Document:

Exhibit 10.7

 

	
 
    

 

$375,000,000

 

AMENDED AND RESTATED

SENIOR SECURED CREDIT AGREEMENT

 

DATED AS OF OCTOBER 1, 2010

 

as amended and restated as of November 20, 2013

 

by and among

 

NEFF LLC,

as Parent Borrower,

 

NEFF HOLDINGS LLC,

 

THE OTHER PERSONS PARTY HERETO THAT ARE

DESIGNATED AS CREDIT PARTIES,

 

BANK OF AMERICA, N.A.,

as Agent, Swing Line Lender, and L/C Issuer,

 

THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

 

BANK OF AMERICA, N.A.

and

WELLS FARGO CAPITAL FINANCE, LLC,

as Co-Collateral Agents,

 

WELLS FARGO CAPITAL FINANCE, LLC,

as Syndication Agent,

 

REGIONS BANK,

as Documentation Agent,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

 

as Lead Arranger and Book Runner

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, New York 10005

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    
	
 
    
	
AMOUNTS AND TERMS OF LOANS
    
	
 
    	
 
    	
 
    
	
1.1
    	
Loans
    	
2
    
	
1.2
    	
Interest
    	
7
    
	
1.3
    	
Fees
    	
9
    
	
1.4
    	
Payments
    	
11
    
	
1.5
    	
Prepayments
    	
11
    
	
1.6
    	
Maturity
    	
14
    
	
1.7
    	
Eligible   Accounts
    	
14
    
	
1.8
    	
[Reserved]
    	
16
    
	
1.9
    	
Eligible   Rental Fleet and Equipment
    	
16
    
	
1.10
    	
[Reserved]
    	
18
    
	
1.11
    	
Loan   Accounts
    	
18
    
	
1.12
    	
Yield   Protection; Illegality
    	
18
    
	
1.13
    	
Taxes
    	
20
    
	
1.14
    	
Incremental   Revolving Commitments
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    
	
 
    
	
AFFIRMATIVE COVENANTS
    
	
 
    	
 
    	
 
    
	
2.1
    	
Compliance   with Laws and Contractual Obligations
    	
23
    
	
2.2
    	
Insurance;   Damage to or Destruction of Collateral
    	
24
    
	
2.3
    	
Inspection
    	
25
    
	
2.4
    	
Organizational   Existence
    	
25
    
	
2.5
    	
Environmental   Matters
    	
25
    
	
2.6
    	
Landlords’   Agreements, Bailee Letters and Real Estate Purchases
    	
26
    
	
2.7
    	
Conduct   of Business
    	
27
    
	
2.8
    	
Further   Assurances
    	
27
    
	
2.9
    	
Control   Agreements
    	
28
    
	
2.10
    	
Business   and Properties
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    
	
 
    
	
NEGATIVE COVENANTS
    
	
 
    	
 
    	
 
    
	
3.1
    	
Indebtedness
    	
29
    
	
3.2
    	
Liens   and Related Matters
    	
31
    
	
3.3
    	
Investments
    	
32
    
	
3.4
    	
Contingent   Obligations
    	
34
    
	
3.5
    	
Restricted   Payments
    	
35
    
	
3.6
    	
Amendments   to Constituent Documents; Restriction on Fundamental Changes
    	
36
    
	
3.7
    	
Disposal   of Assets or Subsidiary Stock
    	
37
    
	
3.8
    	
Transactions   with Affiliates
    	
37
    
	
3.9
    	
Conduct   of Business
    	
38
    

 

i

 

	
3.10
    	
[Reserved]
    	
39
    
	
3.11
    	
Fiscal   Year
    	
39
    
	
3.12
    	
[Reserved]
    	
39
    
	
3.13
    	
[Reserved]
    	
39
    
	
3.14
    	
Bank   Accounts; Securities Accounts; Commodities Accounts
    	
39
    
	
3.15
    	
Hazardous   Materials
    	
40
    
	
3.16
    	
[Reserved]
    	
40
    
	
3.17
    	
Lease   Limits
    	
40
    
	
3.18
    	
Prepayments;   Amendments of Other Indebtedness
    	
40
    
	
3.19
    	
Consolidated   Total Leverage Ratio
    	
40
    
	
3.20
    	
Fixed   Charge Coverage Ratio
    	
41
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    
	
 
    
	
FINANCIAL AND OTHER   REPORTING COVENANTS
    
	
 
    	
 
    	
 
    
	
4.1
    	
Financial   Statements and Other Reports
    	
41
    
	
4.2
    	
Accounting   Terms; Utilization of GAAP for Purposes of Calculations Under Agreement
    	
46
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    
	
 
    
	
REPRESENTATIONS AND   WARRANTIES
    
	
 
    	
 
    	
 
    
	
5.1
    	
Disclosure
    	
46
    
	
5.2
    	
No   Material Adverse Effect
    	
46
    
	
5.3
    	
No   Conflict; Compliance with Laws
    	
46
    
	
5.4
    	
Organization,   Powers, Capitalization and Good Standing
    	
47
    
	
5.5
    	
Financial   Statements
    	
48
    
	
5.6
    	
Intellectual   Property
    	
48
    
	
5.7
    	
Investigations,   Audits, Etc.
    	
48
    
	
5.8
    	
Employee   Matters
    	
48
    
	
5.9
    	
Solvency
    	
49
    
	
5.10
    	
Litigation;   Adverse Facts
    	
49
    
	
5.11
    	
Use   of Proceeds; Margin Regulations
    	
49
    
	
5.12
    	
Ownership   of Property; Liens
    	
49
    
	
5.13
    	
Environmental   Matters
    	
49
    
	
5.14
    	
ERISA
    	
50
    
	
5.15
    	
Brokers
    	
51
    
	
5.16
    	
Deposit   Accounts; Securities Accounts; Other Accounts
    	
51
    
	
5.17
    	
[Reserved]
    	
51
    
	
5.18
    	
Insurance
    	
51
    
	
5.19
    	
Investment   Company Act
    	
51
    
	
5.20
    	
[Reserved]
    	
52
    
	
5.21
    	
Taxes
    	
52
    
	
5.22
    	
Collateral   Documents
    	
52
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    
	
 
    
	
DEFAULT, RIGHTS AND   REMEDIES
    
	
 
    	
 
    	
 
    
	
6.1
    	
Event   of Default
    	
53
    

 

ii

 

	
6.2
    	
Suspension   or Termination of Revolving Loan Commitments
    	
55
    
	
6.3
    	
Acceleration   and Other Remedies
    	
55
    
	
6.4
    	
Performance   by Agent
    	
55
    
	
6.5
    	
Application   of Proceeds
    	
56
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    
	
 
    	
 
    	
 
    
	
CONDITIONS TO LOANS
    
	
 
    	
 
    	
 
    
	
7.1
    	
Conditions   to Loans on the Restatement Effective Date
    	
56
    
	
7.2
    	
Conditions   to All Loans
    	
57
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    
	
 
    
	
ASSIGNMENT AND   PARTICIPATION
    
	
 
    	
 
    	
 
    
	
8.1
    	
Assignment   and Participations
    	
57
    
	
8.2
    	
Agent
    	
59
    
	
8.3
    	
Set   Off and Sharing of Payments
    	
64
    
	
8.4
    	
Disbursement   of Funds
    	
64
    
	
8.5
    	
Disbursements   of Advances; Payment
    	
64
    
	
8.6
    	
Related   Obligations Matters
    	
66
    
	
8.7
    	
Other   Agents
    	
66
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
9.1
    	
Indemnities
    	
67
    
	
9.2
    	
Amendments   and Waivers
    	
67
    
	
9.3
    	
Notices
    	
69
    
	
9.4
    	
Failure   or Indulgence Not Waiver; Remedies Cumulative
    	
72
    
	
9.5
    	
Marshaling;   Payments Set Aside
    	
72
    
	
9.6
    	
Severability
    	
72
    
	
9.7
    	
Lenders’   Obligations Several; Independent Nature of Lenders’ Rights
    	
72
    
	
9.8
    	
Headings
    	
72
    
	
9.9
    	
Applicable   Law
    	
72
    
	
9.10
    	
Successors   and Assigns
    	
72
    
	
9.11
    	
No   Advisory or Fiduciary Responsibility
    	
72
    
	
9.12
    	
Construction
    	
73
    
	
9.13
    	
Confidentiality
    	
73
    
	
9.14
    	
CONSENT   TO JURISDICTION
    	
73
    
	
9.15
    	
WAIVER   OF JURY TRIAL
    	
74
    
	
9.16
    	
Survival   of Warranties and Certain Agreements
    	
74
    
	
9.17
    	
Entire   Agreement
    	
74
    
	
9.18
    	
Counterparts;   Effectiveness
    	
74
    
	
9.19
    	
Replacement   of Lenders
    	
74
    
	
9.20
    	
Patriot   Act Notice
    	
75
    
	
9.21
    	
Joint   and Several Liability
    	
76
    
	
9.22
    	
Contribution   and Indemnification Among Borrowers
    	
77
    
	
9.23
    	
Agency   of Parent Borrower for Each Other Borrower
    	
77
    

 

iii

 

	
9.24
    	
Reinstatement
    	
77
    
	
9.25
    	
Express   Waivers by Borrowers in Respect of Cross Guaranties and Cross   Collateralization
    	
77
    
	
9.26
    	
Amendment   and Restatement
    	
78
    
	
9.27
    	
Authorization   of Amendments
    	
79
    

 

INDEX OF APPENDICES

 

	
Annexes
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Annex   A
    	
-
    	
Definitions
    
	
Annex   B
    	
-
    	
Pro   Rata Shares and Commitment Amounts
    
	
Annex   C
    	
-
    	
Closing   Checklist
    
	
Annex   D
    	
-
    	
Lenders’   Bank Accounts
    
	
 
    	
 
    	
 
    
	
Exhibits
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit 4.1(m)
    	
-
    	
Compliance   and Pricing Certificate
    
	
Exhibit I
    	
-
    	
Form of   Opinion of Stroock & Stroock & Lavan LLP
    
	
 
    	
 
    	
 
    
	
Schedules
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule   5.4(a)
    	
-
    	
Jurisdictions   of Organization and Qualifications
    
	
Schedule   5.4(b)
    	
-
    	
Pledged   Stock and Pledged Notes
    
	
Schedule   5.6
    	
-
    	
Intellectual   Property
    
	
Schedule   5.8
    	
-
    	
Employee   Matters
    
	
Schedule   5.10
    	
-
    	
Litigation;   Adverse Facts
    
	
Schedule   5.12
    	
-
    	
Real   Estate
    
	
Schedule   5.13
    	
-
    	
Environmental   Matters
    
	
Schedule   5.16
    	
-
    	
Bank   Accounts, Securities Accounts; Other Accounts
    
	
Schedule   5.18
    	
-
    	
Insurance
    

 

iv

 

AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT

 

This AMENDED AND RESTATED SENIOR SECURED CREDIT AGREEMENT is dated as of October 1, 2010 and amended and restated as of November 20, 2013, as may be further amended, restated, supplemented or otherwise modified from time to time, and entered into by and among Neff LLC, a Delaware limited liability company (“Parent Borrower”), Neff Holdings LLC, a Delaware limited liability company (“Holdings”), and the other persons designated as “Credit Parties” on the signature pages hereof and each other person which becomes party hereto as a Credit Party pursuant to Section 2.8 below, the financial institutions who are or hereafter become parties to this Agreement as Lenders, BANK OF AMERICA, N.A. as Agent, Swing Line Lender and L/C Issuer, BANK OF AMERICA, N.A. and WELLS FARGO CAPITAL FINANCE, LLC, as Co-Collateral Agents, WELLS FARGO CAPITAL FINANCE, LLC, as Syndication Agent, REGIONS BANK, as Documentation Agent, and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as lead arranger and book runner.

 

R  E  C  I  T  A  L  S:

 

WHEREAS, all capitalized terms used herein shall have the meanings ascribed thereto in Annex A hereto which is incorporated herein by reference;

 

WHEREAS, Parent Borrower, Holdings, each of Parent Borrower’s Subsidiaries (other than Neff Finance), the Lenders, the Agent, Swing Line Lender and L/C Issuer are parties to a Senior Secured Credit Agreement, dated as of October 1, 2010 (as amended by (i) Amendment No. 1, dated as of October 1, 2010, (ii) Amendment No. 2 to Credit Agreement and Amendment No. 1 to Security Agreement, dated as of May 5, 2011, (iii) Amendment No. 3 to the Credit Agreement, dated as of March 12, 2012 and (iv) Incremental Revolver Joinder and Amendment No. 4 to Credit Agreement dated as of October 25, 2012, the “Existing Credit Agreement”);

 

WHEREAS, the Lenders (under and as defined in the Existing Credit Agreement) have consented to the amendment and restatement of the Existing Credit Agreement on the terms set forth herein;

 

WHEREAS, Parent Borrower has requested that the Lenders make available, subject to the terms and conditions set forth herein, to the Credit Parties an asset-based revolving credit facility, in an amount not to exceed $375,000,000 (subject to such increases as more fully described in Section 1.14), extensions of credit under which the Credit Parties will use for the purposes described herein;

 

WHEREAS, the Lenders have agreed to make available, subject to the terms and conditions set forth herein, to the Credit Parties an asset-based revolving credit facility, in an amount not to exceed $375,000,000 (subject to such increases as more fully described in Section 1.14), extensions of credit under which the Credit Parties will use for the purposes described herein; and

 

WHEREAS, the obligations of the Credit Parties hereunder are secured by the grant to the Agent, for the benefit of the Secured Parties, of first priority liens in or on all assets owned by them, subject to the terms and conditions set forth herein;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and of the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as follows:

 

 

SECTION 1.

 

AMOUNTS AND TERMS OF LOANS

 

1.1                               Loans. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Parent Borrower and the other Credit Parties contained herein:

 

(a)                                 Revolving Loans.

 

(i)                                     Subject to the terms and conditions set forth herein, each Lender agrees, severally and not jointly, to make available to Parent Borrower on behalf of Borrowers from time to time until the Commitment Termination Date its Pro Rata Share of advances (each, a “Revolving Credit Advance”) requested by Parent Borrower hereunder. The Pro Rata Share of the Revolving Loan of any Lender (including, without duplication, Swing Line Loans and Letter of Credit Obligations) shall not at any time exceed its separate Revolving Loan Commitment. Revolving Credit Advances may be repaid and reborrowed; provided that the amount of any Revolving Credit Advance to be made at any time shall not exceed Excess Availability. All Revolving Loans shall be repaid in full on the Commitment Termination Date. Promptly upon request by a Lender, Parent Borrower on behalf of Borrowers shall execute and deliver to such Lender a note to evidence the Revolving Loan Commitment of such Lender. Each note shall be in the principal amount of the Revolving Loan Commitment of the applicable Lender, dated the Restatement Effective Date (or, if later, as of the date on which such Person became a Lender under this Agreement pursuant to an Assignment Agreement) and substantially in the form of Exhibit 1.1(a)(i) to the Existing Credit Agreement (each a “Revolving Note” and, collectively, the “Revolving Notes”). Other than pursuant to Section 1.1(a)(ii), if at any time the outstanding Revolving Loans (including the outstanding Swing Line Loans and Letter of Credit Obligations) exceed the Borrowing Base (any such excess Revolving Loans are herein referred to collectively as “Overadvances”), Lenders shall not be obligated to make Revolving Credit Advances, no additional Letters of Credit shall be issued and, except as provided in Section 1.1(a)(ii), Revolving Loans must be repaid immediately and, if necessary, Letters of Credit cash collateralized in an amount sufficient to eliminate any Overadvances. All Overadvances shall constitute Base Rate Loans. Revolving Loans which are Base Rate Loans may be requested in any amount with one (1) Business Day’s prior written notice required for funding requests equal to or greater than $5,000,000. For funding requests for such Revolving Loans less than $5,000,000, written notice must be provided by 12:00 p.m. (noon) (New York time) on the Business Day on which the Revolving Loan is to be made. All LIBOR Loans require three (3) Business Days prior written notice. Written notices for funding requests shall be in the form attached as Exhibit 1.1(a)(ii) to the Existing Credit Agreement (“Notice of Revolving Credit Advance”).

 

(ii)                                  If Parent Borrower on behalf of Borrowers requests that Lenders make, or permit to remain outstanding any Overadvances, Agent may, in its sole discretion, elect to make, or permit to remain outstanding such Overadvances; provided, however, that Agent may not require Lenders to make, or permit to remain outstanding, (a) aggregate Revolving Loans (including, without duplication, Swing Line Loans) in excess of the Maximum Amount or (b)(i) Overadvances in an aggregate amount in excess of $7,000,000 and (ii) in addition to any Overadvances outstanding under clause (b)(i) immediately prior to any Event of Default, Protective Advances in an aggregate amount in excess of $7,000,000. If an Overadvance is made, or permitted to remain outstanding, pursuant to the preceding sentence, then all Lenders shall be bound to make, or permit to remain outstanding, such Overadvance based upon their Pro Rata Shares of the Revolving Loan Commitments in accordance with the terms of this Agreement. If an Overadvance remains outstanding for more than thirty (30) consecutive days during any one hundred eighty (180) day period, Revolving Loans must be repaid immediately in an amount sufficient to eliminate all of such Overadvances; provided that the Requisite Lenders may prospectively revoke Agent’s ability to make or permit Overadvances by written notice to

 

2

 

Agent. Any Overadvance may be made as a Swing Line Advance; and provided, further, that if an Event of Default shall have occurred and be continuing, no Overadvance may be made unless such Overadvance constitutes a “Protective Advance.”

 

(b)                                 Swing Line Facility.

 

(i)                                     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 revolving advances under the Swing Line Commitment (each, a “Swing Line Advance”) in accordance with a “Notice of Swing Line Advance” substantially in the form of Exhibit 1.1(b)(i) to the Existing Credit Agreement. Notwithstanding anything herein to the contrary, the Swing Line Lender shall not be obligated to fund the percentage of any Swing Line Advance allocable to any Non-Funding Lender and with respect to any portion of a Swing Line Advance so not funded such Non-Funding Lender shall not have any obligation to make Revolving Credit Advances in accordance with Section 1.1(b)(iii) or to purchase participation interests in accordance with Section 1.1(b)(iv) and any pro rata calculations related to such Swing Line Advance for purposes of such sections shall disregard such Non-Funding Lender. Except as provided in Section 1.1(a)(ii) above, the aggregate amount of Swing Line Advances outstanding shall not exceed at any time the lesser of (A) the Swing Line Commitment and (B) Excess Availability (“Swing Line Availability”). Until the Commitment Termination Date, Parent Borrower may from time to time borrow, repay and reborrow under this Section 1.1(b). Each Swing Line Advance shall be made pursuant to a Notice of Swing Line Advance delivered by Parent Borrower to the Swing Line Lender no later than 2:00 p.m. (New York time) on the date on which the Swing Line Advance is to be made requesting a Swing Line Advance in an integral multiple of $100,000. Unless the Swing Line Lender has received at least one (1) 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 7.2, be entitled to fund that Swing Line Advance, and to have each 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 a Base Rate Loan. Borrowers shall repay the aggregate outstanding principal amount of the Swing Line Loan upon demand therefor by Agent. The entire unpaid balance of the Swing Line Loan and all other noncontingent Obligations shall be immediately due and payable in full in immediately available funds on the Commitment Termination Date if not sooner paid in full.

 

(ii)                                  Borrowers shall execute and deliver to the Swing Line Lender a promissory note to evidence the Swing Line Commitment, which promissory note shall be in the principal amount of the Swing Line Commitment of the Swing Line Lender, dated the Restatement Effective Date (or, in the case of any successor Swing Line Lender, the date on which such Person becomes the Swing Line Lender pursuant to this Agreement) and substantially in the form of Exhibit 1.1(b) to the Existing Credit Agreement (the “Swing Line Note”). The Swing Line Note shall represent the obligation of Borrowers to pay the amount of the Swing Line Commitment or, if less, the aggregate unpaid principal amount of all Swing Line Advances made to Borrowers together with interest thereon as prescribed in Section 1.2.

 

(iii)                               The Swing Line Lender, at any time and from time to time in its sole and absolute discretion but no less frequently than once weekly, will on behalf of Borrowers (and Borrowers hereby irrevocably authorize the Swing Line Lender to so act on their behalf) request each Lender (including the Swing Line Lender) to make a Revolving Credit Advance to Parent Borrower on behalf of Borrowers (which shall be a Base Rate Loan) in an amount equal to that

 

3

 

Lender’s Pro Rata Share of the principal amount of the Swing Line Loan (the “Refunded Swing Line Loan”) outstanding on the date such notice is given. Unless any of the events described in Section 6.1(f) or 6.1(g) 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 the making of a Revolving Credit Advance are then satisfied, each 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 that notice is given. The proceeds of such Revolving Credit Advances shall be immediately paid to the Swing Line Lender and applied to repay the Refunded Swing Line Loan of Parent 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 Section 6.1(f) or 6.1(g) has occurred, then, subject to the provisions of Section 1.1(b)(v) below, each Lender shall, on the date such Revolving Credit Advance was to have been made for the benefit of Borrowers, purchase from the Swing Line Lender an undivided participation interest in the Swing Line Loan to Parent Borrower in an amount equal to its Pro Rata Share (determined with respect to Revolving Loans) of such Swing Line Loan. Upon request, each Lender shall promptly transfer to the Swing Line Lender, in immediately available funds, the amount of its participation interest.

 

(v)                                 Each 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 Lender may have against the Swing Line Lender, Borrowers 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. Swing Line Lender shall be entitled to recover, on demand, from each Lender the amounts required pursuant to Section 1.1(b)(iii) or 1.1(b)(iv), as the case may be. If any Lender does not make available such amounts to Agent or the Swing Line Lender, as applicable, the Swing Line Lender shall be entitled to recover, on demand, such amount from such 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 (2) Business Days and at the Base Rate thereafter.

 

(c)                                  Letters of Credit. The Revolving Loan Commitment may, in addition to Advances under the Revolving Loan, be utilized, upon the request of any Borrower, for the issuance of Letters of Credit. Immediately upon the issuance by an L/C Issuer of a Letter of Credit, and without further action on the part of Agent or any of the Lenders, each Lender shall be deemed to have purchased from such L/C Issuer a participation in such Letter of Credit (or in its obligation under a risk participation agreement with respect thereto) equal to such Lender’s Pro Rata Share of the maximum aggregate amount available to be drawn under each such Letter of Credit.

 

(i)                                     L/C Sublimit. The aggregate amount of Letter of Credit Obligations with respect to all Letters of Credit outstanding at any time shall not exceed $30,000,000 (the “L/C Sublimit”).

 

(ii)                                  Reimbursement. Each Borrower shall be irrevocably and unconditionally obligated forthwith without presentment, demand, protest or other formalities of any kind, to reimburse each 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,

 

4

 

Charges (excluding any Excluded Taxes), costs and expenses paid or incurred by such L/C Issuer. Each Borrower hereby authorizes and directs Agent, at Agent’s option, to debit such Borrower’s account (by increasing the outstanding principal balance of the Revolving Credit Advances) in the amount of (A) any payment made by an L/C Issuer with respect to any Letter of Credit and (B) the amount of any fees payable to an L/C Issuer pursuant to Section 1.3(c). All amounts paid by an L/C Issuer with respect to any Letter of Credit that are not immediately repaid by Borrowers with the proceeds of a Revolving Credit Advance or otherwise shall bear interest at the interest rate applicable to Revolving Loans which are Base Rate Loans plus, at the election of Agent (or upon the written request of the Requisite Lenders), an additional two percent (2.00%) per annum. Each Lender agrees to fund its Pro Rata Share of any Revolving Loan made pursuant to this Section 1.1(c)(ii). In the event Agent elects not to debit a Borrower’s account and Borrowers fail to reimburse the L/C Issuer in full on the date of any payment in respect of a Letter of Credit, Agent shall promptly notify each Lender of the amount of such unreimbursed payment and the accrued interest thereon and each Lender, on the next Business Day prior to 3:00 p.m. (New York time), shall deliver to Agent an amount equal to its Pro Rata Share thereof in same day funds. Each Lender hereby absolutely and unconditionally agrees to pay to the L/C Issuer upon demand by the L/C Issuer such Lender’s Pro Rata Share of each payment made by the L/C Issuer in respect of a Letter of Credit and not immediately reimbursed by Borrowers or satisfied through a debit of a Borrower’s account. Each Lender acknowledges and agrees that its obligations pursuant to this subsection in respect of Letters of Credit are absolute and unconditional and shall not be affected by any circumstance whatsoever, including setoff, counterclaim, the occurrence and continuance of a Default or an Event of Default or any failure by a Borrower to satisfy any of the conditions set forth in Section 7.2. If any Lender fails to make available to the L/C Issuer the amount of such Lender’s Pro Rata Share of any payments made by the L/C Issuer in respect of a Letter of Credit as provided in this Section 1.1(c)(ii), the L/C Issuer shall be entitled to recover such amount on demand from such Lender together with interest at the Base Rate.

 

(iii)                               Request for Letters of Credit. Each Borrower shall give Agent at least three (3) Business Days prior written notice specifying the date a Letter of Credit is requested to be issued, the amount and the name and address of the beneficiary and a description of the transactions proposed to be supported thereby. If Agent informs a Borrower that the L/C Issuer cannot issue the requested Letter of Credit directly, such Borrower may request that L/C Issuer arrange for the issuance of the requested Letter of Credit under a risk participation agreement with another financial institution reasonably acceptable to Agent, L/C Issuer and Parent Borrower. The issuance of any Letter of Credit under this Agreement shall be subject to the conditions that the Letter of Credit is in a form, is for an amount and contains such terms and conditions as are reasonably satisfactory to the L/C Issuer and Agent. If L/C Issuer receives written notice from Agent or the Requisite Lenders on or before the Business Day preceding issuance of a Letter of Credit that any conditions set forth in Section 7.2 have not been satisfied, L/C Issuer shall have no obligation to issue and, upon direction by the Agent or the Requisite Lenders shall not issue, the requested Letter of Credit or any other Letter of Credit until such direction is withdrawn in writing by Agent or the Requisite Lenders, as applicable. Prior to its receipt of such notice from Agent or the Requisite Lenders, L/C Issuer shall not be deemed to have notice or knowledge of any Default, Event of Default or failure of such conditions. The initial notice requesting the issuance of a Letter of Credit shall be accompanied by the form of the Letter of Credit and the L/C Issuer’s reimbursement agreement and an application for a letter of credit, if any, then required by the L/C Issuer completed in a manner reasonably satisfactory to such L/C Issuer. If any provision of any application or reimbursement agreement is inconsistent with the terms of this Agreement, then the provisions of this Agreement, to the extent of such inconsistency, shall control. L/C Issuer shall have no obligation to issue the requested Letter of Credit or any other

 

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Letter of Credit if at such time any Lender is a Non-Funding Lender, unless the L/C Issuer has entered into arrangements satisfactory to the L/C Issuer with the Borrowers or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender or the L/C Issuer has received Cash Collateral from either the Borrowers or such Non-Funding Lender in relation to an amount equal to such Non-Funding Lender’s obligation to fund under Section 1.1(c)(ii). The Borrowers and/or such Non-Funding Lender hereby grants to the Agent, for the benefit of the L/C Issuer, a security interest in all such Cash Collateral and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, deposit accounts at Bank of America and may be invested in Cash Equivalents reasonably acceptable to the Agent. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable laws, to reimburse the L/C Issuer.

 

(iv)                              Expiration Dates of Letters of Credit. The expiration date of each Letter of Credit shall be on a date which is not later than the earlier of (a) one year from its date of issuance and (b) the fifth (5th) day prior to the fifth (5th) anniversary of the Restatement Effective Date. Notwithstanding the foregoing, a Letter of Credit may provide for automatic extensions of its expiration date for one (1) or more successive one (1) year periods, provided that the L/C Issuer has the right to terminate such Letter of Credit on each such annual expiration date and no renewal term may extend the term of the Letter of Credit to a date that is later than the fifth (5th) day prior to the fifth (5th) anniversary of the Restatement Effective Date. The L/C Issuer may elect not to renew any such Letter of Credit and, upon direction by Agent or Requisite Lenders, shall not renew any such Letter of Credit, in each case, at any time during the continuance of an Event of Default, provided that, in the case of a direction by Agent or Requisite Lenders, the L/C Issuer receives such directions prior to the date notice of non-renewal is required to be given by the L/C Issuer and the L/C Issuer has had a reasonable period of time to act on such notice.

 

(v)                                 Obligations Absolute. The obligation of each Borrower to reimburse the L/C Issuer, Agent and Lenders for payments made in respect of Letters of Credit issued by the L/C Issuer shall be unconditional and irrevocable and shall be paid under all circumstances strictly in accordance with the terms of this Agreement, including the following circumstances: (a) any lack of validity or enforceability of any Letter of Credit; (b) any amendment or waiver of or any consent or departure from all or any of the provisions of any Letter of Credit or any Loan Document; (c) the existence of any claim, setoff, defense or other right which Parent Borrower, any of its Subsidiaries or Affiliates or any other Person may at any time have against any beneficiary of any Letter of Credit, Agent, any L/C Issuer, any Lender or any other Person, whether in connection with this Agreement, any other Loan Document or any other related or unrelated agreements or transactions; (d) any draft or 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; (e) payment under any Letter of Credit against presentation of a draft or other document that does not substantially comply with the terms of such Letter of Credit; or (f) any other act or omission to act or delay of any kind of any L/C Issuer, Agent, any Lender or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this Section 1.1(c)(v), constitute a legal or equitable discharge of any Borrower’s obligations hereunder.

 

(vi)                              Obligations of L/C Issuers. Each L/C Issuer (other than Bank of America) hereby agrees that it will not issue a Letter of Credit hereunder until it has provided Agent with written notice specifying the amount and intended issuance date of such Letter of Credit and Agent has returned a written acknowledgment of such notice to L/C Issuer. Each L/C Issuer (other than Bank of America) further agrees to provide to Agent: (a) a copy of each Letter of Credit issued by such L/C Issuer promptly after its issuance, amendment, extension or renewal;

 

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(b) a monthly report summarizing available amounts under Letters of Credit issued by such L/C Issuer, the dates and amounts of any draws under such Letters of Credit, the effective date of any increase or decrease in the face amount of any Letters of Credit during such month and the amount of any unreimbursed draws under such Letters of Credit; and (c) such additional information reasonably requested by Agent from time to time with respect to the Letters of Credit issued by such L/C Issuer. Without limiting the generality of the foregoing, it is expressly understood and agreed by Borrowers that the absolute and unconditional obligation of Borrowers to Agent and Lenders hereunder to reimburse payments made under a Letter of Credit will not be excused by the gross negligence or willful misconduct of the L/C Issuer. However, the foregoing shall not be construed to excuse an L/C Issuer from liability to Borrowers for gross negligence, willful misconduct, material breach of its obligations under this Agreement or otherwise to the extent of any direct damages (as opposed to consequential damages, with Borrowers hereby waiving all claims for any consequential damages to the extent permitted by applicable law) suffered by any Borrower that are subject to indemnification under the L/C Issuer’s reimbursement agreement.

 

(d)                                 Funding Authorization. The proceeds of all Loans made pursuant to this Agreement subsequent to the Restatement Effective Date are to be funded by Agent or Swing Line Lender (as applicable) by wire transfer to the account designated by Parent Borrower on behalf of Borrowers below (the “Disbursement Account”):

 

	
Bank:
    	
Bank of America, N.A.
    
	
Bank Address:
    	
Atlanta, Georgia
    
	
ABA No.:
    	
0260-0959-3
    
	
Account No.:
    	
4426828095
    
	
Reference:
    	
Bank of America Business Capital- Neff Rental
    
	
 
    	
Master Operating Account
    

 

Parent Borrower shall provide Agent with written notice of any change in the foregoing instructions at least three (3) Business Days before the desired effective date of such change.

 

1.2                               Interest.

 

(a)                                 Borrowers shall pay interest to Agent, for the benefit of Lenders based on their respective Pro Rata Shares, in accordance with the various Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the following rates: (i) with respect to the Revolving Credit Advances which are designated as Base Rate Loans (and for all other Obligations not otherwise set forth below), the Base Rate plus the Applicable Revolver Base Rate Margin per annum; (ii) with respect to Revolving Credit Advances which are designated as LIBOR Loans at the election of Parent Borrower, the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum; and (iii) with respect to any Swing Line Loans, the Base Rate plus the Applicable Revolver Base Rate Margin per annum.

 

(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 interest for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of three hundred and sixty five (365) or three hundred and sixty six (366) days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a three hundred and sixty (360)

 

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day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a three hundred and sixty five (365) day year). Interest shall accrue on each Loan for each day on which the Loan is made or outstanding, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan, or such portion, is paid, provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day (with all day determinations pursuant to this sentence being made pursuant to Section 1.4). Each determination by Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(d)                                 So long as any Event of Default has occurred and is continuing, and without notice of any kind, the interest rates applicable to Loans shall be increased by two percent (2%) per annum above the rates of interest otherwise applicable hereunder (“Default Rate”), and all outstanding Obligations shall bear interest at the Default Rate 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 but in any event, shall be payable on the next regularly scheduled payment date set forth herein for such Obligation.

 

(e)                                  Parent Borrower on behalf of Borrowers 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 Revolving Loans from Base Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan that is a Revolving Loan to a Base Rate Loan, subject to payment of the LIBOR Breakage Fee in accordance with Section 1.3(d) if such conversion is made prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue all or any portion of any Revolving 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 $5,000,000 and integral multiples of $500,000 in excess of such amount. Any such election must be made by 12:00 p.m. (noon) (New York time) on the third Business Day prior to (1) the date of any proposed Revolving Credit 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 Parent Borrower wishes to convert any Base Rate Loan (other than a Swing Line Loan) to a LIBOR Loan for a LIBOR Period designated by Parent Borrower in such election. If no election is received with respect to a LIBOR Loan by 12:00 p.m. (noon) (New York time) on the third Business Day prior to the end of the LIBOR Period with respect thereto, that LIBOR Loan shall be converted to a Base Rate Loan at the end of its LIBOR Period. Parent Borrower must make such election by notice to Agent in writing, by fax or other similar form of transmission 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”) substantially in the form of Exhibit 1.2(e) to the Existing Credit Agreement. No Loan shall be made, converted into or continued as a LIBOR Loan, if an Event of Default has occurred and is continuing and Agent or Requisite Lenders have determined not to make or continue any Loan as a LIBOR Loan as a result thereof. Notwithstanding anything herein to the contrary (other than Section 1.12(b) and the cross reference to this sentence in Section 1.2(g)), at any time the Applicable Revolver Base Rate Margin plus the Base Rate is less than the Applicable Revolver LIBOR Margin plus the LIBOR Rate, the Parent Borrower shall not have the option to request that any Revolving Credit Advances be made as Base Rate Loans and the Parent Borrower agrees to deliver a Notice of Conversion/Continuation converting any then existing Base Rate Loans into LIBOR Rate Loans promptly upon the request of Agent.

 

(f)                                   Notwithstanding anything to the contrary set forth in this Section 1.2, 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

 

8

 

Maximum Lawful Rate; provided, however, 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 or rates of interest and in the manner provided in Sections 1.2(a) through (e), 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 1.2(f), a court of competent jurisdiction shall determine by a final, non-appealable order 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 as specified in Section 1.5(d) and thereafter shall refund any excess to Parent Borrower on behalf of Borrowers or as such court of competent jurisdiction may otherwise order.

 

(g)                                  If the Requisite Lenders determine that for any reason in connection with any request for a Loan or a conversion (if such Loan may be converted) to or continuation thereof that (i) Dollar deposits are not being offered to banks in London interbank eurodollar market for the applicable amount and LIBOR Period of such Loan, (ii) adequate and reasonable means do not exist for determining the LIBOR Rate for any requested LIBOR Period with respect to a proposed LIBOR Loan, or (iii) the LIBOR Rate for any requested LIBOR Period or in connection with a LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Agent will promptly so notify the Parent Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended until the Agent (upon instruction of the Requisite Lenders) revokes such notice. Upon receipt of such notice, the Parent Borrower may revoke any pending request for a borrowing of, conversion (if applicable) or continuation of LIBOR Loans or, failing that, will, notwithstanding anything to the contrary in the last sentence of Section 1.2(e) (if applicable), be deemed to have converted such request into a request for a Base Rate Loan in the amount specified therein.

 

1.3                               Fees.

 

(a)                                 Fee Letters. Holdings and Parent Borrower shall pay the Fees specified in the Fee Letters to the parties specified therein.

 

(b)                                 Unused Line Fee. As additional compensation for the Lenders, Parent Borrower on behalf of Borrowers shall pay to Agent, for the benefit of the Lenders based on their respective Pro Rata Shares, in arrears, on the first Business Day of each Fiscal Month prior to the Commitment Termination Date, on the Restatement Effective Date and on the Commitment Termination Date, a fee (the “Unused Line Fee”) for Borrowers’ non-use of available funds in an amount equal to the Applicable Unused Line Fee Margin per annum for such period multiplied by the difference between (i) the Maximum Amount (as it may be adjusted from time to time) and (ii) the average for the period of the daily closing balances of the Revolving Loan (including, without duplication, outstanding Swing Line Loans and Letter of Credit Obligations) outstanding during the period for which such Fee is due; provided that, for the avoidance of doubt, with respect to the Unused Line Fee payable on December 1, 2013, such Unused Line Fee shall be (x) calculated based on the average of the daily closing balances of the Revolving Loan during the period from the Restatement Effective Date through November 30, 2013 (the

 

9

 

“Stub Period”) and (y) in a pro rata amount based on the number of days in the Stub Period relative to the total number of days in the calendar month of November 2013.

 

(c)                                  Letter of Credit Fee. Parent Borrower on behalf of itself and the other Borrowers agrees to pay to Agent for the benefit of Lenders based on their respective Pro Rata Shares, as compensation to such Lenders for Letter of Credit Obligations incurred hereunder, (i) all reasonable costs and expenses incurred by Agent or any Lender on account of such Letter of Credit Obligations, and (ii) for each Fiscal Month during which any 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 during such Fiscal Month; provided that, for the avoidance of doubt, with respect to the Letter of Credit Fee payable on December 1, 2013, such Letter of Credit Fee shall be (x) calculated based on the maximum amount available from time to time to be drawn under the applicable Letter of Credit during the Stub Period and (y) in a pro rata amount based on the number of days in the Stub Period relative to the total number of days in the calendar month of November 2013. Such fee shall be paid to Agent for the benefit of the Lenders based on their respective Pro Rata Shares monthly in arrears, on the first Business Day of each Fiscal Month, on the Restatement Termination Date and on the Commitment Termination Date. Parent Borrower on behalf of Borrowers shall pay directly to L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued by L/C Issuer pursuant to this Agreement equal to one-fourth of one percent (0.25%) per annum of the maximum amount then available to be drawn under such Letter of Credit. Such fee shall be paid to L/C Issuer monthly in arrears on the first Business Day of each Fiscal Month and on the Commitment Termination Date. In addition, Parent Borrower on behalf of Borrowers 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.

 

(d)                                 LIBOR Breakage Fee. Upon (i) any default by any Borrower in making any borrowing of, conversion into or continuation of any LIBOR Loan following such Borrower’s delivery to Agent of any LIBOR Loan request in respect thereof or (ii) any payment of a LIBOR Loan on any day that is not the last day of the LIBOR Period applicable thereto (regardless of the source of such prepayment and whether voluntary, by acceleration or otherwise), such Borrower shall pay Agent, for the benefit of all Lenders that funded or were prepared to fund any such LIBOR Loan, the LIBOR Breakage Fee.

 

(e)                                  Expenses and Attorneys’ Fees. Parent Borrower on behalf of itself and the other Borrowers agrees to promptly (and in any event no less than on a monthly basis, ten (10) Business Days after submission of invoices documenting out-of-pocket expenses) pay all reasonable and documented out-of-pocket expenses (including reasonable and documented attorneys’ fees and expenses of one counsel in the aggregate for the Agent and Arrangers) incurred by Agent and the Arrangers in connection with any matters contemplated by or arising out of the Loan Documents or in connection with the examination, review, due diligence investigation, documentation, negotiation, closing and syndication of the transactions contemplated herein and in connection with the continued administration of the Loan Documents, including any amendments, modifications, consents and waivers. Parent Borrower on behalf of itself and the other Borrowers agrees to promptly pay reasonable and documented out-of-pocket expenses incurred by Agent for amendments, waivers, consents and any of the documentation prepared by Agent’s external legal counsel. Borrowers agree to promptly pay all reasonable documented out-of-pocket expenses (including those listed in Section 4.1(f), reasonable documented out-of-pocket fees and expenses of attorneys, auditors (whether internal or external), appraisers (including with respect to the field audits and appraisals contemplated by Section 4.1(f) which may be conducted by agents of the Agent), consultants and advisors) incurred by Agent, the Decision Agent or the Arrangers in connection

 

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with any Event of Default, work-out or action to enforce any Loan Document or to collect any payments due from Parent Borrower or any other Credit Party. In addition, in connection with any work-out or action to enforce any Loan Document or to collect any payments due from Parent Borrower or any other Credit Party, Borrowers agree to promptly pay all fees, charges, costs and expenses incurred by Lenders for (i) one (1) counsel acting for all Lenders other than Agent or the Arrangers unless (A) there exist conflicting legal defenses amongst the Lenders or (B) if the interests of any Lender or group of Lenders (other than all of the Lenders) are distinctly or disproportionately affected, then in either case one additional counsel may be appointed, and (ii) such other local counsel in each appropriate jurisdiction as the Agent reasonably determines are necessary or advisable in connection with the creation, perfection, priority and/or enforcement of the Liens granted to the Agent for the benefit of the Secured Parties. All fees, charges, costs and expenses for which Borrowers are responsible under this Section 1.3(e) shall be deemed part of the Obligations when incurred, payable upon demand or by the making of a Revolving Credit Advance or Swing Line Advance in accordance with the final sentence of Section 1.4 and secured by the Collateral. The obligations of Parent Borrower and the other Borrowers set forth in this Section 1.3 are subject to the limitations and other provisions set forth in Section 4.1(f).

 

1.4                               Payments. All payments by Borrowers of the Obligations shall be without deduction, defense, setoff or counterclaim and shall be made in same day funds and delivered to Agent, for the benefit of Agent and the Secured Parties, as applicable, by wire transfer to the following account or such other place as Agent may from time to time designate in writing.

 

Bank of America, NA

New York, NY

ABA# 0260-0959-3

Account Name: Bank of America Business Capital

Account: #9369337536

Reference: Bank of America Business Capital — Neff Holdings LLC

 

Borrowers shall receive credit on the day of receipt for funds received by Agent by 2:00 p.m. (New York time). In the absence of timely receipt, such funds shall be deemed to have been paid on the next Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the payment may be made on the next succeeding Business Day (except as set forth in the definition of LIBOR Period) and such extension of time shall be included in the computation of the amount of interest and Fees due hereunder.

 

Borrowers hereby authorize Lenders to make Revolving Credit Advances or Swing Line Advances, on the basis of their Pro Rata Shares, for the payment of interest, Fees and expenses (but only if such expenses have been unpaid for six Business Days or more after Parent Borrower has been provided an invoice therefor), Letter of Credit reimbursement obligations and any amounts required to be deposited with respect to outstanding Letter of Credit Obligations pursuant to Section 1.5(f) or Section 6.3.

 

1.5                               Prepayments.

 

(a)                                 Voluntary Prepayments of Loans. At any time, Borrowers may prepay the Loans, in whole or in part, without premium or penalty subject to the payment of LIBOR Breakage Fees, if applicable. Unless a Borrower shall otherwise elect in accordance with clause (b) below, a prepayment of Loans shall not constitute or result in a reduction of the Revolving Loan Commitments.

 

(b)                                 Voluntary Termination and Reduction of Revolving Loan Commitment. Upon not less than three (3) Business Days irrevocable prior written notice to Agent, Parent Borrower on behalf

 

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of Borrowers may at any time (i) terminate in whole the Revolving Loan Commitment and on the date specified in such notice the Revolving Loan Commitment shall terminate and all Obligations shall become immediately due and payable or (ii) reduce in part ratably the Revolving Loan Commitments of the Lenders; provided that each partial reduction shall be in an aggregate amount of not less than $1,000,000 or an integral multiple of $500,000 in excess thereof; and provided, further, that no such partial reduction shall be permitted if, after giving effect to such reduction, the then outstanding Revolving Loan (including any outstanding Swing Line Loans and Letter of Credit Obligations) would exceed the Revolving Loan Commitment unless Borrowers shall have prepaid such outstanding Revolving Loans and/or Swing Line Loans or shall have provided cash or a standby letter of credit (in form and substance and from an issuer reasonably satisfactory to Agent) as collateral for such outstanding Letter of Credit Obligations (in an amount equal to 105% of such outstanding Letter of Credit Obligations), in each case, in an amount sufficient to eliminate such excess.

 

(c)                                  Mandatory Prepayments.

 

(i)                                     Prepayments from Asset Dispositions.

 

(A)                               Subject to the reinvestment rights specified in clause (B) below, within five (5) Business Days of receipt by Holdings or any of its Subsidiaries of any Net Proceeds in respect of Asset Disposition(s) pursuant to Sections 3.7(b)(ii), (d) and (g)(ii) in excess of $5,000,000, individually or in the aggregate, during any Fiscal Year, Borrowers shall repay the Revolving Credit Advances (without reduction of the Revolving Loan Commitment) by an amount equal to the amount of any reduction in the Borrowing Base attributable to the Asset Disposition giving rise to such Net Proceeds to the extent that any such reduction would result in the outstanding principal balance of the Revolving Loans (including, without duplication, Swing Line Loans and Letter of Credit Obligations) exceeding the Borrowing Base, in effect at such time, determined based upon the most recent Borrowing Base Certificate delivered (or required to be delivered) by Parent Borrower to Agent pursuant to Section 4.1(e).

 

(B)                               Notwithstanding anything to the contrary in the immediately preceding clause (A), so long as no Event of Default is continuing Parent Borrower or its Subsidiaries may reinvest such Net Proceeds of such Asset Dispositions, within three hundred sixty five (365) days of receipt thereof, in productive replacement assets of a kind then used or usable in the business of Parent Borrower or such Subsidiaries. If Parent Borrower or such Subsidiary does not intend to so reinvest such Net Proceeds or if the period set forth in the immediately preceding sentence expires without Parent Borrower or such Subsidiary having reinvested such Net Proceeds in such productive replacement assets, Borrowers shall prepay the Revolving Credit Advances pro rata in an amount equal to such remaining Net Proceeds of such Asset Disposition; provided, that if any portion of such Net Proceeds are not so reinvested within such 365-day period but within such 365-day period are contractually committed pursuant to a legally binding agreement to be reinvested, then such Net Proceeds shall only be used to prepay Revolving Credit Advances upon the termination of such contract without the use of such Net Proceeds. Such prepayments shall be applied in accordance with Section 1.5(d).

 

(ii)                                  Other Mandatory Prepayments.

 

(A)                               In the event that the sum of all Lenders’ Revolving Loans (including, without duplication, Swing Line Loans and Letter of Credit Obligations) exceeds the Borrowing Base then in effect other than as permitted pursuant to Section 1.1(a)(ii), Borrowers shall, without notice or demand, repay Revolving Loans in an aggregate amount sufficient to eliminate such excess.

 

(B)                               In the event that the aggregate Letter of Credit Obligations exceeds the L/C Sublimit then in effect, Borrowers shall, without notice or demand, within two (2) Business Days cancel

 

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outstanding Letters of Credit or cash collateralize outstanding Letter of Credit Obligations in an aggregate amount sufficient to eliminate such excess in an amount equal to 105% of the aggregate of such excess outstanding Letter of Credit Obligations.

 

(C)                               In the event that the outstanding Swing Line Loans exceed, other than as permitted pursuant to Section 1.1(a)(ii), the Swing Line Commitment then in effect, Borrowers shall, without notice or demand, within one (1) Business Day repay or prepay Swing Line Loans in an aggregate amount sufficient to eliminate such excess.

 

(iii)                               Prepayments from Equity Proceeds. Upon the sale or issuance by Holdings or any of its Subsidiaries of any of its equity interests to Wayzata or its Affiliates (other than any sales or issuances of equity interests to another Credit Party or to fund an acquisition) for net cash proceeds, in the aggregate for all such sales and issuances since the Closing Date, in excess of $50,000,000 but not greater than $75,000,000, the Borrowers shall make a corresponding reduction of the Revolving Loan Commitment and, if applicable, prepay the Revolving Credit Advances, in an amount equal to 25% of all net cash proceeds received therefrom and upon receipt of net cash proceeds in the aggregate for all such sales and issuances since the Closing Date in excess of $75,000,000 the Borrowers shall make a corresponding reduction of the Revolving Loan Commitment and, if applicable, prepay the Revolving Credit Advances, in an amount equal to 50% of all net cash proceeds received therefrom, in each case, immediately upon receipt thereof by Holdings or such Subsidiary (such prepayments to be applied in accordance with Section 1.5(d) below).

 

(d)                                 Application of Proceeds. With respect to any prepayments made by Borrowers pursuant to Sections 1.5(a), 1.5(b), 1.5(c)(i) or 1.5(c)(iii), such prepayments shall be applied as follows: first, to interest then due and payable on the Swing Line Loan; second, to reduce the outstanding principal balance of the Swing Line Loan until the same has been repaid in full; third, pro rata among Lenders to interest then due and payable on Revolving Credit Advances; and fourth, pro rata among Lenders to the outstanding Revolving Credit Advances until the same has been repaid in full. Considering each type of Revolving Loan being prepaid separately, any such prepayment shall be applied first to Base Rate Loans before application to LIBOR Loans in a manner which minimizes any resulting LIBOR Breakage Fee.

 

(e)                                  Notice of Prepayment. Parent Borrower shall notify the Agent by irrevocable written notice of any prepayment hereunder (i) in the case of prepayment of a Base Rate Loan, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment and (ii) in the case of prepayment of a LIBOR Loan, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment. Such notice shall be irrevocable. Each such notice shall specify the prepayment date, the principal amount of each Loan prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Agent shall advise the Lenders of the contents thereof.

 

(f)                                   Letter of Credit Obligations. In the event any Letters of Credit are outstanding at the time that the Revolving Loan Commitment is terminated, Borrowers shall (1) deposit with Agent for the benefit of all Lenders cash in an amount equal to 105% of the aggregate outstanding Letter of Credit Obligations or provide a standby letter of credit (in form and substance and from an issuer reasonably satisfactory to Agent) in a face amount equal to 105% of the aggregate outstanding Letter of Credit Obligations, in each case to be available to Agent to reimburse payments of drafts drawn under such Letters of Credit and pay any Fees and expenses related thereto and (2) prepay the fee payable under Section 1.3(c) with respect to such Letters of Credit for the full remaining terms of such Letters of Credit.

 

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Upon termination of any such Letter of Credit, the unearned portion of such prepaid fee attributable to such Letter of Credit shall be refunded to Parent Borrower on behalf of Borrowers.

 

1.6                               Maturity. All of the Obligations shall become due and payable as otherwise set forth herein, but in any event all of the remaining Obligations (other than contingent indemnification Obligations to the extent no unsatisfied claim has been asserted) under this Agreement and the Loan Documents shall become due and payable upon termination of this Agreement on the Commitment Termination Date or otherwise. Until all Obligations have been fully paid and satisfied (other than contingent indemnification obligations to the extent no unsatisfied claim has been asserted), the Revolving Loan Commitment has been terminated, all Letters of Credit have been terminated or otherwise secured to the reasonable satisfaction of Agent, Agent shall be entitled to retain the security interests in the Collateral granted under the Collateral Documents and the ability to exercise all rights and remedies available to Agent and the Secured Parties under the Loan Documents and applicable laws. Notwithstanding anything contained in this Agreement to the contrary, upon any termination of the Revolving Loan Commitment, all of the Obligations shall be due and payable.

 

1.7                               Eligible Accounts. All of the Accounts (other than Ineligible Accounts) owned by any Borrower reflected in the most recent Borrowing Base Certificate delivered by Parent Borrower to Agent shall be “Eligible Accounts” for purposes of this Agreement. The Decision Agent shall have the right to establish, modify or eliminate Reserves against Eligible Accounts from time to time in its Permitted Discretion. An “Ineligible Account” shall mean an Account of any Borrower as to which any of the exclusionary criteria set forth below applies:

 

(a)                                 that does not arise from the sale or lease of goods or the performance of services by such Borrower in the ordinary course of its business;

 

(b)                                 (i) upon which the right of such Borrower to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever, (ii) as to which such Borrower is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract (other than a lease or rental agreement for Rental Fleet and Equipment in the ordinary course of business) under which the Account Debtor’s obligation to pay that invoice is subject to such Borrower’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;

 

(c)                                  to the extent that any defense, counterclaim, setoff or dispute is asserted as to such Account but only to the extent of such offset;

 

(d)                                 that is not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for merchandise sold or leased to or services rendered and accepted by the applicable Account Debtor;

 

(e)                                  with respect to which an invoice, in form and substance reasonably acceptable to Agent, has not been sent to the applicable Account Debtor; provided that it is understood and agreed that Parent Borrower’s standard form invoice previously provided to Agent is acceptable;

 

(f)                                   that (i) is not owned by such Borrower or (ii) is subject to any right, claim, security interest or other interest of any other Person, other than (A) Liens in favor of Agent, on behalf of itself and the Secured Parties or (B) Permitted Encumbrances that are junior in priority to the Liens of the Agent securing the Obligations, provided, that, with respect to any tax Lien

 

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having such priority, eligibility of such Accounts shall, without duplication, be reduced only by the amount of such tax Lien;

 

(g)                                  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;

 

(h)                                 that is the obligation of an Account Debtor that is the United States government or a political subdivision thereof, or any state, county 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 respect to such obligation with the Federal Assignment of Claims Act of 1940, or any applicable state, county or municipal law restricting the assignment thereof with respect to such obligation;

 

(i)                                     that is the obligation of an Account Debtor located (i) in a foreign country other than Canada 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 or (ii) in a state in which such Borrower is deemed to be doing business under the laws of such state and which denies creditors access to its courts in the absence of a qualification to transact business in such state or of the filing of any reports with such state, unless such Borrower has qualified as a foreign entity authorized to transact business in such state or has filed all required reports, except in the case of clause (ii) to the extent such Borrower may qualify subsequently as a foreign entity authorized to transact business in such state and gain access to such courts, without incurring any cost or penalty reasonably viewed by the Agent to be material in amount, and such later qualification cures any access to such courts to enforce payment of such Accounts;

 

(j)                                    to the extent such Borrower is liable for goods sold or services rendered by the applicable Account Debtor to such Borrower or any of its Subsidiaries but only to the extent of the potential offset;

 

(k)                                 that arises with respect to goods that are delivered on a bill-and-hold basis, arises as a result of any consideration consisting of a credit received by such Borrower or any of its Subsidiaries in connection with any Trade-In Transaction, 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;

 

(l)                                     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:

 

(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;

 

(m)                             that is the obligation of an Account Debtor if 50% or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this Section 1.7;

 

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(n)                                 as to which Agent’s Lien thereon, on behalf of itself and Lenders, is not a first priority perfected Lien, provided that, with respect to any tax Lien having priority, eligibility of such Accounts shall, without duplication, be reduced only by the amount of such tax Lien;

 

(o)                                 as to which any of the representations or warranties in the Loan Documents are untrue;

 

(p)                                 to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (other than any Account evidenced by a lease or rental agreement for Rental Fleet and Equipment) unless (i) such Chattel Paper or Instrument is not required to be delivered to Agent pursuant to the Security Agreement or (ii) if such Chattel Paper or Instrument is required to be delivered to Agent pursuant to the Security Agreement, such Chattel Paper or Instrument has been so delivered;

 

(q)                                 to the extent that such Account, together with all other Accounts owing by such Account Debtor and its Affiliates as of any date of determination, exceeds 15% of all Eligible Accounts of such Borrower except as may otherwise be agreed to by Agent in its sole discretion;

 

(r)                                    that is payable in any currency other than Dollars;

 

(s)                                   in the case of any Rental Payment, is not subject to a written lease agreement;

 

(t)                                    in the case of any Rental Payment, is not subject to a first priority security interest in favor of Agent for the benefit of the Secured Parties, perfected by possession of all Chattel Paper related to such Rental Payment (to the extent possession of such Chattel Paper is required by the Security Agreement) or by the filing of a financing statement, which financing statement indicates that a purchase of or security interest in such Chattel Paper by or in favor of any Person other than Agent is in violation of the rights of Agent;

 

(u)                                 with respect to which such Borrower has made an agreement with the Account Debtor to extend the time of payment thereof; or

 

(v)                                 that represents, in whole or in part, a billing for interest, fees or late charges, provided that such Account shall be ineligible only to the extent of the amount of such billing.

 

1.8                               [Reserved].

 

1.9                               Eligible Rental Fleet and Equipment. All of the Rental Fleet and Equipment (other than Ineligible Rental Fleet and Equipment) owned by any Borrower and reflected in the most recent Borrowing Base Certificate delivered by Parent Borrower to Agent shall be “Eligible Rental Fleet and Equipment” for purposes of this Agreement. The Decision Agent shall have the right to establish, modify, or eliminate Reserves against Eligible Rental Fleet and Equipment from time to time in its Permitted Discretion. “Ineligible Rental Fleet and Equipment” shall mean Rental Fleet and Equipment as to which any of the exclusionary criteria set forth below applies:

 

(a)                                 is not Rental Fleet and Equipment;

 

(b)                                 is not classified as “rental equipment, net” on Holdings’ balance sheet;

 

(c)                                  is not owned by such Borrower free and clear of all Liens (including Liens securing Purchase Money Obligations) and rights of any other Person (including the rights of a

 

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purchaser that has made progress payments and the rights of a surety that has issued a bond to assure performance by such Borrower with respect to that Inventory), except the Liens in favor of Agent, on behalf of itself and the Secured Parties, and Permitted Encumbrances that are junior in priority to the Liens of Agent securing the Obligations (other than any bailee, warehouseman, landlord or similar non-consensual Liens having priority by operation of law to the extent subclauses (ii) or (iii) of clause (d) below is satisfied with respect to the relevant Rental Fleet and Equipment), provided that, with respect to any tax Lien having priority, eligibility of such Rental Fleet and Equipment shall, without duplication, be reduced only by the amount of such tax Lien;

 

(d)                                 (i) is not (A) located on premises owned, leased or rented by such Borrower located in a state of the United States or the District of Columbia or (B) being leased by a customer of such Borrower and used by such customer at a location of such customer in a state of the United States or the District of Columbia pursuant to the terms of a rental agreement entered into between such customer and such Borrower; (ii) is stored at a leased location, unless Agent has given its prior consent thereto or unless (A) a reasonably satisfactory landlord waiver has been delivered to Agent or (B) a Rent Reserve has been established with respect thereto; or (iii) is stored with a bailee or warehouseman or is in a processor or converter facility unless a reasonably satisfactory, acknowledged bailee letter or other agreement waiving or subordinating all Liens and claims by such Person to the Liens of Agent or a Rent Reserve has been established with respect thereto;

 

(e)                                  is placed on consignment or is in transit or is being serviced, except for Rental Fleet and Equipment in transit or being serviced in the United States or the District of Columbia as to which Agent’s Liens in such Inventory remain perfected without any further action by Agent;

 

(f)                                   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 the Secured Parties, and Permitted Encumbrances that are junior in priority to the Liens of the Agent securing the Obligations (other than any bailee, warehouseman, landlord or similar non-consensual Liens having priority by operation of law to the extent subclauses (ii) or (iii) of clause (d) above is satisfied with respect to the relevant Rental Fleet and Equipment), provided that, with respect to any tax Lien having priority, eligibility of such Rental Fleet and Equipment shall, without duplication, be reduced only by the amount of such tax Lien;

 

(g)                                  is excess, obsolete, unsaleable, shopworn, seconds, damaged or unfit for sale;

 

(h)                                 is not held for sale, lease or use in the ordinary course of business of such Borrower;

 

(i)                                     is not subject to a first priority Lien in favor of Agent on behalf of itself and the Secured Parties, provided that, with respect to any tax Lien having priority, eligibility of such Rental Fleet and Equipment shall, without duplication, be reduced only by the amount of such tax Lien;

 

(j)                                    breaches any of the representations or warranties pertaining to Rental Fleet and Equipment set forth in the Loan Documents;

 

(k)                                 consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available;

 

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

 

(m)                             is held by such Borrower under a Vendor Lease or any other lease where a Credit Party is a lessee;

 

(n)                                 is being leased to a third party as lessee (i) which has commenced a voluntary case or has consented to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case, under the Bankruptcy Code or (ii) with respect to which a court has entered a decree or order for relief in an involuntary case under the Bankruptcy Code;

 

(o)                                 is non-serialized Rental Fleet and Equipment;

 

(p)                                 which is not segregated or separated identifiably from goods of third parties stored on the same premises as such Rental Fleet and Equipment; or

 

(q)                                 which does not meet the applicable standards imposed by any Governmental Authority.

 

1.10                        [Reserved]

 

1.11                        Loan Accounts. Agent shall maintain a loan account (the “Loan Account”) on its books to record: all Advances, all payments made by Borrowers, and 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 conclusive evidence of the amounts due and owing to Agent and Lenders by Borrowers; provided that any failure to so record or any error in so recording shall not limit or otherwise affect Borrowers’ duty to pay the Obligations. Notwithstanding any provision herein contained to the contrary, any Lender may elect (which election may be revoked) to dispense with the issuance of Notes to that Lender and may rely on the Loan Account as evidence of the amount of Obligations from time to time owing to it.

 

1.12                        Yield Protection; Illegality.

 

(a)                                 Capital Adequacy and Other Adjustments. In the event that any Lender shall have reasonably determined that the adoption after the Restatement Effective Date of any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding capital adequacy, liquidity, reserve requirements or similar requirements or compliance by any Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy, reserve requirements or similar requirements (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) from any central bank or governmental agency or body having jurisdiction does or shall have the effect of increasing the amount of capital, liquidity, reserves or other funds required to be maintained by such Lender or any corporation controlling such Lender and thereby reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder, then Borrowers shall from time to time within fifteen (15) days after notice and demand from such Lender (together with the certificate referred to in the next sentence and with a copy to Agent) pay to Agent, for the account of such Lender, additional amounts sufficient to compensate such Lender for such reduction; provided, however, that Borrowers shall not be required to compensate any Lender pursuant to this paragraph for any amounts incurred more than ninety (90) days prior to the date that such Lender notifies Parent Borrower of such Lender’s intention to claim compensation therefor, and provided, further, that if

 

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the circumstances giving rise to such claim have a retroactive effect, then such ninety (90) day period shall be extended to include the period of such retroactive effect. A certificate as to the amount of such cost and showing the basis of the computation of such cost submitted by such Lender to Parent Borrower and Agent shall, absent manifest error, be final, conclusive and binding for all purposes.

 

(b)                                 Increased LIBOR Funding Costs; Illegality. Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law, rule, regulation, treaty or directive (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 opinion, adversely affecting it or its Loans or the income obtained therefrom, on notice thereof and demand therefor by such Lender to Parent Borrower 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) Borrowers shall forthwith prepay in full all outstanding LIBOR Loans owing by Borrowers to such Lender, together with interest accrued thereon, unless Parent Borrower on behalf of Borrowers, within five (5) Business Days after the delivery of such notice and demand, converts (to the extent such LIBOR Loans may be converted) all such LIBOR Loans into Base Rate Loans. If, after the Restatement Effective Date, the introduction of, change in or interpretation of any law, rule, regulation, treaty or directive would impose or increase reserve requirements (other than as taken into account in the definition of LIBOR) or otherwise increase the cost (except for any Taxes) to any Lender of making or maintaining a LIBOR Loan, then Borrowers shall from time to time within fifteen (15) days after notice and demand from Agent to Parent Borrower (together with the certificate referred to in the next sentence) pay to Agent, for the account of all such affected Lenders, additional amounts sufficient to compensate such Lenders on an after tax basis for such increased cost; provided, however, that Borrowers shall not be required to compensate any Lender pursuant to this paragraph for any amounts incurred more than ninety (90) days prior to the date that such Lender notifies Parent Borrower of such Lender’s intention to claim compensation therefor, and provided, further, that if the circumstances giving rise to such claim have a retroactive effect, then such ninety (90) day period shall be extended to include the period of such retroactive effect. A certificate as to the amount of such cost and showing the basis of the computation of such cost submitted by Agent on behalf of all such affected Lenders to Parent Borrower shall, absent manifest error, be final, conclusive and binding for all purposes.

 

(c)                                  Change of Lending Office. Each Lender agrees that upon the occurrence of any event giving rise to the operation of clauses (a) and (b) above or Section 1.13(a) below with respect to such Lender, it will, if requested by Parent Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office no economic, legal or regulatory disadvantage; and provided, further, that nothing in this clause (c) shall affect or postpone any of the obligations of Parent Borrower or the other Borrowers or the rights of any Lender pursuant to clauses (a) and (b) above or Section 1.13(a) below.

 

(d)                                 Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be the adoption of or the introduction of or any change in any law, rule, regulation, treaty or directive (or any change in the interpretation thereof) for all purposes of Section 1.12 and Section 1.13 of this Agreement, regardless of the date enacted, adopted or issued

 

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1.13                        Taxes.

 

(a)                                 No Deductions. Subject to the immediately succeeding sentences and Section 1.13(e) below, any and all payments or reimbursements by any Credit Party made hereunder, under the Notes or under any other Loan Document shall be made free and clear of and without deduction for any and all Taxes, and all liabilities with respect thereto of any nature whatsoever imposed by any taxing authority, excluding (i) such Taxes to the extent imposed on Agent’s or a Lender’s net income (including franchise taxes imposed in lieu of net income taxes) by the jurisdiction in which Agent or such Lender is organized or is engaged in business (including the jurisdiction in which a principal office or applicable lending office is located) or as a result of a present connection between the Lender or Agent and the jurisdiction of a taxing authority (other than any business or connection arising solely from having executed, delivered, been a party to or performed its obligations or received any payments under, enforced or engaged in any other transactions pursuant to any Loan Document), (ii) any United States federal withholding tax imposed pursuant to FATCA, (iii) any United States federal backup withholding Tax imposed under Section 3406 of the IRC and (iv) any United States federal withholding tax resulting from a Lender’s failure to comply with Section 1.13(c) (the Taxes described in clauses (i)-(iv) above and United States federal withholding tax excluded from the gross up pursuant to the last sentence of this Section 1.13(a), collectively “Excluded Taxes”). Except as otherwise provided in this Section 1.13, if any applicable withholding agent shall be required by current or future law to deduct any such amounts from or in respect of any sum payable hereunder or under any other Loan Document to any Lender or Agent, then the sum payable by the applicable Credit Party shall be increased as may be necessary so that, after all required deductions have been made, such Lender (or in the case of any payment being made to Agent for its own account, the Agent) receives an amount equal to the sum it would have received had no such deductions been made. All required deductions shall be complied with and paid over to the relevant taxing authority or other Governmental Authority in accordance with applicable law. Notwithstanding the foregoing, no Credit Party shall have any obligation to increase the sum payable hereunder or under any other Loan Document (or pay additional amounts) pursuant to this Section 1.13(a) with respect to any United States federal withholding taxes that would apply to a payment hereunder or under any other Loan Document made to any Lender (or to the Agent on behalf of such Lender) that are required by any applicable law in effect (i) when such Lender became a Lender or (ii) immediately after such Lender changes its applicable lending office, except to the extent that (x) where the Lender is an assignee, such Lender’s assignor was entitled, immediately prior to the assignment to such Lender, to additional amounts in respect of such taxes or (y) where the Lender changes its applicable lending office, such Lender was entitled to additional amounts in respect of such taxes immediately prior to such change in lending office.

 

(b)                                 Changes in Laws. In the event that, subsequent to the Restatement Effective Date, any changes in any existing law, regulation, treaty or directive or in the interpretation or application thereof or any new law, regulation, treaty or directive enacted or any interpretation or application thereof:

 

(i)                                     does or shall subject Agent or any Lender to any Tax of any kind whatsoever with respect to this Agreement, the other Loan Documents or any Loans made or Letters of Credit issued hereunder or thereunder, or change the basis of taxation of payments to Agent or such Lender of principal, fees, interest or any other amount payable under any Loan Document (except, in each case, for Excluded Taxes and any Taxes that are subject to gross up, indemnification or other payment pursuant to Section 1.13(a), 1.13(f) or 1.13(g)); or

 

(ii)                                  does or shall impose on Agent or any Lender any other condition or increased cost (other than Taxes) in connection with the transactions contemplated hereby or participations herein;

 

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and the result of any of the foregoing is to increase the cost to Agent or any such Lender of issuing any Letter of Credit or making or continuing any Loan hereunder, as the case may be, or to reduce any amount receivable hereunder or under any Loan Document, then, in any such case, subject to Section 1.13(c) below and without duplication, Borrowers shall promptly pay to Agent or such Lender, upon its demand, any additional amounts necessary to compensate Agent or such Lender, on an after-tax basis, for such additional cost or reduced amount receivable, as determined by Agent or such Lender with respect to this Agreement or the other Loan Documents. If Agent or such Lender becomes entitled to claim any additional amounts pursuant to this Section 1.13(b), it shall promptly notify Parent Borrower of the event by reason of which Agent or such Lender has become so entitled. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or such Lender to Parent Borrower (with a copy to Agent) shall, absent manifest error, be final, conclusive and binding for all purposes.

 

(c)                                  Tax Documentation.

 

(i)                                     Prior to becoming a Lender under this Agreement and from time to time thereafter upon the reasonable request of Parent Borrower or Agent, each Lender organized under the laws of a jurisdiction outside the United States (a “Foreign Lender”), to the extent it is legally entitled to do so, shall provide to Parent Borrower and Agent any of the following forms applicable to such Lender (i) a properly completed and executed IRS Form W-8BEN (claiming a complete exemption or a reduction under an applicable treaty) or Form W-8ECI plus any additional form, certificate or document or a successor form prescribed by the IRS, certifying as to such Foreign Lender’s entitlement to a complete exemption from or a reduction in United States federal withholding tax with respect to payments to be made to such Foreign Lender under any Loan Document, (ii) in the case of a Foreign Lender that is not a “bank” (within the meaning of Section 881(c)(3)(A) of the IRC) and meets the qualifications under the “portfolio interest” exemption rules, a properly completed and executed IRS Form W-8BEN (or applicable successor form) and a written certificate to the effect that such Foreign Lender is eligible for a complete exemption with respect to payments of interest under Section 871(h) or 881(c) of the IRC (in each case, a “Certificate of Exemption”) or (iii) where the Lender is not the beneficial owner for tax purposes (e.g., where the Lender is a partnership or has sold a participation), a properly completed and executed IRS Form W-8IMY (or applicable successor form), together with all required attachments with respect to the beneficial owners (including applicable IRS Forms W-8 and W-9, or their respective applicable successor forms) and, where one or more of the beneficial owners is claiming the “portfolio interest” exemption, Certificates of Exemption from each such beneficial owner (provided that, where the Lender is a partnership and not a participating lender, the Lender may provide any applicable Certificates of Exemption on behalf of its partners). In addition, each Lender shall from time to time, upon the reasonable written request of any Credit Party or Agent, provide other certificates or forms that are necessary in order for payments made hereunder or under the Notes to be qualified for an exemption from, or a reduction in, withholding taxes or deductions.

 

(ii)                                  To the extent it is legally entitled to do so, each Lender that is a United States person within the meaning of Section 7701(a)(30) of the IRC shall provide to Parent Borrower and Agent, prior to becoming a Lender under this Agreement and from time to time thereafter upon the reasonable request of Parent Borrower or Agent, a properly completed and executed IRS Form W-9 (or applicable successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax.

 

(iii)                               Upon the occurrence of any event that renders any prior documentation provided by a Lender obsolete, inaccurate or invalid, or upon the expiration of any such prior

 

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documentation, such Lender shall promptly provide Parent Borrower and Agent with updated documentation or promptly notify Parent Borrower and Agent that such Lender is unable to do so.

 

(iv)                              For the avoidance of doubt, no Lender shall be required to deliver any documentation under this Section 1.13(c) that such Lender is not legally eligible to deliver.

 

(d)                                 If a Credit Party is required to increase the sum payable hereunder (or pay additional amounts) to any Lender or Agent pursuant to this Section 1.13, such Lender or Agent shall, at the request and expense of the Credit Party, change the jurisdiction of its applicable lending office if such change (i) will eliminate or reduce any such increase in the payment obligation (or additional amounts) and (ii) is, in such Lender’s reasonable judgment, determined not to be materially disadvantageous to such Lender.

 

(e)                                  To the extent any Lender has received (as determined by such Lender in its reasonable judgment) any refund of any taxes with respect to which any Credit Party paid an increased sum or additional amounts pursuant to this Section 1.13, such Lender shall pay the amount of such tax refund (net of any expenses) to such Credit Party; provided that such Credit Party shall repay such amount to such Lender (with any interest and penalties charged by the taxing authority) if the amount of the refund is required to be repaid to the relevant taxing authority.

 

(f)                                   In addition, the Credit Parties agree to pay any current or future stamp or documentary Taxes or any other excise or property Taxes, charges, assessments or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, the other Loan Documents or any Loans made or Letters of Credit issued hereunder (“Other Taxes”).

 

(g)                                  Each Credit Party agrees to indemnify each Lender and Agent for the full amount of non-Excluded Taxes and Other Taxes paid by such Lender or Agent, as the case may be, and any liability (including penalties, interest and expenses other than penalties, interest and expenses resulting from the Lender’s gross negligence or willful misconduct) arising therefrom or with respect thereto, whether or not such non-Excluded Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant taxing authority. Such indemnification shall be made within thirty (30) days after the date any Lender or Agent, as the case may be, makes written demand therefor.

 

(h)                                 Within thirty (30) days after the date of any payment of Taxes or Other Taxes withheld or paid by a Credit Party in respect of any payment to any Lender (or assignee Lender) or Agent, the Credit Party will furnish to Agent, at its address for notices specified in Section 9.3 hereof, the original or a certified copy of any available receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to the Agent.

 

(i)                                     For purposes of this Section 1.13, the term “Lender” shall include any Swing Line Lender and L/C Issuer.

 

1.14                        Incremental Revolving Commitments.

 

(a)                                 At any time following the Restatement Effective Date, the Parent Borrower on behalf of the Borrowers may by written notice to Agent and with the consent of the Agent elect to request the establishment of an increase in Revolving Loan Commitments (the “Incremental Revolving Loan Commitments”), by an aggregate amount not in excess of $25,000,000 in the aggregate. Any such notice shall specify the date (the “Increased Amount Date”) on which the Parent Borrower on behalf of the Borrowers proposes that the Incremental Revolving Loan Commitments shall be effective, which shall be

 

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a date not less than ten Business Days after the date on which such notice is delivered to the Agent. The Parent Borrower may approach any Lender or any other Qualified Assignee to provide all or a portion of the Incremental Revolving Loan Commitments; provided that (x) any Lender offered or approached to provide all or a portion of the Incremental Revolving Loan Commitments may elect or decline, in its sole discretion, to provide an Incremental Revolving Loan Commitment and (y) any Incremental Revolving Loan Lender which is not an existing Lender shall be subject to the approval of the Agent, the L/C Issuer, the Swing Line Lender and the Borrowers (which approval shall not be unreasonably withheld or delayed). Such Incremental Revolving Loan Commitments shall become effective, as of the Increased Amount Date; provided that (i) no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to such Incremental Revolving Loan Commitments, as applicable; (ii) the Incremental Revolving Loan Commitments shall be effected pursuant to one or more joinder agreements executed and delivered by the Borrowers and Agent, and each of which shall be recorded in the register; (iii) the Parent Borrower on behalf of the Borrowers shall make any payments required pursuant to Section 1.3 in connection with the Incremental Revolving Loan Commitments, as applicable; and (iv) the Parent Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by the Agent in connection with any such transaction.

 

(b)                                 On the Increased Amount Date, subject to the satisfaction of the foregoing terms and conditions, (x) (i) each of the Lenders with Revolving Loan Commitments shall assign to each Lender with an Incremental Revolving Loan Commitment (each, an “Incremental Revolving Loan Lender”) and each of the Incremental Revolving Loan Lenders shall purchase from each of the Lenders with Revolving Loan Commitments, at the principal amount thereof (together with accrued interest), such interests in the Revolving Loans outstanding on such Increased Amount Date as shall be necessary in order that, after giving effect to all such assignments and purchases, such Revolving Loans will be held by existing Revolving Lenders and Incremental Revolving Loan Lenders ratably in accordance with their Revolving Loan Commitments after giving effect to the addition of such Incremental Revolving Loan Commitments to the Revolving Loan Commitments or (ii) other actions, as reasonably determined by the Agent, Lenders and the Borrowers, may be taken to achieve the ratable effect of the foregoing clause (i), (y) each Incremental Revolving Loan Commitment shall be deemed for all purposes a Revolving Loan Commitment and each Loan made thereunder (a “Incremental Revolving Loan”) shall be deemed, for all purposes, a Revolving Loan and (z) each Incremental Revolving Loan Lender shall become a Lender with respect to the Incremental Revolving Loan Commitment and all matters relating thereto.

 

(c)                                  The terms and provisions of the Incremental Revolving Loans and Incremental Revolving Loan Commitments shall be identical to the Revolving Loans and the Revolving Loan Commitments.

 

(d)                                 Any joinder agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Agent, to effect the provisions of this Section 1.14.

 

SECTION 2.

 

AFFIRMATIVE COVENANTS

 

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the Closing Date and until the Termination Date:

 

2.1                               Compliance with Laws and Contractual Obligations. Each Credit Party will (a) comply with and shall cause each of its Subsidiaries to comply with (i) the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, laws, rules,

 

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regulations and orders relating to taxes, employer and employee contributions, securities, employee retirement and welfare benefits, environmental protection matters and employee health and safety) as now in effect and which may be imposed in the future in all jurisdictions in which any Credit Party or any of its Subsidiaries is now doing business or may hereafter be doing business and (ii) the obligations, covenants and conditions contained in all Contractual Obligations of such Credit Party or any of its Subsidiaries other than those laws, rules, regulations, orders and provisions of such Contractual Obligations the noncompliance with which could not be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect and except for such Contractual Obligations being diligently contested in good faith, and (b) maintain or obtain and shall cause each of its Subsidiaries to maintain or obtain all rights, franchises, licenses, qualifications and permits now held or hereafter required to be held by such Credit Party or any of its Subsidiaries, for which the loss, suspension, revocation or failure to obtain or renew, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. This Section 2.1 shall not preclude any Credit Party or its Subsidiaries from contesting any taxes or other payments, if they are being diligently contested in good faith in a manner which stays enforcement thereof and if appropriate expense provisions have been recorded in conformity with GAAP, subject in the case of any Lien in connection therewith, to the terms and conditions of Section 3.2.

 

2.2                               Insurance; Damage to or Destruction of Collateral.

 

(a)                                 The Credit Parties shall, at their sole cost and expense, maintain with financially sound and reputable insurance companies, or through self-insurance, insurance on all their property in at least such amounts and against at least such risks (but including in any event public liability coverage) as are usually insured against in the same general area by companies engaged in the same or a similar business; provided, notwithstanding any industry standard, any amount of self-insurance shall be commercially reasonable and must be reasonably satisfactory to Agent. Such policies of insurance shall contain provisions pursuant to which the insurer agrees to (i) name Agent, for its benefit and the benefit of the Secured Parties, as additional insured, (ii) in the case of all property insurance policies, name the Agent as lender loss payee, (iii) in the case of all property insurance policies, provide a breach of warranty in favor of Agent and the Secured Parties, (iv) provide for a waiver of subrogation in favor of Agent and the Secured Parties and (v) provide thirty (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. Without limiting the generality of the foregoing, Borrowers will maintain or cause to be maintained flood insurance with respect to each Mortgaged Property that is located in a community that participates in the National Flood Insurance Program, in each case in compliance with any applicable regulations of the Board of Governors of the Federal Reserve System.

 

(b)                                 Upon the reasonable request of 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, at the time of the applicable policy renewal, in form and substance reasonably satisfactory to Agent, certificates of insurance evidencing

 

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(i) all “All Risk” policies naming Agent, on behalf of itself and the Secured Parties, as additional insured and loss payee, with a breach of warranty in favor of Agent and the Secured Parties, (ii) all general liability and other liability policies naming Agent, for the benefit of itself and the Secured Parties, as additional insured and (iii) waiver of subrogation and thirty (30) days notice of cancellation for all insurance policies. Each Credit Party irrevocably makes, constitutes and appoints Agent (and all officers, employees or agents designated by Agent), so long as (i) any Event of Default has occurred and is continuing or the casualty giving rise to such insurance proceeds could reasonably be expected to result in a Material Adverse Effect and (ii) the anticipated insurance proceeds exceed $5,000,000 (an “Insurance Trigger Event”), as each 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 each 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. Parent Borrower shall promptly notify Agent of any loss, damage or destruction to the Collateral in the amount of $5,000,000 or more ($1,000,000 or more in the case of Collateral included within the calculation of the Borrowing Base), whether or not covered by insurance. If the Agent receives any insurance proceeds following an Insurance Trigger Event, after deducting from any insurance proceeds the expenses, if any, incurred by Agent in the collection or handling thereof, Agent may, at its option, apply such proceeds to the reduction of the Obligations in accordance with Section 1.5(d).

 

2.3                               Inspection. Each Credit Party shall permit any authorized representatives of Agent to visit, audit and inspect any of the properties of such Credit Party and its Subsidiaries, including its and their financial and accounting records, and to make copies and take extracts therefrom, and to discuss its and their affairs, finances and business with its and their officers and certified public accountants, at such reasonable times during normal business hours and upon reasonable notice to the applicable Credit Party, and as often as may be reasonably requested. Representatives of each Lender will be permitted to accompany representatives of Agent during each visit, inspection and discussion referred to in the immediately preceding sentence, at the expense of such Lender or, following an Event of Default, at the expense of such Credit Party. The obligations of the Credit Parties set forth in this Section 2.3 are subject to the limitations and other provisions set forth in Section 4.1(f).

 

2.4                               Organizational Existence. Except as otherwise permitted by Section 3.6, each Credit Party will and will cause its Subsidiaries to at all times preserve and keep in full force and effect its organizational existence.

 

2.5                               Environmental Matters. Each Credit Party (a) shall and shall cause its Subsidiaries and shall take commercially reasonable steps to cause each tenant, subtenant contractor, subcontractor and invitee of any of them to 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, individually or in the aggregate, to result in a Material Adverse Effect, including without limitation perform all investigation, remediation, removal and response actions that are necessary to 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; and (b) shall notify Agent promptly after such Credit Party or any of its Subsidiaries 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 that is reasonably likely to result in Environmental Liabilities to a Credit Party or its Subsidiaries in excess of $5,000,000. 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 Subsidiary, tenant, subtenant, contractor, subcontractor or invitee of such Credit Party or any Subsidiary or any Environmental Liability arising

 

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thereunder, or a Release of Hazardous Materials on, at, in, under, above, to, from or about any of its Real Estate, that, in each case, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, then Parent Borrower shall, upon Agent’s written request cause the performance of such environmental assessments reasonably necessary to evaluate the alleged noncompliance or Release (which in the event of a potential Release may include subsurface sampling of soil and groundwater) and preparation of such environmental reports, at Borrowers’ 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. If an environmental assessment requested by Agent pursuant to the preceding sentence is not initiated within thirty (30) Business Days following receipt of Agent’s request therefor, then each Credit Party and its Subsidiaries shall permit Agent or its representatives to have access to the parcel of Real Estate where the alleged violation or Release occurred for the purpose of conducting such environmental assessments and sampling; provided that any such environmental assessment or sampling shall be conducted in such a manner as to minimize interference with the conduct of the Credit Parties’ operations and Agent shall use commercially reasonable efforts to conduct such environmental assessment or sampling in such a manner that would not result in a material violation of any lease relating to such Real Estate. Borrowers shall reimburse Agent for the costs of such assessments and samples and the same will constitute a part of the Obligations secured hereunder. The Credit Parties may require that prior to entry on any Real Estate any representative of Agent that will conduct sampling shall present evidence of reasonable general liability and professional liability insurance.

 

2.6                               Landlords’ Agreements, Bailee Letters and Real Estate Purchases.

 

(a)                                 Each Credit Party shall use commercially reasonable efforts to obtain a landlord’s waiver and consent 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 in a Landlord Lien State, which agreement or letter shall be reasonably satisfactory in form and substance to the Decision Agent (any such agreement or letter delivered prior to the Restatement Effective Date shall be deemed reasonably satisfactory in form and substance to the Decision Agent). Without limiting any other rights Decision Agent may have to establish Reserves with respect to such locations or warehouse space leased or owned as of the Restatement Effective Date, if the Decision Agent has not received a landlord’s agreement or bailee letter on or prior to the Restatement Effective Date (or such later date as may be agreed to by Agent in its sole discretion), the Collateral at that location in a Landlord Lien State shall, in the Decision Agent’s Permitted Discretion, be subject to a Rent Reserve (without duplication of existing Reserves).

 

(b)                                 If after the Restatement Effective Date, any Credit Party or any of its Subsidiaries (i) enters into a lease for real property or warehouse space or (ii) establishes arrangements or enters into Contractual Obligations pursuant to which Rental Fleet and Equipment shall be shipped to a processor or converter, such Credit Party or Subsidiary, as the case may be, shall use commercially reasonable efforts to cause a landlord’s waiver and consent agreement or bailee letter, as appropriate, to be obtained with respect to such location in a Landlord Lien State in form and substance reasonably satisfactory to the Decision Agent; provided that unless and until such time as such landlord’s waiver and consent agreement or bailee letter, as appropriate, shall be obtained and delivered to Agent, each of the Credit Parties agrees that the Decision Agent shall be permitted (i) in the case of any leased real property, to establish a Rent Reserve in respect of such location and (ii) in the case of Rental Fleet and Equipment located at any warehouse facility or shipped to any processor or converter, to exclude such Rental Fleet and Equipment from the Borrowing Base or establish a Rent Reserve (but not both). Each Credit Party shall and shall cause its Subsidiaries to timely and fully pay and perform their material obligations under all leases and other agreements with respect to each leased location or public warehouse where any Rental Fleet and Equipment is or may be located.

 

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2.7                               Conduct of Business. Each Credit Party shall at all times maintain, preserve and protect all of its assets and properties necessary for 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 transact business only in such corporate and trade names as are set forth in Schedule 2.7 to the Existing Credit Agreement (as amended) or other names notified to Agent in accordance with the Loan Documents.

 

2.8                               Further Assurances.

 

(a)                                 Borrowers and Holdings shall, from time to time, execute such guaranties, financing statements, documents, security agreements and reports as the Decision Agent at any time may reasonably request to evidence, perfect or otherwise implement the guaranties and security for repayment of the Obligations contemplated by the Loan Documents.

 

(b)                                 In the event a Borrower or Holdings acquires an interest in real property after the Restatement Effective Date, with a recently appraised fair market value in excess of $5,000,000 within ninety (90) days of the acquisition thereof (or such later date as may be agreed to by the Decision Agent) such Person shall deliver to Agent a fully executed mortgage or deed of trust over such real property in form and substance reasonably satisfactory to the Decision Agent, together with such title insurance policies, surveys, evidence of insurance, legal opinions and other documents and certificates as shall be reasonably required by the Decision Agent.

 

(c)                                  Parent Borrower and each other Credit Party shall (i) cause each Person, upon its becoming a Wholly Owned Domestic Subsidiary of Parent Borrower (other than Neff Finance and any Subsidiary that is a Subsidiary of a Foreign Subsidiary), promptly to execute and deliver to Agent a Joinder Agreement and (A) become party to this Agreement as a Credit Party pursuant to such Joinder Agreement and (B) to grant to Agent, for the benefit of Agent and the Secured Parties, a security interest in the real, personal and mixed property of such Person to secure the Obligations and to become party to the Security Agreement and the Pledge Agreement, as applicable, in each case by executing and delivering a Joinder Agreement to Agent, and take all actions required by the applicable Collateral Documents to perfect such security interest and (ii) pledge, or cause to be pledged, to Agent all of the Stock of such Subsidiary, in each case, to secure the Obligations. The documentation required pursuant to the foregoing sentence shall be accompanied by such certificates, legal opinions and other documents as may be reasonably requested by the Decision Agent. Notwithstanding the foregoing, the provisions of this clause (c) shall not apply to assets as to which the Decision Agent shall have determined in writing in its reasonable discretion, after consultation with Parent Borrower, that the costs and burdens of obtaining a security interest are excessive in relation to the value of the security afforded thereby. Notwithstanding anything to the contrary in this Section 2.8(c) or elsewhere in this Agreement or any other Loan Document, Neff Finance shall not be required to execute a Joinder Agreement and become a Credit Party hereunder, or to grant to Agent, for the benefit of Agent and the Secured Parties, a security interest in its real, personal and mixed property to secure the Obligations or become party to the Security Agreement or the Pledge Agreement.

 

(d)                                 After the acquisition by Parent Borrower or any of its Subsidiaries of assets or personal property of the type that would have constituted Collateral on the Closing Date, including investments of the type that would have constituted Collateral on the Closing Date, Parent Borrower will take, or will cause its Subsidiaries to take, all necessary action, including (i) the filing of appropriate financing statements under the applicable provisions of the Code, applicable domestic or local laws, rules or regulations in each of the offices where such filing is necessary or appropriate, (ii) to the extent required by Section 2.9, the execution and delivery of Control Agreements and (iii) to the extent required

 

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by the Security Agreement, the notation of the Lien of Agent on any certificate of title for Collateral constituting Eligible Rental Fleet or Equipment, in each case, to create and perfect a first priority Lien in such Collateral pursuant to and to the full extent required by this Agreement or any of the Collateral Documents. Notwithstanding the foregoing, the provisions of this clause (d) shall not apply to assets as to which the Decision Agent shall have determined in writing in its reasonable discretion, after consultation with Parent Borrower, that the costs and burdens of obtaining a security interest are excessive in relation to the value of the security afforded thereby.

 

(e)                                  Notwithstanding anything to the contrary in this Section 2.8, with respect to any Subsidiary of Parent Borrower which becomes a Credit Party at any time after the Closing Date or any assets acquired by any Credit Party after the Closing Date in connection with a Permitted Acquisition, the Accounts and the Rental Fleet and Equipment of such new Credit Party or in respect of such newly acquired assets, as applicable, shall not be included in the Borrowing Base until (i) Agent shall have conducted such appraisals, audits, evaluations and/or inspections of such Collateral as the Decision Agent shall deem reasonably necessary or advisable with respect to such Collateral and (ii) Holdings, Parent Borrower and such Subsidiary shall have complied with the requirements of this Section 2.8.

 

2.9                               Control Agreements.

 

(a)                                 Each of Holdings and Parent Borrower shall, and shall cause each other Credit Party to (i) enter into Control Agreements with respect to each deposit account, securities account and commodities account maintained by Holdings, Parent Borrower or any such Credit Party as of or after the Closing Date, (ii) deposit in a deposit account subject to a Control Agreement all cash received on each Business Day and (iii) not establish or maintain any deposit account, securities account or commodities account unless such deposit account, securities account or commodities account is subject to a Control Agreement as provided in Section 3.14, in each case, other than (A) any payroll account so long as such payroll account is a zero balance account, (B) any disbursement account so long as the cash and Cash Equivalents on deposit in such disbursement account shall not exceed $100,000 at any time, (C) cash and Cash Equivalents on deposit in or credited to the balance of withholding tax, trust and other fiduciary accounts and (D) petty cash accounts not to have more than $50,000 on deposit in the aggregate at any time. Each such Control Agreement shall be in form and substance reasonably satisfactory to the Decision Agent (it being understood that the control agreements of the Credit Parties in place as of the Restatement Effective Date are in form and substance reasonably satisfactory). Each Credit Party shall enter into and maintain with one or more banks and pursuant to agreements in form and substance reasonably satisfactory to the Decision Agent, lock box arrangements.

 

(b)                                 Each of Holdings and Parent Borrower shall, and shall cause each Credit Party, to (i) direct each Account Debtor or other Person obligated to make a payment to any of them under any Account or General Intangible to make payment to the applicable Credit Party directly to a lockbox account or other deposit account subject to a Control Agreement and (ii) deposit in a deposit account or securities account (as applicable) subject to a Control Agreement promptly (but in any event within three (3) Business Days) upon receipt all Proceeds (as defined in the Code) of such Accounts and General Intangibles received by Holdings, Parent Borrower or any such Credit Party from any other Person.

 

(c)                                  Notwithstanding anything to the contrary in the foregoing clauses (a) or (b), it is understood and agreed that:

 

(i)                                     Agent shall not deliver a notice of control or other similar notice to any depository institution, securities intermediary or commodities intermediary, as applicable, pursuant to any Control Agreement unless (A) an Event of Default shall be continuing or (B) Excess Availability is less than (x) for five (5) consecutive Business Days the greater of (i) 12.5%

 

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of the aggregate Revolving Loan Commitments then in effect and (ii) $35.0 million or (y) at any time 10% of the Revolving Loan Commitments of all Lenders then in effect; and

 

(ii)                                  if an Event of Default shall be continuing or Excess Availability is less than (x) for five (5) consecutive Business Days the greater of (A) 12.5% of the aggregate Revolving Loan Commitments then in effect and (B) $35.0 million or (y) at any time 10% of the Revolving Loan Commitments of all Lenders then in effect, and, in each case, a control notice or similar notice has been given by Agent in accordance with the applicable Control Agreement and the immediately preceding clause (i), amounts deposited in or credited to deposit accounts, securities accounts or commodities accounts subject to Control Agreements or credited to the lock-box account will be transferred on a daily basis to the Concentration Account and shall not be available to the applicable Credit Party.

 

2.10                        Business and Properties. The Credit Parties shall do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, privileges, franchises, authorizations, Patents, Copyrights, Trademarks and trade names reasonably useful to the conduct of their business except where the failure to do so could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply with all applicable requirements of law and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except where the failure to comply could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and at all times maintain, preserve and protect all property reasonably useful to the conduct of such business and keep such property in good repair, working order and condition (other than wear and tear occurring in the ordinary course of business) and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times except where the failure to do so could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

SECTION 3.

 

NEGATIVE COVENANTS

 

Each Credit Party executing this Agreement jointly and severally agrees as to all Credit Parties that from and after the Closing Date until the Termination Date:

 

3.1                               Indebtedness. The Credit Parties shall not and shall not cause or permit their Subsidiaries directly or indirectly to create, incur, assume, or otherwise become or remain directly or indirectly liable with respect to any Indebtedness except:

 

(a)                                 the Obligations;

 

(b)                                 intercompany Indebtedness to the extent permitted pursuant to Section 3.3(b) or Section 3.3(m);

 

(c)                                  Indebtedness existing prior to the Closing Date and set forth in Schedule 3.1(c) to the Existing Credit Agreement;

 

(d)                                 Indebtedness in respect of the Second Lien Notes and any Parity Lien Debt and guarantees by the Credit Parties and Neff Finance in respect thereof and any Indebtedness issued, incurred or otherwise obtained in exchange for, or to renew, replace or refinance, in whole or

 

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part, the Second Lien Notes or any Parity Lien Debt (or any such exchanged, renewed, replaced or refinanced Indebtedness) and guarantees by the Credit Parties and Neff Finance thereof; provided that in the case of any such renewal, replacement, exchange or refinancing (i) such exchanging, renewing, replacing or refinancing Indebtedness is in an original aggregate principal amount (or accreted value, if applicable) not greater than the original aggregate principal amount (or accreted value, if applicable) of the Second Lien Notes or Parity Lien Debt (or any such exchanged, renewed, replaced or refinanced Indebtedness), as applicable, except by an amount not greater than the unpaid accrued interest and premium thereon plus other reasonable amounts paid (including tender premium), and fees, costs and expenses (including upfront fees and original issue discount) incurred, in connection with such exchanging, renewing, replacing or refinancing Indebtedness, (ii) such Indebtedness has the same or a later final maturity than the maturity date of the Second Lien Notes or any such Parity Lien Debt (or any such exchanged, renewed, replaced or refinanced Indebtedness), as applicable, and a weighted average life to maturity equal to or greater than the Second Lien Notes or any such Parity Lien Debt (or any such exchanged, renewed, replaced or refinanced Indebtedness), as applicable, (iii) the Second Lien Notes or any such Parity Lien Debt (or any such exchanged, renewed, replaced or refinanced Indebtedness), as applicable, being exchanged, renewed, replaced or refinanced shall be repaid, defeased or satisfied and discharged with the net cash proceeds from any such refinancing Indebtedness, and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, on the date such exchanging, renewing, replacing or refinancing Indebtedness is issued, incurred or obtained and (iv) such Indebtedness shall have no obligors other than the Credit Parties and Neff Finance and, if secured, be secured by a junior lien pursuant to the Intercreditor Agreement or an intercreditor agreement substantially similar to the Intercreditor Agreement;

 

(e)                                  Indebtedness not to exceed $5,000,000 in the aggregate at any time outstanding incurred to finance the acquisition or construction of new equipment, fixed assets or real property or the repair or improvement thereof or incurred with respect to Capital Leases or synthetic leases;

 

(f)                                   any other Indebtedness not to exceed $5,000,000 in the aggregate at any time outstanding;

 

(g)                                  [reserved];

 

(h)                                 Indebtedness assumed in connection with Permitted Acquisitions and Permitted Earnout Obligations with respect to Permitted Acquisitions; provided that such assumed Indebtedness and Permitted Earnout Obligations shall not exceed the amount permitted under clause (d) of the definition of Permitted Acquisition;

 

(i)                                     Indebtedness pursuant to sale and leaseback transactions that are permitted pursuant to Section 3.7(c);

 

(j)                                    unsecured Indebtedness to Wayzata or its Affiliates, or any investment fund or vehicle managed, sponsored or advised by Wayzata or any Affiliate thereof, and any Affiliate of or successor to any such investment fund or vehicle in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding so long as no cash interest or amortization payments are made on, or required with respect to, such Indebtedness and such Indebtedness has a final maturity date at least six months after the Commitment Termination Date;

 

(k)                                 Contingent Obligations permitted pursuant to Section 3.4 of this Agreement;

 

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(l)                                     Indebtedness under Currency Agreements, Hedging Agreements and Interest Rate Agreements entered into by Parent Borrower or its Subsidiaries in the ordinary course of business and otherwise in compliance with this Agreement and, in each case, not for speculative purposes;

 

(m)                             Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business; and

 

(n)                                 Indebtedness consisting of insurance premiums due or financed in the ordinary course of business over the course of the year.

 

3.2                               Liens and Related Matters.

 

(a)                                 No Liens. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create, incur, assume or permit to exist any Lien on or with respect to any property or asset of such Credit Party or any such Subsidiary, whether now owned or hereafter acquired, or any income or profits therefrom, except (collectively, the “Permitted Encumbrances”):

 

(i)                                     Permitted Liens;

 

(ii)                                  Liens existing on the Closing Date as set forth on Schedule 3.2 to the Existing Credit Agreement and renewals and extensions thereof;

 

(iii)                               Liens to secure Indebtedness or any Capital Leases permitted under Section 3.1(e); provided that, in each case, the Liens attach only to the assets financed by such Indebtedness or other obligations;

 

(iv)                              Liens arising from the filing of precautionary financing statements under the Code by lessors with respect to operating leases;

 

(v)                                 Liens existing on the assets of any Person that becomes a Credit Party (or is a Credit Party that survives a merger with such Person), or existing on assets acquired, pursuant to a Permitted Acquisition or other Investment to the extent the Liens on such assets secure Indebtedness permitted by Section 3.1(h); provided in all cases discussed in this clause that such Liens attach at all times only to the same assets (other than after acquired property that is affixed or incorporated into the property covered by such Lien and proceeds and products thereof) that such Liens attached to, and secure only the same Indebtedness or obligations (or any modifications, refinancing, extensions, renewals, refundings or replacements of such Indebtedness that do not increase the principal amount of the original Indebtedness) that such Liens secured, immediately prior to such Permitted Acquisition or other Investment or transaction and that such Liens do not attach to any Rental Fleet and Equipment;

 

(vi)                              Liens not otherwise permitted above securing obligations (including Indebtedness) in an aggregate principal amount not to exceed $5,000,000 at any time outstanding;

 

(vii)                           Liens to secure Indebtedness permitted under Section 3.1(d), together with all indemnities, reimbursement obligations, fees, expenses and other amounts owed in respect thereof or relating thereto; provided that such Liens are subject to the Intercreditor Agreement or an intercreditor agreement substantially similar to the Intercreditor Agreement;

 

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(viii)                        Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Section 3.3 to be applied against the purchase price for such Investment and (ii) consisting of an agreement to sell, transfer, lease or otherwise dispose of any property in a transaction permitted under Section 3.7, in each case, solely to the extent such Investment or sale, disposition, transfer or lease, as the case may be, would have been permitted on the date of the creation of such Lien;

 

(ix)                              Liens arising out of conditional sale, title retention, consignment or similar arrangements for sale of goods entered into by Parent Borrower or any of the other Credit Parties in the ordinary course of business permitted by this Agreement;

 

(x)                                 Liens that are contractual rights of setoff (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of Parent Borrower or any of the other Credit Parties to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of Parent Borrower and the other Credit Parties or (iii) relating to purchase orders and other agreements entered into with customers of Parent Borrower or any of the other Credit Parties in the ordinary course of business;

 

(xi)                              any Lien arising in connection with the financing of insurance premiums not otherwise prohibited hereunder; and

 

(xii)                           Liens solely on purchased inventory (and not on the proceeds thereof unless such Liens are expressly subordinated by contract or by operation of law to the Liens securing the Obligations) to secure obligations for the deferred purchase price of such inventory, payment for which is deferred for less than six (6) months.

 

(b)                                 No Negative Pledges. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly enter into or assume any agreement (other than the Loan Documents, any agreement relating to secured Indebtedness permitted by this Agreement and, with respect to any inventory (but not the proceeds thereof unless such Liens are expressly subordinated by contract or operation of law to the Liens securing the Obligations), any agreements governing the purchase of such inventory, payment of the purchase price for which is deferred six (6) months or more) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired.

 

(c)                                  No Restrictions on Subsidiary Distributions to Parent Borrower. Subject to Section 3.5 and except as provided herein (to the extent the relevant Indebtedness is permitted under Section 3.1), the Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create or otherwise cause or suffer to exist or become effective any consensual Lien, encumbrance or restriction of any kind on the ability of any such Subsidiary to: (i) pay dividends or make any other distribution on any of such Subsidiary’s Stock owned by Parent Borrower or any other Subsidiary; (ii) pay any Indebtedness owed to Parent Borrower or any other Subsidiary; (iii) make loans or advances to Parent Borrower or any other Subsidiary; or (iv) transfer any of its property or assets to Parent Borrower or any other Subsidiary.

 

3.3                               Investments. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly make or own any Investment in any Person except:

 

(a)                                 Parent Borrower and its Subsidiaries may make and own Investments in cash and Cash Equivalents; provided that to the extent required by Section 2.9, such Investments shall be

 

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permitted only to the extent such cash and Cash Equivalents are maintained in a deposit account or securities account (as applicable) subject to a Control Agreement;

 

(b)                                 Investments consisting of intercompany loans, advances or capital contributions made by (i) any Borrower to another Borrower, (ii) Parent Borrower or any other Credit Party to any Subsidiary of Parent Borrower that is not a Credit Party in an aggregate amount not to exceed $1,000,000 at any one time outstanding, and (iii) any Subsidiary of Holdings that is not a Credit Party to (A) a Credit Party or (B) any other Subsidiary of Holdings that is not a Credit Party; provided that the obligations of any Credit Party pursuant to the foregoing clause (iii) shall be expressly subordinated to the Obligations of such Credit Party under the Loan Documents in a manner reasonably satisfactory to the Agent;

 

(c)                                  Parent Borrower and its Subsidiaries may make loans and advances to employees for moving, entertainment, travel and other similar expenses in the ordinary course of business not to exceed $1,000,000 in the aggregate at any one time outstanding;

 

(d)                                 Investments under Currency Agreements, Hedging Agreements and Interest Rate Agreements entered into by Parent Borrower or its Subsidiaries in the ordinary course of business and otherwise in compliance with this Agreement and, in each case, not for speculative purposes;

 

(e)                                  Investments by Parent Borrower and its Subsidiaries in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in good faith settlement of delinquent obligations of such trade creditors or customers;

 

(f)                                   Investments made by Parent Borrower or its Subsidiaries as a result of consideration received in connection with an Asset Disposition made in compliance with Section 3.7;

 

(g)                                  (i) accounts receivable and extended payment terms of Parent Borrower and its Subsidiaries provided to customers that are made, created or acquired in the ordinary course of business and (ii) Investments in the ordinary course of business consisting of Article 3 endorsements for collection or deposit and Article 4 customary trade arrangements with customers consistent with past practices;

 

(h)                                 Investments consisting of deposits, prepayments and other credits to suppliers made in the ordinary course of business of Parent Borrower and its Subsidiaries;

 

(i)                                     Investments existing on the Closing Date and set forth on Schedule 3.3 to the Existing Credit Agreement;

 

(j)                                    Investments consisting of loans made by Holdings to officers or employees of Holdings or any other Credit Party in connection with the purchase by such officers or employees of Stock of Holdings; provided that the aggregate amount of such Investments shall not exceed $1,000,000 at any one time outstanding;

 

(k)                                 Investments constituting Permitted Acquisitions;

 

(l)                                     Investments consisting of intercompany loans or advances made by Parent Borrower to Holdings in lieu of making any Restricted Payment permitted pursuant to Section 3.5

 

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by way of dividend or other distribution; provided that the amount of such loan shall count as a Restricted Payment for purposes of Section 3.5;

 

(m)                             the formation of and Investments in new Domestic Subsidiaries of the Parent Borrower that are Credit Parties, provided that (i) such Subsidiary is owned by the Parent Borrower or another Borrower, (ii) the Parent Borrower shall have notified the Agent at least ten (10) Business Days prior to the formation or acquisition of any such Subsidiary, (iii) such Subsidiary shall be engaged in a permitted business of the Parent Borrower or its Subsidiaries hereunder and (iv) as of the date of the formation or acquisition of any such Subsidiary and the Investment therein, and after giving effect thereto, (A) such new Subsidiary and its parent shall have entered into any and all agreements (in form and substance reasonably satisfactory to the Agent) necessary to comply with Section 2.8, and the Agent shall be satisfied that all Liens required to be granted in the assets and ownership interests of such new Subsidiary under such Section 2.8 have been granted or pledged and have been perfected and are subject only to Permitted Encumbrances hereunder, and (B) no Event of Default shall have occurred and be continuing;

 

(n)                                 other Investments in an aggregate amount not to exceed $5,000,000 at any one time outstanding; and

 

(o)                                 the acquisition (by purchase or otherwise) of all or substantially all of the Stock of any company or the assets comprising a business unit of any company, provided that (i) no Default or Event of Default shall have occurred and be continuing at such time or would result therefrom, (ii) either (x)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such Investment shall not be less than 15% of the Revolving Loan Commitments of all Lenders, (2) Excess Availability on a pro forma basis immediately after giving effect to such Investment shall not be less than 15% of the Revolving Loan Commitments of all Lenders and (3) at the time of such Investment and after giving effect thereto the Credit Parties shall be in compliance with the financial covenants set forth in Section 3.19 and Section 3.20 as if then operative or (y)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such Investment shall not be less than 20% of the Revolving Loan Commitments of all Lenders and (2) Excess Availability on a pro forma basis immediately after giving effect to such Investment shall not be less than 20% of the Revolving Loan Commitments of all Lenders; and (iii) if the purchase price payable in connection with such Investment is in excess of $25,000,000, Parent Borrower shall have complied with the requirements set forth in clauses (a), (b), (c), (f) and (g) of the definition of “Permitted Acquisition” with respect to such Investment.

 

3.4                               Contingent Obligations. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly create or become or be liable with respect to any Contingent Obligation except:

 

(a)                                 guarantees by Parent Borrower or a Subsidiary of Parent Borrower of Indebtedness or other obligations permitted to be incurred under this Agreement; provided that no guarantee may be made by any Subsidiary of any Indebtedness unless such Subsidiary also guarantees the Obligations;

 

(b)                                 those resulting from endorsement of negotiable instruments for collection in the ordinary course of business;

 

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(c)                                  those existing on the Closing Date and described in Schedule 3.4 to the Existing Credit Agreement;

 

(d)                                 those arising under indemnity agreements to title insurers to cause such title insurers to issue (i) to Agent mortgagee title insurance policies and (ii) to the Credit Parties owner’s title insurance policies;

 

(e)                                  those arising with respect to customary indemnification obligations incurred in connection with Asset Dispositions permitted hereunder;

 

(f)                                   those incurred with respect to Indebtedness permitted by Section 3.1; provided that in the case of any Contingent Obligation with respect to subordinated Indebtedness, any such Contingent Obligation is subordinated to the Obligations to the same extent as the Indebtedness to which it relates is subordinated to the Obligations;

 

(g)                                  any other Contingent Obligations not expressly permitted by clauses (a) through (f) above, so long as any such other Contingent Obligations, in the aggregate at any one time outstanding, do not exceed $5,000,000; and

 

(h)                                 those arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five (5) Business Days of incurrence.

 

3.5                               Restricted Payments. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly declare, order, pay, make or set apart any sum for any Restricted Payment (other than dividends or distributions payable solely in common stock or common units of the Person making such dividend or distribution), except that:

 

(a)                                 The Credit Parties and Neff Finance may make Tax Distributions;

 

(b)                                 any Subsidiary of Parent Borrower may make Restricted Payments to Parent Borrower or any other Borrower;

 

(c)                                  Parent Borrower or Holdings may make Restricted Payments to pay as and when due all reasonable amounts required to be paid in connection with the preparation and filing of all reports that Holdings or any parent thereof is or will be required to file with or furnish to the U.S. Securities and Exchange Commission, including reasonable fees and disbursements of Holdings’ or such Person’s counsel, accountants, financial printers and other third parties that are customarily involved in such filings;

 

(d)                                 Parent Borrower may make Restricted Payments to Holdings and Holdings may make Restricted Payments to the equity holders of Holdings in connection with the 2013 Special Distribution;

 

(e)                                  Parent Borrower may make Restricted Payments to Holdings in the minimum amount necessary to enable Holdings to make repurchases of Stock deemed to occur upon the exercise of stock options if such Stock represents a portion of the exercise price thereof or the minimum amount of taxes due upon such exercises;

 

35

 

(f)                                   if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, Parent Borrower may make Restricted Payments to Holdings in the minimum amount necessary to enable Holdings to, and Holdings shall be permitted to, fund its repurchase, redemption, acquisition or cancellation of Stock from management members or their transferees upon the death, disability, retirement or termination of any such former management members; provided that the sum of all such Restricted Payments referred to in this clause (f) shall not exceed the Management Buyout Amount;

 

(g)                                  Parent Borrower may make Restricted Payments to Holdings (and Holdings may make Restricted Payments to any parent entity) to the extent necessary to permit Holdings or such parent entity, as the case may be, to pay general administrative costs and expenses when due in the ordinary course of business in aggregate amount not to exceed $2,000,000 in any Fiscal Year;

 

(h)                                 so long as no Default or Event of Default has occurred and is continuing, Holdings may make Restricted Payments to pay out-of-pocket expenses incurred by Wayzata or its Affiliates (or any of its principals, employees, agents or other representatives) in connection with its performance of management, consulting, monitoring, financial advisory or other services provided to Holdings and its Subsidiaries in an amount not to exceed $100,000 per any Fiscal Year; and

 

(i)                                     Parent Borrower may make Restricted Payments to Holdings and Holdings may make Restricted Payments to the holders of Stock of Holdings, provided that (i) no Default or Event of Default shall have occurred and be continuing at such time or would result therefrom and (ii) either (x)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such Restricted Payment shall not be less than 15% of the Revolving Loan Commitments of all Lenders, (2) Excess Availability on a pro forma basis immediately after giving effect to such Restricted Payment shall not be less than 15% of the Revolving Loan Commitments of all Lenders and (3) at the time of such Restricted Payment and after giving effect thereto the Credit Parties shall be in compliance with the financial covenants set forth Section 3.19 and Section 3.20 as if then operative, (y)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such Restricted Payment shall not be less than 20% of the Revolving Loan Commitments of all Lenders, (2) Excess Availability on a pro forma basis immediately after giving effect to such Restricted Payment shall not be less than 20% of the Revolving Loan Commitments of all Lenders and (3) at the time of such Restricted Payment and after giving effect thereto the Credit Parties shall be in compliance with the financial covenant set forth in Section 3.19 as if then operative or (z)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such Restricted Payment shall not be less than 25% of the Revolving Loan Commitments of all Lenders and (2) Excess Availability on a pro forma basis immediately after giving effect to such Restricted Payment shall not be less than 25% of the Revolving Loan Commitments of all Lenders.

 

3.6                               Amendments to Constituent Documents; Restriction on Fundamental Changes. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly:

 

(a)                                 amend, modify or waive any term or provision of its organizational documents, including its articles of incorporation, certificates of designations pertaining to preferred stock, by-laws, partnership agreement or operating agreement in a manner materially adverse to Agent or Lenders unless required by law;

 

(b)                                 other than Investments not prohibited by Section 3.3 or Asset Dispositions not prohibited by Section 3.7, (i) enter into any transaction of merger or consolidation except any

 

36

 

Wholly Owned Subsidiary of Parent Borrower may be merged with or into Parent Borrower (provided that Parent Borrower is the surviving entity) or any other Wholly Owned Subsidiary of Parent Borrower (provided that if either such Subsidiary is a Credit Party, the surviving entity shall also be a Credit Party) or (ii) sell, lease, transfer or otherwise dispose of all or substantially all of its assets (upon voluntary dissolution or otherwise) except to any Credit Party; or

 

(c)                                  liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) except (i) if Parent Borrower determines in good faith that such liquidation or dissolution of a Credit Party other than Parent Borrower is in the best interests of Parent Borrower and is not materially disadvantageous to the Lenders and (ii) to the extent such Person is a Credit Party, any assets or business not otherwise disposed of or transferred in accordance with Sections 3.3 and 3.7, or, in the case of any such business, discontinued, shall be transferred to, or otherwise owned or conducted by, another Credit Party after giving effect to such liquidation or dissolution.

 

3.7                               Disposal of Assets or Subsidiary Stock. The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly consummate any Asset Disposition, or grant any Person an option to acquire, in one transaction or a series of related transactions, any of its property, business or assets, whether now owned or hereafter acquired, except:

 

(a)                                 the sale, lease, rental, transfer or other disposition of Rental Fleet and Equipment or Rolling Stock in good faith for fair value in the ordinary course of business;

 

(b)                                 the sale, lease, transfer or other disposition of (i) obsolete, worn-out or surplus equipment or leased or owned real property not used or useful in the business or (ii) Investments in cash or Cash Equivalents;

 

(c)                                  the disposition by Parent Borrower and its Subsidiaries of Rolling Stock pursuant to sale and leaseback transactions for good faith fair value;

 

(d)                                 losses or destruction of, or damage to, or condemnation of any property of Holdings or its Subsidiaries so long as the Net Proceeds thereof are applied in accordance with Section 1.5(c);

 

(e)                                  Asset Dispositions by Parent Borrower and its Subsidiaries to Parent Borrower or another Credit Party;

 

(f)                                   Asset Dispositions by any Subsidiary of Holdings that is not a Credit Party to any other Subsidiary of Holdings that is not a Credit Party or to a Credit Party; and

 

(g)                                  Asset Dispositions to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the following conditions precedent are met; (w) the consideration received is at least equal to the fair market value of such assets, (x) with respect to any Asset Disposition pursuant to this clause (g) for a purchase price in excess of $2,500,000, at least 75% of the consideration received is cash or Cash Equivalents, (y) no Default or Event of Default then exists or would result from such Asset Disposition and (z) the Net Proceeds thereof are applied in accordance with Section 1.5(c).

 

Notwithstanding anything herein to the contrary, sale and leaseback transactions of Rental Fleet and Equipment shall not be permitted.

 

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3.8                               Transactions with Affiliates.

 

(a)                                 The Credit Parties shall not and shall not cause or permit their Subsidiaries to directly or indirectly enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any management, consulting, investment banking, advisory or other similar services) with any Affiliate or with any director, officer or employee of any Credit Party (an “Affiliate Transaction”), other than Affiliate Transactions pursuant to the reasonable requirements of the business of any such Credit Party or any of its Subsidiaries and upon terms which are not materially less favorable than those that might reasonably have been obtained by such Credit Party in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of Holdings or such Subsidiary.

 

(b)                                 The restrictions of clause (a) of this Section 3.8 shall not apply to:

 

(i)                                     reasonable fees and compensation paid to, and indemnity provided on behalf of, officers, directors, managers, members, employees or consultants of Holdings, Parent Borrower or any of its Subsidiaries as determined in good faith by Parent Borrower’s Board of Directors or senior management;

 

(ii)                                  transactions exclusively between or among Parent Borrower and any of its Subsidiaries or exclusively between or among Subsidiaries, provided such transactions are not otherwise prohibited by this Agreement;

 

(iii)                               Affiliate Transactions as set forth on Schedule 3.8 to the Existing Credit Agreement (including pursuant to any amendment to such Contractual Obligations or documentation replacing such Contractual Obligations to the extent that such amendment or agreement is permitted hereunder and is not more disadvantageous to the applicable Credit Party or the Lenders in any material respect than the original Contractual Obligation);

 

(iv)                              Restricted Payments permitted by this Agreement;

 

(v)                                 sales of Qualified Stock of Holdings; and

 

(vi)                              loans to employees of a Borrower that are approved by the Board of Directors of Parent Borrower in good faith.

 

3.9                               Conduct of Business.

 

(a)                                 Holdings shall not engage in any business or activity other than (i) being a guarantor with respect to the Obligations under the Loan Documents and performing its Obligations thereunder and a guarantor with respect to the obligations under the Second Lien Notes and any Parity Lien Debt and performing its obligations thereunder and the security and other documents executed in connection therewith, (ii) holding shares of the Stock of Parent Borrower, (iii) paying taxes, (iv) preparing reports to Governmental Authorities and to the holders of its Stock, (v) holding meetings of its Board of Directors and/or the holders of its Stock, preparing company records and other company activities required to maintain its separate company structure and (vi) any activities reasonably related thereto.

 

(b)                                 The Credit Parties shall not and shall not cause or permit their Subsidiaries to engage in any businesses a majority of whose revenues are not derived from businesses that are the same as or reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which the Credit Parties and their Subsidiaries are engaged on the Closing Date as set forth on Schedule 3.9 to the Existing Credit Agreement.

 

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(c)                                  Neff Finance shall not engage in any business or activity, own any assets, or incur any liabilities other than (i) co-issuing the Second Lien Notes (and any additional notes issued under the Second Lien Notes Indenture), issuing any Parity Lien Debt or any Indebtedness issued, incurred or otherwise obtained in exchange for, or to renew, replace or refinance, in whole or in part, the Second Lien Notes and Parity Lien Debt (or any such renewed, replaced or refinanced Indebtedness), (ii) preparing reports to Governmental Authorities and to its shareholders, (iii) holding meetings of its shareholders or directors, preparing corporate records or other corporate activities required to maintain its separate corporate existence, and (iv) any activities incidental thereto.

 

3.10                        [Reserved].

 

3.11                        Fiscal Year. No Credit Party shall change its Fiscal Year or permit any of its Subsidiaries to change their respective Fiscal Years.

 

3.12                        [Reserved].

 

3.13                        [Reserved].

 

3.14                        Bank Accounts; Securities Accounts; Commodities Accounts. The Credit Parties shall not:

 

(a)                                 establish any new bank accounts without prior written notice to Agent and unless Agent and the depository institution at which the account is to be opened enter into a Control Agreement if required by Section 2.9; provided that Agent shall not cause (or deliver notice to the applicable depository institution to cause) amounts credited to such deposit accounts to be transferred on a daily basis to the Concentration Account or otherwise unless (i) an Event of Default shall have occurred and be continuing or (ii) Excess Availability shall be less than (x) for five (5) consecutive Business Days the greater of (i) 12.5% of the aggregate Revolving Loan Commitments then in effect and (ii) $35.0 million or (y) at any time 10% of the Revolving Loan Commitments of all Lenders then in effect;

 

(b)                                 establish any new securities accounts without prior written notice to Agent and unless Agent and the securities intermediary at which the account is to be opened enter into a Control Agreement if required by Section 2.9; provided that Agent shall not cause (or deliver notice to the applicable securities intermediary to cause) amounts credited to such securities accounts to be transferred on a daily basis to the Concentration Account or otherwise unless (i) an Event of Default shall have occurred and be continuing or (ii) Excess Availability shall be less than (x) for five (5) consecutive Business Days the greater of (i) 12.5% of the aggregate Revolving Loan Commitments then in effect and (ii) $35.0 million or (y) at any time 10% of the Revolving Loan Commitments of all Lenders then in effect; and

 

(c)                                  establish any new commodities accounts without prior written notice to Agent and unless Agent and the commodities intermediary at which the account is to be opened enter into a Control Agreement if required by Section 2.9; provided that Agent shall not cause (or deliver notice to the applicable commodities intermediary to cause) amounts credited to such commodities accounts to be transferred on a daily basis to the Concentration Account or otherwise unless (i) an Event of Default shall have occurred and be continuing or (ii) Excess Availability shall be less than (x) for five (5) consecutive Business Days the greater of (i) 12.5% of the aggregate Revolving Loan Commitments then in effect and (ii) $35.0 million or (y) at any time 10% of the Revolving Loan Commitments of all Lenders then in effect.

 

39

 

3.15                        Hazardous Materials. The Credit Parties shall not and shall not cause or permit their Subsidiaries to 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 by the Credit Parties or any of their Subsidiaries 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 Environmental Liabilities or impairment of the value or marketability of the Real Estate or any of the Collateral that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

3.16                        [Reserved].

 

3.17                        Lease Limits. Holdings will not and will not permit any of its Subsidiaries directly or indirectly to become or remain liable in any way, whether directly or by assignment or as a guarantor or other surety, for the obligations of the lessee under any operating lease, synthetic lease or similar off balance sheet financing relating to Rental Fleet and Equipment, if the aggregate amount of all rents (or substantially equivalent payments) paid by Holdings and its Subsidiaries under all such leases would exceed $20,000,000 in any Fiscal Year of Parent Borrower. For purposes of this Section 3.17, “operating lease” shall mean an operating lease under GAAP as in effect on the Closing Date.

 

3.18                        Prepayments; Amendments of Other Indebtedness. The Credit Parties shall not, directly or indirectly, voluntarily purchase, redeem, refinance, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness incurred pursuant to Section 3.1(d) unless (a) such Indebtedness is prepaid solely with the proceeds of Indebtedness incurred in whole or in part to refinance such Indebtedness pursuant to a refinancing that is permitted pursuant to Section 3.1(d) or (b) (i) no Default or Event of Default shall have occurred and be continuing at such time or would result therefrom, and (ii) either (x)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such purchase, redemption, refinancing, defeasance or prepayment shall not be less than 15% of the Revolving Loan Commitments of all Lenders, (2) Excess Availability on a pro forma basis immediately after giving effect to such purchase, redemption, refinancing, defeasance or prepayment shall not be less than 15% of the Revolving Loan Commitments of all Lenders and (3) at the time of such purchase, redemption, refinancing, defeasance or prepayment and after giving effect thereto the Credit Parties shall be in compliance with the financial covenants set forth in Section 3.19 and Section 3.20 as if then operative or (y)(1) Average Availability on a pro forma basis for the 30-day period immediately prior to the date of such purchase, redemption, refinancing, defeasance or prepayment shall not be less than 25% of the Revolving Loan Commitments of all Lenders and (2) Excess Availability on a pro forma basis immediately after giving effect to such purchase, redemption, refinancing, defeasance or prepayment shall not be less than 25% of the Revolving Loan Commitments of all Lenders. The Credit Parties shall not (A) increase the rate of interest on the Second Lien Notes by more than 1% from the rate in effect on May 5, 2011 (including any contingent default interest rate) or (B) shorten the maturity of, or add amortization payments to, the Second Lien Notes. Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, any consent payments on or in respect of the Second Lien Notes made by the Credit Parties and Neff Finance in connection with the Consent Solicitation are permitted.

 

3.19                        Consolidated Total Leverage Ratio. At any time that Excess Availability is less than the Threshold Amount (each occurrence of such an event, a “Trigger Event”), Parent Borrower shall not permit the Consolidated Total Leverage Ratio as of the last day of each Fiscal Quarter ended immediately prior to and after such Trigger Event occurs, and only so long as a Reversal Event shall not have occurred following such Trigger Event, to be more than the applicable amount set forth in the table below for each such Fiscal Quarter:

 

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Consolidated Total
    	
 
    
	
Fiscal Quarter Ending
    	
 
    	
Leverage Ratio
    	
 
    
	
For   each Fiscal Quarter ended during the period from May 5, 2011 through   December 31, 2014
    	
 
    	
4.50:1.0
    	
 
    
	
For each Fiscal Quarter ended on or after   January 1, 2015
    	
 
    	
4.25:1.0
    	
 
    

 

; provided that after the occurrence of a Trigger Event, if Excess Availability is greater than or equal to the Threshold Amount for a period of thirty (30) consecutive days (a “Reversal Event”), then Parent Borrower shall not be required to comply with the Consolidated Total Leverage Ratio requirements set forth in this Section 3.19 for each Fiscal Quarter ended after such Reversal Event until the occurrence of another Trigger Event.

 

3.20                        Fixed Charge Coverage Ratio. Upon the occurrence of a Trigger Event, Parent Borrower shall not permit the Fixed Charge Coverage Ratio as of the last day of each Fiscal Quarter ended immediately prior to and after such Trigger Event occurs, and only so long as a Reversal Event shall not have occurred following such Trigger Event, to be less than 1.0:1.0; provided that if a Reversal Event shall occur after the occurrence of a Trigger Event, then Parent Borrower shall not be required to comply with the Fixed Charge Coverage Ratio requirements set forth in this Section 3.20 for each Fiscal Quarter ended after such Reversal Event until the occurrence of another Trigger Event.

 

SECTION 4.

 

FINANCIAL AND OTHER REPORTING COVENANTS

 

Each Credit Party covenants and agrees that from and after the Closing Date until the Termination Date, such Credit Party shall perform and comply with, and shall cause each of the other Credit Parties to perform and comply with, all covenants in this Section 4 applicable to such Person.

 

4.1                               Financial Statements and Other Reports. Holdings and Parent Borrower will maintain, and cause each of their Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of Financial Statements in conformity with GAAP (it being understood that monthly Financial Statements are not required to have footnote disclosures). Parent Borrower will deliver each of the Financial Statements and other reports described below to Agent:

 

(a)                                 Monthly Financial Operating Reports. As soon as available, but in any event not later than thirty (30) days after the end of any month (i) the consolidated balance sheets of Holdings and its Subsidiaries or, for any month which includes a period prior to the Closing Date, of the Predecessor Entities (as defined in the Existing Credit Agreement) and their respective Subsidiaries, in each case, as at the end of such month and the related statements of income and cash flow for such month and for the period from the beginning of the then current Fiscal Year of Holdings to the end of such month, (ii) a monthly utilization report and (iii) a monthly report of any additions or deletions to Rental Fleet and Equipment and a monthly report of average fleet age, rate changes and average fleet size at original cost, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion, which shall be prepared by Holdings as of the last day of the immediately preceding month, in each case, and related guidance.

 

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(b)                                 Quarterly Financials. As soon as available and in any event within forty-five (45) days after the end of each Fiscal Quarter (other than at the Fiscal Year end) or, in the case of the Fiscal Quarter ending September 30, 2010, only, ninety (90) days after the end of such Fiscal Quarter, Holdings will deliver (i) the consolidated balance sheets of Holdings and its Subsidiaries or, for any Fiscal Quarter which includes a period prior to the Closing Date, of the Predecessor Entities and their respective Subsidiaries, in each case, as at the end of such Fiscal Quarter, and the related consolidated statements of income and cash flow for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year of Holdings to the end of such Fiscal Quarter (which financial statements shall have been subject to a SAS 100 or other similar review by Borrower’s Accountants if otherwise available) and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year.

 

(c)                                  Year-End Financials. As soon as available and in any event within ninety (90) days after the end of each Fiscal Year of Holdings or, in the case of the Fiscal Year ending December 31, 2010 only, one hundred twenty (120) days after the end of such Fiscal Year, Holdings will deliver (i) the consolidated balance sheets of Holdings and its Subsidiaries or, for any Fiscal Year which includes a period prior to the Closing Date, of the Predecessor Entities and their respective Subsidiaries, in each case, as at the end of such year, and the related consolidated statements of income, members’ or stockholders’ equity and cash flow for such Fiscal Year, and (ii) a report from Borrower’s Accountants, which report shall be prepared in accordance with Statement of Auditing Standards No. 58 (the “Statement”) “Reports on Audited Financial Statements” and such report shall be “Unqualified” (as such term is defined in such Statement).

 

(d)                                 Accountants’ Reports. Promptly upon receipt thereof, Holdings will deliver copies of all significant reports submitted by Borrower’s Accountants in connection with each annual, interim or special audit or review of any type of the Financial Statements or related internal control systems of Holdings and its Subsidiaries made by such accountants.

 

(e)                                  Additional Deliveries.

 

(i)                                     To Agent, as soon as available and in any event no later than 12:00 p.m. (noon) (New York time) on the twentieth Business Day after the end of each Fiscal Month of Parent Borrower, a Borrowing Base Certificate, with respect to Borrowers, executed by a responsible officer of the Parent Borrower, accompanied by such supporting detail and documentation as shall be requested by Agent in its reasonable discretion (in substantially the same form as Exhibit 4.1(e) to the Existing Credit Agreement (the “Borrowing Base Certificate”), which shall be prepared by Parent Borrower as of the last day of the immediately preceding Fiscal Month reporting period or the date that is two (2) days prior to the date of any such additional request.

 

(ii)                                  To Agent, at the time of delivery of each of the quarterly Financial Statements and the annual Financial Statements delivered pursuant to Section 4.1(b) and (c) to the extent applicable, (i) a listing of government contracts of Parent Borrower or any other Credit Party 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.

 

(iii)                               To Agent at the time of delivery of the annual Financial Statements delivered pursuant to Section 4.1(c), an update to the Perfection Certificate bringing down the information therein as of the date of such delivery in form reasonably satisfactory to Agent.

 

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(f)                                   Appraisals; Inspections.

 

(i)                                     Each Credit Party, at its sole cost and expense, shall promptly deliver to Agent the results of each physical verification, if any, which such Credit Party may, in its discretion have made, or caused any other Person to have made on its behalf, of all or any portion of its Inventory.

 

(ii)                                  If a Default or Event of Default has occurred and is continuing, Parent Borrower, at its own expense, shall deliver to Agent the results of any physical verification, as Agent may reasonably require.

 

(iii)                               Parent Borrower, at its own expense, shall cause to be delivered to Agent an appraisal, performed by an Approved Appraiser, of the Net Orderly Liquidation Value of its Rental Fleet and Equipment one time during each Fiscal Year (at the time during such Fiscal Year determined by Agent and at the cost and expense of Parent Borrower) and a second appraisal if Excess Availability is less than 50% of the aggregate Revolving Loan Commitments at the time such appraisal is commenced and a third appraisal if Excess Availability is less than 20% of the aggregate Revolving Loan Commitments at the time such appraisal is commenced; provided that Parent Borrower shall cause to be delivered to Agent additional appraisals at the discretion of the Agent at any time an Event of Default has occurred and is continuing. For the purposes of this clause (iii), an appraisal requested or initiated by Agent while an Event of Default is continuing or Excess Availability is below any cited threshold, shall be required whether or not such Event of Default or threshold breach continues through the time of completion of such appraisal.

 

(iv)                              Parent Borrower shall permit Agent or a Person designated by Agent to conduct a field audit of the Accounts one time during each Fiscal Year (at the time during such Fiscal Year determined by Agent and at the cost and expense of Parent Borrower) and a second field audit if at any time Excess Availability is less than 20% of the aggregate Revolving Loan Commitments at the time such field audit is commenced (or up to four times per year at the discretion of the Agent at any time an Event of Default has occurred and is continuing); provided that, no more than four field audits shall be conducted in any Fiscal Year. For the purposes of this clause (iv), an audit initiated by Agent or such Person while an Event of Default is continuing, shall be required whether or not such Event of Default continues through the time of completion of such audit.

 

(g)                                  Projections. As soon as available and in any event no later than thirty (30) days after the last day of each of Fiscal Year of Parent Borrower, Parent Borrower will deliver Projections of Parent Borrower and its Subsidiaries for the forthcoming Fiscal Year, prepared on a quarterly basis, which Projections shall be accompanied by a certificate of a responsible officer stating that such Projections are based on reasonable estimates, information and assumptions and that such responsible officer has no reason to believe that such Projections are incorrect or misleading in any material respect.

 

(h)                                 SEC Filings and Press Releases. Promptly upon their becoming available, Parent Borrower will deliver copies of (i) all Financial Statements, reports, notices and proxy statements sent or made available by Holdings, Parent Borrower or any of their Subsidiaries to the holders of any Indebtedness, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Holdings, Parent Borrower or any of their Subsidiaries with any securities exchange or with the Securities and Exchange Commission, and (iii) all press releases and other statements made available by Holdings, Parent Borrower or any of their Subsidiaries to the public concerning developments in the business of any such Person.

 

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(i)                                     Events of Default, Etc. Promptly (but in any event within two (2) Business Days) upon any officer of any Credit Party obtaining knowledge of any of the following events or conditions, Parent Borrower or such Credit Party shall deliver copies of all notices given or received by Holdings, Parent Borrower or any of their Subsidiaries with respect to any such event or condition and a certificate of Parent Borrower’s chief executive officer specifying the nature and period of existence of such event or condition and what action Holdings, Parent Borrower or any of their Subsidiaries has taken, is taking and proposes to take with respect thereto: (i) any condition or event that constitutes an Event of Default or Default; (ii) any written notice that any Person has given to Holdings, Parent Borrower or any of their Subsidiaries or any other action taken with respect to a claimed default or event or condition of the type referred to in Section 6.1(b); or (iii) any event or condition that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

(j)                                    Litigation. Promptly upon any officer of any Credit Party obtaining knowledge of (i) the institution of any action, suit, proceeding, governmental investigation, tax audit or arbitration now pending or, to the best knowledge of such Credit Party after due inquiry, threatened against or adversely affecting any Credit Party or any of its Subsidiaries or any property of any Credit Party or any of its Subsidiaries (“Litigation”) not previously disclosed by Parent Borrower or any other Credit Party to Agent or (ii) any material development in any action, suit, proceeding, governmental investigation or arbitration at any time pending against or affecting any Credit Party or any property of any Credit Party which, in each case, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, Parent Borrower will promptly give notice thereof to Agent and provide such other information as may be reasonably available to it to enable Agent and its counsel to evaluate such matter.

 

(k)                                 ERISA. Promptly upon any officer of any Credit Party obtaining knowledge of (i) the occurrence of a “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the IRC) with respect to any Plan that would result in the imposition on Parent Borrower or any of its Subsidiaries of a tax or penalty that could reasonably be expected individually or in the aggregate to result in a Material Adverse Effect; (ii) any reportable event as defined in Section 4043(c) of ERISA with respect to a Title IV Plan (for which the thirty (30) day notice requirement has not been waived); (iii) the creation of any Lien in favor of the PBGC or a Title IV Plan; (iv) any withdrawal by a Credit Party from, or the termination, reorganization or insolvency of any Multiemployer Plan to which any Credit Party is making or is obligated to make contributions; or (v) the institution or taking of any other action by the PBGC, Holdings or any of its Subsidiaries under ERISA to terminate or to partially terminate any Title IV Plan or appoint a trustee to administer any such plan or the commencement or threatened commencement of any litigation regarding any such Plan that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, Parent Borrower shall provide a written notice specifying the nature of such event, what action the Credit Parties or any ERISA Affiliates have taken, are taking or propose to take with respect thereto, and, when known, any action taken or threatened by the IRS, Department of Labor, PBGC or Multiemployer Plan sponsor with respect thereto.

 

(l)                                     Notice of Corporate and Other Changes. Parent Borrower shall provide prompt (and in any event within five (5) Business Days) written notice of (i) any change after the Closing Date in the legal name of any Credit Party, (ii) any change after the Closing Date in the authorized and issued Stock of any Credit Party or any Subsidiary of any Credit Party (other than any change in the authorized and issued Stock of Holdings issued in connection with the grant of Stock or stock options to employees of Holdings or any of its Subsidiaries) or any amendment to their articles or certificate of incorporation, by-laws, partnership agreement or other

 

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organizational documents, (iii) any change in the jurisdiction of organization of any Credit Party and (iv) any Subsidiary created or acquired by any Credit Party or any of its Subsidiaries after the Closing Date, such notice, in each case, to identify the applicable jurisdictions, capital structures or Subsidiaries, as applicable. The foregoing notice requirement shall not be construed to constitute consent by any of the Lenders to any transaction referred to above which is not expressly permitted by the terms of this Agreement. Notwithstanding the foregoing Parent Borrower shall not make or allow to be made any of the changes described in clauses (i) or (iii) above unless the Credit Parties have done everything necessary to continue the perfection of the Agent’s security interest in the Collateral.

 

(m)                             Compliance and Pricing Certificate. Together with each delivery of Financial Statements of Holdings and its Subsidiaries pursuant to Sections 4.1(b) and (c), Parent Borrower will deliver a fully and properly completed Compliance and Pricing Certificate (in substantially the same form as Exhibit 4.1(m) to this Amended and Restated Credit Agreement (the “Compliance and Pricing Certificate”) signed by Parent Borrower’s chief executive officer or chief financial officer which shall include a calculation of the Consolidated Total Leverage Ratio and the Fixed Charge Coverage Ratio (whether or not Section 3.19 or Section 3.20 is then operative).

 

(n)                                 Other Information. With reasonable promptness, each Credit Party will deliver such other information and data with respect to such Credit Party or any Subsidiary of such Credit Party as from time to time may be reasonably requested by Agent.

 

Documents required to be delivered pursuant to Section 4.1(a), (b), (c) or (h) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Parent Borrower posts such documents, or provides a link thereto on Parent Borrower’s website on the Internet at the website address listed in Section 9.3; or (ii) on which such documents are posted on Parent Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent); provided that (i) Parent Borrower shall deliver paper copies of such documents to the Agent or any Lender that requests Parent Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Agent or such Lender and (ii) any such posting shall only be deemed delivered when Parent Borrower shall notify the Agent (by facsimile or electronic mail) of the posting of any such documents and provide to the Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance Parent Borrower shall be required to provide paper copies of the Compliance and Pricing Certificates required by Section 4.1(m) to the Agent. Except for such Compliance and Pricing Certificates, the Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by Parent Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

Parent Borrower hereby acknowledges that (a) the Agent and/or other Persons named on the cover page hereof will make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of Parent Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to Parent Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Parent Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that

 

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(w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” Parent Borrower shall be deemed to have authorized the Agent, the Arrangers, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to Borrowers or their securities for purposes of United States federal and state securities laws (provided, however, that to the extent applicable such Borrower Materials shall be treated as set forth in Section 9.13); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor”; and (z) the Agent and all other Persons shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

4.2                               Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. For purposes of this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to such terms in conformity with GAAP. Financial Statements and other information furnished to Agent or Lenders pursuant to Section 4.1 or any other section (unless specifically indicated otherwise) shall be prepared in accordance with GAAP as in effect at the time of such preparation.

 

SECTION 5.

 

REPRESENTATIONS AND WARRANTIES

 

To induce Agent and Lenders to enter into the Loan Documents, to make Loans and to issue or cause to be issued Letters of Credit, Holdings, Parent Borrower and the other Credit Parties executing this Agreement, jointly and severally, represent and warrant to Agent and each Lender that, on and as of the Closing Date and the Restatement Effective Date and after giving effect to the making of the Loans hereunder on the Closing Date and the Restatement Effective Date and the other Related Transactions occurring on the Closing Date and the Restatement Effective Date, and on and as of each date as required by Section 7.2, the following statements are true, correct and complete with respect to all Credit Parties (provided that, any reference to a Schedule in any representation or warranty in this Section 5 (x) made or deemed to be made on a date prior to the Restatement Effective Date, shall be a reference to such Schedule as attached to the Existing Credit Agreement and (y) made or deemed to be made on a date that is on or after the Restatement Effective Date, shall be a reference to such Schedule as attached to this Agreement):

 

5.1                               Disclosure. No statement or information of any Credit Party contained in this Agreement, any other Loan Documents or any other document, certificate or written statement furnished to Agent or any Lender by or on behalf of any such Person for use in connection with the Loan Documents, when taken as a whole, contained, as of the date of such statement, information, document or certificate so furnished, any untrue statement of a material fact or omits or will omit to state a material fact necessary in order to make the statements contained herein or therein not materially misleading in light of the circumstances in which the same were made.

 

5.2                               No Material Adverse Effect. Since the Closing Date, there have been no events or changes in facts or circumstances affecting any Credit Party or any of its Subsidiaries which individually or in the aggregate have had or could reasonably be expected to result in a Material Adverse Effect.

 

5.3                               No Conflict; Compliance with Laws. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, the consummation of the Related Transactions do not and will not violate or conflict with any laws, rules, regulations or orders of any Governmental Authority or violate, conflict with, result in a breach of, or constitute a default (with due

 

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notice or lapse of time or both) under any Contractual Obligation or organizational documents of any Credit Party or any of its Subsidiaries.

 

Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, the Related Transactions do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) filings necessary to perfect Liens created by the Loan Documents.

 

Such Credit Party (i) is in compliance and each of its Subsidiaries is in compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority and the obligations, covenants and conditions contained in all Contractual Obligations other than those laws, rules, regulations, orders and provisions of such Contractual Obligations the noncompliance with which could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and (ii) maintains and each of its Subsidiaries maintains all licenses, qualifications and permits referred to above other than those licenses, qualifications and permits the failure of which to maintain could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

5.4                               Organization, Powers, Capitalization and Good Standing.

 

(a)                                 Organization and Powers. Each of the Credit Parties and each of their Subsidiaries is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and qualified to do business in all states where such qualification is required except where failure to be so qualified could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. As of the Closing Date and the Restatement Effective Date, the exact legal name, the jurisdiction of organization and all jurisdictions in which each Credit Party is qualified to do business are set forth on Schedule 5.4(a). Each of the Credit Parties and each of their Subsidiaries has all requisite organizational power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be conducted, to enter into each Loan Document to which it is a party and to incur the Obligations, grant Liens and security interests in the Collateral and carry out the Related Transactions. Each Credit Party has rights in and the power to transfer, pledge, assign, deliver, deposit and set over each item of the Collateral upon which it purports to grant a Lien hereunder.

 

(b)                                 Capitalization. (i) As of the Closing Date and the Restatement Effective Date, the authorized Stock of each of the Credit Parties and each of their Subsidiaries as set forth on and as presently represented by the certificates listed on Part A of Schedule 5.4(b) hereto constitute all of the issued and outstanding shares of all classes of Stock owned by the relevant Credit Party; (ii) all issued and outstanding Stock of each of the Credit Parties and each of their Subsidiaries is duly authorized and validly issued, fully paid and (except as set forth in such Credit Party’s organizational documents) nonassesable; (iii) the Pledged Notes (as defined in the Security Agreement) have been duly authorized, authenticated or issued and delivered by, and are the legal, valid and binding obligations of, the issuer thereof, and no such issuer thereof is in default thereunder; (iv) each Credit Party is, and at the time of delivery of the Pledged Stock (as defined in the Security Agreement) to Agent will be, the sole holder of record and, other than Wayzata, the sole beneficial owner of such pledged Collateral pledged by each Credit Party free and clear of any Lien thereon or affecting the title thereto, except for any Lien created by this Agreement or any of the Collateral Documents in favor of the Agent for the benefit of the Agent and Lenders and the Permitted Encumbrances; (v) each Credit Party is and at the time of delivery of the Pledged Notes to Agent will be, the sole owner of such pledged Collateral free and clear of any Lien thereon or affecting title thereto, except for any Lien created by this Agreement or any of the Collateral Documents in favor of the Agent for the benefit of the Agent and Lenders and the Permitted Encumbrances; (vi) none of the Stock of the Credit Parties or their Subsidiaries or the Pledged Notes was

 

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issued or transferred in violation of the securities registration, securities disclosure or any applicable state, federal and foreign laws concerning the issuance or transfer of securities; (vii) as of the Closing Date and the Restatement Effective Date, the identity of the holders of the Stock of each of the Credit Parties and each of their Subsidiaries and the percentage of their fully-diluted ownership of the Stock of each of the Credit Parties and each of their Subsidiaries is set forth on Part A of Schedule 5.4(b); (viii) as of the Closing Date and the Restatement Effective Date, no Stock of any Credit Party or any of their Subsidiaries, other than as described on Part A of Schedule 5.4(b), are issued and outstanding; (ix) the Pledged Stock constitutes 100% of the issued and outstanding shares of Stock of each pledged Entity that is a Domestic Subsidiary of a Credit Party; and (x) except as disclosed on Part B of Schedule 5.4(b), none of the Pledged Notes are subordinated in right of payment to other Indebtedness (except for the Obligations). Except as provided in Part A of Schedule 5.4(b), as of the Closing Date and the Restatement Effective Date, there are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from any Credit Party or any of their Subsidiaries of any Stock of any such entity.

 

(c)                                  Binding Obligation. This Agreement and the other Loan Documents have been duly authorized, executed and delivered, are the legally valid and binding obligations of each of the Credit Parties, each enforceable against each of such Credit Parties, as applicable, in accordance with their respective terms subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and fair dealing.

 

5.5                               Financial Statements. All Financial Statements concerning Holdings, Parent Borrower and its Subsidiaries and their respective Subsidiaries which have been or will hereafter be furnished to Agent pursuant to this Agreement have been or will be prepared in accordance with GAAP consistently applied (except as disclosed therein) and do or will present fairly in all material respects the financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended, subject to, in the case of unaudited Financial Statements, the absence of footnotes and normal year-end adjustments.

 

5.6                               Intellectual Property. Each of the Credit Parties and their Subsidiaries owns, is licensed to use or otherwise has the right to use all Intellectual Property necessary for the conduct of its business as currently conducted that is material to the financial condition, business or operations of such Credit Party and its Subsidiaries. All such Intellectual Property owned by or licensed to the Credit Parties as of the Closing Date and the Restatement Effective Date is identified on Schedule 5.6. The use of such Intellectual Property by the Credit Parties and their Subsidiaries and the conduct of their businesses does not and has not been alleged by any Person to infringe on the rights of any Person except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

5.7                               Investigations, Audits, Etc. To the best knowledge of each Credit Party, no Credit Party or any of their Subsidiaries is the subject of any review or audit by the IRS or any investigation by any other Governmental Authority concerning the violation or possible violation of any law that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

5.8                               Employee Matters. Except as set forth on Schedule 5.8, (a) as of the Closing Date and the Restatement Effective Date, no Credit Party or Subsidiary of a Credit Party nor any of their respective employees is subject to any collective bargaining agreement, (b) as of the Closing Date and the Restatement Effective Date, no petition for certification or union election is pending with respect to the employees of any Credit Party or any of their Subsidiaries and no union or collective bargaining unit has sought such certification or recognition with respect to the employees of any Credit Party or any of their

 

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Subsidiaries, (c) there are no strikes, slowdowns, work stoppages or controversies pending or, to the best knowledge of any Credit Party after due inquiry, threatened between any Credit Party or any of their Subsidiaries and its respective employees, other than employee grievances arising in the ordinary course of business which could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect and (d) hours worked by and payment made to employees of each Credit Party and each of their Subsidiaries comply in all material respects with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters.

 

5.9                               Solvency. Holdings and each of its Subsidiaries are, on a consolidated basis, Solvent.

 

5.10                        Litigation; Adverse Facts. Except as set forth on Schedule 5.10, there are no judgments outstanding against any Credit Party or any of its Subsidiaries or affecting any property of any Credit Party or any of its Subsidiaries that constitute an Event of Default, nor is there any Litigation pending, or to the best knowledge of any Credit Party threatened, against any Credit Party or any of its Subsidiaries which Litigation could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

5.11                        Use of Proceeds; Margin Regulations.

 

(a)                                 No part of the proceeds of any Loan will be used for “buying” or “carrying” “margin stock” within the respective meanings of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or for any other purpose that violates the provisions of the regulations of the Board of Governors of the Federal Reserve System.

 

(b)                                 Borrowers shall utilize the proceeds of the Loans for (i) ongoing working capital purposes and other general company purposes (including financing Capital Expenditures) and/or (ii) to make the 2013 Special Distribution.

 

5.12                        Ownership of Property; Liens. As of the Closing Date and the Restatement Effective Date, the real property (together with any real property acquired by any Credit Party after the Closing Date, collectively, the “Real Estate”) listed in Schedule 5.12 constitutes all of the real property owned, leased, subleased or used by any Credit Party or any of its Subsidiaries. Each of the Credit Parties and each of its Subsidiaries 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 material Real Estate. Schedule 5.12 further describes any material Real Estate with respect to which any Credit Party or any of its Subsidiaries is a lessor as of the Closing Date or the Restatement Effective Date. Each of the Credit Parties and each of its Subsidiaries also has good and marketable title to, or valid leasehold interests in, all of its material personal property and assets. None of the properties and assets of any Credit Party or any of its Subsidiaries are subject to any Liens other than Permitted Encumbrances, and there are no facts, circumstances or conditions known to Parent Borrower or any other Credit Party that may result in any Liens (including Liens arising under Environmental Laws) other than Permitted Encumbrances against the properties or assets of any Credit Party or any of its Subsidiaries. As of the Closing Date and the Restatement Effective Date, no portion of any Credit Party’s or any of its Subsidiaries’ 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.

 

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5.13                        Environmental Matters. Except as set forth in Schedule 5.13:

 

(a)                                 the Real Estate is free of contamination from any Hazardous Material except for such contamination that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(b)                                 no Credit Party and no Subsidiary of a Credit Party has caused or suffered to occur any Release of Hazardous Materials on, at, in, under, from or about any of their Real Estate, except for such Releases that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(c)                                  the Credit Parties and their Subsidiaries are and have been in compliance with all Environmental Laws, except for such noncompliance that could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(d)                                 the Credit Parties and their Subsidiaries have obtained, and are in compliance with, all Environmental Permits required by Environmental Laws for the operations of their respective businesses as presently conducted, except where the failure to so obtain or comply with such Environmental Permits could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and all Environmental Permits are valid, uncontested and in good standing, except where the failure to be valid, uncontested or in good standing could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(e)                                  there are no Releases of Hazardous Materials on, at, in, under, from or about any formerly owned or leased property of any Credit Party that are likely to result in any Environmental Liabilities of such Credit Party or Subsidiary which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(f)                                   there is no pending or, to the actual knowledge of the Credit Parties, threatened Litigation (including any that alleges criminal misconduct by any Credit Party or any Subsidiary of a Credit Party) arising under any Environmental Laws or related to any Environmental Permits or the Release of Hazardous Materials which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect;

 

(g)                                  except for such matters that have been resolved or could not reasonably be expected to result in Environmental Liabilities which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) no written notice has been received by any Credit Party or any Subsidiary of a Credit Party identifying any of them as a “potentially responsible party” or requesting information under CERCLA or analogous state statutes, and (ii) to the knowledge of the Credit Parties, there are no facts, circumstances or conditions that may result in any of the Credit Parties or their Subsidiaries being identified as a “potentially responsible party” under CERCLA or analogous state statutes; and

 

(h)                                 the Credit Parties have made available to Agent copies of all material environmental reports, reviews and audits and all material written information pertaining to actual or potential Environmental Liabilities that could reasonably be expected to result in a Material Adverse Effect, in each case, existing as of the Closing Date and the Restatement Effective Date and relating to any of the Credit Parties or their Subsidiaries.

 

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5.14                        ERISA.

 

(a)                                 Except with respect to Multiemployer Plans, each Qualified Plan has received a determination or opinion letter from the IRS pursuant to which the IRS has determined or opined that such Qualified Plan is qualified under Section 401 of the IRC and that the trust created under such Qualified Plan is exempt from tax under the provisions of Section 501 of the IRC. To the knowledge of each Credit Party, nothing has occurred that would cause the loss of such qualification or tax-exempt status. Except as would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect: (i) each Plan is in compliance with the applicable provisions of ERISA and the IRC, including the timely filing of all reports required under the IRC or ERISA, including the statement required by 29 CFR Section 2520.104-23; (ii) neither any Credit Party nor 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 such Plan and (iii) to the knowledge of each Credit Party, neither any Credit Party nor ERISA Affiliate has engaged in a “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that would subject any Credit Party to a tax on prohibited transactions imposed by Section 502(1) of ERISA or Section 4975 of the IRC.

 

(b)                                 Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or could reasonably be expected to occur; (iii) there are no pending, or to the knowledge of Borrowers, 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; and (iv) 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 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or ERISA Affiliate (determined at any time within the past 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.

 

5.15                        Brokers. (a) No broker or finder acting on behalf of any Credit Party or Affiliate thereof brought about the obtaining, making or closing of the Loans or the Related Transactions, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated in connection with the Consent Solicitation and (b) no Credit Party or Affiliate thereof has any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

 

5.16                        Deposit Accounts; Securities Accounts; Other Accounts.   Schedule 5.16 lists all banks and other financial institutions at which any Credit Party maintains deposit accounts, securities accounts or other accounts (including any commodities accounts) as of the Closing Date and the Restatement Effective Date, including the Disbursement Account and any other disbursement accounts, and such Schedule 5.16 correctly identifies the name, address and telephone number of each depository institution, securities intermediary or other financial institution as of the Closing Date and the Restatement Effective Date, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

 

5.17                        [Reserved].

 

5.18                        Insurance.   Schedule 5.18 lists (i) all insurance policies of any nature maintained, as of the Restatement Effective Date, for current occurrences by each Credit Party, and (ii) a summary of the key business terms of each such policy such as deductibles, coverage limits and term of policy.

 

5.19                        Investment Company Act. None of the Credit Parties is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

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5.20                        [Reserved].

 

5.21                        Taxes. Each of Holdings, Parent Borrower and each of its Subsidiaries has (a) timely filed or caused to be timely filed all federal Tax Returns and all material state, local and foreign Tax Returns or materials required to have been filed by it and all such Tax Returns are true and correct in all material respects and (b) duly and timely paid, collected or remitted or caused to be duly and timely paid, collected or remitted all Taxes (whether or not shown on any Tax Return) due and payable, collectible or remittable by it and all assessments received by it, except Taxes (i) that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves in accordance with GAAP and (ii) which could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Each of Holdings, Parent Borrower and each of its Subsidiaries has made adequate provision in accordance with GAAP for all Taxes not yet due and payable. Each of Holdings, Parent Borrower and each of its Subsidiaries is unaware of any proposed or pending tax assessments, deficiencies or audits that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

 

5.22                        Collateral Documents.

 

(a)                                 Security Agreement. The Security Agreement is effective to create in favor of the Agent for the benefit of the Secured Parties, legal, valid and enforceable first priority Liens on, and security interests in, the Collateral pledged thereunder and, when (i) financing statements and other filings in appropriate form are filed in the office of the Secretary of State of the State of Delaware and (ii) upon the taking of possession or control by the Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Agent to the extent possession or control by the Agent is required hereby or by the Security Agreement), the Liens created by the Security Agreement shall constitute fully perfected first priority Liens on, and security interests in, all right, title and interest of the grantors in such Collateral (other than Collateral in which a security interest cannot be perfected under the UCC as in effect at the relevant time in the relevant jurisdiction), in each case, subject to no Liens other than Permitted Encumbrances.

 

(b)                                 PTO Filing; Copyright Office Filing. When the Security Agreement or a short form thereof is filed in the United States Patent and Trademark Office and the United States Copyright Office or financing statements are filed in the office of the Secretary of State of the State of Delaware, the Liens created by the Security Agreement shall constitute fully perfected first priority Liens on, and security interests in, each Credit Party’s right, title and interest in Patents and Trademarks registered or applied for with the United States Patent and Trademark Office or Copyrights registered or applied for with the United States Copyright Office, as the case may be, in each case subject to no Liens other than Permitted Encumbrances and, such Liens are enforceable as such against any and all creditors of and purchasers from any Credit Party.

 

(c)                                  Mortgages. Each Mortgage is effective to create, in favor of the Agent, for its benefit and the benefit of the Secured Parties, legal, valid and enforceable first priority Liens on, and security interests in, all of the Credit Parties’ right, title and interest in and to the Real Estate thereunder and the proceeds thereof, subject only to Permitted Encumbrances or other Liens acceptable to the Decision Agent, and when the Mortgages are filed in the offices specified on Schedule 7(a) to the Perfection Certificate (or, in the case of any Mortgage executed and delivered after the date thereof in accordance with the provisions of Section 2.8, when such Mortgage is filed in the offices specified in the local counsel opinion delivered with respect thereto in accordance with the provisions of Section 2.8), the Mortgages shall constitute fully perfected first priority Liens on, and security interests in, all right, title and interest of the Credit Parties in such Real Estate and the proceeds thereof, in each case prior and

 

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superior in right to any other Person, other than Permitted Encumbrances and Liens permitted by such Mortgage.

 

(d)                                 Valid Liens. Each Collateral Document delivered pursuant to Section 2.8 will, upon execution and delivery thereof, be effective to create in favor of the Agent, for the benefit of the Secured Parties, legal, valid, enforceable and continuing first priority Liens on, and security interests in, all of the Credit Parties’ right, title and interest in and to the Collateral thereunder, and (i) when all appropriate filings or recordings are made in the appropriate offices as may be required under applicable law and (ii) upon the taking of possession or control by the Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Agent to the extent required by any Collateral Document), such Collateral Document will constitute fully perfected first priority Liens on, and security interests in, all right, title and interest of the Credit Parties in such Collateral, in each case subject to no Liens other than the applicable Permitted Encumbrances.

 

SECTION 6.

 

DEFAULT, RIGHTS AND REMEDIES

 

6.1                               Event of Default. “Event of Default” shall mean the occurrence or existence of any one or more of the following:

 

(a)                                 Payment. (i) Failure to pay any installment or other payment of principal of any Loan when due, or to repay Revolving Loans to reduce their balance to the maximum amount of Revolving Loans then permitted to be outstanding or to reimburse any L/C Issuer for any payment made by such L/C Issuer under or in respect of any Letter of Credit when due or (ii) failure to pay, within five (5) days after the due date, any interest on any Loan, any Fee or any other amount due under this Agreement or any of the other Loan Documents; or

 

(b)                                 Default in Other Agreements. (i) Any Credit Party or any of its Subsidiaries fails to pay when due (after giving effect to any applicable grace period) any principal or interest on Indebtedness (other than the Loans) or any Contingent Obligations having a principal or face amount in excess of $5,000,000 in the aggregate; or (ii) breach or default of any Credit Party or any of its Subsidiaries, or the occurrence of any condition or event, with respect to any Indebtedness (other than the Loans) or any Contingent Obligations, if the effect of such breach, default or occurrence is to cause or to permit the holder or holders then to cause, Indebtedness and/or Contingent Obligations having a principal amount in excess of $5,000,000 in the aggregate to become or be declared due prior to their stated maturity; or

 

(c)                                  Breach of Certain Provisions; Breach of Warranty. Failure of any Credit Party to perform or comply with any term, condition or covenant contained in Section 2.4 (with respect to Parent Borrower only), Section 3 or Section 4.1(a) and 4.1(e)(i); or

 

(d)                                 Borrowing Base Certificate; Breach of Warranty. (i) 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) and such information is not corrected within five (5) Business Days after the date on which notice thereof shall have been given to Parent Borrower by Agent or any Lender; or (ii) 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 (except that

 

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such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by the text thereof) as of the date when made or deemed made; or

 

(e)                                  Other Defaults Under Loan Documents. Any Credit Party defaults in the performance of or compliance with any term contained in this Agreement or the other Loan Documents (other than occurrences described in other provisions of this Section 6.1, for which a different grace or cure period is specified, or for which no cure period is specified and which constitute immediate Events of Default) and such default is not remedied or waived within thirty (30) days after the earlier of (i) receipt by Parent Borrower of notice thereof from Agent or the Requisite Lenders of such default or (ii) actual knowledge of Parent Borrower or any other Credit Party of such default; or

 

(f)                                   Involuntary Bankruptcy; Appointment of Receiver, Etc. (i) A court enters a decree or order for relief with respect to any Credit Party in an involuntary case under the Bankruptcy Code, which decree or order is not stayed or other similar relief is not granted under any applicable federal or state law; or (ii) the continuance of any of the following events for sixty (60) days unless dismissed, bonded or discharged: (A) an involuntary case is commenced against any Credit Party, under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or (B) a decree or order of a court for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Credit Party, or over all or a substantial part of its property, is entered; or (C) a receiver, trustee or other custodian is appointed without the consent of a Credit Party, for all or a substantial part of the property of the Credit Party; or

 

(g)                                  Voluntary Bankruptcy; Appointment of Receiver, Etc. (i) any Credit Party commences a voluntary case under the Bankruptcy Code, or consents to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case under any such law or consents to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; or (ii) any Credit Party makes any assignment for the benefit of creditors; or (iii) any Credit Party fails to pay its debts as they become due or admits in writing its present or prospective inability to pay its debts as they become due; or (iv) the Board of Directors of any Credit Party adopts any resolution or otherwise authorizes action to approve any of the actions referred to in this Section 6.1(g); or

 

(h)                                 Judgment and Attachments. Any money judgment, writ or warrant of attachment, or similar process (other than those described elsewhere in this Section 6.1) involving an amount in excess of $10,000,000 in the aggregate (to the extent not adequately covered by insurance as to which the insurance company has acknowledged coverage) is entered or filed against one or more of the Credit Parties or any of their respective assets and remains undischarged, unvacated, unbonded or unstayed for a period of sixty-five (65) days; or

 

(i)                                     Invalidity of Loan Documents. Any of the Loan Documents for any reason, other than a partial or full release or termination in accordance with the terms thereof, ceases to be in full force and effect or is declared to be null and void, or any Credit Party denies that it has any further liability under any Loan Documents to which it is party, or gives notice to such effect, or the Loan Documents cease to create a perfected first priority Lien on a material portion of the Collateral or a Credit Party so asserts; or

 

(j)                                    Change of Control. A Change of Control occurs; or

 

(k)                                 [Reserved].

 

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(l)                                     ERISA. One or more ERISA Events shall have occurred that, in the reasonable opinion of the Requisite Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in (i) a Material Adverse Effect or (ii) the imposition of a Lien on any properties of Holdings or its Subsidiaries and such Lien will or could reasonably be expected to result in a Material Adverse Effect.

 

6.2                               Suspension or Termination of Revolving Loan Commitments. Upon the occurrence of any Default or Event of Default, Agent may, and at the request of Requisite Lenders, Agent shall, without notice or demand, immediately suspend or terminate all or any portion of Lenders’ obligations to make additional Loans or issue or cause to be issued Letters of Credit under the Revolving Loan Commitment; provided that, in the case of a Default, if the subject condition or event is waived by Requisite Lenders or cured within any applicable grace or cure period, the Revolving Loan Commitment (and obligations to make additional Loans or issue or cause to be issued Letters of Credit in connection therewith) shall be reinstated.

 

6.3                               Acceleration and Other Remedies.

 

(a)                                 Upon the occurrence of any Event of Default described in Section 6.1(f) or 6.1(g), the Revolving Loan Commitments shall be immediately terminated and all of the Obligations, including the Revolving Loans, Swing Line Loans and Letter of Credit Obligations shall automatically become immediately due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other requirements of any kind, all of which are hereby expressly waived by each Credit Party, and the Revolving Loan Commitments shall thereupon terminate.

 

(b)                                 Upon the occurrence and during the continuance of any other Event of Default, Agent may, and at the request of the Requisite Lenders, Agent shall, by written notice to Parent Borrower (i) reduce the aggregate amount of the Revolving Loan Commitments from time to time, (ii) declare all or any portion of the Revolving Loans, the Swing Line Loans and all or any portion of the other Obligations to be, and the same shall forthwith become, immediately due and payable together with accrued interest thereon, (iii) terminate all or any portion of the obligations of Agent, L/C Issuers and Lenders to make Revolving Credit Advances and issue Letters of Credit, (iv) demand that Borrowers immediately deliver cash collateral or a standby letter of credit (in form and substance and from an issuer reasonably satisfactory to Agent) to Agent for the benefit of L/C Issuers (and Borrowers shall then immediately so deliver) in an amount equal to 105% of the aggregate outstanding Letter of Credit Obligations, (v) set-off against any outstanding Obligations amounts held in the accounts of any Credit Party maintained by or with the Agent, any Lender or their respective Affiliates and (vi) exercise any other remedies which may be available under the Loan Documents or applicable law. Borrowers hereby grant to Agent, for the benefit of L/C Issuers and each Lender with a participation in any Letters of Credit then outstanding, a security interest in such cash collateral to secure all of the Letter of Credit Obligations. Any such cash collateral shall be made available by Agent to L/C Issuers to reimburse L/C Issuers for payments of drafts drawn under such Letters of Credit and any Fees, Charges (excluding any Excluded Taxes) and expenses of L/C Issuers with respect to such Letters of Credit and the unused portion thereof, after all such Letters of Credit shall have expired or been fully drawn upon, shall be applied to repay any other Obligations. After all such Letters of Credit shall have expired or been fully drawn upon and all Obligations shall have been satisfied and paid in full, the balance, if any, of such cash collateral shall be returned to Parent Borrower on behalf of Borrowers. Borrowers shall from time to time execute and deliver to Agent such further documents and instruments as the Decision Agent may request with respect to such cash collateral.

 

6.4                               Performance by Agent. If any Credit Party shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents, Agent may perform or attempt to perform such covenant, duty or agreement on behalf of such Credit Party after the expiration of any cure or grace

 

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periods set forth herein. In such event, such Credit Party shall, at the request of Agent, promptly pay any amount reasonably expended by Agent in such performance or attempted performance to Agent, together with interest thereon at the highest rate of interest in effect upon the occurrence of an Event of Default as specified in Section 1.2(d) from the date of such expenditure until paid. Notwithstanding the foregoing, it is expressly agreed that Agent shall not have any liability or responsibility for the performance of any obligation of any Credit Party under this Agreement or any other Loan Document.

 

6.5          Application of Proceeds. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default:

 

(a)           Borrowers irrevocably waive the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of Borrowers, and Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received at any time or times after the occurrence and during the continuance of an Event of Default against the Obligations in such manner as Agent may deem advisable notwithstanding any previous application by Agent; and

 

(b)           the proceeds of any sale of, or other realization upon, all or any part of the Collateral, any other amounts received under the Guaranty or enforcement of the Loan Documents or any proceeds of the foregoing otherwise received by Agent shall be applied:

 

(i)            first, to all Fees, costs and expenses incurred by or owing to Agent and thereafter any Lender with respect to this Agreement, the other Loan Documents or the Collateral;

 

(ii)           second, to accrued and unpaid interest on the Obligations (including any interest which but for the provisions of the Bankruptcy Code, would have accrued on such amounts following the commencement of any Insolvency or Liquidation Proceeding or otherwise);

 

(iii)          third, to the principal amount of the Obligations outstanding (other than Cash Management Obligations and Obligations pursuant to Related Swap Contracts); and

 

(iv)          fourth to any other Obligations of Borrowers owing to Agent or any Lender under the Loan Documents or to any Secured Party in respect of Cash Management Obligations and/or Related Swap Contracts.

 

The Credit Parties shall remain liable for any deficiency.

 

Any balance remaining shall be delivered to Parent Borrower on behalf of Borrowers or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct.

 

SECTION 7.

 

CONDITIONS TO LOANS

 

The obligations of Lenders and L/C Issuers to make Loans and to issue or cause to be issued Letters of Credit are subject to satisfaction of all of the applicable conditions set forth below.

 

7.1          Conditions to Loans on the Restatement Effective Date. The obligations of the Lenders and L/C Issuers to make the Loans and to issue or cause to be issued Letters of Credit, in each case, on the Restatement Effective Date are, in addition to the conditions precedent specified in Section 7.2, subject to

 

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the delivery of all documents listed on, the taking of all actions set forth on and the satisfaction of all other conditions precedent listed in the Closing Checklist attached hereto as Annex C.

 

7.2          Conditions to All Loans. Except as otherwise expressly provided herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur any Letter of Credit Obligation, if, as of the date thereof (the “Funding Date”):

 

(a)           any representation or warranty by any Credit Party contained herein or in any other Loan Document is untrue or incorrect in any material respect (except that such materiality qualifier shall not be applicable to any representation or warranty that is already qualified or modified by the text thereof) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date, in which case, as of such earlier date, and Agent or Requisite Lenders have determined not to make such Advance or incur such Letter of Credit Obligation as a result of the fact that such warranty or representation is untrue or incorrect;

 

(b)           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); or

 

(c)           after giving effect to any Advance (or the incurrence or renewal of any Letter of Credit Obligations), the outstanding amount of the Revolving Loans (including, without duplication, Swing Line Loans and Letter of Credit Obligations) would exceed the Borrowing Base (except as provided in Section 1.l(a)(ii)).

 

The request and acceptance by a 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, a representation and warranty by Borrowers that the conditions in this Section 7.2 have been satisfied.

 

SECTION 8.

 

ASSIGNMENT AND PARTICIPATION

 

8.1          Assignment and Participations.

 

(a)           Subject to the terms of this Section 8.1, any Lender may make an assignment to a Qualified Assignee of, or sale of participation in, at any time or times, the Loan Documents, Loans, Letter of Credit Obligations and any Revolving Loan 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 (and, if different, the L/C Issuer and the Swing Line Lender) (which consent shall not be unreasonably withheld or delayed with respect to a Qualified Assignee) only if such assignment is not to an existing Lender and the execution of an assignment agreement (an “Assignment Agreement” substantially in the form attached as Exhibit 8.1 to the Existing Credit Agreement and otherwise in form and substance reasonably satisfactory to, and acknowledged by, Agent); (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) any such partial assignment of the Revolving Loan Commitments shall be in a minimum of $5,000,000 and in an amount equal to a multiple of $1,000,000 in excess thereof; provided that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Qualified Assignee (or to a Qualified Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met; (iv) require a payment to Agent of an

 

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assignment fee of $3,500; provided, however, that the Agent may, in its sole discretion, elect to waive such assignment fee; provided, further, that no such assignment fee shall be paid by any Lender assigning Loans or Revolving Loan Commitments to an Affiliate; and (v) so long as no Event of Default under Section 6.1(a), (f) or (g) has occurred and is continuing, require the consent of Parent Borrower, which shall not be unreasonably withheld or delayed; provided that no such consent of Parent Borrower shall be required for an assignment to a Lender meeting the requirements of clause (a) of the definition of Qualified Assignee that does not result in immediate increased costs to Parent Borrower under Section 1.12. In the case of an assignment by a Lender under this Section 8.1 the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations as all other Lenders hereunder. The assigning Lender shall be relieved of its obligations hereunder with respect to its Revolving Loan Commitments or assigned portion thereof from and after the date of such assignment. Borrowers hereby acknowledge and agree that any assignment shall give rise to a direct obligation of Borrowers 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 Revolving Loan Commitment. In the event Agent or any Lender assigns or otherwise transfers all or any part of the Obligations, Agent or any such Lender shall so notify Parent Borrower and Borrowers shall, upon the request of Agent or such Lender, execute new Notes in exchange for the Notes, if any, being assigned. Notwithstanding the foregoing provisions of this Section 8.1(a), (a) any Lender may at any time pledge the Obligations held by it and such Lender’s rights under this Agreement and the other Loan Documents to a Federal Reserve Bank, (b) any Lender that is an investment fund may assign the Obligations held by it and such Lender’s rights under this Agreement and the other Loan Documents to another investment fund managed by the same investment advisor or pledge such Obligations and rights to a trustee for the benefit of its investors or holders of obligations of such Lender and (c) the Agent shall acknowledge each assignment for it to be effective even if its consent thereto is not required.

 

(b)           Any participation by a Lender (which Lenders shall be free to make) of all or any part of its Revolving Loan Commitments shall be made 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 scheduled amortization of the principal amount of any Loan in which such holder participates or the final maturity date thereof, and (iii) any release of all or substantially all of the Collateral (other than in accordance with the terms of this Agreement, the Collateral Documents or the other Loan Documents). Solely for purposes of Sections 1.12, 1.13, 8.3 and 9.1, Borrowers acknowledge and agree that a participation shall give rise to a direct obligation of Borrowers to the participant and the participant shall be considered to be a “Lender.” Borrowers further acknowledge and agree that each participant shall be entitled to the benefits of Section 1.13 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (a) of this Section; provided that a participant shall not be entitled to receive any greater payment under Section 1.13 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant, unless the sale of the participation to such participant is made with the Borrowers’ prior written consent or the higher amount results from a change in law as described in Section 1.13(b); provided further that no participant shall be entitled to the benefits of Section 1.13 to the extent that the tax in question results from a failure by such participant to comply with Section 1.13(c) as if such participant were a Lender. Except as set forth in the two preceding sentences no Borrower or any other Credit Party 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.

 

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(c)           Except as expressly provided in this Section 8.1, no Lender shall, as between Borrowers 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)           Agent shall maintain, on behalf of Borrowers, at the Agent’s Office a “register” for recording the name, address, commitment and Loans owing to each Lender (including assignees) and the assignment of the Loan Documents, Loans, Letter of Credit Obligations, any Revolving Loan Commitment or any portion thereof or interest therein, including any Lender’s rights, title, interests, remedies, powers or duties thereunder. The entries in such register shall be presumptive evidence of the amounts due and owing to each Lender in the absence of manifest error. Borrowers, Agent and each Lender shall treat each Person whose name is recorded in such register pursuant to the terms hereof as a Lender for all purposes of this Agreement, notwithstanding notice to the contrary. The register described herein shall be available for inspection by Borrowers and any Lender (with respect to itself only), at any reasonable time upon reasonable prior notice.

 

(e)           A Lender may furnish any information concerning Credit Parties 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 9.13.

 

(f)            Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the applicable Credit Party, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”). The entries in the Participant Register shall be conclusive and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

8.2          Agent.

 

(a)           Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf and on behalf of its Affiliates as the Agent hereunder and under the other Loan Documents, the Cash Management Documents and the Related Swap Contracts and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 8.2 are solely for the benefit of the Agent, the Lenders and the L/C Issuer, and no Borrower has rights as a third party beneficiary of any of such provisions.

 

The Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders on their behalf and on behalf of their respective Affiliates (in their capacities as a Lender, Swing Line Lender (if applicable), or party to a Cash Management Document or Related Swap Contract) and the L/C Issuer hereby irrevocably appoints and authorizes the Agent to act as the agent of such Lender and the L/C Issuer for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Credit Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Agent pursuant to Section 8.2(e) for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Agent), shall be entitled to the benefits of all provisions of this Section 8.2, Section 1.3(e) and Section 9 (including Section 9.1, as

 

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though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto. Wells Fargo Capital Finance, LLC shall act as co-collateral agent under the Loan Documents and each of the Lenders on their behalf and on behalf of their respective Affiliates (in their capacities as a Lender, Swing Line Lender (if applicable), or party to a Cash Management Document or Related Swap Contract) and the L/C Issuer hereby irrevocably appoints and authorizes Wells Fargo Capital Finance, LLC to act as co-collateral agent under the Loan Documents. Notwithstanding the foregoing, Wells Fargo Capital Finance, LLC shall not have any rights or obligations as co-collateral agent that it does not have as a Lender and its title of co-collateral agent is subject to Section 8.7 in all respects.

 

(b)           Rights as a Lender. The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Parent Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Lenders.

 

(c)           Exculpatory Provisions. The Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Agent:

 

(i)            shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(ii)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Requisite Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and

 

(iii)          shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Parent Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Subsidiaries in any capacity.

 

The Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 6 and 9.2) or (ii) in the absence of its own gross negligence or willful misconduct. The Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Agent by a Borrower, a Lender or the L/C Issuer.

 

The Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv)

 

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the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Section 7 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent.

 

(d)           Reliance by Agent. The Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Agent may consult with legal counsel (who may be counsel for a Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

(e)           Delegation of Duties. The Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Agent. The Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Agent.

 

(f)            Resignation of Agent. The Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and Parent Borrower. Upon receipt of any such notice of resignation, the Requisite Lenders shall have the right, in consultation with the Parent Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Requisite Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders and the L/C Issuer, appoint a successor Agent meeting the qualifications set forth above; provided that if the Agent shall notify Parent Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time as the Requisite Lenders appoint a successor Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by Parent Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between Parent Borrower and such successor. After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Section 8.2,

 

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Section 1.3(e) and Section 9.1 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as Agent.

 

Any resignation by Bank of America as Agent pursuant to this Section 8.2 shall also constitute its resignation as L/C Issuer and Swing Line Lender. Upon the acceptance of a successor’s appointment as Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents (other than with respect to Letters of Credit issued by it prior to such resignation), and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

 

(g)           Non-Reliance on Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

(h)           No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Persons listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Agent, a Lender or the L/C Issuer hereunder.

 

(i)            Agent May File Proofs of Claim. In case of the pendency of any proceeding under the Bankruptcy Code or any other judicial proceeding relative to any Credit Party, the Agent (irrespective of whether the principal of any Loan or Letter of Credit Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on a Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

(i)            to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Agent under Sections 1.3 and 9.1) allowed in such judicial proceeding; and

 

(ii)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Agent and, if the Agent shall consent to the making of such payments directly to the Lenders and the L/C

 

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Issuer, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its agents and counsel, and any other amounts due the Agent under Sections 1.3 and 9.1.

 

Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer to authorize the Agent to vote in respect of the claim of any Lender or the L/C Issuer or in any such proceeding.

 

(j)            Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize the Agent, at its option and in its discretion,

 

(i)            to release any Lien on any property granted to or held by the Agent under any Loan Document (i) upon termination of the Revolving Loan Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing in accordance with Section 9.2;

 

(ii)           to release any Borrower from its obligations hereunder if such Person ceases to be a Subsidiary of Parent Borrower as a result of a transaction permitted hereunder; and

 

(iii)          to subordinate any Lien on any property granted to or held by the Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 3.2(a)(iii).

 

Upon request by the Agent at any time, the Requisite Lenders will confirm in writing the Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Borrower from its obligations hereunder. In each case as specified in this Section 8.2(j), the Agent will, at Borrowers’ expense, execute and deliver to the applicable Credit Party such documents as such Credit Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Borrower from its obligations, in each case in accordance with the terms of the Loan Documents and this Section 8.2(j).

 

(k)           Withholding Tax. To the extent required by law (as determined by the Agent in its good faith discretion), the Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding tax. Without limiting or expanding the obligations of the Credit Parties under Section 1.13, each Lender shall indemnify the Agent, and shall make payable in respect thereof within thirty (30) calendar days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Agent) incurred by or asserted against the Agent by the IRS or any other Governmental Authority as a result of the failure of the Agent to properly withhold tax from amounts paid to or for the account of such Lender for any reason (including, without limitation, because the appropriate form was not delivered or not properly executed, or because such Lender failed to notify the Agent of a change in circumstance that rendered the exemption from, or reduction of, withholding tax ineffective). A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due the Agent under this Section 8.2(k). The agreements in this Section 8.2(k) shall survive the resignation

 

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and/or replacement of the Agent, any assignment of rights by, or the replacement of, a Lender, and the repayment, satisfaction or discharge of any Loans and all other amounts payable under the Loan Documents.

 

8.3          Set Off 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, during the continuance of any Event of Default, each Lender and each Affiliate of a Lender is hereby authorized by Borrowers at any time or from time to time, with reasonably prompt subsequent notice to Parent Borrower (any prior or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply any and all (i) balances held by such Lender or Affiliate of a Lender at any of its offices for the account of Parent Borrower or any of its Subsidiaries (regardless of whether such balances are then due to Parent Borrower or its Subsidiaries), and (ii) other property at any time held or owing by such Lender or Affiliate of a Lender to or for the credit or for the account of Parent Borrower or any of its Subsidiaries, against and on account of any of the Obligations; except that no Lender or Affiliate of a Lender shall exercise any such right without the prior written consent of Agent. Any Lender exercising a right to set off (including any setoff by an Affiliate of such Lender) shall purchase for cash (and the other Lenders shall sell) interests in each of such other Lender’s Pro Rata Share of the Obligations as would be necessary to cause all Lenders to share the amount so set off with each other Lender or Affiliate of a Lender in accordance with their respective Pro Rata Shares.

 

8.4          Disbursement of Funds. Agent may, on behalf of Lenders, disburse funds to Parent Borrower for Loans requested. Each Lender shall reimburse Agent on demand for all funds disbursed on its behalf by Agent, or if Agent so requests, each Lender will remit to Agent its Pro Rata Share of any Loan before Agent disburses same to Borrowers. If Agent elects to require that each Lender make funds available to Agent prior to a disbursement by Agent to Borrowers, Agent shall advise each Lender by telephone or fax or other similar form of transmission of the amount of such Lender’s Pro Rata Share of the Loan requested by a Borrower no later than 1:00 p.m. (New York time) on the Funding Date applicable thereto, and each such Lender shall pay Agent such Lender’s Pro Rata Share of such requested Loan, in same day funds, by wire transfer to Agent’s account specified on Annex D on such Funding Date. If any Lender fails to pay the amount of its Pro Rata Share within one (1) Business Day after Agent’s demand, Agent shall promptly notify the Borrowers, and the Borrowers shall immediately repay such amount to Agent. Any repayment required pursuant to this Section 8.4 shall be without premium or penalty. Nothing in this Section 8.4 or elsewhere in this Agreement or the other Loan Documents, including the provisions of Section 8.5, shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that Agent or a Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

8.5          Disbursements of Advances; Payment.

 

(a)           Advances; Payments.

 

(i)            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 Lenders, promptly after receipt of a Notice of Credit Advance and in any event prior to 1:00 p.m. (New York time) on the date such Notice of a Credit Advance is received, by fax, telephone or other similar form of transmission. Each Lender shall make the amount of such Lender’s Pro Rata Share of a Revolving Credit Advance available to Agent in same day funds by wire transfer to Agent’s account as set forth in Annex D not later than 3:00 p.m. (New York time) on the requested Funding Date in the case of a Base Rate Loan and not later than 11:00 a.m. (New York time) on the requested Funding Date

 

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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 a Borrower as designated by such Borrower in the Notice of Credit Advance. All payments by each Lender shall be made without setoff, counterclaim or deduction of any kind.

 

(ii)           To the extent that any Lender (a “Non-Funding Lender”) has failed to fund any payment owed by it to Agent under this Agreement or Advances or failed to fund the purchase of any participation required to be purchased by it under this Agreement, Agent shall be entitled to set off the funding shortfall against that Non-Funding Lender’s Pro Rata Share of all payments received from Borrowers.

 

(b)           Availability of Lender’s Pro Rata Share. Agent may assume that each Lender will make its Pro Rata Share of each Revolving Credit Advance available to Agent on each Funding Date. If such Pro Rata Share of each Revolving Credit Advance, is not, in fact, paid to Agent by such Lender when due, Agent will be entitled to recover such amount on demand from such Lender without setoff, counterclaim or deduction of any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith upon Agent’s demand, Agent shall promptly notify Parent Borrower and Borrowers shall immediately repay such amount to Agent. Nothing in this Section 8.5(b) or elsewhere in this Agreement or the other Loan Documents shall be deemed to require Agent to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Revolving Loan Commitments hereunder or to prejudice any rights that Borrowers may have against any Lender as a result of any default by such Lender hereunder. To the extent that Agent advances funds to Borrowers on behalf of any 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 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 Parent Borrower on behalf of Borrowers 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 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 Parent 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 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 “Lender” (or be included in the calculation of “Requisite Lenders” or

 

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“Supermajority Lenders” hereunder) for any voting or consent rights under or with respect to any Loan Document other than those voting rights set forth in Sections 9.2(d)(i), 9.2(d)(iii) and 9.2(d)(ix).

 

(e)                                  Dissemination of Information. Agent shall use reasonable efforts to provide Lenders with any notice of Default or Event of Default received by Agent from, or delivered by Agent to, any Credit Party, with notice of any Event of Default of which Agent has become actually 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.

 

(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 the 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 and the Requisite Lenders. Agent is authorized to issue all notices to be issued by or on behalf of the Lenders with respect to any subordinated Indebtedness.

 

8.6                               Related Obligations Matters. The benefit of this Agreement and the other Loan Documents relating to the Collateral shall extend to and be available in respect of any Obligation arising under any Related Swap Contract or any Cash Management Obligation that is otherwise owed to Persons other than Agent, Lenders and L/C Issuer (collectively, “Related Obligations”) solely on the condition and understanding, as among the Agent and all Secured Parties, that (a) the Related Obligations shall be entitled to the benefit of the Loan Documents and the Collateral to the extent expressly set forth in this Agreement and the other Loan Documents and to such extent Agent shall hold, and have the right and power to act with respect to, the Guaranty and the Collateral on behalf of and as agent for the holders of the Related Obligations, but Agent is otherwise acting solely as agent for Lenders and L/C Issuer and shall have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other obligation whatsoever to any holder of Related Obligations, (b) all matters, acts and omissions relating in any manner to the Guaranty, the Collateral, or the omission, creation, perfection, priority, abandonment or release of any Lien, shall be governed solely by the provisions of this Agreement and the other Loan Documents and no separate Lien, right, power or remedy shall arise or exist in favor of any Secured Party under any separate instrument or agreement or in respect of any Related Obligation, (c) each Secured Party shall be bound by all actions taken or omitted, in accordance with the provisions of this Agreement and the other Loan Documents, by the Agent and the Requisite Lenders, each of whom shall be entitled to act at its sole discretion and exclusively in its own interest given its own Revolving Loan Commitments and its own interest in the Loans, Letter of Credit Obligations and other Obligations to it arising under this Agreement or the other Loan Documents, without any duty or liability to any other Secured Party or as to any Related Obligation and without regard to whether any Related Obligation remains outstanding or is deprived of the benefit of the Collateral or becomes unsecured or is otherwise affected or put in jeopardy thereby, (d) no holder of Related Obligations and no other Secured Party (except Agent, Lenders and L/C Issuer, to the extent set forth in this Agreement) shall have any right to be notified of, or to direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under this Agreement or the Loan Documents and (e) no holder of any Related Obligation shall exercise any right of setoff, banker’s lien or similar right except to the extent provided in Section 8.3 and then only to the extent such right is exercised in compliance with Section 8.3.

 

8.7                               Other Agents. None of the Lenders or other Persons identified on the cover page or signature pages of this Agreement as a “collateral agent,” “documentation agent,” “syndication agent,” “arranger” or “co-manager” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Persons in their respective capacities as Lenders, those

 

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applicable to all Lenders as such. Without limiting the foregoing, no Lender or other Persons so identified 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 other Lender or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

 

SECTION 9.

 

MISCELLANEOUS

 

9.1                               Indemnities. Borrowers shall indemnify the Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by a Borrower arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on, at, under or from any property owned, leased or operated by Parent Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to Parent Borrower or any of its Subsidiaries and (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by a Credit Party or any Credit Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by a Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if Parent Borrower or such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

To the extent that any Borrower for any reason fails to indefeasibly pay any amount required under the paragraph above or Section 1.3(e) to be paid by it to the Agent (or any sub-agent thereof), the L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s Pro Rata Share of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) or L/C Issuer in connection with such capacity.

 

9.2                               Amendments and Waivers.

 

(a)                                 Except for actions, consents or approvals expressly permitted to be taken or given 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

 

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event be effective unless the same shall be in writing (it being understood that any necessary signatures may be on a document consenting to such amendment, modification, termination or waiver) and:

 

(i)                                     in the case of an amendment to cure any ambiguity, omission, defect or inconsistency, signed by Agent and Parent Borrower; and

 

(ii)                                  in the case of any other amendment, modification, termination or waiver, signed by Parent Borrower, Agent and by Requisite Lenders, and to the extent required below, Supermajority Lenders or all affected Lenders.

 

(b)                                 No amendment, modification, termination or waiver of or consent with respect to any provision of this Agreement that (i) increases the percentage of the advance rates set forth in the definitions of Eligible Accounts Formula or Eligible Rental Fleet and Equipment Formula, (ii) makes less restrictive the nondiscretionary criteria for exclusion from Eligible Accounts or Eligible Rental Fleet and Equipment set forth in Section 1.7 or 1.9 or (iii) modifies the definition of Excess Availability, shall be effective unless the same shall be in writing and signed by Agent, Supermajority Lenders and Parent Borrower.

 

(c)                                  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 7.2 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, Supermajority Lenders and Parent Borrower. Notwithstanding anything contained in this Agreement to the contrary, no waiver or consent with respect to any Default or any Event of Default shall be effective for purposes of the conditions precedent to the making of Loans or the incurrence of Letter of Credit Obligations set forth in Section 7.2 unless the same shall be in writing and signed by Agent, Supermajority Lenders and Parent Borrower.

 

(d)                                 No amendment, modification, termination or waiver of or consent with respect to any provision of this Agreement shall, unless in writing and signed by Agent and each Lender directly affected thereby: (i) increase the principal amount of any Lender’s Revolving Loan Commitment (which action shall be deemed to directly affect only those Lenders providing such increased Revolving Loan Commitments); (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 or final maturity date of the principal amount of any Loan of any affected Lender or extend the maturity or potential maturity of any Letter of Credit beyond the fifth (5th) day prior to the fifth (5th) anniversary of the Restatement Effective Date; (iv) waive, forgive, defer, extend or postpone any payment of interest or Fees as to any affected Lender (which action shall be deemed only to affect those Lenders to whom such payments are made); (v) except in connection with an Asset Disposition expressly permitted pursuant to this Agreement, release the Guaranty or, except as otherwise permitted in Section 3.7, release all or substantially all of the Collateral (which action shall be deemed to directly affect all Lenders); (vi) change the definition of Requisite Lenders or Supermajority Lenders to decrease the percentage of the Revolving Loan Commitments or of the aggregate unpaid principal amount of the Loans specified therein; (vii) subordinate the Obligations or the Liens securing them (which action shall be deemed to directly affect all Lenders); (viii) change the definition of LIBOR Period to permit the availability of interest periods in excess of six months without the agreement of all Lenders; (ix) alter the pro rata sharing provisions herein, (x) amend or modify any provision of this Section 9.2 or (xi) amend, modify or waive any provision of Section 6.5.

 

(e)                                  No amendment, modification, termination or waiver affecting the rights or duties of Agent, the Swing Line Lender or L/C Issuers under this Agreement or any other Loan Document shall be effective unless in writing and signed by Agent, the Swing Line Lender or L/C Issuers, as the case may

 

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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.

 

(f)                                   No amendment, modification, termination or waiver shall be required for Agent to take additional Collateral pursuant to any Loan Document.

 

(g)                                  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 9.2 shall be binding upon each holder of the Revolving Loan Commitments and the Notes at the time outstanding and each future holder of the Revolving Loan Commitments and the Notes.

 

9.3                               Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

	
If to Parent Borrower:
    	
Neff LLC
    
	
 
    	
3750 N.W. 87th Avenue
    
	
 
    	
Suite 400
    
	
 
    	
Miami, Florida 33178
    
	
 
    	
ATTN: Mark Irion, Chief Financial Officer
    
	
 
    	
Phone: (305) 901-2280
    
	
 
    	
Fax: (305) 513-4156
    
	
 
    	
Email: MIrion@Neffcorp.com
    
	
 
    	
Website:www.neffcorp.com
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Wayzata Investment Partners LLC
    
	
 
    	
701 East Lake Street
    
	
 
    	
Wayzata, MN 55391
    
	
 
    	
ATTN: Susan Peterson
    
	
 
    	
Phone: (952) 345-0700
    
	
 
    	
Fax: (952) 345-8901
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Stroock & Stroock & Lavan LLP
    
	
 
    	
180 Maiden Lane
    
	
 
    	
New York, NY 10038
    
	
 
    	
ATTN: Matthew A. Schwartz, Esq.
    
	
 
    	
Phone: (212) 806-5929
    
	
 
    	
Fax: (212) 806-6006
    
	
 
    	
 
    
	
If to Holdings
    	
To such Credit Party
    
	
or any other Credit
    	
c/o Neff LLC
    
	
Party (other than
    	
3750 N.W. 87th Avenue
    
	
 
    	
Suite 400
    

 

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Parent Borrower):
    	
Miami, Florida 33178
    
	
 
    	
ATTN: Mark Irion, Chief Financial Officer
    
	
 
    	
Phone: (305) 901-2280
    
	
 
    	
Fax: (305) 513-4156
    
	
 
    	
Email: MIrion@Neffcorp.com
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Wayzata Investment Partners LLC
    
	
 
    	
701 East Lake Street
    
	
 
    	
Wayzata, MN 55391
    
	
 
    	
ATTN: Susan Peterson
    
	
 
    	
Phone: (952) 345-0700
    
	
 
    	
Fax: (952) 345-8901
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Stroock & Stroock & Lavan LLP
    
	
 
    	
180 Maiden Lane
    
	
 
    	
New York, NY 10038
    
	
 
    	
ATTN: Matthew A. Schwartz, Esq.
    
	
 
    	
Phone: (212) 806-5929
    
	
 
    	
Fax: (212) 806-6006
    
	
 
    	
 
    
	
If to Agent, L/C Issuer
    	
BANK OF AMERICA, N.A.
    
	
or Swing Line Lender:
    	
300 Galleria Parkway, Suite 800
    
	
 
    	
Atlanta, GA 30339
    
	
 
    	
ATTN: Loan Administration
    
	
 
    	
Phone: (404) 607-3200
    
	
 
    	
Fax:(404) 607-3277
    
	
 
    	
Email: dennis.losin@baml.com
    
	
 
    	
 
    
	
If to a Lender:
    	
To the address set forth on the signature page hereto or in the   applicable Assignment Agreement
    

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided herein shall be effective as provided herein.

 

Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Section 1 if such Lender or the L/C Issuer, as applicable, has notified the Agent that it is incapable of receiving notices under such Article by electronic communication. The Agent or any Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by

 

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electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

 

Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Credit Party, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of a Credit Party’s or the Agent’s transmission of Borrower Materials through the internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Credit Party, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

Each Credit Party, the Agent, each Arranger, the L/C Issuer and the Swing Line Lender may change its address, email address, facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, email address, facsimile or telephone number for notices and other communications hereunder by notice to Parent Borrower, the Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Agent from time to time to ensure that the Agent has on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States federal and state securities laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to Parent Borrower or its securities for purposes of United States federal or state securities laws.

 

The Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices) purportedly given by or on behalf of a Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from

 

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any confirmation thereof. The Borrowers shall indemnify the Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Borrower. All telephonic notices to and other telephonic communications with the Agent may be recorded by the Agent, and each of the parties hereto hereby consents to such recording.

 

9.4                               Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of Agent or any Lender to exercise, nor any partial exercise of, any power, right or privilege hereunder or under any other Loan Documents shall impair such power, right, or privilege or be construed to be a waiver of any Default or Event of Default. All rights and remedies existing hereunder or under any other Loan Document are cumulative to and not exclusive of any rights or remedies otherwise available.

 

9.5                               Marshaling; Payments Set Aside. Neither Agent nor any Lender shall be under any obligation to marshal any assets in payment of any or all of the Obligations. To the extent that a Borrower makes payments or Agent enforces its Liens or Agent or any Lender exercises its right of setoff, and such payments or the proceeds of such enforcement or setoff are subsequently invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by anyone, then to the extent of such recovery, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

9.6                               Severability. The invalidity, illegality, or unenforceability in any jurisdiction of any provision under the Loan Documents shall not affect or impair the remaining provisions in the Loan Documents.

 

9.7                               Lenders’ Obligations Several; Independent Nature of Lenders’ Rights. The obligation of each Lender hereunder is several and not joint and no Lender shall be responsible for the obligation or commitment of any other Lender hereunder. In the event that any Lender at any time should fail to make a Loan as herein provided, the Lenders, or any of them, at their sole option, may make the Loan that was to have been made by the Lender so failing to make such Loan. Nothing contained in any Loan Document and no action taken by Agent or any Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt.

 

9.8                               Headings. Section and subsection headings are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purposes or be given substantive effect.

 

9.9                               Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

9.10                        Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns except that neither Parent Borrower nor any other Credit Party may assign its rights or obligations hereunder without the written consent of Agent and all Lenders and any prohibited assignment shall be absolutely void ab initio.

 

9.11                        No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Credit Party acknowledges and agrees that: (i)

 

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(A) the arranging and other services regarding this Agreement provided by the Agent and the other Persons named on the cover page hereof are arm’s-length commercial transactions between the Credit Parties, on the one hand, and the Agent and such other Persons, on the other hand, (B) each Credit Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) each Credit Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Agent and each other Person named on the cover page hereof is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Credit Party, or any other Person and (B) neither the Agent nor any other Person on the cover page hereof has any obligation to a Credit Party with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Agent, the other Persons named on the cover page hereof and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Credit Parties and their Affiliates, and neither the Agent nor any other Person on the cover page hereof has any obligation to disclose any of such interests to any Credit Party or its Affiliates. To the fullest extent permitted by law, each Credit Party hereby waives and releases any claims that it may have against the Agent and all other Persons on the cover page hereof with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

9.12                        Construction. Agent, each Lender, Parent Borrower and each other Credit Party acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review the Loan Documents with its legal counsel and that the Loan Documents shall be construed as if jointly drafted by Agent, each Lender, Parent Borrower and each other Credit Party.

 

9.13                        Confidentiality. Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts Agent or such Lender applies to maintaining the confidentiality of its own confidential information) to maintain as confidential all confidential information provided to them by the Credit Parties and designated as confidential for a period of two (2) years following receipt thereof, except that Agent and any Lender may disclose such information (a) to Persons employed or engaged by Agent, such Lender or such Lender’s Affiliates; (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 9.13 (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 the foregoing clause (a)); (c) as required or requested by any Governmental Authority, including any self-regulatory 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, on the advice 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; (f) that ceases to be confidential through no fault of Agent or any Lender; (g) to any party hereto; (h) with the consent of Parent Borrower; or (i) that becomes available to such Person or its Affiliates on a non-confidential basis.

 

9.14                        CONSENT TO JURISDICTION. PARENT BORROWER AND EACH CREDIT PARTY HEREBY CONSENT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. PARENT BORROWER AND EACH CREDIT PARTY EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. PARENT

 

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BORROWER AND EACH CREDIT PARTY HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON PARENT BORROWER AND SUCH CREDIT PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO PARENT BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

 

9.15                        WAIVER OF JURY TRIAL. PARENT BORROWER, EACH CREDIT PARTY, AGENT AND EACH LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. PARENT BORROWER, EACH CREDIT PARTY, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN ITS RELATED FUTURE DEALINGS.

 

9.16                        Survival of Warranties and Certain Agreements. All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement, the making of the Loans, issuances of Letters of Credit and the execution and delivery of the Notes. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Borrowers set forth in Sections 1.3(e), 1.12, 1.13 and 9.1 (including with respect to assignees and participants to the extent provided in Section 8.1) shall survive the repayment of the Obligations and the termination of this Agreement.

 

9.17                        Entire Agreement. This Agreement, the Notes and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior commitments, agreements, representations, and understandings, whether oral or written, relating to the subject matter hereof, and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. All Exhibits, Schedules and Annexes referred to herein are incorporated in this Agreement by reference and constitute a part of this Agreement.

 

9.18                        Counterparts; Effectiveness. This Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one in the same instrument. This Agreement shall become effective upon the execution of, and provision to the Agent of, a counterpart hereof by each of the parties hereto.

 

9.19                        Replacement of Lenders.

 

(a)                                 Within fifteen (15) days after receipt by Parent Borrower of written notice and demand from any Lender for payment pursuant to Section 1.12 or 1.13 and such Lender being unable to change its lending office after a request therefor pursuant to Section 1.12(c) or, as provided in Section 9.19(c), after certain refusals by any Lender to consent to certain proposed amendments, modifications, terminations or waivers with respect to this Agreement that have been approved by Requisite Lenders (any such Lender demanding such payment or refusing to so consent being referred to herein as an “Affected Lender”), Parent Borrower may, at its option, notify Agent and such Affected Lender of its intention to obtain, at Parent Borrower’s expense, a replacement Lender (“Replacement Lender”) for such Affected Lender, which Replacement Lender shall be reasonably satisfactory to Agent. In the event Parent Borrower obtains a Replacement Lender that will purchase all outstanding Obligations owed to

 

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such Affected Lender and assume its Revolving Loan Commitments hereunder within ninety (90) days following notice of Parent Borrower’s intention to do so, the Affected Lender shall sell and assign all of its rights and delegate all of its obligations under this Agreement to such Replacement Lender in accordance with the provisions of Section 8.1 for an amount equal to the principal balance of all Loans held by such Affected Lender and all accrued interest and Fees with respect thereto through the date of sale, provided that Parent Borrower has reimbursed such Affected Lender for any administrative fee payable pursuant to Section 8.1 and, in any case where such replacement occurs as the result of a demand for payment pursuant to Section 1.12 or 1.13, paid all amounts required to be paid to such Affected Lender pursuant to Section 1.12 or 1.13 through the date of such sale and assignment.

 

(b)                                 In the case of a Non-Funding Lender pursuant to Section 8.5(a), at Parent Borrower’s request, Agent or a Person 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 Loans and Revolving Loan 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. Assignments effected pursuant to this clause (b) or clause (a) above or (c) below shall be effective even if the Affected Lender, Non-Consenting Lender or Non-Funding Lender, as applicable, does not sign an Assignment Agreement.

 

(c)                                  If, in connection with any proposed amendment, modification, waiver or termination pursuant to Section 9.2 (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) and in clause (ii) below being referred to as a “Non-Consenting Lender”), or

 

(ii)                                  requiring the consent of Supermajority Lenders, the consent of Requisite Lenders is obtained, but the consent of Supermajority Lenders is not obtained,

 

then, so long as Agent is not a Non-Consenting Lender, at Parent Borrower’s written request, Agent, or a Person reasonably acceptable to Agent, shall have the right with Agent’s consent (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, all of the Loans and Revolving Loan 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. Notwithstanding anything in the foregoing to the contrary, Non-Consenting Lenders shall only be required to assign under this Section 9.19 so long as all Non-Consenting Lenders are replaced and the Proposed Change is thus approved.

 

9.20                        Patriot Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Agent (for itself and not on behalf of any Lender) hereby notifies the Credit Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender or the Agent, as applicable, to identify each Credit Party in accordance with the Act.

 

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9.21        Joint and Several Liability. All Loans and other extensions of credit, upon funding, shall be deemed to be jointly funded to and received by Borrowers. Each Borrower is jointly and severally liable under this Agreement for all Obligations, regardless of the manner or amount in which proceeds of Loans are used, allocated, shared or disbursed by or among Borrowers themselves, or the manner in which the Agent and/or any Lender accounts for such Loans or other extensions of credit on its books and records. Each Borrower shall be liable for all amounts due to the Agent and/or any Lender from Borrowers under this Agreement, regardless of which Borrower actually receives Loans or other extensions of credit hereunder or the amount of such Loans and extensions of credit received or the manner in which such Agent and/or such Lender accounts for such Loans or other extensions of credit on its books and records. Each Borrower’s Obligations with respect to Loans and other extensions of credit made to it, and such Borrower’s Obligations arising as a result of the joint and several liability of such Borrower hereunder with respect to Loans made to the other Borrowers hereunder shall be separate and distinct obligations, but all such Obligations shall be primary obligations of such Borrower. Borrowers acknowledge and expressly agree with the Agent and each Lender that the joint and several liability of each Borrower is required solely as a condition to, and is given solely as inducement for and in consideration of, credit or accommodations extended or to be extended under the Loan Documents to any or all of the other Borrowers and is not required or given as a condition of extensions of credit to such Borrower. Each Borrower’s Obligations under this Agreement shall, to the fullest extent permitted by law, be unconditional irrespective of (i) the validity or enforceability, avoidance, or subordination of the Obligations of any other Borrower or of any promissory note or other document evidencing all or any part of the Obligations of any other Borrower, (ii) the absence of any attempt to collect the Obligations from any other Borrower, or any other security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance, or granting of any indulgence by the Agent and/or any Lender with respect to any provision of any instrument evidencing the Obligations of any other Borrower, or any part thereof, or any other agreement now or hereafter executed by any other Borrower and delivered to the Agent and/or any Lender, (iv) the failure by the Agent and/or any Lender to take any steps to perfect and maintain its security interest in, or to preserve its rights to, any security or collateral for the Obligations of any other Borrower, (v) the Agent’s and/or any Lender’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or grant of a security interest by any other Borrower, as debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the disallowance of all or any portion of the Agent’s and/or any Lender’s claim(s) for the repayment of the Obligations of any other Borrower under Section 502 of the Bankruptcy Code, or (viii) any other circumstances which might constitute a legal or equitable discharge or defense of a guarantor or of any other Borrower. With respect to any Borrower’s Obligations arising as a result of the joint and several liability of Borrowers hereunder with respect to Revolving Loans or other extensions of credit made to any of the other Borrowers hereunder, such Borrower waives, until the Obligations shall have been paid in full and this Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which the Agent and/or any Lender now has or may hereafter have against any other Borrower, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to the Agent and/or any Lender to secure payment of the Obligations or any other liability of any Borrower to the Agent and/or any Lender. Upon any Event of Default, the Agent may proceed directly and at once, without notice, against any Borrower to collect and recover the full amount, or any portion of the Obligations, without first proceeding against any other Borrower or any other Person, or against any security or collateral for the Obligations. Each Borrower consents and agrees that the Agent shall be under no obligation to marshal any assets in favor of any Borrower or against or in payment of any or all of the Obligations. Notwithstanding anything to the contrary in the foregoing, none of the foregoing provisions of this Section 9.21 shall apply to any Person released from its Obligations as a Borrower in accordance with this Agreement.

 

76

 

9.22        Contribution and Indemnification Among Borrowers. Each Borrower is obligated to repay the Obligations as a joint and several obligor under this Agreement. To the extent that any Borrower shall, under this Agreement as a joint and several obligor, repay any of the Obligations constituting Loans made to another Borrower hereunder or other Obligations incurred directly and primarily by any other Borrower (an “Accommodation Payment”), then Borrower making such Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed by, each of the other Borrowers in an amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of which fraction is such other Borrower’s Allocable Amount (as defined below) and the denominator of which is the sum of the Allocable Amounts of all of Borrowers. As of any date of determination, the “Allocable Amount” of each Borrower shall be equal to the maximum amount of liability for Accommodation Payments which could be asserted against such Borrower hereunder without (a) rendering such Borrower “insolvent” within the meaning of Section 101(31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower unable to pay its debts as they become due within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA. All rights and claims of contribution, indemnification, and reimbursement under this Section shall be subordinate in right of payment to the prior payment in full of the Obligations. The provisions of this Section shall, to the extent expressly inconsistent with any provision in any Loan Document, supersede such inconsistent provision.

 

9.23        Agency of Parent Borrower for Each Other Borrower. Each of the other Borrowers irrevocably appoints Parent Borrower as its agent for all purposes relevant to this Agreement, including the giving and receipt of notices and execution and delivery of all documents, instruments, and certificates contemplated herein (including, without limitation, execution and delivery to the Agent of all financial certificates, compliance certificates and borrowing related notices) and all modifications hereto. Any acknowledgment, consent, direction, certification, or other action which might otherwise be valid or effective only if given or taken by all or any of Borrowers or acting singly, shall be valid and effective if given or taken only by Parent Borrower, whether or not any of the other Borrowers join therein, and the Agent and the Lenders shall have no duty or obligation to make further inquiry with respect to the authority of Parent Borrower under this Section 9.23; provided that nothing in this Section 9.23 shall limit the effectiveness of, or the right of the Agent and the Lenders to rely upon, any notice (including without limitation a borrowing and conversion notices), document, instrument, certificate, acknowledgment, consent, direction, certification or other action delivered by any Borrower pursuant to this Agreement.

 

9.24        Reinstatement. This Agreement shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Parent Borrower or any other Borrower, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

9.25        Express Waivers by Borrowers in Respect of Cross Guaranties and Cross Collateralization. Each Borrower agrees as follows:

 

(a)           Each Borrower hereby waives: (i) notice of acceptance of this Agreement; (ii) notice of the making of any Loans, the issuance of any Letter of Credit or any other financial accommodations made or extended under the Loan Documents or the creation or existence of any Obligations; (iii) notice of the amount of the Obligations, subject, however, to such Borrower’s

 

77

 

right to make inquiry of the Agent to ascertain the amount of the Obligations at any reasonable time; (iv) notice of any adverse change in the financial condition of any other Borrower or of any other fact that might increase such Borrower’s risk with respect to such other Borrower under the Loan Documents; (v) notice of presentment for payment, demand, protest, and notice thereof as to any promissory notes or other instruments among the Loan Documents; and (vi) all other notices (except if such notice is specifically required to be given to such Borrower hereunder or under any of the other Loan Documents to which such Borrower is a party) and demands to which such Borrower might otherwise be entitled.

 

(b)           Each Borrower hereby waives the right by statute or otherwise to require the Agent or any Lender to institute suit against any other Borrower or to exhaust any rights and remedies which the Agent or any Lender has or may have against any other Borrower. Each Borrower further waives any defense arising by reason of any disability or other defense of any other Borrower (other than the defense of payment in full) or by reason of the cessation from any cause whatsoever of the liability of any such Borrower in respect thereof.

 

(c)           Each Borrower hereby waives and agrees not to assert against the Agent, any Lender, or any L/C Issuer: (i) any defense (legal or equitable) other than a defense of payment, set-off, counterclaim, or claim which such Borrower may now or at any time hereafter have against any other Borrower or any other party liable under the Loan Documents; (ii) any defense, set-off, counterclaim, or claim of any kind or nature available to any other Borrower (other than a defense of payment) against the Agent, any Lender, or any L/C Issuer, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor; (iii) any right or defense arising by reason of any claim or defense based upon an election of remedies by the Agent, any Lender, or any L/C Issuer under any applicable law; and (iv) the benefit of any statute of limitations affecting any other Borrower’s liability hereunder.

 

(d)           Each Borrower consents and agrees that, without notice to or by such Borrower and without affecting or impairing the obligations of such Borrower hereunder, the Agent may (subject to any requirement for consent of any of the Lenders to the extent required by this Agreement), by action or inaction: (i) compromise, settle, extend the duration or the time for the payment of, or discharge the performance of, or may refuse to or otherwise not enforce the Letter of Credit documents; (ii) release all or any one or more parties to any one or more of the Letter of Credit documents or grant other indulgences to any other Borrower in respect thereof; (iii) amend or modify in any manner and at any time (or from time to time) any of the Letter of Credit documents; or (iv) release or substitute any Person liable for payment of the Obligations, or enforce, exchange, release, or waive any security for the Obligations.

 

(e)           Each Borrower represents and warrants that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Borrower agrees that neither the Agent, any Lender, nor any L/C Issuer has any responsibility to inform any Borrower of the financial condition of any other Borrower or of any other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

 

9.26        Amendment and Restatement.

 

(a)           The Borrowers, Holdings, the Agent and the Lenders hereby agree that upon the effectiveness of this Agreement, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended and restated in their entirety by the terms and provisions of this Agreement and the

 

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terms and provisions of the Existing Credit Agreement, except as otherwise provided in the next paragraph, shall be superseded by this Agreement.

 

(b)           Notwithstanding the amendment and restatement of the Existing Credit Agreement by this Agreement, the Borrowers and Holdings shall continue to be liable to the Agent and the Lenders with respect to agreements on the part of the Borrowers and Holdings under the Existing Credit Agreement to indemnify and hold harmless the Agent and the Lenders from and against all claims, demands, liabilities, damages, losses, costs, charges and expenses to which the Agent and the Lenders may be subject arising in connection with the Existing Credit Agreement prior to the Restatement Effective Date. This Agreement is given as a substitution of, and not as a payment of, the obligations of the Borrowers and Holdings under the Existing Credit Agreement and is not intended to constitute a novation of the Existing Credit Agreement or to have any effect on the applicability of the terms, including any defaults, of the Existing Credit Agreement for dates prior to the Restatement Effective Date. Upon the effectiveness of this Agreement all amounts outstanding and owing by the Borrowers under the Existing Credit Agreement shall constitute Obligations hereunder.

 

(c)           By execution of this Agreement all parties hereto agree that (i) each of the Collateral Documents and other Loan Documents is hereby amended if at all necessary such that all references to the Existing Credit Agreement and the Loans and Obligations thereunder shall be deemed to refer to this Agreement and the Loans and Obligations hereunder, (ii) the Guaranty is reaffirmed and (iii) all security interests and Liens granted under the Collateral Documents shall continue and secure the Obligations hereunder and the obligations of Holdings under the Guaranty. Each Credit Party hereby confirms, ratifies, reaffirms and continues the existence of the security interest and Lien created under the Security Agreement, in favor of the Agent for itself and the benefit of the Secured Parties, in and on all of the Collateral covered by the Security Agreement.

 

9.27        Authorization of Amendments. Each Lender, by its execution of this Agreement on the Restatement Effective Date, consents and agrees to the terms of Amendment No. 1 to the Intercreditor Agreement and authorizes and empowers the Agent to execute and deliver such amendment. The Lenders further consent to the entry by the Agent into the amendment or reaffirmation of any Collateral Document deemed necessary or advisable by the Agent in connection herewith.

 

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Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

	
 
    	
NEFF LLC, as Parent   Borrower
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Irion
    
	
 
    	
 
    	
Name: 
    	
Mark Irion
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NEFF HOLDINGS LLC,
    
	
 
    	
as Holdings and a Credit Party
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Irion
    
	
 
    	
 
    	
Name: 
    	
Mark Irion
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NEFF RENTAL LLC,
    
	
 
    	
as a Borrower
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark Irion
    
	
 
    	
 
    	
Name: 
    	
Mark Irion
    
	
 
    	
 
    	
Title: 
    	
Chief Financial Officer
    
	
 
    	
 
    	
 
    

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
BANK OF AMERICA, N.A.,
    
	
 
    	
as Agent, Co-Collateral Agent, L/C Issuer, Swing Line
    
	
 
    	
Lender and a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Dennis S. Losin
    
	
 
    	
 
    	
Name: 
    	
Dennis S. Losin
    
	
 
    	
 
    	
Title: 
    	
Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Credit Contact: SE Loan Administration
    
	
 
    	
Address: 
    	
300 Galleria Parkway, Suite 800
    
	
 
    	
 
    	
Atlanta, GA 30339
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Operations Contact: ABL Servicing — Waukesha
    
	
 
    	
Address: 
    	
20975 Swenson Dr
    
	
 
    	
 
    	
Waukesha, WI 53186
    
					

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
WELLS FARGO CAPITAL FINANCE, LLC,
    
	
 
    	
as Co-Collateral Agent and Syndication Agent and a
    
	
 
    	
Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kevin S. Fong
    
	
 
    	
 
    	
Name:
    	
Kevin S. Fong
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Credit Contact:
    	
Kevin S. Fong
    
	
 
    	
Address:
    	
Syndicated Finance
    
	
 
    	
 
    	
2450 Colorado Avenue
    
	
 
    	
 
    	
Suite 3000 West
    
	
 
    	
 
    	
Santa Monica, CA 90404
    
	
 
    	
 
    	
310-453-7222
    
	
 
    	
 
    	
 
    
	
 
    	
Operations Contact:
    	
Wade Lin
    
	
 
    	
Address: 
    	
Syndicated Finance
    
	
 
    	
 
    	
2450 Colorado Avenue
    
	
 
    	
 
    	
Suite 3000 West
    
	
 
    	
 
    	
Santa Monica, CA 90404
    
	
 
    	
 
    	
310-453-7271
    
					

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
REGIONS BANK,
    
	
 
    	
as Documentation Agent and a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bruce Kasper
    
	
 
    	
 
    	
Name:
    	
Bruce Kasper
    
	
 
    	
 
    	
Title:
    	
Attorney in Fact
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Credit Contact:
    
	
 
    	
Address: 250 Park Avenue NY   NY 10177
    
	
 
    	
 
    
	
 
    	
Operations Contact: Anna Isbell
    
	
 
    	
Address: 1900 5th Avenue North
    
	
 
    	
Birmingham Alabama 35203
    

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
PNC BANK, N.A.,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Cunningham
    
	
 
    	
 
    	
Name:
    	
John Cunningham
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    
	
 
    	
Credit Contact: John Cunningham
    
	
 
    	
Address: 200 S. Wacker Dr., Chicago, II 60606
    
	
 
    	
 
    
	
 
    	
Operations Contact: Paul Raquepo
    
	
 
    	
Address:
    

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
CIT FINANCE LLC,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Donna H. Evans
    
	
 
    	
 
    	
Name:
    	
Donna H. Evans
    
	
 
    	
 
    	
Title:
    	
Director
    

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
Credit Contact: Chris Handler
    
	
 
    	
Address:
    	
5420 LBJ Freeway, Ste 200
    
	
 
    	
 
    	
Dallas, TX 75240
    
	
 
    	
 
    
	
 
    	
Operations Contact: Krystal   Powell
    
	
 
    	
Address:
    	
134 Wooding Avenue
    
	
 
    	
 
    	
Danville, VA 24541
    
					

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
RBS CITIZENS BUSINESS CAPITAL,   A DIVISION
    
	
 
    	
OF RBS ASSET FINANCE, INC.
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian J. Baker
    
	
 
    	
 
    	
Name:
    	
Brian J. Baker
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
Credit Contact:
    	
James Herzog
    
	
 
    	
Address:
    	
8521 Leesburg Pike, Suite 405
    
	
 
    	
 
    	
Vienna, VA 22182
    
	
 
    	
 
    	
 
    
	
 
    	
Operations Contact:
    	
Matt Rodrigues
    
	
 
    	
Address:
    	
100 Sockanosset Rd
    
	
 
    	
 
    	
Cranston, RI 02920
    
					

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
SUNTRUST BANK,
    
	
 
    	
as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Seth Meier
    
	
 
    	
 
    	
Name: Seth Meier
    
	
 
    	
 
    	
Title: Director
    
	
 
    	
 
    
	
 
    	
Credit Contact: Nigel   Fabien
    
	
 
    	
Address: 303 Peachtree Street, Atlanta GA 30308
    
	
 
    	
 
    	
 
    
	
 
    	
Operations Contact: Christy kemp
    
	
 
    	
Address: 303 Peachtree Street, Atlanta GA 30308
    
				

 

[Neff — A&R Credit Agreement]

 

 

	
 
    	
NYCB SPECIALTY FINANCE COMPANY,
    
	
 
    	
LLC, A WHOLLY-OWNED SUBSIDIARY OF
    
	
 
    	
NEW YORK COMMUNITY BANK, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Willard D. Dickerson, Jr.
    
	
 
    	
 
    	
Name:
    	
Willard D. Dickerson, Jr.
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
Credit Contact: Willard D.   Dickerson, Jr.
    
	
 
    	
Address: 16 Chestnut Street, Foxboro, MA 02035
    
	
 
    	
 
    
	
 
    	
Operations Contact: Mary C. Trabucco
    
	
 
    	
Address: 16 Chestnut Street, Foxboro, MA 02035
    

 

[Neff — A&R Credit Agreement]

 

	
  

  	
  A-1 ANNEX A 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 this Agreement unless specified
  otherwise to refer to Exhibits or Schedules to the Existing Credit Agreement:
  “2011 Notes Transactions” means the issuance of the Second Lien Notes, the
  entry into the purchase agreement relating to the Second Lien Notes, the
  entry into the Second Lien Notes Indenture and the security documents,
  certificates, instruments and agreements entered into and executed in
  connection therewith and the transactions contemplated thereby, the 2011
  Special Distribution and the entry into Amendment No. 2 to the Existing
  Credit Agreement, and the consummation of the transactions contemplated by
  all of the foregoing. “2011 Special Distribution” means that certain
  distribution made on or about May 5, 2011, to the members of Holdings in an
  amount not exceeding $120 million with a portion of the proceeds of the
  Second Lien Notes. “2013 Notes Transactions” means (a) the Consent
  Solicitation, (b) the execution and delivery of Supplemental Indenture No. 1
  with respect to the Second Lien Notes Indenture, (c) the execution and
  delivery of Amendment No. 1 to the Intercreditor Agreement and (d) the
  consummation of the transactions contemplated by each of the foregoing
  (including the making of any consent payments in connection with the Consent
  Solicitation). “2013 Special Distribution” means a distribution made on or
  about the Restatement Effective Date to the members of Holdings in an amount
  not to exceed $110 million with the proceeds of Revolving Loans.
  “Accommodation Payment” has the meaning specified in Section 9.22. “Account
  Debtor” means any Person who may become obligated to any Credit Party under,
  with respect to, or on account of, an Account, Chattel Paper or General
  Intangibles (including a payment intangible). “Accounts” means all
  “accounts,” as such term is defined in the Code, owned on the Closing Date or
  thereafter acquired by any Credit Party, such term to include (a) all
  accounts receivable, other receivables, book debts, Rental Payments and other
  forms of obligations (other than, except in the case of Rental Payments,
  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 confidential confidential 

  

 

	
  

  	
  A-2 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, 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) and (e) all
  collateral security of any kind, now or hereafter in existence, given by any
  Account Debtor or other Person with respect to any of the foregoing.
  “Acquisition Pro Forma” has the meaning specified in the definition of Pro
  Forma. “Act” has the meaning specified in Section 9.20. “Advances” means any
  Revolving Credit Advance or Swing Line Advance, as the context may require. “Affected
  Lender” has the meaning specified in Section 9.19(a). “Affiliate” means, with
  respect to any Person, each Person that controls, is controlled by or is
  under common control with such Person; provided that for purposes of Section
  3.8, the term “Affiliate” shall include each Person that, directly or
  indirectly, owns or controls, whether beneficially, or as a trustee, guardian
  or other fiduciary, 10% or more of the Stock having ordinary voting power in
  the election of directors of such Person; provided, however, that the term
  “Affiliate” shall specifically exclude Agent and each Lender. For the
  purposes of this definition, “control” of a Person shall mean 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. “Affiliate Transaction” has the meaning specified
  in Section 3.8(a). “Agent” means Bank of America, N.A., in its capacity as
  administrative agent and collateral agent for the Lenders, L/C Issuers and
  any other Secured Parties, or its successor appointed pursuant to Section
  8.2. “Agent Fee Letter” means that certain Administrative Agent Fee Letter,
  dated as of the Restatement Effective Date, between Neff LLC and the Agent,
  relating to certain fees payable in connection with this Agreement, and any
  other fee letter replacing or supplementing such Administrative Agent Fee
  Letter and relating to fees payable to the Agent. “Agent Parties” has the
  meaning specified in Section 9.3. “Agent’s Office” means the Agent’s offices
  located at One Bryant Park, New York, New York 10036 or such other office
  designated in writing by Agent to Parent Borrower and the Lenders.
  “Agreement” means, on any date, this Amended and Restated Credit Agreement
  (including all schedules, subschedules, annexes and exhibits hereto), as the
  same may be amended, supplemented, restated or otherwise modified from time
  to time. confidential confidential 

  

 

	
  

  	
  A-3 “Allocable
  Amount” has the meaning specified in Section 9.22. “Applicable L/C Margin”
  means the per annum interest rate, from time to time in effect, payable with
  respect to outstanding Letter of Credit Obligations as determined by
  reference to the definition of “Applicable Margins.” “Applicable Margins”
  means collectively the Applicable L/C Margin, the Applicable Unused Line Fee
  Margin, the Applicable Revolver Base Rate Margin and the Applicable Revolver
  LIBOR Margin. The Applicable Margins are as follows: Applicable Revolver Base
  Rate Margin 1.50% Applicable Revolver LIBOR Margin 2.50% Applicable L/C
  Margin 2.50% Applicable Unused Line Fee Margin Utilized Amount Margin >
  66.00% 0.25% 66.00% and > 33.00% 0.375% < 33.00% 0.50% The Applicable
  Margins (other than the Applicable Unused Line Fee Margin) shall be adjusted
  (up or down) from time to time prospectively on a quarterly basis as
  determined by Average Availability for the most recently completed quarter,
  commencing with the first Business Day after the end of the first full
  calendar quarter commencing after the Restatement Effective Date and
  continuing with the first Business Day of the first calendar month that
  occurs more than one (1) day after each Fiscal Quarter thereafter.
  Adjustments in Applicable Margins will be determined by reference to the
  following grids: If the Average Availability is: Level of Applicable Margins:
  Less than $100,000,000 Level I Equal to or greater than $100,000,000 but less
  than $200,000,000 Level II Equal to or greater than $200,000,000 Level III
  confidential confidential 

  

 

	
  

  	
  A-4 Applicable
  Margins Level I Level II Level III Applicable Revolver Base Rate Margin 1.50%
  1.25% 1.00% Applicable Revolver LIBOR Margin 2.50% 2.25% 2.00% Applicable L/C
  Margin 2.50% 2.25% 2.00% In addition, the Applicable Margins (other than the
  Applicable Unused Line Fee Margin) shall be reduced by 0.25%, from time to
  time, for any period (a “Reduction Period”) commencing on the date on which
  quarterly Financial Statements required to be delivered pursuant to Section
  4.1(b) are delivered and the Consolidated Total Leverage Ratio based on such
  Financial Statements is less than 2.75 to 1.00 and ending on the date, if
  any, on which quarterly Financial Statements required to be delivered
  pursuant to Section 4.1(b) are delivered and the Consolidated Total Leverage
  Ratio based on such Financial Statements is 2.75 to 1.00 or more. At the end
  of any Reduction Period, the Applicable Margins shall be increased by 0.25%
  until the date on which any other Reduction Period commences. At the end of
  each Fiscal Quarter, concurrently with the delivery of the quarterly
  Financial Statements required to be delivered pursuant to Section 4.1(b)
  hereof, Parent Borrower 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. The
  initial Applicable Margins shall be based on Level I until the first full
  Fiscal Quarter ending after the Restatement Effective Date. Failure to timely
  deliver such certificate or the occurrence of any other Default or Event of
  Default shall, in addition to any other remedy provided for in this
  Agreement, result in an increase in the Applicable Margins to the highest
  level set forth in the foregoing grid, until the first Business Day following
  the delivery of a certificate demonstrating that such an increase is not
  required and the cure or waiver of all other Defaults and Events of Default.
  In the event that any certificate is shown to be inaccurate (regardless of
  whether this Agreement or the Revolving Loan Commitments are in effect when
  such inaccuracy is discovered), and such inaccuracy, if corrected, would have
  led to the application of a higher Applicable Margin for any period (an
  “Applicable Period”) than the Applicable Margin applied for such Applicable
  Period, then (i) Parent Borrower shall immediately deliver to the Agent a
  correct certificate for such Applicable Period, (ii) the Applicable Margin
  shall be determined in accordance with the Average Availability indicated on
  such correct certificate and (iii) Parent Borrower shall immediately pay to
  the Agent the accrued additional interest owing as a result of such increased
  Applicable Margin for such Applicable Period. Nothing herein shall limit the
  rights of the Agent and Lenders with respect to Sections 1.2(d) and 6.
  “Applicable Revolver Base Rate Margin” means the per annum interest rate
  margin from time to time in effect and payable in addition to the Base Rate
  applicable to the Revolving Loans, as determined by reference to the
  definition of “Applicable Margins.” “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 the Revolving Loans, as determined by
  reference to the definition of “Applicable Margins.” confidential
  confidential 

  

 

	
  

  	
  A-5 “Applicable
  Unused Line Fee Margin” means the per annum interest rate, from time to time
  in effect, payable in respect of Borrowers’ non-use of committed funds pursuant
  to Section 1.3(b), which interest rate is determined by reference to the
  definition of “Applicable Margins.” “Approved Appraiser” means Rouse Asset
  Services, Inc., Hunyady Appraisal Services, Ritchie Brothers Auctioneers or
  such other appraisal company of similar qualifications and standing
  acceptable to Agent in its sole discretion. “Approved Fund” has the meaning
  specified in the definition of “Qualified Assignee”. “Arranger Fee Letter”
  means that certain Engagement and Fee Letter, dated as of October 29, 2013,
  among Neff LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
  relating to certain fees payable in connection with this Agreement, and any
  other fee letter replacing or supplementing such Engagement and Fee Letter
  and relating to fees payable to the Arranger. “Arranger” means, Merrill
  Lynch, Pierce, Fenner & Smith Incorporated, or its successors. “Asset
  Disposition(s)” means (a) the disposition, whether by sale, lease, transfer,
  rental, conveyance, license or otherwise, of (i) any of the Stock or other
  equity or ownership interest of any direct or indirect Subsidiary of Holdings
  or (ii) any or all of the assets of Holdings or any of its Subsidiaries, (b)
  any loss or destruction of, or damage to, any or all of the assets of
  Holdings or any of its Subsidiaries that results in the receipt by such
  Person of insurance proceeds with respect to such assets and/or (c) any loss
  of property of Holdings or any of its Subsidiaries by condemnation, taking of
  such property or otherwise, that results in the receipt by such Person of a
  compensation payment in respect thereof. “Assignee Group” means two or more
  Qualified Assignees that are Affiliates of one another or two or more
  Approved Funds managed by the same investment advisor. “Assignment Agreement”
  has the meaning specified in Section 8.1(a). “Average Availability” means for
  any period the average Excess Availability over the Business Days in such
  period measured as of the end of each such Business Day. “Bank of America”
  means Bank of America, N.A. “Bank Products” means (a) Related Swap Contracts,
  (b) products and services under Cash Management Documents and (c) to the
  extent not otherwise included in the foregoing, any or all types of banking
  products, services or facilities (other than Letters of Credit) extended to
  any Borrower by Agent or any Person that was a Lender or an Affiliate of
  Agent or any Lender at the time it entered into such banking products,
  services or facilities, including credit card services, merchant card
  services and such other banking products or services as may be requested by
  any Borrower (on behalf of itself or its Subsidiaries). confidential
  confidential 

  

 

	
  

  	
  A-6 “Banking
  Relationship Debt” means Indebtedness or other obligations of any Borrower
  owing (a) to Agent, any Lender or any of their respective Affiliates with
  respect to any Bank Products or (b) to Agent in connection with its having
  provided any guaranty or indemnity on behalf of any such Person. “Bankruptcy
  Code” means the provisions of Title 11 of the United States Code, 11 U.S.C.
  §§ 101 et seq., or other applicable bankruptcy, insolvency or similar laws,
  as now and hereafter in effect, or any successor statute. “Bankruptcy Law”
  means the Bankruptcy Code and any similar federal, state or foreign
  (including any provincial) receivership, insolvency relief or other law or
  laws for the relief of debtors. “Base Rate” means for any day a fluctuating
  rate per annum equal to the highest of (i) the Federal Funds Rate plus 1⁄2 of
  1%; (ii) the rate of interest in effect for such day as publicly announced
  from time to time by Bank of America as its “prime rate”; and (iii) the LIBOR
  Rate for a 30-day interest period as of such day plus 1%. The “prime rate” is
  a rate set by Bank of America based upon various factors including Bank of
  America’s costs and desired return, general economic conditions and other
  factors, and is used as a reference point for pricing some loans, which may
  be priced at, above, or below such announced rate. Any change in such rate
  announced by Bank of America shall take effect at the opening of business on
  the day specified in the public announcement of such change. “Base Rate
  Loan(s)” means a Loan or portion thereof bearing interest by reference to the
  Base Rate. “Board of Directors” means, with respect to any person, (i) in the
  case of any corporation, the board of directors of such person, (ii) in the
  case of any limited liability company, the board of managers of such person,
  (iii) in the case of any partnership, the Board of Directors of the general
  partner of such person and (iv) in any other case, the functional equivalent
  of the foregoing. “Board of Governors of the Federal Reserve System” means
  the Board of Governors of the Federal Reserve System of the United States.
  “Borrower Materials” has the meaning specified in Section 4.1. “Borrowers”
  means Parent Borrower and each Domestic Subsidiary of Parent Borrower
  (excluding Neff Finance). “Borrower’s Accountants” means Deloitte &
  Touche LLP or such other independent certified public accountants of nationally
  recognized standing reasonably acceptable to Agent. “Borrowing Base” means,
  with respect to the Credit Parties, as of any date of determination, from
  time to time, an amount equal to, without duplication, the lesser of (a) the
  Maximum Amount and (b) (i) the sum of (A) the Eligible Accounts Formula and
  (B) the Eligible Rental Fleet and Equipment Formula, less (ii) any Reserves
  established by the Decision Agent confidential confidential 

  

 

	
  

  	
  A-7 in its
  Permitted Discretion (it being understood that no Reserves may be imposed
  with respect to (x) Hedging Agreements existing on the Closing Date and
  obligations under Hedging Agreements existing on the Closing Date and (y) the
  specific events, conditions, facts and circumstances that have occurred prior
  to the Restatement Effective Date that caused the Decision Agent (or formed
  the basis for the Decision Agent’s determination) to establish the Reserve in
  an amount equal to $25,000,000 in effect immediately prior to the Restatement
  Effective Date); provided, that with respect to any Subsidiary of Parent
  Borrower which becomes a Credit Party at any time after the Closing Date, the
  Accounts and Rental Fleet and Equipment of such new Credit Party shall not be
  included in the Borrowing Base until (x) Agent shall have conducted such
  appraisals, audits, evaluations and/or inspections of such Collateral as
  Agent shall deem reasonably necessary or advisable with respect to such
  Collateral and (y) Parent Borrower and such Subsidiary shall have complied
  with the requirements of Section 2.8. Borrowing Base reserve determinations
  and decisions will be made by the Decision Agent in its Permitted Discretion.
  “Borrowing Base Certificate” has the meaning specified in Section 4.1(e).
  “Business Day” means any day other than a Saturday, Sunday or other day on
  which commercial banks are authorized to close under the laws of, or are in
  fact closed in, the state where the Agent’s Office is located and, if such
  day relates to any LIBOR Loan, means any such day on which dealings in Dollar
  deposits are conducted by and between banks in the London interbank
  eurodollar market. “Capital Expenditures” means, with respect to any Person
  for any period, any expenditure in respect of the purchase or other
  acquisition of any fixed or capital asset (excluding normal replacements and
  maintenance which are properly charged to current operations). For purposes
  of this definition, the purchase price of equipment that is purchased
  simultaneously with the trade-in of existing equipment or with insurance
  proceeds shall be included in Capital Expenditures only to the extent of the
  gross amount by which such purchase price exceeds the credit granted by the
  seller of such equipment for the equipment being traded in at such time or
  the amount of such insurance proceeds, as the case may be. “Capital Lease(s)”
  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, with respect
  to any Capital Lease of any Person, the amount of the obligation of the
  lessee thereunder that, in accordance with GAAP, would appear on a balance
  sheet of such lessee in respect of such Capital Lease. “Cash Collateral”
  means cash or deposit account balances pledged and deposited with or
  delivered to Agent, for the benefit of the L/C Issuer, as collateral for the
  Letter of Credit Obligations, in an amount equal to 105% of such Letter of
  Credit Obligations, pursuant to documentation in form and substance
  reasonably satisfactory to the L/C Issuer (which documents are hereby
  consented to by the Lenders to the extent applicable). confidential
  confidential 

  

 

	
  

  	
  A-8 “Cash Equivalents”
  means: (a) marketable securities (i) issued or directly and unconditionally
  guaranteed as to interest and principal by the United States government or
  (ii) issued by any agency of the United States government the obligations of
  which are backed by the full faith and credit of the United States, in each
  case maturing within one (1) year after acquisition thereof; (b) marketable
  direct obligations issued by any state of the United States of America or any
  political subdivision of any such state or any public instrumentality
  thereof, in each case maturing within one year after acquisition thereof and
  having, at the time of acquisition, a rating of at least A-1 from S&P or
  at least P-1 from Moody’s; (c) commercial paper maturing no more than one year
  from the date of acquisition and, at the time of acquisition, having a rating
  of at least A-1 from S&P or at least P-1 from Moody’s; (d) certificates
  of deposit or bankers’ acceptances issued or accepted by any Lender or by any
  commercial bank organized under the laws of the United States of America or
  any state thereof or the District of Columbia that (i) is at least
  “adequately capitalized” (as defined in the regulations of its primary
  federal banking regulator) and (ii) has Tier 1 capital (as defined in such
  regulations) of not less than $250,000,000, in each case maturing within one
  year after issuance or acceptance thereof; and (e) shares of any money market
  mutual or similar fund that (i) has substantially all of its assets invested
  continuously in the types of investments referred to in clauses (a) through
  (d) above, (ii) has net assets of not less than $500,000,000 and (iii) has
  the highest rating obtainable from either S&P or Moody’s. “Cash
  Management Document” means any certificate, agreement or other document
  executed by any Borrower in respect of the Cash Management Obligations of any
  such Person. “Cash Management Obligation(s)” means, as applied to any Person,
  any direct or indirect liability, contingent or otherwise, of such Person in
  respect of cash management services (including treasury, depository, return
  item, overdraft, controlled disbursement, credit, merchant store value or
  debit card, purchase card, electronic funds transfer, interstate depository
  network, automatic clearing house transfer and other cash management
  arrangements) provided after the Closing Date (regardless of whether these or
  similar services were provided prior to the Closing Date by Agent, any Lender
  or any Affiliate of any of them) by Agent or any Person that was a Lender or
  Agent or an Affiliate of Agent or any Lender at the time the applicable Cash
  Management Documents were entered into, including obligations for the payment
  of fees, interest, charges, expenses, attorneys’ fees and disbursements in
  connection therewith. “CERCLA” means the Comprehensive Environmental
  Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. §
  9601 et seq.). “Certificate of Exemption” has the meaning specified in
  Section 1.13(c). confidential confidential 

  

 

	
  

  	
  A-9 “Certificate
  of Title” means any certificate of title, certificate of ownership or any
  other registration certificate issued under the laws of any state or
  commonwealth of the United States or any political subdivision thereof with
  respect to motor vehicles or other vehicles. “Change of Control” means any
  event, transaction or occurrence as a result of which: (a) at any time prior
  to the consummation of a Qualifying IPO, the Permitted Holders cease to
  “beneficially own” (within the meaning of Rules 13d-3 and 13d-5 under the
  Securities Exchange Act of 1934) and control all of the voting rights
  associated with ownership of more than fifty percent (50%) of the outstanding
  Stock of Holdings having ordinary voting power on a fully diluted basis; or
  (b) at any time as of or after the consummation of a Qualifying IPO, (A) any
  “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the
  Securities Exchange Act of 1934, but excluding any employee benefit plan of
  such person and its subsidiaries, and any person or entity acting in its
  capacity as trustee, agent or other fiduciary or administrator of any such
  plan, and excluding the Permitted Holders) shall become the “beneficial
  owner” (within the meaning of Rules 13d-3 and 13d-5 under the Securities
  Exchange Act of 1934), directly or indirectly, of outstanding Stock having
  more than thirty-five percent (35%) of the ordinary voting power of the
  Qualifying IPO Issuer and (B) the Permitted Holders shall own outstanding
  Stock having a lesser percentage of the ordinary voting power of the
  Qualifying IPO Issuer at such time; or (c) during any period of twelve (12)
  consecutive months, the Board of Directors of Holdings (or, after the
  consummation of a Qualifying IPO, the Qualifying IPO Issuer) shall not, for
  any reason other than death or disability, consist of a majority of the
  Continuing Directors; or (d) Holdings ceases to own and control all of the
  voting rights associated with all of the outstanding Stock of Parent
  Borrower. “Charges” means all federal, state, county, city, municipal, local,
  foreign or other governmental taxes (including premiums and other amounts
  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, wherever located. “Closing Checklist” means the schedule,
  including all appendices, exhibits or schedules thereto, listing certain
  documents and information to be delivered in connection with this Agreement,
  the other Loan Documents and the transactions contemplated thereunder,
  substantially in the form attached hereto as Annex C. confidential
  confidential 

  

 

	
  

  	
  A-10 “Closing
  Date” means October 1, 2010. “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 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 Secured Party’s Lien
  on any Collateral is governed by the Uniform Commercial Code as enacted and
  in effect in a 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 Agreement, the Mortgages and the other Collateral Documents and any
  other property of any of the Credit Parties, 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 the Secured Parties, to secure the Obligations or any portion
  thereof. “Collateral Documents” means the Security Agreement, the Pledge
  Agreement, the Guaranty, the Mortgages, the Patent Security Agreements, the
  Trademark Security Agreements, the Copyright Security Agreements, the Control
  Agreements and all similar agreements entered into guaranteeing payment of,
  or granting a Lien upon property of any of the Credit Parties as security for
  payment of, the Obligations or any portion thereof. “Commitment Termination
  Date” means the earliest of (a) the date which is the fifth anniversary of
  the Restatement Effective Date, (b) the date of termination of Lenders’
  obligations to make Advances and to incur Letter of Credit Obligations or
  permit existing Revolving Loans to remain outstanding pursuant to Section
  6.3, (c) the date of (i) prepayment in full by Borrowers of the Revolving
  Loans, (ii) 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 Section 1.5(f), and (iii) the permanent reduction of
  the Revolving Loan Commitments to zero Dollars ($0) and (d) the date that is
  ninety days prior to the maturity date of the Second Lien Notes to the extent
  any Second Lien Notes remain outstanding on such date. “Compliance and
  Pricing Certificate” has the meaning specified in Section 4.1(m).
  “Concentration Account” means any cash collateral account (which may be a
  deposit account or a securities account) that is (a) established by Agent
  from time to time in its sole discretion to receive cash and Cash Equivalents
  (or purchase cash or Cash Equivalents with funds received) from the Credit
  Parties or Persons acting on their behalf pursuant to the Loan Documents, (b)
  with such depositaries and securities intermediaries as Agent may determine
  in its sole discretion, (c) in the name of Agent (although such account may
  also have words referring to a Borrower and the account’s purpose), (d) under
  the control of Agent and (e) in the case of a securities account, with
  respect to which Agent shall be the Entitlement Holder (as confidential
  confidential 

  

 

	
  

  	
  A-11 defined in
  the Code) and the only Person authorized to give Entitlement Orders (as
  defined in the Code). “Consent Solicitation” means the solicitation pursuant
  to that certain Consent Solicitation Statement, dated October 15, 2013, of
  Neff Rental LLC and Neff Finance in connection with the amendment of the
  Second Lien Notes Indenture and the Intercreditor Agreement (as amended,
  restated, supplemented or otherwise modified from time to time).
  “Consolidated EBITDA” means, for any period, an amount equal to Consolidated
  Net Income of Parent Borrower and its Subsidiaries on a consolidated basis in
  accordance with GAAP plus (a) the following to the extent deducted in
  calculating such Consolidated Net Income, but without duplication: (i) any
  provision for taxes based on income, capital or profits, including state,
  franchise and similar taxes and foreign withholding taxes paid or accrued
  during such period (net of any credits applicable to any such taxes utilized
  or accrued during such period), (ii) total Interest Expense and, to the
  extent not reflected in such total Interest Expense, any losses on hedging
  obligations or other derivative transactions entered into for the purpose of
  hedging interest rate risk, net of interest income and gains on such hedging
  obligations, (iii) depreciation and amortization expense, (iv) amortized debt
  discount, (v) cash expenses incurred in connection with the consummation of
  Permitted Acquisitions, the issuance of Qualified Stock or the incurrence of
  Indebtedness (in each case, whether or not the applicable Permitted
  Acquisition, issuance of Qualified Stock or incurrence of Indebtedness is
  consummated), (vi) all non-cash charges and non-cash losses (including the
  amount of (A) any compensation deduction as the result of any grant of Stock
  to employees, officers, directors, managers or members of management and (B)
  asset write-downs but excluding the write-down of any Accounts), (vii) cash
  expenses of a business acquired in connection with a Permitted Acquisition
  that will be eliminated within six months after the consummation of such
  acquisition which are either (x) permitted to be excluded by the Securities
  and Exchange Commission under Regulation S-X or (y) otherwise reasonably
  satisfactory to Agent, (viii) [Reserved], (ix) expenses incurred in
  connection with the consummation of the Related Transactions (as defined in
  the Existing Credit Agreement) to the extent such expenses were incurred
  within six months of the Closing Date, (x) expenses attributable to minority
  interests (excluding dividends and other distributions paid or payable in
  cash to the holders of such minority interests), (xi) any non-cash charge,
  expense or other impact attributable to application of the purchase method of
  accounting (including the total amount of depreciation and amortization, cost
  of sales or other non-cash expense resulting from the write-up of assets to
  the extent resulting from such purchase accounting adjustments), (xii)
  expenses in connection with rental splits, (xiii) fees, costs, expenses and
  charges related to the 2011 Special Distribution and any fees, costs,
  expenses and charges related to the 2011 Notes Transactions, (xiv) expenses
  and charges in connection with impairment of goodwill and other intangible
  assets, (xv) out-of-pocket expenses incurred by Wayzata or its Affiliates (or
  any of its principals, employees, agents or other representatives) in
  connection with its performance of management, consulting, monitoring,
  financial advisory or other services provided to Holdings and its
  Subsidiaries to the extent permitted hereunder, (xvi) [Reserved] and (xvii)
  any fees, costs, expenses or charges related to, or arising in connection
  with, this Agreement, the transactions contemplated hereby and the 2013 Notes
  Transactions (including any payment of fees under the Fee Letters and any
  consent payments paid in connection with the Consent Solicitation) and minus
  (b) the following to the extent included in calculating such Consolidated Net
  Income, but without duplication: (i) net after tax income from the early
  extinguish of indebtedness or hedging confidential confidential 

  

 

	
  

  	
  A-12
  obligations or other derivative instruments, (ii) gains from extraordinary
  items (net of loss from extraordinary items), (iii) any aggregate net gain
  (but not any aggregate net loss) arising from the sale, exchange or other
  disposition of capital assets (including any fixed assets, whether tangible
  or intangible, all Inventory sold in conjunction with the disposition of
  fixed assets and all Stock and other securities) excluding gains from the
  sale of Rental Fleet and Equipment and Inventory in the ordinary course of
  business and (iv) all non-cash items increasing Consolidated Net Income
  including the reversal of any non-cash charge or non-cash loss (in each case
  of or by Parent Borrower and its Subsidiaries for such period).
  Notwithstanding anything to the contrary in the foregoing, upon the
  consummation of a Permitted Acquisition, Consolidated EBITDA will be
  calculated on a pro forma basis to give effect to such Permitted Acquisition
  as if such Permitted Acquisition was completed on the first day of the
  applicable measurement period; provided that (a) income statement items
  attributable to the target acquired shall be included to the extent relating
  to any period applicable in such calculations to the extent (i) such items
  are not otherwise included in such income statement items for Parent Borrower
  and its Subsidiaries in accordance with GAAP or in accordance with this
  definition and (ii) such items are supported by financial statements or other
  information reasonably satisfactory to the Agent and (b) any Indebtedness
  incurred or assumed by any Borrower or any of its Subsidiaries (including
  target) in connection with such transaction and any Indebtedness of target
  which is assumed but not retired in connection with such transaction (i)
  shall be deemed to have been incurred as of the first day of the applicable
  measurement period and (ii) if such Indebtedness has a floating or formula
  rate, shall have an implied rate of interest for the applicable measurement period
  for purposes of this definition determined by utilizing the rate which is or
  would be in effect with respect to such Indebtedness as at the relevant date
  of determination. “Consolidated Net Income” means, for any period, the
  consolidated net income (or loss) of Parent Borrower and its Subsidiaries,
  determined on a consolidated basis in accordance with GAAP; provided that
  there shall be excluded from such net income (to the extent otherwise
  included therein), without duplication: (a) the net income (or loss) of any
  Person (other than a Subsidiary of Parent Borrower) in which any Person other
  than Parent Borrower and its Subsidiaries has an ownership interest, except
  to the extent that cash in an amount equal to any such income has actually
  been received by Parent Borrower or (subject to clause (b) below) any of its
  Subsidiaries during such period; (b) the net income of any Subsidiary of
  Parent Borrower during such period to the extent that the declaration or
  payment of dividends or similar distributions by such Subsidiary of that
  income is not permitted by operation of the terms of its organizational
  documents or any agreement, instrument or requirement of law applicable to
  that Subsidiary during such period; and (c) the net income (or loss) of any
  Person accrued prior to the date it became a Subsidiary of, or was merged or
  consolidated into, Parent Borrower or any of its Subsidiaries. confidential
  confidential 

  

 

	
  

  	
  A-13
  “Consolidated Secured Indebtedness” means an amount equal to the aggregate
  principal amount of Indebtedness under this Agreement and any Parity Lien
  Debt that is secured by Liens on property or assets of any of the Credit
  Parties and secured refinancings thereof and any other Indebtedness incurred
  pursuant to Section 3.1(d) that is secured by Liens on property or assets of
  any of the Credit Parties (other than the Second Lien Notes and any
  Indebtedness issued, incurred or otherwise obtained in exchange for, or to
  renew, replace or refinance, in whole or in part, the Second Lien Notes or
  any such refinancing Indebtedness). “Consolidated Secured Leverage Ratio”
  means, as of any date of determination, the ratio of (x) Consolidated Secured
  Indebtedness as at such date (after giving effect to any incurrence or
  discharge of Indebtedness on such date) to (y) Consolidated EBITDA for the
  period of the most recent four consecutive Fiscal Quarters ending prior to
  the date of such determination for which consolidated Financial Statements of
  Holdings are available, provided that: (1) if since the beginning of such
  period any Credit Party shall have made an Asset Disposition to any Person
  that is not a Credit Party (other than Asset Dispositions that are permitted
  by Sections 3.7(a), 3.7(b) or 3.7(c)), the Consolidated EBITDA for such
  period shall be reduced by an amount equal to the Consolidated EBITDA (if
  positive) attributable to the assets that are the subject of such Asset
  Disposition for such period or increased by an amount equal to the
  Consolidated EBITDA (if negative) attributable thereto for such period; and
  (2) if since the beginning of such period any Credit Party (by merger,
  consolidation or otherwise) shall have made an acquisition of assets or Stock
  (including any acquisition occurring in connection with a transaction causing
  a calculation to be made hereunder), Consolidated EBITDA for such period
  shall be calculated after giving pro forma effect thereto as if such
  acquisition occurred on the first day of such period. For purposes of this
  definition, whenever pro forma effect is to be given to any Asset Disposition
  or acquisition or other transaction, or the amount of income or earnings
  relating thereto, the pro forma calculations in respect thereof (including
  without limitation in respect of anticipated cost savings and operations
  expense reductions relating to any such Asset Disposition, acquisition or
  other transaction) shall be as determined in good faith by a responsible
  financial or accounting officer of Holdings. “Consolidated Total Leverage
  Ratio” means, as of any date of determination, the ratio of (x) Indebtedness
  of Parent Borrower and its Subsidiaries as at such date (after giving effect
  to any incurrence or discharge of Indebtedness on such date) to (y)
  Consolidated EBITDA for the period of the most recent four consecutive Fiscal
  Quarters ending prior to the date of such determination for which
  consolidated Financial Statements of Holdings are available, provided that:
  (1) if since the beginning of such period any Credit Party shall have made an
  Asset Disposition to any Person that is not a Credit Party (other than Asset
  Dispositions that are permitted by Sections 3.7(a), 3.7(b) or 3.7(c)), the
  Consolidated EBITDA for such period shall be reduced by an amount equal to
  the Consolidated EBITDA (if confidential confidential 

  

 

	
  

  	
  A-14 positive)
  attributable to the assets that are the subject of such Asset Disposition for
  such period or increased by an amount equal to the Consolidated EBITDA (if
  negative) attributable thereto for such period; and (2) if since the
  beginning of such period any Credit Party (by merger, consolidation or
  otherwise) shall have made an acquisition of assets or Stock (including any
  acquisition occurring in connection with a transaction causing a calculation
  to be made hereunder), Consolidated EBITDA for such period shall be
  calculated after giving pro forma effect thereto as if such acquisition
  occurred on the first day of such period. For purposes of this definition,
  whenever pro forma effect is to be given to any Asset Disposition or
  acquisition or other transaction, or the amount of income or earnings
  relating thereto, the pro forma calculations in respect thereof (including
  without limitation in respect of anticipated cost savings and operations
  expense reductions relating to any such Asset Disposition, acquisition or
  other transaction) shall be as determined in good faith by a responsible
  financial or accounting officer of Holdings. “Contingent Obligation(s)”
  means, as applied to any Person, any direct or indirect liability of that
  Person: (a) with respect to Guaranteed Indebtedness and with respect to any
  Indebtedness, lease, dividend or other obligation of another Person if the
  purpose or intent of the Person incurring such liability, or the effect
  thereof, is to provide assurance to the obligee of such liability that such
  liability will be paid or discharged, or that any agreements relating thereto
  will be complied with, or that the holders of such liability will be
  protected (in whole or in part) against loss with respect thereto; (b) to
  make take-or-pay or similar payments if required regardless of nonperformance
  by any other party or parties to an agreement; or (c) pursuant to any
  agreement to purchase, repurchase or otherwise acquire any obligation or any
  property constituting security therefor, to provide funds for the payment or
  discharge of such obligation or to maintain the solvency, financial condition
  or any balance sheet item or level of income of another. The amount of any
  Contingent Obligation shall be equal to the amount of the obligation so
  guaranteed or otherwise supported or, if not a fixed and determined amount,
  the maximum amount so guaranteed. “Continuing Directors” means the directors
  or managers of Holdings on the Closing Date, after giving effect to the
  transactions contemplated hereby, and each other director or manager, if, in
  each case, such other director’s or manager’s nomination for election to the
  Board of Directors of Holdings (or the Qualifying IPO Issuer after a
  Qualifying IPO) is recommended by at least a majority of the then Continuing Directors
  or such other director or manager is approved by, or receives the vote of,
  the Permitted Holders in his or her election by the Stockholders of Holdings
  (or the Qualifying IPO Issuer after a Qualifying IPO). “Contractual
  Obligations” means, as applied to any Person, any indenture, mortgage, deed
  of trust, contract, undertaking, agreement or other instrument to which that
  Person is a party or by which it or any of its properties is bound or to
  which it or any of its properties is subject. “Control Agreements” means:
  confidential confidential 

  

 

	
  

  	
  A-15 (a) in the
  case of any bank account, a deposit account control agreement by and among
  the applicable Credit Party, Agent and the depository, in form customarily
  signed by Agent and otherwise in form and substance reasonably satisfactory
  in all respects to Agent (it being understood a form customarily signed by
  Agent is reasonably satisfactory) pursuant to which such depository
  acknowledges the security interest of Agent in the deposit account, agrees to
  comply with instructions originated by Agent directing disposition of the
  funds in the bank account without further consent from such Credit Party and
  agrees to subordinate and limit any security interest the bank may have in
  such bank account on terms reasonably satisfactory to Agent; (b) in the case
  of any securities account, a securities account control agreement by and
  among the applicable Credit Party, Agent and the securities intermediary, in
  form customarily signed by Agent and otherwise in form and substance
  reasonably satisfactory in all respects to Agent (it being understood a form
  customarily signed by Agent is reasonably satisfactory) pursuant to which
  such securities intermediary acknowledges the security interest of Agent in
  the securities account, agrees to comply with instructions originated by
  Agent directing disposition of the funds in the securities account without
  further consent from such Credit Party and agrees to subordinate and limit
  any security interest the securities intermediary may have in such securities
  account on terms reasonably satisfactory to Agent; and (c) in the case of any
  commodities account, a commodities account control agreement by and among the
  applicable Credit Party, Agent and the commodities intermediary, in form customarily
  signed by Agent and otherwise in form and substance reasonably satisfactory
  in all respects to Agent (it being understood a form customarily signed by
  Agent is reasonably satisfactory) pursuant to which such commodities
  intermediary acknowledges the security interest of Agent in the commodities
  account, agrees to comply with instructions originated by Agent directing
  disposition of the funds in the commodities account without further consent
  from such Credit Party and agrees to subordinate and limit any security
  interest the commodities intermediary may have in such commodities account on
  terms reasonably satisfactory to Agent. “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 the Secured Parties, by each
  applicable Credit Party. “Copyrights” means all of the following now owned or
  hereafter adopted or 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 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. confidential confidential 

  

 

	
  

  	
  A-16 “Cost”
  means, in respect of the cost of acquisition by any Borrower of any Rental
  Fleet and Equipment, the net cost of such Rental Fleet and Equipment to such
  Person after all cash and other discounts, premiums, rebates, advertising and
  other allowances and all other discounts or other allowances which may be
  allowed or taken by such Person against the purchase price of such Rental
  Fleet and Equipment. “Credit Parties” means Holdings, Parent Borrower, each
  of Parent Borrower’s Subsidiaries (other than Neff Finance) and each other
  Person, in each case, who executes this Agreement as a “Credit Party” or who
  executes a Joinder Agreement or who grants a Lien on all or part of its
  assets to secure all of part of the Obligations. “Currency Agreement” means
  any foreign exchange contracts, currency swap agreements or other similar
  agreements or arrangements designed to protect Parent Borrower or any
  Subsidiary of Parent Borrower against fluctuations in currency values.
  “Decision Agent” means, Agent. “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 Rate” has the meaning specified in Section 1.2(d).
  “Disbursement Account” has the meaning specified in Section 1.1(d).
  “Disqualified Stock” means that portion of any Stock which, by its terms (or
  by the terms of any security into which it is convertible or for which it is
  exchangeable at the option of the holder thereof), or upon the happening of
  any event (other than an event which would constitute a Change of Control),
  matures (excluding any maturity as the result of an optional redemption by
  the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
  obligation or otherwise, or is redeemable at the sole option of the holder
  thereof (except, in each case, upon the occurrence of a Change of Control) on
  or prior to the date that is five (5) years and six months after the
  Restatement Effective Date. “Documents” means any “document,” as such term is
  defined in the Code, including electronic documents, now owned or hereafter
  acquired by any Credit Party, wherever located. “Dollars” or “$” means lawful
  currency of the United States. “Domestic Person” means any “United States
  person” under and as defined in Section 7701(a)(30) of the IRC. “Domestic
  Subsidiary” means each Subsidiary of Parent Borrower that is organized under
  the laws of a state of the United States, the laws of the District of
  Columbia or the laws of the United States. “Eligible Accounts” has the
  meaning specified in Section 1.7. confidential confidential 

  

 

	
  

  	
  A-17 “Eligible
  Accounts Formula” means, on any date of determination, 85% of the net amount
  of Eligible Accounts at such time. “Eligible Rental Fleet and Equipment” has
  the meaning specified in Section 1.9. “Eligible Rental Fleet and Equipment
  Formula” means, on any date of determination, the lesser of (i) the Rental
  Fleet and Equipment NOLV Amount and (ii) 100% of the Net Book Value of
  Eligible Rental Fleet and Equipment. “Environmental Laws” means all
  applicable federal, state, local and foreign laws, statutes, ordinances,
  codes, rules and regulations, now or hereafter in effect, and any applicable
  and legally enforceable 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 (i) human health and safety (to the
  extent related to exposure to Hazardous Materials) and (ii) the environment
  and natural resources (including ambient air, indoor air, surface water,
  groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
  species and vegetation). Environmental Laws include 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 environmental 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 (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 liability or common law 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 or registrations required by any
  Governmental Authority under any Environmental Laws. “Equipment” 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 confidential confidential 

  

 

	
  

  	
  A-18 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. “ERISA” means the Employee
  Retirement Income Security Act of 1974, as amended from time to time, 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, are treated as a single employer within the
  meaning of Section 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; (b)
  the withdrawal of any 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 any 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 any Credit Party or ERISA Affiliate to make when due required
  contributions to a Multiemployer Plan or Title IV Plan; (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; (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; (i)
  the loss of a Qualified Plan’s qualification or tax exempt status; or (j) the
  termination of a Plan described in Section 4064 of ERISA. “Event of Default”
  has the meaning specified in Section 6.1. “Excess Availability” means as of
  any date of determination (a) the Borrowing Base less (b) the Revolving Loans
  then outstanding (including, without duplication, the then outstanding
  balance of Swing Line Loans and Letter of Credit Obligations (other than
  Letter of Credit Obligations that are secured by cash collateral or a standby
  letter of credit (in form and substance and from an issuer satisfactory to
  Agent) in an amount equal to 105% of such Letter of Credit Obligations)).
  “Excluded Taxes” has the meaning specified in Section 1.13(a). “Fair Labor
  Standards Act” means the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.
  confidential confidential 

  

 

	
  

  	
  A-19 “FATCA”
  means Sections 1471 through 1474 of the IRC, as of the date hereof (or any
  amended or successor version that is substantively comparable and not
  materially more onerous to comply with), and any regulations or
  administrative authority promulgated thereunder, and any agreements entered
  into pursuant to Section 1471(b)(1) of the IRC as in effect on the date
  hereof (or any amended or successor version that is substantively comparable
  and not materially more onerous to comply with) and any intergovernmental
  agreements implementing the foregoing. “Federal Assignment of Claims Act of
  1940” means the Assignment of Claims Act of 1940, 31 U.S.C. § 3727 et seq.
  “Federal Funds Rate” means, for any day, the rate per annum equal to the
  weighted average of the rates on overnight federal funds transactions with
  members of the Federal Reserve System arranged by federal funds brokers on
  such day, as published by the Federal Reserve Bank of New York on the
  Business Day next succeeding such day; provided that (a) if such day is not a
  Business Day, the Federal Funds Rate for such day shall be such rate on such
  transactions on the next preceding Business Day as so published on the next
  succeeding Business Day, and (b) if no such rate is so published on such next
  succeeding Business Day, the Federal Funds Rate for such day shall be the
  average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
  1%) charged to Bank of America on such day on such transactions as determined
  by Agent. “Fee Letters” means, collectively, the Arranger Fee Letter and the
  Agent Fee Letter. “Fees” means any and all fees payable to Agent, Arranger,
  the Decision Agent, L/C Issuer or any Lender pursuant to this Agreement or
  any of the other Loan Documents. “Financial Statements” means the
  consolidated income statements, statements of cash flows and balance sheets
  of Holdings and its Subsidiaries delivered in accordance with Sections
  4.1(a), 4.1(b), and 4.1(c). “Fiscal Month” means any of the monthly
  accounting periods of Parent Borrower. “Fiscal Quarter” means any of the
  quarterly accounting periods of Parent Borrower, ending on March 31, June 30,
  September 30 and December 31 of each year. “Fiscal Year” means any of the
  annual accounting periods of Parent Borrower ending on December 31 of each
  year. “Fixed Charge Coverage Ratio” means, as of any date of determination,
  the ratio of (a) Consolidated EBITDA for the most recent period of four
  consecutive Fiscal Quarters of Parent Borrower ending prior to the date of
  such determination for which consolidated Financial Statements of Holdings
  are available minus the aggregate amount of all Capital Expenditures of
  Parent Borrower and its Subsidiaries for such period (excluding the aggregate
  principal amount of Indebtedness expressly permitted under Section 3.1 (other
  than Indebtedness incurred under this Agreement) incurred to finance such
  Capital Expenditures and, without duplication of amounts netted from Capital
  Expenditures, the net proceeds of any used equipment disposals, in
  confidential confidential 

  

 

	
  

  	
  A-20 each case,
  to the extent Capital Expenditures for purposes of this calculation are above
  zero and for the avoidance of doubt any gains from the sale of Rental Fleet
  and Equipment and Inventory in the ordinary course of business shall not be
  netted against Capital Expenditures for purposes of calculating the Fixed
  Charge Coverage Ratio) to (b) the sum of (i) Interest Expense of Parent
  Borrower and its Subsidiaries for such period, (ii) the aggregate principal
  amount of all regularly scheduled principal or amortization payments on
  Indebtedness of Parent Borrower and its Subsidiaries for such period, but
  excluding any such payments to the extent refinanced through the incurrence
  of additional Indebtedness expressly permitted under Section 3.1, (iii) the
  aggregate amount of Federal, state, local and foreign income, capital or
  profits taxes, including franchise and similar taxes and foreign withholding
  taxes of Parent Borrower and its Subsidiaries for such period, paid in cash,
  in each case, by Parent Borrower and its Subsidiaries and (iv) Restricted
  Payments paid by Holdings and its Subsidiaries after the Restatement
  Effective Date pursuant to Sections 3.5(a), (e), (f) and (i). For purposes of
  calculating the Fixed Charge Coverage Ratio, for any period, in the event
  that Parent Borrower or any of its Subsidiaries incurs, assumes, guarantees,
  repays, repurchases, redeems, defeases or otherwise discharges any
  Indebtedness (other than ordinary working capital borrowings and Indebtedness
  incurred in connection with the 2013 Special Distribution) or issues,
  repurchases or redeems preferred stock or Disqualified Stock subsequent to
  the commencement of the period for which the relevant calculation is being
  calculated and on or prior to the date on which the event for which the
  relevant calculation is made, then the relevant calculation will be
  calculated giving pro forma effect to such incurrence, assumption, guarantee,
  repayment, repurchase, redemption, defeasance or other discharge of
  Indebtedness, or such issuance, repurchase or redemption of preferred stock
  or Disqualified Stock, and the use of the proceeds therefrom, as if the same
  had occurred at the beginning of the applicable period. In addition, for
  purposes of the relevant calculation: (1) Investments, acquisitions, mergers,
  consolidations and dispositions of assets comprising a business unit that
  have been made by Parent Borrower or any of its Subsidiaries, or any Person
  or any of its Subsidiaries acquired by, or merged or consolidated with,
  Parent Borrower or any of its Subsidiaries during the applicable period will
  be given pro forma effect, as if they had occurred on the first day of the
  twelvemonth reference period; (2) the Consolidated EBITDA attributable to
  discontinued operations, as determined in accordance with GAAP, and
  operations or businesses (and ownership interests therein) disposed of prior
  to the calculation date, will be excluded; (3) the fixed charges attributable
  to discontinued operations, as determined in accordance with GAAP, and
  operations or businesses (and ownership interests therein) disposed of prior
  to the calculation date, will be excluded, but only to the extent that the
  obligations giving rise to such fixed charges will not be obligations of
  Parent Borrower or any of its Subsidiaries following the calculation date;
  (4) any Person that is a Subsidiary on the calculation date will be deemed to
  have been a Subsidiary at all times during the applicable period;
  confidential confidential 

  

 

	
  

  	
  A-21 (5) any
  Person that is not a Subsidiary on the calculation date will be deemed not to
  have been a Subsidiary at any time during the applicable period; and (6) if
  any Indebtedness bears a floating rate of interest, the cash interest expense
  on such Indebtedness will be calculated as if the rate in effect on the
  calculation date had been the applicable rate for the entire period (taking
  into account any hedging agreement permitted hereunder applicable to such
  Indebtedness). For purposes of this definition, whenever pro forma effect is
  given to a transaction, the pro forma calculations shall be made in
  accordance with Regulation S-X of the Securities Act of 1933, as amended.
  Interest on a Capital Lease Obligation shall be deemed to accrue at an
  interest rate reasonably determined by the chief financial officer of Parent
  Borrower to be the rate of interest implicit in such Capital Lease Obligation
  in accordance with GAAP. For purposes of making the computation referred to
  above, interest on any Indebtedness under a revolving credit facility
  computed on a pro forma basis shall be computed based upon the average daily
  balance of such Indebtedness during the applicable period. Interest on
  Indebtedness that may optionally be determined at an interest rate based upon
  a factor of a prime or similar rate, a eurocurrency interbank offered rate,
  or other rate, shall be deemed to have been based upon the rate actually
  chosen, or, if none, then based upon such optional rate chosen as Parent
  Borrower may designate. “Fixtures” means all “fixtures” as such term is
  defined in the Code, now owned or hereafter acquired by any Credit Party.
  “Foreign Lender” has the meaning specified in Section 1.13(c). “Foreign
  Subsidiary” means each Subsidiary of Parent Borrower other than a Domestic
  Subsidiary. “Funding Date” has the meaning specified in Section 7.2. “GAAP”
  means generally accepted accounting principles in the United States, as in
  effect from time to time; provided, however, that all calculations relative
  to liabilities shall be made without giving effect to the Statement of
  Financial Accounting Standards No. 159. “General Intangibles” means “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 Contractual
  Obligation, 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
  confidential confidential 

  

 

	
  

  	
  A-22 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 all tapes, cards, computer runs and other papers
  and documents in the 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. “Goods” means any “goods,” as such term is 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. “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 obligation”) 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 (i) the stated or determinable amount of the
  primary obligation in respect of which such Guaranteed Indebtedness is
  incurred and (ii) 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. “Guaranty” means
  the Guaranty dated as of the Closing Date, as amended, restated, supplemented
  or otherwise modified from time to time, entered into by Holdings in favor of
  Agent, for the benefit of the Secured Parties. “Hazardous Material” means any
  chemical, compound, substance, material or waste or constituent thereof in
  any form 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
  confidential confidential 

  

 

	
  

  	
  A-23 any
  Environmental Laws, or (b) petroleum or any fraction or by-product thereof,
  asbestos, polychlorinated biphenyls (PCBs), or any radioactive substance.
  “Hedging Agreement” means any agreement with respect to the hedging of price
  risk associated with the purchase of commodities used in the business of
  Parent Borrower and its Subsidiaries, as such agreements may be amended,
  amended and restated, or supplemented from time to time. “Holdings” has the
  meaning specified in the introductory paragraph to this Agreement. “Increased
  Amount Date” shall have the meaning provided in Section 1.14. “Incremental
  Revolving Commitments” shall have the meaning provided in Section 1.14.
  “Incremental Revolving Loan” shall have the meaning provided in Section 1.14.
  “Incremental Revolving Loan Lender” shall have the meaning provided in
  Section 1.14. “Indebtedness” means, with respect to any Person, without
  duplication (a) all indebtedness of such Person for borrowed money or for the
  deferred purchase price of property 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 not overdue by 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 that would be Capital Lease Obligations under GAAP as in effect
  on the Closing Date and the present value (discounted at the Base Rate as in
  effect on the Closing Date) of future rental payments under all synthetic
  leases, (f) all net obligations of such Person under commodity purchase or
  option agreements or other commodity price hedging arrangements, (g) all net
  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, (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) ”earnouts” and similar
  payment obligations. “Indemnitee” has the meaning specified in Section 9.1.
  “Ineligible Accounts” has the meaning specified in Section 1.7. confidential
  confidential 

  

 

	
  

  	
  A-24
  “Ineligible Rental Fleet and Equipment” has the meaning specified in Section
  1.9. “Insolvency or Liquidation Proceeding” means (i) any voluntary or
  involuntary case or proceeding under the Bankruptcy Code or any other
  Bankruptcy Law with respect to any Credit Party, (ii) any other voluntary or
  involuntary insolvency, reorganization or bankruptcy case or proceeding, or
  any receivership, liquidation, reorganization or other similar case or
  proceeding with respect to any Credit Party or with respect to a material
  portion of their respective assets, (iii) any liquidation, dissolution,
  reorganization or winding up of any Credit Party whether voluntary or
  involuntary and whether or not involving insolvency or bankruptcy or (iv) any
  assignment for the benefit of creditors or any other marshalling of assets
  and liabilities of any Credit Party. “Instruments” means all “instruments,”
  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 indebtedness, other than instruments that constitute, or are a
  part of a group of writings that constitute, Chattel Paper. “Insurance
  Trigger Event” has the meaning specified in Section 2.2(c). “Intellectual
  Property” means any and all Licenses, Patents, Copyrights, Trademarks, and
  the goodwill associated with such Trademarks. “Intercompany Note” means any
  promissory note evidencing loans made by any Credit Party to Parent Borrower
  or any of its Subsidiaries. “Intercreditor Agreement” means the Intercreditor
  Agreement, dated as of May 5, 2011, among the Agent and the collateral agent
  for the Second Lien Notes and the other indebtedness described therein, as
  the same may be amended, restated, modified or waived from time to time.
  “Interest Expense” means, with reference to any period, total cash interest
  expense (including that attributable to Capital Lease Obligations) of Parent
  Borrower and its Subsidiaries for such period with respect to all outstanding
  Indebtedness of Parent Borrower and its Subsidiaries (including all commissions,
  discounts and other fees and charges owed with respect to letters of credit
  and bankers’ acceptance financing and net costs under Hedging Agreements in
  respect of interest rates), calculated on a consolidated basis for Parent
  Borrower and its Subsidiaries for such period in accordance with GAAP.
  “Interest Payment Date” means (a) as to any Base Rate Loan, the first
  Business Day of each Fiscal Quarter 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 (i) the date upon which all of the Revolving Loan
  Commitments have terminated and the Loans have been paid in full, (ii) the
  Commitment Termination Date and (iii) the Restatement Effective Date, shall
  be deemed to be an “Interest Payment Date” with respect to any interest that
  has then accrued under this Agreement or any other Loan Document.
  confidential confidential 

  

 

	
  

  	
  A-25 “Interest
  Rate Agreement” means any interest rate swap agreement, interest rate cap
  agreement, interest rate collar agreement or similar agreement or arrangement
  designed to protect Parent Borrower against fluctuations in interest rates.
  “Inventory” means any “inventory,” as such term is defined in the Code,
  including Rental Fleet and Equipment, now owned or hereafter acquired by any Credit
  Party, wherever located, 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, supplies or materials 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” means (a)
  any direct or indirect purchase or other acquisition by Holdings or any of
  its Subsidiaries of any Stock, or other ownership interest in, any other
  Person, and (b) any direct or indirect loan, advance or capital contribution
  by Holdings or any of its Subsidiaries to any other Person, including all
  indebtedness and accounts receivable from that other Person that are not
  current assets or did not arise from sales to that other Person in the
  ordinary course of business. The amount of any Investment shall be the
  initial amount of such Investment and any addition thereto, as reduced by any
  repayment of principal (in the case of an Investment constituting Indebtedness)
  or any distribution constituting a return of capital (in the case of any
  other Investment). “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: (a) all securities, whether
  certificated or uncertificated, including stocks, bonds, interests in limited
  liability companies, partnership interests, treasuries, certificates of
  deposit, and mutual fund shares; (b) all securities entitlements of any
  Credit Party, including the rights of such 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; (c) all securities
  accounts of any Credit Party; (d) all commodity contracts of any Credit
  Party; and (e) all commodity accounts held by any Credit Party. “IRC” means
  the Internal Revenue Code of 1986, as amended, and all regulations
  promulgated thereunder. “IRS” means the Internal Revenue Service. “Joinder
  Agreement” means a joinder agreement, in substantially the form of Exhibit A
  to the Existing Credit Agreement or such other documentation acceptable to
  Agent pursuant to which any Subsidiary of Parent Borrower becomes a party to
  this Agreement, the Pledge Agreement and the Security Agreement after the
  Closing Date. “Landlord Lien State” means such state(s) or jurisdictions in
  which a landlord’s claim for rent or other obligations has priority over the
  Lien of Agent in any of the Collateral. confidential confidential 

  

 

	
  

  	
  A-26 “L/C
  Issuer” means Bank of America or a Subsidiary thereof or a bank or other
  legally authorized Person selected by or reasonably acceptable to Agent, in such
  Person’s capacity as an issuer of Letters of Credit hereunder. “L/C Sublimit”
  has the meaning specified in Section 1.1(c)(i). “Lenders” means Bank of
  America and the other Lenders named on the signature pages of this Agreement,
  and, if any such Lender shall decide to assign all or any portion of the
  Obligations as provided in Section 8.1, such term shall include any Qualified
  Assignees of such Lender and each other assignee of such Lender permitted
  under Section 8.1(a). “Letter of Credit Fee” has the meaning specified in
  Section 1.3(c). “Letter of Credit Obligations” means all outstanding
  obligations incurred by Agent and Lenders at the request of a Borrower,
  whether direct or indirect, contingent or otherwise, due or not due, in
  connection with the issuance of Letters of Credit by L/C Issuers or the
  purchase of a participation as set forth in Section 1.1(c) with respect to
  any Letter of Credit. The amount of such Letter of Credit Obligations shall
  equal the maximum amount that may be payable by Agent and Lenders thereupon
  or pursuant thereto. “Letters of Credit” means standby letters of credit
  issued for the account of a Borrower by L/C Issuer for which Agent and
  Lenders have incurred Letter of Credit Obligations. “LIBOR Breakage Fee”
  means an amount equal to the amount of any losses, expenses, liabilities
  (excluding loss of profit) that any Lender may sustain as a result of (a) any
  default by a Borrower in making any borrowing of, conversion into or
  continuation of any LIBOR Loan following a Borrower’s delivery to Agent of
  any LIBOR Loan request in respect thereof or (b) any payment of the principal
  amount of a LIBOR Loan on any day that is not the last day of the LIBOR
  Period applicable thereto (regardless of the source of such prepayment and
  whether voluntary, by acceleration or otherwise). For purposes of calculating
  amounts payable to a Lender under Section 1.3(d), each Lender shall be deemed
  to have actually funded its relevant LIBOR Loan through the purchase of a
  deposit bearing interest at the LIBOR Rate in an amount equal to the amount
  of that LIBOR Loan and having a maturity and repricing characteristics
  comparable to the relevant LIBOR Period; provided, however, 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 Section 1.3(d). “LIBOR Loans” 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 Business Day selected
  by a Borrower pursuant to this Agreement and ending one, two, three or six
  months (or twelve months if agreed to by all Revolving Lenders) thereafter,
  as selected by a Borrower in its irrevocable notice delivered to Agent in
  accordance with Section 1.1(a) or Section 1.2(e), as the context requires;
  provided that the foregoing provision relating to LIBOR Periods is subject to
  the following: confidential confidential 

  

 

	
  

  	
  A-27 (a) if any
  LIBOR Period would otherwise end on a day that is not a Business Day, such
  LIBOR Period shall be extended to the next succeeding 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 Business Day; (b) any LIBOR Period that would otherwise extend
  beyond the date set forth in clause (a) of the definition of “Commitment
  Termination Date” shall end two (2) Business Days prior to such date; (c) any
  LIBOR Period that begins on the last Business Day of a calendar month (or on
  a day for which there is no numerically corresponding day in the calendar
  month at the end of such LIBOR Period) shall end on the last Business Day of
  a calendar month; (d) Borrowers 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) Borrowers shall select LIBOR Periods so that there shall
  be no more than 8 separate LIBOR Loans in existence at any one time. “LIBOR
  Rate” means, for any LIBOR Period with respect to a LIBOR Loan, the per annum
  rate of interest (rounded up, if necessary, to the nearest 1/8th of 1%)
  determined by Agent at or about 11:00 a.m. (London time) two Business Days
  prior a LIBOR Period, for a term equivalent to such LIBOR Period, equal to
  the London Interbank Offered Rate, or comparable or successor rate approved
  by Agent, as published on the applicable Reuters screen page (or other
  commercially available source designated by Agent from time to time);
  provided, that any such comparable or successor rate shall be applied by
  Agent, if administratively feasible, in a manner consistent with market
  practice. “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).
  “Litigation” has the meaning specified in Section 4.1(j). “Loan Account” as
  the meaning specified in Section 1.11. “Loan Documents” means this Agreement,
  the Notes, the Collateral Documents, the Intercreditor Agreement, the Fee
  Letters (other than for purposes of Section 9.2), and all other agreements,
  instruments, documents and certificates 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 confidential confidential 

  

 

	
  

  	
  A-28 executed
  by or on behalf of any Credit Party, or any employee of any Credit Party, and
  delivered to Agent or any Lender in connection with this Agreement or the
  transactions contemplated thereby. Any reference in this Agreement or any
  other Loan Document 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 this 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. “Management Buyout
  Amount” means $2,000,000 in the aggregate during any Fiscal Year, plus the unused
  amount remaining from the prior Fiscal Year. “Material Adverse Effect” means
  a material adverse effect on, or material adverse developments with respect
  to, (a) the business operations, properties, assets or condition (financial
  or otherwise) of Holdings and its Subsidiaries, taken as a whole, (b) the
  legality, validity, binding effect or enforceability against a Credit Party
  of any Loan Document to which it is a party, (c) the ability of any Credit
  Party to fully and timely perform its Obligations and (d) the rights,
  remedies and benefits available to, or conferred on, Agent, any Lender or any
  Secured Party under any Loan Document. “Maximum Amount” means, as of any date
  of determination, an amount equal to the Revolving Loan Commitments of all
  Lenders as of that date. The Maximum Amount in effect on the Restatement
  Effective Date is equal to $375,000,000. “Maximum Lawful Rate” has the
  meaning specified in Section 1.2(f). “Moody’s” means Moody’s Investors
  Service, Inc. “Mortgaged Property” means all property that is subject to the
  Mortgages. “Mortgages” means each of the mortgages, deeds of trust, leasehold
  mortgages, leasehold deeds of trust, collateral assignments of leases or
  other real estate security documents delivered by any Credit Party to Agent on
  behalf of itself and the Secured Parties with respect to the Real Estate.
  “Multiemployer Plan” means a “multiemployer plan,” as defined in Section
  4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
  making, is obligated to make or has made or been obligated to make,
  contributions on behalf of participants who are or were employed by any of
  them. “Neff Finance” means Neff Rental Finance Corp., a Delaware corporation.
  “Net Book Value” means Cost minus accumulated depreciation that is calculated
  in accordance with GAAP. “Net Orderly Liquidation Value” means, with respect
  to any Rental Fleet and Equipment and as determined by an Approved Appraiser,
  a net expected dollar amount to be realized at an orderly negotiated sale of
  such Rental Fleet and Equipment held within a confidential confidential 

  

 

	
  

  	
  A-29 reasonable
  period of time (but in any event within one hundred eighty (180) days) as of
  the date of such determination. “Net Proceeds” means cash proceeds received
  by Holdings or any of its Subsidiaries from any Asset Disposition (including
  insurance proceeds, awards of condemnation, and payments under notes or other
  debt securities received in connection with any Asset Disposition), net of
  (i) the costs of such Asset Disposition (including taxes attributable
  thereto) and (ii) amounts applied to repayment of Indebtedness (other than
  the Obligations) secured by a Lien on the asset or property disposed. “NOLV
  Appraisal” means an appraisal, in form and substance reasonably satisfactory
  to the Decision Agent, conducted by an Approved Appraiser pursuant to which
  such Approved Appraiser determines the net expected dollar amount to be
  realized at an orderly negotiated sale of the Rental Fleet and Equipment held
  within a reasonable period of time. “NOLV Appraisal Presentment Date” means
  the date on which an NOLV Appraisal is conducted or performed, which date
  shall in any event be as of the last day of each Fiscal Quarter of Holdings
  and its Subsidiaries. “Non-Consenting Lender” has the meaning specified in
  Section 9.19(c)(i). “Non-Funding Lender” has the meaning specified in Section
  8.5(a)(ii). “Notes” means, collectively, the Revolving Notes and the Swing
  Line Notes. “Notice of Conversion/Continuation” has the meaning specified in
  Section 1.2(e). “Notice of Revolving Credit Advance” has the meaning
  specified in Section 1.1(a)(i). “Notice of Swing Line Advance” has the
  meaning specified in Section 1.1(b)(i). “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), including Cash Management Obligations,
  obligations pursuant to Related Swap Contracts and Letter of Credit
  Obligations, owing by any Credit Party to Agent or any Lender or, solely to
  the extent arising in respect of any Cash Management Obligation or Related
  Swap Contract, to any Affiliate of any Lender or Agent or to a Person who was
  an Affiliate of, or an, Agent or Lender, at the time such item was entered
  into, and all covenants and duties regarding such amounts, of any kind or
  nature, present or future, whether or not evidenced by any note, agreement or
  other instrument, arising under this Agreement or any of the other Loan
  Documents, Cash Management Documents or any Related Swap Contract. 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 or allowable in such case or proceeding),
  Fees, Charges (excluding any Excluded Taxes), expenses, attorneys’ fees and
  any other sum chargeable to any Credit Party under this Agreement or any of
  the other Loan Documents. confidential confidential 

  

 

	
  

  	
  A-30 “Other
  Lender” has the meaning specified in Section 8.5(d). “Other Taxes” has the
  meaning specified in Section 1.13(f). “Overadvance” has the meaning specified
  in Section 1.1(a)(i). “Parent Borrower” has the meaning specified in the
  introductory paragraph to this Agreement. “Parity Lien Debt” means (a)
  Indebtedness with a maturity that is the same as or later than the Second
  Lien Notes (excluding the Second Lien Notes and any refinancing and subsequent
  refinancings of the Second Lien Notes) up to an amount, after giving effect
  to the incurrence of such Indebtedness, such that the Consolidated Secured
  Leverage Ratio does not exceed 3.0 to 1.0 immediately after giving effect to
  the incurrence of such Indebtedness and the application of the proceeds
  thereof and (b) any Indebtedness that has been issued, incurred or otherwise
  obtained in exchange for, or to renew, replace or refinance, in whole or in
  part, any Indebtedness incurred under clause (a) of this definition or any
  Indebtedness incurred under this clause (b), subject to the proviso set forth
  in Section 3.1(d); provided however that no amortization payments may be
  included in or be made on any Indebtedness incurred under clause (a) or (b)
  of this definition. For the avoidance of doubt, Parity Lien Debt, if secured,
  shall be subject to the Intercreditor Agreement or a substantially similar
  intercreditor agreement pursuant to which the Liens securing such Parity Lien
  Debt shall be junior in priority to the Liens securing the Obligations.
  “Participant Register” has the meaning specified in Section 8.1. “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
  the Secured Parties, 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 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. “Perfection
  Certificate” means a certificate dated the Restatement Effective Date in the
  form of Exhibit B to the Existing Credit Agreement or any other form approved
  by the Agent. confidential confidential 

  

 

	
  

  	
  A-31 “Permitted
  Acquisition” means the acquisition by purchase or otherwise of all or
  substantially all of the Stock of any company or the assets comprising a
  business unit of any company subject to the satisfaction of the following
  conditions: (a) Agent shall receive at least 15 days’ prior written notice of
  such proposed Permitted Acquisition, which notice shall include a reasonably
  detailed description of such proposed Permitted Acquisition; (b) such
  Permitted Acquisition shall only involve assets located in the United States
  and comprising a business, or those assets of a business, of the type
  permitted under Section 3.9; (c) such Permitted Acquisition shall be consensual
  and shall have been approved by at least a majority of the target’s board of
  directors or similar governing body; (d) the purchase price payable in
  connection with all Permitted Acquisitions, together with the principal
  amount of all Indebtedness assumed in connection with all such Permitted
  Acquisitions and the amount of all Permitted Earnout Obligations assumed in
  connection with such Permitted Acquisitions, shall not exceed for all
  Permitted Acquisitions since the Closing Date the sum of (i) $50,000,000 in
  aggregate principal amount and (ii) the aggregate fair value of any Qualified
  Stock of Holdings issued and sold to finance all or any portion of such
  Permitted Acquisition; provided, that the Credit Parties shall not be
  permitted to consummate a Permitted Acquisition unless Excess Availability
  (determined on a pro forma basis after giving effect to such Permitted
  Acquisition and all Loans funded and Letter of Credit Obligations incurred in
  connection therewith as if made on the first day of such period, and, upon
  satisfaction of the requirements in Section 2.8(e), after giving effect to
  any adjustment to Excess Availability in respect of such Permitted
  Acquisition) is not less than $50,000,000; (e) at or prior to the closing of
  any Permitted Acquisition, Agent will be granted a first priority perfected
  Lien (subject to Permitted Encumbrances) in all assets and/or Stock acquired
  pursuant thereto, and Holdings and Parent Borrower shall have executed such
  documents and taken such actions as may be required by Agent in connection
  therewith; (f) concurrently with delivery of the notice referred to in clause
  (a) above, Parent Borrower shall have delivered to Agent, in form and
  substance reasonably satisfactory to Agent: (i) a pro forma consolidated balance
  sheet and income statement of Holdings and its Subsidiaries (including
  target) (the “Acquisition Pro Forma”), based on the most recently available
  financial statements, but taking into account such Permitted Acquisition and
  the funding of all Loans and other Indebtedness incurred in connection
  therewith; and confidential confidential 

  

 

	
  

  	
  A-32 (ii) such
  financial and other information as may be available to any of the Credit
  Parties with respect to target and/or the assets acquired in connection with
  such Permitted Acquisition; (g) 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 any related
  material agreements, documents and instruments reasonably requested by Agent;
  (h) at the time of such Permitted Acquisition and after giving effect
  thereto, the Credit Parties shall be in compliance with Section 3.19 as if
  then operative; and (i) at the time of such Permitted Acquisition and after
  giving effect thereto, no Default or Event of Default has occurred and is
  continuing. Notwithstanding the foregoing, the Accounts and the Rental Fleet
  and Equipment of the target shall not be included in the Borrowing Base until
  the requirements of Section 2.8(e) have been satisfied. “Permitted
  Discretion” means, on three Business Days’ prior notice, discretional changes
  in Reserves based on events or conditions or other circumstances arising
  after the Restatement Effective Date or based on facts not known to the
  Decision Agent as of the Restatement Effective Date (i) that, in the Decision
  Agent’s commercially reasonable credit judgment exercised in good faith in
  accordance with customary business practices for comparable asset-based
  lending transactions, have a reasonable relationship to the event, condition
  or other circumstance that caused such change and (ii) will be eliminated
  when, in the Decision Agent’s commercially reasonable credit judgment
  exercised in good faith in accordance with customary business practices for
  comparable asset-based lending transactions, the event, condition or other
  circumstance causing the establishment thereof no longer exists or is no
  longer relevant to Parent Borrower’s business. The Decision Agent will use
  its commercially reasonable efforts to consult with Parent Borrower when
  establishing new or increasing existing Reserves. “Permitted Earnout
  Obligations” means an unsecured obligation to pay the seller in a Permitted
  Acquisition a future payment that is contingent upon the financial
  performance of the business acquired in such Permitted Acquisition exceeding
  a specified benchmark level, which payment becomes payable when such excess
  financial performance is achieved. “Permitted Encumbrances” has the meaning
  specified in Section 3.2(a). “Permitted Holders” means Wayzata, its
  respective Affiliates (other than portfolio companies) and any members of
  Wayzata as of the Closing Date. “Permitted Liens” means the following Liens,
  security interests or other encumbrances: (a) Liens for taxes or assessments
  or other governmental Charges not yet due and payable; confidential
  confidential 

  

 

	
  

  	
  A-33 (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 bids, tenders, contracts (other than contracts for
  the payment of money) or leases to which any Credit Party is a party as
  lessee made in the ordinary course of business; (d) inchoate and unperfected
  workers’, mechanics’ or similar Liens arising in the ordinary course of
  business, so long as such Liens attach only to Equipment, Fixtures and/or
  Real Estate; (e) subject to Section 2.6, statutory Liens of landlords for
  sums not yet delinquent or being contested in good faith, if such reserve or
  other appropriate provision, if any, as shall be required by GAAP has been
  made in respect thereof; (f) subject to Section 2.6 and solely to the extent
  that such Liens attach only to Inventory, Liens of carriers, warehousemen,
  suppliers or other similar possessory Liens arising in the ordinary course of
  business to the extent such amounts are for sums not yet delinquent or being
  contested in good faith, if such reserve or other appropriate provision, if
  any, as shall be required by GAAP has been made in respect thereof; (g)
  deposits securing, or in lieu of, surety, appeal or customs bonds in
  proceedings to which any Credit Party is a party; (h) any attachment or
  judgment Lien not constituting an Event of Default under Section 6.1; (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) Liens, presently existing or
  hereafter created, in favor of Agent, for the benefit of the Secured Parties,
  securing the Obligations; (k) leases and subleases of property granted by a
  Credit Party to other Persons in the ordinary course and consistent with past
  practice so long as such lease or sublease does not materially interfere with
  the conduct of such Credit Party’s business or adversely affect the Liens
  granted to Agent pursuant to the Collateral Documents; (l) Liens (i) of a
  collection bank arising under Section 4-210 of the Code on items in the
  course of collection, (ii) attaching to commodity trading accounts or other
  commodities brokerage accounts incurred in the ordinary course of business
  and not for speculative purposes and (iii) in favor of a banking institution
  arising as a matter of law encumbering deposits (including the right of
  set-off) and which are within the general parameters customary in the banking
  industry; and confidential confidential 

  

 

	
  

  	
  A-34 (m) Liens
  encumbering deposits made to secure obligations arising from statutory,
  regulatory, contractual or warranty requirements of Parent Borrower or any of
  its Subsidiaries, including rights of offset and set-off. “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 or ERISA Affiliate
  maintains, contributes to or has an obligation to contribute to or with
  respect to which any Credit Party or ERISA Affiliate could reasonably expect
  to incur liability. “Platform” has the meaning specified in Section 4.1.
  “Pledge Agreement” means the Pledge Agreement entered into as of the Closing
  Date, as amended, restated, supplemented or otherwise modified from time to
  time, by Holdings, Parent Borrower and each other Credit Party that is (or
  hereafter becomes) party thereto in favor of Agent, for itself and the
  benefit of the Secured Parties, and any other pledge agreement entered into
  after the Closing Date by any Credit Party or any other Person specified in
  Section 2.8(e). “Pro Rata Share” means, with respect to all matters relating
  to any Lender, (i) with respect to the Revolving Loan, the percentage
  obtained by dividing (x) the Revolving Loan Commitment of that Lender by (y)
  the aggregate Revolving Loan Commitments of all Lenders, and (ii) with
  respect to all Loans on and after the Commitment Termination Date, the
  percentage obtained by dividing (x) the aggregate outstanding principal
  balance of the Loans held by that Lender by (y) the outstanding principal
  balance of the Loans held by all Lenders, as such percentages may be adjusted
  by assignments pursuant to Section 8.1. “Projections” means Parent Borrower’s
  forecasted consolidated (a) balance sheets; (b) profit and loss statements
  and (c) cash flow statements. “Proposed Change” has the meaning specified in
  Section 9.19(c). “Protective Advance” means all expenses, disbursements and
  advances made or incurred by Agent pursuant to the Loan Documents after the
  occurrence and during the continuance of an Event of Default that Agent, in
  its sole discretion, deems necessary or desirable to (a) preserve or protect
  the Collateral or any portion thereof, (b) enhance the likelihood, or
  maximize the amount, of repayment of the Obligations or (c) provide for the
  payment of unanticipated liabilities of any Credit Party arising after the
  Closing Date. “Public Lender” has the meaning specified in Section 4.1.
  “Purchase Money Obligation” has the meaning specified in Section 9-103 of the
  Code. confidential confidential 

  

 

	
  

  	
  A-35 “Qualified
  Assignee” means (a) (i) any Lender, (ii) any Affiliate of any Lender and
  (iii) 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 (each such Person described in
  this clause (iii), an “Approved Fund”), and (b) any other Person other than
  (i) Parent Borrower or any of Parent Borrower’s Affiliates or Subsidiaries or
  (ii) any natural person. “Qualified Plan” means a Pension Plan that is
  intended to be tax-qualified under Section 401(a) of the IRC. “Qualified
  Stock” means Stock that is not Disqualified Stock. “Qualifying IPO” means the
  issuance by the Qualifying IPO Issuer of its common Stock in an underwritten
  primary public offering (other than a public offering pursuant to a
  registration statement on Form S-8) pursuant to an effective registration
  statement filed with the Securities and Exchange Commission in accordance
  with the Securities Act of 1933 (whether alone or in connection with a
  secondary public offering). “Qualifying IPO Issuer” means Holdings or a
  corporation or other legal entity which owns, directly or indirectly, 100% of
  the outstanding Stock of Holdings. “Real Estate” has the meaning specified in
  Section 5.12. “Refunded Swing Line Loan” has the meaning specified in Section
  1.1(b)(iii). “Related Obligations” has the meaning specified in Section 8.6.
  “Related Parties” means, with respect to any Person, such Person’s Affiliates
  and the partners, directors, officers, employees, agents and advisors of such
  Person and of such Person’s Affiliates. “Related Swap Contracts” means each
  Interest Rate Agreement entered into between the Parent Borrower or any other
  Credit Party with Agent or any Person that was a Lender or Agent or an
  Affiliate of Agent or any Lender at the time it entered into such Interest
  Rate Agreement. “Related Transactions” means (a) the execution, delivery and
  performance by the Borrowers of this Agreement and each other Loan Document
  to which they are a party, the borrowing of Loans, the use of the proceeds
  thereof and the issuance of Letters of Credit hereunder, and the grant of
  Liens by the Borrowers on Mortgaged Properties and other properties pursuant
  to this Agreement and the Collateral Documents, (b) the execution, delivery
  and performance by Holdings of this Agreement and each of the other Loan
  Documents to which it is a party, the guaranteeing of the Obligations by
  Holdings and the grant of Liens by Holdings on Mortgaged properties and other
  Collateral pursuant to this Agreement and the Collateral Documents, (c) 2013
  Notes Transactions, and (d) the payment of all Fees, costs and expenses
  associated with all of the foregoing. confidential confidential 

  

 

	
  

  	
  A-36 “Release”
  means any release, spill, emission, leaking, pumping, pouring, emitting,
  emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping
  or leaching of Hazardous Material in the indoor or outdoor environment. “Rent
  Reserve” means, with respect to any property of any Credit Party in any
  Landlord Lien State at which any Collateral is located but for which such
  Credit Party has not obtained a landlord’s agreement, mortgagee agreement or
  bailee letter, as applicable, in accordance with Section 2.6, an amount equal
  to three (3) months’ estimated mortgage or rental payments for such property
  plus any other fees or charges owing by such Credit Party to each applicable
  landlord, mortgagee or bailee, as applicable, that has not duly executed and
  delivered to Agent a landlord’s agreement, mortgagee agreement or bailee
  letter or other subordination of security interest, in form and substance
  reasonably satisfactory to Agent; provided, however, that any of the
  foregoing amounts shall be adjusted from time to time hereafter upon (a)
  delivery to Agent of any such acceptable waiver or subordination, (b) the
  opening or closing of a Collateral location and/or (c) any change in the
  amount of rental, storage or processor payments or similar charges. “Rental
  Fleet and Equipment” means Inventory which is of a type offered for sale or
  lease by any Borrower in the ordinary course of business of any Borrower
  including Inventory of any Borrower currently described as “rental equipment,
  net”. “Rental Fleet and Equipment NOLV Adjusted Amount” means, on any date of
  determination, (a) the Net Book Value of Eligible Rental Fleet and Equipment
  multiplied by (b) the Rental Fleet and Equipment NOLV Adjustment Percentage.
  “Rental Fleet and Equipment NOLV Adjustment Percentage” means, on any date of
  determination, a percentage equal to (a) the Net Orderly Liquidation Value of
  Rental Fleet and Equipment as of the most recent NOLV Appraisal Presentment
  Date divided by (b) the Net Book Value of Rental Fleet and Equipment as of
  the most recent NOLV Appraisal Presentment Date. “Rental Fleet and Equipment
  NOLV Amount” means (a) on any NOLV Appraisal Presentment Date, 85% of the Net
  Orderly Liquidation Value of Eligible Rental Fleet and Equipment and (b) on
  any date following the most recent NOLV Appraisal Presentment Date, 85% of
  the Rental Fleet and Equipment NOLV Adjusted Amount. “Rental Payments” means
  rental payments due to Parent Borrower or any other Subsidiary from the
  rental of Rental Fleet and Equipment owned or leased by such Person.
  “Replacement Lender” has the meaning specified in Section 9.19(a). “Requisite
  Lenders” means Lenders having (a) at least 51% of the Revolving Loan
  Commitments of all Lenders, or (b) if the Revolving Loan Commitments have
  been terminated, at least 51% of the aggregate outstanding amount of the
  Revolving Loans. “Reserves” means, on any date of determination, with respect
  to the Borrowing Base, reserves established by the Decision Agent, from time
  to time against the Borrowing Base or any component thereof in an amount
  equal to the sum of, without duplication, the following: confidential
  confidential 

  

 

	
  

  	
  A-37 (a) all
  amounts of past due rent, fees or other charges owing at such time by any
  Credit Party to any landlord of any premises where any of the Collateral is
  located or to any processor, repairman, mechanic or other Person who is in
  possession of any Collateral or has asserted any Lien or claim thereto; (b)
  any amounts which any Credit Party is obligated to pay pursuant to the provisions
  of any of the Loan Documents that the Decision Agent or any Lender elects to
  pay for the account of such Credit Party in accordance with authority for
  such election contained in any of the Loan Documents; (c) the aggregate
  amount of reserves established by the Decision Agent in respect of Banking
  Relationship Debt; (d) any Rent Reserve; and (e) such additional reserves in
  respect of events, conditions or other circumstances arising after the
  Closing Date, in each case, in such amounts as the Decision Agent may elect
  to impose from time to time in its Permitted Discretion; provided, however,
  in no event shall Reserves be imposed with respect to (x) Hedging Agreements
  existing on the Closing Date and obligations under Hedging Agreements
  existing on the Closing Date and (y) the specific events, conditions, facts
  and circumstances that have occurred prior to the Restatement Effective Date
  that caused the Decision Agent (or formed the basis for the Decision Agent’s
  determination) to establish the Reserve in an amount equal to $25,000,000 in
  effect immediately prior to the Restatement Effective Date. Notwithstanding
  anything in the Loan Documents to the contrary, Reserves shall not be
  established to the extent that such Reserves would be duplicative of any specific
  item excluded as ineligible in the definitions of “Eligible Accounts” or
  “Eligible Rental Fleet and Equipment,” but the Decision Agent shall retain
  the right, subject to the requirements set forth above, to establish Reserves
  with respect to prospective changes in eligible Collateral in its Permitted
  Discretion. “Restatement Effective Date” means November 20, 2013. “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
  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; and (c) 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. “Reversal Event” has the meaning specified in Section 3.19.
  “Revolving Credit Advance” has the meaning specified in Section 1.1(a)(i).
  confidential confidential 

  

 

	
  

  	
  A-38 “Revolving
  Loan” means, at any time, the sum of (a) the aggregate amount of Revolving
  Credit Advances outstanding to a Borrower (including Swing Line Advances) at
  any time plus (b) the aggregate Letter of Credit Obligations incurred on
  behalf of a Borrower. 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. “Revolving Loan
  Commitment” means (a) as to any Lender, the commitment of such Lender to make
  its Pro Rata Share of Revolving Credit Advances or incur its Pro Rata Share
  of Letter of Credit Obligations (including, in the case of the Swing Line
  Lender, its commitment to make Swing Line Advances as a portion of its
  Revolving Loan Commitment) as set forth on Annex B or in the most recent
  Assignment Agreement, if any, executed by such Lender and (b) as to all
  Lenders, the aggregate commitment of all Lenders to make the Revolving Credit
  Advances (including, in the case of the Swing Line Lender, Swing Line
  Advances) or incur Letter of Credit Obligations, which aggregate commitment
  shall be three hundred seventy five million dollars ($375,000,000) on the
  Restatement Effective Date, as may be increased from time to time on any
  Increased Amount Date to the extent of such Incremental Revolving Loan
  Commitment, as such amount may be adjusted, if at all, from time to time in
  accordance with this Agreement. “Revolving Notes” has the meaning specified
  in Section 1.1(a)(i). “Rolling Stock” means all transportation equipment
  owned by any of the Credit Parties that is used to transport Rental Fleet and
  Equipment including all trucks, trailers, tractors, service vehicles, vans,
  pick-up trucks, forklifts, wheel loaders and other mobile equipment and other
  vehicles, wherever located, which in each case is covered by a Certificate of
  Title under applicable state law, other than in each case Rental Fleet and
  Equipment. “S&P” means Standard & Poor’s Ratings Services, a division
  of McGraw-Hill Financial, Inc. “Second Lien Notes” means the $200,000,000
  aggregate principal amount of senior secured notes due 2016 issued under the
  Second Lien Notes Indenture on May 5, 2011. “Second Lien Notes Indenture”
  means the Indenture dated as of May 5, 2011, among Neff Rental LLC, Neff
  Finance, the guarantors party thereto and Wilmington Trust FSB, as trustee
  and collateral agent, pursuant to which the Second Lien Notes are issued, as
  the same may be amended, supplemented or otherwise modified from time to time
  in accordance therewith. “Secured Parties” means, collectively, Agent,
  Lenders, L/C Issuers and any other holder of an Obligation, including holders
  of Cash Management Obligations or Obligations under Related Swap Contracts.
  “Security Agreement” means the Security Agreement entered into as of the
  Closing Date, as amended, restated, supplemented or otherwise modified from
  time to time, by Holdings, Parent Borrower and each other Credit Party that
  is (or hereafter becomes) party thereto in favor of Agent, for itself and the
  benefit of the Secured Parties, and any other security agreement entered into
  after the Closing Date by any Credit Party or any other Person. confidential
  confidential 

  

 

 

	
  

  	
  A-39 “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 subordinated and contingent liabilities, of
  such Person; (b) the present fair saleable 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 and liabilities, including subordinated
  and contingent liabilities 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 reasonably be expected to become an actual or matured liability.
  “Statement” has the meaning specified in Section 4.1(c). “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 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. “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 more than 50% of such Stock whether by proxy, agreement, operation of
  law or otherwise, (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 50% or of which any such Person is a
  general partner or may exercise the powers of a general partner and (c) any
  other Person the accounts of which would be consolidated with those of such
  Person in such Person’s consolidated financial statements if such financial
  statements were prepared in accordance with GAAP as of such date. Unless the
  context otherwise requires, each reference to a Subsidiary shall be a
  reference to a Subsidiary of Parent Borrower. “Supermajority Lenders” means
  Lenders having (a) 75% or more of the Revolving Loan Commitments of all
  Lenders, or (b) if the Revolving Loan Commitments have been terminated, 75%
  or more of the aggregate outstanding amount of the Revolving Loans (with the
  Swing Line Loan being attributed to the Lender making such Loan).
  confidential confidential 

  

 

	
  

  	
  A-40 “Swing
  Line Advance” has the meaning specified in Section 1.1(b)(i). “Swing Line
  Availability” has the meaning specified in Section 1.1(b)(i). “Swing Line
  Commitment” means the commitment of the Swing Line Lender to make Swing Line
  Advances as set forth on Annex B to this Agreement, which commitment
  constitutes a subfacility of the Revolving Loan Commitment of the Swing Line
  Lender. As of the Restatement Effective Date, the Swing Line Commitment is
  equal to $37,500,000. “Swing Line Lender” means Bank of America. “Swing Line
  Loan” means, at any time, the aggregate amount of Swing Line Advances
  outstanding to Borrower. “Swing Line Note” has the meaning specified in
  Section 1.1(b)(ii). “Tax Distributions” means, (1) for so long as for U.S.
  federal income tax purposes, Parent Borrower is taxed as a partnership or
  disregarded entity and is not wholly owned (directly or indirectly) by a
  corporate parent, (A) with respect to any taxable year ending after the
  Closing Date, cash distributions to fund the assumed income tax liabilities
  of the direct or indirect equity owners of Parent Borrower (including
  estimated tax liabilities) in respect of the income of Parent Borrower for
  such taxable year, in an aggregate amount equal to the excess of (i) the
  product of (x) the net taxable income of Parent Borrower (treating Parent
  Borrower as a taxable entity, and including in such net taxable income Parent
  Borrower’s distributive share of all tax items attributable to any Subsidiary
  of Parent Borrower taxed as a partnership or disregarded entity) for the
  taxable year in question, reduced by any cumulative net taxable loss with
  respect to all prior taxable years ending after the Closing Date (determined
  as if all such taxable years were one taxable period) to the extent such
  cumulative net taxable loss is of a character (ordinary or capital) that
  would permit such loss to be deducted against the income of the taxable year
  in question and (y) the highest combined marginal federal and applicable
  state and/or local income tax rate (taking into account the deductibility of
  state and local income taxes for U.S. federal income tax purposes and the
  character of the taxable income in question (i.e., long term capital gain,
  qualified dividend income, etc.)) applicable to an individual United States
  citizen residing in New York, New York for the taxable year in question (or
  portion thereof) over (ii) in the case of any taxable year beginning prior to
  the Closing Date, the aggregate amount of assumed estimated tax payments that
  should have been made under Section 6654 of the Code prior to the Closing
  Date (based on the assumption that all of the owners are individual residents
  of New York, New York) and (B) with respect to any taxable year ending prior
  to the Closing Date, cash distributions to pay the assumed income tax
  liabilities of the direct or indirect equity owners of Parent Borrower in
  respect of the income of Parent Borrower for such taxable year, in an
  aggregate amount equal to the product of (i) any additional taxable income of
  Parent Borrower (calculated in a manner consistent with the calculation in
  clause (A) above) for such taxable year resulting from a tax audit adjustment
  made after the Closing Date and (ii) the highest combined marginal federal
  and applicable state and/or local income tax rate (taking into account the
  deductibility of state and local income taxes for U.S. federal income tax
  purposes and the character of the taxable income in question (i.e., long term
  capital gain, qualified confidential confidential 

  

 

	
  

  	
  A-41 dividend
  income, etc.)) applicable to an individual United States citizen residing in
  New York, New York for the taxable year in question, (2) with respect to any
  taxable period for which Parent Borrower or any of its Subsidiaries is a
  member of a consolidated, combined or similar income, franchise or other
  state and/or local tax group of which Holdings or its direct or indirect
  parent is the common parent (a “Tax Group”), or for which Parent Borrower is
  a partnership or disregarded entity that is wholly owned (directly or
  indirectly) by a corporate parent (a “Corporate Parent”), cash distributions
  to pay the portion of the Tax Group’s or Corporate Parent’s actual cash
  income, franchise or other state and/or local tax liability attributable to
  Parent Borrower and/or its Subsidiaries, in an amount not to exceed the
  income, franchise or other state and/or local tax liability that would have
  been payable by Parent Borrower and/or such Subsidiaries if such entities had
  always been taxable on a stand-alone basis (reduced by any such income,
  franchise or other state and/or local taxes paid or to be paid directly by
  Parent Borrower or its Subsidiaries), and (3) with respect to any period
  ending after December 31, 2010, cash distributions to pay any taxes of
  Holdings not described in clause (1) or (2) above, provided that the
  aggregate payments pursuant to this clause (3) shall not exceed $250,000 per
  calendar year. “Tax Return” means all returns, statements, filings,
  attachments and other documents or certifications required to be filed in
  respect of Taxes. “Taxes” means all present or future taxes, levies, imposts,
  duties, deductions, withholdings, assessments, fees or other charges imposed
  by any Governmental Authority, including any interest, additions to tax or
  penalties applicable thereto. “Termination Date” means the date on which (a)
  the Loans have been repaid in full in cash, (b) all other Obligations under
  this Agreement and the other Loan Documents (other than contingent
  indemnification Obligations to the extent no claim has been asserted) have
  been completely discharged, (c) all Letter of Credit Obligations have been
  cash collateralized in the amount set forth in Section 1.5(f), cancelled or
  backed by standby letters of credit acceptable to Agent and (d) no Borrower
  shall have any further right to borrow any monies or request any other
  extensions of credit under this Agreement or the other Loan Documents.
  “Threshold Amount” means, as of any date of determination, an amount equal to
  the greater of (i) 10.0% of the Revolving Loan Commitments of all Lenders as
  of such date and (ii) $35.0 million. “Title IV Plan” means a Pension Plan
  (other than a Multiemployer Plan), that is covered by Title IV of ERISA, and
  that Parent Borrower, any other Credit Party or any of their respective ERISA
  Affiliates maintains, contributes to or has an obligation to contribute to or
  with respect to which any Credit Party or ERISA Affiliate could incur
  liability. “Trade-In Transaction” means a transaction in which Parent
  Borrower or any of its Subsidiaries trades in Inventory or Equipment to a
  dealer or an original equipment manufacturer in consideration for cash,
  credit or similar Inventory or Equipment or a combination thereof. confidential
  confidential 

  

 

	
  

  	
  A-42 “Trademark
  License” means rights under any written agreement now owned or hereafter
  acquired by any Credit Party granting any right to use any Trademark.
  “Trademark Security Agreements” means the Trademark Security Agreements made
  in favor of Agent, on behalf of itself and the Secured Parties, by each
  applicable Credit Party. “Trademarks” means all of the following now owned or
  hereafter adopted or acquired by any Credit Party: (a) all trademarks, trade
  names, corporate names, business names, trade styles, service marks, logos,
  internet domain names, 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.
  “Trigger Event” has the meaning specified in Section 3.19. “UFCA” has the
  meaning specified in Section 9.22. “UFTA” has the meaning specified in
  Section 9.22. “Unfunded Pension Liability” means, at any time, the aggregate
  amount, if any, 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 allocable to such benefits in accordance with Title IV
  of ERISA, 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. “United States” means the United States of America,
  including, for the avoidance of doubt, the Commonwealth of Puerto Rico.
  “Unused Line Fee” has the meaning specified in Section 1.3. “Utilized Amount”
  means with respect to any quarterly or other period, the average for such
  period of the daily closing balances of the Revolving Loan (including,
  without duplication, outstanding Swing Line Loans and Letter of Credit Obligations)
  outstanding during such period divided by the Maximum Amount (as it may be
  adjusted from time to time). “Vendor Lease” means a lease pursuant to which
  any Person leases Rental Fleet and Equipment from a Vendor Lessor, whether or
  not such lease constitutes an operating lease or a Capital Lease under GAAP
  and whether or not such lease constitutes a true lease or a secured
  transaction under the Code or other applicable law. “Vendor Lessor” means any
  Person who leases Rental Fleet and Equipment to a Credit Party pursuant to a
  Vendor Lease. confidential confidential 

  

 

	
  

  	
  A-43 “Wayzata”
  means funds managed by Wayzata Investment Partners LLC. “Wholly Owned” means,
  with respect to any Person, a Subsidiary of such Person all the outstanding
  Stock of which (other than (x) directors’ qualifying shares and (y) shares
  issued to foreign nationals to the extent required by applicable law) is
  owned by such Person and/or by one or more wholly owned Subsidiaries of such
  Person. Rules of construction with respect to accounting terms used in this
  Agreement or the other Loan Documents shall be as set forth or referred to in
  this Annex A. 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 or
  Divisions of the Code, the definition contained in Article or Division 9
  shall control. Unless otherwise specified, references in this Agreement or
  any other Loan Document or any of the Appendices, Section, subsection or
  clause hereof or thereof refer to such Section, subsection or clause as
  contained in this Agreement (as amended and restated on November 20, 2013) or
  such Loan Documents, as applicable. The words “herein,” “hereof” and
  “hereunder” and other words of similar import in this Agreement or any other
  Loan Document refer to this Agreement or such other Loan Document, as
  applicable, as a whole, including all Annexes, Exhibits and Schedules hereto
  or thereto, 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 this Agreement, such other Loan Document or any such Annex,
  Exhibit or Schedule, as the case may be. 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.
  confidential confidential 

  

 

	
  

  	
  B-1 ANNEX B to
  CREDIT AGREEMENT PRO RATA SHARES AND COMMITMENT AMOUNTS LENDER REVOLVING LOAN
  COMMITMENT SWING LINE LOAN COMMITMENT (IF ANY) PRO RATA SHARE Bank of
  America, N.A. $125,000,000 $37,500,000 33.333333333% Wells Fargo Capital
  Finance, LLC $60,000,000 16.000000000% Regions Bank $50,000,000 13.333333333%
  PNC Bank, National Association $40,000,000 10.666666667% CIT Finance LLC
  $27,500,000 7.333333333% RBS Citizens Business Capital, a division of RBS
  Asset Finance, Inc. $27,500,000 7.333333333% SunTrust Bank $25,000,000
  6.666666667% NYCB Specialty Finance Company, LLC, a whollyowned subsidiary of
  New York Community Bank $20,000,000 5.333333333% Total $375,000,000
  $37,500,000 100.00% confidential confidential 

  

 

	
  

  	
  C-1 ANNEX C to
  CREDIT AGREEMENT CLOSING CHECKLIST A. LOAN DOCUMENTS AND COLLATERAL MATTERS
  1. Credit Agreement: This Agreement or counterparts hereof shall have been
  duly executed and delivered by each Credit Party, Agent and Lenders. 2.
  Revolving Notes: Duly executed originals of the Revolving Notes for each
  requesting Lender, dated the Restatement Effective Date, shall have been
  delivered to Agent. 3. Swing Line Notes: Duly executed originals of the Swing
  Line Notes for each requesting Lender, dated the Restatement Effective Date,
  shall have been delivered to Agent. 4. Amendment to Intercreditor Agreement:
  Duly executed originals of Amendment No. 1 to the Intercreditor Agreement,
  executed by the collateral agent under the Second Lien Notes Indenture, dated
  the Restatement Effective Date, shall have been delivered to the Agent. 5.
  Evidence of Insurance: Satisfactory evidence shall have been delivered to
  Agent that the insurance policies required by Section 2.2 of the Agreement
  are in full force and effect, together with appropriate evidence showing loss
  payable and/or additional insured clauses or endorsements, as applicable, in
  favor of Agent, for the benefit of the Secured Parties. 6. Personal Property
  Requirements. Agent shall have received, (to the extent not already received
  by the Agent prior to the Restatement Effective Date): • all certificates,
  agreements or instruments representing or evidencing securities Collateral
  accompanied by instruments of transfer and stock powers undated and endorsed
  in blank; • UCC financing statements in appropriate form for filing under the
  UCC, filings with the United States Patent and Trademark Office and United
  States Copyright Office; • evidence acceptable to the Agent of payment or
  arrangements for payment by the Credit Parties of all applicable recording
  taxes, fees, charges, costs and expenses required for the recording of the
  Collateral Documents; • an Intercompany Note in a form reasonably
  satisfactory to Agent executed by and among Holdings, Parent Borrower and
  each of its Subsidiaries, accompanied by instruments of transfer undated and
  endorsed in blank; confidential confidential 

  

 

	
  

  	
  C-2 • all other
  certificates, agreements, including Control Agreements, or instruments
  necessary to perfect the Agent’s security interest in all Chattel Paper, all
  Instruments, all deposit, securities and commodities accounts and all
  Investment Property of each Credit Party; • UCC, tax and judgment lien
  searches or equivalent reports or searches that the Agent deems appropriate,
  none of which show liens that encumber the Collateral covered or intended to
  be covered by the Collateral Documents (other than Permitted Encumbrances or
  any other Liens acceptable to the Agent); • Duly executed originals of the
  Patent Security Agreement; Trademark Security Agreement and Copyright
  Security Agreement (collectively, the “Intellectual Property Security
  Agreements”) dated the Restatement Effective Date, shall have been delivered
  to Agent, together with evidence that all actions that the Agent deems
  necessary to perfect and protect the first priority Liens and security
  interests created under the Intellectual Property Security Agreements in the
  United States have been taken or will be taken in accordance with the terms
  of the Loan Documents; and • a duly executed Perfection Certificate. B.
  CLOSING CERTIFICATES 1. Borrowing Base Certificate: A Borrowing Base
  Certificate for the Borrowers. 2. Notice of Revolving Credit Advance: Duly
  executed Notice of Revolving Credit Advance, dated at least one (1) Business
  Day prior to the Restatement Effective Date, shall have been delivered to
  Agent and may request Loans to be made available on the Restatement Effective
  Date in an aggregate amount such that the total amount of Revolving Loans
  outstanding after giving effect thereto is not more than $295 million. 3.
  Officer’s Certificate: Duly executed originals of a certificate of an
  authorized officer of Parent Borrower, dated the Restatement Effective Date,
  certifying on behalf of Parent Borrower that as of the Restatement Effective
  Date and after giving effect to the Related Transactions the representations
  and warranties in this Agreement are accurate, true and correct in all
  material respects. 4. Other Documents. Agent shall have received such other
  certificates, documents and agreements with respect to any Credit Party as
  Agent may, in its sole discretion, request. C. FINANCIAL MATTERS 1. Solvency:
  Agent shall have received a certificate of the chief financial officer of
  each Credit Party certifying that such Credit Party (after giving effect to
  the Transactions and the incurrence of Indebtedness related thereto) is
  solvent. confidential confidential 

  

 

	
  

  	
  C-3 2. Minimum
  Excess Availability: On the Restatement Effective Date, Borrower shall have
  Excess Availability (determined based on the Borrowing Base Certificate
  delivered to Agent on the Restatement Effective Date) of at least
  $75,000,000, calculated on a pro forma basis after giving effect to the Loans
  made on the Restatement Effective Date and the consummation of the Related
  Transactions, and with all of Borrowers’ obligations current in accordance
  with historical practices. D. CORPORATE DOCUMENTS & LEGAL OPINIONS 1.
  Certificate of Incorporation and Good Standing: For each Credit Party, Agent
  shall have received (a) the articles or certificate of incorporation or
  certificate of formation, as applicable, of such Credit Party and all
  amendments thereto and (b) good standing certificates (including verification
  of tax status, if available) in such Credit Party’s state of incorporation or
  formation, as applicable, each dated a recent date prior to the Restatement
  Effective Date and certified by the applicable Secretary of State or other
  authorized Governmental Authority. 2. By-laws and Resolutions: For each
  Credit Party, Agent shall have received (a) the bylaws or operating agreement
  of such Credit Party, as applicable, together with all amendments thereto and
  (b) resolutions of such Credit Party’s Board of Directors 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 Restatement Effective Date by such Credit
  Party’s secretary or an assistant secretary as being in full force and effect
  without any modification or amendment. 3. Incumbency Certificates: For each
  Credit Party, Agent shall have received incumbency certificates and specimen
  signatures of the officers of such Credit Party executing any of the Loan
  Documents, certified as of the Restatement Effective Date by such Credit
  Party’s secretary or an assistant secretary as being true, accurate, correct
  and complete. 4. Opinions of Counsel: Duly executed originals of an opinion
  of (a) Stroock & Stroock & Lavan LLP, special New York counsel for
  the Credit Parties, in the form set forth in Exhibit I to this Agreement. E.
  OTHER CONDITIONS 1. Payment of Fees: Holdings and Parent Borrower shall have
  paid the Fees required to be paid on the Restatement Effective Date to the
  Arranger and the Decision Agent, including, without limitation, fees and expenses
  of counsel for the Agent and the Fees specified in the Fee Letters. 2.
  Information. The Lenders shall have received all documentation and other
  information required by bank regulatory authorities under applicable
  “know-your-customer” and antimoney laundering rules and regulations,
  including the U.S.A. Patriot Act. confidential confidential 

  

 

	
  

  	
  D-1 ANNEX D to
  CREDIT AGREEMENT LENDERS’ BANK ACCOUNTS Name: Bank of America, N.A. Bank: A
  Bank of America Company ABA #: 0260-0959-3 Account #: 9369337536 Reference:
  BABC/ NEFF confidential confidential 

  

 

	
  

  	
  EXHIBIT 4.1(m)
  to CREDIT AGREEMENT COMPLIANCE AND PRICING CERTIFICATE NEFF LLC Date: , This
  Compliance and Pricing Certificate (this “Certificate”) is given by NEFF LLC
  (“Parent Borrower”) pursuant to Section 4.1(m) of that certain Amended and
  Restated Senior Secured Credit Agreement, dated as of November [20], 2013,
  among Parent Borrower, Neff Holdings LLC, as Holdings, the Lenders from time
  to time party thereto and Bank of America, N.A., as agent for the Lenders and
  the other Secured Parties (as such agreement may have been amended, restated,
  supplemented or otherwise modified from time to time, the “Credit
  Agreement”). Capitalized terms used herein without definitions shall have the
  meanings set forth in the Credit Agreement. The undersigned is duly
  authorized to execute and deliver this Certificate on behalf of Parent
  Borrower. By executing this Certificate such officer hereby certifies on
  behalf of Parent Borrower, and not in any individual capacity, to Agent and
  Lenders on and as of the date hereof that: (a) I am the duly elected [Chief
  Financial Officer/Chief Executive Officer] of Parent Borrower. (b) the
  financial statements delivered with this Certificate in accordance with
  Section 4.1(b), and/or 4.1(c) of the Credit Agreement fairly present in all
  material respects the results of operations and financial condition of Parent
  Borrower and its Subsidiaries as of the dates of such financial statements
  [(except that quarterly Financial Statements do not include footnote
  disclosures and are subject to year-end adjustment)]; (c) I have reviewed the
  terms of the Credit Agreement and have made, or caused to be made under my
  supervision, a review in reasonable detail of the transactions and conditions
  of the Borrowers during the accounting period covered by such financial
  statements; (d) such review has not disclosed the existence during or at the
  end of such accounting period, and I have no knowledge of the existence as of
  the date hereof, of any condition or event that constitutes a Default or an
  Event of Default, except as set forth on Schedule 1 hereto, which includes a
  description of the nature and period of existence of such Default or an Event
  of Default and what action Parent Borrower has taken, is taking and proposes
  to take with respect thereto; each representation or warranty by any Credit
  Party contained in any Loan Document is true and correct in all material
  respects (without duplication of any materiality qualifier contained therein)
  as of the date hereof, except to the extent that such representation or
  warranty expressly relates to an earlier date, in which case, as of such
  earlier date; confidential confidential 

  

 

	
  

  	
  (e) except as
  set forth on Schedule 1 hereto, Parent Borrower is in compliance with the
  covenants contained in Sections 3.1, 3.3, 3.4, 3.5, 3.17, 3.19 and 3.20 of
  the Credit Agreement, as demonstrated on Schedule 1 hereto; (f) except as set
  forth on Schedule 2 hereto, subsequent to the date of the most recent
  Certificate submitted by Parent Borrower pursuant to Section 4.1(m) of the
  Credit Agreement, no Credit Party has (i) changed its name as it appears in
  official filings in the jurisdiction of its organization, (ii) changed its
  chief executive office, principal place of business, corporate offices,
  warehouses or locations at which Collateral is held or stored, or the
  location of its records concerning Collateral, (iii) changed the type of
  entity that it is, (iv) changed (or has had changed) its organization
  identification number, if any, issued by its jurisdiction of organization,
  (v) changed its jurisdiction of organization, (vi) changed the end of its
  Fiscal Year, or (vii) formed any new Subsidiary or entered into any
  partnership or joint venture with any other Person without giving Agent any
  notice required by the Security Agreement; and (g) except as set forth on
  Schedule 3 hereto, subsequent to the date of the most recent Certificate
  submitted by Parent Borrower pursuant to Section 4.1(m) of the Credit
  Agreement, there has been no event which would alter any of the disclosures
  set forth on Schedule 5.4(b) of the Credit Agreement. IN WITNESS WHEREOF,
  Parent Borrower has caused this Certificate to be executed by this day of , .
  NEFF LLC By: Its: confidential confidential 

  

 

	
  

  	
  SCHEDULE 1
  Exhibit 4.1(m) ALL AMOUNTS IN EXHIBIT 4.1(M) ARE WITHOUT DUPLICATION AND,
  UNLESS OTHERWISE INDICATED, ARE CALCULATED FOR HOLDINGS AND ITS SUBSIDIARIES
  ON A CONSOLIDATED BASIS. INDEBTEDNESS (Section 3.1) Indebtedness secured by
  purchase money Liens or incurred with respect to Capital Leases or synthetic
  leases (Section 3.1(e)): Actual in the aggregate $___________ Permitted in
  the aggregate $5,000,000 In Compliance Yes/No confidential confidential 

  

 

	
  

  	
  INVESTMENTS
  (Section 3.3) Intercompany loans, advances or capital contributions by any
  Credit Party to any Subsidiary that is not a Credit Party (Section 3.3(b)):
  Actual in the aggregate $___________ Permitted in the aggregate $1,000,000 In
  Compliance Yes/No Loans and advances to employees for moving, entertainment,
  travel, and similar expenses in the ordinary course of business (Section
  3.3(c)): Actual in the aggregate $___________ Permitted in the aggregate
  $1,000,000 In Compliance Yes/No Loans made to officers or employees in
  connection with the purchase of Stock of Holdings (Section 3.3(j)): Actual in
  the aggregate $___________ Permitted in the aggregate $1,000,000 In
  Compliance Yes/No Other Investments (Section 3.3(a)): Actual in the aggregate
  $___________ Permitted in the aggregate $5,000,000 In Compliance Yes/No
  confidential confidential 

  

 

	
  

  	
  CONTINGENT
  OBLIGATIONS (Section 3.4) Contingent Obligations not otherwise permitted in
  Sections 3.4(a) through (f) (Section 3.4(g)): Actual in the aggregate
  $___________ Permitted in the aggregate $5,000,000 In Compliance Yes/No
  confidential confidential 

  

 

	
  

  	
  RESTRICTED
  PAYMENTS (Section 3.5) Payments to Holdings to permit Holdings to pay general
  administrative costs and expenses when due in the ordinary course of business
  (Section 3.5(g)): Actual in the aggregate $___________ Permitted in the
  aggregate $2,000,000 In Compliance Yes/No Payment of out-of-pocket expenses
  by Holdings incurred by Wayzata or any of its Affiliates in connection with
  its performance of management, consulting, monitoring, financial advisory or
  other services provided to Holdings and its Subsidiaries (Section 3.3(h)):
  Actual in the aggregate $___________ Permitted in the aggregate $100,000/year
  In Compliance Yes/No confidential confidential 

  

 

	
  

  	
  LEASE LIMITS
  (Section 3.17) All rents (or substantially equivalent payments) paid during
  the measuring period for operating leases, synthetic leases and similar
  off-balance sheet financing (Section 3.17): $___________ Permitted Lease
  Payments (Fiscal Year) $20,000,000 In Compliance Yes/No confidential
  confidential 

  

 

	
  

  	
  CONSOLIDATED
  TOTAL LEVERAGE RATIO (Section 3.19) Minimum Consolidated Total Leverage Ratio
  required if Excess Availability is less than an amount equal to the greater
  of (i) 10.0% of the Revolving Loan Commitments of all Lenders and (ii) $35.0
  million (subject to a Reversal Event) (Section 3.19): $___________ In
  Compliance Yes/No Calculation of the Consolidated Total Leverage Ratio: The
  ratio of: Indebtedness of Parent Borrower and its Subsidiaries as at such
  date (after giving effect to any incurrence or discharge of Indebtedness on
  such date) to: Consolidated EBITDA for the period of the most recent four
  consecutive Fiscal Quarters ending prior to the date of such determination
  for which consolidated Financial Statements of Holdings are available
  Consolidated Total Leverage Ratio confidential confidential 

  

 

	
  

  	
  FIXED CHARGE
  COVERAGE RATIO (Section 3.20) Fixed Charge Coverage Ratio may not be less
  than 1.0:1.0 if Excess Availability is less than an amount equal to the
  greater of (i) 10.0% of the Revolving Loan Commitments of all Lenders and
  (ii) $35.0 million (subject to a Reversal Event) (Section 3.20): $___________
  In Compliance Yes/No Calculation of Fixed Charge Coverage Ratio: The ratio
  of: Consolidated EBITDA for the most recent period of four consecutive Fiscal
  Quarters of Parent Borrower ending prior to the date of such determination
  for which consolidated Financial Statements of Holdings are available minus
  the aggregate amount of all Capital Expenditures of Parent Borrower and its
  Subsidiaries for such period (excluding the aggregate principal amount of
  Indebtedness expressly permitted under Section 3.1 of the Credit Agreement
  incurred to finance such Capital Expenditures and, without duplication of
  amounts netted from Capital Expenditures, the net proceeds of any used
  equipment disposals, in each case, to the extent Capital Expenditures for
  purposes of this calculation are above zero and for the avoidance of doubt
  any gains from the sale of Rental Fleet and Equipment and Inventory in the
  ordinary course of business shall not be netted against Capital Expenditures
  for purposes of calculating the Fixed Charge Coverage Ratio) to: the sum of:
  Interest Expense of Parent Borrower and its Subsidiaries for the period;
  confidential confidential 

  

 

	
  

  	
  the aggregate
  principal amount of all regularly scheduled principal or amortization
  payments on Indebtedness of Parent Borrower and its Subsidiaries for such
  period, but excluding any such payments to the extent refinanced through the
  incurrence of additional Indebtedness expressly permitted under Section 3.1
  of the Credit Agreement; the aggregate amount of Federal, state, local and
  foreign income, capital or profits taxes, including franchise and similar
  taxes and foreign withholding taxes of Parent Borrower and its Subsidiaries
  for such period, paid in cash, in each case, by Parent Borrower and its
  Subsidiaries; and Restricted Payments paid by Holdings and its Subsidiaries
  after the Restatement Effective Date pursuant to Sections 3.5(e), (f) and (i)
  of the Credit Agreement Fixed Charge Coverage Ratio confidential confidential
  

  

 

	
  

  	
  CONDITIONS OR
  EVENTS WHICH CONSTITUTE A DEFAULT OR EVENT OF DEFAULT [If any condition or
  event exists that constitutes a Default or Event of Default, specify nature
  and period of existence and what action Parent Borrower has taken, is taking
  or proposes to take with respect thereto; if no condition or event exists,
  state “None.”] confidential confidential 

  

 

	
  

  	
  SCHEDULE 2
  Exhibit 4.1(m) ORGANIZATION/LOCATION CHANGES [If any Credit Party has (i)
  changed its name as it appears in official filings in the jurisdiction of its
  organization, (ii) changed its chief executive office, principal place of
  business, corporate offices, warehouses or locations at which Collateral is
  held or stored, or the location of its records concerning Collateral, (iii)
  changed the type of entity that it is, (iv) changed (or has had changed) its
  organization identification number, if any, issued by its jurisdiction of
  organization, (v) changed its jurisdiction of organization, (vi) changed the
  end of its Fiscal Year, or (vii) formed any new Subsidiary or entered into
  any partnership or joint venture with any other Person without giving Agent
  any notice required by the Security Agreement, such event shall be specified
  below; if no such event has occurred, state “None.”] confidential
  confidential 

  

 

	
  

  	
  SCHEDULE 3
  Exhibit 4.1(m) CAPITALIZATION CHANGES [If with respect to any Credit Party
  there has been a change in authorized Stock, issued and outstanding Stock or
  the identity of the holders of any Stock, or if with respect to any Credit
  Party there has been a change pertaining to preemptive rights or any other
  outstanding rights, options, warrants, conversion rights or similar
  agreements or understandings for the purchase or acquisition of any Stock,
  such change shall be set forth below; if no such change has occurred, state
  “None.” confidential confidential 

  

 

	
  

  	
  EXHIBIT I-1 to
  CREDIT AGREEMENT Form of Opinion of Stroock & Stroock & Lavan LLP
  [See Attached} confidential confidential 

  

 

	
  

  	
   NY 74844018v2 November [_], 2013 To the
  Lender Parties Referred to Below c/o Agent, L/C Issuer and Swing Line Lender
  300 Galleria Parkway, Suite 800 Atlanta, GA 30339 Re: Financing Agreement
  Ladies and Gentlemen: We have acted as special New York counsel to Neff LLC,
  a Delaware limited liability company (“Parent Borrower”), Neff Holdings LLC,
  a Delaware limited liability company (“Holdings”), and Neff Rental LLC, a
  Delaware limited liability company (the “Company”), in connection with the
  Amended and Restated Senior Secured Credit Agreement, dated as of November
  [_], 2013 (the “Financing Agreement”), among the Company, Parent Borrower and
  Holdings, the institutions from time to time party thereto as Lenders (the
  “Lenders”), Bank of America, N.A. (“Bank of America”), as administrative
  agent for the Lenders (in such capacity, the “Agent”), as collateral agent
  for the Lenders (in such capacity, the “Collateral Agent”, and together with
  the Agent and the Lenders, individually, a “Lender Party” and, collectively,
  the “Lender Parties”) and as Swing Line Lender and L/C Issuer, and the other
  institutions from time to time party thereto as agents, arrangers and
  bookrunners. The Company, Parent Borrower and Holdings are sometimes referred
  to herein individually as a “Transaction Party” and collectively as the
  “Transaction Parties.” This opinion letter is delivered to you pursuant to
  Section 7.1 of the Financing Agreement. Capitalized terms used but not
  otherwise defined in this opinion letter shall have the meanings assigned to
  such terms in the Financing Agreement. The Uniform Commercial Code, as
  amended and in effect in the State of New York on the date hereof, is
  referred to herein as the “NY UCC.” The Uniform Commercial Code, as amended
  and in effect in the State of Delaware on the date hereof, is referred to
  herein as the “Del. UCC.” The NY UCC and the Del. UCC are referred to herein,
  collectively, as the “UCC.” In addition, as used herein, “security interest”
  has the meaning it is given in Section 1-201(37) of the NY UCC. With your
  permission, all assumptions and statements of reliance herein have been made
  without any independent investigation or verification on our part except to
  the extent, if any, otherwise expressly stated, and we express no opinion
  with respect to the subject matter or accuracy of these assumptions or items
  upon which we have relied. confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 2 NY 74844018v2 In connection with the
  opinions expressed herein, we have examined, among other documents, the
  following: (1) an executed copy of the Financing Agreement; (2) an executed
  copy of each of the promissory notes, dated as of the date hereof, in favor
  of certain of the Lenders; (3) an executed copy of the Trademark Security
  Agreement, dated as of the date hereof, executed by the Company in favor of
  the Collateral Agent; (4) an executed copy of Amendment No. 1 to
  Intercreditor Agreement, dated as of the date hereof (the “Intercreditor
  Amendment”), among the Transaction Parties, Wilmington Trust, National
  Association as second lien collateral agent and Bank of America, N.A. as
  first lien agent and as control agent; (5) an executed copy of the Senior
  Secured Credit Agreement, dated as of October 1, 2010, among the Transaction
  Parties, the institutions parties thereto as lenders thereunder, Bank of
  America as agent, swing line lender and L/C issuer, Bank of America and Wells
  Fargo Capital Finance, LLC, as co-collateral agents, Wells Fargo Capital Finance,
  LLC and GE Capital Markets, Inc., as co-syndication agents, GMAC Commercial
  Finance LLC and UBS Securities LLC, as co- documentation agents and Banc of
  America Securities LLC, Wells Fargo Capital Finance, LLC and GE Capital
  Markets, Inc., as join lead arrangers and joint bookrunners, as amended by
  (i) Amendment No. 1, dated as of October 1, 2010, (ii) Amendment No. 2 to
  Credit Agreement and Amendment No. 1 to Security Agreement, dated as of May
  5, 2011, (iii) Amendment No. 3 to Credit Agreement, dated as of March 12,
  2012 and (iv) Incremental Revolver Joinder and Amendment No. 4 to Credit
  Agreement, dated as of October 25, 2012 (as so amended, the “Existing
  Financing Agreement”); (6) an executed copy of the Intercreditor Agreement,
  dated as of May 13, 2011 (the “Intercreditor Agreement”), among the
  Transaction Parties, Wilmington Trust, National Association (as successor by
  merger to Wilmington Trust FSB), as second lien collateral agent and Bank of
  America, as first lien agent and as control agent; (7) an executed copy of
  the Security Agreement, dated as of October 1, 2010, among the Transaction
  Parties and the Collateral Agent, as amended by Amendment No. 2 to Credit
  Agreement and Amendment No. 1 to Security Agreement, dated as of May 5, 2011
  (as so amended, confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 3 NY 74844018v2 the “Security Agreement”);
  (8) the Officer’s Certificate of each of the Transaction Parties delivered to
  us in connection with this opinion letter, a copy of which is attached hereto
  as Exhibit A (the “Officer’s Certificate”); (9) time-stamped copies of
  financing statements naming each Transaction Party as debtor and the
  Collateral Agent as secured party (the “Financing Statements”), a copy of
  each of which is attached hereto as Exhibit B, which Financing Statements
  have been filed in the office of the Secretary of State of the State of
  Delaware (the “Delaware Filing Office”); (10) a copy of the Certificate of
  Formation of each Transaction Party certified by the Secretary of State of
  the State of Delaware on November 7, 2013 (each, a “Certified Certificate of
  Formation”) and certified to us by an officer of each Transaction Party, as
  applicable, as being complete and correct and in full force and effect as of
  the date hereof; (11) a copy of the Amended and Restated Limited Liability
  Company Agreement of each Transaction Party (each, a “Limited Liability
  Company Agreement”), certified to us by an officer of each Transaction Party,
  as applicable, as being complete and correct and in full force and effect as
  of the date hereof; and (12) a copy of the certificates, dated November 6,
  2013, of the Secretary of State of the State of Delaware as to the existence
  and good standing of each Transaction Party in the State of Delaware as of
  such date. The documents referred to in items (1) through (4) above,
  inclusive, are referred to herein collectively as the “Documents.” Each of
  the certificates described in item (12) above is referred to herein as a
  “Good Standing Certificate.” We have also examined originals or copies,
  certified or otherwise identified to our satisfaction, of minutes, written
  consents, records, agreements and other instruments of the Transaction
  Parties, certificates of public officials, certificates of officers and other
  representatives of the Transaction Parties, and other documents, and have
  made such examinations of law, as we have deemed necessary to form the basis
  of the opinions hereinafter expressed. In all examinations made by us in
  connection with this opinion, we have assumed the legal capacity of all
  natural persons executing documents, the genuineness of all signatures, the
  completeness and authenticity of all original and certified documents and
  records, the conformity to the originals of all copies submitted to us as
  conformed or reproduction copies and the completeness and authenticity of the
  originals of such copies. confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 4 NY 74844018v2 As to various questions of
  fact relevant to the opinions hereinafter expressed, we have relied upon, and
  assume the accuracy of, the statements in the Officer’s Certificate and
  certificates of officers of other parties to the Documents and the Security
  Agreement and the representations and warranties of the Transaction Parties
  contained in the Documents and the Security Agreement and assume compliance
  on the part of the Transaction Parties with their covenants and agreements
  contained therein. Our firm does not act as general counsel to the
  Transaction Parties, and we have not conducted an independent investigation
  of the business affairs of the Transaction Parties or the Lender Parties. For
  purposes of our opinions expressed below, we have assumed: (i) the due
  organization, valid existence and good standing of each party to each
  Document, other than the Transaction Parties; (ii) the power and authority of
  each party to each Document, other than the Transaction Parties, and that
  each such party (other than the Transaction Parties) has all requisite
  limited liability company, partnership, corporate, shareholder, third party
  and governmental authorizations, consents and approvals, and made all
  requisite filings and registrations, in each case, necessary to execute,
  deliver and perform each of the Documents to which it is a party; (iii) the
  due execution and delivery pursuant to due authorization of each of the
  Documents by each party thereto, other than the Transaction Parties; (iv)
  that such execution, delivery and performance will not violate or conflict
  with any law, rule, regulation, order, decree, judgment, instrument or
  agreement binding upon or applicable to any such party or its properties
  (except with respect to the Transaction Parties to the extent expressly set
  forth in clauses (ii) and (iii) of paragraph 4 below); and (v) that each of
  the Documents is a valid and binding obligation of, and enforceable in
  accordance with its terms against, each of the parties thereto, other than
  the Transaction Parties. We have also assumed that each of the Existing
  Financing Agreement, the Intercreditor Agreement and the Security Agreement
  remains outstanding and in full force and effect, and has not been amended,
  restated, supplemented or modified, except by the Financing Agreement and the
  Intercreditor Amendment, as applicable. In connection with the opinions
  expressed in paragraph 1 below, we have relied solely upon certificates of
  public officials (including, without limitation, the Good Standing
  Certificates) as to the factual matters and legal conclusions set forth
  therein. With respect to the opinions expressed in clauses (i) and (ii)(A) of
  paragraph below, our opinions are limited (x) to our actual knowledge, if
  any, of the specially regulated business activities and properties of the
  Transaction Parties based solely upon the Officer’s Certificate in respect of
  such matters and without any independent investigation or verification on our
  part and (y) to only those laws and regulations that, in our experience, are
  normally applicable to transactions of the type contemplated by the
  Documents. Based on the foregoing, and subject to the assumptions,
  exceptions, limitations and qualifications set forth in this opinion letter,
  it is our opinion that: confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 5 NY 74844018v2 1. Each Transaction Party is
  a limited liability company existing in good standing under the laws of the
  State of Delaware. 2. Each Transaction Party has the limited liability
  company power and authority to enter into and to incur and perform its
  obligations under the Documents to which it is a party. 3. The execution and
  delivery to the Agent and/or the Collateral Agent by each Transaction Party
  of the Documents to which it is a party and the performance by such Transaction
  Party of its obligations thereunder (i) have been authorized by all necessary
  limited liability company action by such Transaction Party, and (ii) do not
  violate any provision of the Certificate of Formation or Limited Liability
  Company Agreement of such Transaction Party. 4. The execution and delivery to
  the Agent and/or the Collateral Agent by each Transaction Party of 1the
  Documents to which it is a party and the performance by such Transaction
  Party of its obligations thereunder (i) do not require under law or
  regulation of any governmental agency or authority of the State of New York,
  the State of Delaware pursuant to the Delaware Limited Liability Company Act
  (the “DLLCA”) or the United States of America any filing or registration by
  such Transaction Party with, or approval or consent to any such action by
  such Transaction Party of, any governmental agency or authority of the State
  of New York, the State of Delaware or the United States of America that has
  not been made or obtained except (A) those required in the ordinary course of
  business in connection with the performance by such Transaction Party of its
  obligations under certain covenants contained in the Documents, (B) pursuant
  to securities and other laws that may be applicable to the disposition of any
  collateral subject thereto and (C) filings, registrations, consents or
  approvals in each case not required to be made or obtained by the date
  hereof, (ii) do not violate (A) any present law, or present regulation of any
  governmental agency or authority, of the State of New York or the United
  States of America applicable to such Transaction Party or its property or (B)
  any provision of the DLLCA applicable to such Transaction Party and (iii)
  violate any agreement binding upon such Transaction Party or its property
  that is listed on Exhibit C hereto (this opinion being limited in that we
  express no opinion with respect to any violation, breach or default not
  readily ascertainable from the face of any such agreement or arising under or
  based upon any cross default provision insofar as it relates to a default
  under an agreement not so identified to us on such Exhibit C hereto, or
  arising under or based upon any covenant of a financial or numerical nature
  or requiring computation). 5. Each Document has been duly executed and
  delivered on behalf of each Transaction Party signatory thereto, and each
  Document constitutes a valid and binding 1 Note: Performance of obligations
  is already covered in the next line directly below. confidential confidential
  

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 6 NY 74844018v2 obligation of such
  Transaction Party, enforceable against such Transaction Party in accordance
  with its terms. 6. The execution and delivery to the Agent and/or the
  Collateral Agent by each Transaction Party of the Documents to which it is a
  party do not adversely affect the continued existence of the security
  interest created by the Security Agreement, as confirmed, ratified,
  reaffirmed and continued by such Transaction Party pursuant to the Financing
  Agreement, in such Transaction Party’s rights in the Collateral (as defined
  in the Security Agreement) to which Article 9 of the NY UCC is applicable
  (the “Article 9 Collateral”), in favor of the Collateral Agent for the
  benefit of the Secured Parties (including any new Lenders that become Lenders
  under the Financing Agreement on the date hereof). 7. The execution and
  delivery to the Agent and/or the Collateral Agent by each Transaction Party
  of the Documents to which it is a party do not adversely affect the continued
  perfection of the security interest created by the Security Agreement in
  favor of the Collateral Agent for the benefit of the Secured Parties
  (including any new Lenders that become Lenders under the Financing Agreement
  on the date hereof), as confirmed, ratified, reaffirmed and continued by such
  Transaction Party pursuant to the Financing Agreement, in such Transaction
  Party’s rights in that portion of the Article 9 Collateral in which a
  security interest was perfected by filing of the applicable Financing
  Statement in the Delaware Filing Office under the Uniform Commercial Code as
  in effect in the State of Delaware on the Closing Date. 8. The borrowings by
  Parent Borrower and the Company2 under the Financing Agreement and the application
  of the proceeds thereof as provided in the Financing Agreement will not
  violate Regulation T, U or X of the Board of Governors of the Federal Reserve
  System (the “Margin Regulations”). 9. None of the Transaction Parties is
  required to register as an “investment company” (under, and as defined in,
  the Investment Company Act of 1940, as amended (the “1940 Act”)). The
  opinions contained in this letter are subject to the following further
  limitations and qualifications: A. Our opinions set forth in paragraph 5
  above with respect to the enforceability of the Documents are (i) subject to
  applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
  conveyance, preferential transfer, receivership, conservatorship and similar
  laws, and related regulations and judicial doctrines, now or hereafter in
  effect relating to or affecting creditors’ 2 Note: Holdings is not a borrower
  under the Financing Agreement. confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 7 NY 74844018v2 rights and remedies generally
  (collectively, “Insolvency Laws”), (ii) as to enforceability of any right or
  remedy that may be exercised by or on behalf of the Lenders under any of the
  Documents, subject to the limitations contained in Part 6 of Article 9 of the
  NY UCC and (iii) subject to and may be limited by legal and equitable
  principles, whether such principles are considered in a proceeding at law or
  in equity. B. We express no opinion as to the enforceability of any provision
  in the Documents: (i) providing that any person or entity may sell or
  otherwise dispose of, or purchase, any collateral subject thereto, or enforce
  any other right or remedy thereunder (including without limitation any self-
  help or taking-possession remedy), except in compliance with the NY UCC and
  other applicable laws; (ii) establishing standards for the performance of the
  obligations of good faith, diligence, reasonableness and care prescribed by
  the NY UCC or of any of the rights or duties referred to in Section 9-603 of
  the NY UCC; (iii) relating to indemnification, contribution or exculpation in
  connection with violations of any securities laws or statutory duties or
  public policy, or in connection with willful, reckless or unlawful acts or
  gross negligence of the indemnified or exculpated party or the party
  receiving contribution; (iv) providing that any person or entity may exercise
  set-off rights other than in accordance with and pursuant to applicable law;
  (v) relating to choice of governing law to the extent that the enforceability
  of any such provision is to be determined by any court other than a court of
  the State of New York or may be subject to constitutional limitations; (vi)
  waiving any rights to trial by jury; (vii) purporting to confer, or
  constituting an agreement with respect to, subject matter jurisdiction of
  United States federal courts to adjudicate any matter; (viii) purporting to
  create a trust or other fiduciary relationship; (ix) specifying that
  provisions thereof may be waived or amended only in writing, to the extent
  that an oral agreement or an confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 8 NY 74844018v2 implied agreement by trade
  practice or course of conduct has been created that modifies any provision of
  such Documents; (x) giving any person or entity the power to accelerate
  obligations or to foreclose upon collateral without any notice to the
  obligor; (xi) providing for the performance by any guarantor of any of the
  nonmonetary obligations of any person or entity not controlled by such
  guarantor; (xii) providing for restraints on alienation of property and
  purporting to render transfers of such property void and of no effect or
  prohibiting or restricting the assignment or transfer of property or rights
  to the extent that any such prohibition or restriction is ineffective
  pursuant to Sections 9-406 through 9-409 of the NY UCC; (xiii) constituting a
  severability provision or any provision of similar intent or purpose; (xiv)
  providing for the waiver of any non-waivable rights granted by the
  Constitution of the United States, any federal or state statute or any
  decisional law, including any waiver of notice or an opportunity for a
  hearing; or (xv) providing that a failure on the part of any party to
  exercise, in whole or in part, a right or remedy provided to such party shall
  not constitute a waiver of such party’s rights or remedies or of any default.
  C. Our opinions as to enforceability are subject to the effect of generally
  applicable rules of law that: (i) limit the vesting of jurisdiction in, or
  the consent to the exercise of jurisdiction by, any court where the exercise
  of jurisdiction is within the discretion of such court or the court is not a
  court of general jurisdiction; (ii) may, where less than all of a contract may
  be unenforceable, limit the enforceability of the balance of the contract to
  circumstances in which the unenforceable portion is not an essential part of
  the agreed exchange, or that permit a court to reserve to itself a decision
  as to whether any provision of any agreement is severable; and confidential
  confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 9 NY 74844018v2 (iii) limit the availability
  of a remedy under certain circumstances when another remedy has been elected.
  D. We render no opinion as to (i) provisions which purport to establish
  evidentiary standards, disclaimers, liability limitations with respect to
  third parties, powers of attorney, rights of third parties to enforce
  provisions of any of the Documents, set off, discharge of defenses, and
  liquidated damages, make-whole or other prepayment premiums, charges or
  similar payments, late payment charges or default interest, and (ii) the
  effect of the compliance or non- compliance of any Lender Party with any
  state or federal laws or regulations applicable to such Lender Party because
  of such Lender Party’s legal or regulatory status, the nature of such Lender
  Party’s business or the authority of such Lender Party to conduct business in
  any jurisdiction. E. With respect to our opinions set forth in paragraphs 6
  and 7 above: (i) We have assumed that (x) each Transaction Party has
  sufficient rights within the meaning of Section 9-203(b)(2) of the NY UCC to
  all property or assets existing on the date hereof and (y) each Transaction Party
  will have rights within the meaning of Section 9-203(b)(2) of the NY UCC in
  each item of collateral arising after the date hereof, in the case of each of
  clauses (x) and (y) above, in which such Transaction Party purports to grant
  a security interest under the Security Agreement. (ii) Any security interest
  in the proceeds of collateral is subject in all respects to the limitations
  set forth in Section 9-315 of the NY UCC. (iii) Under certain circumstances
  described in Section 9-315 of the NY UCC, the right of a secured party to
  enforce a security interest in the proceeds of collateral may be limited.
  (iv) Section 552 of the United States Bankruptcy Code (the “Code”) limits the
  extent to which property acquired by a debtor after the commencement of a case
  under the Code may be subject to a security interest arising from a security
  agreement entered into by the debtor before the commencement of such case,
  and Section 547 of the Code may render a security interest in such
  after-acquired property voidable to the extent it serves as collateral for
  any antecedent debt, subject to the exceptions provided therein. confidential
  confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 10 NY 74844018v2 (v) Other than as expressly
  set forth in paragraph 6 above, we express no opinion as to the creation,
  validity or enforceability of any pledge, security interest, assignment for
  security, lien or other encumbrance, as the case may be, that may be created
  or purported to be created under the Security Agreement. (vi) We express no
  opinion as to the creation, validity or enforceability of any pledge,
  security interest, assignment for security, lien or other encumbrance, as the
  case may be, that may be created or purported to be created under the
  Security Agreement in any commercial tort claim. (vii) Other than as
  expressly set forth in paragraph 7 above, we express no opinion as to the
  perfection of any pledge, security interest, assignment for security, lien or
  other encumbrance, as the case may be, that may be created or purported to be
  created under the Security Agreement. (viii) We express no opinion as to the
  priority of any pledge, security interest, assignment for security, lien or
  other encumbrance, as the case may be, that may be created or purported to be
  created under the Security Agreement. (ix) We express no opinion as to the
  enforceability of the security interests under the Security Agreement in any
  item of collateral subject to any restriction on or prohibition against
  transfer contained in or otherwise applicable to such item of collateral or
  any contract, agreement, license, permit, security, instrument or document
  constituting, evidencing or relating to such item, except to the extent that
  any such restriction is rendered ineffective pursuant to any of Sections
  9-406 through 9-409, inclusive, of the NY UCC. (x) We call to your attention
  that Article 9 of the Del. UCC requires the filing of continuation statements
  within the period of six months prior to the expiration of five years from
  the date of original filing of financing statements under the Del. UCC in
  order to maintain the effectiveness of such financing statements and that
  additional financing statements may be required to be filed to maintain the
  perfection of security interests if the debtor granting such security
  interests makes certain changes to its name, or changes its location
  (including through a change in its jurisdiction of organization) or the
  location of certain types of collateral, all as provided in the Del. UCC.
  confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 11 NY 74844018v2 (xi) We call to your
  attention that an obligor (as defined in the NY UCC) other than a debtor may
  have rights under Part 6 of Article 9 of the NY UCC. (xii) With respect to
  our opinions set forth above in paragraph 7, we express no opinion with
  respect to the perfection of any such security interest in any Article 9
  Collateral constituting timber to be cut, as extracted collateral,
  cooperative interests, or property described in Section 9-311(a) of the NY
  UCC (including, without limitation, property subject to a
  certificate-of-title statute), and we express no opinion with respect to the
  effectiveness of any financing statement filed or purported to be filed as a
  fixture filing. (xiii) We express no opinion as to the effectiveness of
  Section 2(a) of the Security Agreement for purposes of Sections 9-108 and
  9-203 (as it relates to Section 9-108) of the NY UCC. We express no opinion
  as to the effectiveness of a description of collateral as “all the debtor’s
  assets” or “all the debtor’s personal property” or words to similar effect
  for purposes of Section 9-203 of the NY UCC. (xiv) We have assumed that each
  Transaction Party is organized solely under the laws of the state identified
  as such Transaction Party’s jurisdiction of organization in the Certified
  Certificate of Formation of, and Good Standing Certificate for, such
  Transaction Party. (xv) We have assumed that on the Closing Date the Security
  Agreement created in favor of the Collateral Agent, for the benefit of the
  Secured Parties (as defined in the Existing Financing Agreement), a security
  interest in each Transaction Party’s rights in the Article 9 Collateral.
  (xvi) We have assumed that the Financing Statements were effectively filed in
  the Delaware Filing Office and such filing perfected, for the benefit of the
  Secured Parties (as defined in the Existing Financing Agreement), the
  security interest created by the Security Agreement in each Transaction
  Party’s rights in that portion of the Article 9 Collateral in which a
  security interest may be perfected by filing an initial financing statement
  under the Uniform Commercial Code as in effect in the State of Delaware on
  the Closing Date, and such Financing Statements have not been amended,
  modified or terminated. F. We express no opinion in this opinion letter as to
  the Existing Financing Agreement or any document relating to the Existing
  Financing Agreement (other than the Security Agreement) executed and
  delivered prior to confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 12 NY 74844018v2 the date hereof
  (collectively, the “Existing Facility Documents”), and our opinions herein as
  to the Financing Agreement relate solely to the Financing Agreement that amends
  and restates the Existing Financing Agreement in its entirety and do not in
  any way relate back to any Existing Facility Document. G. We express no
  opinion as to (i) any county, city or municipal law, ordinance or regulation
  or judicial decisions to the extent they deal with the foregoing, or (ii) tax
  laws, securities laws, environmental laws or antitrust laws. H. We express no
  opinion with respect to (i) any provision of The Dodd-Frank Wall Street
  Reform and Consumer Protection Act (Public Law No. 111-203, 124 Stat. 1376,
  12 U.S.C. 5301 et seq.) (the “Act”) that requires the adoption of any
  implementing rule or regulation by any United States regulatory agency or
  authority (each, a “Regulatory Authority”), which implementing rule or
  regulation has not been adopted in final form by the applicable Regulatory
  Authority or is not yet effective or (ii) any provision of the Act, or any
  final rule or final regulation promulgated under the Act, to the extent that
  such statutory provision, final rule or final regulation uses, refers to or
  incorporates by reference (x) any term that the Act requires to be defined by
  the adoption of any implementing rule or regulation by any Regulatory
  Authority, which implementing rule or regulation has not been adopted in
  final form by the applicable Regulatory Authority or is not yet effective or
  (y) any other rule or regulation that has not been adopted in final form by
  the applicable Regulatory Authority or is not yet effective. I. We express no
  opinion as to the effect or waiver of suretyship defenses, or defenses in the
  nature thereof, with respect to the obligations of any applicable guarantor,
  indemnitor, joint obligor, surety, accommodation party, or other secondary
  obligor. J. Attorneys involved in the preparation of this opinion are
  admitted to practice law in the State of New York. The opinions expressed
  herein are limited to (i) the laws of the State of New York and the federal
  laws of the United States of America and (ii) to the extent relevant to the
  opinions expressed in paragraphs 1, 2, 3, 4 and 5, the DLLCA. Our opinions in
  paragraph 6 above are limited to Article 9 of the NY UCC and our opinions in
  paragraph 7 above are limited to Article 9 of the Del. UCC and therefore
  those opinion paragraphs do not address (a) laws of jurisdictions other than
  New York, Delaware and the United States of America, and laws of New York,
  Delaware and the United States of America except for Article 9 of the NY UCC
  and Article 9 of the Del. UCC, (b) collateral of a type not subject to Article
  9 of the UCC, and (c) under the choice of law rules of the NY UCC and the
  Del. UCC with respect to the law governing perfection and priority of
  security interests. confidential confidential 

  

 

	
  

  	
  To the Lender
  Parties November [_], 2013 Page 13 NY 74844018v2 Our opinions as to any
  matters governed by (i) the Del. UCC are based solely upon our review of the
  Del. UCC as published in the CCH Secured Transactions Guide, last updated
  [October 22], 2013 and (ii) the DLLCA are based solely upon our review of the
  DLLCA as published in the Corporation Service Company’s Delaware Laws
  Governing Business Entities Annotated, last updated September 2013, without
  any review or consideration of any regulations promulgated thereunder or any
  decisions or opinions of courts or other adjudicative bodies or governmental
  authorities of the State of Delaware, whether or not reported or summarized
  in the foregoing publication. Our opinions are limited to those expressly set
  forth herein, and we express no opinions by implication. This opinion letter
  speaks only as of the date hereof. We have no responsibility or obligation to
  update this letter, whether in respect of changes in law, changes in facts or
  any other development, in each case, which arise after the date hereof and whether
  or not we may later become aware of such changes or developments. This
  opinion letter is furnished solely for your benefit, and of any other person
  or entity becoming a Lender Party under the Financing Agreement, in each
  case, in connection with matters relating to the Documents and may not be
  used or relied upon by any other person or for any other purpose without our
  prior written consent. Very truly yours, STROOCK & STROOCK & LAVAN
  LLP confidential confidential 

  

 

	
  

  	
   A-1 NY 74844018V2 Exhibits A Officer’s
  Certificate confidential confidential 

  

 

	
  

  	
   B-1 NY 74844018V2 Exhibit B Financing
  Statements confidential confidential 

  

 

	
  

  	
  C-1 NY
  74844018V2 Exhibit C 1. That certain Indenture, dated as of May 13, 2011,
  among the Transaction Parties and Wilmington Trust, National Association (as
  successor by merger to Wilmington Trust FSB) as trustee (in such capacity,
  the “Trustee”) and as parity junior lien collateral agent (in such capacity,
  the “Parity Junior Lien Collateral Agent”), as amended and supplemented by
  that certain Supplemental Indenture No. 1 to the Indenture, dated as of the
  date hereof, among the Transaction Parties, the Trustee and the Parity Junior
  Lien Collateral Agent. 2. That certain Security Agreement, dated as of May
  13, 2011, among the Transaction Parties and Wilmington Trust, National
  Association (as successor by merger to Wilmington Trust FSB) as collateral
  agent. confidential confidential 

  

 

	
  

  	
  NY 74829809v4
  Schedule 5.4(a) Jurisdiction of Organization and Qualifications Company Jurisdiction
  of Organization Qualifications Neff Holdings LLC Delaware Delaware Neff LLC
  Delaware Delaware Neff Rental LLC Delaware Florida Virginia Tennessee
  California Texas North Carolina Georgia Colorado South Carolina Washington
  Louisiana Arizona Maryland Alabama Neff Rental Finance Corp. Delaware
  Delaware 

  

 

	
  

  	
  2 NY 74829809v4
  Schedule 5.4(b) Pledged Stock and Pledged Notes Part A Capitalization of
  Parent Borrower and its Subsidiaries Capitalization of Holdings Holder of
  Class A Units of Neff Holdings LLC Unit Certificate No. No. Units Issued
  Fully-Diluted Percentage Ownership Wayzata Opportunities Fund II, L.P. A1-1
  (for 7,610,800 Units) and A1-3 (for 1,363,796) 8,974,596 89.940% Wayzata
  Opportunities Fund Offshore II, L.P. A1-4 225,404 2.259% Total: 9,200,000
  92.199% Options Exercisable into Class B Limited Voting Common Units (“Class
  B Units”) of Holdings: Holder of Options of Neff Holdings LLC Number of
  Options (Expressed in Number of Class B Units Issuable Upon Exercise)
  Fully-Diluted Percentage Ownership Graham Hood 218,000 2.185% Mark Irion
  130,000 1.303% Wes Parks 60,000 0.601% Henry Lawson 60,000 0.601% John
  Anderson 60,000 0.601% Brad Nowell 37,000 0.371% Steven Settelmayer 37,000
  0.371% Paula Papamarcos 31,000 0.311% Steve Michaels 37,000 0.371% Tom
  Sutherland 31,000 0.310% Tammy Parham 14,000 0.14% Jim Horn 14,000 0.14%
  Bryant Becton 14,000 0.14% Company Holder of Stock Stock/Unit Certificate No.
  No. Shares/ Units Issued No. Shares/Units Authorized Fully-Diluted Percentage
  Ownership Neff LLC Neff Holdings LLC 1 100 Common Units 100 Common Units 100%
  Neff Rental LLC Neff LLC 1 100 Common Units 100 Common Units 100% Neff Rental
  Finance Corp. Neff Rental LLC 1 1000 Shares of Common Stock 3000 Shares of
  Common Stock 100% 

  

 

	
  

  	
  3 NY 74829809v4
  Bobby Comer 14,000 0.14% Robert C. Singer 8,801 0.088% James Continenza
  12,573 0.126% Total: 778,374 7.801% Part B None. 

  

 

	
  

  	
  4 NY 74829809v4
  Schedule 5.6 Intellectual Property Patents None. Trademarks Owner Title
  Registration Number Neff Rental LLC Words Neff Rental and Circular Design
  3,200,927 Neff Rental LLC Words Neff Rental and Lined Design 3,200,938 Neff
  Rental LLC Words Neff Rental 3,205,229 Neff Rental LLC Words We Care More
  3,467,842 Neff Rental LLC Words We Have It . . . 86,093,901 Copyrights None. 

  

 

	
  

  	
  5 NY 74829809v4
  Schedule 5.8 Employee Matters None. 

  

 

	
  

  	
  6 NY 74829809v4
  Schedule 5.10 Litigation; Adverse Facts None. 

  

 

	
  

  	
  7 NY 74829809v4
  Schedule 5.12 Real Estate Lease Real Property (All leased by Neff Rental LLC)
  Address City State Vendor/Landlord 6501 NW 77TH AVENUE MIAMI FL RMK
  PROPERTIES, LLC #28464 1860 MARTIN LUTHER KING JR BLVD WEST PALM FL LaMae
  Realty #17162 7400 COMMERCIAL CIRCLE PORT ST. LUCIE FL PSL INDUSTRIAL LLC
  #31262 1925 NW 18TH STREET POMPANO FL DUBLIN HOLDINGS, LLC #30639 1925 NW 18TH
  STREET POMPANO SUB- LEASE FL DUBLIN HOLDINGS, LLC #30639 – LESSOR ON “PRIME
  LEASE” 11700 METRO PARKWAY FT. MYERS FL G&M ESTATES USA, INC. (#17122)
  4321 NORTH US HIGHWAY 301 TAMPA FL H & R LAND TRUST #12349 4321 NORTH US
  HIGHWAY 301 FLORIDA REGION OFFICE FL H & R LAND TRUST #12349 109
  BLUEGRASS COURT SARASOTA FL HUPP TRIPLE D IND., LLC #33552 4310 AIRPORT
  COMMERCE BLVD. TALLAHASSEE FL HUPP TRIPLE D IND., LLC #33507 11909 SOUTH
  ORANGE BLOSSOM TRAIL SOUTH ORLANDO FL CLARKSON FAMILY PARTNERSHIP #8846 3500
  - A WEST KING STREET MERRITT ISLAND (COCOA) FL WUISMAN FAM LTD. PARTNERSHIP
  (# 17488) 500 AERO LANE SANFORD FL CLARKSON PROPERTIES, INC. #25002 5955
  PHILLIPS HIGHWAY JACKSONVILLE FL PHILLIPS HIGHWAY PROPERTY #26348 3678
  LIDDELL ROAD DORAVILLE GA JIM L. LITTLE, INC. #32277 5035 HWY. 85 SOUTH
  FOREST PARK GA SULLIVAN PROPERTIES #1486 4406 DARIEN HIGHWAY BRUNSWICK GA
  JULIE BLAKE #38953 4326 HURRICANE CREEK BLVD NASHVILLE TN KNOXVILLE
  INDUSTRIAL GROUP, LTD #5654 SUITE H 520 PIRKLE FERRY RD. SOUTHEAST REGION OFFICE
  GA MICHAEL F. SMITH #28834 SUITE H SUITE I 520 PIRKLE FERRY RD. SOUTHEAST
  REGION OFFICE GA MICHAEL F. SMITH #28834 SUITE I 1111 SHALLOWFORD ROAD
  MARIETTA GA JAMES A. RAPTIS #5136 1460 CHASE STREET ATHENS GA BRUCE RICHBOURG
  #7268 2325 TUBMAN HOME ROAD AUGUSTA GA RASI, LLC #26470 5340 HAWKINSVILLE
  ROAD MACON GA BRUCE RICHBOURG #7268 1808 SANDERSON ROAD KNOXVILLE TN
  KNOXVILLE INDUSTRIAL GROUP, LTD #5654 3000 A PINSON VALLEY PARKWAY BIRMINGHAM
  AL BAGGETT LEASING, INC. #36718 1 PROSPERITY DRIVE SAVANNAH GA AMERICAN
  SHREDDING PROPERTIES, LLC #37911 2470 I-65 SERVICE ROAD NORTH MOBILE AL
  MCALEER PROPERTIES, L.P. #39592 2951 ROWLAND ROAD RALEIGH NC LETC, INC.
  #29538 7430 PEPPERMILL PARKWAY CHARLESTON SC RE/MAX PROFESSIONAL REALTY #4191
  4501 EQUIPMENT DRIVE CHARLOTTE NC BGCS PROPERTY ASSOCIATES LLC #35007 1936
  HIGHWAY 101 SOUTH GREER SC BRUCE RICHBOURG #7268 2039 WEST DEKALB STREET,
  ATLANTIC REGION OFFICE SC LARRY DIBIASE #32646 

  

 

	
  

  	
  8 NY 74829809v4
  Address City State Vendor/Landlord UNIT D 3813 US HIGHWAY 421 NORTH
  WILMINGTON NC OLD NORTH STATE PROPERTIES, LLC #28081 1112 WOLF SWAMP ROAD
  JACKSONVILLE NC RWK LLC #34883 2323 SOUTH ALSTON AVENUE DURHAM NC BRUCE
  RICHBOURG #7268 2323 SOUTH ALSTON AVENUE DURHAM#2 NC REAL ESTATE ASSOCIATES
  INC #10397 140 PEPSI LANE FAYETTEVILLE NC BRUCE RICHBOURG #7268 1716 E.
  PALMETTO STREET FLORENCE SC ARTHUR J. & BARBARA M. DELLANO #24312 108
  NORTH MONTAGUE DRIVE COLUMBIA SC BRUCE RICHBOURG #7268 5357 NC HWY 11 SOUTH
  GREENVILLE NC ARTHUR J. & BARBARA M. DELLANO #24312 4 COMMERCE PARKWAY
  FREDERICKSBURG VA VENTURE INVESTMENTS LLC #30395 5640 RABY ROAD NORFOLK VA
  ERNEST L. HUDSON #12694 600 INDUSTRIAL PARK DRIVE NEWPORT NEWS VA VENTURE
  INVESTMENTS LLC #30395 9030 BURGE AVENUE RICHMOND VA SPD ENTERPRISES LLC
  #34355 6382 BURNT POPLAR ROAD GREENSBORO NC EDWARD J. GREEN #18935 12101 TAC
  COURT MANASSASS VA MORAIS INVESTMENTS LLC 7601 JEFFERSON AVENUE WASHINGTON DC
  B & R PROPERTY MANAGEMENT, INC. #28792 101 NORTH LOOP WEST HOUSTON TX THE
  EISEMANN TRUST #28458 1248 E. INDUSTRIAL FT. WORTH TX ATOLL INVESTMENTS, LP
  #5815 210 NURSERY ROAD CENTRAL REGION OFFICE TX RONALD E DYKES #39480 12949
  RESEARCH BLVD. AUSTIN TX RCH COMPANY #6775 1622 WEST 2ND STREET ODESSA TX E
  & N PROPERTIES LLC #38335 29740 SE LOOP 410 SAN ANTONIO TX DENNIS R.
  OLOTEO JR. #38204 390 SOUTH VAN AVENUE HOUMA LA BRS LEASING & FINANCING,
  LLC #12775 1407 GENERAL MOUTON LAFAYETTE LA BRS LEASING & FINANCING, LLC
  #12775 3718 HIGHWAY 14 NEW IBERIA LA BRS LEASING & FINANCING, LLC #12775
  10300 AIRLINE HIGHWAY ST. ROSE LA LATINO MUFFLERS, INC. #29831 3836
  INDUSTRIAL CIRCLE BOSSIER CITY LA M & O INVESTMENTS, INC. #36648 37010
  HIGHWAY 30 BATON ROUGE LA BAROGON PROPERTIES #13075 3718 HIGHWAY 14 MAJOR
  REPAIR (LOC @ NEW IBERIA) LA BRS LEASING & FINANCING, LLC #12775 390
  SOUTH VAN AVENUE GULF REGION OFFICE LA BRS LEASING & FINANCING, LLC
  #12775 1835 S. BLACK CANYON HIGHWAY PHOENIX AZ MCP INVESTMENTS, LLC #1956
  3682 SOUTH VALLEY VIEW BLVD LAS VEGAS NV GARY AND CAROL VOSBURG #35219 9700
  ALTON WAY DENVER CO ALTON RENTALS, INC. #38356 2819 W. RUTHRAUFF ROAD TUCSON
  AZ GEORGE H MUSEKAMP, III #6423 222 EAST VALLEY STREET SAN BERNARDINO CA HNK
  ASSOCIATES, LLC #25006 9580 WEST SAHARA AVENUE, #180E WESTERN REGION OFFICE
  NV THE PARK-215, LLC #34729 8401 EAST ILIFF AVENUE DENVER CENTRAL CO SCOTT
  & ELLEN HAMBURG #11717 1354 N. RED GUM AVENUE ANAHEIM CA ERDTSIECK FAMILY
  LIMITED PARTNERSHIP #5217 12410 MEAD WAY DENVER SOUTH CO SCOTT & ELLEN
  HAMBURG #11717 955 MISSION AVENUE ESCONDIDO CA DORIS LYMAN #6778 957 WEST
  MISSION AVENUE ESCONDIDO (#2) CA MARK D. KLAMMER #11074 621 L. STREET SAN
  DIEGO (CHULA VISTA) CA SANDRA BATES #16207 

  

 

	
  

  	
  9 NY 74829809v4
  Address City State Vendor/Landlord 8700 FRUITRIDGE ROAD SACRAMENTO CA GEORGE
  M. PHILPOTT, JR #8113 8455 SIERRA COLLEGE BLVD. ROSEVILLE CA McKINNEY &
  SONS #30853 Owned Real Property (All Owned by Neff Rental LLC) Address City
  State Owned 128 21ST STREET S TEXAS CITY TX OWNED PROPERTY Subleased Real
  Property (Neff Rental LLC as Sublessor) Address City State Sublessee 12949
  RESEARCH BLVD. AUSTIN TX RIVER CITY MANUFACTURING COMPANY 

  

 

	
  

  	
  10 NY
  74829809v4 Schedule 5.13 Environmental Matters None. 

  

 

 

	
  

  	
  11 NY
  74829809v4 Schedule 5.16 Bank Accounts, Securities Accounts; Other Accounts
  Name of Entity Holding Account Bank/Institution Account Address 1 City State
  Zip Code Phone Number Description Neff Rental LLC Bank of America 41321 1000
  West Temple Street Los Angeles CA 90012 1-888-400-9009 Lockbox - Los Angeles
  Neff Rental LLC Bank of America 405138 6000 Feldwood Road College Park GA
  30349 1-888-400-9009 Lockbox - Atlanta Neff Rental LLC Bank of America
  3359325019 600 Peachtree Street NE Atlanta GA 30308 1-888-400-9009 Payroll -
  Disbursement Account Neff Rental LLC Bank of America 3359325027 600 Peachtree
  Street NE Atlanta GA 30308 1-888-400-9009 A/P - Disbursement Account Neff
  Rental LLC Bank of America 4426828095 600 Peachtree Street NE Atlanta GA 30308
  1-888-400-9009 Master Operating Neff Rental LLC Bank of America 4426828105
  600 Peachtree Street NE Atlanta GA 30308 1-888-400-9009 Cash Drawer SRV -
  Blocked Neff Rental LLC Bank of America 4426828118 600 Peachtree Street NE
  Atlanta GA 30308 1-888-400-9009 Lockbox Depository - Blocked Neff Rental LLC
  Bank of America 4426828121 600 Peachtree Street NE Atlanta GA 30308
  1-888-400-9009 Purchase Card Neff Rental LLC Bank of America 4426828134 600
  Peachtree Street NE Atlanta GA 30308 1-888-400-9009 A/P Neff Rental LLC Bank
  of America 4426828147 600 Peachtree Street NE Atlanta GA 30308 1-888-400-9009
  Payroll Neff Rental LLC Bank of America 4426841030 600 Peachtree Street NE
  Atlanta GA 30308 1-888-400-9009 FSA - Flexible Spending Neff Rental LLC Bank
  of America 4426841043 600 Peachtree Street NE Atlanta GA 30308 1-888-400-9009
  Petty Cash - CTR Neff Rental LLC Bank of America 4426841056 600 Peachtree
  Street NE Atlanta GA 30308 1-888-400-9009 Petty Cash - WER Neff Rental LLC
  Bank of America 4427095607 600 Peachtree Street NE Atlanta GA 30308
  1-888-400-9009 Petty Cash - SER Neff Rental LLC Bank of America 4427095610
  600 Peachtree Street NE Atlanta GA 30308 1-888-400-9009 Petty Cash - ATR Neff
  LLC Bank of America 4427095636 600 Peachtree Street NE Atlanta GA 30308
  1-888-400-9009 Neff LLC, Master Operating 

  

 

	
  

  	
  12 NY
  74829809v4 Schedule 5.18 Insurance Policy Description Insurance Company
  Policy Number Policy Period Coverage Deductible Premium Property Insurance:
  Provides coverage for real and personal property, contractors' equipment,
  equipment breakdown, business interruption, and extra expense. Alterra
  America Ins Co $10M limit; Indian Harbor Ins. $15M xs $10M Travelers Boiler
  & Machinery MAXA6IM0049081 Indian Harbor - TBD BAJ-BME1- 659M6029-TIL-13
  3/1/2013 to 3/1/2014 3/1/2013 to 3/1/2014 3/1/2013 to 3/1/2014 $10,000,000
  Limit for Real, Personal Physical Damage & Business Income Excess
  $15,000,000 Loss Limit for Contr. Equipt. (Total $25M for Contr Equipt)
  $10,000,000 Earthquake Aggregate $10,000,000 Flood Aggregate $500,000
  Waterborne Equipment, any one vessel $250,000 Per Item/ $2,500,000 Per
  Occurrence Leased Rental Equipment from Others Boiler & Machinery Total
  Limit: $25M Sublimits: $250,000 Ammonia Contamination $250,000 Hazardous
  Substances $250,000 Water Damage $50,000 except $10,000 Transit Earthquake:
  $50,000; Flood: 3% of the total values at each location, subject to $50,000
  minimum/$250,000 maximum any one occurrence Windstorm/Hail: $50,000 except
  TIER I locations - 3% of the total values at each location, subject to a
  minimum of $250,000/$750,000 maximum Waterborne Equipment: $100,000 Business
  Income/Extra Expense/Contingent BI: 48 Hr Waiting Period. $382,527 + $11,474
  TRIA Prem. + $9,938 S/C's =$403,939 $51,156 Excl. TRIA Prem. + S/C's-TBD
  Boiler: $7,498 Prem. + $25 S/C (12 Month Policy) Grand Total:TBD Commercial
  General Liability: Covers liability for claims of other parties by reason of
  bodily injury, property damage, etc. Liberty Mutual Fire Ins. Company
  EB2-631-509976-023 3/1/2013 to 3/1/2014 $2,000,000 General Aggregate
  $2,000,000 Products - Completed Operations Aggregate $1,000,000 Personal
  & Advertising Injury Limit $1,000,000 Bodily Injury & Property
  Damage, Ea Occ N/A Damages to premises rented to you $250,000 SIR $161,812
  Premium $4,084 Assessments & Surcharges Automobile Liability Coverage:
  Covers liability for claims of other parties by reason of bodily injury,
  property damage, etc. Liberty Mutual Fire Ins. Company AS2-631-509976-033
  3/1/2013 to 3/1/2014 $2,000,000 Combined Single Limit, Liability; Personal
  Injury Protection- Statutory/Minimum; Uninsured/Underinsured Motorists-
  Statutory/Minimum $100,000 Deductible Each Occurrence for Liability No
  Physical Damage Coverage $680,588 Premium $53,328 Est. Claim Handling Costs 

  

 

	
  

  	
  13 NY
  74829809v4 Worker's Compensation (All States except those in a state fund):
  Provides statutory coverage and employer's liability. EL is provided for
  states with monopolistic funds. Liberty Insurance Corporation WA7-63D-509976-
  013 3/1/2013 to 3/1/2014 $1,000,000 BI by Accident Each Accident $1,000,000
  BI by Disease Each Employee $1,000,000 BI by Disease Policy Limit $250,000
  DED $472,805 Premium $11,898 TRIA $33,160 Assessments & Surcharges
  $45,521 Est. Claims Handling Costs Umbrella Policy: Provides coverage excess
  of that provided by the following policies: Commercial Gen. Liability,
  Automobile Liab., Employers' Liability, Employee Benefits Liab. Commerce
  & Industry (Chartis) BE 011912852 3/1/2013 to 3/1/2014 $25,000,000 Each
  Occurrence $25,000,000 General Aggregate in accordance with Section IV Limits
  $25,000,000 Products/Completed Operations Aggregate in accordance with
  Section IV. Limits $250,000 Crisis Response Limit of Insurance $50,000 Excess
  Casualty Crisis Fund Limit of Insurance $10,000 SIR $643,564 Premium $6,436 TRIA
  $650,000 Total Premium $8,450 Surcharges Crime Houston Casualty Company (HCC)
  64-MG-13-A11463 3/1/2013 to 3/1/2014 $1,000,000 $10,000 $2,958 premium plus
  Surplus Lines Taxes TBD Directors & Officers Liability including
  Employment Practices Liability and Fiduciary Liability U.S. Specialty
  Insurance Co.(HCC) 14-MGU-13-A28753 3/1/2013 to 3/1/2014 $10,000,000
  inclusive of defense expenses $5,000,000 Separate Limit for Fiduciary
  Liability $0 Insuring Agreement (A), per Insured Person: Nonindemnifiable
  Loss $75,000 Insuring Agreement (A), Indemnifiable Loss $75,000 Insuring
  Agreement (B) $0 Deductible for Fiduciary Liability $49,724 Premium $646.41
  Surcharges applicable to all coverages Excess D&O Starr Indemnity &
  Liability Company SISIXFL21039013 3/1/2013 to 3/1/2014 $10,000,000 excess of
  $10,000,000 $0 $20,884 Premium $271.49 Surcharge $21,155.49 Total
  Environmental - Commercial Pollution Legal Liability Chartis Specialty
  Insurance Co. PLC14490207 12/19/2011- 12/19/2014 $3,000,000 Each Incident
  $3,000,000 Policy Aggregate $25,000 Deductible, Each Incident $112,783 (3
  Year Pre-Paid) Environmental - Florida Storage Tanks Commerce & Industry
  (Chartis) through Program Managers 11943971 12/19/2012- 12/19/2013 $1,000,000
  Each Incident $1,000,000 Policy Aggregate $5,000 Deductible Each Incident
  $1,320.00 $11 TRIA premium $27.96 Florida Surcharge $1,358.96 Total Premium
  & Surcharges Flood - Pompano Beach, FL Hartford Insurance Co of the
  Midwest 99043721982012 2/27/2012-2/27/2013 $500,000 Building $152,800 Contents
  $1,000 DED - Building $1,000 DED - Contents $4,877 Flood - St. Rose, LA.
  American Bankers Insurance Co of FL AB00137830 4/30/2012-4/30/2013 $500,000
  Building Limit $189,300 Contents $1,000 DED - Building $1,000 DED - Contents
  $2,961 Flood - Fort Myers, FL American Bankers Insurance Co of FL AB00044586
  11/8/2012-11/8/2013 $500,000 Building Limit $149,800 Contents Limit $1,000
  DED - Building $1,000 DED - Contents $875Exhibit 10.10

 

NEFF CORPORATION
  2014 INCENTIVE AWARD PLAN

 

ARTICLE 1.

 

PURPOSE

 

The purpose of the Neff Corporation 2014 Incentive Award Plan (as it may be amended or restated from time to time, the “Plan”) is to promote the success and enhance the value of Neff Corporation (the “Company”) by linking the individual interests of the members of the Board, Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2.

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

 

2.1              “Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 13. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 13.6, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.

 

2.2              “Affiliate” shall mean (a) any Subsidiary, (b) any Parent, and (c) any domestic eligible entity that is disregarded, under Treasury Regulation Section 301.7701-3, as an entity separate from either (i) the Company, (ii) any Subsidiary or (iii) any Parent.

 

2.3              “Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.

 

2.4              “Applicable Law” shall mean any applicable law, including without limitation: (i) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (iii) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.

 

 

2.5              “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend Equivalents award, a Deferred Stock award, a Deferred Stock Unit award, a Stock Payment award or a Stock Appreciation Right, which may be awarded or granted under the Plan (collectively, “Awards”).

 

2.6              “Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.

 

2.7              “Award Limit” shall mean with respect to Awards that shall be payable in Shares or in cash, as the case may be, the respective limit set forth in Section 3.3.

 

2.8              “Board” shall mean the Board of Directors of the Company.

 

2.9              “Change in Control” shall mean and includes each of the following:

 

(a)           A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than Wayzata and its respective affiliates, the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

 

(b)           During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.10(a) or 2.10(c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the Directors then still in office who either were Directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

 

(c)           The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

 

(i)            which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or

 

 

substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, or Wayzata and any of its respective affiliates beneficially owning, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

 

(ii)           after which no person or group, including Wayzata, beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.10(c)(ii) as beneficially owning 50% or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or

 

(d)           The consummation of a liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any portion of an Award that provides for the deferral of compensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) must also constitute a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A.

 

The Committee shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

 

2.10            “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.

 

2.11            “Committee” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board or the Compensation Committee of the Board, appointed as provided in Section 13.1.

 

2.12            “Common Stock” shall mean the Class A common stock of the Company, par value $0.01 per share.

 

2.13            “Company” shall have the meaning set forth in Article 1.

 

2.14            “Consultant” shall mean any consultant or adviser engaged to provide services to the Company or any Affiliate that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.

 

2.15            “Covered Employee” shall mean any Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.

 

 

2.16            “Deferred Stock” shall mean a right to receive Shares awarded under Section 10.4.

 

2.17            “Deferred Stock Unit” shall mean a right to receive Shares awarded under Section 10.5.

 

2.18            “Director” shall mean a member of the Board, as constituted from time to time.

 

2.19            “Director Limit” shall have the meaning set forth in Section 4.6.

 

2.20            “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 10.2.

 

2.21            “DRO” shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.

 

2.22            “Effective Date” shall mean [        ], 2014.

 

2.23            “Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Committee.

 

2.24            “Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any Affiliate.

 

2.25            “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per-share value of the Common Stock underlying outstanding Awards.

 

2.26            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

2.27            “Expiration Date” shall have the meaning given to such term in Section 14.1.

 

2.28            “Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows:

 

(a)           If the Common Stock is listed on any (i) established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) national market system or (iii) automated quotation system on which the Shares are listed, quoted or traded, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for

 

 

which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(b)           If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(c)           If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Board in good faith.

 

Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registration statement relating to its initial public offering and on or prior to the Public Trading Date, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

 

2.29            “Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary corporation (as defined in Section 424(f) of the Code) or parent corporation thereof (as defined in Section 424(e) of the Code).

 

2.30            “Holder” shall mean a person who has been granted an Award.

 

2.31            “Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.

 

2.32            “Non-Employee Director” shall mean a Director of the Company who is not an Employee.

 

2.33            “Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6.

 

2.34            “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option.

 

2.35            “Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6. An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.

 

2.36            “Option Term” shall have the meaning set forth in Section 6.4.

 

 

2.37            “Parent” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests representing at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

2.38            “Performance Award” shall mean a cash bonus award, stock bonus award, performance award or incentive award that is paid in cash, Shares or a combination of both, awarded under Section 10.1.

 

2.39            “Performance-Based Compensation” shall mean any compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code.

 

2.40            “Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Award for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:

 

(a)           The Performance Criteria that shall be used to establish Performance Goals are limited to the following: (i) net earnings or losses (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization); (ii) gross or net sales or revenue; (iii) revenue growth or product revenue growth; (iv) net income (either before or after taxes); (v) adjusted net income; (vi) operating earnings or profit (either before or after taxes); (vii) cash flow (including, but not limited to, operating cash flow and free cash flow); (viii) return on assets or net assets; (ix) return on capital (or invested capital) and cost of capital; (x) return on stockholders’ equity; (xi) total stockholder return; (xii) return on sales; (xiii) gross or net profit or operating margin; (xiv) costs, reductions in costs and cost control measures; (xv) funds from operations or funds available for distributions; (xvi) expenses; (xvii) working capital; (xviii) earnings or loss per share; (xix) adjusted earnings per share; (xx) price per share of and dividends with respect to Common Stock or appreciation in and/or maintenance of such price or dividends; (xxi) economic value added models or similar metrics; (xxii) regulatory achievements or compliance (including, without limitation, regulatory body approval for commercialization of a product); (xxiii) implementation or completion of critical projects or processes; (xxiv) sales, unit volume or market share; (xxv) licensing revenue; (xxvi) brand recognition/acceptance, (xxvii) inventory turns or cycle time, (xxviii) strategic initiatives (including, without limitation, with respect to market penetration and spending efficiency, geographic business expansion, manufacturing, commercialization, production and productivity, customer satisfaction and growth, employee satisfaction, recruitment and maintenance of personnel, human resources management, supervision of litigation and other legal matters, information technology, strategic partnerships and transactions (including acquisitions, dispositions, joint ventures, in-licensing and out-licensing of intellectual property, and establishment of relationships with commercial entities with respect to the marketing, distribution and sale of Company products, and factoring transactions, research and development and related activity, financial or other capital raising transactions, operating efficiency, and asset quality); (xxix) financial ratios (including, without limitation, those measuring liquidity, activity, profitability or leverage); and (xxx) lease placement of rental equipment, any of which may be measured either in absolute terms or as

 

 

compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.

 

(b)           The Administrator, in its sole discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments may include one or more of the following: (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the disposal of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix) items relating to any other unusual or nonrecurring events or changes in Applicable Law, accounting principles or business conditions. For all Awards intended to qualify as Performance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.

 

2.41            “Performance Goals” shall mean, for a Performance Period, one or more goals established in writing by the Administrator for the Performance Period based upon one or more Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an Affiliate, division, business unit, or an individual. The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards.

 

2.42            “Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, and the payment of, an Award.

 

2.43            “Performance Stock Unit” shall mean a Performance Award awarded under Section 10.1 which is denominated in units of value including dollar value of Shares.

 

2.44            “Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, as defined in the instructions to Form S-8 under the Securities Act, after taking into account Applicable Law.

 

2.45            “Plan” shall have the meaning set forth in Article 1.

 

 

2.46            “Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.

 

2.47            “Public Trading Date” shall mean the first date upon which Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

 

2.48            “Restricted Stock” shall mean Common Stock awarded under Article 8 that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

 

2.49            “Restricted Stock Units” shall mean the right to receive Shares, cash or a combination of Shares and cash as awarded under Article 9.

 

2.50            “Securities Act” shall mean the Securities Act of 1933, as amended.

 

2.51            “Share Limit” shall have the meaning set forth in Section 3.1(a).

 

2.52            “Shares” shall mean shares of Common Stock.

 

2.53            “Stock Appreciation Right” shall mean a stock appreciation right granted under Article 11.

 

2.54            “Stock Appreciation Right Term” shall have the meaning set forth in Section 11.4.

 

2.55            “Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right to purchase Shares, as part of a bonus, deferred compensation or other arrangement, awarded under Section 10.3.

 

2.56            “Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

2.57            “Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

 

 

2.58            “Termination of Service” shall mean:

 

(a)           As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or an Affiliate is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

(b)           As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

(c)           As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of the Program, the Award Agreement or otherwise, or as otherwise required by Applicable Law, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then-applicable regulations and revenue rulings under said Section. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Affiliate employing or contracting with such Holder ceases to remain an Affiliate following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

 

2.59            “Wayzata” shall mean Wayzata Investment Partners LLC, a Delaware limited liability company, or any funds managed byWayzata Investment Partners LLC.

 

ARTICLE 3.

 

SHARES SUBJECT TO THE PLAN

 

3.1          Number of Shares.

 

(a)           Subject to Sections 3.1(b) and 14.2, the aggregate number of Shares which may be issued or transferred pursuant to Awards (including without limitation, Incentive Stock Options) under the Plan is [                        ] (the “Share Limit”).  Notwithstanding the foregoing,

 

 

to the extent permitted under applicable law and applicable stock exchange rules, Awards that provide for the delivery of Shares subsequent to the applicable grant date may be granted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remain under the Share Limit at the time that Shares would otherwise be issued in respect of such Award.

 

(b)           If any Shares subject to an Award are forfeited or expire or such Award is settled in cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under Section 3.1(a) and shall not be available for future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Option or Stock Appreciation Right; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 8.4 at the same price paid by the Holder so that such Shares are returned to the Company shall again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

 

(c)           Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available Shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination.

 

3.2              Stock Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.

 

3.3              Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Section 14.2, the maximum aggregate number of Shares with respect to one or more Awards that may be granted to any one person during any calendar year shall be [            ] and the maximum aggregate amount that may be paid

 

 

in cash to any one person during any calendar year with respect to one or more Awards payable in cash shall be $5,000,000; provided, however, that the foregoing limitations shall not apply prior to the Public Trading Date and, following the Public Trading Date, the foregoing limitations shall not apply until the earliest of: (a) the first material modification of the Plan (including any increase in the Share Limit); (b) the issuance of all of the Shares reserved for issuance under the Plan; (c) the expiration of the Plan; (d) the first meeting of stockholders at which members of the Board are to be elected that occurs after the close of the third calendar year following the calendar year in which occurred the first registration of an equity security of the Company under Section 12 of the Exchange Act; or (e) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent required by Section 162(m) of the Code, Shares subject to Awards which are canceled shall continue to be counted against the Award Limit.

 

ARTICLE 4.

 

GRANTING OF AWARDS

 

4.1              Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. Except as provided in Section 4.6 regarding the grant of Awards pursuant to the Non-Employee Director Equity Compensation Policy, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.

 

4.2              Award Agreement. Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such Award, which may include the term of the Award, the provisions applicable in the event of the Holder’s Termination of Service, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award. Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

 

4.3              Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

4.4              At-Will Employment; Voluntary Participation. Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of, or as a Director or Consultant for, the Company or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any Affiliate, which rights are hereby

 

 

expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Affiliate. Participation by each Holder in the Plan shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible Individual shall participate in the Plan.

 

4.5              Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries other than the United States in which the Company and its Affiliates operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the Share Limit, the Award Limit or the Director Limit; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate Applicable Law. For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.

 

4.6              Non-Employee Director Awards. The Administrator, in its sole discretion, may provide that Awards granted to Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan. The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its sole discretion. The Non-Employee Director Equity Compensation Policy may be modified by the Administrator from time to time in its sole discretion.  Notwithstanding any provision to the contrary in the Plan or in the Non-Employee Director Equity Compensation Policy, the maximum aggregate grant date fair value of Awards granted to a Non-Employee Director during any calendar year shall be $500,000 (the “Director Limit”).

 

4.7              Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the sole discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.

 

 

ARTICLE 5.

 

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION

 

5.1              Purpose. The Committee, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether such Award is intended to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an Award to an Eligible Individual that is intended to qualify as Performance-Based Compensation (other than an Option or Stock Appreciation Right), then the provisions of this Article 5 shall control over any contrary provision contained in the Plan. The Administrator, in its sole discretion, may grant Awards to other Eligible Individuals that are based on Performance Criteria or Performance Goals or any such other criteria and goals as the Administrator shall establish, but that do not satisfy the requirements of this Article 5 and that are not intended to qualify as Performance-Based Compensation. Unless otherwise specified by the Committee at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of Applicable Accounting Standards.

 

5.2              Applicability. The grant of an Award to an Eligible Individual for a particular Performance Period shall not require the grant of an Award to such Eligible Individual in any subsequent Performance Period and the grant of an Award to any one Eligible Individual shall not require the grant of an Award to any other Eligible Individual in such period or in any other period.

 

5.3              Types of Awards. Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to an Eligible Individual intended to qualify as Performance-Based Compensation, including, without limitation, Restricted Stock the restrictions with respect to which lapse upon the attainment of specified Performance Goals, Restricted Stock Units that vest and become payable upon the attainment of specified Performance Goals and any Performance Awards described in Article 10 that vest or become exercisable or payable upon the attainment of one or more specified Performance Goals.

 

5.4              Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation, no later than 90 days following the commencement of any Performance Period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Committee shall certify in writing whether and the extent to which the applicable Performance Goals have been achieved for such Performance Period. In determining the amount earned under

 

 

such Awards, the Committee shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant, including the assessment of individual or corporate performance for the Performance Period.

 

5.5              Payment of Performance-Based Awards. Unless otherwise provided in the applicable Program or Award Agreement and only to the extent otherwise permitted by Section 162(m) of the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be employed by the Company or an Affiliate throughout the Performance Period. Unless otherwise provided in the applicable Performance Goals, Program or Award Agreement, a Holder shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such period are achieved.

 

5.6              Additional Limitations. Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and the applicable Program and Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.

 

ARTICLE 6.

 

GRANTING OF OPTIONS

 

6.1              Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.

 

6.2              Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted to any person who is not an Employee of the Company or any “subsidiary corporation” (as defined in Section 424(f) of the Code) of the Company. No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code. To the extent that the aggregate Fair Market Value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any parent or subsidiary corporation thereof (each as defined in Section 424(e) and 424(f) of the Code, respectively), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code. The rule set forth in the immediately preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the Fair Market Value of stock shall be determined as of the time the respective options were granted.

 

 

6.3              Option Exercise Price. The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than 110% of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

 

6.4              Option Term. The term of each Option (the “Option Term”) shall be set by the Administrator in its sole discretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may not extend beyond the last day of the Option Term. Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder or the first sentence of this Section 6.4, the Administrator may extend the Option Term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Option relating to such a Termination of Service.

 

6.5              Option Vesting.

 

(a)           The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator, and, except as limited by the Plan, at any time after the grant of an Option, the Administrator, in its sole discretion and subject to whatever terms and conditions it selects, may accelerate the period during which an Option vests.

 

(b)           No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program, the Award Agreement evidencing the grant of an Option, or by action of the Administrator following the grant of the Option. Unless otherwise determined by the Administrator in the Award Agreement or by action of the Administrator following the grant of the Option, the portion of an Option that is unexercisable at a Holder’s Termination of Service shall automatically expire thirty (30) days following such Termination of Service.

 

6.6              Substitute Awards. Notwithstanding the foregoing provisions of this Article 6 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the Shares subject to such Option may be less than the Fair Market Value per share on the date of grant; provided that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the Shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time

 

 

immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

6.7              Substitution of Stock Appreciation Rights.  The Administrator may provide in the applicable Program or the Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price, vesting schedule and remaining Option Term as the substituted Option.

 

ARTICLE 7.

 

EXERCISE OF OPTIONS

 

7.1              Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.

 

7.2              Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

 

(a)           A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;

 

(b)           Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with Applicable Law. The Administrator, in its sole discretion, may also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

 

(c)           In the event that the Option shall be exercised pursuant to Section 12.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and

 

(d)           Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Sections 12.1 and 12.2.

 

7.3              Notification Regarding Disposition. The Holder shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive

 

 

Stock Option which occurs within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder, or (b) one year after the transfer of such Shares to such Holder.

 

ARTICLE 8.

 

AWARD OF RESTRICTED STOCK

 

8.1          Award of Restricted Stock.

 

(a)           The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.

 

(b)           The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.

 

8.2              Rights as Stockholders. Subject to Section 8.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the applicable Program or in each individual Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares; provided, however, that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth in Section 8.3. In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to vesting shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests.

 

8.3              Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of the applicable Program or in each individual Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Holder’s duration of employment, directorship or consultancy with the Company, the Performance Criteria, Company performance, individual performance or other criteria selected by the Administrator. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of the applicable

 

 

Program or Award Agreement. Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.

 

8.4              Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Administrator at the time of the grant of the Award or thereafter, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Program or Award Agreement. Notwithstanding the foregoing, the Administrator, in its sole discretion, may provide that upon certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shall not have a right of repurchase.

 

8.5              Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock shall include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. The Company, in its sole discretion, may (a) retain physical possession of any stock certificate evidencing shares of Restricted Stock until the restrictions thereon shall have lapsed and/or (b) require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Restricted Stock.

 

8.6              Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof with the Internal Revenue Service.

 

ARTICLE 9.

 

AWARD OF RESTRICTED STOCK UNITS

 

9.1              Grant of Restricted Stock Units. The Administrator is authorized to grant Awards of Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator.

 

9.2              Term. Except as otherwise provided herein, the term of a Restricted Stock Unit award shall be set by the Administrator in its sole discretion.

 

 

9.3              Purchase Price. The Administrator shall specify the purchase price, if any, to be paid by the Holder to the Company with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

 

9.4              Vesting of Restricted Stock Units. At the time of grant, the Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or any Affiliate, one or more Performance Criteria, Company performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the Administrator.

 

9.5              Maturity and Payment. At the time of grant, the Administrator shall specify the maturity date applicable to each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise determined by the Administrator, set forth in any applicable Award Agreement, and subject to compliance with Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock Unit occur following the later of (a) the 15th day of the third month following the end of calendar year in which the applicable portion of the Restricted Stock Unit vests; or (b) the 15th day of the third month following the end of the Company’s fiscal year in which the applicable portion of the Restricted Stock Unit vests. On the maturity date, the Company shall, subject to Section 12.4(e), transfer to the Holder one unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash and Common Stock as determined by the Administrator.

 

9.6              Payment upon Termination of Service. An Award of Restricted Stock Units shall only be payable while the Holder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that the Administrator, in its sole discretion, may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

 

9.7              No Rights as a Stockholder. Unless otherwise determined by the Administrator, a Holder of Restricted Stock Units shall possess no incidents of ownership with respect to the Shares represented by such Restricted Stock Units, unless and until such Shares are transferred to the Holder pursuant to the terms of this Plan and the applicable Award Agreement.

 

9.8              Dividend Equivalents.  Subject to Section 10.2, the Administrator, in its sole discretion, may provide that Dividend Equivalents shall be earned by a Holder of Restricted Stock Units based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date an Award of Restricted Stock Units is granted to a Holder and the maturity date of such Award.

 

 

ARTICLE 10.

 

AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED STOCK, DEFERRED STOCK UNITS

 

10.1            Performance Awards.

 

(a)           The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units, to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based Compensation. The value of Performance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Criteria or other specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods and in such amounts as may be determined by the Administrator. Performance Awards, including Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator.

 

(b)           Without limiting Section 10.1(a), the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Any such bonuses paid to a Holder which are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas established in accordance with the provisions of Article 5.

 

10.2            Dividend Equivalents.

 

(a)           Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates with respect to dividends with record dates that occur during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such restrictions and limitations as may be determined by the Administrator. In addition, Dividend Equivalents with respect to an Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests.

 

(b)           Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.

 

10.3            Stock Payments. The Administrator is authorized to make Stock Payments to any Eligible Individual. The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Criteria or any other specific criteria, including service to the Company or any Affiliate, determined by the Administrator. Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not be issued until those conditions have been satisfied. Unless otherwise provided by the Administrator, a Holder of a Stock Payment shall have no rights as a Company stockholder with respect to such Stock Payment until

 

 

such time as the Stock Payment has vested and the Shares underlying the Award have been issued to the Holder. Stock Payments may, but are not required to, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.

 

10.4            Deferred Stock. The Administrator is authorized to grant Deferred Stock to any Eligible Individual. The number of shares of Deferred Stock shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator. Shares underlying a Deferred Stock award which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall be issued on the vesting date(s) or date(s) that those conditions and criteria have been satisfied, as applicable. Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.5            Deferred Stock Units. The Administrator is authorized to grant Deferred Stock Units to any Eligible Individual. The number of Deferred Stock Units shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator. Each Deferred Stock Unit shall entitle the Holder thereof to receive one Share on the date the Deferred Stock Unit becomes vested or upon a specified settlement date thereafter (which settlement date may (but is not required to) be the date of the Holder’s Termination of Service). Shares underlying a Deferred Stock Unit award which is subject to a vesting schedule or other conditions or criteria set by the Administrator shall not be issued until on or following the date that those conditions and criteria have been satisfied. Unless otherwise provided by the Administrator, a Holder of Deferred Stock Units shall have no rights as a Company stockholder with respect to such Deferred Stock Units until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.6            Term. The term of a Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award shall be established by the Administrator in its sole discretion.

 

10.7            Purchase Price. The Administrator may establish the purchase price of a Performance Award, Shares distributed as a Stock Payment award, shares of Deferred Stock or Shares distributed pursuant to a Deferred Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

 

10.8            Termination of Service. A Performance Award, Stock Payment award, Dividend Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is distributable only while the Holder is an Employee, Director or Consultant, as applicable. The Administrator, however, in its sole discretion, may provide that the Performance Award,

 

 

Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may be distributed subsequent to the Holder’s Termination of Service subject to terms and conditions determined by the Administrator.

 

ARTICLE 11.

 

AWARD OF STOCK APPRECIATION RIGHTS

 

11.1            Grant of Stock Appreciation Rights.

 

(a)           The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine, which shall not be inconsistent with the Plan.

 

(b)           A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Except as described in (c) below, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.

 

(c)           Notwithstanding the foregoing provisions of Section 11.1(b) to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the exercise price per share of the Shares subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant; provided that the excess of: (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the Shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

11.2            Stock Appreciation Right Vesting.

 

(a)           The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator. Except as limited by the Plan, at any time after grant of a Stock Appreciation Right, the Administrator, in its sole discretion and subject to whatever terms and conditions it selects, may accelerate the period during which a Stock Appreciation Right vests.

 

 

(b)           No portion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator in the applicable Program, the Award Agreement evidencing the grant of a Stock Appreciation Right, or by action of the Administrator following the grant of the Stock Appreciation Right.

 

11.3            Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

 

(a)           A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;

 

(b)           Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with Applicable Law. The Administrator, in its sole discretion, may also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

 

(c)           In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right, as determined in the sole discretion of the Administrator; and

 

(d)           Full payment of the applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Stock Appreciation Right, or portion thereof, is exercised, in a manner permitted by Sections 12.1 and 12.2.

 

11.4            Stock Appreciation Right Term. The term of each Stock Appreciation Right (the “Stock Appreciation Right Term”) shall be set by the Administrator in its sole discretion; provided, however, that the Stock Appreciation Right Term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the last day of the Stock Appreciation Right Term applicable to such Stock Appreciation Right. Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder or the first sentence of this Section 11.4, the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Stock Appreciation Rights may be exercised, in connection with any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.

 

 

11.5            Payment. Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 11 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.

 

ARTICLE 12.

 

ADDITIONAL TERMS OF AWARDS

 

12.1            Payment. The Administrator shall determine the methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator in its sole discretion. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

 

12.2            Tax Withholding. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA, employment tax or other social security contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan. The Administrator, in its sole discretion and in satisfaction of the foregoing requirement, may withhold, or allow a Holder to elect to have the Company withhold, Shares otherwise issuable under an Award (or allow the surrender of Shares). The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.

 

 

12.3            Transferability of Awards.

 

(a)           Except as otherwise provided in Sections 12.3(b) and 12.3(c):

 

(i)            No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;

 

(ii)           No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by Section 12.3(a)(i); and

 

(iii)          During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to such Holder under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution.

 

(b)           Notwithstanding Section 12.3(a), the Administrator, in its sole discretion, may determine to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more Permitted Transferees, subject to the following terms and conditions(1): (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution or pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer.

 

(c)           Notwithstanding Section 12.3(a), a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Holder, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the

 

(1)         May also consider adding the following provision to this list: “any transfer of an Award to a Permitted Transferee shall be without consideration, except as required by Applicable Law;”

 

 

Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death.

 

12.4            Conditions to Issuance of Shares.

 

(a)           Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with Applicable Law and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements and representations as the Board or the Committee, in its sole discretion, deems advisable in order to comply with Applicable Law.

 

(b)           All share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law. The Administrator may place legends on any share certificate or book entry to reference restrictions applicable to the Shares.

 

(c)           The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.

 

(d)           No fractional Shares shall be issued and the Administrator, in its sole discretion, shall determine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.

 

(e)           Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

 

12.5            Forfeiture and Claw-Back Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by separate written or electronic instrument, that:

 

 

(a)           (i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, shall be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in the Award Agreement relating to such Award); and

 

(b)           All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

 

12.6            Prohibition on Repricing. Subject to Section 14.2, the Administrator shall not, without the approval of the stockholders of the Company, (i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per share, or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Subject to Section 14.2, the Administrator shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding Award to increase the price per share or to cancel and replace an Award with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award. Furthermore, for purposes of this Section 12.6, except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price per share of outstanding Options or Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Stock Appreciation Rights without the approval of the stockholders of the Company.

 

ARTICLE 13.

 

ADMINISTRATION

 

13.1            Administrator. The Compensation Committee (or another committee or a subcommittee of the Board or the Compensation Committee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted

 

 

herein). To the extent necessary to comply with Rule 16b-3 of the Exchange Act, and with respect to Awards that are intended to be Performance-Based Compensation, including Options and Stock Appreciation Rights, the Compensation Committee (or another committee or subcommittee of the Board or the Compensation Committee of the Board assuming the functions of the Committee under the Plan) shall take all action with respect to such Awards, and the individuals taking such action shall consist solely of two or more Non-Employee Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule and an “outside director” for purposes of Section 162(m) of the Code. Additionally, to the extent required by Applicable Law, each of the individuals constituting the Compensation Committee (or another committee or subcommittee of the Board or the Compensation Committee of the Board assuming the functions of the Committee under the Plan) shall be an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 13.1 or otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” and “Committee” as used in the Plan shall be deemed to refer to the Board and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 13.6.

 

13.2            Duties and Powers of Committee. It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan, the Program and the Award Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any such Program or Award Agreement are not affected adversely by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 14.10. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.

 

13.3            Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved

 

 

in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 

13.4            Authority of Administrator. Subject to the Company’s Bylaws, the Committee’s Charter and any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:

 

(a)           Designate Eligible Individuals to receive Awards;

 

(b)           Determine the type or types of Awards to be granted to each Eligible Individual;

 

(c)           Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

 

(d)           Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any Performance Criteria, any reload provision, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;

 

(e)           Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f)            Prescribe the form of each Award Agreement, which need not be identical for each Holder;

 

(g)           Decide all other matters that must be determined in connection with an Award;

 

(h)           Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 

(i)            Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement;

 

(j)            Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and

 

 

(k)           Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Section 14.2.

 

13.5            Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding and conclusive on all parties.

 

13.6            Delegation of Authority. To the extent permitted by Applicable Law, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to this Article 13; provided, however, that in no event shall an officer of the Company be delegated the authority to grant awards to, or amend awards held by, the following individuals: (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code and other Applicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 13.6 shall serve in such capacity at the pleasure of the Board and the Committee.

 

ARTICLE 14.

 

MISCELLANEOUS PROVISIONS

 

14.1            Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 14.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 14.2, (a) increase the Share Limit, (b) reduce the price per share of any outstanding Option or Stock Appreciation Right granted under the Plan or take any action prohibited under Section 12.6, or (c) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Except as provided in Section 14.10, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and notwithstanding anything herein to the contrary, in no event may any Award be granted under the Plan after the tenth (10th) anniversary of the Effective Date (the “Expiration Date”). Any Awards that are outstanding on the Expiration Date shall remain in force according to the terms of the Plan and the applicable Award Agreement.

 

 

14.2            Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events.

 

(a)           In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator may make equitable adjustments, if any, to reflect such change with respect to: (i) the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit and Award Limit); (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the number and kind of Shares (or other securities or property) for which automatic grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6; (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code.

 

(b)           In the event of any transaction or event described in Section 14.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in Applicable Law or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

 

(i)            To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 14.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator, in its sole discretion, having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested;

 

(ii)           To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent

 

 

or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

 

(iii)          To make adjustments in the number and type of Shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future;

 

(iv)          To provide that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and

 

(v)           To provide that the Award cannot vest, be exercised or become payable after such event.

 

(c)           In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b):

 

(i)            The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or

 

(ii)           The Administrator shall make such equitable adjustments, if any, as the Administrator, in its sole discretion, may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit and Award Limit). The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.

 

(d)           Notwithstanding any other provision of the Plan, in the event of a Change in Control, unless the Administrator elects to (i) terminate an Award in exchange for cash, rights or property, or (ii) cause an Award to become fully exercisable and no longer be subject to any forfeiture restrictions prior to the consummation of a Change in Control, pursuant to Section 14.2, (A) such Award (other than any portion subject to performance-based vesting) shall continue in effect or be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation and (B) the portion of such Award subject to performance-based vesting shall be subject to the terms and conditions of the applicable Award Agreement and, if no applicable terms and conditions, the Administrator’s discretion.

 

(e)           In the event that the successor corporation in a Change in Control refuses to assume or substitute for an Award (other than any portion subject to performance-based vesting), the Administrator may cause any or all of such Award (or portion thereof) to (i) terminate in exchange for cash, rights or property pursuant to Section 14.2(b)(i) or (ii) become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Award to lapse. If such an Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that such Award shall be fully exercisable for a period of fifteen (15) days from the date

 

 

of such notice, contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the expiration of such period.

 

(f)            For the purposes of this Section 14.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per-share consideration received by holders of Common Stock in the Change in Control.

 

(g)           The Administrator, in its sole discretion, may include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

 

(h)           With respect to Awards which are granted to Covered Employees and are intended to qualify as Performance-Based Compensation, no adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify. No adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions.

 

(i)            The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

(j)            No action shall be taken under this Section 14.2 which shall cause an Award to fail to be exempt from or comply with Section 409A of the Code or the Treasury Regulations thereunder.

 

 

(k)           In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Administrator, in its sole discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.

 

14.3            Approval of Plan by Stockholders. The Plan shall be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan.

 

14.4            No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.

 

14.5            Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.

 

14.6            Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Affiliate. Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

 

14.7            Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements), and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to Applicable Law.

 

14.8            Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the

 

 

event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

 

14.9            Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

 

14.10          Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan, the Program and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

 

14.11          No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.

 

14.12          Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Affiliate.

 

14.13          Indemnification. To the extent allowable pursuant to Applicable Law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or

 

 

Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

14.14          Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

14.15          Expenses. The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

* * * * *

 

 

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Neff Corporation on                              , 2014.

 

* * * * *

 

I hereby certify that the foregoing Plan was approved by the stockholders of Neff Corporation on                              , 2014.

 

Executed on this          day of                               , 2014.

 

	
 
    	
 
    
	
 
    	
Corporate Secretary

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