EXHIBIT D
PREFERRED STOCKHOLDERS AGREEMENT
PREFERRED STOCKHOLDERS AGREEMENT, dated as of August 2, 2000 (this
"Agreement"), by and among NR Holdings Limited and NR Investments Limited (the
"Series A Investors") and NR2 Holdings Limited, DB Capital Investors, L.P., X.X.
Xxxxxx Capital Corporation and Sixty Wall Street Fund, L.P. (the "Series B
Investors," and together with the Series A Investors, the "Investors").
W I T N E S S E T H:
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WHEREAS, the Series A Investors are the holders of all of the shares (the
"Series A Preferred Shares") of Series A Convertible Preferred Stock, par value
$.01 per share (the "Series A Preferred Stock"), of NationsRent, Inc. (the
"Company");
WHEREAS, concurrently herewith, the Series B Investors and the Company are
entering into a Preferred Stock Purchase Agreement (the "Stock Purchase
Agreement") pursuant to which the Series B Investors are purchasing all of the
shares (the "Series B Preferred Shares," and together with the Series A
Preferred Shares, the "Preferred Shares") of Series B Convertible Preferred
Stock, par value $.01 per share, of the Company (the "Series B Preferred Stock,"
and together with the Series A Preferred Stock, the "Preferred Stock");
WHEREAS, the Series B Investors wish to set forth their agreement regarding
the manner in which the Series B Preferred Shares will be voted on the election
of directors that the holders of Series B Preferred Stock are entitled to elect
pursuant to the Certificate of Designation of the Company containing the terms
of the Series B Preferred Stock (the "Certificate of Designation");
WHEREAS, all of the Investors wish to set forth their agreement regarding
certain tag-along rights that each of them shall have upon certain sales by the
others of capital stock of the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties hereto hereby agree as follows:
1. Voting. Each of the Series B Investors hereby agrees that, at any
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meeting of the holders of the Series B Preferred Stock, however called, or in
connection with any written consent in lieu thereof, it shall vote all Series B
Preferred Shares owned or controlled by it, whether now owned or controlled or
hereafter acquired or controlled, to elect and maintain in office as directors
of the Company (a) at all times at which the holders of the Series B Preferred
Stock are entitled pursuant to Section 7(ii)(i) of the Certificate of
Designation or Section 7.8(a) of the Stock Purchase Agreement to elect two
members of the Company's Board of Directors, one person designated in writing by
DB Capital Investors, L.P. and one person designated in writing by X.X. Xxxxxx
Capital Corporation, (b) at all times at which the holders of the Series B
Preferred Stock are entitled pursuant to Section 7(ii)(ii) of the Certificate of
Designation to elect one member of the Company's Board of Directors, one person
designated in writing by holders of a majority of the Series B Preferred Shares
then held by the Series B Investors, and (c) at all times at which the holders
of the Series B Preferred Stock are entitled pursuant to Section
7(ii)(iii) of the Certificate of Designation to elect one member of the
Company's Board of Directors, one person designated in writing by the Series B
Investor whose voting or dispositive power with respect to Series B Preferred
Shares was responsible for the holders of Series B Preferred Stock being
entitled to elect a member of the Company's Board of Directors under that
Section at that time. The initial designees of DB Capital Investors, L.P. and
X.X. Xxxxxx Capital Corporation pursuant to clause (a) above are Xxxxxx X. Xxxxx
and Xxxxx Xxxxx, respectively. The Series B Investors agree to take such action
as may be necessary to call and hold a meeting of the holders of the Series B
Preferred Stock or execute a written consent in lieu thereof upon the request of
the holder or holders entitled at the time pursuant to the foregoing provisions
to designate directors, and to remove previous designees and/or elect new
directors in accordance with the directions of such holder or holders. The
Series B Investors shall not enter into any agreement or understanding with any
person or entity the effect of which would be inconsistent with or violative of
the foregoing provisions. The provisions of this Section 1 shall terminate at
such time as the Series B Investors, Investcorp, S.A. and their respective
Affiliates hold in the aggregate fewer than 25,000 Series B Preferred Shares.
Nothing contained in this Agreement shall obligate either X.X. Xxxxxx Capital
Corporation or DB Capital Investors, L.P. to designate a director to the
Company's Board of Directors.
2. Tag-Along Rights.
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(a) For purposes of this Agreement, the term "Conversion Shares"
means shares of Common Stock of the Company issued upon conversion of Preferred
Shares.
(b) For purposes of this Agreement, the term "Tag-Along Sale" means
any transaction or series of transactions occurring at substantially the same
time, other than an underwritten offering, which involves the sale by any
Investor of Preferred Shares convertible into, or Conversion Shares
representing, or a combination of Preferred Shares convertible into and
Conversion Shares representing, 1% or more of the then outstanding shares of
Common Stock of the Company ("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, other than any sale by NR2
Holdings Limited to Investcorp, S.A. or to an Affiliate (as defined in the Stock
Purchase Agreement) of NR2 Holdings Limited or of Investcorp, S.A., or any sale
by any other Investor to an Affiliate of such Investor.
(c) Tag-Along Right. In connection with any proposed Tag-Along Sale,
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the Investor proposing such sale (the "Selling Investor") shall afford to each
of the other Investors (the "Other Investors") the opportunity to participate in
such sale, on the same terms and conditions as the Selling Investor, and on a
pro rata basis. Pro-rata basis shall be determined based upon the total number
of Conversion Shares then held and shares of Common Stock issuable upon
conversion of Preferred Shares then held by the Selling Investor and Other
Investors that are participating in such sale. In any such transaction, Other
Investors shall, to the extent practicable, transfer Preferred Shares if the
Selling Investor is transferring Preferred Shares and Conversion Shares if the
Selling Investor is transferring Conversion Shares (or in a proportional
combination if the Selling Investor is selling both); provided that to the
extent that a participating Other Investor does not hold a sufficient number of
Preferred Shares to fully participate in such transaction, such Other Investor
shall be permitted to deliver instead the number of Conversion Shares into which
the Preferred Shares it would have been entitled to deliver are convertible. In
addition, Other Investors shall, to the extent possible, transfer Series A
Preferred Shares if the Selling Investor is transferring Series A Preferred
Shares and Series B
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Preferred Shares if the Selling Investor is transferring Series B Preferred
Shares; provided that a participating Other Investor shall be permitted to
deliver Preferred Shares of the other Series to the extent such Other Investor
does not hold any or a sufficient number of Preferred Shares of the Series being
transferred by the Selling Investor to participate or fully participate in such
transaction otherwise. If Preferred Shares of the other Series are transferred,
the number of Preferred Shares of the other Series to be transferred shall be
determined on an as-converted to Conversion Shares basis. For example, if the
conversion prices of the Series A Preferred Shares and the Series B Preferred
Shares were $8.00 and $6.00, respectively, then 48 Series A Preferred Shares
would be treated as equivalent to 36 Series B Preferred Shares, because each
would be convertible into 6,000 Conversion Shares.
(d) Notices. The Selling Investor shall, at least 10 days prior to
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the Tag-Along Sale, give written notice to the Other Investors providing a
summary of the terms of the proposed sale and the number of Preferred Shares and
Conversion Shares proposed to be sold in such Tag-Along Sale. Each Other
Investor may exercise its right to participate in such Tag-Along Sale by
providing written notice (a "Tag-Along Notice") to the Selling Investor stating
the number of Preferred Shares and/or the number of Conversion Shares that the
Other Investor wishes to sell in the Tag-Along Sale. If no Tag-Along Notice is
received by the Selling Investor in the 10 day period prior to the proposed sale
from an Other Investor, the Selling Investor shall have the right for a 30-day
period to sell up to the number of shares that such Other Investor was entitled
to sell hereunder on terms and conditions no more favorable to the Selling
Investor than those stated in the notice provided to the Other Investors
pursuant to the first sentence of this Section.
3. Miscellaneous.
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(a) Entire Agreement. This Agreement constitutes the entire agreement
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among the parties with respect to the subject matter hereof and supersedes all
other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
(b) Transfers. In the event of any sale or transfer of Series B
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Preferred Shares, the transferred shares shall remain subject to the provisions
of Section 1 of this Agreement and the transferee shall be treated as a "Series
B Investor" for purposes of Sections 1 and 3 of this Agreement. In the event of
any sale or transfer of Preferred Shares or Conversion Shares by NR2 Holdings
Limited to Investcorp, S.A. or to an Affiliate of NR2 Holdings Limited or of
Investcorp, S.A., or any sale or transfer of Preferred Shares or Conversion
Shares by any other Investor to an Affiliate of such other Investor, the
transferred shares shall remain subject to and shall be entitled to the benefit
of the provisions of Section 2 of this Agreement and the transferee shall be
treated as an "Investor" for purposes of Sections 1 and 3 of this Agreement.
Preferred Shares or Conversion Shares sold in accordance with the provisions of
Section 2 of this Agreement pursuant to a Tag-Along Sale shall no longer be
subject to the provisions of Section 2 of this Agreement. In the case of any
proposed transfer by an Investor of Preferred Shares or Conversion Shares that
would remain subject to any of the provisions of this Agreement in the hands of
the transferee pursuant to the foregoing, the Investor may not transfer such
shares unless the Investor provides to the Company and the other Investors the
transferee's written agreement to be bound by the applicable provisions of this
Agreement. Any transfer of Preferred Shares or Conversion Shares in violation
of the foregoing provisions of this Section 3(b) or in
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violation of the provisions of Section 2 of this Agreement shall be void ab
initio and of no force or effect.
(c) Assignment. Except as contemplated by Section 3(b), this
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Agreement may not be assigned by any party, by operation of law or otherwise,
without the prior written consent of the other parties.
(d) Amendments. Section 1 of this Agreement may not be amended, and
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no provision thereof may be waived, except by written agreement executed by
Series B Investors holding Series B Preferred Shares representing at least two-
thirds of the number of Series B Preferred Shares then held by all of the Series
B Investors. Section 2 of this Agreement may not be amended, and no provision
thereof may be waived, except by written agreement executed by Investors holding
Preferred Shares or Conversion Shares representing in the aggregate at least 90%
of the number of shares of Common Stock issuable upon conversion of the
Preferred Shares then held by all of the Investors plus the number of Conversion
Shares then held by all of the Investors. For purposes of the foregoing
provisions, an amendment to Section 3 of this Agreement shall be treated as an
amendment to Section 1, as an amendment to Section 2 or as amendments to both
Sections depending on which Sections are impacted or potentially impacted by the
amendment. Notwithstanding the foregoing, the observance of a term of this
Agreement may in any event be waived in writing by the party that will give up
the benefit of such term as a result of the waiver.
(e) Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, by telecopy, by
mail (registered or certified mail, postage prepaid, return receipt requested)
or by any courier service, such as Federal Express, providing proof of delivery.
All communications hereunder shall be delivered to the respective parties at the
following addresses:
If to DB Capital Investors, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
L.P.: Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxx
Facsimile: 000-000-0000
If to X.X. Xxxxxx Capital 00 Xxxx Xxxxxx, 00xx Xxxxx
Corporation or Sixty Wall Xxx Xxxx, XX 00000
Street Fund, L.P.: Attention: Xxxxx Xxxxx
Facsimile: 000-000-0000
If to NR2 Holdings Limited: c/o Investcorp Management Services
Limited Xxxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxx
Facsimile: 000-000-000
Attention: H. Xxxxxxx Xxxxxx III
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with a copy to: c/o Investcorp International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 212.599.4700
Attention: Xxxxxxxxxxx X'Xxxxx
And with a copy in all cases to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: 212.351.4035
Attention: E. Xxxxxxx Xxxxxxx
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision of this Agreement will
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be interpreted in such manner as to be effective and valid under applicable law
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction in order
to be enforceable to the maximum extent possible in accordance with the
intention of the parties.
(g) Specific Performance. Each of the parties hereto recognizes and
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acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damage for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(h) No Waiver. The failure of any party hereto to exercise any right,
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power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.
(i) Governing Law. This Agreement shall be governed and construed in
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accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(j) Legend. All certificates evidencing Preferred Shares or Conversion
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Shares owned by the Investors shall bear a legend substantially as follows
during the term of this agreement:
"The securities represented by this Certificate are subject to the
provisions of a Preferred Stockholders Agreement dated August 2,
2000 among the holders of the Series A Convertible Preferred Stock
of the Company and the holders
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of the Series B Convertible Preferred Stock of the Company, as
amended from time to time, with respect to voting rights and
transfers, and no transfer hereof may be made except in accordance
with the provisions of Section 2 and Section 3(b) of that Preferred
Stockholders Agreement."
(k) Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
NR HOLDINGS LIMITED, a Cayman Islands company
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: The Director Ltd.
Title: Director
NR INVESTMENTS LIMITED, a Cayman Islands company
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: The Director Ltd.
Title: Director
NR2 HOLDINGS LIMITED, a Cayman Islands company
By: /s/ Xxxxxxxx Xxxxxxxxx
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Name: The Director Ltd.
Title: Director
DB CAPITAL INVESTORS, L.P., a Delaware limited
partnership
By: DB Capital Partners, L.P.,
its General Partner
By: DB Capital Partners, Inc.,
its General Partner
By: /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
Vice President
X.X. XXXXXX CAPITAL CORPORATION, a Delaware
corporation
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President
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XXXXX XXXX XXXXXX FUND, L.P., a Delaware limited
partnership
By: Sixty Wall Street Corporation,
its General Partner
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President
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