1
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of August 2, 2000 by and between NATIONSRENT, INC., a Delaware
corporation ("NationsRent"), NR2 HOLDINGS LIMITED, a Cayman Islands company, DB
CAPITAL INVESTORS, L.P., a Delaware limited partnership, X.X. XXXXXX CAPITAL
CORPORATION, a Delaware corporation and SIXTY WALL STREET FUND, L.P., a Delaware
limited partnership (collectively, the "Holders"), and Xxxxx X. Xxxx and H.
Xxxxx Xxxxxxxx. Certain other capitalized terms used herein are defined in
Section 10 and throughout this Agreement.
WHEREAS, NationsRent and the Holders have entered into a Preferred
Stock Purchase Agreement dated as of the date hereof (the "Stock Purchase
Agreement"), pursuant to which NationsRent agrees to issue 100,000 shares of its
Series B Convertible Preferred Stock, par value $.01 per share (the "Preferred
Stock") to the Holders; and
WHEREAS, the Preferred Stock is convertible into NationsRent common
stock, par value $.01 per share (the "Common Stock"), as provided in the Stock
Purchase Agreement; and
WHEREAS, NationsRent has agreed to provide to the Holders the
registration rights provided herein with respect to the Registrable Securities;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and in the Stock Purchase Agreement, the parties
agree as follows:
1. DEMAND REGISTRATION.
(a) REGISTRATION ON REQUEST. At any time after the 90th day
following the First Closing (as defined in the Stock Purchase Agreement), upon
written request by the Holders of at least a majority (by number of shares) of
the Registrable Securities, NationsRent shall utilize best reasonable efforts to
cause, as soon as practicable following the date of such notice, a registration
statement to be filed under the Securities Act or a pending registration
statement to be amended for the purpose of registering the Registrable
Securities for resale by the requesting Holders in accordance with the intended
method of disposition stated in such request; provided that NationsRent shall
not be required to effect any registration pursuant to this Section 1(a) on more
than three (3) separate occasions. Each request for a demand registration shall
specify the approximate number of Registrable Securities requested to be
registered and the anticipated per share price range for such offering.
NationsRent shall give all other Holders written notice of such written request
within ten (10) days thereof and give all other Holders the opportunity to
request that their Registrable Securities be included in the registration
statement filed with the SEC. No request for registration may be made pursuant
to this Section 1(a) unless the Registrable Securities requested to be
registered on behalf of requesting Holders total at least 25% of the aggregate
number of Registrable Securities acquired by the Holders in the First Closing
and the Second Closing (as defined in the Stock Purchase Agreement) or have a
market value (based upon the closing price of such Registrable Securities quoted
on the securities exchange or over-the-counter quotation system
2
on which such Registrable Securities are listed or quoted, as the case may be,
on the trading day immediately preceding any request pursuant to this Section
1(a)) of at least $25 million at the close of the last trading day prior to such
request.
(b) REGISTRATION STATEMENT FORM. Registrations under Section
1(a) shall be on such appropriate registration form of the SEC as shall permit
the disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in the request for such registration
and as shall be permitted under the Securities Act.
(c) EFFECTIVE REGISTRATION STATEMENT. A registration requested
pursuant to Section 1(a) shall be deemed to have been effected if a registration
statement with respect thereto has become effective, provided that a
registration statement which does not become effective after NationsRent has
filed a registration statement with respect thereto solely by reason of the
refusal by the Holders to proceed (other than a refusal to proceed based upon
the written advice of counsel relating to a material matter regarding the
Company) shall be deemed to have been effected by the Company at the request of
such Holders, unless (i) after it has become effective, such registration
statement becomes subject to any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason, other than by reason of an act or omission attributable to such Holders
with respect thereto; provided that upon the lifting of any such order
registration will be deemed to be effective, or (ii) unless the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than by
reason of an act or omission attributable to such Holders.
(d) SELECTION OF UNDERWRITERS.
(i) If a requested registration pursuant to Section
1(a) involves an underwritten public offering, the managing or lead
underwriter shall be selected by NationsRent and shall be reasonably
acceptable to the Holders of a majority (by number of shares) of the
Registrable Securities as to which registration has been requested and
a majority (by number of shares) of the Series A Registrable Securities
as to which registration is requested pursuant to the piggyback rights
contained in Section 2(a) of the Series A Registration Rights
Agreement, which shall not unreasonably withhold their acceptance of
any such underwriters, and one co-managing or co-lead underwriter shall
be selected by the Holders of a majority (by number of shares) of the
Registrable Securities as to which registration has been requested and
a majority (by number of shares) of the Series A Registrable Securities
as to which registration has been requested and shall be reasonably
acceptable to NationsRent, which shall not unreasonably withhold its
acceptance of any such co-managing or co-lead underwriter. If a
majority of the Registrable Securities and a majority of the Series A
Registrable Securities are unable to agree on the selection of a
co-lead or co-managing underwriter, then the selection shall be made by
NationsRent.
(ii) If a requested registration pursuant to the
demand rights contained in Section 1(a) of the Series A Registration
Rights Agreement involves an underwritten public offering, the managing
or lead underwriter shall be selected by NationsRent and shall be
reasonably acceptable to the Holders of a majority (by number of
shares) of the Series A Registrable Securities as to which registration
has been requested and a majority (by number of shares) of the
Registrable Securities as to which registration is requested pursuant
to the
3
piggyback rights contained in Section 2(a) of this Agreement, which
shall not unreasonably withhold their acceptance of any such
underwriters, and one co-managing or co-lead underwriter shall be
selected by the Holders of a majority (by number of shares) of the
Series A Registrable Securities as to which registration has been
requested and a majority (by number of shares) of the Registrable
Securities as to which registration has been requested and shall be
reasonably acceptable to NationsRent, which shall not unreasonably
withhold its acceptance of any such co-managing or co-lead underwriter.
If a majority of the Series A Registrable Securities and a majority of
the Registrable Securities are unable to agree on the selection of a
co-lead or co-managing underwriter, then the selection shall be made by
NationsRent.
(e) PRIORITY ON DEMAND REGISTRATIONS.
(i) If a requested registration pursuant to Section
1(a) involves an underwritten public offering and the managing or lead
underwriter advises NationsRent in writing, with a copy to each Holder
requesting registration, that in its opinion the number of securities
requested to be included in such registration (including securities to
be sold by NationsRent or by other persons who are not Holders of
Registrable Securities) exceeds the number of securities which can be
sold in an orderly manner in such offering within a price range
acceptable to the Holders of a majority (by number of shares) of the
Registrable Securities that are requested to be included in such
registration and the holders of a majority (by number of shares) of the
Series A Registrable Securities that are requested to be included in
such registration, if any, pursuant to the piggyback rights contained
in Section 2(a) of the Series A Registration Rights Agreement, without
adversely affecting the marketability of the offering, NationsRent
shall include in such registration prior to the inclusion of any other
securities the number of Registrable Securities that are requested to
be included, and the number of Series A Registrable Securities that are
requested to be included pursuant to the piggyback rights contained in
Section 2(a) of the Series A Registration Rights Agreement, which in
the opinion of such underwriters can be sold in an orderly manner
within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities or
Series A Registrable Securities requested by each such holder to be
included in such offering.
(ii) If a requested registration pursuant to Section
1(a) of the Series A Registration Rights Agreement involves an
underwritten public offering and the managing or lead underwriter
advises NationsRent in writing, with a copy (at the address set forth
in the Series A Registration Rights Agreement) to each holder of Series
A Registrable Securities requesting registration, that in its opinion
the number of securities requested to be included in such registration
(including securities to be sold by NationsRent or by other persons who
are not holders of Series A Registrable Securities) exceeds the number
of securities which can be sold in an orderly manner in such offering
within a price range acceptable to the holders of a majority (by number
of shares) of the Series A Registrable Securities that are requested to
be included in such registration and the Holders of a majority (by
number of shares) of the Registrable Securities that are requested to
be included in such registration, if any, pursuant to the piggyback
rights contained in Section 2(a) of this Agreement, without adversely
affecting the marketability of the offering, NationsRent shall include
in such registration prior to the inclusion of any other securities the
number of Series A Registrable
4
Securities that are requested to be included and the number of
Registrable Securities that are requested to be included pursuant to
the piggyback rights contained in Section 2(a) of this Agreement, which
in the opinion of such underwriters can be sold in an orderly manner
within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Series A Registrable
Securities or Registrable Securities requested by each such holder to
be included in such offering.
(f) RESTRICTIONS ON DEMAND REGISTRATION. NationsRent shall not
be obligated to effect any registration pursuant to Section 1(a) during any of
the following periods: (i) 30 days prior to the anticipated commencement of an
underwritten public offering by NationsRent of its equity securities and 90 days
subsequent to the consummation of such underwritten public offering unless, in
the good faith judgment of the managing or lead underwriter or underwriters
thereof, which is confirmed in writing, such filing would not have an adverse
effect on such offering, (ii) if such filing is prohibited by applicable law or
(iii) if NationsRent determines in good faith that the filing or effectiveness
of such registration statement would require NationsRent to disclose a material
financing, acquisition or other corporate transaction or development, and the
proper officers of NationsRent shall have determined in good faith that such
disclosure is not in the best interests of NationsRent, provided that
NationsRent may not delay the filing or effectiveness of any registration
statement pursuant to this Section 1(f) for more than an aggregate of 180 days
in any twelve-month period; provided, further, that NationsRent shall file the
registration statement and cause it to become effective as soon as reasonably
practicable after it shall determine in its good faith judgment that such
registration will not materially interfere with or materially adversely affect
the financing, acquisition or other corporate transaction or development.
2. PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK. The Holders of the Registrable
Securities are hereby granted the following piggyback registration rights with
respect to the Registrable Securities. Whenever NationsRent proposes to file a
registration statement, other than pursuant to Section 1(a) above, for the
registration of shares of its Common Stock in connection with an underwritten
primary public offering on behalf of NationsRent or an underwritten secondary
public offering on behalf of other persons who are not the Holders of
Registrable Securities, NationsRent will, prior to such filing, give fifteen
(15) days prior written notice to the Holders of its intention to do so and,
upon the written request of any of the Holders given within ten (10) days after
receipt of such notice, NationsRent shall, subject to the terms of this
Agreement, use its best reasonable efforts to cause the Registrable Securities
which NationsRent has been requested to register by such Holders to be
registered under the Securities Act to the extent necessary to permit their
sale. If, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, NationsRent shall determine for any
reason (other than by reason of acts or omissions attributable to any of the
Holders) either not to register or to delay registration of such securities,
NationsRent may, at its election, give written notice of such determination to
each Holder and, thereupon, (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however, to
the rights of any Holders entitled to do so to request that such registration be
effected as a registration under Section 1(a), and (ii) in the case of a
determination to delay registration, shall be permitted to delay registering any
Registrable Securities,
5
for the same period as the delay in registering such other securities. No
registration effected under this Section 2(a) shall relieve NationsRent of its
obligation to effect any registration upon request under Section 1(a), nor shall
any such registration hereunder be deemed to have been effected pursuant to
Section 1(a).
(b) PRIORITY IN PIGGYBACK REGISTRATIONS.
(i) In a requested registration pursuant to Section
2(a), if the managing or lead underwriters advise NationsRent in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in
an orderly manner in such offering within a price range acceptable to
NationsRent or the other persons who are not Holders of Registrable
Securities who requested the filing of a registration statement as
contemplated by Section 2(a) above, NationsRent shall include in such
registration (i) first, if the registration was initiated by
NationsRent, the securities NationsRent proposes to sell, and (ii)
second, the Registrable Securities and securities held by other persons
who are not Holders of Registrable Securities requested to be included
in such registration, pro rata among the Holders of Registrable
Securities and the other persons who are not Holders of Registered
Securities on the basis of the number of shares requested by each such
Holder of Registrable Securities and each other person who is not a
Holder of Registrable Securities to be included in such offering.
Notwithstanding the foregoing, if the registration was requested by
holders of Series A Registrable Securities pursuant to their demand
registration rights under Section 1(a) of the Series A Registration
Rights Agreement, then the priority shall be as set forth in Section
1(e)(ii) of this Agreement.
(ii) In a requested registration pursuant to Section
2(a) of the Series A Registration Rights Agreement, if the managing or
lead underwriters advise NationsRent in writing that in their opinion
the number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to NationsRent or the other
persons who are not holders of Series A Registrable Securities who
requested the filing of a registration statement as contemplated by
Section 2(a) of the Series A Registration Rights Agreement, NationsRent
shall include in such registration (i) first, if the registration was
initiated by NationsRent, the securities NationsRent proposes to sell,
and (ii) second, the Series A Registrable Securities and securities
held by other persons who are not holders of Series A Registrable
Securities requested to be included in such registration, pro rata
among the holders of Series A Registrable Securities and the other
persons who are not holders of Series A Registered Securities on the
basis of the number of shares requested by each such holder of Series A
Registrable Securities and each other person who is not a holder of
Series A Registrable Securities to be included in such offering.
Notwithstanding the foregoing, if the registration was requested by
holders of Registrable Securities pursuant to their demand registration
rights under Section 1(a) of this Agreement, then the priority shall be
as set forth in Section 1(e)(i) of this Agreement.
6
3. HOLDBACK AGREEMENTS.
(a) So long as a Holder and its affiliates own Common Stock
and/or Preferred Stock convertible into Common Stock exceeding 5% of the Common
Stock of NationsRent then outstanding or such Holder has the right to designate
one or more directors to the board of directors of NationsRent (unless otherwise
required by the underwriters), such Holder of Registrable Securities shall not
effect any public sale or distribution (including sales pursuant to Rule 144) of
equity securities of NationsRent, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven (7) days prior
to and the 90-day period beginning on the effective date of any underwritten
registration (except as part of such underwritten registration), unless the
underwriters managing the registered public offering agree to a shorter
restricted period for Messrs. Xxxx or Xxxxxxxx in which case such shorter period
shall apply to such Holder.
(b) NationsRent (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven (7) days prior
to and during the 90-day period beginning on the effective date of any
underwritten demand registration or any underwritten piggyback registration
(except as part of such underwritten registration), unless the underwriters
managing the registered public offering otherwise agree, and (ii) shall use best
reasonable efforts to cause each holder of at least 5% (on a fully-diluted
basis) of its Common Stock, or any securities convertible into or exchangeable
or exercisable for Common Stock, purchased or acquired from NationsRent at any
time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
4. REGISTRATION PROCEDURES. Whenever the Holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, NationsRent shall use its best reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto NationsRent shall
as expeditiously as possible:
(a) prepare and as soon as reasonably practicable file with
the SEC a registration statement with respect to such Registrable Securities and
use its best reasonable efforts to cause such registration statement to become
and remain effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, NationsRent shall furnish
to the counsel selected by the Holders of at least a majority (by number of
shares) of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed, which documents shall be
subject to the review and comment of such counsel);
(b) notify each seller of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
7
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition of the Registrable Securities owned by such seller
in such jurisdictions (provided that NationsRent shall not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(e) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and, at the request of any such
seller, NationsRent shall promptly prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
(f) use its best reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which
securities of the same class are then listed;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions
(including, without limitation, causing the Chief Executive Officer, the Chief
Financial Officer or an Executive Vice President reasonably acceptable to the
Holders to participate in any "road show" or "road shows") as the sellers of at
least a majority (by number of shares) of the Registrable Securities being sold
or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities;
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of NationsRent, and cause NationsRent's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
8
(j) otherwise use its best reasonable efforts to comply with
all applicable rules and regulations of the SEC, and make available to its
stockholders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months beginning with the first day of
NationsRent's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) if and to the extent that any seller of Registrable
Securities, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of NationsRent, permit such seller to
participate in the preparation of such registration or comparable statement and
require the insertion therein of material, furnished to NationsRent in writing,
which in the reasonable judgment of such seller and its counsel should be
included;
(l) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, use its best reasonable efforts promptly to obtain the withdrawal
of such order;
(m) use its best reasonable efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities; and
(n) furnish to each Holder of Registrable Securities a cold
comfort letter from NationsRent's independent public accountants in customary
form and covering such matters of the type customarily covered by cold comfort
letters as the sellers of at least a majority (by number of shares) of the
Registrable Securities being sold reasonably request, in form and substance
reasonably satisfactory to such Holder.
NationsRent will not file any registration statement or
amendment thereto or any prospectus or any supplement thereto (including such
documents incorporated by reference and proposed to be filed after the initial
filing of the registration statement) to which the Holders of at least a
majority (by number of shares) of Registrable Securities covered by such
registration statement or the underwriter or underwriters, if any, shall
reasonably object, provided that NationsRent may file such document in a form
required by law upon the advice of its counsel.
5. REGISTRATION EXPENSES. NationsRent will pay or cause to be paid all
Registration Expenses (as defined below) in connection with any registration of
Registrable Securities requested pursuant to this Agreement. "Registration
Expenses" means all expenses incident to NationsRent's performance of or
compliance with this Agreement, including without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, listing expenses, printing expenses, messenger and delivery expenses, fees
and disbursements of custodians, fees and disbursements of counsel for
NationsRent and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by NationsRent
and the reasonable fees and disbursements of one counsel chosen by the Holders
of at least a majority (by number of shares) of the Registrable Securities
included in such registration. Registration
9
Expenses shall not include any taxes payable in connection with the resale of
the Registrable Securities.
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY NATIONSRENT. NationsRent agrees to
indemnify, to the extent permitted by law, each Holder of Registrable
Securities, its officers, directors, partners, members, affiliates and each
person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, except as otherwise provided herein, NationsRent
will reimburse such Holder, officer, director, partner, member, affiliate and
controlling person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending against any such loss, claim,
damage, liability or expense, except insofar as the same arise from or are based
upon any information made in reliance upon and in conformity with written
information provided to NationsRent by such Holder expressly for use therein or
by such Holder's failure to deliver a copy of the final prospectus or any
amendments or supplements thereto after NationsRent has furnished such Holder
with a sufficient number of copies of the same. In connection with an
underwritten offering, NationsRent shall indemnify such underwriters, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities.
(b) INDEMNIFICATION BY THE HOLDERS. In connection with any
registration statement in which a Holder of Registrable Securities is
participating, each such Holder shall furnish to NationsRent in writing such
information and affidavits as NationsRent reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, shall indemnify NationsRent, its directors and officers and
each person who controls NationsRent (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in
the registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is made in reliance upon and in conformity with written information
furnished to NationsRent by such Holder specifically stating that it is for use
in the preparation of such registration statement, prospectus or preliminary
prospectus, amendment or supplement; provided that the obligation to indemnify
shall be individual, not joint and several, for each Holder and shall be limited
to the net amount of proceeds received by such Holder from the sale of
Registrable Securities pursuant to such registration statement. In connection
with an underwritten offering, the selling Holders of Registrable Securities
shall indemnify such underwriters, their officers and directors and each person
who controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of
NationsRent.
(c) NOTICE OF CLAIMS. Any person entitled to indemnification
hereunder shall (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks
10
indemnification (provided that the failure to give prompt notice shall not
impair any person's right to indemnification hereunder to the extent such
failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided, however, that any
indemnified party may, at its own expense, retain separate counsel to
participate in such defense. If such defense is assumed, the indemnifying party
shall not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent shall not be unreasonably withheld).
No indemnifying party shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation or which requires action other than the payment of money by
the indemnifying party. An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) SURVIVAL OF INDEMNIFICATION. The indemnification provided
for under this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director, partner, member, affiliate or controlling person of such indemnified
party and shall survive the transfer of securities.
(e) CONTRIBUTION. If the indemnification provided for in this
Section 6 is unavailable to an indemnified party in respect of any loss, claim,
damage, liability or expense referred to herein, then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage, liability or expense (i) in such proportion as is appropriate to reflect
the relative benefits received by NationsRent on the one hand and the Holder or
other person, as the case may be, on the other from the distribution of the
Registrable Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of NationsRent on the one hand and of the Holder or other person,
as the case may be, on the other in connection with the statements or omissions
which resulted in such loss, claim, damage, liability or expense, as well as any
other relevant equitable considerations. The relative benefits received by
NationsRent on the one hand and the Holder or other person, as the case may be,
on the other in connection with the distribution of the Registrable Securities
shall be deemed to be in the same proportion as the total net proceeds received
by NationsRent from the initial sale of the Registrable Securities by
NationsRent to the Holder pursuant to the Stock Purchase Agreement bear to the
gain, if any, realized by the selling Holder or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative fault
of NationsRent on the one hand and of the Holder or other person, as the case
may be, on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission to
state a material fact relates to information supplied by NationsRent, by the
Holder or by the other person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, provided that the foregoing contribution agreement shall not
11
inure to the benefit of any indemnified party if indemnification would be
unavailable to such indemnified party by reason of the provisions contained in
the first sentence of Section 6(a), and in no event shall the obligation of any
indemnifying party to contribute under this Section 6(e) exceed the amount that
such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under this Section 6 had
been available under the circumstances.
The Company and the Holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 6(e)
were determined by pro rata allocation (even if the Holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth in the preceding sentence and
Section 6(c), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.
Notwithstanding the provisions of this Section 6(e), no Holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such Holder, the net
proceeds received by such Holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may participate
in any registration hereunder which involves an underwritten offering unless
such Holder (i) agrees to sell such Holder's securities on the basis provided in
any underwriting arrangements approved by the parties entitled hereunder to
approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
Holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to NationsRent or the
underwriters (other than representations and warranties regarding such Holder
and such Holder's intended method of distribution) or to undertake any
indemnification obligations to NationsRent or the underwriters with respect
thereto, except as otherwise provided in paragraph 6 hereof.
8. OTHER AGREEMENTS. NationsRent shall not enter into any agreement or
instrument which would conflict with or result in a material breach or violation
of any of the terms or provisions of this Agreement. In addition, NationsRent
shall not enter into any agreement or instrument with any person which grants
such person demand registration rights similar to those in Section 1(a) which
preclude the Holders of Registrable Securities from exercising their rights
pursuant to Section 2(a) hereof in connection with any registration statement
filed pursuant to which such person will sell securities of NationsRent.
12
9. TAG-ALONG RIGHTS.
(a) Certain Definitions.
(i) The term "Xxxxxxxx Shares" means all shares of
Common Stock beneficially owned by H. Xxxxx Xxxxxxxx as of the date
hereof, and any of such shares which are subsequently transferred to a
Xxxxxxxx Transferee (such persons, the "Xxxxxxxx Stockholders").
(ii) The term "Xxxxxxxx Transferee" means (i) any
member of Xx. Xxxxxxxx'x immediate family, or (ii) any trust, limited
partnership or similar entity controlled by H. Xxxxx Xxxxxxxx or any
members of Xx. Xxxxxxxx'x immediate family, or with respect to which he
has or they have a beneficial interest.
(iii) The term "Xxxx Shares" means all shares of
Common Stock beneficially owned by Xxxxx X. Xxxx or Xxxx Holdings
Limited Partnership as of the date hereof, and any such shares which
are subsequently transferred to a Xxxx Transferee (such persons, the
"Xxxx Stockholders").
(iv) The term "Xxxx Transferee" means (i) any member
of Xx. Xxxx'x immediate family, or (ii) any trust, limited partnership
or similar entity controlled by Xxxxx X. Xxxx, Xxxx Holdings Limited
Partnership or any member of Xx. Xxxx'x immediate family, or with
respect to which he has or they have a beneficial interest.
(v) The term "Tag-Along Sale" means any transaction
or series of transactions occurring at substantially the same time
(other than underwritten offerings, transfers for tax or estate
planning purposes or any pledge as security in a bona fide loan
transaction and any related foreclosure or margin sales) which involves
the sale by any Xxxxxxxx Stockholder or Xxxx Stockholder, or both, of
shares of Common Stock, representing 2% or more of the outstanding
shares of Common Stock, calculated on a fully-diluted basis for all
outstanding options, warrants and other securities convertible into or
exchangeable for shares of Common Stock, including but not limited to
the Registrable Securities and the Series A Registrable Securities.
(b) Tag-Along Right. Prior to the fifth anniversary of the
Second Closing, in connection with any proposed Tag-Along Sale, the Xxxxxxxx
Stockholders and the Xxxx Stockholders participating in such sale shall afford
the Holders and the Series A Holders (pro rata among such Holders and Series A
Holders based on the numbers of Registrable Securities or Series A Registrable
Securities held by them) the opportunity to participate in such sale, on the
same terms and conditions as such Xxxxxxxx Stockholders and Xxxx Stockholders,
with respect to the number of shares of Common Stock equal to the number derived
by multiplying the total number of shares proposed to be sold in the Tag-Along
Sale by a fraction, the numerator of which is the total number of shares of
Common Stock then held by the Holders and the Series A Holders (including shares
issuable upon the conversion of shares of Preferred Stock) and the denominator
of which is the sum of (i) the total number of shares of Common Stock then held
by the Holders and the Series A Holders (including shares issuable upon the
conversion of shares of Preferred Stock), (ii) the total number of Xxxxxxxx
Shares then held by the Xxxxxxxx Stockholders if any Xxxxxxxx Stockholder is
participating in such
13
sale and (iii) the total number of Xxxx Shares then held by the Xxxx
Stockholders if any Xxxx Stockholder is participating in such sale.
(c) Notices. The Xxxxxxxx Stockholders or the Xxxx
Stockholders participating in any Tag-Along Sale shall, at least five (5) days
prior to the Tag-Along Sale, give written notice to the Holders in accordance
with Section 11(a) of this Agreement and to the Series A Holders in accordance
with Section 11(a) of the Series A Registration Rights Agreement providing a
summary of the terms of the proposed sale and the number of Xxxxxxxx Shares and
Xxxx Shares proposed to be sold in such Tag-Along Sale. Each Holder or Series A
Holder may exercise its right to participate in such Tag-Along Sale by providing
written notice to any of the Xxxxxxxx Stockholders or Xxxx Stockholders
participating in such Tag-Along Sale, stating the number of shares of Common
Stock that the Holder or Series A Holder wishes to sell in the Tag-Along Sale.
If no Tag-Along Notice is received by the Xxxxxxxx Stockholders or the Xxxx
Stockholders in the five (5) day period prior to the proposed sale, the Xxxxxxxx
Stockholders and the Xxxx Stockholders shall have the right for a 30-day period
to sell up to the proposed number of shares on terms and conditions no more
favorable in any material respect than those stated in the notice provided to
the Holders and the Series A Holders pursuant to the first sentence of this
Section 9(c) (provided that, in connection with any proposed Tag-Along Sale
intended to be substantially at market price, the sales price can be
substantially at market).
(d) Certain Transfers. No transfer of Xxxxxxxx Shares to a
Xxxxxxxx Transferee and no transfer of Xxxx Shares to a Xxxx Transferee will be
made unless the Xxxxxxxx Transferee or the Xxxx Transferee, as the case may be,
agrees to be bound by the provisions of this Section 9; provided that shares of
Common Stock which are sold by either Xx. Xxxxxxxx or Xx. Xxxx to any Xxxxxxxx
Transferee or Xxxx Transferee, respectively, in a bona fide sale transaction at
fair market value shall not be deemed to be held by the respective transferee
for purposes of any Tag-Along Sale.
10. DEFINITIONS. As used in this Agreement, the following terms shall have
the following respective meanings:
"Affiliate" shall have the meaning attributed thereto under
Rule 12b-2 under the Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations
promulgated thereunder, all as the same shall be in effect at the time.
"Registrable Securities" shall mean, as of any date of
determination, outstanding shares of Common Stock that were issued by
NationsRent upon the conversion of the Preferred Stock, shares of Common Stock
issuable by NationsRent upon conversion of any Preferred Stock and any other
shares of capital stock of NationsRent issued in respect of any of the foregoing
as a result of stock splits, stock dividends, reclassification,
recapitalization, mergers, consolidations or similar events; provided that any
such securities shall no longer be Registrable Securities if such securities
have been resold or exchanged pursuant to an effective registration statement or
pursuant to Rule 144 under the Securities Act.
"SEC" means the Securities and Exchange Commission.
14
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time.
"Series A Holders" means the holders of the Series A
Registrable Securities.
"Series A Registrable Securities" means Registrable Securities
as defined in the Series A Registration Rights Agreement.
"Series A Registration Rights Agreement" means the
Registration Rights Agreement dated July 20, 1999 among NationsRent, NR Holdings
Limited and NR Investments Limited, as amended by an amendment dated the date
hereof.
11. MISCELLANEOUS.
(a) Notice Generally. Any notice, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Agreement shall be sufficiently given or made if in
writing and either delivered in person with receipt acknowledged, delivered by
reputable overnight courier, telecopied and confirmed separately in writing by a
copy mailed or sent by registered or certified mail, return receipt requested,
postage prepaid, to the appropriate address or addresses set forth in the Stock
Purchase Agreement.
(b) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided that none of the Holders may assign, delegate or otherwise
transfer any of its rights, interests or obligations under this Agreement,
without the prior written consent of NationsRent, except to another Holder or an
Affiliate of any of the Holders or of Investcorp S.A. In no event, however, may
any of the Holders or Affiliates of any of the Holders assign, delegate or
otherwise transfer any of the Tag-Along Rights provided in Section 9 of this
Agreement except to another Holder or an Affiliate of any of the Holders or of
Investcorp S.A.
(c) Governing Law. This Agreement shall be governed by the
laws of the State of Delaware, without regard to the provisions thereof relating
to conflict of laws.
(d) Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(e) Entire Agreement. This Agreement, together with the Stock
Purchase Agreement, is intended by the parties as a final expression of their
agreement and intended to be a complete exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof.
15
(f) Counterparts. This Agreement may be executed in separate
counterparts, each of which shall collectively and separately, constitute one
agreement.
(g) Amendments and Waivers. Except as provided in Section 12,
any term of this Agreement may be amended or modified and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of NationsRent and Holders of at least two-thirds (by number of shares)
of the Registrable Securities; provided that the observance of a term of this
Agreement may in any event be waived in writing by the party that will lose the
benefit of such term as a result of the waiver.
12. AMENDMENT OF SERIES A REGISTRATION RIGHTS AGREEMENT. NationsRent, NR
Holdings Limited, a Cayman Islands company, and NR Investments Limited, a Cayman
Islands company, agree that Sections 1(d), 1(e), 2(b) and 9 of the Series A
Registration Rights Agreement are hereby amended in their entirety by Sections
1(d)(ii), 1(e)(ii), 2(b)(ii) and 9 of this Agreement, respectively. This Section
12 shall cause the Series A Registration Rights Agreement to be modified solely
as to the terms which are expressly stated in this Section 12, and all other
terms and conditions of the Series A Registration Rights Agreement shall remain
in full force and effect. NR Holdings Limited and NR Investments Limited join
this Agreement solely with respect to this Section 12 and Sections 1(d)(ii),
1(e)(ii), 2(b)(ii) and 9 of this Agreement. Any amendment or waiver of Section
1(d)(ii), 1(e)(ii), 2(b)(ii) or 9 of this Agreement shall be made in compliance
with Section 11(g) of this Agreement and shall also require the written consent
of holders of a majority (by number of shares) of the Series A Registrable
Securities.
[signatures following on next page]
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NATIONSRENT, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------------------
Name: Xxxxx X. Xxxx
-----------------------------------------
Title: Chairman of the Board & Chief Executive
----------------------------------------
Officer
--------
NR2 HOLDINGS LIMITED
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------------
The Director Ltd.
Director
/s/ Xxxxx X. Xxxx
-----------------------------------------------
XXXXX X. XXXX
/s/ H. Xxxxx Xxxxxxxx
-----------------------------------------------
H. XXXXX XXXXXXXX
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.,
its General Partner
By: DB Capital Partners, Inc.,
its General Partner
By: /s/ Xxx X. Xxxxxxx
------------------------------------
Xxx X. Xxxxxxx
Vice President
X.X. XXXXXX CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxx
--------------------------------------------
Xxxxx Xxxxx
Vice President
-16-
17
NR HOLDINGS LIMITED
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------------
The Director, Ltd.
Director
NR INVESTMENTS LIMITED
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------------
The Director, Ltd.
Director
-17-
18
SIXTY WALL STREET FUND, L.P., a
Delaware limited partnership
By: Sixty Wall Street Corporation, its
General Partner
By: /s/ Xxxxx Xxxxx
----------------------------------------
Xxxxx Xxxxx
Vice President
-18-
