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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d - 1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13-d-2(a)
(AMENDMENT NO.____)1
NATIONSRENT, INC.
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
638588 10 3
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(CUSIP Number)
Stephen K. Roddenberry, Esq.
Akerman, Senterfitt & Eidson, P.A.
One S.E. Third Ave., Miami, FL 33131
TEL. NO. (305) 374-5600
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
OCTOBER 23, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this statement because of Rule 13d-1(b)(3) or (4), check the following box: o
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 6 Pages)
- ----------
1 The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, SEE
the Notes).
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CUSIP NO. 638588 10 3 13D PAGE 2 OF 6 PAGES
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NAME OF REPORTING PERSONS
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
RAY L. O'NEAL, INC.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
2
(b) [ ]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
OO
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) or 2(e) [ ]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
INCORPORATED IN STATE OF TEXAS
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SOLE VOTING POWER
7
NUMBER OF 5,312,500
SHARES -----------------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8
EACH 0
REPORTING -----------------------------------------------------
PERSON SOLE DISPOSITIVE POWER
9
5,312,500
-----------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,312,500
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
12 EXCLUDES CERTAIN SHARES* [X]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
10.7%
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 638588 10 3 13D PAGE 3 OF 6 PAGES
The reporting person (the "Reporting Person") listed on the cover page
to this Schedule 13D hereby makes the following statement (this "Statement")
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated thereunder.
ITEM 1. SECURITY AND ISSUER
This Statement relates to the common stock, $.01 par value per share
(the "Common Stock"), of NationsRent, Inc. a Delaware corporation (the
"Issuer"). The Issuer's principal executive office is located at 450 East Las
Olas Boulevard, 14th Floor, Fort Lauderdale, Florida 33301.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is being filed by Ray L. O'Neal, Inc., a Texas
corporation ("RLOI"). The principal business of RLOI following the sale of
substantially all of its assets (as described below) is to hold the Note (as
defined below). RLOI's principal business address is 3900 Race Street, Fort
Worth, Texas 76111.
The names, address and principal occupations of each executive officer
and director of RLOI, all of whom are United States citizens, are as follows:
<TABLE>
<CAPTION>
NAME Title at RLOI Business Address Principal Occupation
- ---- ------------- ---------------- --------------------
<S> <C> <C> <C>
Don R. O'Neal President and Director NationsRent, Inc. President and Chief Operating
450 East Las Olas Blvd. 14th Floor Officer of the Issuer.
Fort Lauderdale, Florida 33301
Ray L. O'Neal Chairman of Board, Vice Ray L. O'Neal, Inc. Business Consultant
President and Director 3900 Race Street
Fort Worth, Texas 76111
Ellen R. O'Neal Secretary, Treasurer and Ray L. O'Neal, Inc. Retired
Director 3900 Race Street
Fort Worth, Texas 76111
Mike R. O'Neal Assistant Secretary Ray L. O'Neal, Inc. Equipment Manager.
3900 Race Street
Fort Worth, Texas 76111
</TABLE>
The O'Neal Revocable Trust dated December 27, 1987, has a controlling
interest by virtue of having a majority of the voting stock in RLOI. Ray L.
O'Neal and Ellen M. O'Neal are Co-Trustees of such Trust.
Neither RLOI, nor to the knowledge of RLOI, any of the persons
enumerated in Item 2 above have during the last five years, (a) been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (b) been a party to any civil proceeding of a judicial or administrative body
of competent jurisdiction, and as a result of such proceeding was or is subject
to a judgment, decree, or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
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CUSIP NO. 638588 10 3 13D PAGE 4 OF 6 PAGES
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As partial consideration for the sale of substantially all of the
assets of RLOI (as discussed below) to the Issuer, RLOI received from the Issuer
an Unsecured Convertible Subordinated Promissory Note in the principal amount of
$42,500,000 (the "Note"). The Note has a six-year term, bears interest at six
percent per annum and is immediately convertible at $8.00 per share of Common
Stock (assuming a $42,500,000 principal amount) into 5,312,500 shares of Common
Stock. The Issuer may require RLOI at any time during the term of the Note to
convert the Note into shares of Common Stock of the Issuer at a conversion price
equal to the closing price of the Common Stock immediately prior to such
conversion, but in no event may the conversion price be more than $8.00 per
share. The description of the Note above is qualified in its entirety by, and
should be read in conjunction with, the Note filed as Exhibit A to this
Statement and incorporated herein by reference.
ITEM 4. PURPOSE OF THE TRANSACTION
On October 23, 1998, RLOI sold substantially all of its assets to the
Issuer pursuant to an Amended and Restated Asset Purchase Agreement, dated
September 9, 1998, by and among RLOI, Mr. Don R. O'Neal and the Issuer, among
other parties (the "Asset Purchase Agreement"). Prior to such sale, RLOI
specialized in the rental of construction and industrial equipment. As partial
consideration for the sale of substantially all of its assets, RLOI received the
Note from the Issuer.
Upon consummation of the sale of its assets to the Issuer pursuant to
the Asset Purchase Agreement, Mr. Don R. O'Neal became President and Chief
Operating Officer of the Issuer .
Except as set forth herein, neither RLOI nor to RLOI's knowledge any of
the persons or entities listed in Item 2 above, have any current plans or
proposals that may have or which may relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) a sale or transfer of a material amount of assets of the Issuer or
any of its subsidiaries;
(d) any change in the present Board of Directors or management of the
Issuer, including any plans or proposals to change the number or term
of directors or to fill any existing vacancies on the Board of
Directors;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or corporate
structure;
(g) any changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition
of control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) causing a class of equity securities of the Issuer to become
eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934; or
(j) any actions similar to any of those enumerated above.
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CUSIP NO. 638588 10 3 13D PAGE 5 OF 6 PAGES
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b) As of October 23, 1998, RLOI may be deemed to beneficially own
5,312,500 shares of Common Stock which shares are issuable upon the conversion
of the Note. The 5,312,500 shares of Common Stock represent approximately 10.7%
of the outstanding shares of Common Stock, calculated in accordance with Rule
13d-3 under the Exchange Act (based on 44,360,334 shares of Common Stock issued
and outstanding as of October 23, 1998, plus the 5,312,500 shares of Common
Stock issuable upon conversion of the Note). RLOI has the sole power to vote and
the sole power to dispose of the 5,312,500 shares of Common Stock which it may
be deemed to beneficially own. Pursuant to Rule 13d-3 of the Exchange Act, some
persons or entities set forth in Item 2 above may be deemed to beneficially own
the shares of Common Stock issuable upon conversion of the Note, however, as of
the date of issue of the Note, such persons and entities disclaim beneficial
ownership of the shares of Common Stock.
(c) Except for the transactions described herein, there have been no other
transactions in any securities of the Issuer by RLOI or, to the knowledge of
RLOI, any other person listed in Item 2 above during the past 60 days.
(d) No other person, other than as set forth herein, is known to have the right
to receive or the power to direct receipt of dividends from, or the proceeds
from the sale of, the aforementioned shares held by RLOI.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Pursuant to the Asset Purchase Agreement, RLOI has certain registration
rights with respect to the Issuer's Common Stock issuable upon conversion of the
Note including, without limitation, an obligation by the Issuer to cause a
registration statement to be filed with the Securities and Exchange Commission
by October 23, 1999 covering the shares of Common Stock issuable upon conversion
of the Note.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A - Unsecured Convertible Subordinated Promissory Note
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CUSIP NO. 638588 10 3 13D PAGE 6 OF 6 PAGES
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 2, 1998
RAY L. O'NEAL, INC., a Texas corporation
By: /s/ Don R. O'Neal
-------------------------------------
Don R. O'Neal, President
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PROMISSORY NOTE
NEITHER THIS PROMISSORY NOTE NOR THE SHARES ISSUABLE UPON CONVERSION OF THIS
PROMISSORY NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND THIS PROMISSORY NOTE CANNOT BE
SOLD OR TRANSFERRED, AND THE SHARES ISSUABLE UPON CONVERSION OF THIS PROMISSORY
NOTE CANNOT BE SOLD OR TRANSFERRED, UNLESS AND UNTIL THEY ARE SO REGISTERED OR
UPON RECEIPT OF AN OPINION OF COUNSEL, SATISFACTORY TO THE MAKER, THAT SUCH
REGISTRATION IS NOT THEN REQUIRED UNDER THE CIRCUMSTANCES OF SUCH SALE OR
TRANSFER.
UNSECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE
COLUMBUS, OHIO
$42,500,000 AS OF October 23, 1998
FOR VALUE RECEIVED, NATIONSRENT, INC., a Delaware corporation
("Maker"), promises to pay to Ray L. O'Neal, Inc., a Texas corporation, its
successors and assigns ("Payee"), in lawful money of the United States of
America, the principal sum of FORTY TWO MILLION FIVE HUNDRED THOUSAND DOLLARS
($42,500,000), together with interest (calculated on the basis of a year of
365 or 366 days, as applicable, and charged for the actual number of days
elapsed) in arrears on the unpaid principal balance in the manner provided
below. This Note has been executed and delivered pursuant to and in accordance
with the terms and conditions of that certain Amended and Restated Asset
Purchase Agreement, dated as of September 9, 1998 (the "Agreement"), between the
Payee and Maker, and is subject to the terms and conditions of the Agreement,
which are, by this reference, incorporated herein and made a part hereof.
Capitalized terms used in this Note without definition shall have the respective
meanings set forth in the Agreement.
ARTICLE I
PAYMENTS
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1.1 PAYMENTS OF INTEREST.
(a) This Note shall bear interest at the rate of Six Percent
(6%) per annum, commencing on the date hereof, subject to adjustment as
provided in Section 1.1(b) below. Accrued and unpaid interest shall be
payable quarterly on each March 31, June 30, September 30, and December
31, commencing on December 31, 1998, until all principal and accrued
and unpaid interest shall have been paid in full.
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(b) Notwithstanding anything to the contrary contained herein,
on or after an Event of Default (defined below) resulting from the
failure to timely pay principal of or interest on this Note or on or
after another Event of Default for which Payee has accelerated the
maturity date (subject to any notice, grace and cure provisions
provided herein), this Note shall bear interest at a rate per annum
equal to Ten Percent (10%) from the date of such Event of Default until
paid in full.
1.2 REPAYMENT OF PRINCIPAL. The principal amount of this Note shall be
due and payable on October 23, 2004 (the "Maturity Date"). This Note may be
fully or partially prepaid without penalty or premium.
1.3 MANNER OF PAYMENT. All payments of principal and interest on this
Note shall be made by check at such place in the United States of America as
Payee shall designate to Maker in writing or, at Maker's option, by wire
transfer of immediately available funds to an account designated by Payee in
writing. If any payment of principal or interest on this Note is due on a day
which is not a Business Day (defined below), such payment shall be due on the
next succeeding Business Day, and such extension of time shall be taken into
account in calculating the amount of interest payable under this Note. "Business
Day" means any day other than a Saturday, Sunday or legal holiday in the State
of Florida.
1.4 CONVERSION. Subject to and upon compliance with the provisions of
the Agreement, Payee shall be entitled, at its option, at any time prior to the
Maturity Date, to convert the outstanding principal amount of this Note (or any
portion of the principal amount hereof which is $1,000 or any integral multiple
thereof) into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/1000 of a share) of Common Stock, $0.01 par value
per share of Maker ("Common Stock") at a conversion price equal to Eight Dollars
($8.00) per share (the "Conversion Price"). If Maker is merged into or otherwise
acquired by a publicly held entity (the "New Entity"), the Payee shall be
entitled, similarly, to convert such principal amount into shares of New Entity,
the number of which shares shall be that number of shares of New Entity which
the Payee would have received if it had exercised its option of conversion into
shares of Maker immediately prior to such merger. The Payee shall surrender this
Note, duly endorsed or assigned to Maker or in blank, to Maker at its office or
agency at the address provided in writing by maker, accompanied by written
notice to Maker that the holder hereof elects to convert this Note, or if less
than the entire principal amount hereof is to be converted, the portion hereof
to be converted. Except with respect to a conversion made pursuant to clause
(ii) of the first sentence of Section 1.5, no payment or adjustment is to be
made on conversion for interest accrued hereon or for dividends on the common
stock issued on conversion. No fractions of shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
interest the Maker shall pay a cash adjustment. In addition, in case of certain
consolidations or mergers to which Maker is a party or the transfer of
substantially all of the assets of Maker, this Note, if then outstanding, will
be convertible thereafter, during the period this Note shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the
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number of shares of common stock into which this Note might have been converted
immediately prior to such consolidation, merger or transfer (assuming such
holder of common stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares).
1.5 PREPAYMENT; MANDATORY CONVERSION. Maker shall have the right, at
any time and from time to time, upon ten (10) business days prior written notice
to Payee (such ten-day period being referred to as the "Waiting Period" and such
written notice being referred to as the "Notice"), without penalty or premium,
to: (i) prepay the outstanding principal of this Note (or any portion of the
principal amount hereof which is $1,000 or any integral multiple thereof),
together with all accrued and unpaid interest on the amount so prepaid, or (ii)
convert the outstanding principal amount of this Note (or any portion of the
principal amount hereof which is $1,000 or any integral multiple thereof), into
Common Stock of Maker at the Mandatory Conversion Price (as defined below);
PROVIDED, HOWEVER, that Payee shall have the right to exercise its conversion
right pursuant to Section 1.4 hereof during the Waiting Period. The Mandatory
Conversion Price shall mean the price per share equal to the closing price of a
share of Maker's Common Stock as reported (absent manifest error in the printing
thereof) by the Wall Street Journal (Eastern Edition) on the day immediately
preceding the date of the Notice. Upon such conversion Maker shall pay to Payee
in cash accrued and unpaid interest on the outstanding principal of the Note
being converted calculated to the date of such conversion.
1.6 RIGHT OF SET-OFF. Maker shall have the right to withhold and
set-off against any amount due hereunder, pursuant to Article X of the
Agreement, the amount of any claim for Indemnifiable Damages to which Maker may
be entitled under the Agreement and for which an arbitration decision or
judgment by a court of competent jurisdiction has been rendered.
ARTICLE II
DEFAULTS
--------
2.1 EVENTS OF DEFAULT. The occurrence and continuance of any one or
more of the following events with respect to Maker shall constitute an event of
default hereunder ("Event of Default"):
(a) If Maker shall fail to pay when due any payment of
principal or interest on this Note and such failure continues for ten
(10) days after Payee notifies Maker thereof in writing;
(b) If, pursuant to or within the meaning of the United States
Bankruptcy Code or any other federal or state law relating to
insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall (i)
commence a voluntary case or proceeding; (ii) consent to the entry of
an order for relief against it in an involuntary case; (iii) consent to
the appointment of a trustee, receiver, assignee, liquidator or similar
official; (iv) make an assignment for the
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benefit of its creditors; or (v) admit in writing its inability to pay
its debts as they become due; or
(c) If a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (i) is for relief against Maker in
an involuntary case, (ii) appoints a trustee, receiver, assignee,
liquidator or similar official for Maker or substantially all of
Maker's properties, or (iii) orders the liquidation of Maker, and in
each case the order or decree is not dismissed within one hundred
twenty (120) days.
2.2 NOTICE BY MAKER. Upon the occurrence of an Event of
Default hereunder (unless all Events of Default have been waived by Payee or
cured), Payee may, at its option, (i) by written notice to Maker, declare the
entire unpaid principal balance of this Note, together with all accrued interest
thereon, immediately due and payable regardless of any prior forbearance, and
(ii) exercise any and all rights and remedies available to it under applicable
law, including, without limitation, the right to collect from Maker all sums due
under this Note. Maker shall pay all reasonable costs and expenses incurred by
or on behalf of Payee in connection with Payee's exercise of any or all of its
rights and remedies under this Note, including, without limitation, reasonable
attorneys' fees.
Notwithstanding the above, if an Event of Default has occurred
under this Note and such Event of Default results in a default under the Senior
Indebtedness (defined in Section 3.1 below) or a default under the Senior
Indebtedness otherwise exists, then for so long as any Senior Indebtedness
remains unpaid, the Payee shall not commence or join with any creditor of Maker
in commencing any proceedings to collect or enforce its rights hereunder until
the earlier of (x) one hundred eighty (180) days from the occurrence of such
Event of Default, and (y) the date, if any, on which such default is cured or
waived by the holder or holders of the Senior Indebtedness to which such default
relates; provided, however, that notwithstanding such forbearance of the
commencement of proceedings with respect to an Event of Default, such Event of
Default shall nevertheless be an Event of Default for all other purposes of this
Note and Payee shall be entitled to pursue all other remedies other than the
commencement of proceedings under the circumstances set forth in this paragraph.
ARTICLE III
NOTE SUBORDINATE TO SENIOR INDEBTEDNESS
---------------------------------------
3.1 SENIOR INDEBTEDNESS. Anything in this Note to the contrary
notwithstanding, Maker covenants and agrees, and Payee likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in this
Article III, the indebtedness represented by this Note and the payment of
principal of and interest on this Note and other amounts owed by Maker under
this Note are hereby expressly made subordinate and subject in right of payment
to the prior payment in full in cash of all Senior Indebtedness (defined below),
including any interest accruing after the occurrence of an Event of Default,
whether or not such interest is an allowed claim enforceable against the debtor
in a case
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brought under the United States Bankruptcy Code (the "Bankruptcy Code"). "Senior
Indebtedness" means the principal of (and premium, if any) and interest on (i)
all indebtedness, public or private, of Maker for money borrowed, whether
outstanding on the date of this Note or thereafter created, assumed or incurred,
EXCEPT (A) such indebtedness as is by its terms expressly stated to be not
superior in right of payment to this Note or to rank pari passu with this Note,
(B) all notes issued in connection with the acquisition of any business,
properties, stock or assets to the seller of such business, properties, stock or
assets, which shall rank pari passu with this Note unless otherwise expressly
stated to be not superior and (C) this Note, and (ii) any deferrals, renewals,
increases or extensions of any such Senior Indebtedness, and (iii) any fees,
costs, enforcement expenses (including legal fees and disbursements), collateral
protection expenses and other reimbursement or indemnity obligations relating to
Senior Indebtedness. The term "indebtedness of Maker for money borrowed" means
any obligation of, or any obligation guaranteed by, Maker for the repayment of
money borrowed, whether or not evidenced by bonds, debentures, notes or other
written instruments, any capitalized lease obligation and any deferred
obligation for payment of the purchase price of any property or assets. Payee
agrees to furnish any holder of Senior Indebtedness upon request a subordination
agreement that contains reasonably customary subordination provisions, including
the priority rights of Payee and the holder of the Senior Indebtedness and
prohibits payments to Payee that would cause a default under the Senior
Indebtedness.
3.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event of (i)
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to maker or to its creditors, as such, or to its assets, or
(ii) any liquidation, dissolution or other winding up of Maker, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (iii) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of Maker, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, THEN and in any such event:
(a) the holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of all amounts due or to become due on
or in respect of all Senior Indebtedness, or provision shall be made
for such payment in accordance with the instruments governing such
Senior Indebtedness, before Payee is entitled to receive any payment on
account of principal of (or premium, if any) or interest on this Note
or other amounts owed by Maker under this Note;
(b) any payment or distribution of assets or securities of
Maker of any kind or character, whether in cash, property or
securities, to which Payee would be entitled but for the provisions of
this Article III, including any such payment or distribution which may
be payable or deliverable by reason of the payment of any other
indebtedness of Maker being subordinated to the payment of this Note
(except for any such payment or distribution (x) authorized by an order
or decree giving effect, and stating in such order or decree that
effect is given, to the subordination of this Note to the Senior
Indebtedness, and made by a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law, or (y)
of securities that are subordinated, to at least the same extent as
this Note, to the
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payment in full in cash of all Senior Indebtedness then outstanding),
shall be paid by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy, a
receiver of liquidating trustee or otherwise, directly to the holders
of the Senior Indebtedness or their representative or representatives,
ratably according to the aggregate amounts remaining unpaid on the
Senior Indebtedness, for application to the payment of all Senior
Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full in cash, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness; and
(c) in the event that, notwithstanding the foregoing
provisions of Article III, Payee shall have received any such payment
or distribution of assets or securities of Maker of any kind or
character, whether in cash, property or securities (other than payments
or distributions (x) authorized by an order or decree giving effect to
the subordination of this Note to the Senior Indebtedness, or (y) of
securities that are subordinated to the payment in full in cash of all
Senior Indebtedness, all as described in Section 3.2(b) above),
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of Maker
being subordinated to the payment of this Note, before all Senior
Indebtedness is paid in full in cash or payment thereof provided for,
then and in such event such payment or distribution shall be received
and held in trust for the benefit of, and shall be paid over or
delivered to, the holders of the Senior Indebtedness or their
representative or representatives, ratably according to the aggregate
amount remaining unpaid on the Senior Indebtedness, for application to
the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full in cash, after giving
effect to any concurrent payment or distribution to or for the holders
of such Senior Indebtedness.
(d) in the event that Payee fails to, in a timely manner and
to the fullest extent possible, (i) file or cause to be filed such
proofs of claim and other papers or documents as may be necessary or
advisable to have the claims under this Note allowed at any meeting of
creditors or in any proceeding referred to in this Section 3.2 or (ii)
enforce claims under this Note, by proof of debt, proof of claim, or
otherwise, the holders of the Senior Indebtedness shall be entitled and
are authorized to so file and/or enforce either in Payee's name or in
the name or names of any holder of the Senior Indebtedness.
(e) Payee shall retain the right to vote and otherwise act
with respect to the claims under this Note (including, without
limitation, the right to vote to accept or reject any plan of partial
or complete liquidation, reorganization, arrangement, composition or
extension), PROVIDED that Payee shall not vote with respect to any such
plan or take any other action in any way so as to (i) contest the
validity of any Senior Indebtedness or any collateral therefor or
guaranties thereof, (ii) contest the relative rights and duties of any
holders of any Senior Indebtedness established in any instruments or
agreements creating or evidencing any of the Senior Indebtedness with
respect to any of such collateral or guaranties, or (iii) contest
Payee's obligations and agreements set forth in this Article III.
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The consolidation of Maker with, or the merger of Maker into,
another corporation or the liquidation or dissolution of Maker following the
conveyance, transfer or lease of its properties and assets substantially as an
entirety to another corporation shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of Maker for the purposes of this Article
III.
3.3 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
(a) In the event of and during the continuation of any default
in the payment of any Senior Indebtedness beyond any applicable grace
period with respect thereto ("payment default"), then no payment shall
be made by or on behalf of Maker on this Note until the date, if any,
on which such default or event of default is waived by the holders of
such Senior Indebtedness or otherwise cured or has ceased to exist or
the Senior Indebtedness to which such default or event of default
relates is discharged by payment in full in cash.
(b) In the event that any other event of default with respect
to any Senior Indebtedness shall have occurred and be continuing that
permits the holders of such Senior Indebtedness (or a trustee on behalf
of such holders) to declare such Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and
payable, and upon receipt by Maker and Payee of written notice (the
"Payment Notice") from a representative for, or the holder of, any
Senior Indebtedness, then no payment shall be made by or on behalf of
Maker on this Note until the earlier of (x) one hundred seventy nine
(179) days after the date on which such Payment Notice shall have been
received and (y) the date, if any, on which such default or event of
default is cured or waived by the holders of the Senior Indebtedness to
which such default or event of default relates is discharged by payment
in full in cash (a "Blockage Period"). Not more than two (2) Blockage
Periods may be commenced during any period of three hundred sixty (360)
consecutive days. No event of default that existed or was continuing
(it being acknowledged that any subsequent action that would give rise
to an event of default pursuant to any provision under which an event
of default previously existed or was continuing shall constitute a new
event of default for this purpose) on the date of the commencement of
any Blockage Period with respect to the Senior Indebtedness initiating
such Blockage Period shall be, or shall be made, the basis for the
commencement of a second Blockage Period by the representative for, or
the holders of, such Senior Indebtedness whether or not within a period
of three hundred sixty (360) consecutive days, unless such event of
default shall have been cured or waived for a period of not less than
ninety (90) consecutive days. Any such failure to make a payment on
this Note shall not be construed as preventing the occurrence of an
Event of Default under this Note. Any payment permitted hereunder after
a Blockage Period of amounts owed to Payee during a Blockage Period
shall be deemed a cure of any Event of Default caused by any such
delayed payment. Notwithstanding any other provision contained herein,
during all times in which Maker's senior credit facility, dated as of
September 24, 1998, as amended, with BankBoston, N.A., as
administrative agent and LaSalle National Bank, as documentation agent,
with Fleet Bank N. A. and NationsBank, N.A., as co-agents and the
lenders identified therein, or any
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restatement, amendment, supplement or modification thereof or any
replacement facility thereof (the "Senior Bank Facility") is in effect
or the lenders thereunder have any obligations to make loans or extend
credit to Maker or its subsidiaries, the only holder of Senior
Indebtedness entitled to exercise its rights under Section 3.2(d) and
this Section 3.3(b) shall be the agent under the Senior Bank Facility.
In the event that, notwithstanding the foregoing, any payment or
distribution shall be received by Payee in contravention of the provisions of
this Article III, then and in such event such payment or distribution shall be
received and held in trust for the benefit of, and shall be paid over or
delivered to, the holders of the Senior Indebtedness or their representative or
representatives, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness, for application to the Senior Indebtedness
or to be held as collateral for, the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
The provisions of this Section 3.3 shall not apply to any payment with
respect to which Section 3.2 would be applicable.
3.4 PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Article
III or elsewhere in this Note shall prevent Maker, at any time except under the
circumstances described in Section 3.2 or under the conditions described in
Section 3.3, from making regularly scheduled payments at any time of principal
or interest on this Note or other amounts owed by Maker under this Note.
3.5 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS;
MARSHALING. No payment or distributions to the holders of Senior Indebtedness or
their representatives pursuant to the provisions of this Article III shall
entitle Payee to exercise any right of subrogation in respect thereof until the
Senior Indebtedness shall have been paid in full. Payee further waives any and
all rights with respect to marshaling.
3.6 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this
Article III are intended solely for the purpose of defining the relative rights
of Payee on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Note is intended to or shall (a) impair, as
among Maker, its creditors other than holders of Senior Indebtedness and Payee,
the obligation of Maker, which is absolute and unconditional, to pay to Payee
the principal of (and premium, if any) and interest on this Note as and when the
same shall become due and payable in accordance with its terms; or (b) affect
the relative rights against Maker of Payee and creditors of Maker other than the
holders of Senior Indebtedness; or (c) prevent Payee from exercising all
remedies otherwise permitted by applicable law or this Note upon default under
this Note, subject to the rights, if any, under this Article III and Section 2.1
of the holders of the Senior Indebtedness.
3.7 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of Maker or by any act or failure to
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act, in good faith, by any such holder, or by noncompliance by Maker with the
terms, provisions of and covenants of this Note, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
3.8 NOTICE TO PAYEE. Maker shall give prompt written notice to Payee of
any fact known to Maker which would prohibit the making of any payment to or by
Payee in respect of this Note. Notwithstanding the provisions of this Article
III or any other provision of this Note, Payee shall not be charged with the
knowledge of the existence of any facts which would prohibit the making of any
payment to or by Payee in respect of this Note, unless and until Payee shall
have received written notice thereof from Maker or holder of Senior Indebtedness
or from any trustee, fiduciary or agent therefor.
3.9 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets or securities of Maker referred to in
Section 3.2, Payee shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to Payee,
for the purpose of ascertaining the persons entitled to participate in such
payment or distribution, the holders of Senior Indebtedness and other
indebtedness of Maker, the amount thereof or payment thereof, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article III.
3.10 FREEDOM OF DEALING. Payee agrees, with respect to the Senior
Indebtedness and any and all collateral therefor or guaranties thereof, that
Maker and the holders of the Senior Indebtedness may agree to increase the
amount of the Senior Indebtedness or otherwise modify the terms of any of the
Senior Indebtedness, and the holders of the Senior Indebtedness may grant
extensions of the time of payment or performance to and make compromises,
including releases of collateral or guaranties, and settlements with Maker and
all other persons, in each case without the consent of Payee or Maker and
without affecting the agreements of Payee or Maker contained in this Note;
PROVIDED, HOWEVER, that nothing contained in this Section 3.10 shall constitute
a waiver of the right of Maker itself to agree or consent to a settlement or
compromise of a claim which any holder of the Senior Indebtedness may have
against Maker.
3.11 DEFENSE TO ENFORCEMENT. If Payee, in contravention of the terms of
this Note, shall commence, prosecute or participate in any suit, action or
proceeding against Maker, then Maker may interpose as a defense or plea the
provisions of this Article III, and any holder of the Senior Indebtedness may
intervene and interpose such defense or plea in its name or in the name of
Maker. If Payee, in contravention of the terms of this Article III, or the last
paragraph of Section 2.2, shall attempt to collect under this Note or enforce
any provisions of this Note, then any holder of the Senior Indebtedness or Maker
may restrain the enforcement thereof in the name of such holder of the Senior
Indebtedness or in the name of Maker.
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3.12 REINSTATEMENT OF SUBORDINATION. To the extent that Maker or any
guarantor of or provider of collateral for the Senior Indebtedness makes any
payment on the Senior Indebtedness that is subsequently invalidated, declared to
be fraudulent or preferential or set aside or is required to be repaid to a
trustee, receiver or any other party under any bankruptcy, insolvency or
reorganization act, state or federal law, common law or equitable cause (such
payment being hereinafter referred to as a "Voided Payment"), then to the extent
of such Voided Payment, that portion of the Senior Indebtedness that had been
previously satisfied by such Voided Payment shall be revived and continue in
full force and effect as if such Voided Payment had never been made. In the
event that a Voided Payment is recovered from any holder of the Senior
Indebtedness, a default in the payment of the relevant Senior Indebtedness shall
be deemed to have existed and to be continuing from the date of such holder of
the Senior Indebtedness' initial receipt of such Voided Payment until the full
amount of such Voided Payment is restored to such holder of the Senior
Indebtedness. During any continuance of any such payment default, this Article
III and the last paragraph of Section 2.2 shall be in full force and effect with
respect to the obligations hereunder.
3.13 AMENDMENTS; LIENS. The provisions of this Article III and the last
paragraph of Section 2.2 may not be amended or waived without the written
agreement of Maker, the agent under the Senior Bank Facility and Payee. Payee
will not, without the prior written consent of all the holders of the Senior
Indebtedness, take or receive any security interest, lien, mortgage or other
encumbrance on any assets of Maker or its subsidiaries.
ARTICLE IV
MISCELLANEOUS
-------------
4.1 WAIVER. The rights and remedies of Payee under this Note shall be
cumulative and not alternative. No waiver by Payee of any right or remedy under
this Note shall be effective unless in a writing signed by Payee. Neither the
failure nor any delay in exercising any right, power or privilege under this
Note will operate as a waiver of such right, power or privilege and no single or
partial exercise of any such right, power or privilege by Payee will preclude
any other or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege. To the maximum extent permitted by
applicable law: (a) no claim or right of Payee arising out of this Note can be
discharged by Payee, in whole or in part, by a waiver or renunciation of the
claim or right unless in a writing, signed by Payee; (b) no waiver that may be
given by Payee will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on Maker will be deemed to be a waiver
of any obligation of Maker or of the right of Payee to take further action
without notice or demand as provided in this Note. Maker hereby waives
presentment, demand, protest and notice of dishonor and protest.
4.2 NOTICES. Any notice required or permitted to be given hereunder
shall be given in accordance with Section 14.1 of the Agreement.
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4.3 SEVERABILITY. If any provision in this Note is held invalid or
unenforceable by any court of competent jurisdiction, then the other provisions
of this Note shall remain in full force and effect. Any provision of this Note
held invalid or unenforceable only in part or degree shall remain in full force
and effect to the extent not held invalid or unenforceable.
4.4 GOVERNING LAW. This Note shall be governed by the laws of the State
of Florida without regard to conflicts of laws principles.
4.5 PARTIES IN INTEREST. This Note shall bind Maker and its successors
and assigns. This Note shall not be assigned or transferred by Payee without the
express prior written consent of Maker, except by Will or, in default thereof,
by operation of law.
4.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this
Note are provided for convenience only and shall not affect its construction or
interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Note unless otherwise specified. All
words used in this Note shall be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the words "hereof"
and "hereunder" and similar references refer to this Note in its entirety and
not to any specific section or subsection hereof.
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of
the date first stated above.
NATIONSRENT, INC.,
a Delaware corporation
By: /s/ Thomas C. Richardson
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Name: Thomas C. Richardson
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Title: Vice President and Ass't Secretary
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