or liabilities beyond
such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is
not engaged in a business or transaction, and is not about to engage in a business or
transaction, for which such Person’s property would constitute an unreasonably small
capital. The amount of contingent liabilities (such as litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of all the
facts and circumstances existing at the time, represents the amount that can be reasonably
be expected to become an actual or matured liability.




“Stock” means all shares, options, warrants, general or limited partnership interests,
membership interests or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether voting or
nonvoting, including common



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stock, preferred stock or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).




“Stockholder” means, with respect to any Person, each holder of Stock of such Person.




“Subject Property” has the meaning assigned to it in Section 7.3.




“Subordinated Debt” means Indebtedness evidenced by the Senior Subordinated Notes and any
other Indebtedness of any Borrower subordinated to the Obligations in a manner and form
satisfactory to Agent and Lenders in their sole discretion, as to right and time of payment
and as to any other rights and remedies thereunder. For the avoidance of doubt,
“Subordinated Debt” shall not include the Senior Notes or Senior Unsecured Notes.




“Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of
more than 50% of the outstanding Stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the time, Stock of
any other class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of 50% or more
of such Stock whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent (50%) or of
which any such Person is a general partner or may exercise the powers of a general partner.
Unless the context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of H&E Delaware.




“Subsidiary Guaranties” means each Subsidiary Guaranty executed by each Subsidiary (other
than any Borrower), as of the Original Closing Date or at any time thereafter, of the
Borrowers in favor of Agent, on behalf of itself and Lenders.




“Supplemental Indentures” means the Supplemental Indentures dated June 6, 2006 amending the
Senior Note Indenture and the Senior Subordinated Note Indenture, respectively.




“Supporting Obligations” means all “supporting obligations” as such term is defined in the
Code, including letters of credit and guaranties issued in support of Accounts, Chattel
Paper, Documents, General Intangibles, Instruments or Investment Property.




“Swap Related L/C” means a letter of credit or other credit enhancement provided by GE
Capital to the extent supporting the payment obligations by any Borrower under an interest
rate protection or hedging agreement or transaction (including, but not limited to, interest
rate swaps, caps, collars, floors and similar transactions) designed to protect or manage
exposure to the fluctuations in the interest rates applicable to any of the Loans, and which
agreement or



A-35









 






transaction such Borrower entered into as the result of a specific referral pursuant to
which GE Capital, GE Corporate Financial Services, Inc. or any other Affiliate of GE Capital
had arranged for such Borrower to enter into such agreement or transaction. The term
includes a Swap Related L/C as it may be increased from time to time fully to support
Borrower’s payment obligations under any and all such interest rate protection or hedging
agreements or transactions.




“Swap Related Reimbursement Obligation” has the meaning ascribed to it in Section
1.2A.




“Swing Line Advance” has the meaning assigned to it in Section 1.1(b)(i).




“Swing Line Availability” has the meaning assigned to it in Section 1.1(b)(i).




“Swing Line Commitment” means, as to the Swing Line Lender, the commitment of the Swing Line
Lender to make Swing Line Loans as set forth on Annex J which commitment constitutes a
subfacility of the Revolving Loan Commitment of the Swing Line Lender.




“Swing Line Lender” means GE Capital.




“Swing Line Loan” means at any time, as the context may require, the aggregate amount of
Swing Line Advances outstanding to Borrowers.




“Swing Line Note” has the meaning assigned to it in Section 1.1(b)(ii).




“Syndication Letter” means the letter agreement of the Original Closing Date between the
Predecessor of H&E Delaware and the Agent.




“Tangible Assets” means, with respect to any Person, all tangible assets of such Person as
of any date of determination calculated in accordance with GAAP.




“Target” has the meaning assigned to it in Section 6.1.




“Taxes” means taxes, levies, imposts, deductions, Charges or withholdings, and all
liabilities with respect thereto.




“Termination Date” means the date on which (a) the Loans have been indefeasibly repaid in
full in cash, (b) all other Obligations (other than contingent obligations for which no
claim has been asserted), under the Agreement and the other Loan Documents have been
completely discharged, (c) all Letter of Credit Obligations have been cash collateralized,
canceled or backed by standby letters of credit in accordance with Annex B, and (d) none of
the Borrowers shall have any further right to borrow any monies under the Agreement.




“Title IV Plan” means an “employee pension benefit plan” as defined in Section 3(2) of ERISA
(other than a Multiemployer Plan), that is covered by Title IV of ERISA, and that any Credit
Party or ERISA Affiliate maintains, contributes to or has an obligation to contribute to or
has any liability with respect to on behalf of participants who are or were employed by any
of them.



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“Titled Vehicles” means vehicles for which a certificate of title has been issued any
jurisdiction pursuant to a statute described in section 9-311(a)(2) or 9-311(a)(3) of the
Code.




“Trademark Security Agreements” means the Trademark Security Agreements made in favor of
Agent, on behalf of Lenders, by each applicable Credit Party.




“Trademark License” means rights under any written agreement now owned or hereafter acquired
by any Credit Party granting any right to use any Trademark.




“Trademarks” means all of the following now owned or hereafter existing, adopted or acquired
by any Credit Party: (a) all trademarks, trade names, limited liability company names,
corporate names, business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or unregistered),
all registrations and recordings thereof, and all applications in connection therewith,
including registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any state or
territory thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with or symbolized
by any of the foregoing.




“Trustee” means Bank of New York as trustee for (i) the holders of Senior Notes under the
Senior Note Indenture, (ii) the holders of Senior Subordinated Notes under the Senior
Subordinated Note Indenture and (iii) the holders of the Senior Unsecured Notes under the
Senior Unsecured Note Indenture.




“Unasserted Contingent Obligations” means, at any time, Obligations for taxes, costs,
indemnifications, reimbursements, damages and other liabilities (except for (i) the
principal of and interest and premium (if any) on, and fees relating to, any Indebtedness
and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under
Letters of Credit) in respect of which no claim or demand for payment has been made (or, in
the case of Obligations for indemnification, no notice for indemnification has been issued
by the indemnitee) at such time.




“Unfunded Pension Liability” means, at any time, the aggregate amount, if any, of the sum of
the amount by which the present value of all accrued benefits under each Title IV Plan
exceeds the fair market value of all assets of such Title IV Plan, all determined as of the
most recent valuation date for each such Title IV Plan using the actuarial assumptions for
funding purposes in effect under such Title IV Plan.




“Vendor Inter-Creditor Agreement” means an agreement in the form of Exhibit 6.7(d)(iii)(A)
or Exhibit 6.7(d)(iii)(B), in each case, with such changes thereto as may be approved by the
Agent, between the Agent and the holder of a purchase money Lien in Equipment Inventory or
such other form of intercreditor agreement as the Agent may approve.



A-37









 






“Welfare Plan” means a Plan described in Section 3(1) of ERISA.



Rules of construction with respect to accounting terms used in the Agreement or the other Loan
Documents shall be as set forth in Annex G. All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings provided for by the Code
to the extent the same are used or defined therein; in the event that any term is defined
differently in different Articles of the Code, the definition contained in Article 9 shall control.
Unless otherwise specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in the Agreement.
The words “herein,” “hereof” and “hereunder” and other words of similar import refer to the
Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same may from time to
time be amended, restated, modified or supplemented, and not to any particular section, subsection
or clause contained in the Agreement or any such Annex, Exhibit or Schedule. References in the
definitions to any agreement, indenture, note or other contract shall mean and refer to such
agreement, indenture, note or other contract as amended, modified, supplemented, restated, renewed,
extended, replaced, or substituted, in each case in accordance with the terms of such agreement,
indenture, note or other contract and the terms of the Loan Documents.



Wherever from the context it appears appropriate, each term stated in either the singular or plural
shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and neuter genders. The words “including”, “includes”
and “include” shall be deemed to be followed by the words “without limitation”; the word “or” is
not exclusive; references to Persons include their respective successors and assigns (to the extent
and only to the extent permitted by the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor statutes and
regulations. Whenever any provision in any Loan Document refers to the knowledge (or an analogous
phrase) of any Credit Party, such words are intended to signify that such Credit Party has actual
knowledge or awareness of a particular fact or circumstance or that such Credit Party, if it had
exercised reasonable diligence, would have known or been aware of such fact or circumstance. The
phrase “the date hereof” or “of even date herewith” shall mean August 4, 2006.




A-38










 








ANNEX B (Section 1.2)




to




CREDIT AGREEMENT




LETTERS OF CREDIT





	(a)	 	Issuance
	 
	 	 	Subject to the terms and conditions of the Agreement, Agent and Revolving Lenders agree to
incur, from time to time prior to the Commitment Termination Date, upon the request of
Borrower Representative on behalf of the applicable Borrower and for such Borrower’s
account, Letter of Credit Obligations by causing Letters of Credit to be issued by an L/C
Issuer for Borrower’s account and guaranteed by Agent; provided, that if the L/C Issuer is a
Revolving Lender, then such Letters of Credit shall not be guaranteed by Agent but rather
each Revolving Lender shall, subject to the terms and conditions hereinafter set forth,
purchase (or be deemed to have purchased) risk participations in all such Letters of Credit
issued with the written consent of Agent, as more fully described in paragraph (b)(ii)
below. The aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the least of (i) Thirty Million Dollars ($30,000,000) (the “L/C Sublimit”), and (ii)
the Maximum Amount less the aggregate outstanding principal balance of the Revolving Credit
Advances and the Swing Line Loan, and (iii) the Aggregate Borrowing Base less the
aggregate outstanding principal balance of the Revolving Credit Advances and the Swing Line
Loan. Furthermore, the aggregate amount of any Letter of Credit Obligations incurred on
behalf of any Borrower shall not at any time exceed such Borrower’s separate Borrowing Base
less the aggregate principal balance of the Revolving Credit Advances and the Swing
Line Loan to such Borrower. No such Letter of Credit shall have an expiry date that is more
than one year following the date of issuance thereof, unless otherwise determined by Agent
in its sole discretion, and neither Agent nor Revolving Lenders shall be under any
obligation to incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than the date
that is referred to in clause (a) of the definition of Commitment Termination Date. Each
issuance of a Letter of Credit shall be made on notice by Borrower Representative on behalf
of the applicable Borrower to the representative of Agent identified in Schedule 1.1 at the
address specified therein. Any such notice must be given no later noon (New York time) on
the date which is three (3) Business Days prior to the proposed issuance of such Letter of
Credit. Each such notice (a “Notice of Issuance of Letter of Credit”) must be given in
writing (by telecopy or overnight courier) substantially in the form of Exhibit B-1(a),
shall be accompanied by the proposed form of Letter of Credit (which must be acceptable to
the L/C Issuer) and shall include the information required in such Exhibit and such other
administrative information as may be reasonably required by Agent. Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by Borrowers and approvals
by Agent and the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrowers, Agent and the
L/C Issuer.





B-1









 






	(b)	 	Advances Automatic; Participations






	 	(i)	 	In the event that Agent or any Revolving Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, such payment shall then be deemed
automatically to constitute a Revolving Credit Advance to the applicable Borrower under
Section 1.1(a) of the Agreement regardless of whether a Default or Event of Default has
occurred and is continuing and notwithstanding any Borrower’s failure to satisfy the
conditions precedent set forth in Section 2, and each Revolving Lender shall be
obligated to pay its Pro Rata Share thereof in accordance with the Agreement. The
failure of any Revolving Lender to make available to Agent for Agent’s own account its
Pro Rata Share of any such Revolving Credit Advance or payment by Agent under or in
respect of a Letter of Credit shall not relieve any other Revolving Lender of its
obligation hereunder to make available to Agent its Pro Rata Share thereof, but no
Revolving Lender shall be responsible for the failure of any other Revolving Lender to
make available such other Revolving Lender’s Pro Rata Share of any such payment.
	 
	 	(ii)	 	If it shall be illegal or unlawful for any Borrower to incur Revolving Credit
Advances as contemplated by paragraph (b)(i) above because of an Event of Default
described in Section 8.1(h) or Section 8.1(i) or otherwise or if it shall be illegal or
unlawful for any Revolving Lender to be deemed to have assumed a ratable share of the
reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is a Revolving
Lender, then (A) immediately and without further action whatsoever, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from Agent (or
such L/C Issuer, as the case may be) an undivided interest and participation equal to
such Revolving Lender’s Pro Rata Share (based on the Revolving Loan Commitments) of the
Letter of Credit Obligations in respect of all Letters of Credit then outstanding and
(B) thereafter, immediately upon issuance of any Letter of Credit, each Revolving
Lender shall be deemed to have irrevocably and unconditionally purchased from Agent (or
such L/C Issuer, as the case may be) an undivided interest and participation in such
Revolving Lender’s Pro Rata Share (based on the Revolving Loan Commitments) of the
Letter of Credit Obligations with respect to such Letter of Credit on the date of such
issuance. Each Revolving Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner as provided in the
Agreement with respect to Revolving Credit Advances.






	(c)	 	Cash Collateral






	 	(i)	 	If Borrowers are required to provide cash collateral for any Letter of Credit
Obligations pursuant to the Agreement prior to the Commitment Termination Date, each
Borrower will pay to Agent for the ratable benefit of itself and Revolving Lenders cash
or cash equivalents acceptable to Agent (“Cash Equivalents”) in an amount equal to 105%
of the maximum amount then available to be drawn under each applicable Letter of Credit
outstanding for the benefit of such Borrower. Such funds or Cash Equivalents shall be





B-2









 






	 	 	 	held by Agent in a cash collateral account (the “Cash Collateral Account”)
maintained at a bank or financial institution acceptable to Agent. The Cash
Collateral Account shall be in the name of the applicable Borrower and shall be
pledged to, and subject to the control of, Agent, for the benefit of Agent and
Lenders, in a manner reasonably satisfactory to Agent. Each Borrower hereby pledges
and grants to Agent, on behalf of itself and Lenders, a security interest in all
such funds and Cash Equivalents held in the Cash Collateral Account from time to
time and all proceeds thereof, as security for the payment of all amounts due in
respect of the Letter of Credit Obligations and other Obligations, whether or not
then due. The Agreement, including this Annex B, shall constitute a security
agreement under applicable law.
	 
	 	(ii)	 	If any Letter of Credit Obligations, whether or not then due and payable, shall
for any reason be outstanding on the Commitment Termination Date, each applicable
Borrower shall either (A) provide cash collateral therefor in the manner described
above, or (B) cause all such Letters of Credit and guaranties thereof, if any, to be
canceled and returned, or (C) with the consent of Agent, deliver a stand-by letter (or
letters) of credit in guaranty of such Letter of Credit Obligations, which stand-by
letter (or letters) of credit shall be of like tenor and duration as, and in an amount
equal to 105% of the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding Letter of Credit Obligations relate and
shall be issued by a Person, and shall be subject to such terms and conditions, as are
be satisfactory to Agent in its sole discretion.
	 
	 	(iii)	 	From time to time after funds are deposited in the Cash Collateral Account by
Borrower, whether before or after the Commitment Termination Date, Agent may apply such
funds or Cash Equivalents then held in the Cash Collateral Account to the payment of
any amounts, and in such order as Agent may elect, as shall be or shall become due and
payable by such Borrower to Agent and Lenders with respect to such Letter of Credit
Obligations of such Borrower and, upon the satisfaction in full of all Letter of Credit
Obligations, to any other Obligations of such Borrower then due and payable.
	 
	 	(iv)	 	No Borrower nor any Person claiming on behalf of or through any Borrower shall
have any right to withdraw any of the funds or Cash Equivalents held in the Cash
Collateral Account, except that upon the termination of all Letter of Credit
Obligations and the payment of all amounts payable by Borrowers to Agent and Lenders in
respect thereof, any funds remaining in the Cash Collateral Account shall be applied to
other Obligations then due and owing and upon payment in full of such other
Obligations, any remaining amount shall be paid to Borrowers or as otherwise required
by law. Interest earned on deposits in the Cash Collateral Account shall be for the
account of Agent.






	(d)	 	Fees and Expenses
	 
	 	 	Each Borrower agree to pay to Agent for the benefit of Revolving Lenders, as compensation to
such Lenders for Letter of Credit Obligations incurred by such Borrower hereunder, (i) all
costs





B-3









 






	 	 	and expenses incurred by Agent or any Lender on account of such Letter of Credit
Obligations, and (ii) for each month during which any such Letter of Credit Obligation shall
remain outstanding, a fee (the “Letter of Credit Fee”) in an amount equal to the Applicable
L/C Margin from time to time in effect multiplied by the maximum amount available from time
to time to be drawn under the applicable Letter of Credit. Such fee shall be paid to Agent
for the benefit of the Revolving Lenders in arrears, on the first day of each month and on
the Commitment Termination Date. In addition, each Borrower shall pay to any L/C Issuer, on
demand, such fees (including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related documentation
under which such Letter of Credit is issued.
	 
	(e)	 	Omitted
	 
	(f)	 	Obligation Absolute
	 
	 	 	The obligation of Borrowers to reimburse Agent and Revolving Lenders for payments made with
respect to any Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the obligations
of each Revolving Lender to make payments to Agent with respect to Letters of Credit shall
be unconditional and irrevocable. Such obligations of Borrowers and Revolving Lenders shall
be paid strictly in accordance with the terms hereof under all circumstances including the
following:






	 	(i)	 	any lack of validity or enforceability of any Letter of Credit or the Agreement
or the other Loan Documents or any other agreement;
	 
	 	(ii)	 	the existence of any claim, setoff, defense or other right that any Borrower or
any of its Affiliates or any Lender may at any time have against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person, whether in
connection with the Agreement, the Letter of Credit, the transactions contemplated
herein or therein or any unrelated transaction (including any underlying transaction
between any Borrower or any of its Affiliates and the beneficiary for which the Letter
of Credit was procured);
	 
	 	(iii)	 	any draft, demand, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
	 
	 	(iv)	 	payment by Agent (except as otherwise expressly provided in paragraph
(g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or guaranty thereof
against presentation of a demand, draft or certificate or other document that does not
comply with the terms of such Letter of Credit or such guaranty;
	 
	 	(v)	 	any other circumstance or event whatsoever, that is similar to any of the
foregoing; or
	 
	 	(vi)	 	the fact that a Default or an Event of Default has occurred and is continuing.





B-4









 






	(g)	 	Indemnification; Nature of Lenders’ Duties






	 	(i)	 	In addition to amounts payable as elsewhere provided in the Agreement,
Borrowers hereby agree to pay and to protect, indemnify, and save harmless Agent and
each Lender from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys’ fees and allocated costs
of internal counsel) that Agent or any Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of Credit or
guaranty thereof, or (B) the failure of Agent or any Lender seeking indemnification or
of any L/C Issuer to honor a demand for payment under any Letter of Credit or guaranty
thereof as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, in each
case other than to the extent solely as a result of the gross negligence or willful
misconduct of Agent or such Lender (as finally determined by a court of competent
jurisdiction).
	 
	 	(ii)	 	As between Agent and any Lender and Borrowers, Borrowers assume all risks of
the acts and omissions of, or misuse of any Letter of Credit by beneficiaries of any
Letter of Credit. In furtherance and not in limitation of the foregoing, to the
fullest extent permitted by law neither Agent nor any Lender shall be responsible for:
(A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and issuance of any
Letter of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C) failure of the
beneficiary of any Letter of Credit substantially to comply with conditions required in
order to demand payment under such Letter of Credit; provided that, in the case of any
payment by Agent under any Letter of Credit or guaranty thereof, Agent shall be liable
to the extent such payment was made solely as a result of its gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty thereof
complies on its face with any applicable requirements for a demand for payment under
such Letter of Credit or guaranty thereof; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they may be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or guaranty thereof or
of the proceeds thereof; (G) the credit of the proceeds of any drawing under any Letter
of Credit or guaranty thereof; and (H) any consequences arising from causes beyond the
control of Agent or any Lender. None of the above shall affect, impair, or prevent the
vesting of any of Agent’s or any Lender’s rights or powers hereunder or under the
Agreement.





B-5









 






	 	(iii)	 	Nothing contained herein shall be deemed to limit or to expand any waivers,
covenants or indemnities made by Borrowers in favor of any L/C Issuer in any letter of
credit application, reimbursement agreement or similar document, instrument or
agreement between or among Borrowers and such L/C Issuer.






	(h)	 	Reimbursement
	 
	 	 	Borrowers shall be irrevocably and unconditionally obligated forthwith without presentment,
demand, protest or other formalities of any kind (including for purposes of Section 12), to
reimburse any L/C Issuer on demand in immediately available funds for any amounts paid by
such L/C Issuer with respect to a Letter of Credit, including all reimbursement payments,
fees, Charges, costs and expenses paid by such L/C Issuer. Borrowers hereby authorize and
direct Agent, at Agent’s option, to debit Borrowers’ account (by increasing the outstanding
principal balance of the Revolving Credit Advances) in the amount of any payment made by an
L/C Issuer with respect to any Letter of Credit.





B-6









 





ANNEX C (Section 1.8)




to




CREDIT AGREEMENT




CASH MANAGEMENT SYSTEMS



Borrowers shall and shall cause each other Credit Party to establish and maintain the Cash
Management Systems described below:





	(a)	 	On or before the Closing Date, and until the Termination Date, each Borrower shall (i)
establish lock boxes (“Lock Boxes”) or at Agent’s discretion, blocked accounts (“Blocked
Accounts”) at one or more of the banks set forth in Disclosure Schedule (3.19), and shall
request in writing and otherwise take such reasonable steps to ensure that all Account Debtors
(except as set forth below) forward payment directly to such Lock Boxes, and (ii) deposit and
cause its Subsidiaries to deposit or cause to be deposited promptly, and in any event no later
than the first Business Day after the date of receipt thereof, all cash, checks, drafts or
other similar items of payment relating to or constituting payments made in respect of any and
all Collateral (whether or not otherwise delivered to a Lock Box) into one or more Blocked
Accounts in such Borrower’s name or any such Subsidiary’s name and at a bank identified in
Disclosure Schedule (3.19) (each, a “Relationship Bank”). At the request of Agent, each
Borrower shall have established a concentration account in its name (each a “Concentration
Account” and collectively, the “Concentration Accounts”) at the bank which shall be designated
as the Concentration Account bank for such Borrower in Disclosure Schedule (3.19) (the
“Concentration Account Bank” and, collectively, the “Concentration Account Banks”) which bank
shall be reasonably satisfactory to Agent and such Borrower. No Credit Party shall maintain a
deposit account that is not subject to a Blocked Account Agreement.
	 
	(b)	 	Each Borrower may maintain, in its name, an account (each a “Disbursement Account” and
collectively, the “Disbursement Accounts”) at a bank reasonably acceptable to Agent into which
Agent shall, from time to time, deposit proceeds of Revolving Credit Advances and Swing Line
Advances made to such Borrower pursuant to Section 1.1 for use by such Borrower solely in
accordance with the provisions of Section 1.4. No Credit Party shall maintain any deposit
account other than a deposit account that is subject to a Blocked Account Agreement.
	 
	(c)	 	On or before the Closing Date (or such later date as Agent shall consent to in writing), each
Concentration Account Bank, each bank where a Disbursement Account is maintained and all other
Relationship Banks, shall have entered into tri-party blocked account agreements with Agent,
for the benefit of itself and Lenders, and the applicable Credit Party and Subsidiaries
thereof, as applicable, in form and substance reasonably acceptable to Agent, which shall
become operative on or prior to the Closing Date (a “Blocked Account Agreement”). Each such
blocked account agreement shall provide, among other things, that (i) all items of payment
deposited in such account and proceeds thereof deposited in the applicable Concentration
Account are held by





C-1









 






	 	 	such bank as agent or bailee-in-possession for Agent, on behalf of itself and Lenders, (ii)
the bank executing such agreement has no rights of setoff or recoupment or any other claim
against such account, as the case may be, other than for payment of its service fees and
other charges directly related to the administration of such account and for returned checks
or other items of payment, and (iii) from and after the Closing Date (A) with respect to
banks at which a Blocked Account is maintained, such bank agrees, from and after the receipt
of a notice (an “Activation Notice”) from Agent (which Activation Notice may be given by
Agent at any time at which (1) a Default or Event of Default has occurred and is continuing,
(2) Agent reasonably believes based upon information available to it that a Default or an
Event of Default is likely to occur; (3) Agent reasonably believes that an event or
circumstance that is likely to have a Material Adverse Effect has occurred, or (4) Agent
reasonably has grounds to believe that the integrity of any Credit Party Cash Management
Systems has been compromised or any Credit Party compliance with the provisions of this
Annex C or any other provisions of the Loan Documents to the extent related to such Cash
Management Systems (any of the foregoing being referred to herein as an “Activation
Event”)), to forward immediately all amounts in each Blocked Account to such Borrower’s
Concentration Account Bank and to commence the process of daily sweeps from such Blocked
Account into the applicable Concentration Account and (B) with respect to each Concentration
Account Bank, such bank agrees from and after the receipt of an Activation Notice from Agent
upon the occurrence of an Activation Event, to immediately forward all amounts received in
the applicable Concentration Account to the Collection Account through daily sweeps from
such Concentration Account into the Collection Account. From and after the date Agent has
delivered an Activation Notice to any bank with respect to any Blocked Account(s), no Credit
Party shall, or shall cause or permit any Subsidiary thereof to, accumulate or maintain cash
in Disbursement Accounts or payroll accounts as of any date of determination in excess of
checks outstanding against such accounts as of that date and amounts necessary to meet
minimum balance requirements.
	 
	(d)	 	So long as no Default or Event of Default has occurred and is continuing, Credit Parties may
amend Disclosure Schedule (3.19) to add or replace a Relationship Bank, Lock Box or Blocked
Account or to replace any Concentration Account or any Disbursement Account; provided, that
(i) Agent shall have consented in writing in advance to the opening of such account or Lock
Box with the relevant bank and (ii) prior to the time of the opening of such account or Lock
Box, the applicable Credit Party or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked or Lock Box account agreement, in form and
substance reasonably satisfactory to Agent. Each Credit Party shall close any of its accounts
(and establish replacement accounts in accordance with the foregoing sentence) promptly and in
any event within thirty (30) days following notice from Agent that the creditworthiness of any
bank holding an account is no longer acceptable in Agent’s reasonable judgment, or as promptly
as practicable and in any event within sixty (60) days following notice from Agent that the
operating performance, funds transfer or availability procedures or performance with respect
to accounts or Lock Boxes of the bank holding such accounts or Agent’s liability under any
tri-party blocked or Lock Box blocked account agreement with such bank is no longer acceptable
in Agent’s reasonable judgment.





C-2









 






	(e)	 	The Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration Accounts shall
be cash collateral accounts, with all cash, checks and other similar items of payment in such
accounts securing payment of the Loans and all other Obligations, and in which the applicable
Credit Party and each Subsidiary thereof shall have granted a Lien to Agent, on behalf of
itself and Lenders, pursuant to its Security Agreement.
	 
	(f)	 	All amounts deposited in the Collection Account shall be deemed received by Agent in
accordance with Section 1.6 and shall be applied (and allocated) by Agent in accordance with
Section 1.7. In no event shall any amount be so applied unless and until such amount shall
have been credited in immediately available funds to the Collection Account.
	 
	(g)	 	Each Credit Party shall and shall cause its Affiliates, officers, employees, agents,
directors or other Persons acting for or in concert with such Credit Party (each a “Related
Person”) to (i) hold in trust for Agent, for the benefit of itself and Lenders, all checks,
cash and other items or payment constituting proceeds of Collateral received by such Credit
Party or any such Related Person, and (ii) within one (1) Business Day after receipt by such
Credit Party or any such Related Person of any checks, cash or other items or payment, deposit
the same into a Blocked Account of such Credit Party. Each Credit Party and each Related
Person thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of the sale or
other disposition of any Collateral, shall be deposited directly into the applicable Blocked
Accounts.





C-3









 





ANNEX D (Section 2.2(a))




to




CREDIT AGREEMENT




CLOSING CHECKLIST



In addition to, and not in limitation of, the conditions described in Section 2.1 of the Agreement,
pursuant to Section 2.1(a), the following items must be received by Agent in form and substance
satisfactory to Agent on or prior to the Closing Date (each capitalized term used but not otherwise
defined herein has the meaning ascribed thereto in Annex A to the Agreement):





	(A)	 	Appendices
	 
	 	 	All Appendices to the Agreement, in form and substance satisfactory to Agent.
	 
	(B)	 	Revolving Notes and Swing Line Note
	 
	 	 	Duly executed originals of the Revolving Notes and Swing Line Notes for each applicable
Lender, dated the Closing Date, if requested by the respective Lenders.
	 
	(C)	 	Insurance
	 
	 	 	Satisfactory evidence that the insurance policies required by Section 5.4 are in full force
and effect, together with appropriate evidence showing loss payable and/or additional
insured clauses or endorsements, as requested by Agent, in favor of Agent, on behalf of
Lenders.
	 
	(D)	 	Security Documents
	 
	 	 	Such amendments, confirmations and assumptions of or relating to the Collateral Documents
and such additional security, pledge and similar documents as Agent may reasonably request.
	 
	(E)	 	Security Interests and Code Filings






	 	(a)	 	Evidence satisfactory to Agent that Agent (for the benefit of itself and
Lenders) has a valid and perfected first priority security interest in the Collateral,
including (i) such documents duly executed by each Credit Party (including financing
statements under the Code and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Agent may request in order to
perfect its security interests in the Collateral and (ii) copies of Code search reports
listing all effective financing statements that name any Credit Party as debtor,
together with copies of such financing statements, none of which shall cover the
Collateral, except for Permitted Encumbrances.





D-1









 






	 	(b)	 	Evidence satisfactory to Agent, including copies, of all UCC-1 and other
financing statements filed in favor of any Credit Party with respect to each location,
if any, at which Parts and Tools Inventory or Equipment Inventory may be consigned.
	 
	 	(c)	 	Control Letters from (i) all issuers of uncertificated securities and financial
assets held by any Borrower, (ii) all securities intermediaries with respect to all
securities accounts and securities entitlements of any Borrower, and (iii) all futures
commission agents and clearing houses with respect to all commodities contracts and
commodities accounts held by any Borrower.
	 
	 	(d)	 	Evidence that Agent has been named as lien-holder or secured party on all
certificates of title for all Title Vehicles owned by Credit Parties, other than Titled
Vehicles constituting Equipment Inventory (except that Agent must be named as
lien-holder on Titled Vehicles constituting Equipment Inventory of the type listed on
Disclosure Schedule (3.24)).






	(F)	 	Borrowing Base Certificate
	 
	 	 	Duly executed originals of a Borrowing Base Certificate from each Borrower, dated the
Closing Date, reflecting information concerning Eligible Accounts, Eligible Rentals,
Eligible Parts and Tools Inventory, Eligible Rolling Stock and Eligible Equipment Inventory
of Borrowers.
	 
	(G)	 	Notice of Revolving Credit Advance
	 
	 	 	Duly executed originals of a Notice of Revolving Credit Advance, dated the Closing Date,
with respect to the Revolving Credit Advance to be requested by Borrowers on the Closing
Date.
	 
	(H)	 	Letter of Direction
	 
	 	 	Duly executed originals of a letter of direction from Borrowers addressed to Agent, on
behalf of itself and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the Revolving Credit Advance made hereunder.
	 
	(I)	 	Cash Management System; Blocked Account Agreements
	 
	 	 	Evidence satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with Annex C to the Agreement have been established and are currently being
maintained in the manner set forth in such Annex C, together with copies of duly executed
tri-party blocked account and lock box agreements, reasonably satisfactory to Agent, with
the banks as required by Annex C.
	 
	(J)	 	Certificate of Formation and Good Standing
	 
	 	 	For each Credit Party, (a) its articles or certificate of incorporation or certificate of
formation, as applicable, and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation or formation, as
applicable, and (c) good standing certificates (including verification of tax status) and
certificates of qualification to conduct





D-2









 






	 	 	business in each jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the Closing Date and
certified by the applicable Secretary of State or other authorized Governmental Authority.
	 
	(K)	 	By-laws and Resolutions
	 
	 	 	For each Credit Party, (a) its by-laws or operating agreement, as applicable, together with
all amendments thereto and (b) resolutions of such Person’s Board of Directors or Board of
Members, as applicable, approving and authorizing the execution, delivery and performance of
the Loan Documents to which it is a party and the transactions to be consummated in
connection therewith, each certified as of the Closing Date by such Person’s secretary or an
assistant secretary as being in full force and effect without any modification or amendment.
	 
	(L)	 	Incumbency Certificates
	 
	 	 	For each Credit Party, signature and incumbency certificates of the officers of such Person
executing any of the Loan Documents, certified as of the Closing Date by such Person’s
secretary or an assistant secretary as being true, accurate, correct and complete.
	 
	(M)	 	Opinions of Counsel
	 
	 	 	Duly executed originals of opinions of Dechert LLP, New York and California counsel for the
Credit Parties, together with opinions of Delaware, Washington and Montana counsel, each in
form and substance reasonably satisfactory to Agent and its counsel, dated the Closing Date,
and each accompanied by a letter addressed to such counsel from the Credit Parties,
authorizing and directing such counsel to address its opinion to Agent, on behalf of
Lenders, and to include in such opinion an express statement to the effect that Agent and
Lenders are authorized to rely on such opinion.
	 
	(N)	 	GE Capital Fee Letter
	 
	 	 	Duly executed originals of the GE Capital Fee Letter in form and substance satisfactory to
GE Capital.
	 
	(O)	 	Officer’s Certificate
	 
	 	 	Duly executed originals of a certificate of an Authorized Officer of each Credit Party,
dated the Closing Date, stating that, (i) since June 30, 2006 (a) no event or condition has
occurred or is existing which could reasonably be expected to have a Material Adverse
Effect; (b) there has been no material adverse change in the industry in which any Borrower
operates; (c) no Litigation has been commenced against such Credit Party which, if
successful, would have a Material Adverse Effect or could challenge any of the transactions
contemplated by the Agreement and the other Loan Documents; and (d) there has been no
material increase in liabilities, liquidated or contingent, and no material decrease in
assets of any Borrower or any of its Subsidiaries; (ii) no default or event of default has
occurred under any material contract to which any Borrower is a





D-3









 






	 	 	party; (iii) that the conditions set forth in Section 2.1(k) have been satisfied and (iv)
that the attached copies of the Related Transactions Documents are correct and complete.
	 
	(P)	 	Waivers
	 
	 	 	Landlord waivers and consents, bailee letters and mortgagee agreements in form and substance
reasonably satisfactory to Agent, in each case as required pursuant to Section 5.9, provided
that Agent may waive this condition as to any one or more locations as contemplated by
Section 5.9 and the various borrowing base definitions.
	 
	(Q)	 	Appraisals
	 
	 	 	Equipment Inventory Appraisals and P&E Appraisals conducted by an appraiser reasonably
satisfactory to Agent and Borrowers and using a methodology reasonably satisfactory to
Agent, each of which shall be in form and substance reasonably satisfactory to Agent.
	 
	(R)	 	Environmental Reports
	 
	 	 	Agent shall have received such environmental review and audit reports with respect to the
Real Estate of any Credit Party as Agent shall have requested, and Agent shall be satisfied,
in its sole discretion, with the contents of all such environmental reports.
	 
	(S)	 	Audited Financials; Financial Condition
	 
	 	 	The Financial Statements, Projections and other materials set forth in Section 3.4,
certified by an Authorized Officer of Borrower Representative, in each case in form and
substance reasonably satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a certificate of
an Authorized Officer of each Borrower, based on such Pro Forma and Projections, to the
effect that (a) such Borrower will be Solvent upon the consummation of the transactions
contemplated herein; (b) the Pro Forma fairly presents the financial condition of such
Borrower as of the date thereof after giving effect to the transactions contemplated by the
Loan Documents; (c) the Projections are based upon estimates and assumptions stated therein,
all of which such Borrower believes to be reasonable and fair in light of current conditions
and current facts known to such Borrower and, as of the Closing Date, reflect such
Borrower’s good faith and reasonable estimates of its future financial performance and of
the other information projected therein for the period set forth therein; and (e) containing
such other statements with respect to the solvency of such Borrower and matters related
thereto as Agent shall request.
	 
	(T)	 	Other Documents
	 
	 	 	Such other certificates, documents and agreements respecting and Credit Party as Agent may,
in its sole discretion, request.





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ANNEX E (Section 4.1(a))




to




CREDIT AGREEMENT




FINANCIAL STATEMENTS AND PROJECTIONS — REPORTING



Each Borrower shall deliver or cause to be delivered to Agent or to Agent and Lenders, as
indicated, the following:





	 	(a)	 	Monthly Financials
	 
	 	 	 	To Agent and Lenders, within thirty (30) days after the end of each Fiscal Month,
financial information regarding H&E Delaware and its Subsidiaries, certified by an
Authorized Officer of Borrower Representative, consisting of consolidated and
consolidating, if applicable (i) unaudited balance sheets as of the close of such
Fiscal Month (including a summary of the outstanding balance of all Intercompany
Notes as of the last day of such Fiscal Month) and the related statements of income
and cash flow and shareholders’ equity for that portion of the Fiscal Year ending as
of the close of such Fiscal Month and (ii) unaudited statements of income, cash
flows and shareholders’ equity for such Fiscal Month, setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections for such Fiscal Year, all prepared in accordance with
GAAP (subject to normal year-end adjustments). Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a “Compliance
Certificate”) showing the calculations used in determining compliance with each
Financial Covenant which is tested on a monthly basis as of the end of such Fiscal
Quarter, and (B) the certification of an Authorized Officer of Borrower
Representative that (i) such financial information presents fairly in accordance
with GAAP (subject to normal year-end adjustments) the financial position and
results of operations of H&E Delaware and its Subsidiaries, on a consolidated and
consolidating basis, if applicable, in each case as at the end of such Fiscal Month
and for that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there was
no Default or Event of Default in existence as of such time or, if a Default or
Event of Default has occurred and is continuing, describing the nature thereof and
all efforts undertaken to cure such Default or Event of Default.
	 
	 	(b)	 	Quarterly Financials
	 
	 	 	 	To Agent and Lenders, within forty-five (45) days after the end of each Fiscal
Quarter, consolidated and consolidating, if applicable, financial information
regarding H&E Delaware and its Subsidiaries, certified by an Authorized Officer of
Borrower Representative, including (i) unaudited balance sheets as of the close of
such Fiscal





E-1









 






	 	 	 	Quarter and the related statements of income and cash flow for that portion of the
Fiscal Year ending as of the close of such Fiscal Quarter and (ii) unaudited
statements of income and cash flows for such Fiscal Quarter, in each case setting
forth in comparative form, the figures for the corresponding period in the prior
year and the figures contained in the Projections for such Fiscal Year, all prepared
in accordance with GAAP (subject to normal year-end adjustments). Such financial
information shall be accompanied by (A) a Compliance Certificate in respect of each
of the Financial Covenants that are tested on a quarterly basis as at the end of
such Fiscal Quarter and (B) the certification of an Authorized Officer of Borrower
Representative that (i) such financial information presents fairly in accordance
with GAAP (subject to normal year-end adjustments) the financial position, results
of operations and statements of cash flows of H&E Delaware and its Subsidiaries, on
both a consolidated and consolidating basis, if applicable, as at the end of such
Fiscal Quarter and for that portion of the Fiscal Year then ended, (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrowers shall deliver to Agent and Lenders, within forty-five (45) days
after the end of each Fiscal Quarter, a management discussion and analysis that
includes a comparison to budget for that Fiscal Quarter and a comparison of
performance for that Fiscal Quarter to the corresponding period in the prior year.
	 
	 	(c)	 	Operating Plan
	 
	 	 	 	To Agent and Lenders, as soon as available, but not later than forty-five (45) days
after the end of each Fiscal Year, an annual operating plan for H&E Delaware and its
Subsidiaries, on a consolidated and consolidating basis, approved by the Board of
Directors of H&E Delaware, (a) for the first Fiscal Year following the Closing Date,
which (i) includes a statement of all of the material assumptions on which such plan
is based and (ii) includes monthly balance sheets, a monthly budget, income
statements and statements of cash flow for the following year and (b) for the four
Fiscal Years thereafter, which (i) includes a statement of all of the material
assumptions on which such plan is based and (ii) includes monthly balance sheets, a
monthly budget, income statements and statements of cash flow for the following
year, and in each such case, integrates sales, gross profits, operating expenses,
operating profit, cash flow projections and Borrowing Availability projections, all
prepared on the same basis and in similar detail as that on which operating results
are reported (and in the case of cash flow projections, representing management’s
good faith estimates of future financial performance based on historical
performance), and including plans for personnel, P&E Capital Expenditures and
facilities.





E-2









 






	 	(d)	 	Annual Audited Financials
	 
	 	 	 	To Agent and Lenders, within ninety (90) days after the end of each Fiscal Year,
audited Financial Statements for H&E Delaware and its Subsidiaries on a consolidated
and (unaudited) consolidating basis, if applicable, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year which
Financial Statements shall be prepared in accordance with GAAP and certified without
qualification, by an independent certified public accounting firm of national
standing or otherwise acceptable to Agent. Such Financial Statements shall be
accompanied by (i) a statement prepared in reasonable detail showing the
calculations used in determining compliance with each of the Financial Covenants as
of the end of such Fiscal Year, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to their
attention to cause them to believe that a Default or Event of Default has occurred
(or specifying those Defaults and Events of Default that they became aware of), it
being understood that such audit examination extended only to accounting matters and
that no special investigation was made with respect to the existence of Defaults or
Events of Default, (iii) a letter addressed to Agent, on behalf of itself and
Lenders, in form and substance reasonably satisfactory to Agent and subject to
standard qualifications required by nationally recognized accounting firms, signed
by such accounting firm acknowledging that Agent and Lenders are entitled to rely
upon such accounting firm’s certification of such audited Financial Statements, (iv)
the annual letters to such accountants in connection with their audit examination
detailing contingent liabilities and material litigation matters, and (v) the
certification of an Authorized Officer of Borrower Representative that all such
Financial Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of H&E Delaware and its
Subsidiaries on a consolidated and consolidating basis, if applicable, as at the end
of such Fiscal Year and for the period then ended, and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of Default
has occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default.
	 
	 	(e)	 	Management Letters
	 
	 	 	 	To Agent and Lenders, within ten (10) Business Days after receipt thereof by any
Credit Party, copies of all management letters, exception reports or similar letters
or reports received by such Credit Party from its independent certified public
accountants.
	 
	 	(f)	 	Default Notices
	 
	 	 	 	To Agent and Lenders, as soon as practicable, and in any event within five (5)
Business Days after an executive officer of any Credit Party has actual knowledge of
the existence of any Default, Event of Default or other event that has had a
Material Adverse Effect, telephonic or telecopied notice specifying the nature of
such Default or Event of Default





E-3









 






	 	 	 	or other event, including the anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business Day.
	 
	 	(g)	 	SEC Filings and Press Releases
	 
	 	 	 	To Agent and Lenders, promptly upon their becoming available, copies of: (i) all
Financial Statements, reports, notices and proxy statements made publicly available
by any Credit Party to its security holders; (ii) all regular and periodic reports
and all registration statements and prospectuses, if any, filed by any Credit Party
with any securities exchange or with the Securities and Exchange Commission or any
governmental regulatory authority; and (iii) all press releases and other statements
made available by any Credit Party to the public concerning material adverse changes
or developments in the business of such Credit Party.
	 
	 	(h)	 	Subordinated Debt, Senior Notes Senior Unsecured Notes and Equity Notices
	 
	 	 	 	To Agent and Lenders, as soon as practicable, copies of all material written notices
given or received by any Credit Party with respect to any Subordinated Debt
(including the Senior Subordinated Notes), the Senior Notes, the Senior Unsecured
Notes or Stock of such Credit Party, and, within two (2) Business Days after such
Credit Party obtains knowledge of any matured or unmatured event of default with
respect to any Subordinated Debt (including the Senior Subordinated Notes), the
Senior Notes, or the Senior Unsecured Notes notice of such event of default.
	 
	 	(i)	 	Supplemental Schedules
	 
	 	 	 	To Agent, supplemental disclosures, if any, required by Section 5.6.
	 
	 	(j)	 	Litigation
	 
	 	 	 	To Agent and Lenders in writing, promptly upon learning thereof, written notice of
any Litigation commenced or threatened against any Credit Party that (i) seeks
damages in excess of $500,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets or against any Credit
Party or ERISA Affiliate in connection with any Plan, (iv) alleges criminal
misconduct by any Credit Party, or (v) alleges the violation of any law regarding,
or seeks remedies in connection with, any Environmental Liabilities or (vi) involves
any product recall.
	 
	 	(k)	 	Insurance Notices
	 
	 	 	 	To Agent, disclosure of losses or casualties required by Section 5.4.
	 
	 	(l)	 	Default and Other Notices
	 
	 	 	 	To Agent and Lenders, within five (5) Business Days after receipt thereof, copies of
(i) any and all default notices received under or with respect to any leased
location or





E-4









 






	 	 	 	public warehouse where Collateral is located, and (ii) such other notices or documents as
Agent may reasonably request.
	 
	 	(m)	 	Lease Amendments
	 
	 	 	 	To Agent within five (5) Business Days after the receipt thereof, copies of all
material amendments to any of the five (5) largest real estate leases (by the value
of annual payments of the real estate so leased) or to any real estate lease to
which Don Wheeler or John Engquist is a lessor.
	 
	 	(n)	 	Other Documents
	 
	 	 	 	To Agent and Lenders, such other financial and other information respecting any
Credit Party’s business or financial condition as Agent or any Lender shall, from
time to time, reasonably request.





E-5









 





ANNEX F (Section 4.1(b))




to




CREDIT AGREEMENT




COLLATERAL REPORTS



Each Borrower shall deliver or cause to be delivered the following:





	(a)	 	To Agent, upon its request, and in no event less frequently than ten (10) Business Days after
the end of each Fiscal Month (together with a copy of all or any part of the following reports
requested by any Lender in writing after the Closing Date), each of the following reports,
each of which shall be prepared by such Borrower as of the last day of the immediately
preceding Fiscal Month or the date two (2) days prior to the date of any such request:






     (i) a Borrowing Base Certificate with respect to each Borrower, in each case
accompanied by such supporting detail and documentation as shall be requested by Agent in
its reasonable discretion;




     (ii) with respect to such Borrower, a summary of Parts and Tools Inventory and
Equipment Inventory by branch location and type with a supporting perpetual Parts and Tools
Inventory and Equipment Inventory report, in each case accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable discretion;




     (iii) with respect to such Borrower, a monthly trial balance showing Accounts and
Rentals outstanding aged from invoice due date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion; and




     (iv) a report describing outstanding Equipment Inventory rentals for such period and
the Equipment Inventory subject thereto.




	(b)	 	To Agent, on a weekly basis or at such more frequent intervals as Agent may request from time
to time (together with a copy of all or any part of such delivery requested by any Lender in
writing after the Closing Date), collateral reports with respect to such Borrower, including
all additions and reductions (cash and non-cash) with respect to Accounts and Rentals of such
Borrower, in each case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion each of which shall be prepared by such
Borrower as of the last day of the immediately preceding week or the date 2 days prior to the
date of any such request;
	 
	(c)	 	To Agent, at the time of delivery of each of the monthly Financial Statements delivered
pursuant to Annex E:






     (i) a reconciliation of the Accounts and Rentals trial balance of such Borrower to such
Borrower’s most recent Borrowing Base Certificate, general ledger and monthly Financial



F-1









 






Statements delivered pursuant to Annex E, in each case accompanied by such supporting
detail and documentation as shall be requested by Agent in its reasonable discretion;




     (ii) a reconciliation of the perpetual inventory by branch location of such Borrower to
such Borrower’s most recent Borrowing Base Certificate, general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable discretion;




     (iii) an aging of accounts payable and a reconciliation of that accounts payable aging
to such Borrower’s general ledger and monthly Financial Statements delivered pursuant to
Annex E, in each case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion; and




     (iv) a reconciliation of the outstanding Loans as set forth in the monthly Loan Account
statement provided by Agent to such Borrower’s general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable discretion;




	(d)	 	To Agent, at the time of delivery of each of the quarterly Financial Statements delivered
pursuant to Annex E, (i) a listing of government contracts of such Borrower subject to the
Federal Assignment of Claims Act of 1940; and (ii) a list of any applications for the
registration of any Patent, Trademark or Copyright filed by any Credit Party with the United
States Patent and Trademark Office, the United States Copyright Office or any similar office
or agency in the prior Fiscal Quarter;
	 
	(e)	 	At its own expense, to Agent the results of each physical verification, if any, that such
Borrower or any of its Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their Parts and Tools Inventory
or Equipment Inventory (and, if an Event of Default has occurred and is continuing, such
Borrower shall, upon the request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require);
	 
	(f)	 	At its own expense, to Agent monthly, a fleet utilization report for such Borrower, prepared
on a “days rented” basis, or on such other basis or format as is reasonably acceptable to the
Agent;
	 
	(g)	 	At its own expense, to Agent the Equipment Inventory Appraisal for such Borrower, the P&E
Appraisal and such other appraisals of its assets as Agent may request at any time after the
occurrence and during the continuance of a Default or an Event of Default, such appraisals to
be conducted by an appraiser, and in form and substance, reasonably satisfactory to Agent; and
	 
	(h)	 	Such other reports, statements and reconciliations with respect to the Borrowing Base,
Collateral or Obligations of such Borrower or any other Credit Party as Agent shall from time
to time request in its reasonable discretion.





F-2









 





ANNEX G (Section 6.10)




to




CREDIT AGREEMENT




FINANCIAL COVENANTS



Neither H&E Delaware nor any Subsidiary thereof shall breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:





	(a)	 	Minimum Fixed Charge Coverage Ratio. So long as a Covenant Liquidity Event is continuing,
H&E Delaware and its Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Month, a Fixed Charge Coverage Ratio for the period of twelve consecutive Fiscal Months then
ending of not less than 1.10 to 1.00.





G-1









 





ANNEX H (Section 9.10(a))




to




CREDIT AGREEMENT




LENDERS’ WIRE TRANSFER INFORMATION




	 	 	 
	Name:
	 	General Electric Capital Corporation
	Bank:
	 	Deutsche Bank Trust Company
	ABA #:
	 	021 001 033
	Account #:
	 	50279791
	Account Name:
	 	GECC/CAF Depository
	Reference:
	 	CFN8650 H&E Equipment Services
	 
	 	 
	Name:
	 	Bank of America, N.A.
	Bank:
	 	Bank of America, N.A.
	ABA #:
	 	026-009-593
	Account #:
	 	9369337536
	Account Name:
	 	Bank of America Business Capital
	Reference:
	 	BABC and H&E Equipment
	 
	 	 
	Name:
	 	LaSalle Business Credit, Inc.
	Bank:
	 	LaSalle National Bank
	ABA #:
	 	071000505
	Account #:
	 	5800333378
	Account Name:
	 	LaSalle Business
	Reference:
	 	Head & Engquist Participation
	 
	 	 
	Name:
	 	PNC Bank National Association
	Bank:
	 	PNC Bank
	ABA #:
	 	031207607
	Account #:
	 	196039957830
	Account Name:
	 	PNC Business Credit
	Reference:
	 	H&E Equipment Services






H-1









 





ANNEX I (Section 11.10)




to




CREDIT AGREEMENT




NOTICE ADDRESSES





	(A)	 	If to Agent or GE Capital, at:
	 
	 	 	General Electric Capital Corporation

299 Park Ave, 6th Floor

New York, NY 10171

Attention: H&E Equipment Services Account Manager

Telephone No.: (212) 370-8003

Telecopier No.: (646) 428-7398

	 
	 	 	with copies to:
	 
	 	 	Global Sponsor Finance

GE Corporate Financial Services, Inc.

201 Merritt Seven

Norwalk, Connecticut

Attention: Corporate Counsel

Telecopier No.: (203) 956-4216
	 
	 	 	and
	 
	 	 	King & Spalding LLP

1185 Avenue of the Americas

New York, NY 10036-4003

Attention: Robert S. Finley

Telephone No.: (212) 556-2142

Telecopier No.: (212) 556-2222
	 
	(B)	 	If to a Lender other than GE Capital, at the following, as applicable:
	 
	 	 	PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue, 6th Floor

Pittsburgh, PA 15222

Attention: Doug Hoffman

Telephone No.: (412) 768-1333

Telecopier No: (212) 768-4369

LaSalle Business Credit, Inc.





I-1









 






	 	 	One Centerpointe Drive

Suite 500

Lake Oswego, OR 97035

Attention: Andrew Moulton

Telephone No.: (503) 431-6142

Telecopier No.: (503) 684-4665
	 
	 	 	Bank of America, N.A.

335 Madison Avenue

6th Floor

New York, NY 10017

Attention: Ed Kahn

Telephone No.: (212) 503-7370

Telecopier No.: (212) 503-7340
	 
	(C)	 	If to any Credit Party, to Borrower Representative at:
	 
	 	 	H&E Equipment Services, Inc.

11100 Mead Road, Suite 200

Baton Rouge, LA 70816

Attention: Leslie Magee

Telecopier No.: (225) 298-5232

Telephone No.: (225) 298-5332





I-2









 





ANNEX J (from Annex A — Commitments definition)




to




CREDIT AGREEMENT




	 	 	 	 	 
	Lender(s):
	 	 	 	 
	 
	 	 	 	 
	General Electric Capital Corporation
	 	 	 	 
	 
	 	 	 	 
	Revolving Loan Commitment:
	 	$	100,000,000	 
	 
	 	 	 	 
	Swing Line Commitment:
	 	$	15,000,000	 
	 
	 	 	 	 
	Bank of America, N.A.
	 	$	90,000,000	 
	 
	 	 	 	 
	PNC Bank, National Association
	 	$	30,000,000	 
	 
	 	 	 	 
	LaSalle Business Credit
	 	$	30,000,000